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Income Tax - Case Laws
Showing 101 to 120 of 643 Records
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2015 (4) TMI 1175 - ITAT PUNE
Unexplained investment u/s. 69B and unaccounted interest addition - entries found in the seized diary of the Shri Shreeram Soni - Held that:- No addition is called for in the hands of the assessee as it is an admitted fact that neither Shri Shreeram H. Soni has admitted to have accepted any money from the present assessee nor any document or evidence whatsoever was found from the residence of Shri Shreeram H. Soni belonging to the assessee. We find during the course of assessment proceedings ,the assessee had categorically stated before the AO that he does not know Shri Shreeram H. Soni. Nothing has been brought on record to show that the above submission of the assessee is false or untrue.
The statement of the assessee was never recorded by the AO nor the AO has granted any opportunity or directed the assessee to cross-examine Shri Shreeram H. Soni. When the assessee resides at Mahabaleshwar and Shri Shreeram H. Soni resides at Pune therefore, in absence of any corroborative evidence whatsoever found from the residence of Shri Shreeram H. Soni belonging to the assessee, the statement of the assessee before the AO that he does not know Shri Shreeram H. Soni cannot be ignored and addition cannot be made in the hands of the assessee.- Decided in favour of assessee.
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2015 (4) TMI 1174 - PUNJAB AND HARYANA HIGH COURT
Addition u/s 2(22)(e) - Held that:- The first question has already been answered in favour of the respondent-assessee in this very appeal, by the order of the Division Bench [2015 (2) TMI 1233 - PUNJAB AND HARYANA HIGH COURT] as held that as the assessee has proved business expediency the advance is not covered by Section 2(22)(e) of the Act.
Disallowance u/s 40A(2)(b) - Held that:- The second question raised is not a substantial question of law. It is purely a question of fact. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal rightly held that the mere fact that the assessee obtained loans @ 12% per annum does not believe the assessee's contention that the loans are from the family, which are at 15% per annum. It was a question of appreciation of fact and thus, no question of law arises.
Disallowance u/s 36(1)(iii) - proportionate interest on borrowed funds used for capital work in progress - Held that:- Admittedly, a question of fact, namely, as to whether the amounts borrowed were used for capital work in progress. Even in the previous years, the assessee's case has been upheld.
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2015 (4) TMI 1172 - ITAT PUNE
TPA - ALP determination - selection of comparable - Held that:- Assessee is into providing Digitizing services and data conversion/creation services. Both the services fall under the ambit of IT enable service, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
As there is large variation in the operation revenue, operating cost and operating profit of M/s. Bodhtree Consulting Ltd. between different financial years. In view of the above discussion, we are of the considered opinion that M/s. Bodhtree Consulting Ltd. was rightly excluded by the CIT(A) from the list of comparables.
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2015 (4) TMI 1171 - ITAT DELHI
Disallowance u/s 14A - computation of deduction - Held that:- Hon’ble Delhi High Court in Joint Investment Pvt. Ltd. Vs. CIT [2015 (3) TMI 155 - DELHI HIGH COURT] has held that the disallowance u/s 14A cannot exceed the amount of exempt income.
The amount of disallowance u/s 14A should not exceed the exempt income. Since the total exempt income in the instant case is ₹ 25,38,020/-, we direct that the disallowance u/s 14A be restricted to ₹ 18,01,968/- (Rs.25,38,020- ₹ 7,36,052/-). The remaining amount of disallowance is directed to be deleted.
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2015 (4) TMI 1168 - ITAT JAIPUR
Deemed dividend u/s 2(22) - accumulated profit - share premium amount - shareholding more than 10% - Transaction between the two companies or between the company and assessee - receipt of advance for business purposes - Held that:- CIT(A) thoroughly examined the issue in detail after admitted the additional evidence and calling the remand report from the Assessing Officer. He held that these transactions made between the companies for business purposes, which does not form part of loan and advances as envisages in Section 2(22)(e) of the Act. The ld DR has not controverted the findings given by the ld CIT(A). The case laws relied upon by the A.R. are squarely applicable on the case of assessee, therefore, we do not find any reason to intervene in the order of ld CIT(A). Accordingly, we uphold the order of ld. CIT(A) - Decided in favour of assessee.
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2015 (4) TMI 1165 - MADHYA PRADESH HIGH COURT
Penalty u/s 271(1)(c) - violation of the one term settlement - Whether the explanation 4 to Section 271(1)(c) of the Income Tax Act (as it stood before the amendment by the Finance Act, 2002) could be invoked for the purpose of penalty where the income remained at loss? - Held that:- As per the statement annexed by the assessee with the return, they indicated that as per the one time settlement with the Financial Institute, they were required to pay 8.5 Crores on or before 30.6.92 and one of the conditions of the settlement was that if the amount is not paid by the due date then waiver of interest would be forfeited and liquidated damages would also be imposed.
Admittedly, the assessee did not abide by the terms of the one time settlement, could not pay the entire due of 8.5 Crores on or before 30.6.92, they paid it only on 7.4.1993. Till filing of the return they had only paid a sum of ₹ 5.25 Crores and the deduction claimed in the earlier year was deducted and the total deduction claimed was ₹ 3,33,25,278/ - and thereafter under the apprehension that as they have violated the one time settlement, therefore, they are liable to pay compound interest and liquidated damages, the statement was made in the return.
It was, therefore, a case whether under the apprehension that due to violation of the one term settlement the appellant was liable to pay compound interest and liquidated damages they made certain statement in the return and that too when they were not liable to pay any tax due no income having accrued on account of sustained loss, therefore, in the facts and circumstances of the case, we are of the considered view that it is not a case where an inaccurate or statement is made deliberately or there is deliberate concealment of fact by the appellant.
The error seems to be bonafide therefore, we are of the considered view that the penalty could not have been imposed particularly when on the mistake on the part of the Chartered Accountant, the penalty of ₹ 3,30,195/ - has been made. - Decided in favour of assessee
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2015 (4) TMI 1161 - ITAT KOLKATA
Changing the status of assessee from Cooperative Society to Company - Held that:- We have gone through the original assessment order framed u/s. 143(3) of the Act dated 07.08.2006 wherein the status of the assessee was assessed as cooperative society. We have also gone through the impugned assessment order framed by AO u/s. 147 read with section 143(3) of the Act wherein the status of the assessee is taken as company without any basis. Change of status is not permissible under the law unless and until a cogent reasoned order is passed on the same. Here, the assessee’s change of status from a cooperative society to company is without any basis. Hence, we restore the status of the assessee as cooperative society and this issue of assessee’s appeal is allowed.
Validity of rectification order passed by AO - disallowing the provisions for overdue interest and provision for standard assets invoking the provisions of section 36(1)(viia) - Held that:- Assessee is engaged in the business of banking and regulated by the Banking Regulation Act, 1949. The assessee is maintaining its Balance Sheet and P & L Account as required by Banking Regulations Act. The assessee statutorily required to prepare its Balance Sheet and P&L Account and as per said guidelines NPAs where interest has not been realized in cash as a prudential norm, it is not debiting the said account by interest accrued in subsequent quarters and taking this interest amount as income of the bank as the said interest has not been realized. In case of assessee, if interest is debited to borrowed account but for any reason interest has not actually realized, account is to be treated as NPA as per the guidelines issued by RBI. In that eventuality, the amount is unrealized, the unrealized interest so taken to income should be reversed by debiting to the P&L Account and crediting to overdue interest reserve account. It was the claim of the assessee that during the year unrealized interest taken to income has been reversed by debiting the P&L Account and crediting to provision for overdue interest account following the guidelines issued by RBI. We find that this issue is highly debatable and it cannot be adjudicated while acting u/s. 154 of the Act. The AO should have made disallowance only while framing regular assessment or reassessment, which was made prior to resorting to this rectification. This disallowance cannot be made while acting u/s. 154 of the Act reason being this is not a prima facie mistake it is a highly debatable issue - Decided in favour of assessee
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2015 (4) TMI 1160 - ITAT AHMEDABAD
Addition u/s 68 on account of unexplained cash credit - Held that:- The transaction has to be proved as genuine as well as creditors should be creditworthiness. While examining the detail of the first creditor namely Gurumukhdas Dulhanomal A Pritmani, Ld. First Appellate Authority has observed that money was paid through account payee cheque. Shri Gurumukhdas Dulhanomal A Pritmani had not received any money from the assessee before issuance of a cheque to the assessee. He was a income tax payer and the copy of the return was also submitted. It is pertinent to mention that there are 13 creditors. Ld. CIT(A) has confirmed the addition qua four, meaning thereby, additions have been deleted qua 9 creditors. Revenue is challenging the deletion qua five creditors only. The grievance of the revenue is that discussion was not made by the Ld. First Appellate Authority with respect to five.
In our opinion, when Ld. First Appellate Authority has made observation about 13 creditors then it is to be appreciated that Ld. First Appellate Authority must have a glance on all the details. It is the Assessing Officer who did not make specific objections to the details submitted by the assessee, in his remand report in respect of these five creditors. Therefore, after going through the order of Ld. CIT(A), we are of the view that Ld. CIT(A) has appreciated the facts in right perspective and no interference is called for. This appeal is devoid of any merit.
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2015 (4) TMI 1153 - ITAT MUMBAI
Disallowance of interest expenses - Held that:- CIT(A) has followed the findings given in the case of Eminent Holdings Pvt. Ltd. [2014 (7) TMI 466 - ITAT MUMBAI] wherein followed the decision of the Tribunal given in common group case of Hitesh S. Mehta [2013 (11) TMI 1650 - ITAT MUMBAI] and restored the matter to the file of the Ld. CIT(A) for fresh adjudication. Respectfully following the findings of the Co ordinate Bench, we restore this issue to the files of the Ld. CIT(A) for fresh adjudication after giving reasonable opportunity of being heard to the assessee.
Chargeability of interest u/s. 234A, 2324B and 234C - Held that:- Tribunal in the case of Topaz Holding Pvt. Ltd [2013 (10) TMI 1067 - ITAT MUMBAI]held that the chargeability of interest u/s. 234A, 2324B and 234C of the Act does not fall within the domain of the Special Court (Control of offences relating to transactions in securities) at 1992. Since levy of interest is mandatory and is very much applicable in the case of notified persons
It has already mentioned that assessee has filed a declaration in Form No.8 under section 158A, therefore, according to the declaration filed the issue is decided against the assessee with a direction that when the decision on the question of law in respect of assessment year 2007-08 becomes final the same shall be applied to the present appeals accordance with sub-section (5) of section 158A of the Act. Accordingly, this ground for all the three years is decided against the assessee.
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2015 (4) TMI 1151 - DELHI HIGH COURT
Invoking provisions of Section 40A(2)(b)(ii) - payment made to Renu Munjal, Director the assessee company - AO had invoked Section 36(1)(ii) of the Act on the ground that Renu Munjal was also a shareholder and therefore, the commission payment should be disallowed as dividend could have been paid - Held that:- An identical question had engaged the attention of this Court for the Assessment Year 2005-06 [2014 (8) TMI 1091 - DELHI HIGH COURT] as held that reasoning of the Assessing Officer has been rightly rejected by the Tribunal. It is also noticeable that tax on dividend payment payable by the respondent company was much less than the tax payable by the individual assessee on income under the head ‘Salary’. In case, Renu Munjal had received dividend, she would not have paid any tax on dividend. However, she has paid tax on the commission earned. In these circumstances, we are not inclined to interfere with the impugned order.
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2015 (4) TMI 1150 - ITAT AHMEDABAD
Grant of exemption certificate u/s.10(23C)(vi) refused - non maintainability of appeal being not as per the provisions of Section 253(1) of IT Act - Held that:- As held in Sanskruti Samraksha Charitable Trust Vs. CCIT [2014 (6) TMI 975 - ITAT AHMEDABAD] in terms of the provisions of Section 253(1)(c) an order passed by Chief Commissioner of Income Tax u/s.272A is subject to appeal. As per Section 253 of IT Act, any assessee aggrieved by the orders; as listed therein, may appeal to the Appellate Tribunal against such order. In the sub-clause, there is a list of orders against which an appeal can be filed before the Appellate Tribunal. On examination of all those clauses, we have noted that there is no provision for filing of an appeal against an order passed u/s.10(23C) of IT Act.
As far as the written submissions filed by the assessee, the same are on merits of the case. But in this situation, we are not in a position to hear and decide this appeal on merits; therefore, the contentions as raised in those written submissions being beyond our jurisdiction, cannot be adjudicated upon. Few case laws have also been cited but all those judgments are passed by Hon’ble High Courts under Writ jurisdiction. Therefore, this appellant can seek redressal from that forum and not from the Tribunal. Resultantly, we hereby dismiss this appeal in limine being not maintainable before the Tribunal. - Decided against assessee.
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2015 (4) TMI 1149 - ITAT MUMBAI
Addition of Repairs and maintenance expenses - revenue or capital expenditure - Held that:- There is merit in the submissions of the assessee. Though the Ld D.R strongly defended the order of Ld CIT(A), yet we are convinced that the assessee has incurred the impugned expenses on repair and maintenance of the existing building by replacing flooring and carrying out other works. Accordingly, we are of the view that the impugned expenditure cannot be in the nature of Capital expenditure in the absence of creation of any new asset of enduring nature. Accordingly, we set aside the order of Ld CIT(A) and direct the assessing officer to allow the impugned expenditure as revenue expenditure. Consequent adjustment shall also be made with regard to the depreciation allowed by the assessee. - Decided in favour of assessee
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2015 (4) TMI 1147 - ALLAHABAD HIGH COURT
Revision u/s 263 - period of limitation - Held that:- Appeal to be heard with other similar listed appeals
In the meantime, counsel for the parties are at liberty to obtain necessary instructions in this matter as well as in the connected matters. They are also at liberty to file written submissions, if so desired. It is understood that on the next date the matter may be disposed of finally.
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2015 (4) TMI 1146 - SC ORDER
Bogus purchases - Held that:- We do not find any legal and valid ground for interference. The Special Leave Petition is dismissed. Justification in disallowing 25% of the purchase price. - See HC[2015 (1) TMI 828 - GUJARAT HIGH COURT]
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2015 (4) TMI 1145 - ITAT MUMBAI
Application of the assessee to withdraw the appeal - appeal of the assessee is dismissed as withdrawn.
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2015 (4) TMI 1144 - BOMBAY HIGH COURT
Objections to the effect that “Notice not issued” - Held that:- We do not understand whether by this endorsement the Registry is indicating that it has not issued any notice to the opposite party simply because it was not provided with the paper-books or additional copies of the Reference paper-books. If that is how the Registry is proceeding, then, it is for the Revenue's advocate to satisfy the Registry that even though a copy may not be supplied to the Registry to effect the service or to issue notice, yet, the other procedural formalities have been completed by the Revenue. Let the Revenue's representatives and advocates, therefore, appear before the Registry officials and indicate as to how the office objections have been complied with. We grant the same time of eight weeks as is granted in other cases .
we would be spared answering the questions in individual References after they are called out serially. If such an exercise as is expected from the parties is undertaken and the Registry is reported the number of matters and cases from this list of 1500 References and which are covered one way or the other, we would immediately take them up and dispose them off accordingly. We would expect parties to take this trouble and labour and inform and intimate the Registry. We would also expect that the remaining cases are notified for directions on 7th May, 2015. In other words, References other than those listed on 9th April, 2015, 16th April, 2015 and 23rd April, 2015 and today shall be listed for directions on 7th May, 2015.
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2015 (4) TMI 1140 - ITAT PUNE
Non deduction of tds - Addition on account of petty contract charges on account of hire charges - invoking section 40(a)(ia) - retrospectivity - Held that:- The Tribunal in the case of M/s Gaurimal Mahajan & Sons (2015 (3) TMI 770 - ITAT PUNE ) dealt with another argument of the assessee to the effect that the second proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 w.e.f. 01.04.2013 be applied retrospectively. Notably, the said second proviso to section 40(a)(ia) of the Act prescribes that the disallowance u/s 40(a)(ia) of the Act could not be made if an assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the Act. The Tribunal dealt with the plea of the assessee that such amendment was intended to eliminate undue hardships to the taxpayers and therefore it should be held as retrospective in nature.
Thus we restore the matter back to the file of the Assessing Officer to adjudicate the issue afresh in accordance with the directions of the Tribunal in the case of M/s Gaurimal Mahajan & Sons (supra)
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2015 (4) TMI 1139 - ITAT DELHI
Addition made of the price of the international transaction - Held that:- As during the course of the appellate proceedings before the ld CIT(A), the assessee had filed a copy of the, transfer pricing audit conducted by the Internal Revenue Service, Department of the Treasury US. The assessee was audited by Internal Revenue Service - International Division US for the calendar years 2003, 2004 and 2005. The examination carried out by the international division of the Internal Revenue Service, indicated a downward adjustment to income of one its foreign subsidiaries in Sri Lanka, resulting in an increase of income in the U.S. No adjustments were carried out to any transaction between the assessee India Co. and the parent company.
TPO is of the opinion that reason of loss are on other segments and not the content segment which is not correct because in the calendar 2002 the parent company had suffered a total loss of USD (5,165,000), which included loss from content segment of USD (2,996,900)and loss from system and training segment of USD (2,169,000). So, it is an incorrect observation of the TPO that the reasons for the loss of the parent company are on account of segments and not the content segment. In view of the precedents cited in the impugned order, we find that the ld CIT(A) rightly observed that the assessee was justified in reducing idle fixed expenses of ₹ 3,87,30,000/- from the total operating expenses and thereby arriving at net operating expenses of ₹ 18,55,63,560/-. Based on such net operating expenses, the net operating profit margin works out to ₹ 1,80,16,160/-, resulting in NCP margin percentage of 9.71%. The arithmetical mean of the weighted averages of the comparable companies as compiled by the assessee and as also referred to and accepted by the TPO in para 5. 1 of his order is 10.12%. Since the assessee’s operating margins falls within (+1-) 5% of the arithmetical mean of comparable prices, Ld. CIT(A) has rightly held that the assessee’s International Transactions with its associated enterprises during the year to be at Arm's Length. Consequently the addition of ₹ 4,34,12,348/- made to the price of international transaction was directed to be deleted by the ld CIT(A).
For the reasons enumerated above by the ld CIT(A), she rightly deleted the addition made by the Assessing Officer on account of difference in arm's length price of ₹ 4,34,12,348/-. - Decided in favour of assessee
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2015 (4) TMI 1138 - ITAT CHANDIGARH
TDS u/s 194H - commission for daily collection purpose in respect of pigmy deposits without deduction of tax at source - ndividuals whom commission was paid for daily collection the same was treated as salary incomeHeld that:- Tax was required to be deducted by treating the payment as ‘salary’ in respect of three individual NNND Agents, hired by banks for daily collection purposes in respect of Pigmy deposits, in view of the letter dated 12.12.2007, issued by Under Secretary (ITB) from F.No. 275/75/2007-ITB. The Assessing Officer has wrongly treated the payment made to these individuals as commission u/s 194 H of the Act.
In our opinion the Ld. CIT(A) has correctly decided the issue because if an organization is exempted then same is not liable to tax and therefore there is no need for deduction of tax. Therefore we find nothing wrong in the order of Ld. CIT(A) and confirm the same.
Non TDS on interest paid to PEC University of Technology (Pension Fund Trust) - Held that:- The scheme of the provisions for deduction of tax at source applied not only to the amount paid, which bears the character of “income”, such as salaries, dividends, interest on securities, etc., but also to gross sums, the whole of which may not be income or profits in the hands of the recipient, such as payment to contractors or sub-contractors. The purpose of the provisions for deduction of tax at source in Chapter XVII-B of the Income-tax Act, 1961, is to see that from the sum which is chargeable under section 4 for levy and collection of income-tax, the payer should deduct tax thereon at the rates in force, if the amount is to be paid to a non-resident. They are meant for tentative deduction of income-tax subject to regular assessment.
Thus from above it is clear that normally a person making payment is required to deduct the tax as per the provisions of the Act because this is a tentative deduction.Pension fund trust of the PEC University of Technology has not been approved so far and infact in reply to query raised by the branch, it was clearly admitted by the Ld. Counsel for the assessee that University has not been able to provide to the counsel any information on this. Therefore only presumption is that this trust has not been recognized so far. The income of trust which is not approved by the Commissioner is not exempted and therefore tax was required to be deducted by the bank.
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2015 (4) TMI 1135 - ITAT CHENNAI
Eligibility of deduction under section 80P(2(a)(i) - denial of claim on interest income towards jewel loan and other loan on the ground that the purpose of loan issued was for commercial activities and not for agricultural activities - Held that:- We uphold the orders of the Commissioner of Income Tax (Appeals) in allowing the claim of the assessee under section 80P(2a)(i) of the Act on the interest income on jewel loan and other loans and reject the grounds raised by the Revenue in all these appeals.
AS decided in ITO Vs. M/s.Veerakeralam Primary Agricultural Co-operative Credit Society [2015 (7) TMI 557 - ITAT CHENNAI] the assessee is not a co-operative bank. The activities in the nature of accepting deposits, advancing loans etc., carried on by the assessee are confined to its members only and that too in a particular geographical area. The activities of the assessee are not regulated by the RBI or the provisions of the Banking Regulation Act. Thus, in view of the above stated facts and various decisions considered above, we do not find any infirmity in the order of the CIT(Appeals). - Decided in favour of assessee
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