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Income Tax - Case Laws
Showing 281 to 300 of 421 Records
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2012 (4) TMI 306 - ITAT MUMBAI
Additions made for unaccounted donations entered in the four diaries recovered from the business premises of Shri A.K. Patil who was the Hon. Secretary of the trust - Shri Patil in one statement at the time of survey mentioned donations had been collected on the instructions of the trustees and later in statement that donations were collected in his personal capacity - Held that:- confirming addition of unaccounted donations in case of the assessee - CIT(A) has given a clear finding that the assessee could not show any co-relation between entries and the summary and therefore claim was rejected.
Assessee raised ground of applicability of provisions of section 13(1)(c) - applicability of provisions of section 13(1)(c) in assessment years 2000-01 to 2003-04 on ground of unaccounted donations having been used by Hon. Secretary and trustees of the trust. The ld. AR for the assessee has argued that provisions of section 13(1)(c) were not applied by AO and therefore the same cannot be applied by CIT(A), for the first time Held that:- settled legal position that powers of CIT(A) are co-terminus with that of the AO and he can do what the AO can do and can also consider aspects which have been omitted to be considered by the AO.
Allowability of deduction/exemption under section 11 of the IT Act for assessment years 2001-02 to 2006-07 Held that:- assessee was not registered under section 12AA for the assessment year 2000-01 and, therefore, not entitled to exemption under section 11 - As regards assessment years 2004-05 to 2006-07, the registration of the assessee under section 12AA has been restored by the Tribunal and no violations of provisions of section 13(1)(c) have been found in these years and therefore, exemption under section 11 has to be allowed to the assessee.
Assessee has challenged the assessment orders passed by the AO on the ground that the same were barred by limitation Held that:- provisions of section 142(2A) were not applicable and the AO was not entitled to avail extended period and the assessments were thus barred by limitation. The ld. AR for the assessee, however, at the time of hearing of these appeals did not press this ground. This ground is therefore, dismissed as not pressed in all the assessment years.
Assessee had treated these donations as capital receipts on the ground that the same were corpus donations - CIT(A) was convinced by the explanation given by the assessee Held that:- There is no dispute that the assessee had issued receipts in each and every case on which it was specifically mentioned and that donations were received towards corpus - Assessee also filed confirmations from all donors giving name, address, PAN, mode of payment, etc. in which it was clearly mentioned that donations were towards corpus against revenue.
Whether the voluntary contribution even if made with specific direction to form corpus of the trust could be assessed as income ? - Held that :- For assessment year 2000-01 it was not registered, the voluntary contributions with direction to form corpus have to be treated as income - In assessment years 2001-02 to 2003-04 also provisions of sections 11 and 12 were not applicable due to violation of provisions of section 13(1)(c) and voluntary contributions towards corpus have to be treated as income - in assessment year 2004-05 to 2006-07 in which the assessee was registered under section 12AA, and in which no violation of section 13(1)(c) were found, voluntary contributions have to be treated as capital receipt, not taxable.
Disallowance of depreciation - assessee had filed returns of income as trust and claimed capital expenditure as full deduction in the computation of income - Held that:- allowing full deduction in respect of capital expenditure in relation to the provisions of section 11 only meant that expenditure incurred on acquisition of capital asset to be used for charitable /religious purposes has to be treated as application of income. The depreciation has to be allowed in respect of capital assets so acquired and used for charitable activity decided in case of CIT v. Institute of Banking Personnel Selection (2003 - TMI - 11526 - BOMBAY High Court)
Disallowance of deduction claimed by the assessee on account of payment to Director of Technical Education Held that:- The case of the assessee is that extra students had been admitted inadvertently in violation of administrative guidelines thus there was no infraction of law. The ld. DR, could not explain before us as to how there was any violation of statutory provisions in admitting students. Therefore, in our view the deduction claimed cannot be disallowed under the provisions of Explanation to section 37(1) against revenue
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2012 (4) TMI 305 - ITAT MUMBAI
Adjustment u/s 92CA(3) - providing catering services to different airlines - joint venture between IHCL at 51% stake and SATS at 49% stake Taj Sats supplied processed food to AE's using CUP method - TPO made the adjustment to the arm's length price charged by Taj Sats to its AE after comparing the average of prices per item of meal charged to other Airlines - Held that:- the food supplied is a basket containing individual items rather than supply of the items individually. Therefore the entire transaction has to be viewed as a single transaction - A.O. was not justified in making the adjustment of ₹ 460391/-u/s 92CA(3) of the Act in favour of assessee.
Addition u/s 14A - assessee company has earned dividend income from Tata Mutual Funds claimed as exempt u/s 10(35) - A.O disallowed 10% of CFO's remuneration amounting u/s 14A of the I.T. Act relying on fact that the CFO definitely spent some time for investment decision Held that:- since the assessee has not allocated any expenditure for earning tax free dividend income and since the disallowance made by the A.O. on adhoc basis appears to be on higher side, a reasonable disallowance of ₹ 1,50,000/-.
Dis-allowance of claim of depreciation on various intangible assets grouped under the head 'Goodwill' that the business of IHCL was acquired by the assessee as a going concern The consideration is not paid independently for each asset or liability Held that:- when depreciation has neither been claimed nor allowed on intangible assets in the preceding years the assessee, in our opinion, cannot be allowed to claim depreciation on intangible assets in the impugned assessment year against assessee.
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2012 (4) TMI 304 - KERALA HIGH COURT
Search and seizure - Undisclosed income - assessee's claim was that the actual sale as against the later agreement was for an amount of Rs. 1,32,40,000/- and not for Rs.2 crores as is revealed from the earlier agreement - Assessing Officer has noticed that the Stamp paper used for the agreement dated 23.5.2000 and 1.6.2000 has both been purchased on 23.5.2000 from the very same vendor - It is not clear as to how the Tribunal came to the finding that the agreement dated 23.5.2000 was one which was not enforceable and we are afraid that no reasonable person could reach the conclusions arrived at by the Tribunal - Held that: The documents seized on search as also the statement recorded under section 132(4) provides ample evidence to support the actual consideration of Rs.2 crores and we answer the question of law raised by the revenue in favour of the revenue since the deletion made by the Tribunal was without adverting to the material seized and conclusion of the Tribunal with respect to the actual sale consideration is unreasonable and perverse.
Regarding set off of carried forward loss from the assessment year 1999-2000 - Assessing Officer as well as the 1st appellate authority treated the same as undisclosed income for the assessment year 2000-01 - assessee failed to file a return in the assessment year 2000-01 and only after the search on 4.10.2001 and notice under Section 158BC dated 9.10.2002 filed a return of income in Form No.2B for the block period 1.4.1995 to 4.10.2001 that too on 19.2.2003 - Decided against the assessee
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2012 (4) TMI 300 - ITAT CHENNAI
Penalty u/s 271B - It was noticed by the assessing authority that the assessee has failed to furnish audit report alongwith the necessary enclosures in the prescribed form within the stipulated period, as required under section 44AB - held that:- If this benevolency is going to be delivered for all the time to come, what is the sanctity of section 271B remaining in the statute book? The law enacted by the Parliament must be respected and must be followed. If the Act says that penalty is leviable in certain circumstances, penalty must be levied unless the victim shows that sufficient reasons were prevalent to justify the omission caused. Even though evidences cannot be produced in all cases, the explanations offered by an assessee must be plausible and convincing and answerable to the reasoning of a man of ordinary prudence. We are not expecting scientific reasons with mathematical precisions. We are expecting worldly but convincing reasons. - is a fit case to levy penalty under section 271B.
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2012 (4) TMI 299 - KERALA HIGH COURT
Petition to direct additional 4th respondent to expeditiously consider stay petition appeal and stay petition are pending consideration - Held that:- 4th respondent is directed to consider stay petition and pass order within 8 weeks of the order. Meanwhile further proceedings for recovering the amount due under said orders will be kept in abeyance.
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2012 (4) TMI 298 - KARNATAKA HIGH COURT
Remittance of matter back to original authority by Tribunal A.O. made addition of chargeable interest indicated as hire purchase financial income addition deleted by CIT Held that:- Though Tribunal has not gone into the merits of the view taken by the CIT (Appeals), but at the same time no question of law arises in a matter of this nature from the remittance order of Tribunal Appeal dismissed.
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2012 (4) TMI 297 - GUJARAT HIGH COURT
Dis-allowance u/s 36(1)(viii) - assessee claimed deduction on the ground that it had given loans and advances to various persons for construction of residential units - dis-allowance made on ground of insufficient evidences - Held that:- It is undisputed that assessee did not submit full details of the borrowers and their construction or acquisition of houses from the borrowed funds. It is not a case where large number of notices were issued and only three out of such noticees came forward suggesting that the fund was not utilized for such purpose. It was a case wherein on three random notices being issued, all the three borrowers declined to have used the funds either for construction or for purchase of the house. Tribunal rightly held that assessee was not able to discharge the onus cast upon it. No substantial question of law arises - Appeal dismissed.
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2012 (4) TMI 296 - MADRAS HIGH COURT
Legality of proceedings initiated by Assessing Officer u/s 154 when there were no mistakes apparent from records - AO sought to revise the assessment by denying deduction u/s 80HHA & 80I on ground that assessee cannot be regarded as small scale industry - Held that: CIT(A) rightly held that after exclusion, the aggregate value of the P&M relating to industrial undertaking comes less than ₹ 35 lacs, therefore, AO has correctly allowed relief in original order. Further, it is the concurrent finding given by both CIT(A) and Tribunal that the AO was not justified in rectifying the order u/s 154 since there is no patent or glaring mistake on the face of the record regarding the original assessment that warrants rectification u/s 154. See T.S.Balaram, Income Tax Officer Vs. Volkart Brothers (1971 (8) TMI 3 - SUPREME Court)- Decided in favor of the assessee
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2012 (4) TMI 292 - ITAT AHMEDABAD
Plea for admission of appeal for waiver of penalty levied u/s 271(1)(c) assessee being defunct company struck off from the records of ROC on 27.05.2010 - CIT(A) dismissed the appeal on ground that since company is non-existent, there cannot be any director who can sign the verification for the filing of appeal Held that:- It is surprising that Revenue has considered the said company as existing for levy of demand and penalty and on other hand dismissed the appeal on ground of it being non-existent. Therefore, in a situation, where a defunct company can be revived and the directors are responsible for every lawful liability then in our considered opinion they are also entitled to file an appeal u/s 246 and verify the Form No. 35 by signing in the capacity of director. CIT(A) is directed to admit the appeal Decided in favor of petitioner.
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2012 (4) TMI 291 - MADRAS HIGH COURT
Stay petition Revenue contended that petitioner is liable to pay 50% of the demand, for an order of stay to be granted Held that:- Court finds it fit to direct the first respondent to hear the appeal filed by the petitioner, and to pass appropriate orders thereon, on merits, on the petitioner depositing a sum of Rs.15 lacs, within a period of four weeks from the date of receipt of a copy of this order.
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2012 (4) TMI 290 - ITAT VISAKHAPATNAM
Whether Section 40(a)(ia) can be invoked only to disallow expenditure of the nature referred to therein which is shown as "payable" as on the date of the balance sheet or it can be invoked also to disallow such expenditure which become payable at any time during the relevant previous year and was actually paid within the previous year A.O. dis-allowed expenses incurred on brokerage and commission on ground of non-deduction of TDS reference to Special bench - Held that:- The word "payable" used in section 40(a)(ia) is to be assigned strict interpretation, in view of the object of Legislation, which is intended from the replacement of the words in the proposed and enacted provision from the words "amount credited or paid" to "payable". Further, Circular No. 5 of 2005, date 15th July, 2005 issued by CBDT clarifies that the intention to introduce this provision was brought to curb bogus payments by creating bogus liability. Therefore, following cardinal principle of interpretation, Special Bench in view of dissenting view expressed by one of its members hold in light of majority view of the Members that section 40(a)(ia) is applicable only to expenditure which is payable as on 31st March of every year and cannot be invoked to disallow the amounts which are already been paid during the previous year, without deducting tax at source Decided in favor of assessee.
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2012 (4) TMI 289 - DELHI HIGH COURT
Allowability of Depreciation on fixed assets utilized for the charitable purpose Society registered u/s 12A Held that:- Having regard to the consensus of judicial opinion on the precise question it is held that claim of depreciation on fixed assets utilized for the charitable purposes has to be allowed while arriving at the income available for application to charitable and religious purposes, since the income of the society should be computed on the basis of commercial principles. Order of tribunal upheld Appeal of Revenue dismissed.
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2012 (4) TMI 288 - ITAT DELHI
Transfer Pricing rejection of PLI considered by the appellant in the transfer pricing documentation benefit of 5% adjustment assessee engaged in the business of manufacturing automobile catalysts AY 2003-04 - Held that:- Principal of res judicata cannot apply in case of Transfer Pricing and it is open to authorities to adopt different and appropriate PLI. PLI are the ratios that measure relationship between profits with costs or resources. Use of a particular PLI depends on a number factors including, nature of activities of tested party, the reliability of available data with respect to uncontrolled comparables and the extent of which the PLI is likely to produce available measure of income. The PLI is selected with its appropriateness for the transaction under view. With regard to nature of business of assessee, ROCE is not appropriate PLI. Further, purchase cost of the raw material cannot be said to be a pass through cost as assessee claims. Hence, operating profit as a percentage of total cost has to be the basis instead of operating profit as a percentage of the total cost minus raw material cost. Benefit of ± 5% adjustment Held that:- Such benefit cannot be considered to be a standard/universal deduction. This benefit is available only if ALP shown by the taxpayer falls within ±5% of arithmetic mean of more than one price determined by the Most Appropriate Method. As the taxpayer was not falling in above range, it was not entitled to any benefit. Secondly, the option is available only when taxpayer is computing the ALP and not when: AO /TPO is computing the ALP Decided against the assessee.
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2012 (4) TMI 287 - DELHI HIGH COURT
Rectification of mistake A.O. in its rectification order disallowed adjustment on account of change in depreciation method while calculating book profits u/s 115JB on account of it being prior period expenses original order framed u/s 143(3) Held that:- The jurisdiction u/s 154 is confined and restricted to rectification of errors and mistakes which are apparent from the record. The issues and contentions being debatable and in the realm of uncertainty, we do not think the A.O. was right in invoking Section 154. The Tribunal was right in observing that the action of the Assessing Officer under Section 154 was not warranted Decided against the Revenue.
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2012 (4) TMI 286 - DELHI HIGH COURT
Validity of notice issued u/s 142(1) dated 05.08.2011 for AY 2004-05 assessee contests notice issued u/s 142(1) on ground of non-serving of notice u/s 148 dated 22.03.2011 - notice u/s 148 issued at old address - petitioner vide his letter in February 2006 informed A.O. about change in address filed returns of subsequent AYs stating new address Held that:- Petitioner was aware and knew that the A.O. has issued the notice u/s 148 at the address mentioned in the return. A clear distinction between issue and service of the notice has been drawn in case of R K Upadhyaya Vs. Shanabhai P. Patel (1987 (4) TMI 5 - SUPREME Court - Income Tax). Issue of notice within the prescribed time is a mandatory requirement and service of notice is a procedural requirement before completing the assessment. In these circumstances, the assessee can be treated as served with the notice u/s 148, which was earlier issued at the address mentioned in the return Decided against the assessee.
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2012 (4) TMI 285 - ALLAHABAD HIGH COURT
Petition for stay of total demand Dispute about TDS u/s 194C or 194I - assessee contended that direction for depositing 30% of total demand is unjustified when CIT(A) opined it to be fit case for stay of the total demand Held that:- Apex court in case of M/s Pennar Industries Ltd. vs. State of Andhra Pradesh held that it is true that on merely establishing a prima facie case, interim order of protection should not be passed. However, if it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Therefore, in view of aforesaid order of CIT(A) is set aside and appellate authority is directed to decide the appeal finally on merits. Demand is kept in abeyance during pendency of appeal. However, the petitioner shall furnish security to tune of 30% of the total demand within ten days.
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2012 (4) TMI 284 - KERALA HIGH COURT
Registration u/s 80G assessee being religious institution, claims that it is engaged in charitable activities as well, thus, entitled to registration u/s 80G(5B) application rejected by Commissioner Tribunal held entitlement of registration - Held that:- Assessee is entitled to one more opportunity to produce the accounts before the Commissioner to establish that 95% of the income is utilized for charitable purposes during the year for which registration is sought. We, restore the matter to the Commissioner for reconsideration based on accounts and evidence produced.
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2012 (4) TMI 283 - KERALA HIGH COURT
Whether Tribunal was justified in canceling assessment of undisclosed income for the broken period for which, time for filing return was not over as on date of search first installment of advance tax paid by assessee in respect of the income of the previous year in which search took place, even before date of search Held that:- Since advance tax is paid in respect of an item of income, it cannot be said that the assessee intended to suppress it's income merely because accounts are not written up. So much so, payment of advance tax on estimated income is sufficient to exclude such income from the scope of undisclosed income for the broken period of the previous year for which, time for filing of return was not over as on the date of search Decided against the Revenue.
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2012 (4) TMI 282 - KARNATAKA HIGH COURT
Dis-allowance of business expenditure assuming it be expenditure falling u/s 14A assessee dealing in share and securities earned profit on sale and shares and dividend on shares held as stock in trade proportionate brokerage expenses paid on trading of shares and other business expenditure dis-allowed u/s 14A Held that:- When the assessee has not retained shares with the intention of earning dividend income and the dividend income is incidental to his business of sale of shares, which remained unsold by the assessee, it cannot be said that the expenditure incurred in acquiring the shares has to be apportioned to the extent of dividend income and that should be disallowed from deductions. When no expenditure is incurred by the assessee in earning the dividend income, no notional expenditure could be deducted from the said income Decided in favor of assessee.
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2012 (4) TMI 281 - DELHI HIGH COURT
No change in the method of valuation of closing stock by the respondent-assessee during the assessment year 1993-94 as considered by ITAT Held that: - Revenue has not been able to demonstrate and show that in the earlier Assessment Years, the respondent had valued the closing stock at cost and not on Net Realizable Value basis and has not shown what is stated and averred in the impugned order passed by the tribunal is factually incorrect. In view of above factual position, it is not possible to hold that the order of the Tribunal is perverse.
Deleting the addition made by the Assessing Officer to the income of assessee on account of under valuation of closing stock Held that: - Held in Supreme court case in Sanjeev Woolen Mills v. CIT Mumbai (2005 - TMI - 6166 - SUPREME Court) closing stock can be valued on cost price or at market price, if the market price is less than the cost. However, the said principle does not apply if the market value of the closing stock is more than the cost, as profits cannot be brought to tax on notional basis - in favour of the respondent-assessee and against the Revenue.
Reimbursement payable by the manufactures AO stated that the respondent assessee was receiving reimbursement of the loss on export from the sugar manufacturers and losses were reimbursed, therefore, the assessee should compute the closing stock on cost basis i.e. Net realizable Value plus reimbursement Held that:- there was no statutory or contractual obligation under which the respondent-assesses could have claimed reimbursement of export losses from the mills/manufacturers from whom it had procured/purchased sugar for export - The obligation, if any, was moral but non statutory or non contractual - against the Revenue and in favour of the respondent-assessee
Depreciation on lease hold rights - The contention of the appellant-Revenue is that the assessee is not entitled to depreciation in respect of lease hold rights in office/ flat, and car parking space etc. as the respondent/assessee was not the registered owner. - held that:- this issue has to be decided against the Revenue and in favour of the respondent-assessee in view of the decision of the Supreme Court in Mysore Minerals v. CIT (1999 -TMI - 5760 - SUPREME Court).
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