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Showing 61 to 80 of 1510 Records
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2015 (1) TMI 1460
Deduction u/s 80IA - claim to be computed undertaking wise, i.e., in the manner in which the assessee has claimed deduction - Whether the Tribunal was justified in holding that in granting deduction under Section 80IA of the Act, it is only the income of the loss making units should be taken into consideration and not all the units of the assessee, some of which were making profits? - HELD THAT:- This Court had an occasion to consider the said substantial question of law in case of Komarla Feeds and Foods Pvt. Ltd. Vs. Commissioner of Income-tax [2015 (1) TMI 1458 - KARNATAKA HIGH COURT] where this Court has answered the said substantial question of law in favour of the assessee and against the revenue.
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2015 (1) TMI 1459
Appointment of the court receiver in respect of the suit premises - Whether there was any prima facie substance in the allegations of fraud made by the petitioners in both the writ petitions before the learned trial judge played upon the court by respondent no. 1 in collusion with the alleged constituted attorney of Mr. Peter Drego or not? - whether the learned trial court could have taken cognizance of such allegations of fraud committed upon the court and could have set aside the consent decree obtained by respondent no. 1 from the trial court based on such fabricated and fraudulent documents in the applications filed by the petitioners?
HELD THAT:- A perusal of the record indicates that in the said suit, the respondent no. 1 had also filed a Notice of Motion bearing no. 1948 of 2012 inter alia praying for an order and injunction against the said M/s. Drego Enterprises from in any manner interfering with or disturbing with the alleged physical possession of the respondent no. 1 in respect of the suit premises and/or dispossessing the respondent no. 1 and/or his family members otherwise than by due process of law. Roznama dated 16th August, 2012 indicates that the trial court granted ad-interim injunction as prayed in terms of prayer (a) of the draft notice of motion. The alleged constituted attorney of the defendants agreed that the defendant would not dispossess the plaintiff - A perusal of the Roznama dated 14th September, 2012 indicates that respondent no. 1 was present through her advocate. One Mr. A.D. Thakur advocate appears to have been tendered his vakalatnama on behalf of the defendant and the same was taken on record.
A perusal of the record clearly indicates that the material produced before the trial court was more than sufficient to establish the fraud committed by respondent no. 1 and the said Mr. Shamsuddin Kasamali Qureshi upon the court in obtaining consent decree. There was a gross abuse of process of law and of court by the respondent and the said Mr. Shamsuddin Kasamali Qureshi. A perusal of the entire order makes it abundantly clear that the trial judge has taken a very casual approach in the matter while considering serious allegations of fraud committed upon the court though more than sufficient material has been produced by the petitioners to indicate the systematic fraud played upon the court by the respondent no. 1 and the said Mr. Shamsuddin Kasamali Qureshi - when the application was made by the petitioners for setting aside the consent terms on the ground that there was no power of attorney on the record or proceedings, the trial court did not bother to look into the seriousness of such allegations and to look into as to how the vakalatnama of Mr. Shamsuddin Kasamali Qureshi came to be taken on record without original power of attorney and how could such consent terms on behalf of the registered partnership firm be taken on record of the court and the seal of the court was affixed on such fraudulently obtained consent decree.
Whether any of the petitioners filing miscellaneous application for setting aside and/or stay of consent decree had locus to file such application for the relief's as claimed under section 151 of the Code of Civil Procedure or under any other provisions of law? - HELD THAT:- It is held that it would not be equitable to confer a benefit on a party who is a beneficiary of such order and decree obtained by fraud. A person whose case is based on falsehood has no right to approach to the court and can be summarily throughout at any stage of litigation. Even in the said judgment of this court, the petitioner who had applied for setting aside the order passed by this court was not a party to the said proceedings in which the order granting letters of administration was passed by this court and had brought to the notice of the court that the fraud was committed upon the court - Once the allegation of fraud, fabrication or concealment is brought to the notice of the court, which is alleged to have been committed by the opposite party to the proceedings on court, it becomes the duty of the court to look into such allegation whether any such order has been obtained by the party from the court by practicing a fraud, fabrication or concealment. The court can take action even suo moto if comes to the conclusion that an order is obtained fraudulently or by making false suggestion or by concealment of such fact by a party and can set aside such order.
The petitioners have made out a case for appointment of the court receiver in respect of the suit premises in view of the clear case of fraud practiced upon the court by the respondent no. 1 in obtaining the consent decree and in committing gross abuse of process of law and of court - Petition allowed.
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2015 (1) TMI 1458
Revision u/s 263 - deduction u/s 80-IB is different on the gross amount after adjusting the loss - HELD THAT:- Though, the word used in business at Section 80-IB, the careful reading makes it clear that, business has to be understood with reference to the business referred in Sections 3 and 2 of the 11(a) and 11(b) where the reference is to industrial undertaking only. In substance it makes no difference. The judgment of the Apex Court in the case of Synco Industries Ltd. V. Assessing Officer (Income-Tax) And Another [2008 (3) TMI 13 - SUPREME COURT] squarely applies to the facts of this case, on which, the reliance is placed by the Tribunal and held section 80A(2) and section 80B(5) are declaratory in nature.
They apply to all the Sections falling in Chapter VI-A. They impose a ceiling on the total amount of deduction and, therefore the non-obstante clause in Section 80-I(6) cannot restrict the operation of Sections 80A(2) and 80B(5) which operate in different spheres. As observed earlier Section 80-I(6) deals with actual computation of deduction whereas Section 80-I(1) deals with the treatment to be given to such deductions in order to arrive at the total income of the assessee and, therefore while interpreting Section 80-I(1), which also refers to gross total income one has to read the expression 'gross total income' as defined in Section 80B(5).
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2015 (1) TMI 1457
On-money receipt - estimating the net profit - Hon’ble Settlement Commission has accepted the contention of the assessee that only net profit should be estimated on the amounts received outside the books of account. Accordingly, the Hon’ble Settlement Commission has estimated the net profit at 12% of thereon - HELD THAT:- The assessments of AY 2005-06 and also the year before us, viz., AY 2006-07 have been taken up for scrutiny only on the basis of survey operations and hence the facts prevailing in both the cases are identical in nature. Hence, we do not find it necessary to take a different view from that one taken by the Hon’ble Settlement Commission. Accordingly, we are of the view that the Ld CIT(A) was justified in estimating the profit at 12% (it is stated that the rate of profit was wrongly mentioned as 17% in the order of Ld CIT(A)).
D.R submitted that there is a reference of 35% in the Settlement Commission’s order. However, on a perusal of the said order, we notice that the assessee has given a working of the profit of the project by considering the value of scrap sales and adhoc disclosure in order to substantiate the offer of 12%. Hence, in our view, the said reference of 35% is not relevant here.
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2015 (1) TMI 1456
Murder - compliance with the statutory requirement of police report Under Sections 173(2) and 173(5) of Code of Criminal Procedure - HELD THAT:- In view the statutory provisions Under Section 173(2) and (5) read with Section 2(r) of Code of Criminal Procedure and with reference to the judgments on which both the learned senior Counsel placed reliance upon. It is an undisputed fact that the charge sheet was filed on 3.7.2013 that is 90th day. Section 2(r) of Code of Criminal Procedure defines the expression "police report" as a report forwarded by a police officer to a magistrate Under Section 173(2) of Code of Criminal Procedure. The particulars to be furnished in the police report which are extracted as above are complied with in the instant case. Therefore, filing of the police report as required Under Section 173(2) is within 90 days in the instant case.
The High Court is right in rejecting the prayer of default bail Under Section 167(2) of Code of Criminal Procedure. Upon the filing of the police report, cognizance was taken by the learned ACJM on 3.7.2013 which is evident from the order passed by him which is extracted above. It is pertinent to point out that the said order remains unchallenged by the Appellant. Therefore, it is not open for him to turn around and contend that cognizance was not taken by the learned ACJM on 3.7.2013.
Thus, filing of police report containing the particulars as mentioned Under Section 173(2) amounted to completion of filing of the report before the learned ACJM, cognizance is taken and registered the same. The contention of the Appellant that the police report filed in this case is not as per the legal requirement Under Section 173(2) & (5) of Code of Criminal Procedure which entitled him for default bail is rightly rejected by the High Court and does not call for any interference by this Court.
Appeal dismissed.
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2015 (1) TMI 1455
Levy of penalty u/s. 271C - assessee failed to remit the tax - HELD THAT:- The same issue was considered in the case of US Technologies International (P) Ltd. vs. CIT [2009 (6) TMI 1016 - KERALA HIGH COURT] wherein it was held that if there is failure to remit or deduct the tax in whole or any part thereof, will attract provisions of penalty under section 271C - Being so, the assessee cannot re-argue the same issue before us. The facts in this case being identical to that one considered in the case of US Technologies International (P) Ltd., [2009 (6) TMI 1016 - KERALA HIGH COURT] we are inclined to hold that the assessee is liable for penalty not only in terms of provisions of Chapter XVIIB but also for non payment of tax deducted at source in time.
AR made a plea before us that because of financial problem, the assessee failed to remit or deduct tax to the Government. However, there is no iota of evidence to suggest that the assessee is suffering from financial difficulty. Hence, the assessee’s argument thus cannot be constituted as explanation to say that the assessee is suffering from financial difficulty unless the assessee substantiates it with evidence. Even if there is financial difficulty, it is the duty of the assessee to substantiate the financial hardship by placing necessary evidence. In the present case, there is no material to suggest the financial difficulty of the assessee.
The other grievance of the assessee is that when the assessee has remitted the deducted amount with interest before the detection by the Department, hence penalty cannot be levied. This contention of the assessee cannot be considered as reasonable cause and there is delay of remittance of deposited amount to the Government and payment of interest is compensatory in nature and in this case, there was a continuous delay of 4 years and the belated depositing of deducted amount every year and the assessee is a willful defaulter. Being so, we are inclined to confirm the order of the CIT(A) on this issue.
AR made a plea before us that in one assessment year, 2010-11, penalty levied was more than the tax which the assessee failed to deduct . Being so, the Assessing Officer shall recompute the penalty amount and it shall not exceed the amount of tax which the assessee failed to deduct and pay the same to Central Government. With this observation, we are inclined to confirm the order of the penalty. Appeal of assessee dismissed.
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2015 (1) TMI 1454
Exemption u/s 11 - registration filed under Section 12 AA denied - Revenue questions the trust not having commenced its activity for the grant of registration - HELD THAT:- When the genuineness of the objects of the Trust were not questioned by the CIT and when the Trust was yet to commence its operation and when a subject matter of scrutiny by the CIT as contemplated under section 12 AA(3) of the Income Tax Act, the Revenue would not be justified in refusing the registration at the threshold. The said ratio was laid down in a judgment reported in CIT Vs. Arulmighu Sri Kamatchi Amman Trust [2012 (2) TMI 159 - MADRAS HIGH COURT] - Decided against revenue.
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2015 (1) TMI 1453
Income accrued or deemed to accrued in India - Taxability in India - Payment on account of technical services to a non-resident - Whether the sum paid or credited to the account of the foreign resident by the assessee on account of service rendered in relation to forex derivative transactions is chargeable to tax in India under Section 9(1)(vii)? - whether the assessee was liable to deduct tax? - HC held that rendering services could not have been concluded outside India - HELD THAT:- No legal and valid ground for interference. The special leave petition is dismissed.
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2015 (1) TMI 1452
Accrual of interest on NPAs - Mercantile system of accounting followed - income from non-performing assets should be assessed on cash basis or mercantile basis despite the assessee maintain mercantile system of accounting - contention of the revenue that in respect of non-performing assets even though it does not yield any income as the assesse has adopted a mercantile system of accounting, he as to pay tax on the revenue which has accrued notionally is without any basis - HELD THAT:- SLP dismissed.
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2015 (1) TMI 1451
Accrual of income - non disclosure of income from the loan advanced to Al-Haj Abdus Salam Barlaskar - HELD THAT:- AO had made addition only because the assessee was following mercantile system of accounting. It is a fact that the assessee had not received any income though it was entitled to get the interest from Al-Haj Abdus Salam Barlaskar. The principle of accountancy cannot takes place the theory of real income and in the case under consideration the assessee had to write off the loan finally during the AY 2008-09. Just because, the interest was due, it cannot be always presumed same had to be taxed. The agreement in question is effective till September, 2008 only i.e., for a period of three years. In these circumstances, if the assessee was not receiving interest, then in our opinion, the addition should not have been made just because it had accrued to the assessee as per the mercantile system of accounting. In the case of Eicher Ltd. [2009 (7) TMI 43 - DELHI HIGH COURT] the same principle has been propounded. - Decided in favour of assessee.
Disallowance of interest expenditure - HELD THAT:- FAA has not given any reason for the disallowance. As his order is non-speaking, therefore, same has to be reversed. Decided in favour of assessee.
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2015 (1) TMI 1450
Rectification of mistake - Validity of search and assumption of jurisdiction u/s 153A against regular assessment u/s 143(3) - HELD THAT:-For the assessment year 2011-12 it was a regular assessment u/s 143(3) and not assessment made u/s 153A of the Act and grounds raised were against the additions made during the assessment. Tribunal, while disposing of the group of appeals for the assessment years 2005-06 to 2011-12, had disposed of the appeal for assessment year 2011-12 also by remanding the matter to the CIT(A) to adjudicate the ground about validity of the assessment proceedings u/s 153A of the Act without considering the fact that the said ground of appeal did not arise in the assessment year 2011-12. Thus there is a mistake apparent from the face of the record requiring rectification
Having regard to the rival contentions and the material on record and also on further perusal of the grounds of appeal raised by the assessee in [2014 (11) TMI 1189 - ITAT BANGALORE] grounds are against the additions made in the assessment completed u/s 143(3) and not against the validity of the proceedings u/s 153A of the Act. Therefore, we are satisfied that there is a mistake apparent from order of the Tribunal which needs rectification. Accordingly, we recall the order of the Tribunal and direct the registry to fix the appeal for hearing in regular course.
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2015 (1) TMI 1449
Acquisition of Land - Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - allegation that respondent no. 1 has started acquiring the land without complying with the provisions and in utter violation of the Act of 1995 & therefore the acquisition proceedings are bad in law and liable to be quashed - HELD THAT:- The respondent No.2 GMADA has admitted that the possession of the land in question (i.e. about 102 acres) is with the appellants and the appellants have not received the compensation for the said land being acquired by GMADA.
The present case is squarely covered by the law laid down in the matter of PUNE MUNICIPAL CORPORATION & ANR. VERSUS HARAKCHAND MISIRIMAL SOLANKI & ORS. [2014 (1) TMI 1643 - SUPREME COURT] where it was held that the award pertaining to the subject land has been made by the Special Land Acquisition Officer more than five years prior to the commencement of the 2013 Act. It is also admitted position that compensation so awarded has neither been paid to the landowners/persons interested nor deposited in the court. The deposit of compensation amount in the government treasury is of no avail and cannot be held to be equivalent to compensation paid to the landowners/persons interested.
The physical possession of the land belonging to the appellants have neither been taken by the respondents nor compensation paid to them even though the award was passed on 06.08.2007, and more than five years have lapsed prior to date on which the Act of 2013 came into force. Therefore, the conditions mentioned in Section 24(2) of the Act of 2013 are satisfied in this case for allowing the plea of the appellants that the land acquisition proceedings are deemed to have lapsed in terms of Section 24(2) of the Act of 2013 - The said legal principle laid down by this Court in the case of Pune Municipal Corporation with regard to the interpretation of Section 24(2) of the Act of 2013, with all fours are applicable to the fact situation in respect of the land covered in these appeals for granting the relief as prayed by the appellants in the applications.
The acquisition proceedings in respect of the appellants' land have lapse - Application allowed.
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2015 (1) TMI 1448
Winding up of Company - Works contract - Company has failed to pay to the Petitioner an amount of ₹ 24,75,170/despite deducting TDS for ₹ 24,752/- - claim rejected on the ground of time limitation - HELD THAT:- According to the petitioner no payment is made towards the said amount of ₹ 24,75,170/by the Company which is due since 31st August 2010. The claim of the Petitioner therefore prima facie appears to be barred by the Law of Limitation. The argument advanced on behalf of the Petitioner that the period of limitation would get extended till the Petitioner gained knowledge of the fact that the Company had on 7th September 2010 deposited TDS on the said amount of ₹ 24,75,170/is prima facie unacceptable - in the case of S.P. BROTHERS VERSUS BIREN RAMESH KADAKIA [2008 (3) TMI 754 - BOMBAY HIGH COURT] the Division Bench of this Court has held that the issuance of TDS Certificates does not amount to an acknowledgement of Defendant within the meaning of Section 25 of the Evidence Act. The TDS certificate is primarily to acknowledge deduction of tax at source.
This being a triable issue, on this ground alone the Petition deserves to be dismissed - the certificates issued by DMRC would not assist the Petitioner since the Petitioner had privity of contract only with the Company and the said certificate again in any event cannot be construed as an admission of liability on the part of the Company.
As regards the fact that in the ledger account maintained by the Petitioner, an amount of ₹ 12, 19,097/is found due and payable by the Company to the petitioner, the Petitioner has correctly submitted that the said amount does not pertain only to the subject subcontract assigned by the Company to the Petitioner but pertains to various contracts between the Petitioner and the Company.
The Company has raised the aforestated bona fide disputes which need to be adjudicated either in a suit or in arbitration proceedings after giving an opportunity to the parties to lead evidence - petition dismissed.
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2015 (1) TMI 1447
Reopening of assessment u/s 147 - disallowance of set-off of brought forward Unabsorbed Depreciation(UD) - HELD THAT:- Assessee had capitalised the difference between the accumulated losses and fresh capital issued by it. Not only this the difference was treated as goodwill and the goodwill was a mortised equally over a period of 60 months in the books of the accounts of the assessee. AO allowed the claim made by it without considering the above facts.
On a specific query by the Bench the AR admitted that the goodwill was a mortised and that the difference of loss and fresh capital was capitalised in the books. Clear case of claiming double deduction. Considering the facts that the difference between the accumulated losses as on 26. 9. 2002 [of ₹ 19. 21 Crores less value of share capital of SSAPL of 11. 50 Crores (representing share capital extinguished of SSAPL)], capitalization of fresh capital, aggregating to ₹ 8. 86 Crores and treatment of goodwill in the books of the assessee, we are of the opinion that the FAA was justified in upholding the reassessment.
Double taxation/double deduction is not permissible under the Act. In the case under consideration the assessee had claimed the amount of ₹ 2. 96 Crores as goodwill and had amortised it in the books of accounts. In addition to it, the assessee wanted it to the part of unabsorbed losses to be carried forward. Clearly, it is not permissible as per the provisions of the Act - assessee should not have reduced the UD in the computation of book profits u/s. 115 JB - Even if the AO while passing order u/s. 143(3) had allowed an impermissible deduction, it would not bar him from initiating proceedings u/s. 147. The purpose behind the section is to compute the income that has escaped assessment. In the case under consideration brought forward UD of SSAPLwas allowed in excess during the original assessment proceedings. So, if the AO initiated re-assessment procee dings to withdraw the excess allowance, no fault can be found with him.
In Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT] AO has power of reopen an assessment provided there is tangible material to come to the conclusion that there was escapement of income from assessment and that reasons must have link with the formation of the belief. We find that in the case before us, there was tangible material before the AO, as the assessee has reduced the UD in computation of book profit against the clear intent of the legislature. Therefore, in our opinion cases relied upon by the assessee are of no help. We find that the matter relied upon by the DR, supports the stand taken by the FAA. Order of the FAA does not suffer from any legal or factual infirmity. So, confirming it, we decide ground no. 1 & 2 against the assessee.
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2015 (1) TMI 1446
Calculation of credit of MAT u/s 115JAA - MAT credit deduction from the tax payable and Surcharge and Education Cess to be calculated thereon - HELD THAT:- As decided in WYETH LIMITED [2015 (1) TMI 1299 - ITAT MUMBAI] as relying on M/S. VACMENT INDIA AGRA [2014 (10) TMI 787 - ALLAHABAD HIGH COURT] as taken into account the order of entries in the form ITR-6 for the A.Y. 2011-12 in the said case and held that as per form ITR-6, the MAT credit has to be given against the gross tax payable exclusive of surcharge /cess and only after the MAT credit tax liability, the surcharge and cess has to be calculated for the purpose of working out the grand tax liability.
Merit and substance in the alternative contention of the assessee that if the MAT credit is taken into account without including the surcharge and education cess then the surcharge and education cess on the tax liability has to be calculated only after allowing the MAT credit. Alternatively, the amount of MAT credit should also include surcharge and education cess for the purpose of allowing the credit against the tax liability inclusive of surcharge and education cess.
MAT as well as normal tax before allowing the MAT credit has to be taken on parity either exclusion of surcharge and education cess or inclusive of surcharge and education cess or inclusive of surcharge and education cess - Direct the AO to allow the MAT credit against the tax liability payable before surcharge and education cess or alternatively the amount of MAT credit should also be inclusive of surcharge and education cess and then allow the credit against the tax payable inclusive of surcharge and education cess. - Decided against revenue
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2015 (1) TMI 1445
Deduction u/s 10A - disallowance of business expenditure/marketing service charges - reduction of tele-communication charges from the export turnover - disallowance u/s 40(a)(i) - HELD THAT:- We find that the assessee has furnished the copies of the agreement between the assessee and its AE for rendering of marketing services and the invoices raised by the AE before the AO but the AO has not verified the genuineness or reasonableness of the same but has only made the disallowance on a proportionate basis of the increase in revenue to sales. This, in our view, is not sustainable in view of the decision of the Hon’ble Delhi High Court in the case of EKL Appliances [2012 (4) TMI 346 - DELHI HIGH COURT ]
We also find that the assessee has made the same plea before the CIT(A) and has also filed the above details and documents but the CIT(A) also has neither called for a remand report nor has verified the genuineness or reasonableness of the payment made by the assessee to its AE but has only confirmed the addition made by the AO by further holding that the said payment is chargeable to tax in India and since the assessee has failed to deduct tax at source, the disallowance u/s 40(a)(i) is called for. This, in our view, is not justified without verification of facts. In view of the same, we deem it fit and proper to remand the issues to the file of the AO for de novo consideration of the issue as regards the genuineness and also the reasonableness of the expenditure claimed by the assessee. It is made clear that the AO cannot make disallowance on the ground that the assessee has not generated revenue in proportion to the expenditure. This ground of appeal is accordingly allowed for statistical purposes.
Exclusion of tele-communication expenses from the export turnover for the purpose of deduction u/s 10A - We find that the alternate prayer of the assessee is covered in favour of the assessee by the decision of the jurisdictional High Court in the case of CIT vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] which has been followed by the CIT(A) in directing the AO to exclude the same from the total turnover also for the purpose of computation of deduction us 10A. Therefore, we see no reason to interfere with the order of the CIT(A) on this issue. This ground of appeal is rejected.
Deduction u/s 10A should be granted on ‘the profits and gains as are derived by an undertaking from the export of articles or things or computer software’ as assessed by the AO - We find that the AO is bound to first compute the income from export of articles or things or computer software, as the case may be, and thereafter allow the deduction u/s 10A in accordance with law. Therefore, the AO is directed to grant the deduction u/s 10A in accordance with law.
Interest u/s 234B and 234C are consequential in nature and therefore the AO is directed to give consequential relief to the assessee, if any.
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2015 (1) TMI 1444
Disallowance u/s 14A - Non recoding of satisfaction - HELD THAT:- It is an undisputed fact that the assessee itself has offered 0.5% of dividend income on account of other expenses. It is also an undisputed fact that the AO has not pointed out any defect in the calculation made by the assessee nor AO has recorded any dissatisfaction with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income. Considering all these facts in the light of the provisions of Sec. 14A of the Act, we set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition. Ground No. 1 is accordingly allowed.
Addition being securities transaction tax to the book profit computed u/s. 115JB - HELD THAT:- The said provision shows that it refers the amount of expenditure relatable to any income to which Sec. 10 other than the provisions contained in clause-38 thereof or section 11 or section 12 apply. In the case in hand the assessee has claimed exemption u/s. 10(38) of the Act therefore the assessee is covered by the exclusion provided in clause (f) to explanation-1 to Sec. 115JB of the Act. Therefore, we direct the AO to exclude addition being securities transaction tax from the book profit. Ground No. 3 is accordingly allowed.
Addition wrongly accounted in the books of account of the assessee being charged to book profit u/s. 115JB - HELD THAT:- It is not in dispute that the assessee has made book entries of speculation gain which it has not actually earned during the year. Since the speculation gains were credited to the profit and loss account, it can be said that the profit and loss account are not prepared in accordance with part-II of Schedule- VI and for the purpose of Sec. 115JB. Every company has to prepare its accounts in the manner provided in part-II and Part-III of Schedule-VI to the Companies Act 1956. Since the assessee’s profit and loss account is not prepared in accordance with the relevant provisions of the Companies Act, the notional profit shown by the assessee has to be reduced while computing the book profit u/s. 115JB - See BOMBAY DIAMOND CO. LTD. MUMBAI [2009 (11) TMI 903 - ITAT MUMBAI] - we direct the AO to re-work the Book Profit by amount wrongly accounted in the books of account of the assessee - Decided in favour of assessee.
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2015 (1) TMI 1443
Review application - it was held that even if it is taken that the decision of this Court is binding upon the parties, it will not help the applicant because no positive view condoning the delay has been taken by this Court and matter has been remanded back for reconsideration.
HELD THAT:- Appeal dismissed.
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2015 (1) TMI 1442
Negative cash balance - assessee’s main argument was that as per the cash book in “blue colour bind” there was introduction of cash in the name of Anwar Ali H. Lakhani which has covered up the discrepancy which was found in the original cash book - assessee had not shown the transfer of cash tallied with the books of the assessee firm - whether the cash book in “blue colour” which was later on placed before the AO can be considered as an evidence to determine the correct income of the Assessee? - HELD THAT:- Cash book which was submitted by the assessee subsequently was required to be examined by the AO. The AO is free to confirm the veracity of that cash book so that the question of negative cash can be decided in an authenticated manner. The cash book stated to be in blue colour should not therefore be disregard in summarily manner merely on the ground that it was prepared after the inquiries were raised by the Department.
We are not able to satisfy ourselves that there was a regular transfer of fund from the books of account of the partner to the accounts of the assessee-firm or in the books of R.H. Patel & Co. and that there was no shortage of the cash balance in the books of the assessee-firm. Rather, this is a factual aspect which can be ascertained at any point of time by examining the relevant books of accounts; hence, for this limited purpose we hereby refer this issue back to the stage of the AO so that the assessee can demonstrate that there was genuine transfer of funds introduced by the partner and that there was no shortage of the cash as alleged by the Revenue Department. For this limited purpose the matter is restored back; hence this ground of the Revenue may be treated as allowed for statistical purpose only.
Unexplained cash credits - stand taken by the assessee of having made sales to the said parties in the next year is nothing but an afterthought by the assessee to furnish his self servicing submission /details in the appellate proceedings - HELD THAT:- AR has explained that there was some parties who came forward with advance with a guarantee from the assessee to supply the iron in the subsequent years; therefore, the assessee has received the advance and duly credited in its books of account. In the subsequent year sales were executed and duly reflected in the books of account. Since, the said amount has already been taxed by the assessee in the next year; therefore, there was no justification on the part of the AO to disbelieve the action of the assessee. Impugned addition was made on a wrong premise, especially when the assessee has demonstrated that the sales were executed in the subsequent year. - Decided against revenue
Addition on account of low gross profit - as argued assessee’s sales have increased by more than 65%, which has also resulted into a better net profit on which the assessee had paid the tax - HELD THAT:- Marginal decrease in the gross profit ratio was properly explained by the assessee; hence the AO was not justified in making the impugned addition. The admitted factual position is that the turnover had gone up from 5.39 crore of the last year to the turnover of the year under consideration at 8.91 crore. Further, during the course of hearing, we have inquired from learned DR about the assessment record, specifically the position of the notices issued u/s.133(6) of IT Act to certain parties. Learned DR has placed before us a separate folder of the notices issued u/s.133(6) of IT Act and on perusal we have noted that there were few compliances made by those parties to whom the sales were executed by the assessee. Hence, according to us the allegation of non verification of sales was not absolutely corrected.
Earning of profit generated through unaccounted purchases and sales thereon detected by the sales tax department - HELD THAT:- compilation an English translation of the sales tax assessment order is placed. According to which an investigation was carried out at the business premises in the presence of partners, Sri Anwar Lakhani. Further it was noted that the Trader i.e., the Assessee was not able to explain cash in hand of ₹ 25,282/-, stock in trade of ₹ 6,39,239/- and suspense sales of ₹ 3,35,335/-. In that order, it was also held that there was existence of unaccounted purchases which were not proved. After applying gross profit margin the unaccounted purchase amounting to ₹ 12,87,102/- was taxed. We are of the view that in a situation when an another authority has given a finding that there were unaccounted purchases then it is not fair to disregard those finding of the Sales Tax Department.
Sales tax penalty - HELD THAT:- a penalty was imposed by the Sales Tax Department; hence, the expenditure being penal in nature is not admissible as per law. We are not convinced by the argument of learned AR; that it was compensatory in nature as it was paid as an advance payment of tax; because no such evidence was placed before us.
TDS u/s 194C - Addition u/s 40(a)(i)(ia) - HELD THAT:- Situation when there was no evidence of existence of any contract between the assessee and those transporters and the goods were transported to the assessee at the behest of the supplier then the assessee was not under an obligation to deduct the tax at source at the time of payment to truck drivers/owners. We, therefore, reverse the findings of the authorities below and direct to delete the addition.
Addition on account of excess claim of salary and wages and kharajat expenses made - HELD THAT:- Merely on the basis that the some of the amounts or names were not recorded in the salary register, the impugned disallowance should not have been made. The AO was required to investigate the basis of the total salary paid as claimed in the profit and loss account. The assessee’s explanation was that the salary register was maintained for “office staff” but in addition to that the salary was also paid to other staff such as accounting staff, etc, hence the total expenditure was claimed in the profit and loss account. This fact has not been contradicted by Revenue Department before us. Likewise, in the case of payment of Wages etc we have seen that the AO as well as CIT(A) both have made the disallowance merely on an estimation without appreciating the explanation of the assessee. According to us, such an estimation was uncalled for, hence we hereby reverse the same.
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2015 (1) TMI 1441
Exemption u/s 11 - Refusing registration to the assessee trust u/s.12AA - charitable activity u/s 2(15) - HELD THAT:- The main objects of the trust are - to breed the cattle and endeavour to improve the quality of the cows and oxen in view of the need of good oxen as India is prominent agricultural country; to produce and sale the cow milk; to hold and cultivate agricultural lands; to keep grazing lands for cattle keeping and breeding; to rehabilitate and assist Rabaris and Bharwads; to make necessary arrangement for getting informatics and scientific knowledge and to do scientific research with regard to keeping and breeding of the cattle, agriculture, use of milk and its various preparations, etc,; to establish other allied institutions like leather work and to recognize and help them in order to make the cow keeping economically viable; to publish study materials, books, periodicals, monthlies, etc., in order to publicize the objects of the trust as also to open schools and hostels for imparting education in cow keeping and agricultural having regard to the trust objects. The Hon'ble High Court held in Sabarmati Ashram Gaushala Trust [2014 (1) TMI 1539 - GUJARAT HIGH COURT] that all these objects of the trust were of the general public utility and would squarely fall under section 2(15) of the Act.
Recently, ITAT Mumbai Bench in the case of Shree Nashik Panchvati Panjarpole v. DIT (Exemption) [2014 (9) TMI 267 - ITAT MUMBAI] held that the assessee trust was established for the purpose of cow breeding and protection of cows and oxen. In this case, the Tribunal held that the trust can be considered as one created for charitable purpose. The dominant function of the trust was to provide asylum for old, maimed, sock, dry, weak, disabled and stray animals and birds, more particularly cows and other such cattle milk and to bring about improvement in breeding cattle for the beneficial promotion, upkeep, maintenance and propagation of cows and other types of cattle. Thus, the dominant object of the trust is to run Panjrapole and activities related to it. The Tribunal held that these objects constitute charitable purposes. While holding so, the Tribunal relied on the judgment in the case of CIT v. Swastik Textile Trading Co.(P) Ltd.,[1977 (7) TMI 30 - GUJARAT HIGH COURT] wherein, held that establishing and maintaining Gaushalas and Panjrapole constitutes charitable purpose.
We hold that the ld CIT was not justified in refusing grant of registration to the assessee -trust on this count.
Following clause was not incorporated in the trust - "Expressly prohibiting the distribution of assets/immovable property in the event of dissolution of the trust/institution among the trustees" - In view of clause 26 of the trust deed, above objection of the ld CIT is not sustainable. It appears that the Ld CIT has passed the impugned order in a hurry without looking into the express provisions of clause 26 of the trust deed. Accordingly, we hold that the objection raised by ld CIT is not correct and, hence liable to be rejected.
Objects and activities of the trust is not for any particular caste, creed, community or religion is not clearly mention - Above objection of ld CIT is irrelevant, particularly when nowhere in the trust deed, it is stated that the trust is created for the benefit of a particular caste, creed, community or religion. When there is no such clause in the trust deed, it is obvious that the trust is not created for the benefit of any particular caste, creed, community or religion.
Objections raised by ld CIT for not allowing the registration to the assessee trust are not tenable and hence, we reject the same. - Decided in favour of assessee
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