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Income Tax - Case Laws
Showing 181 to 200 of 678 Records
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2016 (2) TMI 1078 - DELHI HIGH COURT
Treating income/loss on account of foreign exchange fluctuation as part of the operating revenue/expense - TPA - Held that:- Reliance placed by the Revenue on the Safe Harbour Notification dated 18th September 2013 will be of no avail to the Revenue since that notice is prospective in nature. It is seen that by the order in Pr. Commissioner of Income Tax-3 v. Fiserv India Pvt. Ltd. (2016 (1) TMI 1276 - DELHI HIGH COURT ), this Court has accepted the above plea of the Assessee. Even otherwise, the decisions referred to by the ITAT in the impugned order on the issue also answer the question in favour of the Assessee and against the Revenue.
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2016 (2) TMI 1077 - ITAT KOLKATA
Reopening of assessment - assessment against non-existent company - Held that:- As the assessee company Gestetner (India) Ltd. got merged with RICOH India Ltd. w.e.f. 01.04.2005 by the orders of Hon’ble Calcutta High Court dated 22.06.2005 and Bombay High Court dated 30.06.2005, the assessments framed u/s. 143(3) for AY 2003-04 vide dated 15.03.2006 and for AY 2004-05 vide dated 08.12.2006 is on nonexistent person and hence, quashed. This legal issue is decided in favour of the assessee.
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2016 (2) TMI 1076 - ITAT AHMEDABAD
Addition of claim of rebate and discount - CIT-A deleted addition - Held that:- As gone through the relevant documentary evidences brought on record before us in the form of the paper book it shows that the assessee had filed complete details before the A.O, the rebate and discount in each bill has been accepted. We also find that the payments received by the assessee from its customers was net of rebate and discount since all these factual details have been examined and verified by the First Appellate Authority. We, therefore, decline to interfere with the findings of the ld. CIT(A) - Decided against revenue
Addition u/s. 40(a)(ia) - assessee has deposited the tax deducted at source in contravention of the provisions of section 194A/194C/194H/194J - Held that:- Factual matrix incorporated in detail by the A.O in his assessment order at pages 7 to 17 clearly shows that the assessee has deposited the tax deducted at source before filing of the return of income which is 29.09.2009.The amendment brought to the provisions of section 40(a)(ia) by Finance Act, 2010 squarely apply. The Hon’ble Calcutta High Court in the case of Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT] has held that the amendment in section 40(a)(ia) is retrospective. The Hon’ble Jurisdictional High Court in the case of Omprakash Chaudhary (2015 (2) TMI 150 - GUJARAT HIGH COURT) has also taken a similar view. We decline to interfere with the findings of the ld. CIT(A). - Decided against revenue
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2016 (2) TMI 1075 - ITAT DELHI
Addition made u/s 68 - Accommodation entries - Addition made in the case of the conduit companies - Held that:- We respectfully following the decision in the case of M/s Omni Farms Pvt. Ltd. (2015 (1) TMI 1119 - ITAT DELHI) delete the addition made u/s 68 wherein held that there is an order of the Settlement Commission as well as the ACIT u/s 144A holding that Shri S.K. Gupta was providing accommodation entries, he used various companies as conduit for providing the accommodation entries, cash was received through mediators from the persons who wanted to avail the accommodation entries. Considering the logical consequences of the order of the Settlement Commission as well as of Additional CIT under Section 144A, no hesitation to hold that the addition under Section 68 cannot be made in the case of the conduit companies. Therefore, we delete the addition made u/s 68 in the case of all the nine companies, which are admittedly conduit companies of Shri S.K. Gupta. - Decided in favour of assessee
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2016 (2) TMI 1074 - ITAT CHENNAI
Profit on sale of the land - date of acquisition of asset - long term capital gain or short term capital gain - entitlement to deduction u/s 54F - Held that:- The first date of acquisition, i.e. 20.12.2006, has to be treated as date of acquisition of capital asset. The actual date of sale of the property is 21.01.2010, which is beyond 36 months from the date of original acquisition. Hence, the asset has to be treated as long term capital asset. Therefore, the profit on sale of such land has to be treated as long term capital gain. Hence the assessee is eligible for deduction under Section 54F of the Act subject to the compliance with the conditions prescribed in Section 54F of the Act. In view of the above, we are unable to uphold the order of the lower authority. Therefore, the orders of the lower authorities are set aside. The Assessing Officer is directed to treat the profit on sale of the land as long term capital gain and examine whether the assessee has complied with the conditions prescribed in Section 54F of the Act. If the assessee has complied with the conditions prescribed in Section 54F of the Act, then the assessee is eligible for deduction under Section 54F of the Act. - Decided in favour of assessee.
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2016 (2) TMI 1073 - ITAT MUMBAI
Recomputation of arm’s length price of international transactions - benchmarking the AMP transactions - Held that:- The issue of benchmarking the AMP transactions was remanded in the case of M/s. Johnson & Johnson Limited (2016 (1) TMI 1280 - ITAT MUMBAI) and judgment of the Hon’ble Delhi High Court in the case of Perfetti Van Melle India Pvt Ltd vs. DCIT [2015 (6) TMI 130 - ITAT DELHI ]. Appeal of the assessee is partly allowed for statistical purposes.
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2016 (2) TMI 1071 - ITAT NAGPUR
Revision u/s 263 - ‘Change in opinion’ - Held that:- As far as the question of invocation of jurisdiction through a notice u/s 263 is concerned, we have perused the said notice, photo copies placed before us and in our considered opinion the learned Commissioner was very much clear in his mind about the genuineness of the claim of expenditure, therefore, he had issued the said notice providing an opportunity to the assessee to explain the legality of the claim. Moreover, the assessee has also answered this query vide a reply without raising any doubt at that point of time. Hence we hereby hold that the objection is not sustainable in the eyes of law.
As examined the findings of Commissioner according to which he has directed the AO to make necessary enquiries as regards the allowability of the said expenditure that too after providing opportunity to the assessee. This is not the case where the directions were to disallow the expenditure in question but the directions were simply to verify the admissibility of the claim. In such situation when the learned Commissioner has not directed to disallow the claim, or in other words, the directions were not conclusive in nature, we hereby hold at this stage that no prejudice has been caused to the assessee. The assessee has ample opportunity to explain his case.
We, therefore, conclude that there is no fallacy in the directions of the learned Commissioner to the AO to pass a fresh assessment after making necessary enquiries in respect of the expenditure claimed under the head “Corporate Social Responsibility.” The order of the learned Commissioner passed u/s 263 dated 27-03-2014 is hereby confirmed. - Decided against assessee.
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2016 (2) TMI 1070 - MADRAS HIGH COURT
Condonation of delay - whether the finding of the Tribunal that there was no sufficient cause for the delay is perverse or not ? - Held that:- The question of condonation of delay in filing the appeal lies within the discretion of the Tribunal and that therefore, the exercise of such a discretion one way or the other cannot give rise to a question of law in terms of Section 260A of the Act. Therefore, in essence, it is contended by the learned Standing Counsel that no question of law arises for consideration in this appeal.
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2016 (2) TMI 1066 - ITAT PUNE
Penalty levied u/s. 271(1)(c) - disallowance u/s. 40(a)(ia) r.w.s. 194C - Held that:- Commissioner of Income Tax (Appeals) confirmed the addition. In second appeal, the Tribunal granted part relief to the assessee. Against the findings of the Tribunal, the assessee filed appeal before the Hon'ble Bombay High Court wheren Hon'ble High Court was pleased to admit the appeal as it involved substantial question of law. Hon'ble Bombay High Court in the case of CIT Vs. Nayan Builders & Developers (P.) Ltd.(2014 (7) TMI 1150 - BOMBAY HIGH COURT) has held that no penalty is leviable where the issue is debatable and the High Court has admitted the appeal as it involves substantial question of law. - Decided in favour of assessee
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2016 (2) TMI 1064 - SC ORDER
Computation of deduction u/s 10A - HC [2015 (6) TMI 1044 - BOMBAY HIGH COURT] held Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter . Appeal divided against revenue
Delay condoned. Revenue appeal against HC accepted.
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2016 (2) TMI 1061 - DELHI HIGH COURT
Reopening of assessment - loss as a result of fluctuation in foreign exchange derivatives - Held that:- The escapement of income by itself is not sufficient for reopening the assessment in a case covered by the first proviso to Section 147 of the said Act and unless and until there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment, the power to reopen the assessment should not be invoked. It was insisted that the reasons for reopening of the assessment should specifically indicate which material fact was not disclosed by the Assessee in the course of the original assessment under Section 143(3) of the Act failing which there should not be any reopening of the assessment.
The submission of Mr. Manchanda that relevant and material facts have to be specifically discussed in the returns of income of the tax audit report appears to overlook the fact that the Assessee cannot be expected to guide the AO on how he should scrutinize the accounts. In the letter dated 28th November 2011 of the Assessee in reply to the query of the AO in the original assessment proceedings, there was a whole note on exchange fluctuation enclosed in the form of Annexure-B. Despite this it cannot be said that the AO was ignorant of what the Assessee was doing in respect of foreign exchange loss while accounting for derivatives contracts. The change in the method of accounting and the consequential change in the loss figure have been adequately explained by the Assessee. Under Note J in the “Statement of significant accounting policy” in Schedule 22 to the audited annual accounts, the Assessee had made a distinction between foreign exchange contracts not intended for trading and speculative purposes and those for trading and speculative purposes. It is, therefore not possible to accept the plea of the Revenue that there was any deliberate failure on the part of the Assessee to make full and true disclosure of the change in the accounting policy that led to computation of loss as a result of fluctuation in foreign exchange derivatives.
This has to be also appreciated in the context of the Assessee following the mercantile system of accounting and Section 145 of the Act. The income of the Assessee is to be computed consistent with the regular method of accounting followed by the Assessee. The Assessee has been following AS-11 and AS-30 issued by the ICAI, in terms of which the loss/gains on outstanding derivatives contracts are to be recognized on mark to market basis. The Assessee is right in contending that CBDT Instruction No. 3 of 2010 cannot possibly override the existing decisions of the Supreme Court/ High Court on similar issues. - Decided in favour of assessee.
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2016 (2) TMI 1060 - ITAT MUMBAI
Assessment u/s 153A - disallowance of the claim of the interest expenditure incurred by the assessee on loans borrowed against the interest income - Held that:- We uphold the orders of the CIT(A) and delete the additions made on account of disallowance of the claim of the interest expenditure incurred by the assessee on loans borrowed against the interest income on the short ground itself by holding that completed assessments can be interfered with by the AO while making assessment under section 153A of the Act only on basis of some incriminating material unearthed during the course of search which was not produced or not already disclosed or made known in course of original assessment and undisclosed income or property discovered in course of search , while in the instant appeal the AO has in the assessments framed vide orders dated 31.12.2009 u/s. 153A read with Section 143(3) of the Act in pursuance to the first search on 19.07.2007 has duly examined and allowed the claim of the assessee for deduction of interest of ₹ 47,22,282/- being interest paid on loan borrowed against the interest income earned on loans advanced by the assessee and no new incriminating material has been found or unearthed during the course of second search on 29-03-2011 . See Commissioner of Income Tax (Central) -III Versus Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT ] - Decided in favour of assessee
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2016 (2) TMI 1054 - ITAT KOLKATA
Addition being the profit on sale of investments - Held that:- Clause (b) was omitted by the Finance Act, 1988 leading to the situation that now neither the loss written off or reserved in the accounts to meet depreciation is required to be reduced from the profits nor appreciation in or gain on the realization of investments is to be added. This position has been clarified by the Memorandum Explaining the Provision in the Finance Bill, 1988. As seen from the legislative intent made explicit through Memorandum Explaining the Provision, Notes and Clauses and also circular issued by the CBDT exemption is to be provided in respect of the profits earned by the insurance company on sale of investment and consequently no deduction is to be allowed towards losses incurred on the realization of investments. In simple words the prescription of the hitherto cl. (b) of r. 5 has been taken back, which granted deduction towards the depreciation reserve or loss on realization of investments and increment towards appreciation in or gains on the realization of investments.
The AO’s viewpoint cannot be accepted for the reason that with the omission of cl. (b) of r. 5 it has been made clear that neither the loss on account of diminution in the value of investment shall be allowed as deduction nor any income on investment shall be subjected to tax. Both the items of loss and income from the investments are to be considered as neither deductible nor includible in the total income of the assessee. Therefore the CIT(A) was justified in deleting the addition made by the AO. We do not find any grounds to interfere with the order of the CIT(A). Accordingly the appeal of the revenue is dismissed.
Addition u/s 14A - Held that:- The Assessee’s case being for the Assessment Year 2006-07, there cannot be any applicability of the above-referred subsection (2) of section 14A or Rule 8D in the Assessee's case for the Assessment Year 2006-07. In the given circumstances, the quantum of disallowance had to be decided in the light of the decisions rendered by the ITAT Kolkata Benches in the cases referred to by the CIT(A) in the impugned order. In those decisions, the ITAT, Kolkata Benches have consistently taken a view that 1% of the exempted income/dividend shall be considered as expenses/expenditure relating to the earning of exempted income u/s 14A in the assessment years where the rule 8D was not applicable.
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2016 (2) TMI 1052 - ITAT DELHI
Admission of additional evidence - objection to the DVO’s Report - sale of land - Held that:- The prayer of the assessee for admission of additional evidences in the peculiar facts and circumstances of the case, I find was fully justified. Not only the evidence is relevant and crucial for determining the issues even otherwise the explanation offered in support of admission of the same i.e. the acute financial need of the assessee prior to the sale on account of the assessee’s father suffering from cancer and finally succumbing to the disease where the financial needs for the treatment etc. was sourced from friends, relatives and the aforesaid uncle thus the relevant document remaining with the uncle is not a far-fetched story and is an acceptable explanation.
CIT(A) in the facts of the present case has not cared to ensure that compliance is made of the directions given by his predecessor CIT(A) dated 08.12.2014 communicated to the DVO through AO vide letter dated 28.08.2014. A perusal of the same shows that the said authority was directed that the assessee be provided an opportunity of being heard by the DVO before submitting the Final Report which issue is found addressed vide Ground No.1.4 of the present proceedings.
The sale instance relied upon by the assessee, it is found have also not been taken into consideration as found addressed in Ground No.2.2. Accordingly in view of these obvious and patent deficiencies, the impugned order is set aside and the issues are restored to the CIT(A) with the direction to admit the fresh evidences and confront the same to the AO by way of a Remand Report. In case the DVO’s Report is relied upon then an opportunity of being heard to the assessee by the DVO be provided before submitting a final Report which as per law is required to be confronted to the assessee before the passing of the order. Similarly, the sale instance of land in the vicinity relied upon by the assessee in support of his prayer are evidences which need to be addressed and the CIT(A) cannot avoid adjudication on the prayer made and the evidences filed. Accordingly, in view of the above reasoning, the impugned order is set aside and the issue is restored back to the CIT(A) with the direction to pass a speaking order in accordance with law. - Appeal of the assessee allowed for statistical purposes.
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2016 (2) TMI 1051 - PUNJAB AND HARYANA HIGH COURT
Wrong valuation of the closing stock - method of valuation of closing stock - return subsequently revised under section 139(5) - Held that:- The closing stock included rice, rice bran, phak, husk and bardana and the assessee revised the value of rice husk, rice bran and bardana. The assessee took a plea that since the valuation of certain finished goods was wrongly adopted at higher rates, their realizable value needed to be rectified. The assessee in the revised return filed under section 139(5) of the Act also had not depicted the true and correct value of the finished goods. Accordingly, the Assessing Officer assessed the income of the assessee at ₹ 9,38,600 by making an addition of ₹ 8,52,513. On appeal by the assessee, the Commissioner of Income-tax (Appeals) restricted the said addition of ₹ 8,52,513 to ₹ 14,344. On further appeal by the Revenue, the Tribunal sustained the addition of ₹ 8,52,513 made by the Assessing Officer by holding that the said addition was made on the basis of sale instances and not on hypothetical basis. It was further held by the Tribunal that nothing was produced by the assessee to show the basis of wrong valuation.
The assessee itself adopted the value of rice at ₹ 1050 per quintal and no reason had been given for revaluing the same at ₹ 950 per quintal. The stock had to be valued either at the market rate or at the cost price but the assessee had adopted a different view which was not realistic. Further, for husk, the original value was taken at ₹ 55 per quintal which was revised to ₹ 48 per quintal but in the case of Pooja Fats Pvt. Ltd., a sister concern of the assessee, the closing stock of husk was valued at ₹ 60 per quintal. For rice bran, the value of rice was worked at ₹ 328 per quintal which was revised to ₹ 280 per quintal whereas during the relevant financial year, it was at the rate of ₹ 295 per quintal. - Decided against assessee
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2016 (2) TMI 1050 - ITAT BANGALORE
Transfer pricing adjustment - selection of comparable - Held that:- Assessee had considered itself to be software development services provider and the TPO had also accepted this. The most appropriate method selected both by assessee and TPO were TNM method. This method obviates necessity for complete product identity or services identity between the tested party and the comparables. Broad functional similarities would suffice. However, where the functional profile show that the dissimilarity, even within the very same segment was so significant so as to erode the comparability, then there is a good case for exclusion. Assessee has mainly relied on the decision of the Co-ordinate Bench in the case of M/s Cisco Systems (Ind.) Pvt.Ltd (2014 (11) TMI 849 - ITAT BANGALORE ). The said company was also engaged in the business of rendering software development services. Nothing has been brought before us by the revenue to show that the functional profile of M/s Cisco Systems (Ind) Pvt.Ltd(Supra) was so different from that of the assessee so as to erode the comparability of the comparable companies considered in the said case with that of the assessee. In our opinion, assessee is justified in relying on the said decision which was also for the very same assessment year.
Hon’ble Delhi High Court in the case of CIT Vs M/s Agnity India Technologies Pvt. Ltd. (2013 (7) TMI 696 - DELHI HIGH COURT ) had affirmed an order of this Tribunal were M/s Infosys Technologies Ltd was directed to be excluded from the list of comparables considering the peculiar features of the said company. Hence, no purpose will be served in remitting the question of comparability of M/s Infosys Tech.Ltd back to the TPO/AO. In view of the above discussion, we direct exclusion of M/s Bodhtree Consulting Ltd., M/s Tata Elxsi Ltd.(Seg.) and M/s Infosys Tech.Ltd from the list of comparables.
Working capital adjustment - Held that:- AO cannot force an artificial limitation to the actual working capital adjustment ratio derived from the comparable companies considered for the arm’s length study. The restriction of working capital adjustment based on PLR of SBI will be appropriate since it is based on a presumption with all lending or credit are having uniform interest rates as decided by the SBI. We therefore, direct the AO to give working capital adjustment considering the comparable companies after exclusion of the three companies mentioned above
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2016 (2) TMI 1049 - ITAT MUMBAI
Condonation of delay - Held that:- The serious ailment of the Director, who was handling financial administrative matters, by taking a lenient view, the delay is condoned, therefore, we direct the ld. First Appellate Authority to decide the appeal of the assessee on merit and in accordance with law. The assessee be given opportunity of being heard with further liberty to furnish evidence, if any, in support of its claim, thus, the appeal of the assessee is allowed for statistical purposes only.
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2016 (2) TMI 1047 - ITAT AHMEDABAD
Revision u/s 263 - disallowance made by the assessee u/s. 14A - Held that:- As under the head income from business, the assessee has added ₹ 18,151/- as disallowance u/s. 14A of the Act. On page 184 of the paper book, we find that in assessment order 2008-09, the assessee has disallowed ₹ 32,725/- u/s. 14A of the Act. Again at page 191, we find that for assessment year 2009-2010, the assessee has disallowed ₹ 23,164/- u/s. 14A of the Act. In both these occasions, the disallowance made by the assessee has been accepted. We fail to understand how a similar disallowance made during the year under consideration on same set of facts would make the assessment erroneous and pre-judicial to the interest of the revenue. Further, in our considered opinion Rule 8D cannot be invoked mechanically. It can be invoked only when the A.O is not satisfied with the computation of disallowance made by the assessee. In the case in hand, we find that the A.O was satisfied as similar disallowances were accepted in earlier years. Considering these facts in totality, the action of the ld. CIT on this issue is not justified.
Claim of set off of brought forward business loss/unabsorbed depreciation of earlier years when there was no loss available - Held that:- While filing the return of income for A.Y. 2008-09, the assessee has reduced the book profit by ₹ 21,77,733/- being adjustments as per Clause- VII of the Explanation to section 115JB(2) of the Act which can be found at page 185 of the paper book.
We further find that in the assessment order for A.Y. 2008-09 made u/s. 143(3) r.w.s. 153A of the Act while computing the tax on book profit u/s. 115JB of the Act. The A.O has deducted the adjustments as mentioned above of ₹ 21,77,733/- and the book profit was computed at Nil figure, this can be seen at page 188 of the paper book.Similarly, in the computation of income for A.Y. 2009-2010, the assessee has reduced the book profit by making adjustments u/s. 115JB of the act at ₹ 6,92,38,861/-, the same adjustments have been accepted by the A.O in the assessment order made u/s. 143(3) of the Act which can be found at page 200 of the paper book.
We fail to understand how a similar adjustment made during the year under consideration can be considered as erroneous and prejudicial to the interest of Revenue. In our considered opinion, the action of the Commissioner is without jurisdiction. As discussed hereinabove, we do not find any error in the assessment order which could make it erroneous and pre-judicial to the interest of the Revenue.
Assessee appeal allowed.
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2016 (2) TMI 1045 - ITAT PUNE
Deduction u/s. 80IB(10) - only reason for rejecting the claim of the assessee given in the assessment order is that two dwelling units i.e. RH/D-6 and RH-3 are having built up area in excess of 1500 sq. ft. - Held that:- The Tribunal in various decisions has held that the assessee is eligible to claim deduction u/s. 80IB(10) on the eligible dwelling units. The view of the Tribunal has been upheld by various Hon'ble High Courts.
The Co-ordinate Bench of the Tribunal in the case of M/s. Rohan Homes Vs. Asstt. Commissioner of Income Tax (2013 (10) TMI 758 - ITAT PUNE ) in similar case where deduction u/s. 80IB(10) was claimed and some of the residential units were having built up area in excess of specified limit, the Tribunal granted proportionate deduction to the eligible units. While holding so, the Tribunal referred to various decisions of the Tribunal, wherein proportionate deduction u/s. 80IB(10) was granted to the housing projects.
Deduction u/s 80- IB(10) of the Act was to be allowed on proportionate basis with reference to qualifying residential units and that the assessee would not be denied claim for deduction u/s 80-IB(10) of the Act in entirety if some of its residential units were of a built-up area exceeding the limit prescribed in clause (c) to sec. 80-IB(10) of the Act.
Excluding residential units RH/D-6 and RH-3 of project ‘Akshay Park’ from the purview of deduction u/s. 80IB(10) on the ground that the ‘built up area’ of said units are in excess of 1500 sq. ft. - Held that:- The issue whether the definition of ‘built up area’ as defined u/s. 80IB(10) is to be applied in case of projects approved prior to 01- 04-2005 is no more res-integra. In view of the decisions of Co-ordinate Bench on the issue, we hold that prior to the insertion of definition of ‘built up area’ by the Finance (No. 2) Act, 2004 w.e.f. 01-04-2005, projections, balconies and open terrace cannot be considered as part of the ‘built up area’ of the residential unit. The newly inserted definition of ‘built up area’ would be applicable only on the projects which are approved/sanctioned after 01-04-2005. In view of the facts of the case and various decisions discussed above, we allow the cross objections by the assessee.
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2016 (2) TMI 1031 - ITAT CHANDIGARH
Unexplained investment - purchase of agricultural land - Held that:- Mere payment by account payee cheques is not sacrosanct nor can it make non-genuine transaction as genuine. In view of the above, we confirm the addition of ₹ 7,55,000. We may also observe here that the assessee has furnished a list of unsecured loans referred to above, totalling to ₹ 18,80,000. However, the assessee claimed that he had received unsecured loans of ₹ 19 lakhs. Thus, there is a difference of ₹ 20,000 (Rs.19,00,000 - ₹ 18,80,000) for which no explanation has been given. Accordingly, the total addition comes to ₹ 7,75,000 (Rs. 7,55,000 + ₹ 20,000). Accordingly, we confirm the addition to the above extent.
The action of the Commissioner of Income-tax (Appeals) cannot be held correct, particularly when he has not brought any material on record to disprove the explanation of the assessee. It is observed that the assessee had furnished details of properties which he had sold during the earlier years. In case of doubt, the Revenue authorities should have verified the contention of the assessee. In fact, no such exercise has been done. As regards the past savings of the assessee also, the authorities below have rejected the contention of the assessee without assigning any cogent reasons. Shri Gurbachan Singh had been doing pheri business for the past many years and he was also having agricultural income. There is no evidence on record to controvert the explanation of the assessee that he was the owner of agricultural land and he had also produced the Jamabandi for the year 1985 in support of his claim. It is also seen that for the year under consideration, the assessee had declared an agricultural income of ₹ 15,000 which has been accepted by the Revenue authorities. In our opinion, the Revenue authorities were not justified in rejecting the assessee's explanation on the basis of surmises and conjectures. Accordingly, we hold that the assessee had invested a sum of ₹ 8,53,150 out of his past savings and out of sale of properties mentioned hereinabove.
In view of the above, we confirm the addition of ₹ 7,75,000 and allow a relief of ₹ 19,78,150 (Rs. 11,25,000 + ₹ 8,53,150) to the assessee.
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