Home Case Index All Cases Income TaxIncome Tax Section Wise 2017 2017 2017 (2) Income Tax - 2017 (2) This

Law	-- All -- GST Income Tax Benami Property Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws
Court	-- Any -- Supreme Court SC Orders / Highlights High Court Appellate Tribunal Tribunal Appellate authority for Advance Ruling Advance Ruling Authority National Financial Reporting Authority Competition Commission of India ANTI-PROFITEERING AUTHORITY Commission Central Government Board DISTRICT/ SESSIONS Court Commissioner / Appellate Authority Other
Citation	--Year-- 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 1963 1962 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 1951 1950 Upto 1949 - -Volume- 1 2 3 4 5 6 7 8 9 10 11 12 -
Landmark	Nil - N/A Referred in >= 3 Cases Referred in >= 4 Cases Referred in >= 5 Cases Referred in >= 10 Cases Referred in >= 15 Cases Referred in >= 25 Cases Referred in >= 50 Cases Referred in >= 100 Cases
Order by	TMI Citation Date of Decision

Advanced Search Options

Income Tax - Case Laws

Showing 121 to 140 of 687 Records

• 2017 (2) TMI 1324 - ITAT MUMBAI
  

  Allowing exemption u/s 11 - assessee Trust has violated the directions given by the Hon’ble Bombay High Court in respect to doctor’s fee is to be included in regard to creation of a IPF account and transfer the amount to IPF account for betterment of poor and indigent patient - Held that:- We find that the assessee is a public charitable trust registered under Bombay Public Trusts Act, 1950 by the charity commissioner since 1964. The assessee is registered u/s 12A and 80G. The assessee is engaged in quality health care at affordable rates to the members of the society of all strata. This institute started cardiac services in May 1999 by foxing on quality, safety and economy. During the year under consideration assessee’s gross receipts was to the tune of ₹ 37,55,60,944/- before considering the amount spent on the object trust permitted accumulation and the amount deemed to have been applied for the object of the Trust.

  There is no dispute about these facts. Hon’ble Bombay High Court on 17-08-2006 notified a scheme applicable to public charitable trusts registered under Bombay Public Trust 1950 which are running charitable hospitals including nursing home, maternity home, dispensaries or any other centre for medical relief whose annual income exceeds ₹ 5 lakhs. This scheme stipulates to provide compulsory free and concessional medical treatment to the indigent and weaker patients. As per the scheme Trust has to credit 2% of the gross billing to the Indigent Patient Fund every year and this fund should be utilized for providing medical treatment to the poor patients.

  There is no single evidence which would suggest otherwise. The rationale behind the same being that the doctor’s fees is not a part of the hospital's earnings, but rather a reimbursement to the hospital. The hospital merely acts as a collecting agent between the two for this particular aspect. Neither is there any evidence which would suggest the assessee’s status of that of a "Charitable Trust registered under the Bombay Public Trusts Act, 1950" being revoked by the Charity Commissioner. AO has no role in law by usurping the role of the Charity Commissioner and declaring that the assessee has breached the covenants of the Scheme. - Decided against Revenue.

  ---

• 2017 (2) TMI 1321 - ITAT AHMEDABAD
  

  Deduction u/s 54 - Held that:- CIT(A) observed that the deduction u/s 54 is available only to an individual or a Hindu Undivided Family and the assessee-trust is neither an individual nor a Hindu Undivided Family; whereas the assessee-trust is being assessee in the status of ‘AOP’. Thus, he rightly held that the assessee is not entitled to the deduction u/s 54. CIT(A) held that the Long Term Capital Gain arised from the transfer of a capital asset should be a building or land appurtenant thereto and must be used as a residential house. CIT(A) observed that the assessee had sold its Farm House which was never been used as a residential house. No evidence was furnished in this regard either before the lower authorities or before us for the contention that the Farm House was used as a residential house. The assessee could not establish as to whether any income was earned from the aforesaid farm house which was being assessed as ‘income from house property’.- Decided against assessee.

  Disallowance for set off of brought forward capital loss - Held that:- CIT(A) held that no capital loss was declared in the return filed by the assessee for the AY 2006-07, which could have disclosed the Long Term Capital Loss in the column meant for income from capital gains. CIT(A) also observed that the assessment for the AY 2006-07 was completed u/s 143(3) and the said assessment order, there was no mention about the loss incurred on account of sale of shares and he accordingly concluded that the assessee had not disclosed the Long Term Capital Loss in the return filed for AY 2006-07 and also not raised the issue of not determining the loss to be carried forward in the order passed u/s 143(3) of the Act before the Assessing Officer and therefore, the set off of carried forward Long Term Capital Loss was not allowable to the assessee. - Decided against assessee.

  ---

• 2017 (2) TMI 1320 - GUJARAT HIGH COURT
  

  Condonation of delay - Non granting refund of excess amount deducted by the assessee at source - Held that:- If the petitioner is correct in pointing out that there has been a clear excess deduction of TDS and in depositing the Government revenue, subject to fulfillment of conditions of the scheme, petitioner must receive refund thereof. Unless the delay is gross or intentional or arising out of inaction and lethargy on the part of the petitioner, tax mistakenly deposited cannot be retained by the Government on the ground of delay.

  CBDT undoubtedly has powers to condone the delay even if we assume the Commissioner does not have such powers. In the present case, the dispute is lingering since quite some time. In any case, the delay is not gross and the repercussion in law is not widespread. We may recall the last date for filing refund claim under the scheme was 31.03.2008. The petitioner upon coming to realize that excess deduction has been made and deposited with the Government, approached the appropriate authority under letter dated 15.12.2008.

  Thus we propose to condone the delay here itself and then require the competent authority before whom the petitioner's application for refund is pending to decide the same on merits.

  ---

• 2017 (2) TMI 1319 - ITAT CHANDIGARH
  

  Estimation of the unaccounted production based upon power consumption - Variation in consumption of electricity units pmt. of finished goods as reproduced in the assessment year - unaccounted investment in unaccounted production and unaccounted profit out of the unaccounted production - addition to income - Held that:- All the respective grounds of appeal in cross appeals are connected with estimation of the unaccounted production based upon power consumption by estimating unaccounted investment and unaccounted profit out of unaccounted production and on the same, Revenue Department has constituted the Committee to consider the grievances of the assessees/tax payers and CIT issued the above guidelines by modifying the basis of estimation of unaccounted production and same guidelines have been adopted in subsequent years by the respective Assessing Officers.

  Thus entire matter requires re-consideration at the level of the Assessing Officer. We set aside the orders of authorities below and restore the entire issue to the file of Assessing Officer i.e. rejection of the books of account under section 145(3)/144, unaccounted production of finished goods, unaccounted profit and unaccounted investment out of unaccounted production with reference to consumption of electricity units per metric ton production of finished goods with direction to re-decide the entire issue in accordance with law in the light of the internal guidelines issued by the ld. Pr. Commissioner of Income Tax, Patiala. - Decided in favour of assessee for statistical purposes.

  ---

• 2017 (2) TMI 1318 - ITAT KOLKATA
  

  TPA - computation of ALP - proof of reference to the TPO u/s 92CA - approval from competent authority - assessment barred by limitation - Held that:- If the Assessing Officer considers it necessary to do so, he may refer the computation of the ALP, in relation to the said international transaction, u/s 92CA of the Act, to the TPO, after obtaining approval from the Commissioner or from the Principal Commissioner.

  What has to be referred by the Assessing Officer is the computation of ALP in relation to the said international transaction. No letter or correspondence making the reference to the TPO by the Assessing Officer is produced before us. Moreover, the approval was taken from the DIT(IT)-Kolkata, for referring M/s. Dongfang Electric, Kolkata Project Office to the TPO and not any international transactions. The TPO, in this case tried to identify the international transactions that the assessee has entered into and then proceeded to determine the ALP. No international transaction was identified by the Assessing Officer and referred to the TPO after taking approval of the DIT (International Taxation). The assessee’s case is that there is no international transaction on the facts of his case. This aspect should have been adjudicated and approval taken from the appropriate authority. Thus, the mandate of the Section has not been followed by the Assessing Officer. Hence we have no other alternative but to hold that the reference to the TPO, u/s 92CA of the Act is bad in law.

  Assessing Officer is bound to pass an assessment order before 31st March, 2014 for the Assessment Year 2011-12. The extended time u/s 153(1) of the Act, does not come into play in the facts of this case. Hence in our considered view, the assessment is barred by limitation. - Decided in favour of assessee.

  ---

• 2017 (2) TMI 1310 - RAJASTHAN HIGH COURT
  

  Registration u/s 12AA eligibility - benefit of a particular religious community - Held that:- There is no dispute with regard to the fact that as per definition of ‘Charitable purpose’ under section 2(15) includes relief of the poor, education, medical relief (preservation of environment(including watersheds, forests and wildlife) and reservation of monuments or places or objects or artistic or historic interest) and the advancement of any other object of General Public Utility.

  As the assessee submitted that ‘Jainism’ is the philosophy and preservation of symbol of such philosophy would definitely come into the embrace of the word ‘Charitable’. During the course of hearing, the Id. D/R could not refute the fact that clauses 16 of the objects which provides that without any descrimination of the caste or creed to help economically poor, old, ailing, handicap, poor students and clause 17 provides for hel0p for hospitalization of ailing persons, medicines, cold water, night shelter and Dharamshala etc. In our considered view, both these objects definitely fall under the category of Charitable purpose and cannot be construed as solely for the benefit of a particular religious community. See CIT vs. Dawoodi Bohara Jamat (2014 (3) TMI 652 - SUPREME COURT) - Decided in favour of assessee

  ---

• 2017 (2) TMI 1307 - ITAT AHMEDABAD
  

  Addition on account of capital introduced by the partner u/s. 68 - Held that:- The assessee had discharged the primary onus which was on it by offering explanation, which has not been found to be incorrect or false in any manner. The interest of the revenue is also safeguarded as the Income Tax Officer has been given the liberty to consider the said-credits in the hands of the partners if he is not satisfied with the sources of investment of cash credits in the accounts of the partners. See Pankaj Dyestuff Industries [2005 (7) TMI 601 - GUJARAT HIGH COURT] - Decided in favour of assessee

  ---

• 2017 (2) TMI 1306 - GUJARAT HIGH COURT
  

  Receipt of on money in cash - Held that:- Considering document i.e. Kaccha receipt, Banakhat, MOU signed by one Vikas Patel and the assessee and details of the payment mentioned in the said MOU which was signed by the assessee and which was duly executed by the assessee both learned CIT(A) as well as learned Tribunal have held that unaccounted payment of ₹ 1.50 Crore has been made on the land in question. Statement of Shri Vikas Patel recorded under Section 132(4) and statement of Shri Bhagwanbhai Aajra dated 12.12.2011 (one of the purchaser) have also been relied upon. Thus it cannot be said that there is any error committed by the learned CIT(A) and learned Tribunal in holding that ₹ 1.50 crore was received in cash as on money. - Decided against assessee.

  admitted to consider the following question of law.

  "E. Whether on the facts and in the circumstances of the case as well as in law, the Appellate Tribunal could have come to the conclusion that the entire gain on sale of said land was assessable as business income as against short term capital gain assessed by AO ?"

  ---

• 2017 (2) TMI 1305 - BOMBAY HIGH COURT
  

  Addition on account of guarantee commission chargeable to its associated enterprises - tribunal deleted addition - Held that:- We note that the impugned order of the Tribunal while allowing the assessee's appeal holding that the arm's length price of corporate guarantee cannot be determined on the basis of comparison with the bank guarantee and relied upon the decision of Everest Kento Cylinders Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT]. No substantial question of law.

  Interest charged under section 234B - MAT computation - tribunal deleted addition - Held that:- As decided in CIT v. JSW Energy Ltd. [2015 (5) TMI 823 - BOMBAY HIGH COURT] there would be no liability to pay interest under section 234B of the Act in view of a retrospective amendment made to section 115JB of the Act. This on the ground that at the time of making the payment of advance tax the respondent was under no obligation to pay advance tax and the same arose only on account of retrospective amendment to the law which came post the conclusion of the previous year relevant to the subject assessment year.The liability to interest under section 234B of the Act would only arise as a con sequence of failure to pay advance tax. No substantial question of law.

  Addition outstanding creditors under section 41(1) - liabilities had been outstanding for more than three years and had ceased to exist - Tribunal deleted the addition - Held that:- Revenue accepted the order of the Tribunal adverse to it on this issue for the assessment year 2005-06. However for the assessment year 2006-07 [2015 (2) TMI 1262 - BOMBAY HIGH COURT] in respect of the same respondent, the Tribunal on this very issue followed its order for the assessment year 2005-06 and held in favour of the respondent by order dated July 27, 2012. However the Revenue preferred an appeal from the order of the Tribunal dated July 27, 2012 relating to the assessment year 2006-07. By an order dated February 4, 2015 this court did not entertain the appeal on an identical question as raised herein. No distinction in facts and/or in law in this assessment year to that existing in the assessment years 2005-06 and 2006-07 has been shown to us which would require taking a different view. - Revenue appeal dismissed.

  ---

• 2017 (2) TMI 1304 - ITAT CHENNAI
  

  Unexplained investment - no source to explain such investments - Held that:- When both the balance sheets of the assessee-company and balance sheets of the companies in which the assessee had invested, reflected the amounts of investments and these correctly tallied, we cannot brush aside such accounts and auditor’s report. Doing so would be giving a licence to any assessee-company to prepare any balance sheet and thereafter go back and say itself that the balance sheet was not correct. The assessee cannot be allowed to approbate and reprobate. Once assessee prepared its books of account and balance sheet which were audited by a Chartered Accountant appointed under the Companies Act as true and fair, and where the amounts reflected in the balance sheet are also shown in the balance sheets of the companies where assessee had placed the investment, we cannot disregard such balance sheets. It may be true that the banker of the assessee denied giving any loans to the assessee.

  However, if the source of investment was not out of loan, the question of bank giving any confirmation does not arise. The addition was made, in our opinion, due to failure of the assessee to give proper source for investment made by the assessee in M/s Sri Padmabalaji Steels Pvt. Ltd. and M/s Suryabalaji Steels Pvt. Ltd. Assessee’s claim that it was only book entry cannot be accepted since the amounts were correctly reflected in the balance sheet of the assessee as well as the balance sheets of M/s Sri Padmabalaji Steels Pvt. Ltd. and M/s Suryabalaji Steels Pvt. Ltd. We are of the opinion that the addition was rightly made by the A.O. and confirmed by the CIT(Appeals - Decided against assessee.

  ---

• 2017 (2) TMI 1302 - ITAT JAIPUR
  

  Unexplained credit u/s 68 - proof of identity, genuineness of the transaction and creditworthiness of the creditor of the four companies - Held that:- Whether investee companies have their own profit making apparatus and were involved in any tangible business activity or were they merely rotated money, which was coming through the bank accounts, which means deposits by way of cash and issue of cheques. Creditworthiness and genuineness of the transaction is therefore not proved by showing merely issue and receipt of a cheque or by furnishing a copy of statement of bank account of share subscriber, when circumstances requires that there should be some more evidence of positive nature to show that the subscribers had made genuine investment.

  In the present case, the Assessing Officer clearly harbours doubts about the legitimacy of share subscription in the assessee company and has gone about issuing notices under section 133(6), summons under section 131 and calling for the personal attendance of the directors of the investee companies. When the Assessing Officer sets about seeking explanation for the credit entries in the books of account of the assessee in terms of section 68, it is legitimately expected that the exercise would be taken to the logical end.

  Whilst it does appear that the time given to the assessee company for proving the identity and creditworthiness of the investee companies was too short, the whole exercise started at the fag end of assessment proceedings and further that it is probably not always possible for the assessee placed in such situation to be able to enforce the physical attendance of the Directors who are not in Jaipur, the curtains on such exercise at verification may not be drawn and adverse inferences reached only on the basis of returning undelivered of the summons under section 131. Conversely, with doubts as to the identity, creditworthiness and genuineness of transaction persisting in the minds of the Assessing officer, the initial burden on the assessee cannot be said to be have been discharged. We accordingly set aside the matter to the file of the AO to examine the matter a fresh taking into consideration the legal proposition. Appeal filed by the Revenue is allowed for statistical purposes.

  ---

• 2017 (2) TMI 1296 - ALLAHABAD HIGH COURT
  

  Grant received by Assessee from Government of India - accrual of income - Held that:- In the case in hand grant/subsidy was forwarded by Government of India to help Assessee in its revival by making payment to employees towards VRS. It was a voluntary remittance fund by Government of India to Assessee. Despite our repeated query learned counsel appearing for appellant could not show anything so as to bring 'grant' or 'subsidy' same within any particular clause of Section 2 (24) of Act, 1961.

  Sub-clause (xviii) has been inserted in Section 2(24) by Finance Act, 2015 with effect from 01.04.2016 which deals with certain kind of subsidy or grant or cash incentive etc. by Government of India or State Government but that clause has no application in the present case. In view thereof, we answer Questions-(i) and (ii) both in favour of Assessee and against Revenue holding that amount of grant received by Assessee from Government of India could not have been treated as "income" and that being so, addition made by AO of amount of grant and upheld by Commissioner and Tribunal is not in accordance with law. Both these Questions are answered in favour of Assessee.

  Payment made to L.I.C. under Gratuity Insurance Scheme by referring to Section 40(A)(vii) - disallowance observing that fund was not recognized by Department - Held that:- A similar question was considered in CIT Vs. Textool Co. Ltd. (2009 (9) TMI 66 - SUPREME COURT) where also payment was made to L.I.C. towards group life assurance scheme and this was held to be an approved Scheme and there was no violation of Section 36(1)(v) of Act, 1961. Court held that a narrow interpretation straining language of Sub-Clause (v) so as to deny deduction to Assessee should not be followed since the objective of fund was achieved. - Decided in favour of assessee.

  ---

• 2017 (2) TMI 1293 - ITAT PUNE
  

  Disallowance u/s.14A - Held that:- Since in the instant case the assessee has not received any dividend on the investment made in shares of group companies, therefore, the investment made in the group companies should be excluded from the investments for the purpose of computing disallowance u/s.14A r.w. Rule 8D.

  So far as inclusion of share application money is concerned, it is an admitted fact that no shares are allotted as on 31-03-2009. We find merit in the submission of the assessee that the question of earning any exempt income simply does not arise on such share application money pending allotment. We find the Mumbai Bench of the Tribunal in the case of Rainy Investments Pvt. Ltd. (2013 (2) TMI 602 - ITAT MUMBAI) has held that share application money cannot be regarded as an investment in shares or an asset yielding tax free income and neither is it capable of yielding any tax free income. Thus we hold that share application money pending allotment should be excluded from the investments for the purpose of computing disallowance u/s.14A.

  Computation of disallowance u/s.14A on account of investment in partnership firms we find the assessee has excluded the same for the purpose of computation of disallowance u/s.14A. We find the Assessing Officer included the investments made in K.K. Erector, Kumar Sons and Kumar Builders on a pro-rata basis which has been upheld by the CIT(A). We find the amounts invested in the above firms is much less than the own capital and free reserves of the assessee company. Since the assessee in the instant case has conclusively proved that its own capital and free reserves are much more than the investment in the partnership firms and since we have already held in the preceding paragraphs that the share application money as well as investment in the group companies on which no dividend has been received has to be excluded from the investments for the purpose of computation of disallowance u/s.14A, therefore, in view of the discussions above no disallowance u/s.14A is called for in the instant case. Accordingly, the grounds raised by the assessee including the additional grounds are allowed.

  Addition being interest received on deposits belonging to the society - Held that:- The assessee could not bring any material before us to show that assessee has infact handed over the money to the society. Since there is no evidence on record that any society has been formed and the assessee has transferred the money to the society or has shown any liability in its books and considering the fact that the assessee has claimed tax credit on such interest income, therefore, we find no infirmity in the order of the CIT(A) on this issue. Accordingly, the grounds raised by the assessee on this issue are dismissed.

  Proportionate disallowance made on account of diversion of borrowed funds and enhancement of income - Held that:- Since in the instant case the assessee has conclusively proved that the own capital and free reserves of the assessee company is much more than the interest free advances given to Sinew Developers Pvt. Ltd. and Riverview Properties Pvt. Ltd. therefore, respectfully following the decision of Coordinate Bench of the Tribunal in the case of Trinity India Ltd. (2013 (8) TMI 948 - ITAT PUNE) we hold that the CIT(A) is not justified in enhancing the income of the assessee by directing the Assessing Officer to disallow proportionate disallowance of interest

  Interest free advances to two concerns - Held that:- CIT(A) has correctly given a categorical finding that the interest free advances to Pune Technopolis Development Pvt. Ltd. and L.K. Developers Pvt. Ltd. are for business expediency and therefore in view of decision of Hon’ble Supreme Court in the case of S.A. Builders Ltd. (2006 (12) TMI 82 - SUPREME COURT) no disallowance of interest u/s.36(1)(iii) is called for under the facts and circumstances of the case.

  Addition on account of society maintenance charges - Held that:- Admittedly, the assessee is a Builder and Developer. It is a normal business practice in construction business that the builder is responsible for the maintenance of the buildings of a society till such time the flat owner’s society or committee is formed and the maintenance of the society is thereafter handed over to the society or committee even though the flats are sold. In the instant case, there is no finding by the Assessing Officer that the assessee has incurred society maintenance charges even after the formation of the committee and the maintenance of the buildings was handed over to such committee. In absence of the same, we find merit in the findings given by the CIT(A) that the society maintenance expenditure incurred by the assessee is a business expenditure incurred in the normal course of business activity since the society has not been formed and the maintenance of the society is not handed over to the society or committee. In this view of the matter and in view of the detailed reasoning given by the CIT(A) we find no infirmity in her order. Accordingly, the same is upheld and the grounds raised by the Revenue on this issue are dismissed.

  ---

• 2017 (2) TMI 1290 - ITAT DELHI
  

  Disallowance u/s 14A - Held that:- CIT(A) has rightly given a finding that the investment in units of UTR was made in the earlier years and all that it had to do for earning the dividend was to deposit the cheque. This does not require the assessee to incur expenditure, the assessee’s contention that Section 14A does not envisage disallowance to any ad-hoc or an estimated expenditure. It is only en expenditure actually incurred for earning an income exempt from tax that would be disallowed u/s 14A. CIT(A) has rightly relied on the order of Hon’ble Delhi High Court in case of CIT Vs. Chemical & Metalogical Design Company Ltd [2008 (7) TMI 1005 - DELHI HIGH COURT] wherein it is held that making a proportionate disallowance of expenses on estimated basis could not be sustained under Section 14A of the act. Thus, the CIT (A) has rightly deleted the said addition.

  Long term capital loss on sale of 1140 units of VECAUS-II 1990 - Held that:- CIT(A)’s finding is correct that the Assessing Officer fail to take into account the indexed cost of acquisition for Assessment Year 1990-91 and also the fact that the same pertaining to 1140 units. This is supported by the notes attached to the return of income and computation of capital gains for the year under appeal.

  Addition on account of change in method of valuation of closing stock applying provisions of Section 145A - Held that:- the assessee has adopted method of valuation of closing stock which is most suitable to the GNF Unit also method has been changed to weighted average cost method in line with other units so that the principle of consistency could be followed among all the units. In-fact, the Assessing Officer’s addition on account of change in method of valuation of closing stock applying provisions of Section 145A does not come in consistence with the proper change of method of accounting, without this fact it could not have been possible to implement the ARP Software for accounting, the said reason is not disputed by the Assessing Officer either in the order or in the remand report. The CIT(A) (A) has rightly deleted this addition.

  Addition of interest paid by the assessee being 10% of the sum advanced by the assessee to its subsidiary company in an earlier year - Held that:- This amount was paid by the assessee to its subsidiary company Kelbex International Ltd, which was no longer an operating company being under liquidation, to meet its statutory expenses such as filing fee and audit fee, etc. The assessee had enough funds of its own to advance this money in the year when it was paid. The A.O nowhere suggested that the assessee used any interest bearing loan funds to make this payment. Thus, the CIT(A) rightly agreed with the assessee’s contentions and followed the decision of the Delhi High Court in the case of CIT vs. Tin Box Co. [2002 (11) TMI 75 - DELHI High Court] by directing deletion of disallowance

  disallowance of contribution to PF as paid belated - Held that:- Though the contribution to PF & ESIC were paid during the previous year, the presented amounts paid beyond the relevant due dates of the respective months. In view of the amendment of the first provision of Section 43 (B) deletion of the second proviso by Finance Act, 2003 any payment on account of PF etc if made before the due date for filing return would not be hit by Section 43(B). The reliance on the judgment of Delhi ITAT in case of ACIT Vs. M/s Vestas RRB India Ltd. [2004 (5) TMI 245 - ITAT DELHI-C ] is rightly taken into account by CIT(A). This ground is dismissed.

  Disallowance of provision for Warranty and Optional Service Contract (OSC) - Held that:- Assessing Officer observation that the provision on the basis of acturual valuation certificate could not be allowed due to over statement of book loss on account of change in the method of accounting for the year under consideration. The decisions cited provides the proposition that provision for warranty was for a definite and ascertain liability and the same could not be disallowed as contingent liability. In-fact in the immediate preceding year i.e. Assessment Year 2000-01 similar disallowance made by the Assessing Officer was deleted in appeal by the CIT(A) and in A.Y. 1993-94 by the ITAT. There is no interference required in the order of the CIT(A) as related to this ground.

  Disallowance of lease rentals - Held that:- A.O did not take into account the accounting of the sale proceeds in the year ended 31/3/2000 and also the interest factor for the period of 51 months. Lease financing through sale cum lease back transactions have been in practice for quite some time and if it is only when the existence of assets itself is in doubt or when an asset subject matter of transfer actually from a physical part of another larger asset or such sham transaction takes place that the revenue can rightly object to the arrangements. in the present case, there was no doubt about existence of the assets, the sale proceeds and consequent short term capital gains were duly assessed in Assessment Year 2000-01, and the transaction entitled the assessee to the use of the sale proceeds at a cost lower than borrowing through debentures. The CIT(A) has rightly deleted the same. This ground is dismissed.

  ---

• 2017 (2) TMI 1286 - ITAT CHENNAI
  

  TPA - idle capacity adjustment - Held that:- The assessee company has requested for idle capacity adjustment as per Rule 10B(1)(e)(iii),10B(2) and 10B(3) but company is not a new company or startup company. The company along with Greaves manufacturing the tractors prior to 2002.The ld A.R has not furnished the details of installed capacity and utilized capacity from the beginning of its operations. Since the company is reasonably old from the profile, justifiable reasons have to be explained for non-utilization of the capacity and the fixed costs incurred from the year of inception, the installed capacity, utilized capacity and capacity of breakeven point.

  Under-utilization of production capacity is a vital factor, as per the information available, this is more than five years old company and did not explain the reasons leading to underutilization of installed capacity. Whether it was on account of non-availability of material, electricity, infrastructures, lack of working capital, etc. In the absence of the details, the case laws relied upon by the assessee are of no help to make adjustment of idle capacity. Therefore we are unable accept the assessee’s request for idle capacity adjustment and the same is rejected. Accordingly grounds raised on this issue are dismissed.

  Selection of comparable - Held that:- Assessee is engaged into manufacture of tractors, thus companies functionally dissimilar with that of assessee need to be deselected from final-list.

  Working capital adjustment - Held that:- While arguing the case before us, the assessee has not furnished the pricing policy and the interest clauses to make necessary working capital adjustment. This is one of the important factors to make the necessary working capital adjustment. Further, though the TPO has determined the margin adopting M/s.VST Tillers as comparable, we have directed the TPO to include M/s.HMT Ltd., as additional comparable. The TPO should take both the comparables and re-work the margins and make necessary adjustments for working capital in the light of above discussion. This ground of appeal is allowed for statistical purposes.

  Rationale for the use of multiple year data - Held that:- As per the discussion made by the TPO and as per the Rule 10B(4) of IT Rules, it is binding of the assessee company to adopt the relevant FY data only in the year in which the international transaction has been entered into. Therefore, the AO has rightly rejected the multiple year data and we do not find any inconformity in the order of the Ld.CIT(A) and TPO. This ground of the appeal is dismissed.

  ---

• 2017 (2) TMI 1284 - PUNJAB AND HARYANA HIGH COURT
  

  Treatment to unexplained money as the Stridhan - Held that:- The proposition of law enunciated in Pratibha Rani’s Vs. Suraj Kumar and another, (1985 (3) TMI 60 - SUPREME Court) relied upon by the learned counsel for the appellant is unexceptionable. It was held by the Apex Court that a Hindu married woman is the absolute owner of her Stridhan property and can deal with it in any manner she likes. She may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband. Ordinarily, the husband has no right or interest in it with the sole exception that in terms of extreme distress as in famine, illness or the like, the husband can utilise it but he is morally bound to restore it or its value when he is able to do so. This right is purely personal to the husband. The property so received by him in marriage cannot be proceeded against even in execution of a decree for debt. However, in the present case, the appellant was unable to substantiate that the amount which was treated to be unexplained money was the Stridhan of the appellant’s wife.

  In view of the above, once the additions have been held to be sustained, no substantial question of law arises.

  ---

• 2017 (2) TMI 1283 - PUNJAB AND HARYANA HIGH COURT
  

  Application for registration under section 12AA and approval under section 80G(5)(iv) rejected - failure to furnish the relevant documents/information - order was passed by the Deputy Director (Systems) and not by the CIT himself. Thus, no proper opportunity of being heard was given to the appellant - competent authority - Held that:- Tribunal after examining the matter held correctly held that law does not permit Deputy Director (Systems) to hear any matter under Sections 12AA and 80G(5)(iv) of the Act. It is for the CIT(Exemptions) to hear and conduct the proceedings himself after giving opportunity of being heard. Thus, the impugned order in the present case was held to be violative of the provisions of the Act and the matter was sent to the CIT(Exemptions) to re-decide the issue afresh in accordance with law by giving reasonable sufficient opportunity of being heard to the assessee. No substantial question of law arises

  ---

• 2017 (2) TMI 1282 - MADRAS HIGH COURT
  

  Determination of actual consideration paid - whether the sale consideration to be adopted is the ‘apparent’ consideration as reflected in the registered deed of sale or the ‘actual’ consideration said to have been paid by the assessee and reflected in the agreement of sale? - section 50 applicability - Held that:- Tribunal, while rightly holding that the deeming provisions of section 50C are not applicable to a situation like the present one, erred in not taking into account various factors relevant to arrive at a proper determination of the actual consideration paid. This is on account of the fact that the assessee did not appear for the hearing and the matter was heard by the Tribunal exparte, qua the assessee.

  We have noticed that the assessee has nowhere explained why the sale deed was registered when, according to him, the consideration contained therein was not the actual sale consideration agreed upon, nor why an Addendum was not executed by the parties correcting the mistake in sale consideration, once the error was noticed. This, and all other relevant facts relating to the matter, require thorough examination to arrive at the actual consideration paid. In order to ensure that the matter is considered in the proper perspective and all relevant details are taken into account, we deem it fit to remit the issue to the file of the Assessing Officer to be considered and adjudicated upon de novo. The assessing officer shall afford adequate opportunity to the assessee to furnish all particulars as may be necessary to arrive at the real and actual price paid by the assessee for acquisition of the property.

  ---

• 2017 (2) TMI 1281 - ITAT MUMBAI
  

  Treatment of alimony received by the assessee from her ex-husband - whether taxable under the head “Income from other sources” or non taxable capital receipt - Held that:- In the proviso to section 56(2)(vi) any sum received from a relative is exempt from tax. In the definition of relative, the receipt from whom is exempt under the Act, inter alia not only the spouse but the brother and sister of the spouse have also been included. As we have observed above that the maintenance or alimony is paid by the husband to his wife in recognition of her pre-existing right, whether marriage relationship is still continuing or has been dissolved, does not bar the payment of alimony by the ex-husband to the divorced wife.

  Under such type of circumstances, in our view, in the definition of spouse, exspouse is also included except where there is an evidence that the payment is not made as a gift or an alimony but for some other consideration or by virtue of some other transaction. In the absence of any such evidence, the payment of alimony amount by the ex-husband to his wife is nothing more than a gift and is exempt under the proviso to section 56(2)(vi) of the Act. We accordingly do not find any justification on the part of Income Tax Authorities to tax the said amount received by the assessee from her ex-husband as alimony and the additions made in this respect are accordingly ordered to be deleted. - Decided in favour of assessee.

  ---

• 2017 (2) TMI 1276 - ALLAHABAD HIGH COURT
  

  Assessment u/s 153A - merely quoting a wrong section will not render assessment order void ab initio and that such mention of a wrong section is a defect curable u/s 292B - Held that:- A bare reading of Section 153A shows that search having been conducted on 10.11.2005, financial year is 2005-06 and A.Y. 2006-07. As per Section 153A (1) (b), assessment or re-assessment could have been done in respect to six Assessment Years immediately preceding the assessment year relevant to the preceding year in which such search is conducted or requisition is made. It brings in period from Assessment Years 2000-01 to 2005-06. Earlier, special procedure for assessment of such cases was given in Chapter XIV-B. It is deleted by virtue of Section 158 (BI) inserted by Finance Act, 2003, w.e.f. 01.06.2003. The provisions of Chapter XIV-B have been made inapplicable where search is initiated under Section 132 or books of account, document or any assets are requisitioned under Section 132A after 31.05.2003. Therein concept of ''block assessment'' as defined in Section 158B, included the period up to the date of commencement of search or date of requisition in the previous year, the said search was conducted or requisitioned or made, but this is missing in Section 153A. Thus assessment under Section 153A for A.Y. 2006-07 is not sustainable.

  Question no.1 is therefore answered by holding that mere mention of a wrong provision will not deny jurisdiction to the authority, if it otherwise has, but this aspect has no application to the present case. Question no.2 is answered against appellant.

  ---

1 ....34567891011........ 35