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Income Tax - Case Laws
Showing 1 to 20 of 819 Records
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2017 (9) TMI 2024 - ITAT CHENNAI
Denial of Additional depreciation claim - plant and machinery used for a period less than 180 days - Assessee had claimed only 50% of the additional depreciation for which it was eligible, since the new plant and machinery on which such depreciation was claimed was put to use for a period less than 180 days in the previous year but Claim of the assessee for the balance additional depreciation for the impugned assessment year was declined - HELD THAT:- Issue in our opinion is squarely covered in favour of the assessee by the judgment of Jurisdictional High Court in the case of CIT vs. T.P. Textiles (P) Ltd [2017 (3) TMI 739 - MADRAS HIGH COURT] wherein as held upon a plain reading of the unamended provision, it could not be said that the Assessee could not claim balance depreciation in the A.Y., which follows the A.Y., in which, the machinery had been bought and used, albeit, for less than 180 days’’.
We, are therefore of the opinion that assessee was eligible for claiming balance 10% of the depreciation in the impugned assessment year. AO is directed to allow such claim. Decided in favour of assessee.
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2017 (9) TMI 2019 - ITAT MUMBAI
Allowable business expenditure - expenditure on gradation & certification of diamonds - absence of correlation of the expenditure on gradation & certification of diamonds with the sale and stock of diamonds - CIT (A) restricting the disallowance of such expenditure to 30% - HELD THAT:- As pointed out by the CIT(A) the assessee has produced the party wise details of grading and certification charges along with ledger statements. The payments were made after deducting tax at source.
CIT(A) has rightly pointed out that grading and certification are the essential part of business and how much expenditure was required to be made on certification and grading was to be decided by the assessee.
AO has not made any comparison to falsify the claim of the assessee. Since, payments to the parties are not in dispute, ad hoc addition cannot be made without establishing that either the transaction was sham or the expenditure was made for the purposes other than the business of the assessee. Hence, we do not find any reason to interfere with the order passed by the Ld. CIT(A). The order passed by the Ld. CIT(A) is upheld and all the grounds of appeal of the revenue are dismissed.
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2017 (9) TMI 2018 - ITAT MUMBAI
Estimation of income - bogus purchases - HELD THAT:- We notice that the assessee has purchased various items from the suspicious dealers and the same was consumed in various orders. Accordingly it was submitted that the assessee could not maintain stock register. As already observed that, in the absence of stock register, it would be difficult to prove the consumption of materials. Hence we are unable to understand as to how the CIT(A) has held that the assessee has proved the consumption.
In our view, the submission of the assessee that it would be difficult to maintain stock register in this kind of trade cannot be rejected altogether. Hence there is merit in the view taken by Ld CIT(A) that the profit element embedded in the impugned purchases alone should be assessed to tax.
Since the suppliers have accepted that they have not actually supplied goods, the natural corollary is that the assessee might have purchased goods from some other source. In that case the inference is that the assessee might have made profit in such purchases by inflating the purchase bills. In fact, it is the case of the sales tax department that the suspicious dealers have not paid VAT tax. Hence there is a possibility that the assessee might have saved VAT tax and also obtained some discount in purchase price. The vat rates applicable to the purchases made by the assessee are 5% and 12.5% depending upon the product.
We notice that the G.P rate of the assessee has also fallen down, i.e., in AY 2008-09, the G.P rate was shown at 24.94% and the same has fallen down to 23.76% in AY 2009-10, to 17.24% in AY 2010-11 and to 21.66% in AY 2011-12. In AY 2012-13, the G.P rate has again risen to 27.73%. The reduction in G.P rates, inter alia, supports the case of the revenue that there might be inflation of purchase rates.
Thus the profit is generally made at Gross profit level and hence the Ld CIT(A) was not justified in adopting N.P rate for sustaining the addition - Addition may be sustained at 12.50%. Accordingly, we modify the orders passed by Ld CIT(A) and direct the AO to sustain addition to the extent of 12.50% of the value of alleged bogus purchases in all the three years under consideration. Appeals of the revenue are partly allowed
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2017 (9) TMI 2016 - ITAT BANGALORE
TDS u/s 194A - Disallowance u/s 40(a)(ia) - non-deduction of tax in respect of interest paid by the assessee co-operative bank - assessee contended that the assessee being co-operative society involved in the business activity of banking is exempt from TDS on interest payment to the members of the assessee-society - HELD THAT:- As decided in in assessee's own case for the Assessment Years 2010-11 & 2011-12 [2015 (7) TMI 614 - ITAT BANGALORE] wherein as held that Assessee which is a cooperative society carrying on banking business when it pays interest income to a member both on time deposits and on deposits other than time deposits with such co-operative society need not deduct tax at source under section 194A by virtue of the exemption granted vide clause (v) of sub-section (3) of the said section. Decided in favour of assessee.
Amortization of premium/depreciation provided in respect of investment in Government securities Held to Maturity (HTM) - whether allowable expenditure? - HELD THAT:- Following the decision of Sir M. Visweswaraya Co-operative Bank Ltd [2012 (9) TMI 774 - ITAT, BANGALORE] we hold and direct that the assessee's claim for amortization of premium on investments in Govt. Securities is to be allowed. Decided in favour of assessee.
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2017 (9) TMI 2013 - DELHI HIGH COURT
TP Adjustment - comparable selection - omission by the ITAT of Celestial Labs Ltd. from the list of comparables - HELD THAT:- This Court finds that the ITAT has itself undertaken a detailed analysis of the functional profile of the tested company vis-a-vis that of the comparable and has given cogent reasons for excluding the said comparable. The Court is not persuaded to hold that this factual finding is perverse. It accordingly declines to frame a question on this issue.
Nature of expenses - Expenditure incurred on software licenses - capital or revenue expenditure - HELD THATR:- The decision of this Court in CIT v. Asahi India Safety Glass Ltd [2011 (11) TMI 2 - DELHI HIGH COURT] answers this very issue against the Revenue. The Supreme Court dismissed the Special Leave Petition filed by the Revenue against the said decision. [2012 (7) TMI 1075 - SC ORDER] In view of that matter, the Court declines to frame a question on this issue as well.
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2017 (9) TMI 2007 - ITAT COCHIN
Nature of expenses - expenditure incurred by the assessee for renovation of the lease hold premises for setting up a new show room - revenue or capital expenditure - HELD THAT:- We noted that the said issue is duly covered in favour of the assessee in assessee’s own case [2014 (6) TMI 80 - KERALA HIGH COURT].
The only submission of Learned D. R. was that the appeal has been filed as the Revenue has gone in appeal by way of SLP before Hon'ble Supreme Court against the decision of Hon'ble High Court in assessee’s own case for assessment year 2007-08. In our view, merely because the Revenue has gone in appeal against the decision of Hon'ble High Court in assessee’s own case by which the issue is duly covered in the earlier year, we cannot take the view that the issue is not covered by the decision of Hon'ble High Court. We, therefore, dismiss the ground taken by the Revenue. Consequently, the appeal filed by the Revenue stands dismissed.
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2017 (9) TMI 2002 - ITAT MUMBAI
Estimation of income - Bogus purchases - onus to substantiate the purchases - HELD THAT:- As there could be no sale without purchase / consumption of material since assessee was engaged as real estate developers, which is material intensive. The sales turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. At the same time, the assessee could not produce any confirmations from any of the 25 alleged bogus suppliers and further notices u/s 133(6) could not be served due to non-availability of any of the party at the given address, which cast serious doubt on assessee’s claim.
The addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against bogus purchases. We estimate the same @8% keeping in view the assessee’s nature of business and overall facts of the case. Accordingly, we sustain the addition to the extent of 8% of bogus purchases - Revenue’s appeal stands partly allowed.
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2017 (9) TMI 2001 - GUJARAT HIGH COURT
Unexplained cash credit - loan amount availed by the assessee from the sister concern - HELD THAT:- From the materials on record, CIT (Appeals) and Tribunal both had come to the conclusion that the assessee had produced the copy of PAN card, address confirmation, copy of the return and the bank statements of the payee for the present assessment year as well as in the earlier assessment year where such an issue had cropped up. Essentially, Commissioner of Income Tax (Appeals) as well as the Tribunal held that the assessee established the genuineness of transaction, creditworthiness of payee and the source of the payment. The issue hinges on appreciation of material on record. No question of law arises.
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2017 (9) TMI 1999 - ITAT MUMBAI
Income taxable in India - Income received for executing the Offshore Supply Contract - offshore Supply contracts were 'carried and concluded' outside India - HELD THAT:- The issue stands covered in favour the assessee by the orders of the Tribunal for the AY. s. 2007-08, 2008-09, 2011-12 [2017 (4) TMI 758 - ITAT MUMBAI] as held since, supply of materials and equipments under the off-shore supply contracts were carried out and concluded outside India, the receipts from offshore supply contracts cannot be deemed to accrue or arise in India as per section 9(1) and DTAA provisions and accordingly, not chargeable to tax. The receipts thereof do not form part of receipts for the purpose of computational provisions of section 44BBB. Explanation-4 could not overcome the limitation imposed by Explanation-l(a) to section 9(i)(i) and hence, the impugned income do not form part of business receipts for computation of income u/s 44BBB . Decided in favour of assessee.
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2017 (9) TMI 1998 - ITAT COCHIN
Deduction u/s 80P(2)(a)(vi) denied - income of the society has nothing to do with the collective disposal of the labour of its members but is entirely from out of the price realised by it for the sale of toddy through the society's own toddy shops - assessee purchase of toddy from its members and non- members on payment of the agreed remuneration and its sale through the toddy shops established by the society itself - income of the society has nothing to do with the collective disposal of the labour of its members but is entirely from out of the price realised by it for the sale of toddy through the society's own toddy shops - HELD THAT:- Respectfully following the said decision of Hon'ble High Court in assessee’s own case for assessment year 2008-09 and 2009-10 [2014 (1) TMI 1080 - ITAT COCHIN] we do not find any illegality or infirmity in the order of the CIT(A) denying the deduction to the assessee under section 80P(2)(a)(vi) of the Act. We, therefore, confirm the order of CIT(A) dismissing the appeal of the assessee in both the assessment years.
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2017 (9) TMI 1994 - ITAT MUMBAI
Loss from Jeevan Suraksha Fund - income includes loss thus the loss form Jeevan Suraksha Fund can be set off against taxable income of the assessee corporation despite the fact that Jeevan Suraksha is covered u/s 10(23AAB) - Whether non-obstante clause in section 44 of the Act is not extended to section 10(23)AAB? - HELD THAT:- Hon'ble High Court [2011 (8) TMI 47 - BOMBAY HIGH COURT] clearly held that the object of insert in section 10(23AAB), as per Board Circular No.762 dated 18/02/1998, was to enable the assessee to offer attractive terms to the contributors. The order of the Tribunal with respect to section 10(23AAB) that the loss incurred from the pension fund like Jeevan Suraksha Fund has to be excluded while determining the accrual surplus from the insurance business u/s 44 of the Act cannot be faulted, resultantly, the issue was decided in favour of the assessee. We don’t find any infirmity in the conclusion of the First Appellate Authority. Thus, the impugned grounds are dismissed.
Dividend income of the assessee hold as exempt u/s 10(34) - As identical issued is covered by the decision in the case of ICICI Prudential Insurance Co. Ltd. [2012 (11) TMI 13 - ITAT MUMBAI] therefore, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), resultantly, this ground of the Revenue is also fails.
Whether negative reserves has an impact of reducing the taxable surplus, as per form-1 therefore, corresponding adjustment for negative reserves need to be made to arrive a taxable surplus? - HELD THAT:- Issue decided in favour of assessee as relying on own case High Court vide order dated [2015 (9) TMI 1718 - BOMBAY HIGH COURT]. Assessing Officer had no power to modify its accounts after Actuarial valuation is done.
Addition made on account of interim bonus paid - Whether no deduction on account of interim bonus is required to be made from the total surplus as per the regulation of IDRA, the provisions of Act are not applicable in the case of the assessee? - HELD THAT:- If section 28 of the Life Insurance Corporation Act, 1956 is analyzed, with respect to surplus from life insurance business and its utilization, it is clear that 95% of such surplus or such higher percentage thereof, as the central government may approve shall be allocated to or reserve for life insurance policy holders of the corporation and after meeting the liability of corporation, if any, which may arise u/s 9, the reminder shall be paid to the Central Government or if the Central Government so direct, shall be utilized for such purposes and in such manner as the government may determine. Considering the clear language of the section, we direct the Assessing Officer to examine the factual matrix/utilization of the surplus and decide in accordance with law. The assessee be given opportunity to substantiate its claim. Thus, this ground is allowed for statistical purposes.
Applicability of provisions of section 115-O r.w.s 115Q - HELD THAT:- The Tribunal in a later decision dated 10/07/2013 [2013 (7) TMI 1204 - ITAT MUMBAI] followed the decision of Assessment Year 2006-07 - No contrary decision was brought to our notice by the Revenue, thus, we find no infirmity, in the order of the First Appellate Authority, on this issue also, therefore, this ground is dismissed, resultantly, the appeal of the Revenue is partly allowed for statistical purposes.
Addition made on account of income from shareholders funds credited directly to the shareholders account - HELD THAT:- As decided in assessee own case [2017 (3) TMI 1904 - ITAT MUMBAI] payment made by the assessee to the Central Government could not be treated as dividend within the ambit of definition clause 2(22) of the Act, that provisions of section 115-O of the Act were not applicable, that assessee could not be declared as assessee in default u/s.115 Q of the Act. In our opinion, in the case relied upon by the AR of the assessee, question of taxability of particular items of income under the head income from other sources was not before the Tribunal. Therefore, upholding the order of the FAA we decide Ground of appeal against the assessee.
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2017 (9) TMI 1988 - ITAT HYDERABAD
Reopening of assessment u/s 147 - Period of limitation - Applicability of provisions of section 150(1) - HELD THAT:- As in the order passed by the ITAT for the AYs 2001-02 to 2004-05 [2017 (2) TMI 854 - ITAT HYDERABAD] the Tribunal decided the matter by holding that section 150(1) of the Act can be invoked only when there is a direction to bring the balance of interest to tax in the earlier assessment years whereas there is no such direction in the order passed by the ITAT for the A.Y. 2006-07. It deserves to be noticed that section 150(1) refers to “finding or direction”.
The Division Bench of the ITAT, while disposing of the appeal for the AYs 2001-02 to 2004-05, appears to have been of the view that in the absence of any specific direction section 150(1) cannot be invoked, probably by assuming that there is no difference between the expression “finding and direction”. Since this is an order passed by the Division Bench and that too in the assessee’s own case in the earlier years, respectfully follow the same to hold that the provisions of section 150(1) were wrongly invoked by the Assessing Officer. Under these circumstances, the reopening of the assessment is treated as bad in law and the assessment is hereby set aside. Appeal filed by the assessee is allowed.
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2017 (9) TMI 1987 - RAJASTHAN HIGH COURT
Denying the exemption claimed u/s 54EC - Capital gain not to be charged on investment in certain bonds - Learned counsel contended that he is entitled for the benefit of the investment which has been made in the subsequent date - whether word used is ‘whole’ and the two investments which have been made are within six months and the whole capital gain is invested in two different financial years? - HELD THAT:- Taking into account the object of Section 54EC is to give benefit to the assessee to invest in the Government bond and where proviso came for the first time on 01.4.2007 providing benefit of 50 lacs each of the transaction of the property the view taken by the Tribunal is just and proper.
We are not in agreement with the view taken by the Madras High Court [2014 (11) TMI 54 - MADRAS HIGH COURT]. The benefit is qua one transaction. It cannot have for different financial years. The purpose is to have investment for benefit of long term capital and once there is interpretation put forward by the basic connotation of law, in that view of the matter, we are affirming the view of the Tribunal. Decided against the assessee.
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2017 (9) TMI 1986 - DELHI HIGH COURT
TP Adjustment - intra-group services - issue to be decided by the ITAT by giving reasons was whether “the issue as to the payment on account of other group charges made by the Assessee to its AE for services rendered was to be determined by the TPO/DRP or it was to be determined by the AO under Section 37 (1) of the Act?” - Whether the ITAT erred in not deciding the issue before it instead of remanding it to the AO/TPO - HELD THAT:- The Court is of the view that remanding the matter to the AO again, when all the relevant material on record was available, was not warranted. Repeatedly remanding the matter results in delay in resolution of the issue arising in a particular AY. A remand would be necessary only where the relevant facts necessary for deciding the issue are not available.
In the circumstances, the impugned order of the ITAT is set aside and the Assessee’s appeal for AY 2007-08 is restored to the file before the ITAT for a decision on merits, in accordance with law, on the above issue regarding the payment of group charges by the Assessee to its AE. The appeal will be decided on the basis of the documents already on record before the ITAT.
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2017 (9) TMI 1982 - ITAT MUMBAI
Disallowance of bad debts written off - AO disallowed assessee’s claim in respect of bad debts written off on the ground that there was a credit balance as on 31.03.2009 in the reserve for provision of bad debts - AO was of the view that the provisions of Section 36(1)(vii) r.w.s. 36|(1)(viia), a claim of bad debts can only be allowed if the same is in excess of the provision for bad debts, therefore, disallowed the said claim - HELD THAT:- The deduction under section 36(1)(vii) is available in respect of bad debts written off subject to the fulfilment of the conditions specified under section 36(2). Section 36(1)(viia) provides for the treatment of provisions for bad and doubtful debts of an amount not exceeding 7.5% of the total income (computed before making any deduction under this clause and Chapter VIA) and an amount not exceeding 10% of the aggregate average advances made by the rural branches of such banks.
The provisions of Section 36(1)(vii) and section 36(1)(viia) are distinct and independent. The provisions of Section 36(1)(viia) are applicable w.e.f. A.Y. 2007-08 to cooperative bank also. Therefore any provision allowed in A.Y. 2007-08 onwards in the case of a cooperative bank under clause (viia) will be hit by this amendment but a provision standing in the account of a cooperative bank prior to 01.04.2006 will not come in the ambit of section 36(1)(viia) and in our opinion if any bad debts written off for which a provision has been created prior to 01.04.2006 will be entitled for deduction under section 36(1)(viia) if the conditions stipulated under section 36(2) are satisfied. From the chart as appearing on page 15 it is apparent that the assessee had written off the bad debts amounting to ₹ 92,45,827/- during the year. It is not related to the provisions in respect of which the assessee has claimed deduction in the earlier assessment year. We, therefore, set aside the order of the CIT(A) on this issue and delete the said addition. Thus, this ground stands allowed.
Disallowance being excess claim of depreciation on account of want of proof for additions during the year - AO disallowed depreciation on addition of certain fixed assets on the ground that supporting evidences in the form of bills, etc. were not filed by the assessee - HELD THAT:- We noted that the assessee has filed copies of the bills and vouchers before the CIT(A) by making an application dated 19.01.2015 under Rule 16A but the CIT(A) did not accept the additional evidences. We, therefore, in the interest of justice and fair play to both parties set aside the order of the CIT(A) and restore this issue to the file of the AO with the direction that the assessee shall file copies of these bills and evidences pertaining to the addition to fixed assets in respect of which depreciation has been disallowed before the AO. The AO shall, after verifying the genuineness of purchases, allow depreciation to the assessee. In case the assessee is not able to file the direct evidences the AO is directed to verify the indirect evidences in the form of confirmation of purchases, etc. Thus, both these grounds are allowed for statistical purposes.
Claim of deduction by the assessee under section 36(1)(viia) as per the provisions of income tax law, i.e. 7.5% of the total income before deduction to be allowed under Chapter VIA of the Income Tax Act - HELD THAT:- It is not denied that the assessee is a cooperative bank, therefore in view of provisions of Section 36(1)(viia), in our opinion, the assessee shall be entitled for the deduction @7.5% of the total income (computed before making any deduction under this clause and Chapter 6A) and an amount not exceeding 10% of the aggregate average advances made by rural branches of such banks computed in the prescribed manner in respect of any provision for bad and doubtful debts made by the assessee. We accordingly direct the AO to allow the deduction to the assessee in respect of any provision for bad and doubtful debts made by the assessee during the year in accordance with the provisions of Section 36(1)(viia). Thus, this ground is allowed for statistical purposes.
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2017 (9) TMI 1981 - ITAT PUNE
Treatment of profits arising on sale / redemption of investments which also includes the amount received on profits on account of amortization - HELD THAT:- The issue arising in the present ground of appeal similar to the issue in earlier years and the Assessing Officer had also disallowed the claim of assessee, following the deletion made in earlier years. However, following the same parity of reasoning, we hold that while computing income from business in the hands of assessee under section 44 of the Act and First Schedule of the Act, profit / loss on sale / redemption of securities or investments including the amortization of securities is to be reduced from taxable income of assessee. The grounds of appeal No.1.1 and 1.2 raised by the assessee are thus, allowed.
Disallowance under section 14A of the Act read with Rule 8D - HELD THAT:- Tribunal after considering the issue held the same to be identical to the issue before the Tribunal in assessment year 2003-04 and following the same parity of reasoning deleted the disallowance made by the Assessing Officer and the DRP but confirmed the disallowance made by the assessee under section 14A of the Act at ₹ 49,42,631/-. Following the same parity of reasoning, we direct the Assessing Officer to delete the addition worked out under section 14A of the Act except to the extent of ₹ 2,43,836/-, which has been suo motu disallowed by the assessee in the computation of income.
Disallowance u/s 14A of the Act in respect of profits and gains on sale/redemption of investments claimed as non taxable - HELD THAT:- In view of our order holding that the provisions of section 14A are not applicable, then the same even applied for income claimed as exempt under section 10 of the Act. Hence, the grounds of appeal No.1 to 3 raised by the Revenue are dismissed.
Disallowance made u/s 40(a)(i) in respect of re-insurance premium paid to Allianz SE, Germany - HELD THAT:- We find that the Tribunal in assessment year 2008-09 [2020 (1) TMI 1566 - ITAT PUNE] has elaborately discussed the issue and had decided the same. The Tribunal reversed the findings of DRP and held that the assessee was entitled to claim the deduction on account of reinsurance premium of ₹ 62.7 crores paid to the Germany company. We find that the issue raised in the ground of appeal No.4 is identical to the issue before the Tribunal and following the same parity of reasoning which are not being reproduced for the sake of brevity, we direct the Assessing Officer to allow the claim of assessee with regard to reinsurance premium of ₹ 69.86 crores paid to the Germany company. The ground of appeal No.4 raised by the assessee is thus, allowed.
Disallowing risk inspection charges for want of purchase orders - HELD THAT:- The issue arising in the present appeal before us is identical to the issue before the Tribunal in assessment year 2008-09. Mere absence of purchase orders would not disentitles the assessee from the claim of risk inspection charges. However, we find merit in the plea of assessee that in the absence of any adverse evidences collected during the year, no disallowance is to be made in the hands of assessee in the instant assessment year. The assessee has further filed purchase orders by way of additional evidence before us. However, in the entirety of the ratio laid down in assessee’s own case in assessment year 2008-09, absence of purchase orders would not disentitles the assessee to claim the said expenditure. Accordingly, we allow the claim of assessee in entirety. The ground of appeal No.5 raised by the assessee is thus, allowed.
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2017 (9) TMI 1979 - ITAT MUMBAI
Penalty u/s 271(1) (c) - estimation of income on bogus purchases - assessee argued additions has been made on and estimate basis and that in case of estimation no penalties leviable - HELD THAT:- Perusal of assessment order reveals that the assessing officer, while passing the assessment order under section 143(3) rws 147, made the addition on the basis of estimation. The assessing officer made addition @ 25% of the alleged bogus purchases. The revenue has not disputed that additions were made merely on the basis of estimation. It is settled law that no penalties is leviable under section 271(1)(c) for ad hoc /estimated additions.Accordingly, we are of the opinion that this is not a fit case for levy of penalty. In the result the grounds of appeal raised by the assessee is allowed.
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2017 (9) TMI 1976 - ITAT KOLKATA
Exemption u/s 11 - cancelling the registration of the Appellant assessee trust u/s 12AA(3) on illegal/money laundering activities carried on by the assessee - bogus donation was ascertained on the basis of the statement recorded u/s. 131 of the Act of the Director of the company - HELD THAT:- There is no evidence brought on record to show any connection between those brokers and the assessee. In the absence of such corroborative evidence, it is not possible to come to any conclusion that the assessee indulged in money laundering and that the donation received by it was a bogus donation. In fact on identical facts this Tribunal in the case of Sri Mayapur Dham Pilgrim and Visitors Trust [2017 (5) TMI 1486 - ITAT KOLKATA] came to the conclusion that cancellation of registration u/s 12AA of the Act cannot be sustained.
Cancellation of registration granted to the assessee u/s 12A of the Act cannot be sustained and the impugned order is hereby quashed. The appeal of the assessee is accordingly allowed.
Donation to assessee is bogus then the amount of bogus donation will not be eligible for exemptions u/s 11 - The registration certificate issued u/s 12AA of the Act cannot be cancelled as long as the objects of the trust are within the provisions of law. The objects/ byelaws of the trust are placed on pages 1 to 12 of the paper book and on the basis of same objects the assessee was given registration certificate u/s 12AA of the Act. While holding so, we find support & guidance from the judgment of Hon’ble High Court of Punjab & Haryana in the case of CIT Vs. Apeejay Education Society [2015 (4) TMI 303 - PUNJAB & HARYANA HIGH COURT]
In the instant case the assessee is a charitable trust duly constituted as Charitable Trust under a Deed of Trust as a Public Charitable Trust for imparting education which is a “Charitable Purpose” u/s. 2(15) of the Income Tax Act. The trust duly applied for registration u/s. 12AA of the IT Act before the Director of Income Tax (Exemption) in conformity with rule 17A and submitted Form No. 10A together with other requisite documents. The Director of Income Tax (Exemption) after verification of documents and after being satisfied about the object of the trust and genuineness of its activities granted registration effective from 11.09.1979 vide order No. T-81/WB.VII of 1979-80 dated 11.09.1979
CIT(Exemption) before granting the registration certificate shall conduct necessary enquiries as he thinks fit in order to satisfy himself about the genuineness of activities of the trust. Once the ld CIT(Ex) is satisfied with the genuineness of the activities then he will grant the registration certificate. In the instant case before us, we find that the activities of the trust have not been doubted except the donation received by the assessee from two parties. Thus in our view at the most the exemption u/s 11 of the Act will be denied to such donation. Thus, in such circumstances the registration u/s 12A of the Act cannot be cancelled.
We find that the activities of the trust in relation to its education activities have not been doubted and on the basis of same activities registration u/s 12AA of the Act was awarded to the assessee. Simply the assessee has received donation from some parties which are involved in the bogus transactions cannot be the basis for the denial of the registration certificates as discussed above. Appeal of assessee allowed.
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2017 (9) TMI 1974 - ITAT MUMBAI
Addition u/s 68 - Discharge of burden of proof - HELD THAT:- The assessee has furnished written submissions and therein furnished the details of evidences furnished by it in order to discharge the initial burden of proof placed upon it.
The assessee has discharged the initial burden of proof in this year. Accordingly, consistent with the view taken by the co-ordinate bench in AY 2006-07 in the case of Netscape Software P Ltd. [2012 (5) TMI 486 - ITAT, MUMBAI] we uphold the order passed by Ld CIT(A) - Appeal filed by the revenue is dismissed.
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2017 (9) TMI 1973 - ITAT DELHI
Addition u/s 14A - Mandation of recording of satisfaction - assessee company did not specifically pointed out any expenditure which is attributable to exempt income - CIT-A deleted the addition - HELD THAT:- As carefully perused the computation of total income and we found that there is no exempt income earned by the assessee during the year. Further more, the expression given by the assessee before the Ld. assessing officer that investment made by the assessee were only ₹ 1 5652 9018/– whereas the shareholder’s funds available with the assessee are ₹ 2 6275 1170. Therefore, the amount of investment made by the assessee for earning tax-free income are much more than the shareholders fund available with it.
AO has not recorded any satisfaction with respect to the explanation of the assessee that no expenditure has been incurred by it and which is demonstrated by showing that the amount of shareholders fund available with the the assessee are more than the amount that is invested which can possibly earn the tax-free income. In view of this we agree with the contention of the Ld. authorised representative that in absence of any exempt income earned by the assessee during the year the disallowance under section 14 A of the act can not be made. - Decided in favour of assessee.
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