|
Advanced Search Options
Case Laws
Showing 221 to 240 of 1051 Records
-
2013 (1) TMI 843
Addition on account of long-term capital gains on sale of shares - bogus accommodation entry - Held that:- Assessee sold shares through two brokers and their copies of sale bills and contract notes are filed and sale consideration of share is given to the assessee through banking channel and the rates at which the shares are transferred are similar as approved by M.P. Stock Exchange. The ld. CIT(A) asked the Income-tax Authorities to produce all relevant evidences and material before him to prove that the assessee has accepted bogus accommodation entry, but no material was produced before him in this regard. Therefore, the ld. CIT(A) on proper appreciation of facts and material on record rightly deleted the addition. Further, whatever material was collected at the back of the assessee was not forwarded to the assessee. Therefore, same cannot be read in evidence against the assessee. - Decided against revenue
-
2013 (1) TMI 842
The Gujarat High Court granted an interim order in favor of the petitioner in accordance with paragraph 8 (C) of the order dated 20.12.2012. The application for speaking to minutes was allowed to include the additional line specifying the grant of interim order. The matter was disposed of, and it will be placed before the appropriate Bench as per the Roster.
-
2013 (1) TMI 841
Issues Involved:
1. Disallowance of prior period expenses.
2. Disallowance u/s 40(a)(ia).
3. Disallowance of bad debt claim.
4. Disallowance of provision for wage arrears.
5. Interest estimated on "substandard" status loans.
6. Disallowance of exemption claimed u/s 10(23G).
7. Disallowance made u/s 14A.
8. Disallowance made u/s 40A(9).
9. Disallowance of claim of broken period interest.
10. Ad hoc disallowance from "sundry expenses'.
11. Addition of Excess provision for bad and doubtful debts written back.
Summary:
1. Disallowance of prior period expenses:
The issue of Rs.15,81,931/- as prior period expenses was contested. The assessee's claim that these expenses arose during the current year was contradicted by the statutory auditors' certification. The Tribunal directed a fresh examination by the assessing officer (AO).
2. Disallowance u/s 40(a)(ia):
The assessee adjusted excess TDS payment against future liabilities, which the AO disallowed. The Tribunal found the CBDT's letter did not fully support the assessee's adjustment and remitted the matter back to the AO for reconsideration.
3. Disallowance of bad debt claim:
The AO disallowed Rs.62,34,95,370/- for bad debts, questioning compliance with sec. 36(1)(vii) and 36(2)(v). The Tribunal noted contradictions in the assessee's explanations and remitted the issue back to the AO for fresh examination.
4. Disallowance of provision for wage arrears:
The AO disallowed Rs.50 crores for wage arrears as the agreement and payment occurred in the succeeding year. The Tribunal, considering the changed scenario due to reassessment, remitted the issue back to Ld CIT(A) for fresh adjudication.
5. Interest estimated on "substandard" status loans:
The AO estimated Rs.18.21 crores as interest income on NPAs, which was confirmed by Ld CIT(A). The Tribunal noted the acceptance of the changed accounting method in preceding and succeeding years and remitted the issue back to Ld CIT(A) for fresh examination.
6. Disallowance of exemption claimed u/s 10(23G):
The AO denied the exemption due to lack of proof that borrowers were approved u/s 10(23G). The Tribunal directed a fresh examination by the AO, considering additional evidences.
7. Disallowance made u/s 14A:
The AO estimated 5% of exempt income as related expenses, which Ld CIT(A) deleted. The Tribunal, referencing the jurisdictional High Court's decision in Catholic Syrian Bank, remitted the issue back to the AO for fresh examination.
8. Disallowance made u/s 40A(9):
The Tribunal upheld Ld CIT(A)'s decision favoring the assessee, based on a prior Tribunal decision allowing contributions to a retired employees' medical benefit scheme.
9. Disallowance of claim of broken period interest:
The Tribunal followed the jurisdictional High Court's decision, allowing the broken period interest as business expenditure.
10. Ad hoc disallowance from "sundry expenses':
The AO made an ad hoc disallowance of Rs.10 crores for lack of details. The Tribunal remitted the issue back to the AO, granting the assessee another opportunity to furnish necessary details.
11. Addition of Excess provision for bad and doubtful debts written back:
The Tribunal found contradictions in the assessee's explanations and remitted the issue back to the AO for fresh examination.
Conclusion:
The appeal of the assessee is allowed for statistical purposes, and the revenue's appeal is partly allowed for statistical purposes.
-
2013 (1) TMI 840
Issues involved: Whether a Wind Mill commissioned on the last day of the F.Y. (on 31.03.2008) is entitled for depreciation.
Comprehensive Details:
Issue 1: Entitlement for Depreciation
- The assessee installed two Wind-Mills before 31.03.2008 at Sirund Village in Gadak Taluka of Distt. Karnathka.
- The A.O. demanded proof of user by 31.03.2008, which the assessee provided through a certificate from the Executive Engineer of HESCOM, GADAG.
- The A.O. denied depreciation due to lack of proof of electricity generation and sale, supported by the ld. CIT(A).
- The appellant argued that the Wind-Mills were commissioned on 31.03.2008 and ready for use, with evidence of electricity generation.
- The Tribunal found sufficient evidence that the Wind-Mills were ready for use on 31.03.2008, making the assessee eligible for depreciation u/s 32 of the Act.
- The Tribunal equated "put to use" with "ready for use" for depreciation purposes, citing various judicial decisions in support.
- The appeal of the assessee was allowed by setting aside the previous finding.
Judicial Decisions Cited:
1. Hindustan Platinum P. Ltd ITA No. 3352/Mum/2010 dated 15.6.2011
2. Omkar Textiles P. Ltd 115 TTJ 716 [Ahd]
3. CIT Vs.Vidhyanchal Distilleries Pvt. Ltd 272 ITR 583 [MP]
4. CIT Vs. Vegetable Products Ltd. 88 ITR 192 [SC]
5. Narang Overseas Pvt. Ltd. Vs. ACIT 111 ITD 1 [Mum] [SB]
This judgment by the Appellate Tribunal ITAT JODHPUR addressed the issue of whether a Wind Mill commissioned on the last day of the financial year is entitled to depreciation. The assessee had installed two Wind-Mills before 31.03.2008 and claimed depreciation, which was denied by the A.O. due to lack of proof of electricity generation and sale. The Tribunal, after considering the evidence presented, concluded that the Wind-Mills were ready for use on 31.03.2008, making the assessee eligible for depreciation under Section 32 of the Act. The decision was supported by citing relevant judicial decisions equating "put to use" with "ready for use" in the context of depreciation.
-
2013 (1) TMI 839
Issues Involved:
1. Whether the assessee Trust is engaged in educational or charitable activities u/s 2(15) of the Income Tax Act, 1961.
2. Whether the assessee Trust qualifies as an educational institution eligible for exemption u/s 10(23C)(iiiab) of the Income Tax Act, 1961.
Summary:
Issue 1: Educational or Charitable Activities u/s 2(15)
The assessee Trust filed an appeal against the order of the CIT(A) confirming the AO's decision that the Trust is neither engaged in educational activities nor charitable activities as defined u/s 2(15) of the Income Tax Act, 1961. The AO had denied the exemption u/s 10(23C)(iiiab) and proposed a review of the exemption granted u/s 12AA. The CIT(A) upheld the AO's decision, stating that the Trust's activities, primarily training public servants, do not fall under "education" within the restricted meaning given in section 2(15). However, the ITAT noted that the DIT (Exemption) had accepted the Trust's activities as educational, and the revenue did not challenge this decision. Consequently, the ITAT dismissed this ground as infructuous.
Issue 2: Exemption u/s 10(23C)(iiiab)
The AO and CIT(A) held that the Trust did not qualify for exemption u/s 10(23C)(iiiab) as it was not solely existing for educational purposes. The AO cited the Supreme Court's definition of "education" in the case of Sole Trustee Loka Shikshana Trust Vs CIT, which emphasized systematic instruction and schooling. The CIT(A) also relied on similar judicial decisions. However, the ITAT examined the Trust's objectives and governance, noting that it was formed by a Government resolution, registered under the Societies Registration Act, 1860, and funded by the State and Central Governments. The Trust's activities included training government officers and conducting educational programs, which the ITAT deemed as imparting education. The ITAT concluded that the Trust is an extended limb of the State Government created for educational purposes and thus qualifies for exemption u/s 10(23C)(iiiab). Therefore, the ITAT held this issue in favor of the assessee.
Conclusion:
The ITAT allowed the appeal of the assessee, holding both grounds in its favor. The order was pronounced in the open Court on 04-01-2013.
-
2013 (1) TMI 838
Issues involved: Application for rectification/recall of the order of the Tribunal u/s 254(2) of the Income-tax Act, 1961 regarding the assessment year 2007-08.
Details of the judgment:
The applicants sought rectification/recall of the Tribunal's order, disputing the findings related to the nature of land and non-mentioning of certain citations relied upon. The Tribunal considered all contentions and found no material omission or mistake in recording the arguments. The power of rectification u/s 254(2) is limited to mistakes apparent from the record, not for reviewing its own order. The Tribunal cannot recall its order based on a change of opinion or new arguments. The judgment cited the case law to support this principle.
The Tribunal emphasized that rectification is confined to mistakes that are patent and obvious, not requiring lengthy arguments or investigation. It cannot be used to review or rewrite an order based on different interpretations of the law. The judgment highlighted that the Tribunal must act within the limits set by the statute and does not have inherent power of review. The application for rectification was rejected as the Tribunal found no merit in the arguments presented by the applicants.
In conclusion, the Tribunal rejected all the Miscellaneous Applications of the assessees seeking rectification/recall of the order, emphasizing that rectification under S.254(2) is limited to correcting mistakes apparent from the record, not for re-arguing the case or seeking a review of the order based on different legal interpretations.
-
2013 (1) TMI 837
The High Court of Bombay disposed of the appeal as the Tribunal recalled the impugned order. The appellant withdrew the appeal, and the Tribunal will reconsider the matter, taking into account relevant decisions. All contentions are kept open.
-
2013 (1) TMI 836
Issues Involved:
1. Classification of the assessee as a commission agent or transport contractor.
2. Rejection of books of account u/s 145(3) of the IT Act.
3. Reasonableness of net profit rate applied by the Assessing Officer (AO).
Summary:
1. Classification of the Assessee:
The primary issue was whether the assessee was a commission agent or a transport contractor. The assessee claimed to be a commission agent, arranging trucks for consignors and earning commission, while the AO considered the assessee as a transport contractor. The Tribunal held that the assessee was neither a contractor nor an agent but was independently engaged in the transportation business. The difference between the hire charges paid and received represented the assessee's income.
2. Rejection of Books of Account u/s 145(3):
The AO rejected the assessee's books of account u/s 145(3) due to the failure to show gross receipts and reconcile the tax deducted at source (TDS) with the corresponding income. The Tribunal confirmed the AO's action, stating that the books of account were not correct and complete, and the assessee was obliged to reflect the income corresponding to the TDS claimed.
3. Reasonableness of Net Profit Rate:
The AO estimated the net profit at 8% of gross receipts after rejecting the book results. The Tribunal found no justification for the 8% rate and directed the AO to apply a net profit rate of 3.5% (exclusive of all expenses/allowances/deductions under Chapter IV-D of the IT Act) of gross receipts for both assessment years under appeal. This direction was specific to the assessment years under appeal and not a precedent for other years.
Conclusion:
The Tribunal partly allowed the Department's appeals, confirming the rejection of books of account but modifying the net profit rate to 3.5%. The decision emphasized that the principles from cited cases were considered but the ruling was based on the specific facts of the case.
-
2013 (1) TMI 835
Issues Involved:
Conviction and sentence under Section 135 (1) (a) of The Customs Act, 1962, challenge to the impugned judgment, mandatory sanction under Section 157 of The Customs Act, 1962, contradictory statements of accused persons under Section 108 of The Customs Act, 1962, reduction of substantive sentence for special reasons.
For the revision petition challenging the conviction and sentence under Section 135 (1) (a) of The Customs Act, 1962, the petitioner argued that obtaining sanction under Section 157 of the Act is mandatory. The petitioner contended that the sanction (EX.PW1/A) for prosecution was not proved by the Officer who granted it (paragraph 3).
The petitioner's counsel further argued that the statements of the accused persons recorded under Section 108 of The Customs Act, 1962 were contradictory, making them unreliable. It was pointed out that one co-accused named the petitioner while the other co-accused did not, leading to a plea for acquittal based on lack of recovery and parity with the acquitted co-accused (paragraph 4).
Alternatively, the petitioner's counsel submitted that due to the petitioner's poor financial situation, health issues, and the lengthy duration of the legal proceedings since 1989, there were special and adequate reasons to reduce the substantive sentence. The petitioner had already spent more than six months in jail and was the sole breadwinner for his family (paragraph 5).
In response, the respondent's counsel argued that the sanctioning authority did not need to testify in court as the Sanctioning Officer had duly proved the sanction for the petitioner's prosecution. It was contended that the petitioner could not be equated with the acquitted co-accused as their roles were different, and the retraction of the statement under Section 108 of the Act was insignificant due to the recovery of gold (paragraph 6).
After considering the arguments and evidence, the Court found no merit in the petitioner's contentions. The deposition of the Seizing Officer was deemed credible, and there were no substantial contradictions in the statements of the accused persons. The Court concluded that the conviction of the petitioner was justified based on the evidence presented (paragraph 7).
Regarding the substantive sentence imposed, the Court noted that for special reasons, a sentence of less than one year could be awarded as per the Proviso to Section 135 of The Customs Act, 1962. Taking into account the petitioner's age, family responsibilities, health condition, and the lengthy legal process, the Court found special and adequate reasons to reduce the substantive sentence to the period already served by the petitioner (paragraph 8-9).
Ultimately, the petition was partly allowed, and the substantive sentence imposed on the petitioner was reduced to the time already spent in custody, considering the unique circumstances of the case (paragraph 10).
-
2013 (1) TMI 834
Nature of income earned by the assessees from purchase and sale of shares through Portfolio Management Scheme - Held that:- Assessees have been making investments in shares and units of mutual funds for several years which had been declared as investment in the books and income from which was being declared as capital gain and accepted by the department - with AY 2003-04 assessee started making investment through PMS - PMS Manager was authorized to purchase, acquire, obtain, take, hold, sell, transfer, substitute or change all or any of the investments made on behalf of the assessee - average holding period of the shares was more than two months - accordingly the income earned from PMS has to be assessed as capital gain - Decided as per assessees own case for the earlier years - Decided in favor of assessee
-
2013 (1) TMI 833
Issues Involved:
1. Charging to tax interest on securities accrued but not due.
2. Taxation of appreciation in value of capital invested in foreign branch repatriated to India.
3. Disallowance of depreciation on building.
4. Disallowance of entertainment expenses.
5. Addition of appreciation in value of balance of foreign branches account in head office books.
6. Disallowance of arrears of salary payable to staff.
7. Disallowance of loss on revaluation of securities.
8. Disallowance of expenditure on Wills World Cup.
9. Various other grounds including deduction u/s 43B, taxability of write-back of excess provision towards bad debts, deduction u/s 80G, levy of additional tax, non-taxability of rebated interest, and deduction u/s 80M.
Summary:
1. Charging to Tax Interest on Securities Accrued but Not Due:
The assessee contested the addition of Rs. 26,25,37,472/- for AY 1994-95 and Rs. 71,59,42,553/- for AY 1995-96 made by the Assessing Officer (AO) and confirmed by the CIT(A). The Tribunal found that the assessee failed to explain the exclusion of interest income that became legally due in the relevant years. The Tribunal upheld the AO's addition, dismissing the assessee's ground of appeal.
2. Taxation of Appreciation in Value of Capital Invested in Foreign Branch Repatriated to India:
The AO added Rs. 1,31,59,65,267/- to the income of the assessee, which was confirmed by the CIT(A). The Tribunal upheld this decision, stating that the exchange gain was realized and not notional, and thus taxable as revenue receipt.
3. Disallowance of Depreciation on Building:
The assessee's claim for depreciation on building was disallowed by the AO and confirmed by the CIT(A). The Tribunal upheld the disallowance based on its earlier decision in the assessee's case for AY 1997-98.
4. Disallowance of Entertainment Expenses:
The AO disallowed entertainment expenses of Rs. 6,86,572/- for AY 1994-95, Rs. 6,52,612/- for AY 1995-96, and Rs. 7,23,780/- for AY 1996-97, which was confirmed by the CIT(A). The Tribunal upheld the disallowance, following its earlier decision in the assessee's case for AY 1997-98.
5. Addition of Appreciation in Value of Balance of Foreign Branches Account in Head Office Books:
The AO added Rs. 47,05,41,973/- to the income of the assessee, which was confirmed by the CIT(A). The Tribunal remanded the matter back to the AO for fresh adjudication after verification of facts.
6. Disallowance of Arrears of Salary Payable to Staff:
The AO disallowed the assessee's claim of Rs. 53,46,21,347/- for wage arrears, which was confirmed by the CIT(A). The Tribunal remanded the issue back to the AO for fresh adjudication considering the bipartite agreement dated 14.2.1995.
7. Disallowance of Loss on Revaluation of Securities:
The AO disallowed the loss of Rs. 104,43,71,688/- on revaluation of securities, which was confirmed by the CIT(A). The Tribunal allowed the assessee's appeal, following the decision of the Hon'ble Madras High Court in CIT vs Karur Vysya Bank Ltd.
8. Disallowance of Expenditure on Wills World Cup:
The AO disallowed Rs. 98,05,001/- of the total expenditure of Rs. 1,58,05,001/- incurred on Wills World Cup, which was confirmed by the CIT(A). The Tribunal allowed the assessee's appeal, stating the entire expenditure is revenue in nature and should be allowed as deduction.
9. Various Other Grounds:
- Deduction u/s 43B: The Tribunal dismissed the ground as not pressed.
- Taxability of Write-back of Excess Provision towards Bad Debts: The Tribunal dismissed the ground as not pressed.
- Deduction u/s 80G: The Tribunal dismissed the ground as not pressed.
- Levy of Additional Tax: The Tribunal dismissed the ground as not pressed.
- Non-taxability of Rebated Interest: The Tribunal remanded the issue back to the AO for fresh adjudication.
- Deduction u/s 80M: The Tribunal dismissed the ground as not pressed.
Conclusion:
The Tribunal dismissed the appeal for AY 1994-95, partly allowed the appeal for AY 1995-96 for statistical purposes, and partly allowed the appeal for AY 1996-97.
-
2013 (1) TMI 832
Issues involved: The judgment involves issues related to the disallowance of loss from the cement segment, setting off of losses from cement manufacturing business against the profit from finance business, and the clubbing and apportioning of expenses of the two businesses of the assessee.
Disallowed Loss from Cement Segment:
The appeal was filed by the revenue against the order of the Commissioner of Income Tax(A)-X, New Delhi for AY 2007-08. The Assessing Officer noted that the assessee had claimed a loss from the cement manufacturing segment and adjusted it against the income of the finance business. The AO finalized the assessment stating that losses from cement manufacturing business cannot be set off against the profit from finance business. However, the CIT(A) partly allowed the appeal, considering the cement manufacturing business as a legitimate activity. The ARs objected to the clubbing of expenses of both businesses without any defect in the audited books of accounts. The CIT(A) directed not to club and apportion the combined expenses of the two businesses.
Setting off Losses and Clubbing of Expenses:
The revenue contended that the CIT(A) erred in deleting the disallowance of loss from the cement segment and directing the AO to rework the business profit from the finance segment. The revenue argued that losses from cement manufacturing business cannot be set off against the profit from finance business. However, the counsel for the assessee argued that the Assessing Officer had no authority to question the legitimacy of the cement manufacturing business. The ITAT observed that the cement manufacturing business was authorized and legitimate, allowing for the set-off of losses against finance business profit. The ITAT dismissed the revenue's grounds related to this issue.
Cross Objection of the Assessee:
The assessee filed a Cross Objection regarding the advance of funds to a company, contending that it was part of the finance activity. The AR argued that the Commissioner erred in upholding the view that the advance of funds was not part of the finance activity. The ITAT, having dismissed the revenue's appeal, found this issue academic and dismissed the Cross Objection of the assessee.
General Ground and Conclusion:
A general ground raised by the revenue was dismissed as it required no adjudication. The ITAT ultimately dismissed the appeal of the revenue and the Cross Objection of the assessee, upholding the findings of the Commissioner of Income Tax(A).
-
2013 (1) TMI 831
Issues involved: Appeal against CIT (A) order on disallowance of processing loss, general expenses, motor car expenses, telephone expenses, and other expenses under section 40(a)(ia).
Processing Loss Disallowance (Ground No.1): Assessee explained process loss as reason for stock shortage. AO disallowed 20% of loss, CIT (A) restricted to 15%. Tribunal found no basis for disallowance, considering low loss percentage and lack of previous disallowances by AO. Ground No.1 allowed, addition to be deleted.
General Expenses Disallowance (Ground No.2): AO disallowed 20% of general expenses due to lack of details, CIT (A) restricted to 10%. Tribunal found no need for disallowance considering small amount and proper maintenance of vouchers. Ground partly allowed, &8377; 10,000 disallowed.
Motor Car and Telephone Expenses (Ground Nos. 3 & 4): Expenses already considered for Fringe Benefit Tax, paid and filed in return of income. Tribunal followed precedent and principles, disallowance of 10% for personal use not justified. Ground Nos. 3 and 4 allowed, disallowances to be deleted.
Other Expenses Disallowance (Ground No.5): TDS not made on stipend and retainer ship salary, disallowed under section 40(a)(ia). Assessee failed to justify payments as non-professional services, disallowance upheld. Ground No.5 rejected, appeal partly allowed.
*Order pronounced on 31st January, 2013.*
-
2013 (1) TMI 830
Business Expenditure - Annual Event Celebration expenses - Whether the expenditure incurred on carrying out a contract work on annual event celebrated by the naval staff is allowable under section 37 of the I.T. Act, 1961 - HELD THAT:- the amount was contributed to the function of Naval Staff which is necessary for the purpose of a business, being a contractor doing the work in the Naval facility,therefore expenditure is allowable under section 37(1).
The expenditure should be allowed as deduction under section 37 of the I.T. Act 1961.
-
2013 (1) TMI 829
Issues involved: Appeal by Revenue against deletion of addition made by AO on account of transfer fees and non-occupancy charges.
Transfer Fees Issue: The AO added the amount received by a Co-operative Housing Society as transfer premium to its total income, alleging a profit motive behind it. The CIT(A) deleted this addition based on the principle of mutuality upheld in previous court decisions. The Tribunal, citing the case of Sind Co-operative Housing Society vs. ITO, ruled in favor of the assessee, stating that the charging of transfer fees had no commercial element and was not liable to tax. The appeal by Revenue on this ground was dismissed.
Non-Occupancy Charges Issue: The AO also added non-occupancy charges received by the society to its total income. The CIT(A) deleted this addition, following the decision of Mittal Court Premises Cooperative Society case, where it was held that non-occupancy charges were exempt under the principle of mutuality. The Tribunal upheld this decision, stating that the charges were collected to increase funds for providing services to members. The appeal by Revenue on this ground was also dismissed.
Conclusion: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the additions made by the AO on transfer fees and non-occupancy charges, based on the principle of mutuality and previous court rulings.
-
2013 (1) TMI 828
Issues involved: Appeal against deletion of addition of depreciation on goodwill u/s 32(1) of the Income Tax Act, 1961 for Assessment Year 2007-08.
The Appellate Tribunal ITAT Delhi heard an appeal filed by the revenue against the order of CIT (Appeals)-V, New Delhi for the Assessment Year 2007-08. The only issue in question was the deletion of an addition of Rs. 40,04,517 made on account of depreciation on goodwill. The revenue contended that goodwill is not covered within intangible assets as specified under the Income Tax Act.
The assessee, engaged in manufacturing, distribution, and marketing of telephone instruments for landline, had its assessment completed at Rs. 63,89,37,240 against the returned income of Rs. 63,14,39,130. The crux of the matter revolved around the treatment of goodwill as an asset for the purpose of claiming depreciation.
During the hearing, the assessee's representative referred to a previous decision by the Hon'ble ITAT in the assessee's own case for Assessment Years 2008-09 and 2009-10. Citing the Hon'ble Supreme Court's ruling in the case of CIT vs. Smifs Securities Ltd., it was established that goodwill is indeed an asset under section 32 of the Income Tax Act, 1961, making depreciation on goodwill admissible.
The explanation provided by the assessee regarding the origin of goodwill stemmed from a Scheme of Amalgamation, resulting in the creation of goodwill in the company's books. The Assessing Officer had initially disallowed the depreciation on goodwill, contending that it did not fall under the specified intangible assets under Explanation 3 to Section 32(1) of the Act.
Explanation 3 to Section 32(1) of the Act defines assets as tangible assets like buildings, machinery, and intangible assets such as know-how, patents, copyrights, trademarks, licenses, franchises, or any other business or commercial rights of similar nature. The Tribunal, in line with the Supreme Court's decision, held that goodwill falls under the category of 'any other business or commercial rights of similar nature,' making it eligible for depreciation.
Ultimately, the Tribunal, following the precedent set by the Hon'ble Supreme Court and the ITAT in the assessee's previous cases, dismissed the revenue's appeal. The decision was pronounced on January 14, 2013, in open court after the conclusion of the hearing.
-
2013 (1) TMI 827
Issues involved:
The judgment involves issues related to adjustment of internet expenses in export turnover, denial of deduction under section 10A, setting off brought forward losses before deduction under section 10A, and upward adjustment of prices by the Transfer Pricing Officer (TPO).
Adjustment of Internet Expenses:
The first issue pertains to the adjustment of internet expenses in the export turnover. The Tribunal directed the Assessing Officer to exclude an equal amount from the total turnover as well, based on the judgment of the Hon'ble Karnataka High Court in a similar case. The decision was made in favor of the assessee, emphasizing that components of export turnover in the numerator and denominator cannot differ.
Denial of Deduction under Section 10A:
The next issue concerns the denial of deduction under section 10A by the Assessing Officer, alleging the formation of the business through splitting up or reconstruction. Referring to a previous decision in the assessee's case, the Tribunal held that shifting an existing business to a new location does not constitute forming a new business. Relying on relevant legal precedents, the Tribunal directed the assessing authority to grant the deduction under section 10A to the assessee.
Setting off Brought Forward Losses:
Another issue raised was the sequence of setting off brought forward losses before allowing the deduction under section 10A. The Tribunal, citing previous decisions and the Hon'ble Karnataka High Court, ruled in favor of the assessee. It directed the Assessing Officer to allow the deduction under section 10A before setting off the brought forward losses.
Upward Adjustment of Prices by TPO:
The final issue involved an upward adjustment of prices by the Transfer Pricing Officer (TPO) based on comparables with higher turnovers and different business lines. The Tribunal found the TPO's adjustment arbitrary and determined the Profit Level Indicator (PLI) at 7% for the assessment year 2007-08, significantly lower than the TPO's 25.44%. The Tribunal modified the ALP adjustment accordingly, partially allowing the assessee's appeal.
-
2013 (1) TMI 826
Issues involved: Appeal against CIT(A) order confirming reopening of assessment and addition made under section 68 of the Income Tax Act, 1961.
Reopening of Assessment:
The appeal was made against the Order of the CIT(A)-34, Mumbai dated 26.10.2012 for the assessment year 2003-2004. The assessee objected to the reopening of the assessment and the addition of Rs. 1,02,064 made under section 68 of the Income Tax Act, 1961. The search action under section 132 of the IT Act was conducted in the case of M/s. Mahasagar Securities Pvt. Ltd., now known as 'M/s. Alag Securities Pvt. Ltd.', revealing bogus dealing activities. The assessee had purchased shares worth Rs. 1,02,064 from M/s. Buniyad Chemicals, funded by loans from friends. The Assessing Officer added this amount under section 68 of the Act, leading to the appeal.
Merits of the Addition:
The assessee submitted that loans were obtained from friends to purchase shares, and the amounts were returned in the subsequent year. Details of the loans and ledger accounts were provided, but no further enquiry was made by the Assessing Officer. The CIT(A) upheld the reopening of the assessment, stating that there was material to support it. However, the Tribunal found that the addition of Rs. 1,02,064 was unjustified. The assessee had provided evidence of the loans and purchase of shares through a broker. The genuineness of the transactions was supported by documents, and the Tribunal held that the addition under section 68 was not justified. The CIT(A) was also criticized for confirming the addition.
Conclusion:
The Tribunal allowed the appeal, deleting the addition of Rs. 1,02,064 made by the Assessing Officer under section 68 of the Act. The Tribunal held that the genuineness of the transaction should not have been doubted and criticized the CIT(A) for confirming the addition. The Tribunal did not dispose of the legal ground due to the deletion of the addition on merit.
Note: Separate judgment was not delivered by the judges.
-
2013 (1) TMI 825
Tax on Job work - Bleaching, dyeing, processing and printing of gray cloth on the ground that there is no transfer of any goods involved in such activity - Held that: - Similar controversy came up for consideration before this court in Writ Petition No. 1683 of 2007 ( M/s. Super Fine Processors Pvt. Ltd. vs. State of U.P. and Others [2013 (6) TMI 482 - ALLAHABAD HIGH COURT] and four other connected writ petitions and this court vide judgment and order dated 10.1.2013 had held that the decision taken by the State Government on 7.10.2005, on the representation made by two such similarly situated persons as also the Northern India Textile Processors Association would be binding on the Assessing Authority within the State of U.P. wherein it has been held that colour, dye, chemicals, etc. used in bleaching, dyeing, processing and printing of gray cloth are consumable and are not transferred and not included in the definition of sale and the writ petitions were allowed - Petition allowed.
-
2013 (1) TMI 824
Issues Involved:
1. Legality of the notice issued u/s 148 of the Income Tax Act, 1961.
2. Validity of the reasons for reopening the assessment.
3. Jurisdiction of the Assessing Officer to make income additions.
4. Whether there was a failure to disclose material facts by the assessee.
5. Whether the reopening of the assessment was based on tangible material.
Summary:
1. Legality of the notice issued u/s 148 of the Income Tax Act, 1961:
The Petitioner challenged the legality of a notice dated 24 March 2011 issued by the Assessing Officer u/s 148, seeking to reopen an assessment for A.Y. 2006-07. The reopening occurred within four years of the end of the relevant assessment year.
2. Validity of the reasons for reopening the assessment:
The reasons for reopening included:
- Unapportioned claim recovery of Rs. 27.24 crores not offered to tax.
- Change in accounting policy reducing income by Rs. 20 crores.
- Liability of Rs. 6.57 crores for revised pay scales not crystallized before the balance-sheet date.
- ISO Certification/Audit fees of Rs. 16.29 lakhs treated as revenue expenses instead of capital expenses.
- Prior period expenses of Rs. 1.73 crores not related to the relevant previous year.
3. Jurisdiction of the Assessing Officer to make income additions:
The Petitioner argued that the Assessing Officer had no jurisdiction to make income additions u/s 44 read with Rule 5(a). The Revenue contended that the reopening was within jurisdiction as it was based on tangible material and not a mere change of opinion.
4. Whether there was a failure to disclose material facts by the assessee:
The Petitioner claimed complete disclosure of material facts during the original assessment, while the Revenue argued that the Assessing Officer failed to apply his mind to the relevant points during the original assessment proceedings.
5. Whether the reopening of the assessment was based on tangible material:
The Court held that the reopening within four years required tangible material, not a mere change of opinion. The Assessing Officer had tangible material to believe that income had escaped assessment, fulfilling the jurisdictional requirement of Section 147.
Conclusion:
The Court dismissed the Petition, stating that the Assessing Officer acted within jurisdiction in reopening the assessment. The merits of the assessment would be considered by the Assessing Officer upon reopening. No case for interference under Article 226 of the Constitution was made out.
............
|
9911796707
