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Income Tax - Case Laws
Showing 81 to 100 of 803 Records
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2016 (8) TMI 1476 - GUJARAT HIGH COURT
Bogus purchases - addition u/s 69C - Tribunal deleted the addition - HELD THAT:- Tribunal recorded a finding of fact that though the two suppliers, viz. M/s. P. Jitendra & Co. and M/s. P.R. Diamonds, from whom the assessee had purchased polished diamonds, had stated that they had issued bogus bills to the assessee, no evidence was brought on record to prove that the assessee had received cash back from the said parties. The assessee maintained books of accounts, which have been audited. The purchases made from these two parties have been duly entered in the stock record.
The books of the said two suppliers have also been audited and the sales made to the assessee find place in their books of accounts as well. Further, the sales made by the assessee have not been rejected by the Assessing Officer and payment towards the exports have been received by the assessee through banking channel.
AO has made disallowance u/s.69C of the Act. However, in our opinion, the same is erroneous since Section 69C is applicable to cases where the source of expenditure has not been explained by assessee. Even if we take the plea that assessee has incurred the expenditure, it is a case where the source of expenditure is duly explained as the payment for the purchases has been made by the assessee out of its bank account. Therefore, the Tribunal rightly concluded that provisions of Section 69C of the Act will not apply to the case on hand. - Decided against revenue.
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2016 (8) TMI 1475 - ITAT MUMBAI
Depreciation on goodwill - whether goodwill is an intangible asset under section 32, hence, eligible for claim of depreciation? - HELD THAT:- This issue is no more res integra in view of the decision of Hon'ble Supreme Court in Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] where the Hon'ble Supreme Court has held that goodwill is in the nature of any other business or commercial rights as provided under Explanation–3(b) of section 32(i) r/w section 32(1)(ii). The other decisions of the Tribunal relied upon by learned Authorised Representative also express similar view. Therefore, respectfully following the ratio laid down in the decision referred to above, we uphold the order of the learned Commissioner (Appeals) on the issue. Accordingly, grounds raised by the Department are dismissed.
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2016 (8) TMI 1474 - ITAT KOLKATA
Interest u/s 201(1A) - failure of the Appellant to deduct tax at source even when the deductee was not liable to pay Income Tax on account of losses - HELD THAT:- In the instant case, it is proved beyond doubt that the deductee does not have any liability to pay tax as could be evident from the scrutiny assessment order u/s 143(3) of the Act for the Asst Year 2004-05 enclosed in pages 50 to 52 of the paper book. This fact was also placed by the assessee before the ld AO and he had also noted the same in the assessment order.
We hold in the instant case, there is no tax due to the exchequer and accordingly there is no question of compensating the same by way of interest. We find that this aspect is also dealt by the Hon’ble Supreme Court in the case of CIT s Eli Lilly & Company (India) (P) Ltd & Ors [2009 (3) TMI 33 - SUPREME COURT] - Decided in favour of assessee.
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2016 (8) TMI 1472 - ITAT AHMEDABAD
Reopening of assessment - proof of escapement of income - cash deposited in bank account - HELD THAT:- There is nothing more than cash deposit of R.12,76,000/- in the bank account to justify the reopening of assessment by holding the belief that income has escaped assessment. A mere cash deposit in the bank account, however, cannot justify such a belief or inference.
In this view of the matter, and respectfully following the division bench order in the case of Bir Bahadur Singh Sijwali [2015 (2) TMI 60 - ITAT DELHI] hold that the very initiation of reassessment proceedings, on the facts of this case, were unsustainable in law. Therefore, quash the reassessment proceedings and the impugned reassessment order. As the reassessment itself stands quashed, all other issue raised in the appeal are rendered infructuous and do not call for any adjudication. - Decided in favour of assessee.
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2016 (8) TMI 1471 - ITAT DELHI
TP Adjustment - Comparable selection - HELD THAT:- Comparable functionally dissimilar with that of assessee a company incorporated in Korea and has project offices (PO) in India for carrying out on-site work in relation to specified licensing, coordination and other activities. During the year under consideration, assessee had 3 project offices in India being Rotem RS 1, Rotem RS 3 and BRCL.
The role of the Rotem RS1 project office, is to overview the replacement/modification job being undertaken by outsourcing companies and lace with the MRC personnel in relation to maritime and troubleshooting in relation to rolling stock supplied under contract Rotem RS 3 undertakes the supply of components to BEML and is not involved in on-site activities need to be deselected from selected from final list.
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2016 (8) TMI 1470 - DELHI HIGH COURT
TP Adjustment - comparable selection - Whether the ITAT was justified in concluding that the Assessee is involved in the research and development activity and not provision of market support services? - HELD THAT:- The Court is of the considered view that the ITAT did not have sufficient material before it to come to the conclusion that HRDI was into core R&D activity. That finding of the ITAT would only cause confusion before the CIT(A) in the remand proceedings. On the other hand there was sufficient material in the form of the remand report of the TPO for AY 2005-2006 as well as DRP‟s order for 2007-2008 to show that HRDI was not into core R&D activity. Accordingly Question (i) is answered in the negative by holding that the ITAT was not justified in concluding that HRDI was involved in R&D activity and not provision of market support services. The order of the CIT(A), which was reversed by the ITAT, is restored.
ITAT in remanding the matter to the CIT (A) on the issue of appropriate comparables - HELD THAT:- As already noticed the ITAT overlooked the fact that the TPO in his remand report had accepted three comparables suggested by HRDI. The DRP in its order dated 12th July, 2011, gave cogent reasons why ITDC should be included as a comparable. This is consistent with the conclusion reached by the CIT(A). Consequently, Question (ii) is also answered in the negative, i.e., in favour of the Assessee and against the Revenue and it is held that the ITAT was not justified in remanding the matter to the CIT (A) on the issue of appropriate comparables.
ITAT remanding the matter concerning disallowance of 50% of depreciation on fixed assets acquired from the liaison office of the parent company - physical transfer of the asset - HELD THAT:- Physical transfer of the assets took place in June, 2003 when the assets were shifted from New Delhi to Gurgaon where both the LO of HRDJ and HRDI shared a common office. Thereafter there was no occasion for any further physical transfer of the assets. As far as legal transfer of the assets was concerned it could not have taken place unless approvals from the RBI were obtained both for transfer of the assets which approval was granted on 13th July, 2004 and for closure of LO which was granted on 30th September, 2004. Till then the Assessee had physical possession of the assets. Therefore, it could not be said that during the AY in question the assets had been put to use for less than 180 days.
CIT(A) was fully justified in accepting the plea of HRDI for grant of 100% depreciation on the assets transferred to it from the LO of HRDJ. Consequently Question (iii) is answered in the negative, i.e., in favour of the Assessee and against the Revenue. It is held that the ITAT was not justified in remanding the matter concerning disallowance of 50% of depreciation on fixed assets acquired from the liaison office of the parent company.
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2016 (8) TMI 1468 - ITAT MUMBAI
Rectification u/s 154 - AO enhanced book profit computed u/s. 115JB by making addition on account of amortised amount of exchange differences arising out of foreign currency borrowings - CIT(A) upholding the claim of the assessee that the amortised amount of exchange differences arising out of foreign currency borrowings are not contingent liability and should not form part of computation of “Book Profit” for the purposes of S.115JB - HELD THAT:- CIT(A) reached to the conclusion that the said liability is not contingent. As per the CIT(A), a contingent liability depend purely on happening and not happening of the event, whereas if an event has already been taken place, which in the present case, is of entering into the contract and undertaking of obligation to meet the liability, and only consequential effect of the same is to be determined, then, it cannot be said that it is in the nature of contingent liability. After applying the proposition of law laid down by Hon’ble Supreme Court in the case of Woodward Governor India [2009 (4) TMI 4 - SUPREME COURT] and Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] , CIT(A) recorded a finding to the effect that it was not a contingent liability. Accordingly we do not find any reason to interfere in the order of the CIT(A), which is a well reasoned order. Appeal of the Revenue is dismissed.
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2016 (8) TMI 1467 - ITAT AHMEDABAD
Charging of interest u/s. 234 - HELD THAT:- Assessee had filed the return of income on 30th September 2009 whereas the amendment to clause (i) to Explanation was made by Finance (No 2) Act 2009 with retrospective effect from 1st April 2001 meaning thereby that at the time of filing of return of income, the amendment(had already come into force and that the assessee was aware about it.
During the course of regular assessment proceedings, Assessee voluntarily revised the computation of income on the basis of newly inserted s.115JB(2) Explanation 1(h). In such a situation it was held that when the assessee was under a bona fide belief and based his estimate of income as per the law prevailing at the relevant time of filing the original return of income, no interest u/s 234B and 234C of the Act is leviable on account of subsequent amendment to the provisions. In view of these facts, we are of the view that the additional ground of Assessee needs to be decided against the assessee and therefore to be dismissed.
MAT computation - Book profits u/s 115JB - provision for bad debts debited to profit and loss account for calculating book profit u/s.115JB (MAT) - in all the decisions that are relied upon by Ld AR, the issue in those appeals was not with respect to clause (i) to Explanation 1 of s. 115JB and therefore the benefit of those decisions will not be applicable to the facts of the present case. On the other hand we find that Hon'ble Punjab & Haryana High Court in the case of CIT v. Steriplate (P.) Ltd. [2011 (5) TMI 645 - PUNJAB AND HARYANA HIGH COURT] , in the case of CIT v. Mysore Breweries Ltd [2009 (9) TMI 829 - KARNATAKA HIGH COURT] and CIT v. Yashaswi Leasing & Finance Ltd. [2011 (8) TMI 765 - KARNATAKA HIGH COURT] have held that in view of insertion of clause (i) to Explanation 1 to s. 115JB, with retrospective effect, amount set aside as provision for diminution in value of assets is to be added back for computation of book profits u/s 115JB of the Act. In view of the fact that the provision made by the assessee is covered by the clause (i) to Expln.1 to s.115JB of the act and in view of the various decisions of Hon'ble High Courts cited herein, we are of the view that no interference to the order of CIT(A) is called for and thus we dismiss this ground of Assessee.
Penalty u/s.271(1)(c) - addition on account of "provision for bad and doubtful debts to book profit u/s.115JB - HELD THAT:- Merely because additions have confirmed in appeal or no appeal has been filed by assessee against additions made, it cannot be the sole ground for coming to the conclusion that assessee has concealed any income. Before us, ld.AR has given the reasons and the facts which had resulted into addition. These submissions have not been controverted by the Revenue. Further, there is nothing on record to demonstrate that assessee had filed inaccurate particulars of income or had concealed the particulars of income.
We also get support from the judgement of the Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010 (3) TMI 80 - SUPREME COURT] wherein held that a mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. - Decided in favour of assessee.
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2016 (8) TMI 1466 - ITAT CHENNAI
TP Adjustment - inclusion or exclusion of certain comparable companies while determining the ALP - HELD THAT:- The assessee’s service portfolio enables to provide integrated solution for the management of clinical research data right from inception to completion. The assessee’s world-class team of highly-qualified and experienced scientists, clinicians and multidisciplinary staff are committed to providing quality solutions across a wide range of therapeutic areas.
The assessee’s commitment to quality and customer-focused approach, bundled with outstanding expertise distinguishes us from others. The assessee manages the projects based on the clients’ requirements and provide customized solutions. The assessee is having immense talent pool to reliably meet the needs of clients and deliver well within timelines. The services at Jeevan Scientific Technologies Ltd. include Medical Writing, Clinical Data Management, Biostatistics and other services including copy editing, proofreading, formatting, quality assurance, literature search, graphic design and submissions to journals and congresses.
AR submitted that as the assessee is an IT company, Jeevan Scientific Technologies Ltd. cannot be considered as comparable to the assessee’s case. There is force in the argument of the ld. AR. There is no dispute that Jeevan Scientific Technologies Ltd. is being ITES, it cannot be compared to the medical prescription company. Accordingly, we are inclined to direct the TPO to exclude Jeevan as comparable to the assessee’s case.
The assessee pleaded before us that Microgenetics Systems Ltd. to be considered as comparable to the assessee’s case and should be included as comparable.
We considered the argument of the ld. AR. The turnover of Microgenetics Systems Ltd. is very low i.e. ₹ 62.5 crores, whereas the assessee’s turnover is ₹ 600 crores and not proper to compare. On this basis, we are inclined to hold that Microgenetics Systems Ltd. is not comparable to the assessee’s case. This argument is rejected.
Disallowance u/s.14A - HELD THAT:- Admittedly, the assessee filed documents before the DRP regarding the computation of disallowance u/s.14A r.w.r 8D However, there is no discussion by the DRP in their order. He observed that there is no segregation of expenses attributable to investment which will exempt income. In our opinion, the documents furnished by the assessee to be looked into and thereafter the DRP has to give direction to the TPO. We direct the assessee to furnish the same documents what is furnished before the DRP on earlier occasion for their consideration and the DRP shall decide the issue in accordance with law after considering the same.
Assessee’s appeal is partly allowed for statistical purposes.
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2016 (8) TMI 1465 - ITAT MUMBAI
Rejection of registration of trust u/s 12A - HELD THAT:- Application of income of the trust has to be seen at the time of assessment and it is premature to examine the said issue at the time of grant of registration u/s 12A of the Act. The case of the assessee is supported by a decision of the Tribunal Life Shines Educational and Charitable Trust Vs ACIT [2015 (10) TMI 1478 - ITAT CHENNAI] in which it is held that the issue of application of income or the activities carried on were to be considered at an appropriate proceedings i.e. the assessment proceedings and not at the time of granting registration u/s 12A.
In view of the ratio laid down in the decisions cited (supra), we find that the order of ld.CIT(A) is wrong and cannot be sustained as registration has been denied for no valid reasons. We ,therefore following the ratio laid down by the above said decisions, set aside the order of ld.Director (Exemption) with a direct to grant registration to the assessee u/s 12A of the Act.
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2016 (8) TMI 1464 - ITAT MUMBAI
Additions u/s 41(1) - assessee contested that unsecured loans represent capital transactions - CIT-A deleted the addition - HELD THAT:- Assessee has obtained unsecured loans from various parties, the confirmation of which he failed to produce. Nevertheless, it is nowhere disputed that the liability in respect thereof has ceased to exist. CIT(A) has observed that these represents loan transaction and the assessee has not purchased any merchandise from these parties.
The unsecured loan obtained by the assessee are capital in nature and do not represent any trading liability, the deduction of which has been allowed to assessee. Further, the revenue has failed to prove the remission or cessation thereof. So, section 41(1) has no applicability in the case of the assessee. Resultantly, addition made on this account has rightly been deleted by CIT(A) - Decided in favour of assessee.
Disallowance of expenses u/s. 37(1) - HELD THAT:- CIT(A) has allowed substantial relief to assessee after considering the detail submissions of the assessee in this regard. These submissions were not before AO and these constitute additional evidences for which opportunity should be provided to AO for examination. Therefore, this issue of disallowance of expenses is remitted back to the AO so as to afford another opportunity to revenue in this regard.
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2016 (8) TMI 1463 - DELHI HIGH COURT
Addition u/s 68 - initial burden to prove identity of the applicant/investor as well as the genuineness of the transaction - ITAT deleted the addition - HELD THAT:- AO shall undoubtedly be justified as to the identity of the share applicants. This Court is however unpersuaded by the revenue submission that the genuineness of the transaction or the creditworthiness of the assessee had to be established in the given facts of this case. The factual narration by the CIT(A) which was affirmed by the ITAT unequivocally point to the assessee disclosing materials such as the bank accounts, the share particulars, income tax details and other materials which would have enabled further enquiry by the AO.
CIT (A) further also records that on a scrutiny of the bank accounts of the share applicants, the source of deposit of ₹ 3.5 crores, except a small amount of ₹ 84,858/-, are by way of account payee cheques, there was no cash inclusion. In case AO so wished, it was open for him to make further enquiries. That he did not do so, in our opinion, would not mean that the assessee failed to discharge the initial burden in establishing the genuineness of the transaction or the creditworthiness of the share applicants. - Decided against revenue
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2016 (8) TMI 1462 - GUJARAT HIGH COURT
Addition on account of expenses incurred for replacement of remembering cells-II - HELD THAT:- This issue in case of this very assessee for earlier assessment years came up for consideration before this Court in case of Commissioner of Income Tax vs. Gujarat Alkalies and Cheimcals Ltd.
[2015 (2) TMI 118 - GUJARAT HIGH COURT] as held that attempt to contend that life of membrane would be spread over from 3 to 5 years or that the amount involved for replacement of membrane is huge and, therefore, the departure on the part of the Revenue could be said as justified, in our view, cannot be countenance for two reasons. One is that the amount involved would not make difference for chargability of the tax but the nature of expenditure would be relevant for the chargability of tax. It hardly matters whether the amount is more or less. Further, on the aspect of life of the membrane, nothing is referred to by the A.O. nor by C.I.T. (Appeals) that earlier, such aspect, namely, life of the membrane spread over from 3 to 5 years was not considered or it had missed or otherwise. - Decided against revenue
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2016 (8) TMI 1461 - ITAT DELHI
Admission of additional evidence - return of the assessee declaring an income was selected for scrutiny assessment through CASS - HELD THAT:- CIT(A) has erred in deleting the addition made without first confronting the fresh evidences to the AO. We find that though before admitting the fresh evidences the CIT(A) remanded these to the AO. AO as per record objected to its admissibility. Thereafter over-ruling the objection the CIT(A) considering the reasons for filing fresh evidences and the fact that the “Agreement to Sell” “Possession letter” and “Power of Attorney in favour of the seller” were crucial and material evidences required to be considered for adjudicating upon the issue admitted the evidences. '
The decision to admit the evidences is upheld as facts justifying admission of fresh evidences namely the assessee remaining unavailable at her address for reasons beyond her control i.e. health reasons and thus did not receive the notices which may have been sent have been duly noted and thus we find fulfill the requirements of sub- Rules (2) of Rule 46A. However, having so concluded, we find it was incumbent upon the CIT(A) thereafter, in terms of sub-Rule (3) of Rule 46A to confront the evidences to the AO so as to allow him an opportunity to rebut the evidences placed on record which opportunity admittedly has not been provided.
We are of the view that the CIT(A) after over-ruling the objection of the AO on the admissibility of the fresh evidences was required to communicate the decision to admit the evidence to the AO and provide him a reasonable opportunity to rebut the same. In the absence of any such exercises the order is in violation of the Statutory Rules and is open to the challenge of being perverse.
Considering the submission of the parties before the Bench and the precedent relied upon the impugned order is set aside and allowing the departmental ground, the issue is restored back to the file of the CIT(A) to address the procedural lapses and pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.
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2016 (8) TMI 1459 - ITAT MUMBAI
Condonation of delay - Disallowance of deduction u/s.80HHC - export profit including DEPB incentive, excise duty refund and duty drawback - HELD THAT:- Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar Pahilajrai Jaikishin v/s. JCIT Mumbai [2013 (8) TMI 1049 - ITAT MUMBAI], following same reasoning, we are of the view that there is a reasonable cause for delay in filing the appeal, so in the interest of natural justice we condone the delay in filing the appeal and admit the appeal for adjudication.
Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we therefore set aside the order of the CIT(A) and direct the Assessing Officer to recomputed the deduction u/s.80HHC in respect of DEPB income in the light of the judgment of Hon’ble Supreme Court in the case of Topman Exports Ltd [2012 (2) TMI 100 - SUPREME COURT]
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2016 (8) TMI 1458 - ITAT NAGPUR
Character of land - gain on sale of land - agricultural land or capital asset - land was compulsorily acquired by NHAI - HELD THAT:- The plot of land was situated in Dongargaon that the assessee had filed copies of registered sale deed along with copy of 7/12 extract, that the land in question was categoriesed as agricultural land in the revenue record. In these circumstances, in our opinion, the FAA was justified in holding that the land in question was agricultural land. It is also a fact that the plot of land was compulsorily acquired by the Government and was purchased as agricultural land. The certificate dated 23-08-2013 of Gram Adhikari Dongargaon states that plot of land was an agricultural land since it was purchased till the date of compulsory acquisition.
AO himself has admitted referring to the 7/12 extracts. that land in question was agricultural land in the earlier assessment years. In our opinion, the character of land would not change automatically in subsequent years until and unless the same is used for some other purposes
There is nothing on record to show that the land was not used for agricultural purposes. The AO has not brought on record to prove the fact that agricultural land was converted into non agricultural land or that the assessee had applied for such conversion. The AO had referred to the aerial distance to determine the distance of plot of land from the Municipal limits. The Circular No. 7/215 (supra)clearly stipulates that distance between the Municipal limits and agricultural land had to be measured having regard to the shortest road distance.
Sale of agricultural land cannot be treated as an advenctur as the land was compulsorily acquired by NHAI. The plot of land, acquired by the assessee was an agricultural land and, therefore, was out of ambit of taxability. It was not liable for charging under the capital gains/business profit. - Decided in favour of assessee
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2016 (8) TMI 1456 - ITAT HYDERABAD
Disallowance u/s 43B - HELD THAT:- As observed that the assessee is following the method of accounting consistently that statutory dues are collected from the customers and the collection of statutory dues are treated as statutory liability and shown as liability in the balance sheet without charging into P&L A/c. This method is being followed consistently and acceptable method of accounting. Provisions of section 43B will be applicable only when the assessee claimed those payments of statutory dues as expenditure.
We are not in agreement with the CIT(A) as the assessee has not claimed statutory liability as business expenditure as laid down in the above decisions that the business expenditure are not claimed in the P&L account, provisions of section 43B will not be applicable. Accordingly, we set aside the order of the CIT(A) and direct the AO to delete the disallowance made u/s 43B - Appeal of the assessee is allowed.
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2016 (8) TMI 1455 - ITAT PUNE
Capital gain computation - reference to DVO - scope of amendment in section 55A - rectification u/s 154 - HELD THAT:- Such amendment to provisions of section 55A(a) is not retrospective and prospective, therefore, merely because the AO has made a reference to the DVO after the date of such amendment for an assessment year prior to the amendment is a highly debatable issue. The Hon’ble Supreme Court in the case of T.S. Balaram, ITO Vs. Volkart Brothers and Others [1971 (8) TMI 3 - SUPREME COURT] has held that a mistake apparent on the record must be an obvious patent mistake and not something which can be established by a long run process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record.
Since in the instant case the issue as to whether the AO can make a reference to the DVO u/s.55A(a) of the I.T. Act after the amendment brought in the statute book w.e.f. 01-07-2012 but for an assessment year prior to that date where the fair market value adopted by the assessee as on 01-04-1981 is more than the fair market value determined by the AO is a highly debatable issue, therefore, following the decision of Hon’ble Supreme Court in the case of T.S. Baralam, ITO Vs. Volkart Brothers and Others (Supra) I hold that the CIT(A) was not justified in passing the order u/s.154 of the I.T. Act in the instant case which in my opinion is a highly debatable issue. Accordingly, set aside the order of the CIT(A) passed the order u/s.154 of the I.T. Act. Grounds raised by the assessee are accordingly allowed.
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2016 (8) TMI 1454 - ITAT NAGPUR
Characterization of gain on land sold - nature of land sold - agricultural land or capital asset - HELD THAT:- Said property was purchased by the assessee on 25-03-2008 for a consideration of ₹ 31,50,000/-. Prior to this date on 10-03-2008 the assessee has received an advance payment of ₹ 5,00,000/- against the sale consideration of ₹ 60,00,000/- for the said property. This fact emerges from the sale deed itself. Assessee had entered into the transaction of sale even before execution of the purchase deed. This amply supports the Revenue’s contention that business intention of the assessee was very evident.
As rightly noted by the CIT(Appeals) in this context it is important to note that eventually the sale consideration of ₹ 30 lacs was received by the assessee directly from the builders to whom the said land was eventually sold and who plotted the land and sold it in pieces. The assessee was one of the ‘witnesses’ who signed the sale deed when the land was sold to Rajendra Ramdas Dhore who had later sold 14 plots to one M/s United Builders and Developers for ₹ 15 lacs and 14 plots to Shri Sahebrao Wadekar for ₹ 15 lacs and the sale proceeds totalling ₹ 30 lacs were directly paid to the assessee by these two purchase parties. Further more the assessee has also made application for conversion of the said land for non agricultural land for residential purpose. Thus the assessee was aware of the purpose for which the entire transaction was being entered at the threshold.
There is no evidence of any cultivation activity on the said land.
The assessee has not disclosed any agricultural activity/income/expenditure on the said land. Rather the facts of the case clearly indicate that the assessee was in the process of converting the land into non agricultural land and he eventually sold for non agricultural activities.
Hence agree with the conclusion of the learned CIT(Appeals) that the facts of the case that no agricultural operation being carried out in the said property, the efforts to convert the said land into non agricultural land, taking advance from the eventual purchaser even before the said property had been purchased and being aware all along that the said land will be used for plotting by builders clearly reflects the commercial and profit element in the purchase and sale of the said property. - Decided against assessee.
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2016 (8) TMI 1452 - ITAT CHENNAI
Deduction u/s 80-IA denied - assessee established “Olympia Tech Park” for providing infrastructure facilities to software development companies. It is in STPI notified area - only contention of the Revenue is that the income from building has to be classified as income from house property, therefore, the assessee is not eligible for deduction under Section 80-IA - HELD THAT:- The building of the assessee is not a mere building. It has infrastructure facilities for the purpose of development of software. The assessee is systematically providing services besides letting out the property. Therefore, the judgment of Apex Court in Chennai Properties and Investments Ltd. v. CIT [2015 (5) TMI 46 - SUPREME COURT] would squarely applicable to the present case.
Hence, this Tribunal is of the considered opinion that the income from letting out of the property has to be classified as “income from business” and the assessee is eligible for deduction under Section 80-IA of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against revenue.
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