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Income Tax - Case Laws
Showing 81 to 100 of 533 Records
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2017 (7) TMI 1294 - DELHI HIGH COURT
Reopening of assessment - Allowability of deduction under Section 10A on the profits of foreign branches in the case of the three undertakings (Shivalaya unit, Chennai unit and GNR unit) and Allowability of provision for doubtful debts - HELD THAT:- Both these issues had been examined by the AO during the original assessment proceedings under Section 143 (3) of the Act. There was neither any failure by the Assessee to disclose the relevant materials nor was there any fresh tangible material to justify the AO's formation of belief that income had escaped assessment. Consequently, the Court is satisfied that the jurisdictional requirement of there having to be a failure by the Assessee to make a full and true disclosure of the material facts relevant for the assessment in terms of the first proviso to Section 147 of the Act is not fulfilled in the present case.
Deduction under Section 10A there was a complete disclosure of all the relevant facts for each of the units in respect of which the deduction was claimed. The certificate in Form 56F as prepared by the CA, enclosed the calculations for the deductions claimed. The assessment order also shows that the AO had applied its mind to the issues and after considering the explanation submitted by the Assessee, allowed the deduction.
There was no fresh tangible material available with the AO which would justify the formation of the reasons to believe that income had escaped assessment. The mere conclusion that the deduction under Section 10A and 80HHE was ‘wrongly claimed’, without anything more, would not satisfy the statutory requirement or be a sufficient justification for reopening the assessment.
Alleged failure by the Assessee to add back to its income comprising the provision for doubtful debts, the Court finds that the computation in that regard was furnished by the Assessee as is evident from the documents placed on record in the original assessment proceedings. In the letter addressed by the AO to the Assessee, this aspect was specifically adverted to. The reply by the Assessee also dealt with it. Not possible to accept the Revenue’s case that on this aspect there was any failure by the Assessee to make a full and true disclosure of all material facts relevant to the assessment - neither of the reasons on the basis of which the assessment for AY in question was sought to be reopened by the AO are tenable in law. - Decided in favour of assessee.
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2017 (7) TMI 1291 - GUJARAT HIGH COURT
Disallowance u/s. 14A r.w. Rule 8D - disallowance on account of proportionate interest expenses u/s.36(1)(iii) on the interest free funds advance to it subsidiary companies - CIT (Appeals) as well as the Tribunal held on facts that the disallowances were not justified - as held that the assessee has sufficient interest free funds and there was nothing on record to suggest that interest bearing funds were diverted for investment - HELD THAT:- We notice that both these questions were considered by the Division Bench of this Court in GMM PFAULDER LTD. [2014 (10) TMI 1002 - GUJARAT HIGH COURT] concerning the same assessee for earlier assessment year. These questions were rejected as being only factual in nature. This Tax Appeal is also therefore dismissed.
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2017 (7) TMI 1290 - BOMBAY HIGH COURT
Deduction under Section 80IB(10) in respect of redevelopment project - not eligible for deduction in view of the board instructions under Section 119 - Tribunal allowed claim - as per revenue tribunal was not justified in overwriting the notification of the board under Section 119 of the Act - HELD THAT:- The Commissioner [Appeals] in his judgment has specifically observed that the project of the assessee is approved as slum rehabilitation project by slum rehabilitation authority of the State and the same has also been notified. The assessee has submitted the project and the plan dated 28/04/2004 and the same was approved by the Rehabilitation Authority on 04/06/2004, the same is filed on record. The Tribunal has also considered the said aspect, so also proviso to Section 80IB(10) of the Act and has correctly passed the order. The judgment of the Tribunal cannot be faulted with.
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2017 (7) TMI 1289 - ITAT MUMBAI
Disallowance of bad debts written off - HELD THAT:- Tribunal in assessee’s own case for AY 2001-02 and facts being exactly identical, respectfully following the same, we allow the claim of the assessee. Further, this issue has also been decided in favour of assessee in case of Bank of Baroda in ITA [2014 (3) TMI 1144 - ITAT MUMBAI] for AY 2003-04 vide order dated 12-06-2013. Respectfully, following the Tribunal decision in assessee’s own case and consistently following the precedence, we allow the claim of the assessee. This issue of assessee’s appeal is allowed.
Disallowance of payments made to liquidators of BCCI, interest and legal expenses - AO disallowed the payment made to liquidator’s Bank of Credit and Commerce International SA and Bank of Credit and Consumers International (overseas Ltd.) amounting to ₹ 364,64,32,957/- and also legal charges paid for defending suit filed by the liquidators of BCCI - HELD THAT:- On account of passage of time and the claim is in the nature of interest allowable u/s 28 of the Act in computing the total income. Further, the legal expenses incurred to defend the suit against the bank to avoid the full compensation should be allowed as deduction in computing the total income u/s 28 of the Act, since the same was incurred in the ordinary course of carrying on the banking business to contest a substantial original demand of USD 10 Billion against the assessee which was reduced substantially in the appeal.
We are of the view that the compensation paid in term of judgment of Hon’ble High Court of Justice Chanclry Division, Companies Court, London is allowable deduction in view of the commercial expediency. Respectfully following Hon’ble Supreme Court, we allow the claim of assessee. This issue of assessee’s appeal is allowed.
Disallowance of lease premium paid in respect of its bank premises - HELD THAT:- Assessee has made claim of ₹ 1,50,53,817/- on account of lease and premium of various lease of land by the Bank claiming that it is a proportionate of the total leased amount paid because the total lease and premium is spread over the life of lease and proportionately this amount is claimed in each year. AO treated the same as capital expenditure and CIT(A) also treated the same as capital expenditure and placing the reliance on the decision of ITAT, Mumbai special bench in the case of JCIT vs Mukund Ltd. [2007 (2) TMI 358 - ITAT MUMBAI] . We find that the Tribunal in ITA No.2781/Mum/201 for AY 2003-04 has already considered this issue against assessee and in favour of Revenue by following the special bench decision in the case Mukund Ltd. (Supra). Respectfully following the same, we confirm the addition and dismiss this issue of assessee’s appeal.
Disallowance of stamp duty paid on leasehold property - HELD THAT:- Expenditure incurred by the assessee by way of stamp duty etc., in connection with lease agreement was covered by its own decision in the case of CIT vs. Cinceita (P.) Ltd. [1982 (2) TMI 58 - BOMBAY HIGH COURT] , respectfully, following the same we allow the appeal of the assessee on this issue.
Disallowance of expenditure relatable to exempt income under section 14A - HELD THAT:- , we direct the AO to restrict the disallowance on exempt income at 1% and this issue of assessee’s appeal is partly allowed.
Deleting/ excluding the income of foreign branches - HELD THAT:- As decided in assessee’s own case for AY 2003-04 the right of the Indian Government to levy tax in respect of business profits of these types of Indian Enterprise as provided in opening paragraph of Article 7 is taken away because a permanent establishment is situated in Malaysia.” In the appellant’s case also in all the foreign countries the operation is carried out through its branches which is a permanent establishment situated outside India. Hence the income attributable to these branches cannot be taxed in India. - decided against revenue
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2017 (7) TMI 1285 - ITAT HYDERABAD
Rectification of mistake - HELD THAT:- The Registry had pointed out certain defects and accordingly issued a notice to the assessee along with a notice for hearing of the appeal. The appeal was initially fixed for hearing on 12-01-2017 and for the assessee appeared and sought time to rectify the defects. Subsequently, the assessee has been taking time on one of the other ground till 11-05-2011. On 16-05-2017, the case was adjourned to 19-06-2017 at the request of DR.
On 19-06-2017, the assessee sought time to get a declaration that there is no managing director in the company, and at his request, the case was adjourned to 05-07-2017. However, on 05-07-2017, none appeared for the assessee nor any application for adjournment is filed. In view of the same, it is presumed that assessee is not interested to pursue the appeal before the Tribunal. Therefore, respectfully following the decision of the Tribunal in the case of Multiplan (India) Ltd., (1991 (5) TMI 120 - ITAT DELHI-D) and in Late Tukojirao Holkar (1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT), we deem it fit and proper to dismiss these appeals. - Assessee’s appeal is dismissed.
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2017 (7) TMI 1283 - ITAT CHANDIGARH
Condonation of delay - Ex-parte assessment - notice of hearing was not served upon the assessee - non speaking order - in absence of any specific prayer, the CIT(A) has dismissed ground No. 1 as a general ground - HELD THAT:- Argument on the basis of which the order was claimed to be bad in law is found extracted in the order and has been reproduced in the earlier part of this order. The said argument has been addressed though for explaining the delay in filing of the appeal. I find that the finding of the CIT(A) that it was a general ground, cannot be faulted with.
Since the assessee seeks to assail the jurisdiction of the AO itself by way of facts available on record,find that in the peculiar facts and circumstances, it would be appropriate to set aside the issue back to the file of the CIT(A) with a direction to pass a speaking order in accordance with law requiring the assessee first to raise specific objection to the jurisdiction of the AO and only thereafter the assessee can pray for a decision on merits, if need be. Said order was pronounced after hearing the submissions of the parties before the Bench. The jurisdictional ground being the foundational ground can be assailed at any stage, specially where the facts are already available on record as per settled legal position thereof. - Decided in favour of assessee for statistical purposes.
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2017 (7) TMI 1280 - ITAT DELHI
Penalty u/s. 271(1)(c) - Addition u/s 68 - loan transactions were not genuine nor the creditworthiness of the creditors stood proved - whether the Assessing Officer has recorded its satisfaction specifying a particular facet of section 271(1)(c) as concealment of particulars of income or furnishing of inaccurate particulars of income before initiating the penalty proceedings. - HELD THAT:- In the instant case, a study of the assessment order as a whole indicates that the satisfaction of the AO regarding initiation of penalty proceedings for furnishing inaccurate particulars of income is quite discernible from the assessment order itself. It is no doubt true that in last para of assessment order, the AO has mentioned “Issue notice u/s. 271(1)(c), read with explanation (B) for penal proceedings which are being initiated separately”. However, at the same time, the AO has mentioned in last lines of para 5 of assessment order as under :
“The assessee has failed to disclose the correct details regarding the income as well as the investments made by him, penal proceedings u/s. 271(1)(c) read with explanation (B) are being initiated against her.”
AO and on composite reading of assessment order, we find that the satisfaction of AO was discernible from the assessment order that the penalty proceedings were proposed to be initiated for furnishing inaccurate particulars of income. This alludes that the assessee was aware of the facets of section 271(1)(c), under which the penalty proceedings were proposed to be initiated, as is discernible from the assessment order. As such now there lies nothing in the mouth of assessee to contend that penalty is bad in law for want of specific charge against her. Therefore, we find that the facts of the case in hand are not existing in the judicial pronouncements relied by the assessee and thus are not relevant to the context of the present appeal before us in the peculiar facts and circumstances. Therefore, the additional ground raised by the assessee deserves to fail.
On going through the findings reached by the ld. Authorities below and the examinations of documentary evidence furnished by assessee made by AO, we find that the creditors had made cash deposits in their bank accounts almost equal to the amounts of unsecured loans advanced to the assessee immediately prior to issuance of cheques/DDs in favour of the assessee. CIT(A) has rightly observed that in such a scenario, cash deposits of huge amounts prior to issue of cheques cannot be a co-incidence in case of each and every creditors under consideration, particularly when no such other instances of huge cash deposit were found in the bank statements.
One of the creditors, Mr. Bishan Swaroop admitted in his statement that he borrowed money from several persons to advance loan to the appellant, which also does not appear credible for want of any supporting documents on record. ITRs submitted with respect to two of the creditors showing meager income, do not justify the creditworthiness of the creditors to advance huge loans to the appellant.No cogent evidence were laid on record to prove the creditworthiness of the creditors, the onus of which lay upon the assessee u/s. 68 which he failed to discharge - AO has rightly been treated as income in respect of which particulars were concealed by the assessee within the meaning of Explanation 1(B) of Section 271(1)(c) - Decided against assessee.
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2017 (7) TMI 1278 - PUNJAB AND HARYANA HIGH COURT
Refund of TDS in respect of the amount received by them on account of interest awarded under Section 28 of the Land Acquisition Act - acquisition of the agricultural land - Held that:- The TDS is provisional collection of tax by the revenue and is always subject to final determination at the time of filing of the return. The petitioners had received the amount of enhanced compensation and interest thereon. A perusal of Annexures P-3 and P-4 appended by the petitioners clearly shows that tax has been deducted on the element of interest on enhanced compensation and, therefore, would fall under Section 194A of the Act which relates to interest other than "interest on securities".
Examining the issue of taxability of interest under Section 28 of the Act, in THE COMMISSIONER OF INCOME TAX, FARIDABAD VERSUS BIR SINGH (HUF), BALLABGARH [2010 (10) TMI 581 - PUNJAB & HARYANA HIGH COURT], it was held by the Division Bench of this Court that the interest awarded by court on enhanced compensation under Section 28 of the Act was chargeable to tax as income from other sources in the year of receipt.
The tax at source has been rightly deducted and the petitioners can claim the refund, if any, admissible to them by filing the income tax returns in accordance with law - Petition dismissed.
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2017 (7) TMI 1277 - GUJARAT HIGH COURT
Disallowance u/s. 14A - expenditure in terms of section 14A r.w.r. 8D cannot exceed the exempt income itself - HELD THAT:- The assessee had earned exempt income of ₹ 55,604/-. As against that, the Assessing Officer had worked out the disallowance of expenditure under section 14A read with Rule 8D to ₹ 1,02,82,049/-.
The Tribunal, while restricting the disallowance to ₹ 55,604/-, relied on the decision of Delhi High Court in case of Joint Investments (P) Ltd vs. CIT [2015 (3) TMI 155 - DELHI HIGH COURT] holding that disallowance of expenditure in terms of section 14A read with Rule 8D cannot exceed the exempt income itself. Our High Court has also adopted the similar view in case of Commissioner of Income Tax vs. Corrtech Energy Pvt. Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT.]
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2017 (7) TMI 1272 - ITAT MUMBAI
Deduction u/s 54F - assessee holding more than one residential property - assessee contended that it was holding only one house property in the status of individual and joint ownership in another house - CIT-A allowed the claim - HELD THAT:- CIT(A) has granted relief to assessee by placing reliance on many judicial pronouncements where a liberal view has been taken by various courts / authorities as it is well settled that beneficial provisions should be construed liberally.
We find that the ratio of decision in Dr. Smt. P. K. Vasanthi Rangarajan Vs. Commissioner of Income Tax Chennai. [2012 (7) TMI 563 - MADRAS HIGH COURT] squarely applies to the case of the assessee wherein as clearly held that joint ownership of a property could not be held to stand in assessee’s way of claiming exemption u/s 54 of the Act. DR could not point out any contrary decision in revenue’s favor. - Decided against revenue
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2017 (7) TMI 1271 - ITAT AHMEDABAD
Claim for exemption u/s. 11 r.w.s. 12A and section 2(15) denied - Charitable activity - HELD THAT:- CIT(A) observed that the activities of Sabarmati Ashram Gaushala Trust [2014 (1) TMI 1539 - GUJARAT HIGH COURT] are similar to the activities of the appellant and the objects are also similar to the objects of Sabarmati Ashram Gaushala Trust. Therefore, respectfully following the binding decisions, the ld. CIT(A) correctly allowed the claim of exemption.
D.R. could not bring any distinguishing decision in favour of the revenue. Per contra, the ld. counsel for the assessee once again relied upon the decision of the Tribunal in the case of Sabarmati Ashram Gaushala Trust. - Decided in favour of assessee.
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2017 (7) TMI 1269 - ITAT DELHI
Supply of software which are "off the shelf" software - providing software on rental basis - software facilitates related to training used for the exploration/extraction of mineral oils - applicability provisions of Section 44BB - Indo-US DTAA - PE in India - HELD THAT:- Software supply to the foreign company cannot be taxed as royalty - The assessee claimed that these services have been provided in connection with the exploration, and the extraction of mineral oils in India and these revenues should be tax in terms of provisions of Section 44BB.
CIT (A) deleted the additions made by the AO and held that the said additions should be as per the provisions of Section 44BB of the Act, but since there is no Permanent Establishment in India, the assessee cannot be taxed in India at least in A.Y. 2002-03.
This issue has not arose in subsequent years wherein the CIT (A) has rightly held that the same should be taxed as per provisions of Section 44BB of the Act. As regards to the rental of software which was in connection with the exploration/extraction of mineral oils in India, the Assessing Officer was not right by applying 15% of rate by applying decision of Advance Authority Ruling in case of Ishikawajima Harima Heavy Industries Co. Ltd. v. DIT [2004 (10) TMI 87 - AUTHORITY FOR ADVANCE RULINGS] as the facts of the said case is different from that of the present appeals. Thus, for subsequent years the issue of permanent establishment is not in question and hence the applicability of the judgment of ONGC is very much necessary as all these activities which assessee took are coming under the purview of Section 44BB. AO is therefore, directed to tax the income of the assessee as per Section 44BB for A.Y. 2003-04, 2004-05, 2005-06, 2006-07 and 2008-09. Needless to say the assessee be given the opportunity to hear before the Assessing Officer.
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2017 (7) TMI 1266 - ITAT MUMBAI
Treatment of Capital Gain arising out of sale of Shop as Short Term Capital Gain (STCG) - denying the exemption under section 54 - HELD THAT:- In Late Mulya B Dass Vs ITO (2014 (5) TMI 478 - ITAT MUMBAI) the assest was acquired on surrender of tenancy in the year 2005 and sold within 36 months of taking possession of the property, the AO treated the same as STCG, the AO treated the cost of acquisition of the property as nil.
The coordinate bench of the Tribunal remanded the matter to the file of AO with the direction to consider the cost of acquisition as per market value; however no finding was given by Tribunal with regard to claim of Long Term or short Term.
In Ajit M Pendurkar Vs ITO [2012 (12) TMI 1175 - ITAT MUMBAI] the assessee was tenant in the property form the year 1984. On 04.03.2004 by the scheme of the Government the assessee become owner of the property on payment of certain amount. The assessee sold the property on 31.10.2004. The assessing officer treated the gain as STCG as property was sold in less than 36 month. During the appeal before the Tribunal the assessee conceded that the Gain could be treated as STCG. Thus, none of the decision relied by the ld AR for the assessee is helpful to the assessee. CIT(A) is based on factual matrix and well as on legal aspect is correct. Thus, the ground of appeal raised by the assessee is dismissed.
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2017 (7) TMI 1265 - ITAT MUMBAI
Bogus purchases - Held that:- There is no evidence of the actual movement of the goods under dispute. In these circumstances learned Departmental Representative has referred to decision in the case of of N K Industries vs Dy CIT [2016 (6) TMI 1139 - GUJARAT HIGH COURT] wherein 100% of the bogus purchases will held to be added in the hands of the assessee and tribunals restriction of the addition to 25% of the bogus purchases was set aside. The Special Leave Petition against this order along with others has been dismissed by the Hon’ble Apex Court.
Despite the above precedence, find that this is not an appeal by the Revenue and assessee cannot be denied the benefit already granted by the learned CIT(A). Hence uphold the order of the learned CIT(A).
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2017 (7) TMI 1263 - ITAT PUNE
Nature of expenditure - allowability of expenditure on maintenance and upgradation of ERP systems, wherein the assessee was using ERP system and expenditure was incurred on upgradation of the said system - Disallowance of Prime Project expenses and other software development charges net of depreciation - AO had disallowed the said expenses to be capital in nature - HELD THAT:- Issue arose before the Tribunal in assessee’s own case in assessment year 2009-10 and the Tribunal had directed the Assessing Officer to verify the claim of assessee. Following the same parity of reasoning, we direct the Assessing Officer to verify the claim of assessee in this regard that the expenditure has been incurred on upgradation of ERP system and allow the same in accordance with the ratio laid down by the jurisdictional High Court in UHDE INDIA P. LTD. [2013 (12) TMI 309 - BOMBAY HIGH COURT]. Thus, the grounds of appeal raised by the assessee allowed.
TPA - MAM selection - application of CPM method adopted by the TPO - Whether domestic market segment and the export market segment were distinct and not comparable? - plea of assessee before us is that TNNM method should be applied as the most appropriate method after aggregation approach applied by the assessee in the equipment division - HELD THAT:- Tribunal in assessee’s own case in assessment year 2008-09 held that CPM method should not be applied and TNNM method is to be applied as most appropriate method. We apply the parity of reasoning as in assessment year 2009-10 to decide the issue in favour of the assessee. The TPO is thus, directed to exclude five concerns i.e. Axtel Industries Ltd., Anup Engineering Ltd., Thermax Ltd., Walchandnagar Industries Ltd. and GMM Pfaudler Ltd. and after excluding the said comparables, the average margin of balance comparables work to 14.01% against which, the assessee has shown the margins of 25.27%. Hence, no adjustment is to be made on account of arm's length price of international transactions. The ground of appeal No.1 raised by the Revenue is thus, dismissed.
Addition u/s 14A - CIT(A) deleted the said addition accepting the plea of assessee that no satisfaction was recorded by the Assessing Officer before making the aforesaid addition - HELD THAT:- In the facts of the present case, the Assessing Officer has failed to record any satisfaction before making the aforesaid disallowance and in the absence of recording of satisfaction, the provisions of section 14A of the Act cannot be invoked as the Assessing Officer has failed to come to a finding as to why the disallowance made by the assessee under section 14A of the Act at ₹ 3 lakhs is incorrect. Accordingly, we uphold the order of CIT(A). See KALYANI STEELS LTD. VERSUS ADDL. COMMISSIONER OF INCOME TAX [2014 (2) TMI 661 - ITAT PUNE] - Decided in favour of assessee
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2017 (7) TMI 1261 - ITAT PUNE
Eligibility for deduction claimed u/s 80IA(4) - assessee is a State Government undertaking as set up Inland Container Depot (ICD) and Container Freight Station (CFS) for handling bonded warehouse on the leasehold land - AO disallowed the claim on the ground that the assessee has failed to furnish a certificate from the concerned port authorities certifying that the structure at the port for storage, loading and unloading etc. form part of Port - Held that:- As decided in assessee's own case when the proposal to set up a CFS has been accepted by the Government, there is no requirement of either a specific agreement as contende. Nor can it be said that by virtue of any certification of the JNPT and its subsequent withdrawal the position undergoes any change. Once the facility is nothing but a infrastructural facility set up and within the precincts of the port, then, considering and even otherwise having considered its proximity to the sea port and its activities that we have no doubt and it can be safely concluded that the deduction admissible under sub-section (4) of section 80-IA can be claimed by both the ICDs and CFSs.- Decided in favour of assessee
Disallowance u/s. 43B - land revenue charges which have been bifurcated under two heads and includes prior period expenses - Held that:- As during the year under consideration the said sum has been reversed and its reference can be found in annexure IX of tax audit report for the year and hence, as the entire amount is reversed it automatically amounts to offering income in the year of reversal by claiming the expenses less to that extent. The aforesaid fact becomes more evident from the ledger extract of prior period expenses, ledger extract of land revenue charges and the outstanding expenses account including the journal entries of the said reversal. The Assessing Officer has disallowed the aforesaid amount without making any enquiry or verification in this regard. The appellant during the year in any case has already disallowed the statutory payments not paid during A.Y. 2011-12 as is evident from the computation of income (on account of various statutory heads). Thus, the disallowance made by the Assessing Officer is not in accordance with the fact of the case - Decided against revenue
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2017 (7) TMI 1258 - ITAT CHENNAI
Concealment Of interest income for taxation - difference in interest received as per Form No. 26AS and interest disclosed in the return in the computation of taxable total income - Held that:- A credit in one's bank account amounts to receipt by the account holder. Cash system of accounting does not mean that it should be cash received by the assessee. A credit to bank account is equally a receipt. It is true that if such interest is credited in the accounts of any third party, such interest cannot be taken as receipt. But interest from the bank is different, because the bank holds money on behalf of the account holder.
Even where bank collects cheques, dividends, bills, promissory notes and the like for credit to customer's account, the bank is acting as the agent of the customer. The relationship of the banker and the customer is not necessarily different as between current account and fixed deposits. Since the assessee can draw the fixed deposit amount on maturity, the interest receivable on maturity shall be treated as “received”, though it was not drawn. The interest credited to the assessee’s account during the financial year 2009-10 by various Banks/institution, with respect to which TDS was deducted and therefore, the same has to be assessed as income in the hands of the assessee - decided against assessee.
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2017 (7) TMI 1257 - ITAT KOLKATA
Benefit of deduction u/s 54F - Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house - Long term capital gains - Reliance of ‘full value of consideration’ as mentioned in section 50C - Held that:- Language of section 54F explaining the meaning of ‘net consideration’ is very clear expecting an assessee to reinvest only the actual consideration received by the assessee and not the deemed value of consideration u/s 50C. The deeming fiction as provided in section 50C in respect of the words ‘full value of consideration’ is to be applied only to section 48 and therefore, meaning of ‘full value of consideration’ as referred to in Explanation to Section 54F(1) is not governed by the meaning of the words ‘full value of consideration’ as mentioned in section 50C. The provisions of section 54F of the Act are to be looked independently by ignoring section 50C of the Act.
CIT-A had rightly relied on the decision of CIT vs Jagriti Agarwal (2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT) that even if the assessee had deposited the net sale consideration in capital gain account scheme within the due date prescribed u/s 139(4) of the Act for reinvestment in another property, then the assessee should be treated as having satisfied the basic conditions of claiming deduction u/s 54F.
The assessee had filed his return of income on 20.3.2012 which is well within the time limit prescribed u/s 139(4) and it is not in dispute that before the date of filing of such return, the assessee had duly deposited the sale consideration in capital gains account scheme. Hence the assessee would be entitled for deduction u/s 54F for the reinvestment made in the new property. There was no occasion for the AO to look into the total amount of reinvestment made by the assessee in new property in terms of section 54F - remand this issue to the file of the AO for the limited purpose of examination of reinvestment of ₹ 6 crores (actual sale consideration received) in new residential property and re-compute the long term capital gains accordingly. - Appeal of revenue allowed for statistical purposes.
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2017 (7) TMI 1255 - ITAT CHENNAI
Disallowance u/s 14A r.w.r 8D - Held that:- To workout the disallowance under Rule 8D, the Assessing Officer has to first examine the accounts of the assessee and the correctness of the claim and then, if having regard to such accounts and the claim, he is not satisfied with either the correctness of the claim made by the assessee or made a claim that no expenditure at all has been incurred for the purpose of earning the exempt income, then only he can resort to Rule 8D.
In the present case, AO has straightaway proceeded to apply Rule 8D for the purpose of disallowance under section 14A without satisfying or complying with the mandatory requirement of section 14A(2) or Rule 8D(1). Once the Assessing Officer has failed to comply the statutory requirement, then he cannot proceed to make the disallowance under section 14A(1) of the Act and accordingly, the disallowance made by the Assessing Officer is reduced to the extent of ₹.2,64,14,439/- as was voluntarily offered by the assessee. Hence, the ground raised by the assessee is partly allowed.
Addition u/s 14A - investments with regard to administrative and managerial activities - Held that:- In the present assessment year, it was stated to have made fresh investment of ₹.20 crores, which are also capable of earning dividend income, as per the details under ‘Note on issues’ and not admitted any expenses towards administrative and managerial. The Assessing Officer has not called for any specific explanation on the above facts. Under the above facts and circumstances, we direct the assessee to work out the expenditure component towards administrative and managerial aspect and so that the same shall be disallowed in the computation of income of the assessee. Accordingly, the ground raised by the assessee is partly allowed.
Disallowance u/s 43B - employers contribution to other funds for which a provision is made but not completely paid and thus, attracts disallowance - Held that:- As assessee has submitted that the assessee itself has disallowed the expenditure in the computation of income, and therefore, he has pleaded that the Assessing Officer cannot make double disallowance, which was already disallowed by the assessee we direct the Assessing Officer to verify as to whether the assessee has disallowed the employer’s contribution to other fund/leave salary paid, etc. in its account and if is found that the assessee has disallowed in its account, the same cannot be again disallowed by the Assessing Officer.
Disallowance of provision for enhanced compensation - Held that:- As per trading account of the assessee, filed before us, vide cheque No. 139189 dated 29.03.2012, the assessee has made payment of ₹.12,500/- for the land acquired for PCP in Kattupalli Village. Similarly, vide cheque No. 139189 dated 30.03.2012 and the assessee is stated to have made payment of ₹.1,4074,027/- for the land acquired for PCP in Kattupalli Village. Since there is no possibility to issue one cheque on two different dates with different amounts, the same need to be verified. Further, no payment details are available with regard to the amount stated to have paid to Petrochem Park Project of ₹.2,11,74,945/-, which required to be furnished by the assessee before the Assessing Officer for verification. If the above payments have been made by the assessee against the provisions for enhanced compensation, the Assessing Officer is directed to allow the expenditure after verification of records, which is subjected to the decision of the Tribunal on the issue of allowance of provision for enhanced compensation of ₹.25.66 crores as was not allowed in the assessment year 2009-10 by the Assessing Officer and the same is under adjudication by the Coordinate Benches of the Tribunal. Hence, the ground raised by the assessee is allowed for statistical purposes.
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2017 (7) TMI 1252 - ITAT DELHI
Deduction u/s 10A/10AA - Held that:- If the first sale is effected after the unit is recognized as STP, then the assessee is entitled to benefit of sec 10A even though the unit started production before it become a STP unit. In the instant case, the assessee has demonstrated that first invoice has been raised after it has obtained the approval of STPI. Thus, the issue of claim of exemption u/s 10A is covered by the decisions of this Bench in the case of M/s Infosys Technologies ltd [2005 (7) TMI 667 - ITAT BANGALORE]. Following that order, we hold that the Id. CIT(A) was justified in allowing exemption u/s 10A for units 2, 3 and 4. In respect of unit 4, the deduction is held as admissible as the first invoice is raised after STPI approval. - Decided in favour of assessee.
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