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Income Tax - Case Laws
Showing 481 to 500 of 10077 Records
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2019 (12) TMI 577
Addition u/s 68 - Re-opening of assessment - addition of full value of sale proceeds including long term capital gain as accommodation entry based on the statement of the Director of the Company which is engaged in fraudulent billing activities and in the business of providing bogus speculation profit/loss, commodities, profit/loss on commodity trading (through MCX) - HELD THAT:- 0n the basis of detailed inquiries and the material available on record, the AO has made addition and CIT(A) has considered the issue threadbare and after applying various judicial pronouncements reached to the conclusion that assessee has taken accommodation bill which was in the form of credit entry of the books of accounts and credit worthiness of the creditors was not proved. The detailed finding so recorded by the lower authorities are as per material on record. However, nothing was produced before me so as to persuade me to deviate from the finding recorded by lower authorities. Accordingly, do not find any reason to interfere in the order of the lower authorities. Appeal of the assessee is dismissed.
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2019 (12) TMI 576
Income of the assessee u/s 56(2)(vii) - difference between the amount paid to the land owners and the market price estimated by the Registration Department - whether the amount paid to the agreement holder for purchase of property has to be taken into consideration as cost of acquisition or not? - pre-existing right for purchase of the property by Durai and associates by virtue of agreement for sale executed with the land owners - HELD THAT:- The right to purchase the property can be specifically enforced through a court of law. Therefore, when there was pre-existing right to sell the property in favour of Durai and associates, the assessee cannot purchase the property unless the agreement to purchase the property in favour of Durai and associates is discharged. In other words, the agreement holder, namely, Durai and associates has to be paid for his pre-existing right to purchase the property.
This Tribunal is of the considered opinion that the payment made to pre-existing agreement holder to purchase the property to the extent of ₹ 1,58,00,000/- has to be considered as cost of the property/ purchase price. If this amount of ₹ 1,58,00,000/- paid to the agreement holder, namely, Durai and associates was taken into consideration, admittedly, there was no benefit accrued to the assessee. In fact, the assessee has paid more than the market value fixed by the Registration Department. Therefore, there is no question of computing any income under Section 56(2)(vii). Tribunal is unable to uphold the orders of the lower authorities. Accordingly, orders of both the authorities below are set aside and the addition is deleted. - Decided in favour of assessee.
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2019 (12) TMI 575
Revision u/s 263 - an order which is erroneous and prejudicial to the interest of Revenue - deduction in respect of interest and exchange fluctuation loss outstanding on Floating Rate Notes (FRN) - The assessee has added interest paid and foreign exchange loss on the date of Balance Sheet to Capital Assets in those cases where funds were applied for acquisition of capital assets/projects and in case if the funds are applied for working capital , then the said interest / foreign exchange losses were charged to Profit and Loss Account as Revenue Expenses.
Held that:- The assessee has completely failed to discharge its onus and the AO clearly erred in accepting the bald statement made by the assessee without conducting any enquiry and certainly the action of the AO in accepting these capital work in progress accumulated over years as Revenue expenses in the year under consideration while computing income of the assessee chargeable to tax without making any enquiry which was certainly warranted based on facts and circumstances of this case before allowing entire capital work in progress existing upto ay: 2002-03 as Revenue expenses in this year viz. ay: 2003-04 is clearly erroneous and prejudicial to the interest of Revenue and learned CIT rightly interfered by invoking his revisionary powers u/s 263 of the 1961 Act.
The AO simply accepted the contentions of the assessee that the assessee has made claim of deduction of lower interest but has not directed its enquiry as to whether any benefit or cessation or remission of liability has taken place which is required to be brought to tax u/s 41(1) or Section 28(iv) or any other relevant section of the 1961 Act. Thus, under these circumstances, the assessment order passed by AO is erroneous so far as is prejudicial to the interest of Revenue and the learned CIT rightly invoked its revisionary powers u/s 263 of the 1961 Act, which action of learned CIT we upheld/confirms. We order accordingy.
Appeal of the assessee dismissed.
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2019 (12) TMI 574
Levy of late fee u/s 234E - late filing of quarterly electronic TDS returns, as provided u/s 200(3) for AY 2013-14 - Held that:- As rightly observed by co-ordinate bench in para-17, the decision of Hon’ble Bombay High Court in Rashmikant Kundalia v. Union of India [2015 (2) TMI 412 - BOMBAY HIGH COURT] deal only with examining the constitutional validity of provisions of section 234E of the Act and do not deal with effect of amendment in Section 200A w.e.f. 01.06.2015. Therefore, respectfully following the aforesaid view of co-ordinate bench of Pune Tribunal, we hold that view favorable to the assessee was to be adopted and therefore, the levy of fees u/s 234E for any period prior to 01/06/2015 would not be sustainable in the eyes of law.
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2019 (12) TMI 573
Additions u/s 68 - unexplained cash credit - Share Capital and Share premium - identity creditworthiness of the Shareholders and genuineness of the transaction - Held that:- From the details of share applicants companies it is clear that they have meagre income or nil income. While going through the bank statements submitted by the assessee for a small period, which have been placed on record, we find that huge transactions have been made and the amount i.e. more or less have been withdrawn on the same day. The ld. AR of the assessee also unable to satisfy that the share applicant companies have genuineness business activities.
The creditworthiness of the share applicants, in the present case in hand, have not been proved by the assessee, therefore, the AO has rightly made addition on account of unexplained cash credit.
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2019 (12) TMI 538
TDS u/s 194A - payment of interest from the District Co-operative Bank Kottayam to the petitioner - Benefit of the exemption provided u/s 194A(3)(v) - case of the petitioner that the interest income accruing to it is from the deposits made by the petitioner with the Kottayam District Co-operative Bank and hence, as per the provisions of Section 194A(3)(v), the provisions of sub section (1) thereof, which contemplate a deduction of tax at source would not apply - HELD THAT:- Through a statement filed by the learned Standing Counsel appearing on behalf of the 1st respondent, it is conceded that the petitioner would get the benefit of the exemption provided under Section 194A(3)(v) of the Income Tax Act. Taking note of the statement, I allow the writ petition by declaring that there will be no requirement of deducting tax at source in the case of payment of interest from the District Co-operative Bank Kottayam to the petitioner.
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2019 (12) TMI 537
LTCG - withdrawal of exemption u/s 54B - lock in period - sale of agriculture land - purchased a new agriculture land (not being a capital asset) - sale of new land within one year after purchase - Held that:- After acquiring the new agricultural land (be it a rural agricultural land), if the new rural agricultural land is transferred within a period of three years from the date of purchase, then the tax exemption allowed earlier would be liable to be withdrawn. In such a case, the assessee is required to pay tax on the exemption claimed earlier.
We fail to understand why lot of emphasis has been put on the fact that as the rural agricultural land does not constitute a capital asset, the capital gain tax is not levied on the sale of such rural agricultural land. There need not be any debate on this issue. No capital gains will arise on the sale of the agricultural land situated in a rural area as it is specifically excluded from the definition of the term 'capital asset'. However, the capital gains will arise on the sale of the agricultural land situated in a non-rural area.
In the case on hand, we are concerned with the capital gains with respect to the first transaction, i.e. the sale of urban agricultural land. We are not concerned with the second transaction of the sale of the rural agricultural land. In such circumstances, after acquiring the new agricultural land (rural or urban), if the new agricultural land is transferred within a period of three years from the date of the purchase, then the tax exemption allowed earlier (i.e. with respect to the first transaction of sale or urban agricultural land) would be withdrawn. In such a case, the assessee would be required to pay tax on the exemption claimed earlier.
Decided against the assessee.
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2019 (12) TMI 536
SEZ unit - Deduction u/s 10AA - conversion of EPZ unit to SEZ unit - eligibility for additional 5 years after availing benefit of exemption u/s 10A for 10 years - Additions u/s 40(a)(i) for non deduction of TDS - validity of assessment order passed u/s 143(3) - assessee is in business of manufacturing and export of pillows and cushions. - The assessee unit got itself converted into an SEZ unit during previous year relevant to ay: 2003-04 but can it be said that it begins to manufacture or produce goods or articles in SEZ in previous year relevant to ay: 2003-04.
Held that:- The answer is emphatic ‘no’, the assessee unit begins to manufacture or produce pillows or cushions in previous year relevant to ay: 2001-02 in MEPZ and once the unit begins to manufacture or produce articles in previous year relevant to ay: 2001-02 , then it cannot be said that it again begins to manufacture or produce articles in SEZ when it got converted itself from EPZ unit to SEZ unit. - It is merely a conversion of EPZ unit into an SEZ unit but the fact remains that unit was already in operation since previous year relevant to ay: 2001-02 onwards and it could not be said the unit of the assessee begins to manufacture or produce articles or things or computer software in the previous year relevant to assessment year 2003-04 in SEZ as it is a clear case of mere conversion of EPZ into an SEZ and not setting up of new unit in SEZ.
The assessee was entitled for deduction u/s 10A for a period of a ten consecutive assessment years commencing from ay: 2001-02 onwards and provisions of Section 10A(1) will continue to apply to it even after being converted into an SEZ unit effective from 01.01.2003 keeping in view second proviso to Section 10A(1) of the 1961 Act.
The intention of law makers is manifestly clear that they intent to apply Section 10A(1A) to newly set up units in SEZ during previous year relevant to ay: 2003-04 onwards as terminology used in ‘begins to manufacture…’ and the word ‘begun’ is conspicuously missing in Section 10A(1A) and by no stretch of imagination provisions of Section 10A(1A) can be made applicable to existing EPZ/FTZ units which got themselves converted into an SEZ unit which shall continue to be governed by provisions of Section 10A(1) of the 1961 Act.
Careful perusal of sub-section 7B of the 1961 Act which was inserted in Section 10A of the 1961 Act by SEZ Act, 2005 w.e.f. 10.02.2006, clearly reveals that it excludes applicability of entire Section 10A to any undertaking , being a Unit referred to in clause (zc) of Section 2 of the SEZ Act, 2005 which has begun to manufacture or produce articles or things or computer software in SEZ or begins to manufacture or produce articles or things or computer software commencing on or after the 1st day of April 2006. Thus , the objective of using the word ‘begun’ is to exclude applicability of Section 10A to all the units in SEZ effective from insertion of Section 10AA of the 1961 Act and henceforth provisions of Section 10AA shall be applicable to units in SEZ, even if these units are existing units in SEZ on or before commencement of SEZ Act, 2005.
These SEZ units shall be entitled for deduction for further period of 5 years beyond period of ten consecutive assessment years owing to newly inserted Section 10AA of the 1961 Act keeping in view provisions of Section 10AA(1)(ii) of the 1961 Act. Thus, vide our detailed discussions above, we hold that the assessee is entitled for deduction u/s 10AA(1)(ii) of the 1961 Act for the impugned assessment year, subject to fulfilment of other conditions for grant of deduction u/s 10AA of the 1961 Act. We order accordingly.
Addition u/s 40(a)(i) r.w.s 9(1)(vii) - TDS u/s 195 - payment to foreign agents for procuring sales orders - Held that:- Be that it may be but learned CIT(A) has not adjudicated this issue in its appellate order on merits for impugned assessment year under consideration and has simply dismissed appeal of the assessee at threshold on the ground that no written submissions are filed by assessee on this issue and in the interest of substantial justice, this issue need to be restored to the file of learned CIT(A) for fresh adjudication on merits in accordance with law.
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2019 (12) TMI 535
Carry forward and set of the unabsorbed depreciation u/s 32(2) of the Act – Effect of amendment under Finance Act 2001 w.e.f. 01.04.02 - ITAT decided the issue against the revenue - Held that:- Considering the submission made and keeping in view the observations made by the learned Tribunal as quoted above, we are in complete agreement with the view taken by the learned Tribunal in the impugned order and find no case is made out to interfere with the same.
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2019 (12) TMI 534
Accrual of income - offshore supply of equipments and materials etc. including supply of spares - DTAA between India and Japan - Scope of the term "a transaction" u/s 245N for advance ruling - the property in the goods and the title had passed outside India and the payment was also received in foreign currency outside India. - The Bill of Lading named JSW as the consignee of the goods and the commercial invoice was drawn by the applicant on JSW. Further, the Marine Insurance Policy was taken by the purchaser on its own for all the equipments supplied by the applicant under the contract for any loss/damage during transit after FOB delivery on the basis of INCOTERMS 2000.
Held that:- In view of the above interpretation of a singular word as given by the various Courts under Income Tax Act as well as other Acts, it is crystal clear that 'a transaction' appearing in Section 245N(a) of the Act would include more than one transaction. The provisions of the Income Tax Rules, the Notes to Form No, 34C and the clarification issued by the CBDT vide 0M dated 28-08-2019 fortify this interpretation. However, a question may arise whether an applicant can file one application in respect of two unrelated set of transactions. In our opinion as the advance ruling is in respect of "a transaction", an applicant can file one application in respect of related set of transactions. If the facts and circumstances of the two transactions are not identical and totally different, then such transactions may not be clubbed in one application.
The facts clearly establish that the supply of equipment and material was made outside India and thus the transfer of title to the equipment and materials also took place while the goods were outside the territory of India. The payment for the offshore supply of equipments was also made outside the country in foreign currency as per the terms of contract.
The revenue has relied upon the enquiries made from JSW in respect of the contention that all the seven contracts were not independent but part of the composite contract. This admission of JSW that the seven contracts were not evaluated separately and the evaluation was done from the entire package, does not prove that the contract was composite. It was further submitted that JSW had confirmed that the contract was split at the request of Nippon Steel. This submission is not found to be correct.
The revenue has alleged a lop-sided attribution of cost to the contract for offshore supply of materials and equipments without any concrete evidence. The revenue has neither placed any material in support of such suspicion nor has any transfer pricing adjustment made in the case of the payee been brought on record to substantiate the same.
The principle of apportionment of income on the basis of territorial nexus is now well accepted. Explanation I(a) to section 9(l)(i) of the Act stipulates that where all the operations are not carried out in India, only that part of income which can be reasonably attributed to the operations in India, would be deemed to accrue or arise in India. It, therefore, follows that in a composite contract where only a part of the operations is to be carried out in India, the assessee would not be liable for part of income that arises from operations conducted outside India.
Existence of PE in India - The applicant does not have any fixed place of business through which its business was wholly or partly carried on to be considered as PE under Article 5.1. As per Alticle 5.3 of India-Japan DTAA, a building site or construction, installation or assembly project constitutes PE, only if it had lasted for more than six months. Similarly as per Article 5.4, for the supervisory activities to constitute a PE, such activity should be carried on for more than six months. No such evidence has been brought on record by the revenue in respect of offshore supply contracts.
There is no dispute to the fact that the applicant had a supervisory PE which was in respect of contract for supervision services and the income in respect of this supervisory PE had already been offered to tax in India. The revenue has alleged that the supervisory PE was also involved in offshore supply contract for equipments, for which no evidence has been brought on record.
Further, from thé terms of the contract as already discussed earlier, there is no element of Fee for Technical Services (FTS) involved in the contracts for offshore supply of equipments.
The amounts received/receivable by Nippon Steel Engineering Co., Ltd. under contracts for offshore supply of Coke Dry Quenching (CDQ) Units for CO 3 AND CO # 4 vide Contract # JSWPL/VJNR/CDQ/OOI for Japan portion and Contract # JSWPL/VJNR/CDQ/002 for China portion dated 30 September 2010 awarded by JSW Projects Ltd., are not chargeable to tax in India under the provisions of Income-Tax Act 1961 and Double Taxation avoidance agreement between India and Japan
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2019 (12) TMI 533
Prosecution proceedings - validity of sanction has been granted by Principal Director of Income Tax (PDIT) u/s 279 - Petition contended that, sanction has to be given only by Principal Commissioner who is heading the assessment wing - intent of the legislation - offence punishable under Sections 276 (C)(1), 277, 278 - escapement of the income tax in the middle of the financial year - The moot question which arise for consideration of the Court is that whether the proceedings initiated are going to vitiate the entire proceedings without concluding the adjudicatory proceedings under the Act.
Held that:- No provision of the Income Tax Act provides that a prosecution for the offence cannot be launched until reassessment proceedings are initiated against the assessee and are completed. They are two different proceedings and it has also been the law laid down by the Hon'ble Apex Court that the finding in the adjudication proceedings are not binding in the Criminal Court or if adjudication proceedings are decided on merits without contravention to the criminal proceedings and on the similar proceedings if a criminal proceedings have been launched, then under such circumstances it can be said to be abuse of process of the Court. - the contention raised by the learned Senior counsels appearing for the petitioners is not having any force, the same is liable to be rejected.
Under Article 13 of the Constitution of India, there also the interpretation of unless the context otherwise has been interpreted. "Law" has been defined and it includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India, the force of Law. When the said Notification has been challenged and not yet finalized with regard to legality or otherwise, in that light, Notification dated 13.11.2014 as per Article 13 of the Constitution of India is having a force of law and by virtue of the said authority, if the sanction has been issued by the Principal Director of Commissioner, then under such circumstances, it cannot be held that he is not having any authority to issue the sanction order. While seeing the intention and otherwise of the enactment, subsequent notification, amendments, ordinance and other aspects have to be seen conjointly. They cannot be read independently. In that light, the contention taken up by the petitioners is not having any force.
If the sanction is invalid on any of the grounds, then under such circumstances, sine-qua-non taking the cognizance of the offence itself is going to vitiate the entire proceedings. When the sanction order has been challenged on any other grounds and the only ground raised is that it has been issued by a non-competent authority and if by virtue of Notification any authority has been given, then under such circumstances it cannot be held that the sanction has not been granted by a proper and a competent authority.
Though Section 279 of the Act starts with non-obstante clause, the said error or omission is not considered to be a illegality, but it will be only irregularity. If it is irregularity, then it will not amounts to failure of justice and even it has been observed by the Hon'ble Apex Court, subsequently the sanction can also be obtained for prosecuting the accused.
Taking into consideration the above facts and circumstances as discussed above in detail, the petitioners-accused have been found escaping huge tax which is going to affect the economy of the country. Under such circumstances prima facie petitioners-accused have not made out any grounds so as to interfere with the order of the trial Court.
The petitions are devoid of merits and the same are liable to be dismissed and accordingly they are dismissed.
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2019 (12) TMI 521
Levy of penalty u/s 271(1)(c) - concealment of income or furnishing of inaccurate particulars of income? - the CIT(A) levied penalty u/s 271(1)(c) of the Act but under which limb of Section 271(1)(c), the penalty is levied was not mentioned in the notice issued under Section 271(1)(c) read with Section 274 of the Act - case of assessee is that the penalty provision being quasi judicial, unless there is specific charge there cannot be levy of penalty - HELD THAT:- In the notice issued u/s 274 r.w.s 271(1)(c) of the Income Tax Act, 1961, there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income - From the notice dated 27/3/2015 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee’s case.
There is separate provision for penalty in search cases given under the statute after 01.07.2012 that of Section 271AAB of the Act which was totally ignored by the Assessing Officer. While dealing with this contention, the CIT(A) has taken the due date that of filing of return of income i.e. 31.08.2007 which is contrary to Section 271AAB of the Income Tax Act, 1961. Thus, the penalty itself is based on incorrect Section. Therefore we are taking up the contention of the assessee that there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 of the Act.
The penalty levied u/s 271(1)(c) is not sustainable and has to be deleted - notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law - appeal of the assessee is allowed.
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2019 (12) TMI 518
Reopening/revision of assessment - various expenses incurred/claimed by the assessee to arrive at net figure not correctly examined by AO - case of assessee is that the observations made by learned PCIT is of general nature without revealing any specific instance of lapse or non–enquiry by the Assessing Officer, and, the order passed under section 263 of the Act deserves to be quashed.
HELD THAT:- On a perusal of the impugned assessment order, it is seen that the Assessing Officer has specifically stated that the requisite details called for as per the questionnaire were not only placed on record but were duly verified by him. He has also referred to assessee’s explanation and reconciliation of the AIR information/Form no.26A. Thus, as could be seen from the facts on record, the Assessing Officer in the course of assessment proceedings, has examined and enquired into the income shown by the assessee in the Profit & Loss Account and has also verified the details of expenditures claimed.
The allegation of learned PCIT that the Assessing Officer has not made any enquiry on the issues referred to by him is without any basis and contrary to the facts and materials on record - Also, on a perusal of the impugned order of learned PCIT, it is noticed that he has not pointed out even a single defect or deficiency in the evidences filed by the assessee. Even, he has not dealt with a single item of expenditure, which according to him, is either non genuine or unreasonable - Thus, prima facie, it appears that learned PCIT has exercised his power under section 263 of the Act to initiate a roving and fishing enquiry without pointing out any specific error in the assessment order which made it erroneous and prejudicial to the interests of Revenue.
The basic conditions of section 263 of the Act in the present case are not fulfilled - the order passed under section 263 of the Act is quashed - appeal allowed.
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2019 (12) TMI 517
Revision u/s 263 - AO allowed the deduction of interest and remuneration to partners while passing order u/s 144 ignoring the provisions of section 184 - Hawala Transactions - allegation that the assessee is a beneficiary of accommodation entries provided by some entities identified as hawala operators - in spite of the statutory notice issued under section 143(2) of the Act, the assessee neither appeared nor made any compliance - AO has completed the assessment invoking the provisions of section 144 of the Act, to the best of his judgment.
Whether the assessment order passed is erroneous and prejudicial to the interests of Revenue due to non–application of the provision contained under section 184(5) of the Act while allowing interest / remuneration paid to the partners?
HELD THAT:- In the facts of the present case, admittedly, the Assessing Officer has completed the assessment under section 144 of the Act to the best of his judgment alleging non–compliance to the statutory notices issued under section 142(1) and 143(2) of the Act. Provisions of section 184 of the Act lay down the procedure for the assessment in case of a partnership firm. Sub–section (5) of section 184 of the Act, which begins with a non–obstante clause, makes it clear that in a case where the assessment is completed under section 144 of the Act for any such failure on the part of the firm as mentioned in the said provision, assessment has to be made without allowing any deduction by way of payment of interest, salary, bonus, commission or remuneration, etc., to any partner.
Thus, once the assessment is completed under section 144 of the Act, the provision of section 184(5) of the Act gets triggered automatically and it will override all other provisions of the Act.
In the facts of the present case, by the very reason of the Assessing Officer completing assessment under section 144 of the Act, the provision of section 184(5) would automatically come into play. However, while completing the assessment, the Assessing Officer completely overlooking the provisions of section 184(5) of the Act has allowed deduction on account of interest / remuneration paid to partners - In the facts of the present case, the failure on the part of the Assessing Officer to apply or at least even examine the applicability of section 184(5) of the Act, certainly makes the assessment order erroneous and prejudicial to the interests of Revenue. Therefore, the exercise of power under section 263 of the Act to revise the assessment order is valid.
Appeal dismissed.
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2019 (12) TMI 516
Addition of income - interest from savings bank a/c, Interest on FDR, Interest from parties and rent of land - AO in the assessment order passed u/s 143(3) of the Act disallowed the deduction of interest u/s 57(iii) of the Act on the ground that the assessee failed to establish that the expenditure was incurred for earning interest income - HELD THAT:- There is no dispute that in the return of income the assessee has shown entire income as income from other sources which includes interest from saving bank a/c, interest from FDR and interest from parties.
It is pertinent to note that an identical issue was also arisen for the Assessment Year 2013-14 and the AO had allowed the claim of interest expenditure to the extent of interest income received from various parties. Thus it appears that interest received by the assessee against these parties for the Assessment Year 2013-14 was accepted by the AO and corresponding interest was also allowed by the AO - The assessee challenged the said action of the AO restricting the claim of deduction on account of interest expenditure to the interest income. However, the ld. CIT(A) while passing the order dated 19-12-2017 for the Assessment Year 2013-14 has confirmed the action of the AO.
The claim of interest expenditure of the assessee to the interest income of ₹ 3.57 lacs is allowed - the appeal of the assessee is partly allowed.
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2019 (12) TMI 515
Addition of income - notional and estimated rent - deduction u/s 24(1) - HELD THAT:- As per books of account, this property was shown as a part of the fixed assets which means that the property was shown in the books of account as business assets of the assessee. Since the property was under construction, therefore, the same cannot be considered house property for the purpose of section 22 of the Act until and unless the construction of the house is completed in all respects - The AO has not considered the state of the building in question whether it is a bare structure without having all the basic amenities/ facilities and compared the same with another property which was let out on rent. Therefore, once the property in question is shown by the assessee as part of its fixed assets and it was used only for the stay of the security guard and driver of the assessee without charging any rent then said property cannot be assessed to income tax u/s 22 of the Act - the addition made by the AO on account of income from house is not justified and the same is deleted - in favor of assessee.
Disallowance of expenses - repair and maintenance expenses - HELD THAT:- As regards the repairs and maintenance expenses incurred in respect of property bearing No. 125, Mahaveer Nagar-1, Kota, the AO determined the annual rental value and allowed deduction u/s 24 of the Act, however the said addition made by the AO to the income from house property is deleted and consequently the repairs and maintenance expenses to the extent of said property shall be capitalized as assessee has claimed that construction was not completed during the year under consideration - There are no reason to interfere with the order of the authorities below in disallowing the said of expenditure on account repairs and maintenance - decided against assessee.
Appeal of the assessee allowed in part.
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2019 (12) TMI 509
Deduction u/s 10A computation - unrealised sale proceeds in foreign exchange within the prescribed period inclusion in the total turnover - HELD THAT:- When the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd.
Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well. What is 'export turnover' for the purpose of the numerator would have to be the 'export turnover' for the purpose of denominator as well and 'export turnover' cannot assume two different characteristics for two parts of the same formula.
In the present case, the quantum of 'export turnover' has been taken to be the actual remittances of foreign exchange after excluding the unrealised foreign exchange.
This then would be the same figure to be adopted so far as the denominator is concerned as well. In fine, 'total turnover' for purposes of the formula would be the actual sale receipts excluding unrealised foreign exchange as adopted for 'export turnover'. This conclusion is also supported by the reasoning that the provisions of Section 10A/10B are beneficial in nature and seek to encourage an assessee engaging in a prescribed activity. See M/S. MAARS SOFTWARE INTERNATIONAL LTD. [2019 (3) TMI 578 - MADRAS HIGH COURT]
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2019 (12) TMI 508
Provisional attachment of property - adjournment seeked on behalf of revenue - HELD THAT:- Today again learned counsel for the respondents seeks an adjournment. Even the PCIT (Central) Ludhiana has sought and been granted exemptions from appearance. We find this situation intolerable. In the circumstances, the petitions are disposed of with a direction that the provisional attachment would be to the extent of ₹ 45 crores (as against the proposals for provisional attachment where it was mentioned that a sum of ₹ 22 crores odd was unaccounted under different heads (in all three petitions)).
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2019 (12) TMI 507
Addition u/s 40A(3) - chargeability of transactions to tax by way of TCS forms in accordance with Section 206CA r.w. Rule 114A substantiating the purchases made and the genuineness thereof - Tribunal remanded the case back to the Assessing Officer - HELD THAT:- We are in agreement with learned counsel for the Revenue. In view of the shifting stand taken by the appellant, no illegality can be found with the order of the Tribunal which, it must be remembered, has not restored the order of the Assessing Officer but has asked both the parties to lead evidence in support of their claims and by source no prejudice can be caused to the appellant. Appeal dismissed.
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2019 (12) TMI 506
Deduction of interest on borrowed fund when the same is utilised to give interest free loan/share application money to subsidiary companies - HELD THAT:- In M/S E-CITY INVESTMENTS & HOLDINGS [2019 (4) TMI 1793 - BOMBAY HIGH COURT] Assessee is a private limited company and is engaged in the business of financing. During the scrutiny assessment of the assessee's return for the assessment year 2008-09, AO noticed that the assessee had claimed expenditure of interest paid on borrowed funds. The assessee had also funded its sister concern without charging interest. AO therefore disallowed the interest expenditure. The issue eventually reached the Tribunal. The Tribunal by the impugned judgment held in favour of the assessee.
The entire issue is squarely covered in favour of the assessee in case of S.A.Builders Ltd. [2006 (12) TMI 82 - SUPREME COURT] . The Tribunal correctly held that the assessee's decision to fund its subsidiaries driven by business exigency.
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9911796707
