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Income Tax - Case Laws
Showing 241 to 260 of 503 Records
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2013 (1) TMI 628 - PUNJAB AND HARYANA HIGH COURT
Registration under Section 12A - assessee has failed to prove the genuineness of its activities - Held that:- The list of 87 donors shows that the only names are mentioned without any address. The lack of information in respect of parentage, age, address or PAN Numbers in the list of donors are the good reasons for declining the registration of the assessee as a charitable trust. The list of such donors is sufficient to infer that about the genuineness of the activities of the trust as contemplated and required to be considered by the AO in terms of Section 12AA(1)(aa).
Thus on the basis of enquiry conducted and the information submitted by the respondent, the introduction of donors, shows in-genuineness of activities of the trust. Therefore, it is a sufficient reason to decline registration in terms of Section 12AA(1) (a) - in favour of the Revenue
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2013 (1) TMI 627 - SUPREME COURT
Gift tax on the value of the bonus shares - whether ITAT was right in law in holding that the provisions of section 16B(3) were applicable to this case - Held that:- As decided in assessee's own case in [2013 (1) TMI 608 - SUPREME COURT] where the order of the High Court has been set aside & remanded back for de novo consideration. In view thereof, the judgment and order in appeal in these cases is also set aside.
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2013 (1) TMI 626 - PUNJAB AND HARYANA HIGH COURT
Computation u/s 80 HHC - scrap sale - Held that:- The expenditure is incurred by the assessee not for generation of the scrap but for generation of the finished product. There is and cannot be any expenses which are incurred for generation of scrap. Scrap is bi-product of the manufacturing activity. Therefore, there are no expenses which could be excluded from the sale of scrap. Since the question of law stands answered by this Court in favour of assessee as decided in CIT, Ludhiana Vs. Bicycle Wheels [2010 (10) TMI 496 - PUNJAB AND HARYANA HIGH COURT], Kar Mobiles' case [2010 (1) TMI 618 - KERALA HIGH COURT]& Mahavir Cycle Industries [2013 (1) TMI 610 - PUNJAB AND HARYANA HIGH COURT ] - substantial question of law answered in favour of assessee.
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2013 (1) TMI 625 - DELHI HIGH COURT
Re opening of assessment - DTA supply in India does not constitute export out of India then why it has been included in export turnover? - Held that:- Petitioner had filed his return pursuant to the notice and had also given his objections to the said notice which had been disposed of by an order dated 07.12.2009, rejecting the petitioners objections. The said order dated 07.12.2009 is also impugned in this writ petition.
This is a clear case of change of opinion as it is writ large from the records of the case as AO had specifically raised a query with regard to the supplies made in the domestic tariff area and the assessee had given a detailed reply to the same. The AO, after considering the reply furnished by the assessee, framed the assessment order in which, he made specific references to exports in the domestic tariff area and / or constructive exports. While computing the claim for exemption u/s 10B AO has included the supply made in the domestic tariff area, both in the main body of the assessment order as also in Annexure-A thereto, which was the calculation of the deductions.
Therefore, it is absolutely clear that the AO had applied his mind to the very issue which is now sought to be raised under Section 147. That would mean that the present venture of invoking Section 147 is nothing but a mere change of opinion, which is impermissible in law.
It is also a case which was beyond the jurisdiction of the revenue audit which had pointed to the so-called discrepancies on points of law, particularly, on an interpretation of Section 10B as an audit party could not have commented on a point of law and, particularly, on an interpretation of Section 10B - writ petition allowed - in favour of assessee.
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2013 (1) TMI 624 - DELHI HIGH COURT
Unexplained share application - addition u/s 68 - ITAT deleted the addition - Held that:- The facts of the present case are more in line with facts of Lovely Exports (P) Ltd. (2008 (1) TMI 575 - SUPREME COURT OF INDIA) wherein held that if the share application money is received by the assessee-Company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to re-open their individual assessments in accordance with law - not to be treated as undisclosed income.
As in the present case there was a clear lack of inquiry on the part of the assessing officer once the assessee had furnished all the material. In such an eventuality no addition can be made under section 68 - in favour of assessee.
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2013 (1) TMI 623 - ITAT MUMBAI
Disallowance of club membership fee - Held that:- It is clear from the details that the expenditure is only towards entrance fee, subscription and other services of the club. AO has allowed the expenditure incurred for the services availed from the club and has not doubted the payment of the entrance fee and service charges for the club membership. Therefore,no discrepancy in the details of the expenditure which is towards entrance fee and subscription of member ship and not for any resort. Thus as similar disallowance made AO for the AYs 2004-05 to 2006-07 has been deleted by the CIT (A) and the revenue has accepted such orders - As AO has not brought out on record that there is a change in the facts and circumstances with respect to the claim of the assessee for the current AY rule of consistency has to be followed - in favour of assessee.
Disallowance of sale discount u/s 40(a)(ia) - Held that:- Though the assessee has claimed that the discount was given to the distributor under the sale scheme expenses however, when this amount is not as per the obligation under the contract, then the assessee was required to produce the relevant records and material in support of its claim that such scheme of giving the benefit/incentive to the distributor was duly approved by the Board of Directors of the assessee company. As the assessee has failed to produce any material such as the scheme under which the benefit has been given to the distributors set aside this issue to the record of the AO to verify and examine the relevant record as to be filed by the assessee and then to decide this issue as per law - in favour of assessee for statistical purposes.
Disallowance of depreciation claim on Foster's Brand u/s 40(a)(i) - Held that:- As decided in case of M/s Mark Auto Industries Ltd. [2013 (1) TMI 448 - PUNJAB AND HARYANA HIGH COURT] deduction u/s 32 is not in respect of the amount paid or payable which is subjected to TDS, but is a statutory deduction on an asset which is otherwise eligible for deduction of deprecation - Revenue was unable to substantiate that in the absence of any requirement of law for making deduction of tax out of the expenditure on technical know-how which was capitalized and no amount was claimed as revenue expenditure, the deduction could be disallowed u/s 40(a)(i). There was also no reason to disallow depreciation on such capitalized amount as the aforesaid provision does not deal with deduction of depreciation - In favour of assessee.
Disallowance for not withholding of taxes on payment made on account of license fees u/s 40(a)(i) - Held that:- Following the decision of Sonata Information Technology Ltd. Versus Deputy Commissioner of Income-tax [2012 (9) TMI 335 - ITAT MUMBAI] and accordingly held that when the royalty for transfer of right to use of computer software does not fall under Explanation 2 to sec. 9(1)(vi), but the same falls under Explanation 4 to sec. 9(1)(vi), then in view of the Explanation to sec. 40(a)(i), the said amount cannot be disallowed under the provisions of sec. 40(a)(i) - in favour of assessee.
Disallowance of interest for diversion of funds to the group companies u/s 36(1)(iii) - Held that:- This issue has not been examined on the aspect whether the assessee was having its own sufficient funds other than the borrowed funds to advance these amounts to the group companies namely M/s SAB Miller (A&A) Pty Ltd., and M/s MBL Investment Ltd. Hence, this issue is set aside to the record of the AO with the direction to examine the issue by taking into account all the relevant facts and availability of the assessee's owned funds as well as the above observations - in favour of assessee for statistical purpose.
Arms length Price - when the payment of royalty is within the prescribed limit of press note no.9 of 2000 FDI policy, the same is at ALP - Held that:- As the assessee did not furnish the comparable data in respect of uncontrolled transactions which are similar to the transaction of the assessee as to that of AE has merely relied upon the Press Note no.9 of 2000 issued by the Ministry of Commerce and Industry in respect of FDI policy allowing the percentage of royalty in foreign exchange. Thus in agreement with the contention of the DR that the press note issued regarding FDI policy and prescribing the percentage of the royalty to the sales allowed under automatic route and cannot substitute as ALP to be determined under the provisions of the Act and Rules. FDI policy permitting certain percentage of payment of royalty is only for remittance of the amount in foreign exchange and therefore, such permission given in an entirely different context and purpose cannot be considered as relevant for determination of the ALP. See Nestle India Ltd [2011 (5) TMI 566 - DELHI HIGH COURT] - no substance or merit in the assessee's stand that when the payment of royalty is within the prescribed limit of press note no.9 of 2000 FDI policy, the same is at ALP - against assessee.
Adjustment made by the TPO by determining the ALP - Held that:- It is manifest from the order of the TPO that the adjustment was made on the basis of comparing entity level result of the assessee with the entity level result of the comparables by applying TNMM method. There is no dispute that the international transaction in the case of the assessee constitutes only 3.93% of the total operating cost.Therefore, comparing the entity level result of the assessee with the entity level result of the comparables is absolutely in contravention of the provisions of the Transfer Pricing regulations as provided under the I T Act. In any case the international transaction has to be compared with the benchmarking as arrived at by taking into consideration the comparables of uncontrolled transaction. Therefore, the TPO proceeded in total disregard to the relevant provisions of the TP regulations by comparing entity level results of the assessee instead of comparing only the international transactions.
Also in the subsequent year i.e 2008-09 & 2009-10 the cup method as adopted by the assessee for benchmarking its international transactions has not been disputed by the revenue, thus it is appropriate to determine the ALP by adopting the same method as it was accepted in the subsequent year - set aside the issue of determination of the ALP to the record of the AO to decide the same by adopting the cup method - in favour of assessee
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2013 (1) TMI 622 - ITAT MUMBAI
India-Indonesia DTAA - Royalty receipt - Held that:- After going through the orders of Group Companies of McKinsey where similar issue has been adjudicated in favour of the assessee no need of further deliberation into the issue.
AO has nowhere established that pieces of information supplied by the assessee were arising out of exploitation of the know-how generated by the skills or innovation of the persons who possesses such talent. Information received by McKinsey India was in the nature of data and same cannot be held to payment received as Royalty. Word 'Royalty' in taxation-terminology has its distinct meaning and the amounts received by the assessee does not fall in that category.
As far as taxing the receipts under the head 'Other Income' is concerned, it is to be opinion that residuary head is analogous to sections 56-57. If a certain receipt cannot be taxed under any other head, only then the sections dealing with 'Income from Other Sources', come into play in domestic taxation matters. Likewise, under the DTAAs, if a sum can be taxed under any other Article, provisions of Article 22 will not be applicable. Thus in light of the earlier decisions of the Mumbai Tribunal income received by the assessee-company form McKinsey India is not to be treated as Royalty-rather it has to assessed as business income as per Article 7 of the DTAA - in favour of the assessee.
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2013 (1) TMI 621 - ITAT HYDERABAD
Validity of assessment made u/s 263 by CIT - Order of A.O. sought to be revised is erroneous and also prejudicial to the interests of the Revenue Held that:- The role of the Assessing Officer under the Income-tax Act, is not only that of an adjudicator, but also of an investigator. He cannot remain passive in the face of a return which apparently may be in order but calls for further enquiry. He must discharge both the roles effectively. The assessment order passed by the A.O. should reveal that there is proper investigation and enquiry made by the A.O. and he has applied his mind to the material available before him before coming to his conclusions. In favour of revenue
Tonnage Taxation - Chapter XIIG Whether gain on account of foreign exchange fluctuation is related to the activity of operating qualifying ships has to be taxed under the Tonnage Tax Scheme or income from other sources - Held that:- Following the decision in case of Dredging Corporation of India Ltd. (2011 (7) TMI 584 - ITAT VISAKHAPATNAM) the gains realized on the foreign exchange fluctuation normally take the colour of the primary transactions. The assessee has entered into certain transactions in foreign currency in connection with its core activity. Accordingly the exchange difference arising out of such activities should be treated as related to the core activity In favour of assessee
Disallowance of Gratuity CIT doubting the credibility of the report of the actuary Revenue argued that there is no evidence of accrual of the liability by the close of the relevant accounting year, the expenditure cannot be allowed in terms of Sec.43B Assessee had deposit said amount in gratuity fund with bank before the due date of filling of return - Held that:- The CIT was not justified in discarding the evidences produced before him, on doubts and presumptions only without properly verifying them. If the fact of payment of gratuity is established from the evidence available on record, then the deduction claimed by the assessee cannot be disallowed invoking the provisions of Sec.43B. Direct the A.O. to verify the bank account Remand back in favour of assessee
Disallowance of expenses for issuing Foreign Currency Convertible Bonds (FCCB) Revenue or capital expenditure - Assessee has issued the FCCBs giving an option to the bond-holders for converting the bonds into shares Held that:- A.O. has enquired about the issue of FCCB and the expenditure claimed in that regard, however, in the assessment order there is not even a whisper on this issue. Nothing is also available on record before us which reveals that the Assessing Officer has applied his mind to this issue and has made an in depth enquiry to find out the exact nature of the expenses claimed - Remand back to A.O.
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2013 (1) TMI 610 - PUNJAB AND HARYANA HIGH COURT
Deductions u/s 80HHC - production of scrap - assessee was a 100% EOU - Held that:- As decided in CIT, Ludhiana Vs. Bicycle Wheels [2010 (10) TMI 496 - PUNJAB AND HARYANA HIGH COURT], Kar Mobiles' case [2010 (1) TMI 618 - KERALA HIGH COURT] the profits arising from the sale of scrap shall form part of business profits referred to in the formula for determining admissible deduction under Section 80HHC. It was also recorded that the sale of scrap and shall also form part of the total turnover of the assessee.
Income from scrap sale is part of the business income from which exclusion of 90% thereof is not called for by operation of Explanation (baa)(i) to Section 80HHC, but at the same time, scrap sales turnover, if not included in the total turnover, should be added to the total turnover as denominator in the computation of eligible relief under Section 80HHC (3).
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2013 (1) TMI 601 - UTTARAKHAND HIGH COURT
Presumptive Taxation Permanent establishment (PE) in India India US DTAA - PGBP of the business of exploration, etc., of mineral oils Deemed profit - 10% of any remuneration received by an assessee A US enterprise, has no permanent establishment in India - Held that:- Article 7 of DTAA requires a non-resident US enterprise to have a permanent establishment in India for being taxed in India, otherwise it is not taxable in any view of the said treaty, even it received any remuneration in connection with any matter provided in Section 44BB. In favour of assessee
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2013 (1) TMI 600 - ITAT HYDERABAD
Disallowance of Interest income Interest free advance to group companies Commercial expediency - Held that:- Assessee also taken a plea before us that though the advances made by the assessee to its sister concerns at free of interest in earlier year, however, the interest on these advances has been accounted in subsequent years. The assessee is following mercantile system as such interest has to be accounted on accrual basis. If there is a mutual transaction between the assessee and the sister concerns to whom the assessee made interest free advances then it has to be considered as advances made by the assessee on account of commercial expediency. Issue back to the file of the A.O. to consider the issue afresh. Remand back
Disallowance of advances written off - creditor advances written off Held that:- The assessee only furnished list of debts and the details called for by the authorities have not been furnished. The claim of the bad debts has been disallowed by considering the material on record by finding as a fact that the debt has not been proved as bad debt. Following the decision in case of Sirpur Paper Mills (1971 (12) TMI 37 - ANDHRA PRADESH HIGH COURT) that only the debt which constitutes trade debt could be claimed as bad debt if it is irrecoverable. In the present case it is observed by the lower authorities that the debts which were written off were not trade debts as seen. In favour of revenue
Disallowance of advances given to employees written off - tour advance Held that:- If it is an expenditure incurred in respect of its business, it should have been claimed during the relevant assessment year and if it is a debt it should have been advanced in respect of trade or business of the assessee and it should have gone to computation of income of the assessee in the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year or represents money lent in ordinary course of business
The assessee is not able to lead any evidence how it has gone into computation of income of the assessee in the assessment year under consideration or in any other assessment year. Being so, we are of the opinion that findings of the lower authorities in disallowing the claim of the assessee are justified
Addition u/s 68 - The A.O. called for information at the time of assessment - The assessee failed to produce the same Held that:- The A.O has no occasion to examine the evidence produced before the CIT(A) by the assessee. The CIT(A) ought to have called for a remand report before deleting the addition. In the interest of justice, we remit the entire issue back to the A.O. for fresh consideration. Remand back
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2013 (1) TMI 599 - ITAT HYDERABAD
Deduction u/s 80IB - Whether in the absence of any completion certification showing completion of project before 31/03/2009 by the local authority, the assessee is entitled for claim of deduction u/s 80IB(10) - Assessee obtained approval from Municipal Authorities for construction of the project on 26/06/2004 - Structural Engineer certified that the project is completed on 15.9.2008 i.e. six months prior to the due date - The GHMC authorities issued completion certificate on 31.11.2009 i.e. 14 months after submission of completion certificate by the Structural Engineer
Held that:- Following the decision in case of Satish Bora & Associates (2011 (1) TMI 1215 - ITAT PUNE) has set a legal principle under the provision of relevant Municipal Laws, where there is no concept of completion certificate but only the occupancy certificate. It also contains the provisions for deemed issue of completion certificate if Municipal Authorities did not raise objections if any after filing of the Completion Certificate by the concerned Architect
It is not clear as to why the GHMC took only 14 months to issue the certificate and if there are any deviations from the approved plans by the assessee. One must examine, if the relevant Municipal Laws / Rules / Guidelines specify any time limitation for processing the certificate filed by the Architect / Structural Engineer as the case may be and issue of the final completion certificate.
AO must also examine, if there is any provision in local laws for deemed acceptance of the Completion Certificate filed by the Structural Engineer of the project in local laws. All these issue requires the explanation of the assessee with the supportive evidence of law rules. The minor deviation if any ought not to disentitle the assessee for availing deduction. For fresh adjudication remand back to AO
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2013 (1) TMI 598 - GUJARAT HIGH COURT
Validity of notice u/s 148 Reopening of assessment - Escaped assessment Speculation loss - Assessee had claimed loss from speculative transaction - Transactions for trading in gold and silver futures on commodities exchange MCX Held that:- It is trite law that the notice for reopening must stand or fail on the basis of reasons recorded by the A.O. for issuing such a notice. The case of the assessee was that by virtue of clause (a) of sub-section (5) of section 43, the same would not be treated as speculative transaction. It is not the case of the A.O. in the reasons recorded for reopening the assessment that for any particular reason such claim under clause (a) was not acceptable. A transaction of hedging to fall under clause (a), there are certain conditions to be fulfilled. However, we are afraid such a contention cannot be accepted for two reasons. Firstly, any attempt on the part of the Assessing Officer now to fall back on the conditions required to be satisfied for application of clause (a) would amount to change of reasons recorded for reopening. Secondly, any such inquiry would be wholly a fishing inquiry - In favour of assessee
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2013 (1) TMI 597 - ITAT BANGALORE
TDS u/s 194A Rate of TDS - Whether tax has to be deducted as the rate in force in quarterly basis where the interest is payable on 31st March every year and compounded with quarterly rest After amendment the deduction for interest payable u/s 194A at the rate of 10% w.e.f. 1/10/2009 as against 20% before the said date - Assessee company had moved application u/s 154 seeking rectification as the A.O. had computed the tax deductible in terms of the rates that were in force before 1/10/2010 and had not considered the rates in force as per the amendment made by Finance Act, 2009
Held that:- Merely because the interest is compounded quarterly does not mean that the interest is payable on quarterly basis.
The interest was accruing quarterly and therefore, the tax has to be deducted as the rate in force in quarterly basis, is not correct. The interest on ICD was payable on 31st March, although the interest was compounded with quarterly rests
It can be seen from the ledger account that the assessee company had credited the interest payable on the ICD only on 31st March, 2010; thus the claim of the assessee company that it was liable to deduct tax at source at the rate of 10%, which was the rate in force on the date of credit to the account of the payee. The liability of the assessee to deduct tax at source with reference to the interest payment is only at the rate of 10%. In favour of assessee
Delay in payment of TDS Interest u/s 201(1) Held that:- Following the decision in case of Hindustan Coca Cola Beverage Pvt. Ltd (2007 (8) TMI 12 - SUPREME COURT OF INDIA) that assessee cannot be made liable u/s 201(1), since the payee had disclosed the interest income in its return of income - In favour of assessee
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2013 (1) TMI 595 - GUJARAT HIGH COURT
Revision of order by CIT u/s 263 Computation of Period of limitation from the date of the order of original assessment or from the order of assessment passed after remanded back by Tribunal, and CIT exercising his revisional jurisdiction u/s 263 reopened the order of assessment only in relation to the issue which was not subject matter of the appeal or issues remand back
Held that:- Yes, the order is barred by limitation. Following the decision in case of Alagendran Finance Ltd. (2007 (7) TMI 304 - SUPREME COURT) that the CIT exercising his revisional jurisdiction reopened the order of assessment only in relation to issue which was not subject matter of the reassessment proceedings, it was held that the period of limitation provided for under sub-section (2) of section 263 would begin to run from the date of the order of assessment and not from the order of reassessment.
The scope of remand pursuant to the order of the Tribunal remitting the matter to the A.O., was limited to the addition of Rs. 59,56,000/-, evidently, therefore, such deduction u/s 80I was not in issue in the remand proceedings. Under the circumstances, the limitation qua the issue of grant of deduction u/s 80I would have to be computed from the date of the original assessment order wherein the Assessing Officer had granted 30% deduction on the total income inclusive of the income u/s 68, that is, from 28th March, 1995. When so computed, the order dated 30th March, 2007 passed u/s 263, is hopelessly time barred, the prescribed period of limitation for making such order being two years from the end of the financial year in which the order sought to be revised was passed - In favour of assessee
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2013 (1) TMI 594 - PUNJAB AND HARYANA HIGH COURT
Penalty u/s 271(1)(c) Concealment of income - Bonafide claim - Furnishing of inaccurate particulars - Deduction u/s 80HHC had been claimed without reducing deduction u/s 80IB Held that:- The claim of the assessee for deduction u/s 80HHC was a bona fide claim. The claim of the assessee though later on was found to be untenable on the basis of subsequent decision of the Court, thus, it could not be held that the assessee had intentionally claimed deduction under Section 80HHC of the Act which was legally not permissible. This did not amount to furnishing of inaccurate particulars of income. Under the circumstances, no penalty, thus, could be levied u/s 271(1)(c) - In favour of assessee
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2013 (1) TMI 593 - PUNJAB AND HARYANA HIGH COURT
Rectification of order by Tribunal u/s 254(2) - Computation of deduction u/s 80HHC - Whether it is the net interest which has to be taken into account while computing deduction u/s 80HHC as per Explanation (baa) to Sec. 80HHC(4C) Revision application filed by assessee contended to work out deduction u/s 80HHC, 90% of receipt by way of interest had to be excluded from profits of business taking net interest income and not the gross interest receipts Held that:- The effect of the same would be that it is the net interest which has to be taken into consideration while computing deduction u/s 80HHC as per Clause (baa) of the explanation to Section 80HHC. The order passed by the Tribunal in the miscellaneous application being in conformity with the order in case of ACG Associated Capsules Private Limited (2012 (2) TMI 101 - SUPREME COURT OF INDIA). In favour of assessee
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2013 (1) TMI 592 - GUJARAT HIGH COURT
Disallowance u/s.40(a)(ia) TDS u/s 194C - Scope of sub-section (2) of section 194C Assessee is individual and engaged in the business of construction - To transport construction material at the site, assessee had availed the services of transporters - Made payments to such transporters under the head transport charges - Payment made to contractor and sub-contractor - Assessee had only availed of the services of such transporters for carrying out the material to the site
Held that:- Section 194C(2) what was necessary was a relationship between the contractor and sub-contractor and not merely be hiring of an agency by the contractor during the course of execution of the work. Such vital requirement of relationship of a contractor and sub-contractor between the assessee and the transporters was missing
Till introduce of Clause (k) of sub-section (1) of section 194C, the category of individual, HUF or AOP was not included. Such amendment was made with effect from 1st June 2007 and obviously, therefore, would not apply to the case on hand. The Tribunal, therefore, correctly came to the conclusion that the case of the assessee was not covered u/s 194C(1)
In favour of assessee
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2013 (1) TMI 591 - PUNJAB AND HARYANA HIGH COURT
Addition on account of foreign travel expenses Revenue or personal expenditure - Foreign travel expense incurred by assessee and his wife which has been allowed to the extent of 50% by the CIT(A) and upheld by the Tribunal - Assessee was a heart patient and was looking after the business of the firm - His wife had to accompany for looking after him on visit to the foreign country Held that:- Foreign visit resulted in increase in the business and after analyzing the factual matrix had allowed 50% expenses as revenue expenditure which was wholly and exclusively expended for business purposes. An effort was made by the revenue to submit that 50% had been allowed without any basis. He, however, could not substantiate the said plea - In favour of assessee
Addition on account of late deposit of PF & ESI Held that:- Following the decision in case of Alom Extrusions Limited (2009 (11) TMI 27 - SUPREME COURT) wherein it has been held that Second Proviso to Section 43B of the Act omitted by Finance Act, 2003 with effect from 1.4.2004 was clarificatory in nature and was to operate retrospectively. CIT(A) was right in deleting the addition made by the A.O. u/s 36(1)(va) and u/s 43B on account of late payment of employee's as well as employer's contribution to PF & ESI as the same had been deposited prior to the filing of the return u/s 139 (1) - In favour of assessee
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2013 (1) TMI 574 - DELHI HIGH COURT
Penalty u/s 271(1)(c) - penalty set aside by Tribunal - survey under Section 133A - Unaccounted share capital receipt - assessee surrendered the income under "income from other sources" - Held that:- Revenue is right in contending that there was absolutely no explanation from the assessee in respect of the amount of Rs.40,74,000/- when the AO called upon the assessee to produce the evidence as to the nature and source of the amount received as share capital, the creditworthiness of the applicants and the genuineness of the transactions the assessee simply folded up and surrendered a sum of Rs.56.49 lacs in its hands initially, which was later scaled down to Rs.40,74,000/-.
The assessee merely stated that with a view to avoid litigation and buy peace it surrendered the income under the head income from other sources. In the absence of any explanation in respect of the surrendered income, the first part of clause (A) of Explanation 1 is attracted. It cannot be denied that the nature and source of the amount surrendered are facts material to the computation of the total income of the assessee. The Revenue is entitled to know the same and if the nature and source of the amount are not explained, it is entitled to draw the inference that the amount represents the assessee's taxable income.
It is the assessee who has received the monies & in the absence of any explanation is statutorily considered as amounting to concealment of income - the Tribunal fell into error in setting aside the penalty imposed by the AO and upheld by the CIT(Appeals) - against the assessee
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