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Showing 201 to 220 of 1070 Records

• 2013 (5) TMI 876
  
  Issues involved: Seizure of goods without issuance of show cause notice u/s 124 of the Customs Act, 1962 within the stipulated period.
  
  Judgment Summary:
  
  The main contention raised was regarding the seizure of goods without the issuance of a show cause notice within the prescribed time frame. The petitioner argued that as per a Division Bench decision, failure to issue a show cause notice within the specified period results in the unconditional release of the goods. Citing previous cases, it was emphasized that the goods, released provisionally subject to conditions, should be unconditionally released in favor of the petitioner. The court referred to the mandatory nature of Section 110(2) and its proviso, stating that failure to issue a show cause notice within the specified period leads to the return of seized goods to the rightful owner.
  
  In line with the precedent set by the Division Bench decision, it was declared that the effect of not issuing a show cause notice under Section 124 led to the statutory dissolution of the seizure order, resulting in the unconditional release of the goods. The court directed that if the goods had not been released, they should be released within two weeks, and any related guarantees, like bank guarantees, should be canceled and returned to the petitioner.
  
  A dispute arose regarding the identity of the petitioner, with the respondent claiming it to be Kore Koncepts, a sole proprietorship of Mr. Ravinder Singh. However, an affidavit from Mr. Ravinder Singh clarified that the goods belonged to Mr. Rakesh Divedi, who had pursued the matter and fulfilled all requirements for the release of goods. Therefore, the court ordered the release of the bank guarantee in favor of Mr. Rakesh Divedi by a specified date.
  
  In conclusion, the writ petition was disposed of, and the court directed the necessary actions to release the goods and cancel the bank guarantee in accordance with the judgment.

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• 2013 (5) TMI 875
  

  Disallowance of diminution in the value of securities - securities classified as ‘Held till maturity’ category - Held that:- So far as the securities held under the HTM category the I.T.A.T., Pune has taken a view in the case of Latur Urban Co-operative Bank Ltd. Vs. ACIT [2015 (3) TMI 920 - ITAT PUNE] that all the securities held by the assessee are part of the stock-in-trade irrespective of their classification. So far as the treatment of the assessee in classifying the securities, in our opinion the securities classified under HTM category is also part of the stock-in-trade. There is RBI circular as per which the assessee can amortize the depreciation or loss on the conversion of securities from FST category to HTM category. We, therefore, do not agree with the view taken by the Ld. CIT(A) that the securities held under HTM are capital in nature. We accordingly allow the Ground no. 1 taken by the assessee and direct the Assessing Officer to allow the claim of the assessee in light of the above discussion.

  U/s 14A petty expenditure which has been proved to have been incurred in relation to earning of tax free income can be disallowed and section cannot be extended to disallow even the expenditure is permitted to have been incurred for the purposes of earning tax free income. In the circumstances, the disallowance cannot be made u/s 14A of the Act. This ground is therefore, allowed in favour of assessee

  Adhoc disallowances of Telephone expenses, Vehicle expenses, Advertisement expenses and General expenses - Held that:- Admittedly, the assessee is a bank and it is not individual whereby there can be any personal element involve in incurring the expenditure. In our opinion the reason for disallowance given by both the authorities below is not correct. We therefore delete the disallowance made by the Assessing Officer and allow the respective grounds taken by the assessee.

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• 2013 (5) TMI 874
  

  Assessment u/s 153A/153C - Addition u/s 68 AND 14A -- Held that:- additions made by the Assessing Officer with regard to unexplained gift of ₹ 10,00,000, made under section 68 and disallowance of ₹ 1,01,300 under section 14A, are beyond the scope of section 153A / 153C. Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and on the preliminary ground itself, both the additions are deleted. Thus, the issues arising out of the ground are treated as allowed.

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• 2013 (5) TMI 873
  
  Issues involved: Appeal against orders of CIT(A)-III, Hyderabad for assessment years 2005-06, 2006-07, and 2007-08 due to late filing of appeal and application for condonation of delay.
  
  The Appellate Tribunal ITAT Hyderabad heard appeals by one assessee against CIT(A)-III orders for assessment years 2005-06, 2006-07, and 2007-08, clubbed together for convenience. The assessee, engaged in manufacturing machine tools, filed its return showing a loss. The AO completed assessment u/s 143(3) r.w.s. 147, making additions and determining total income. The assessee appealed to the CIT(A) but faced rejection due to late filing without an application for condonation of delay. The Tribunal remitted the matter back to the CIT(A) to allow the assessee to provide evidence regarding the condonation application and decide accordingly.
  
  For the assessment year 2005-06, the assessee's appeal was dismissed by the CIT(A) due to a delay of 145 days in filing the appeal without any application for condonation of delay. The Tribunal noted that the assessee had indeed filed an application for condonation, which the CIT(A) failed to consider. Consequently, the Tribunal remitted the matter back to the CIT(A) to give the assessee another opportunity to provide evidence regarding the condonation application and make a decision in accordance with the law.
  
  The issues in the appeals for the assessment years 2006-07 and 2007-08 were similar to that of the assessment year 2005-06. Therefore, the Tribunal remitted these appeals back to the CIT(A) as well, instructing the CIT(A) to allow the assessee to present evidence regarding the condonation application and make a decision based on the facts and the law. Ultimately, the appeals were allowed for statistical purposes by the Tribunal.

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• 2013 (5) TMI 872
  

  Levy of interest under S.115P - Held that:- There can not be any declaration of dividend unless the same is approved by Board and by General body of the company. There is no merit in the action of AO in levying interest on notional basis. Revenue’s grounds on this issue are accordingly rejected.

  Disallowance made under S.40(a)(ia) - non deduction of tds - Held that:- Since the assessee is not entitled to export directly and export by the MMTC was on principal-principal basis, there can be no commission payment to MMTC, as such the question of sustaining the order of the Assessing Officer in estimating the commission and disallowing the same under S.40(a)(ia) does not arise. Infact there is no claim of commission by assessee. So question of deduction of tax does not arise and consequently disallowance u/s 40(a)(ia). Accordingly, the order of the CIT(A) is upheld and Revenue’s ground on this issue is rejected.

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• 2013 (5) TMI 871
  
  Issues Involved:
  1. Deduction u/s 80IB(10) of the Income Tax Act, 1961.
  2. Compliance with conditions prescribed in Section 80IB(10)(a)(i), (b), and (d).
  
  Summary:
  
  Issue 1: Deduction u/s 80IB(10) of the Income Tax Act, 1961

  The common issue in the cross-appeals pertains to the assessee's claim for deduction u/s 80IB(10) amounting to Rs. 15,95,015/-. The Assessing Officer (AO) denied the claim on the grounds of non-compliance with conditions in clauses (a)(i), (b), and (d) of Section 80IB(10).

  Issue 2: Compliance with Section 80IB(10)(a)(i)

  The AO argued that the project was approved before 01.04.2004 and should have been completed by 31.03.2008, which was not done. The CIT(A) upheld this objection. However, the Tribunal noted that the requirement for completion by 31.03.2008 was introduced by the Finance (No.2) Act, 2004, effective from 01.04.2005, and did not apply retrospectively. The Tribunal referenced the Hon'ble Madras High Court's decision in CIT vs. Jain Housing & Constructions Ltd., which supported the assessee's position. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to allow the deduction.

  Issue 3: Compliance with Section 80IB(10)(b)

  The AO contended that the plot size was less than one acre. The Tribunal, referencing its earlier decision in the assessee's own case for assessment years 2003-04 and 2004-05, held that the plot size was indeed one acre, thus complying with Section 80IB(10)(b). The CIT(A)'s decision to uphold the assessee's plea on this ground was affirmed.

  Issue 4: Compliance with Section 80IB(10)(d)

  The AO claimed that the built-up area of shops and commercial establishments exceeded the prescribed limit. The Tribunal, citing its previous decision and the Hon'ble Bombay High Court's ruling in CIT vs. Brahma Associates, concluded that the amended clause (d) effective from 01.04.2005 did not apply to the assessee's project approved before this date. The CIT(A)'s decision to negate the AO's objection was upheld.

  Conclusion:

  The appeal of the assessee is allowed, and the appeal of the Revenue is dismissed. The Tribunal directed the AO to allow the deduction u/s 80IB(10) as claimed by the assessee.

  Order pronounced in the open Court on 23rd May, 2013.

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• 2013 (5) TMI 870
  
  Issues involved: Appeal against deletion of additions made by Assessing Officer on account of capital account and remuneration paid to non-working employees of the proprietary firm of the assessee based on surrender made during survey u/s 133A.
  
  Capital Account Addition:
  The revenue appealed against the deletion of additions made by the Assessing Officer on the capital account of the assessee. The survey u/s 133A revealed a surrender by the assessee of Rs. 1,07,69,764 on account of difference in capital and Rs. 5,64,000 on account of remuneration paid to non-working employees. The Assessing Officer reopened the case, and the legal heir of the deceased assessee submitted that she was unaware of the business affairs and financial situation. The Assessing Officer disregarded the explanation and made the additions. The CIT(A) deleted the additions, emphasizing that the survey statement alone cannot be the basis for additions without proper appreciation of facts. The reconciliation statement and supporting documents provided by the legal heir were not considered by the Assessing Officer, leading to an unjustified addition.
  
  Remuneration Addition:
  Regarding the remuneration paid to non-working employees, the CIT(A) held that there was no basis for disallowance as the employees had been working, had income tax assessments, and PF deductions were made. The Assessing Officer failed to establish that the salary claims were not genuine. The revenue appealed against the CIT(A)'s decision.
  
  Judgment:
  The Tribunal dismissed the revenue's appeal, noting that the original assessment was completed before the survey, and all facts were available to the Assessing Officer. The Tribunal referred to legal precedents stating that additions based solely on survey statements are not valid without corroborating evidence. Detailed reconciliation of the capital account was provided with supporting documents, showing legitimate transactions. The Tribunal found no evidence of unaccounted money and upheld the CIT(A)'s decision on both the capital account and remuneration additions.
  
  Conclusion:
  The Tribunal upheld the CIT(A)'s decision to delete the additions made by the Assessing Officer on the capital account and remuneration paid to non-working employees, emphasizing the importance of proper evidence and legal precedents in making such additions.

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• 2013 (5) TMI 869
  
  Issues involved:
  The appeal filed by the Revenue against the order of ld. C.I.T.(A)-I, Kolkata in Appeal No.259/CIT(A)-I/3(2)/08-09 dated 11.11.2009 for the Assessment year 2006-07.
  
  Grounds 1 and 2 - Unexplained cash credit:
  The Revenue contended that the ld. CIT(A) erred in law by deleting the addition of Rs. 63,00,000/- on account of unexplained cash credit without satisfactory proof of creditworthiness and genuineness of transactions. The AO added the share application money received, stating the applicants were of lower middle class with unestablished creditworthiness. The ld. CIT(A) deleted the addition based on documents provided by the applicants. The Tribunal upheld the ld. CIT(A)'s decision citing precedents and the genuineness of transactions.
  
  Ground 3 - Disallowance of loss in trading of textiles:
  The Revenue challenged the deletion of the disallowance of loss of Rs. 3,30,225/- in trading of textiles, arguing lack of explanation for the loss incurred. The ld. CIT(A) upheld the transaction's genuineness and the regular business activity of the assessee. The Tribunal supported the ld. CIT(A)'s decision, emphasizing that a genuine loss in a transaction cannot be disallowed solely based on the loss incurred.
  
  Conclusion:
  The Tribunal dismissed the Revenue's appeal, upholding the decisions of the ld. CIT(A) on both grounds related to unexplained cash credit and the disallowance of loss in trading of textiles. The Tribunal found that the assessee had provided sufficient documentation and explanations, meeting the necessary requirements.

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• 2013 (5) TMI 868
  
  Issues Involved:
  1. Principles of Natural Justice and application of mind by CIT(A).
  2. Classification of Plot/Site development expenses as capital or revenue expenditure.
  3. Treatment of advance against supply transactions.
  4. Validity of additions made under Section 68 of the IT Act, 1961.
  5. Confirmation of Sundry Creditors balances as income under Section 68.
  6. Disallowance of 1/10th of voucher expenses as non-business expenses.
  7. Benefit of telescoping for the additions made.
  8. Charging of interest under Sections 234A, 234B, and 234C.
  
  Summary:
  
  Issue 1: Principles of Natural Justice and Application of Mind
  The Assessee contended that the CIT(A) passed the order without complying with the principles of Natural Justice and without proper application of mind. This ground was considered general in nature and not specifically addressed in the judgment.
  
  Issue 2: Classification of Plot/Site Development Expenses
  The Assessee, engaged in iron ore logistics, claimed site development expenses as revenue expenditure. The AO and CIT(A) treated these expenses as capital expenditure, citing the creation of new assets. The Tribunal, however, found that the expenses were necessary for business operations and did not provide enduring benefits, thus classifying them as revenue expenditure. The disallowance was deleted.
  
  Issue 3: Treatment of Advance Against Supply Transactions
  The AO added Rs. 38,14,727/- to the income, considering the liabilities as non-existent. CIT(A) directed the AO to treat the amount as income in the year of receipt. The Tribunal held that CIT(A) exceeded jurisdiction by addressing a year not under appeal and deleted the direction.
  
  Issue 4: Validity of Additions Under Section 68
  The AO added Rs. 10,90,82,621/- under Section 68, questioning the existence of sundry creditors. The Assessee provided evidence of the creditors' existence and tax payments. The Tribunal admitted these as public documents and found no basis for the addition, deleting the amount.
  
  Issue 5: Confirmation of Sundry Creditors Balances
  The AO added Rs. 62,24,163/- as unclaimed sundry creditors. The Assessee failed to provide evidence or balance confirmation letters. The Tribunal upheld the addition due to the lack of supporting evidence.
  
  Issue 6: Disallowance of Voucher Expenses
  The AO disallowed 1/10th of Rs. 2,65,41,580/- in labour charges, citing cash payments and lack of proper accounting. The CIT(A) and Tribunal upheld the disallowance, noting the Assessee's acceptance of similar disallowance in the previous year.
  
  Issue 7: Benefit of Telescoping
  This issue became infructuous as related grounds were allowed, and thus, it was dismissed.
  
  Issue 8: Charging of Interest
  Interest under Sections 234A, 234B, and 234C was deemed consequential. The AO was directed to re-compute the interest after giving effect to the order.
  
  Conclusion:
  The appeal was partly allowed, with significant deletions of disallowances and additions, and directions for re-computation of interest. The order was pronounced on 17.05.2013.

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• 2013 (5) TMI 867
  
  Issues involved: Challenge to deletion of addition u/s 43B for Employees Contribution to Provident Fund.
  
  Issue 1: Correctness of CIT(A) order
  
  The revenue challenged the order of the CIT(A)-4 Mumbai dated 14.03.12 pertaining to AY 2008-09, specifically regarding the deletion of the addition of Rs. 17,90,191/- made u/s 43B on account of disallowance of Employees Contribution to Provident Fund.
  
  Issue 2: Disallowance of PF and ESIC payments
  
  The AO added back P.F. of Rs. 16,78,500/- and E.S.I.C. of Rs. 1,11,691/- to the income of the assessee u/s 36(1)(va) read with section 2(24)(x) due to late deposits of employee contributions towards P.F and E.S.I.C.
  
  Issue 3: Assessee's claim and judicial decisions
  
  The assessee contended that the contributions were deposited before filing the return and should be allowed. The CIT(A) relied on decisions like BDPA Software 340 ITR 375 to support the assessee's claim, which the revenue contested.
  
  Issue 4: Tribunal decisions and High Court rulings
  
  The DR supported the assessment order citing the Tribunal's decision in Bengal Chemical and the provisions of section 36(1)(va). The assessee referenced the Tribunal's decision in Sonic Biochem Extractions P. Ltd. 23 ITR (Trib.) 447 and the Hon'ble Supreme Court's decision in Alom Extrusions Ltd. 319 ITR 306 to support their case.
  
  Issue 5: Delhi High Court decision
  
  The ITAT considered the decision of the Hon'ble Delhi High Court in CIT vs. P M Electronics Ltd. 177 Taxman page -1, which settled the issue in favor of the assessee regarding the allowability of amounts paid on account of PF/ESI after the due date u/s 43B and section 36(1)(va).
  
  Conclusion:
  
  After considering the submissions, judicial decisions, and the Delhi High Court ruling, the ITAT confirmed the CIT(A)'s decision to delete the addition u/s 43B for Employees Contribution to Provident Fund. The appeal of the revenue was dismissed accordingly.

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• 2013 (5) TMI 866
  

  Carry forward of unabsorbed depreciation - Held that:- Intention of the Legislature was to allow unabsorbed depreciation allowance for an indefinite period of time since it was for enabling the industry to conserve sufficient funds to replace plant and machinery and, bearing in mind the intention of incentive, restriction of 8 years was dispensed with by an amendment. See General Motors India Pvt. Ltd. Vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT]

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• 2013 (5) TMI 865
  

  Income from undisclosed sources - Transaction of sale and purchase of shares - off market transaction - genuine or not - Held that:- even in the absence of the confirmation by those share brokers one has to examine that whether the shares have been purchased and after retaining them for a certain period those shares have actually been sold by the assessee. In the present case, facts have revealed that the shares of Sarang Chemicals were duly demated and thereupon the sales were made through banking transactions. The Demat account maintained with ICICI bank has revealed the shares numbers, etc. From the side of the assessee, it is vehemently contested that there was a reason of denial of transaction by those share-brokers because they have not intimated the transaction to the SEBI and that one of them has also made the purchase transaction in cash which was against the SEBI guidelines. Apartment from these evidences, our attention has also been drawn on a certificate issued by "share transfer agent" that the transfer of those shares in the name of the assessee was duly approved. The assessee has expressed to hold those shares in "dematerialized form" therefore the assessee was asked to fill up the "dematerialization request form". This information is very vital and proves the fact that the assessee had in fact purchased the shares of Sarang Chemicals Ltd. It is also difficult to ignore an another factual position that the assessee is in the past assessment year had duly disclosed in the balance-sheet the purchase of those shares.

  Although, it was an off market transaction but it was properly documented and duly supported by relevant evidences - once the shares were in respect of a listed company and transaction was through Demat account which was as per the recognized Stock Exchange quoted price, then there was no reason to hold such nature of transaction as non-genuine - Decided in favour of assessee.

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• 2013 (5) TMI 864
  
  Issues involved: Appeal against deletion of addition on account of bogus purchases u/s. 143(3) of the Income-tax Act, 1961 for Assessment Year 2007-08.
  
  Issue 1: Addition on account of bogus purchases
  
  The AO identified 29 suppliers for verification of purchases made by the assessee, but notices u/s. 133(6) were returned unserved. The AO disallowed the entire purchase amount of &8377; 46,77,880/- pertaining to these suppliers. The CIT(A) deleted the addition, noting that the purchases were supported by proper bills, recorded in the books of account, and entered in the stock register. The CIT(A) found no defects in the books of account, stock register, or quantitative details of raw material. The CIT(A) also observed improvements in gross profit rate and net profit ratio. The CIT(A) held that failure to serve notices on suppliers does not justify treating the purchases as bogus.
  
  The CIT(A) confirmed that the assessee maintained complete stock details and verified the purchases made. The CIT(A) accepted that the raw materials were processed into finished goods, which were sold and recorded in the books of account. The CIT(A) noted the maintenance of quantity details of raw materials and finished goods as per audit reports. The CIT(A) found no defects in the stock register or quantitative details of raw material. The CIT(A) highlighted the increase in gross profit rate for the relevant year compared to preceding years. Consequently, the failure to serve notices on suppliers was deemed insufficient to disallow the purchases. The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal.
  
  In conclusion, the Tribunal dismissed the revenue's appeal against the deletion of addition on account of alleged bogus purchases, emphasizing the importance of proper documentation and record-keeping in substantiating transactions.

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• 2013 (5) TMI 863
  

  Disallowance of O/D interest - net off this interest expenditure - Held that:- The basic purpose of making FDR was to show net worth of the assessee in the form of liquid assets for the purpose of allotment of plot. In fact there was initial arrangement between the assessee and the sister concern to share the gains if the plot was allotted. It is also disputed that ultimately no plot was allotted to the assessee, therefore it cannot be said that interest expenditure has been used for the purpose of acquisition of capital assets. In any case, we find that assessee has also received interest amounting to ₹ 15,39,228 out of FDR which has been returned by the assessee as its income. Therefore, the interest expenditure on obtaining OD against such FDR is clearly required to be netted off. Accordingly, we set aside the order of learned CIT(A) and direct the AO to net off this interest expenditure amounting to ₹ 13,63,428 against the interest income of ₹ 15,39,228.

  Deemed dividend addition under s. 2(22)(e) - Held that:- As observed that the arrangement by the assessee company with M/s Shalimar Estate (P) Ltd. was to share a plot which was being applied or to purchase another piece of land and money was given by M/s Shalimar Estates (P) Ltd. for definite l/3rd share of such plot or for purchase of another land, cannot be simply called a loan or advance, therefore, such payment would not be hit by s. 2(22)(e) of the Act. In these circumstances, we set aside the order of learned CIT(A) and delete the addition of deemed dividend.

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• 2013 (5) TMI 862
  
  Issues Involved:
  1. Transfer Pricing Adjustment
  2. Disallowance u/s 14A
  3. Disallowance of R&D Expenditure
  4. Disallowance of Commission to Non-Resident Agents
  5. Disallowance of Demurrage Payments
  6. Disallowance of Demurrage on Ships
  7. Disallowance of Education Cess
  8. Deduction u/s 10B for EOU
  9. Disallowance of Contribution to Goa Mineral Ore Exporters Association
  10. Disallowance of Additional Depreciation
  11. Disallowance of Exchange Loss
  12. Disallowance of Forward Contract Loss
  
  Summary:
  
  1. Transfer Pricing Adjustment:
  The Assessee challenged the addition of Rs. 3,95,27,600/- as transfer pricing adjustment made by the TPO u/s 92CA. The Assessee argued that the transaction with BHP Billiton was not an "international transaction" with "associated enterprises" as defined u/s 92A(2)(m). The Tribunal found that the TPO made the addition based on assumptions and without establishing a relationship of mutual interest. The Tribunal deleted the addition, stating that the provisions of Sec. 92A(2)(m) were not applicable as no such relationship was prescribed.
  
  2. Disallowance u/s 14A:
  The Assessee contested the disallowance of Rs. 7,01,41,535/- u/s 14A r/w Rule 8D. The Tribunal noted that the Assessing Officer did not provide a clear finding regarding the incorrectness of the Assessee's claim. Following its decision for A.Y. 2009-10, the Tribunal deleted the disallowance, emphasizing the necessity of recording satisfaction by the Assessing Officer before applying Rule 8D.
  
  3. Disallowance of R&D Expenditure:
  The Tribunal addressed the disallowance of Rs. 1,36,91,148/- as R&D expenditure. It was noted that the Assessee had not claimed the expenditure as scientific research u/s 35. Following its previous decision, the Tribunal deleted the disallowance, recognizing the expenditure as incurred in the usual course of business.
  
  4. Disallowance of Commission to Non-Resident Agents:
  The Assessee contested the disallowance of Rs. 17,72,05,217/- paid as commission to non-resident agents. The Tribunal referred to its earlier decision and the Supreme Court ruling in GE India Technology Centre (P) Ltd., concluding that the Assessee was not liable to deduct TDS as the income was not taxable in India. The Tribunal deleted the disallowance.
  
  5. Disallowance of Demurrage Payments:
  The Tribunal upheld the disallowance of Rs. 1,27,25,674/- paid as demurrage to non-resident buyers, citing the Bombay High Court decision in CIT vs. Orient Goa Co. Pvt. Ltd., which held that such payments were liable for TDS.
  
  6. Disallowance of Demurrage on Ships:
  The Tribunal confirmed the disallowance of Rs. 23,36,879/- paid as demurrage on ships, following the same reasoning as for the demurrage payments to non-resident buyers.
  
  7. Disallowance of Education Cess:
  The Tribunal upheld the disallowance of Education Cess, following its previous decision for A.Y. 2009-10.
  
  8. Deduction u/s 10B for EOU:
  The Assessee claimed deduction u/s 10-B for its EOU at Codli. The Tribunal, following its decision for A.Y. 2009-10, held that the Assessee was entitled to the deduction. However, the Tribunal directed the Assessing Officer to re-compute the profit eligible for exemption after verifying the market value of the tailings used in the Codli unit.
  
  9. Disallowance of Contribution to Goa Mineral Ore Exporters Association:
  The Assessee contested the disallowance of Rs. 1,97,91,667/- contributed to the Goa Mineral Ore Exporters Association. The Tribunal allowed the expenditure as revenue expenditure, citing the Madras High Court decision in CIT vs. Coats Viyella India Ltd., and noting that the expenditure was incurred for the purpose of business without acquiring any asset of enduring nature.
  
  10. Disallowance of Additional Depreciation:
  The Tribunal addressed the disallowance of additional depreciation. Following its decision for A.Y. 2009-10, the Tribunal deleted the disallowance, recognizing the Assessee's entitlement to additional depreciation u/s 32(1)(iia).
  
  11. Disallowance of Exchange Loss:
  The Tribunal deleted the disallowance of Rs. 28,96,685/- being notional loss due to foreign exchange fluctuations, following the Supreme Court decision in CIT vs. Woodward Governor India Pvt. Ltd., which allowed such losses based on AS-11.
  
  12. Disallowance of Forward Contract Loss:
  The Tribunal deleted the disallowance of Rs. 26,01,697/- on account of forward contract loss, following its decision for A.Y. 2009-10 and the jurisdictional High Court decision in CIT vs. Badrida Gauridu(P) Ltd., recognizing the loss as incidental to business activities and not speculative.

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• 2013 (5) TMI 861
  

  Addition u/s 68 - Held that:- The assessing officer has not made any analysis of the details submitted by the assesseee. He has formed his opinion on the basis of the information submitted by the investigation wing, which is a general information and which can only set the machinery of the investigation in motion. The assessing officer has not carried out any investigation, he only discussed the modus operandie of the accommodation entry provider, which has been inferred by him from the information received from investigation wing. Thus the assessing officer has not carried out any investigation on the details submitted by the assessee, therefore, the addition are not sustainable

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• 2013 (5) TMI 860
  
  Issues involved:
  The judgment involves the following Issues:
  1. Whether the CIT erred in assuming jurisdiction u/s 263 of the Act.
  2. Whether the CIT erred in holding that the contribution to unapproved gratuity fund was not an allowable expenditure u/s 36(1)(v) of the Act.
  
  Issue 1: Jurisdiction u/s 263 of the Act
  The assessee objected to the invocation of jurisdiction u/s 263 of the Act, suggesting that the issue could have been rectified u/s 154 or re-opened u/s 148. However, the objection was later withdrawn. The CIT, in a suo motu action, initiated revisional proceedings u/s 263, enhancing the income of the assessee. The appellate tribunal upheld the CIT's decision, citing the failure of the assessing officer to indicate the basis for granting deductions, as per the ruling in Infosys case. The tribunal concluded that the CIT was justified in invoking the provisions of s. 263 of the Act.
  
  Issue 2: Contribution to Unapproved Gratuity Fund
  The CIT had disallowed a contribution of &8377; 3,11,000 to an unapproved gratuity fund, adding it back to the total income of the assessee. The appellate tribunal, after considering relevant judicial precedents, held that the contribution was allowable as a deduction under section 37 of the Act. Citing the Karnataka Electricity Board case and the Punjab Financial Corporation Limited case, the tribunal emphasized that the expenditure was laid out wholly and exclusively for the purpose of business and was deductible. Consequently, the assessment order passed by the assessing officer was upheld, and the contribution to the unapproved gratuity fund was deemed allowable. As a result, the assessee's appeal was partly allowed.
  
  This judgment by the Appellate Tribunal ITAT Bangalore addressed the issues of jurisdiction u/s 263 of the Act and the allowance of the contribution to an unapproved gratuity fund u/s 36(1)(v) of the Act. The tribunal upheld the CIT's decision on jurisdiction based on the assessing officer's failure to indicate the basis for deductions. Regarding the gratuity fund contribution, the tribunal allowed the deduction, citing relevant judicial precedents.

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• 2013 (5) TMI 859
  
  Issues involved: Condonation of delay in filing appeal before the Tribunal.
  
  Summary:
  The assessee filed an appeal before the Tribunal challenging the delay of 347 days in filing the appeal against the order of the CIT(A). The assessee contended that the delay was due to non-information of the order by the employee who received it. The Revenue strongly opposed the condonation of delay, citing the non-cooperative behavior of the assessee throughout the proceedings. The Tribunal noted the substantial delay and lack of cooperation from the assessee's side at various stages of the process. Despite the explanations provided by the assessee, including contradictory affidavits, the Tribunal found the reasons for delay unsatisfactory.
  
  The Tribunal referred to the legal principles regarding the condonation of delay, emphasizing the importance of advancing substantial justice while considering sufficient cause for delay. It highlighted that the delay of 347 days was significant and not a case of a minor delay. The Tribunal also cited precedents where delays were not condoned due to the failure to show reasonable cause. Considering the contradictory statements and lack of valid reasons for the delay, the Tribunal dismissed the application for condonation of delay, leading to the appeal being deemed not maintainable.

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• 2013 (5) TMI 858
  
  Issues involved: Appeal by Revenue and cross objection by assessee against Order passed by CIT(A) for assessment year 2007-08.
  
  Issue 1 - Grounds raised by Revenue:
  The Revenue contested the direction to reduce eligible amount u/s 115JB by Rs. 78 lakh, specifically regarding ITDS Certificate Receivable, Earnest Money Deposit, and Software Expenses. The CIT(A) deleted the addition made by the Assessing Officer. The Tribunal held that the AO cannot increase profit or loss under section 115JB beyond what is specified in Explanation 1. Therefore, the Tribunal found no illegality in the CIT(A)'s decision to delete the addition.
  
  Issue 2 - Disallowance of unabsorbed depreciation:
  The Revenue disallowed the claim of unabsorbed depreciation amounting to Rs. 16,59,64,100 while computing eligible book profit u/s 115JB. The CIT(A) allowed the claim, considering the lower of the loss and unabsorbed depreciation. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.
  
  Issue 3 - Assessee's appeal - TDS certificate amount:
  The assessee wrote off Rs. 12.19 lakhs due from a client as prior period expenses. The Assessing Officer disallowed this amount, which the CIT(A) upheld. The Tribunal agreed with the CIT(A), stating that the expense did not relate to the current year as per accounting standards, thus sustaining the disallowance.
  
  Issue 4 - Disallowance of earnest money deposits:
  The assessee wrote off Rs. 40.62 lakhs deposited with a client as prior period expenses. The CIT(A) confirmed the disallowance, considering it as expenditure from an earlier year. The Tribunal disagreed, stating that the earnest money deposit did not represent current expenditure but a failed recovery from a previous year, allowing the claim.
  
  Issue 5 - Disallowance of software expenses:
  The Revenue disallowed Rs. 25.19 lakhs incurred for acquiring readymade software, treating it as capital expenditure. The CIT(A) confirmed the disallowance but directed depreciation allowance. The Tribunal, after considering the nature of the expenses for software upgradation, allowed the claim as a revenue expenditure, overturning the CIT(A)'s decision.
  
  Issue 6 - TDS credit discrepancy:
  The assessee claimed TDS of Rs. 10,14,579, but the AO allowed credit for Rs. 6,39,801. The CIT(A) held the ground not maintainable under section 246A. The Tribunal disagreed with the CIT(A) and directed the AO to verify the TDS certificate and allow credit accordingly.
  
  In conclusion, the Tribunal dismissed the Revenue's appeal and partially allowed the assessee's appeal, pronouncing the order on 7th May, 2013.

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• 2013 (5) TMI 857
  

  Penalty u/s 271E - whether imposition is time barred as per section 275(1)(c) ? - Held that:- The cases under appeal fall under section 275(1)(a). Both the orders of penalty have been passed well within the period of limitation laid down therein. The order of the CIT(A) cancelling the impugned penalties on the ground that they were time barred in terms of clause (c) of sub-section (1) of section 275 is unsustainable in law for the reason that bar of limitation as contained in clause (c) of section 275(1) applies only in those cases which do not fall under clauses (a) and (b) of section 275(1). The impugned orders passed by the CIT(A) cancelling the impugned penalties as time barred u/s 275(1)(c) are therefore liable to be set aside and they are accordingly set aside. Appeal filed by the Revenue is allowed to that extent.

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