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Showing 81 to 100 of 1382 Records
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2014 (7) TMI 1307 - ALLAHABAD HIGH COURT
Validity of assessment order - difference of stock not properly not properly discussed - HELD THAT:- From a perusal of the order of the Commercial Tax Tribunal, it is noticed that there is no reference to the stock of 1097 M.T. having been recorded in the book of accounts and that in the survey by the S.I.B. on 28.06.2010 the stock was found to be 1083 M.T., therefore, difference in stock has not been discussed at all by the Tribunal - the impugned order dated 27.03.2014 of the Tribunal is illegal and arbitrary and is accordingly set side.
Revision allowed.
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2014 (7) TMI 1306 - ANDHRA PRADESH HIGH COURT
Rejection of books of accounts - estimation of profits - disallowance u/s 40(a)(ia) on labour payments - learned counsel for the appellant submits that even then, the provisions of Section 40(a)(ia) will have to be considered as it was amended subsequently - HELD THAT:- It appears from the records that there has been no production of books of accounts. Naturally, all the authorities below estimated profit at 8%.
We are of the view that amendment or no amendment, if the profit is estimated on any ground, whether ignoring books of accounts or rejection thereof, then there is no scope for allowability/disallowability of any deduction. In our considered view, the above provision mentions how to consider the same when the books of accounts are available and the same shall be accepted on fact by the authorities below.
In the circumstances, the appeal is dismissed.
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2014 (7) TMI 1305 - ITAT MUMBAI
Not accepting the claim that the rate of tax applicable to domestic companies and/or co-operative banks also applicable to the Appellant, in accordance with the provisions of Article 26 (Non-discrimination) of the double taxation avoidance agreement between India and the Republic of France ('India - France tax treaty' - HELD THAT:- Issue is covered, against the assessee, by a series of orders passed by the various co-ordinate benches in assessee’s own case as also in the cases of Chohung Bank vs. DDIT [2005 (11) TMI 372 - ITAT MUMBAI] and JCIT vs. Sakura Bank Limited [2005 (12) TMI 465 - ITAT MUMBAI] .In this view of this undisputed position and the conclusions arrived at by the learned CIT(A) being in harmony with the views of the co-ordinate benches, we reject the grievance of the assessee. No interference is thus called for.
Taxing the interest paid by the Indian branch of the assessee to its head office and overseas branches applying the provisions of Article 12 (Interest of India France Tax Treaty) - HELD THAT:- Since the issue under consideration is covered not only by the order of the Tribunal in assessee’s own case for the AY 2001-02 to 2003-04 but also by the order of the ITAT’s Special Bench in the case of Sumitomo Mitsui Banking Corporation [2012 (4) TMI 80 - ITAT MUMBAI] we hold that the department was not justified in subjecting to tax the interest paid by the Indian Branch of the assessee to its head office and overseas branches applying the provisions of Article 12 of India-France Tax Treaty.
Income accrued in India - data processing fees paid by the India branch office of the appellant to its Singapore bench, as income of the appellant under article 13 (royalties and fees for technical services) of the India France DTAA” - whether an internal charge on the PE can result in income in the hands of the GE or an intra GE unit? - HELD THAT:- This issue is also covered by the order of the Tribunal in assessee’s own case for AY 2001-02 to 2003-04 wherein interest paid by assessee to Head Office/overseas branches was held to be not liable to tax
Non granting credit for tax deducted at source on interest on sub-ordinated debt, paid by Indian branches of the assessee to its head office - HELD THAT:- Interest was allowed as tax has been deducted on payment of interest to the overseas/head office. AO held that computation of profit of PE is to be done as per Article 7(3)(a) of the DTAA. As per the AO, the income of overseas/head office, would be taxable under Article 12 of the Treaty. Accordingly, he added an amount of ₹ 3,09,48,018/- to the total income of the assessee as interest income of the overseas branches/head office. The AO held that assessee will be allowed credit of tax deducted on payment to head office/overseas branches. However, in spite of such observation, no credit for TDS was allowed. In the interest of justice, we restore this issue to the file of the AO with a direction to verify the tax deducted at source and to give respective credit after allowing proper opportunity to the assessee.
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2014 (7) TMI 1304 - ITAT CHANDIGARH
Exemption u/s 11 - claim of registration under section 12A denied - charitable activity or not? - new society (the assessee) proposed to take on lease the management of existing school at Mohali to be run on day to day basis - HELD THAT:- Running of a school falls within the scope of activities for which registration can be granted under Section 12AA of the Act. In fact, the similar activities carried out by Shishu Niketan Model School have been granted registration, which is running four institutions. The Society has been established to manage one of such schools. There cannot be any attempt of the assessee to evade tax liability, as Shishu Niktan Model School has been granted registration and availing the benefit of tax.
As relying on SUCHINTA EDUCATIONAL SOCIETY VERSUS COMMISSIONER OF INCOME TAX-I [2014 (5) TMI 155 - PUNJAB & HARYANA HIGH COURT] we find that the orders of the CIT and that of the Tribunal in declining the registration to the appellant are not sustainable in law. Consequently, while answering the substantial question of law in favour of the appellant, the present appeal is allowed
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2014 (7) TMI 1303 - SUPREME COURT
Demand of enhanced compensation - land was acquired by the Government by way of compulsory acquisition - Section 4 of the Land Acquisition Act, 1894 - appellants in all these appeals had preferred the regular first appeals which were heard and dismissed by the learned Single Judge along with the appeals of other persons. However, they did not challenge the order by preferring further appeal before the Division Bench, though, similarly situated landowners had preferred the appeals and in their cases, compensation was enhanced to ₹ 200 per square yard - HELD THAT:- No doubt, there is a long delay in filing the appeals. However, we find that it is a case of payment of compensation to these appellants who were the landowners and which land was taken away by compulsory acquisition. However, landowners whose lands were taken over by the same notification, have been able to get the compensation @ ₹ 200 per square yard whereas the compensation given to the appellants is @ ₹ 101 per square yard for their entire land - It is also not in dispute that the appellants are agriculturists. Their averment that they could not prefer the LPAs because of their financially weak condition, has not been disputed by the respondents.
In the matter of land acquisition where land of peasants is acquired, a different approach has to be taken. These persons should not be deprived of the reasonable compensation for their lands. If other similarly situated landowners are given the compensation @ ₹ 200 square yard, there is no reason to pay the compensation to the appellants at much lesser rate.
Equities can be balanced by denying the appellants' interest for the period for which they did not approach the Court. The substantive rights of the appellants should not be allowed to be defeated on technical grounds by taking hypertechnical view of self-imposed limitations. In the matter of compensation for land acquisition, we are of the view that approach of the court has to be pragmatic and not pedantic.
Impugned orders of the High Court are set aside. Delay in filing the LPAs is condoned. It is held that the appellants shall be entitled to enhanced compensation @ ₹ 200 per square yard. However, for the period of delay in approaching the High Court by way of LPAs, in all these cases, no interest should be paid to them - Appeal allowed.
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2014 (7) TMI 1302 - BOMBAY HIGH COURT
Scope of medical practitioner - whether comes within the definition of the expression “commercial establishment” under Section 2(4) of the Bombay Shops and Establishments Act, 1948 or not - HELD THAT:- The Apex Court in the case of DR. DEVENDRA M. SURTI VERSUS STATE OF GUJARAT [1968 (5) TMI 57 - SUPREME COURT] has held that private dispensary of a doctor is not a commercial establishment.
The amendment incorporating medical practitioners within the definition of the expression “commercial establishment” will have to be struck down since doctors cannot fall within the definition of the said expression - petition allowed.
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2014 (7) TMI 1301 - ITAT MUMBAI
Unverifiable expenses - addition of 25% on adhoc basis - CIT-A deleted the addition - HELD THAT:- Expenditure has been incurred by India Infoline Ltd on day today basis. It is also an undisputed fact that there exists no agreement for share of the expenditures between India Infoline Ltd and the assessee. It is also an admitted fact that the allocation has been made on adhoc/estimated basis.
There is nothing on record to show how many persons were employed by India Infoline Ltd. for the purpose of the business of the assessee. No detail relating to the brokerage and commission has been brought on record. The names of the persons to whom such brokerage /commission has been paid for the business of the assessee. In the absence of specific details, the AO was left with no choice but to make adhoc disallowance of the expenditure.
CIT(A) deleted the addition as in his opinion, there was no loss to the Revenue. We do not find any justification in this findings of the CIT(A) as the issue before him was whether the expenditure claimed by the assessee are reasonable and sufficient for its business. The findings of the Ld. CIT(A) is accordingly erroneous since India Infoline has allocated the expenditure on estimated basis, we do not find any error in the findings of the AO who disallowed the expenditure on adhoc basis. - Decided in favour of revenue
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2014 (7) TMI 1300 - ITAT MUMBAI
Treatment given to the receipt of manufacturing services income - “income from other sources” OR "business income" - HELD THAT:- We find that in Tribunal in A.Y. 2006-07 has set aside the issue to the file of the AO for examination of the facts and contentions afresh and to decide accordingly. As no distinguishing facts have been brought before us, respectfully following the findings of the Co-ordinate Bench in [2013 (7) TMI 1130 - ITAT MUMBAI] we set aside the issue to the file of the AO. The AO is directed to decide the issue afresh in the light of the findings given as per the directions of the Tribunal for A.Y. 2006-07. Appeal filed by the assessee is allowed for statistical purpose.
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2014 (7) TMI 1299 - CALCUTTA HIGH COURT
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? - HELD THAT:- The assessee has received whatever services have been rendered only in India. The media used for the purpose of communicating the service has not been disclosed. Even if we presume that the service was rendered through electronic media, the conclusion is irresistible that the process of rendering services could not have been concluded outside India. We are as such of the opinion that even without the amendment introduced by the Finance Act, 2010, the liability of the foreign resident to taxation under the Indian laws was there.
The amendment introduced by the Finance Act, 2010 has specifically been made with retrospective effect from 1st June, 1976. These are clarificatory amendments. They always have a retrospective effect. In this case expressly they have been made retrospective. In the matter of taxation, equity has no place. When a law has been amended with retrospective effect Court has to proceed on the basis that the amendment was always there with effect from 1st June, 1976. Therefore, the transaction which took place during the financial year 2007-08 could not have been saved, in any case. The second submission of Mr. Murarka is, therefore, not acceptable.
First question formulated above is answered in the affirmative and in favour of the revenue. Second question is a consequential question and is also answered in the affirmative and in favour of the revenue.
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2014 (7) TMI 1298 - DELHI HIGH COURT
Jurisdiction - power of Inspector General of Police of the Division/Commissioner of Police concerned of the cities/Superintendent of Police of the District concerned to check the activities of each and every police station - HELD THAT:- Let the Superintendent of Police or officer equivalent thereto conduct fresh inspection of the activities of each and every police station with respect to the disposal of the seized vehicles and submit a report before the next date of hearing. The report shall also indicate the condition of the Malkhanas.
List on 8th August, 2014.
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2014 (7) TMI 1297 - ITAT INDORE
Disallowance of provision of warranty - whether a contingent liability? - scope of Accounting Standard u/s.145(2) - HELD THAT:- Assessee has made provision for warranty for each project separately taking into consideration all the factors with regard to the scope of work, terms of warranty agreed with the customers, estimated cost of warranty based on earlier years’ experience. This method of warranty provisions was consistently followed over the years, which is also in accordance with the Accounting Standard u/s.145(2). The basis of provision was not an ad-hoc or contingent as alleged by the AO. With regard to the reasonableness of the warranty provision, we had verified from the warranty provision reversed on yearly basis and the same was found to be reasonable. Exactly similar issue was dealt by the Tribunal in assessee’s own case for the assessment year 2003-04 [2011 (12) TMI 720 - ITAT INDORE] wherein it was held that the provision of warranty was not a ‘contingent liability' - Decided in favour of assessee.
TDS liability on technical drawing expenses under the head “cost of raw materials and components” - AO treated the same as expenditure in the nature of royalty within the meaning of Article 12 of DTAA with Austria - HELD THAT:- merit in the conclusion of the lower authorities insofar as the design and drawings was purchased on a principle to principle basis and same was in the nature of purchase of goods. Precisely the drawing is in the nature of purchase of ‘copyright articles’ and not of purchase of ‘copyright” itself in the drawings. Hence, the same is in the nature of business expenditure and not in the nature of royalty. The payments of technical drawings and design have been incurred to procure such drawings and designs along with all the rights attached to them as the entire set was required to be provided to the customers as per the terms of the contract. Without acquiring all the rights attached to such drawings and designs, the assessee would not have been in the position to meet its contractual obligation. We had verified the copies of bills of entry, copy of physical drawings receipt, copies of invoices and details regarding terms and condition of the transaction and found that the drawing was in the nature of purchase of goods.
The department has also not filed any appeal against the order of CIT(A) for A.Y.2004-05 holding that transaction is in the nature of purchase and design and drawings are not in the nature of royalty. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee’s own case, we delete the disallowance made by the AO by invoking section 40(a)(i) for all the years under consideration.
TP Adjustment - BHEL comparability analysis - HELD THAT:- B ased on Indian transfer pricing regulations supported by judicial decisions, it is clear that a robust functional analysis is required even where TNMM is applied.
BHEL is not a comparable owing to the significant difference in size of operations and turnover. Even we found that BHEL had been accepted as “non-comparable” by the TPO for the assessment year 2008-09. We also found that turnover of segment of BHEL which has been considered as comparable is 100 times more than that of assessee. It is also a matter of record that same international transaction has been accepted to be at arms’ length in the previous year. Anyhow as per proviso to Section 92C(2), adjustment to the income of assessee is to be restricted to the proportion of the international transactions and cannot be made to entity which contain transactions to the unrelated parties as well and adjustment income of assessee is to be restricted to the proportion of international transactions which is allowable international transactions and since as per following calculation, which is within +5%, no adjustment is required. Since the difference is within +5%, adjustment made by AO/TPO in the purchases were not justified.
Purchases/sales to AE - Value of international transaction of the assessee - Held that:- Transaction value is within the +5% of ALP, therefore, adjustment made by the AO/TPO was not justified. Accordingly, we direct to delete the adjustment made by AO/TPO on account of purchases/sales to AE in all the years under consideration.
Depreciation on fixed assets which was capitalized in the assessment year 2005-06 denied - HELD THAT:- during the assessment year 2005-06, the TPO has disallowed the transactions determining the ALP to be NIL in respect of purchase of machinery on the basis of that it is a gratuitous act of parent company. During the year under consideration, the AO had followed the order passed by the TPO in assessment year 2005-06 and disallowed the depreciation on such capital assets in these years also. We found that same issue for A.Y.2005-06 is still pending before the CIT(A), therefore, before finalizing the main assessment year in which value was taken at Nil by the TPO, it will be premature to decide the issues during the years under consideration. Disallowance of depreciation is consequential to the decision of assessment year 2005-06, which is pending before the CIT(A). Hence, in the interest of justice and fair-play, we restore back this ground to the file of the AO in all the years under consideration with a direction to decide the same after considering the order passed by CIT(A) in the A.Y.2005-06.
Appeal of assessee allowed in part
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2014 (7) TMI 1295 - ITAT CHENNAI
Character of the expenditure - Revenue or capital expenditure - payment for executing export commitment spanning over a period of 10 years - assessee company instead of creating the facilities in its own premises, selected M/s. Cibi International to shoulder the responsibility of the production of knitted garments utilizing their facilities and to improve the facilities - HELD THAT:- A clear nexus is apparent between the payment of ₹ 650 lakhs to M/s. Cibi International and the business interests of the assessee company. Therefore, it is clear that the assessee company has made the payment to M/s. Cibi International on the basis of the business agreement for the purpose of carrying on of its business more effectively and more economically. In such circumstances, it is not possible to hold that the assessee has acquired an enduring benefit by creating new capital asset by making payment to M/s. Cibi International. In fact, the assessee has made the payment to M/s. Cibi International for the purpose of executing its export commitment spanning over a period of 10 years. The expenditure is, therefore, incurred for running the business and not for creating the facilities to run the business. Therefore, we find that the payment made by the assessee company is an expenditure allowable under sec.37 of the Act. - Decided in favour of assessee.
Deduction under sec.80IA - exclusion of receipts from trading of carbon credit and insurance claim while computing the deduction - HELD THAT:- We are bound to follow the judgment of CIT vs. M/s. My Home Power Ltd. [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] to hold that the receipts in the hands of the assessee generated out of sale of excess carbon credit are in the nature of capital receipts and, therefore, not includible in the computation of taxable income. Once the entire receipts are excluded from the computation of income itself, there is no question of any separate argument of sec.80IA deduction.
As far as carbon credit receipt is concerned, the issue is decided in favour of the assessee. Therefore, the Assessing Officer is directed to exclude the carbon credit receipts from the computation of assessee’s income.
Quantum of deduction u/s 80IA - Initial assessment year in which the assessee claimed deduction under sec.80IA - Whether depreciation of earlier years (which already have been absorbed) cannot be notionally carried forward and considered in computing the quantum of deduction under sec.80IA? - HELD TJAT:- This issue is already covered by the judgment of CIT v. Velayuthasamy Spinning Mills [2010 (3) TMI 860 - MADRAS HIGH COURT]. As the Revenue has filed an SLP before the Hon’ble Supreme Court, the Revenue is free to keep such issues alive and file appeals before the appropriate court. But as on today, the issue is covered by the decision of the Hon’ble jurisdictional High Court, we find that the order of the Commissioner of Income-tax(Appeals) is just and proper in law - Decided against revenue
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2014 (7) TMI 1294 - RAJASTHAN HIGH COURT
Condonation of delay - sufficient cause for delay - belated restoration application was allowed and when the matter was listed again before the Court on 12.05.2014, nobody appeared for the appellant and the matter stood adjourned - HELD THAT:- Having gone through the application twice over, we are satisfied that it remains vague and incomplete on material particulars and in any event, does not make out any sufficient cause for condonation of delay.
Appeal was filed by the assessee on 24.09.2009 against the impugned order dated 17.04.2009, which was time barred by 25 days. However, neither the particulars of the said appeal are stated nor the ultimate result thereof. This much is from paragraph 2 and 3 of the application. However, the contents of the paragraph 4 are to the effect that nobody could keep a track on the events and, hence the due date of filing the present appeal lapsed ! What is meant by these submissions remains anybody's guess.
Then, an appeal was filed at Jaipur Bench in the year 2011, which was withdrawn on 16.07.2012. Even thereafter, this appeal has been filed at Jodhpur only on 03.10.2012.
Viewed from any angle, we do not find even a semblance of cause to entertain this grossly belated appeal.
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2014 (7) TMI 1293 - ITAT MUMBAI
Mark-to-Market loss - allowable ‘business loss’ - re-valuation of forward contract agreements on the closing date of accounting year - whether not a notional loss and therefore allowable? - HELD THAT:- Mark-to-Market gain or loss is held as allowable gain or loss as the case may be. In the instant case, loss arising on re-valuation of forward contract agreements on 31st March, 2009. Thus, the order of the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, ground raised by the Revenue is dismissed.
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2014 (7) TMI 1292 - ITAT CHENNAI
Addition towards unaccounted capitation fees for the course of Nursing - amount as collected in addition to the regular fee payable by each student - amount kept outside the books of account - misappropriation of income - Held that:- The assessee could have accounted the receipts as and when received under a particular provisional head. When the admission process is over, the provisional head could be closed by transferring the amounts to fees and dues account in the case of applicants admitted for the Nursing course, and by returning the amounts in respect of the applicants not selected for the course. Therefore, the explanation of the assessee that the amounts were not recorded in the books of account for the reason that the admission process was not complete at the time of search, is not acceptable in law. The details must be properly recorded atleast in a rough book. It is a clear case that the entire amount of was blacked out of the records of the assessee.
The assessee has never explained how, finally, this amount was adjusted or accounted in the books of account. The assessee has not furnished the details that how much amounts were returned to the applicants, who were not admitted to the Nursing course.
Assessee society had collected capitation fees from the students admitted to the Nursing course and those capitation fees were kept outside the books of the assessee. Therefore, the Assessing Officer is justified in treating the sum as unaccounted capitation fees. - Decided against assessee.
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2014 (7) TMI 1291 - ALLAHABAD HIGH COURT
Application for compounding of an admitted contravention of the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004, 2004 Regulation - unconditional payment - HELD THAT:- It is necessary, before we direct a consideration of its request, that the petitioner should forward a demand draft to the compounding authority no later than within a period of two weeks from the receipt of a certified copy of this order, of the entire amount as directed to be paid in the order dated 23 December 2013, together with interest at the rate of 12 percent per annum from the expiry of a period of fifteen days from the date of the order dated 23 December 2013 until the date of payment. Subject to the petitioner forwarding a demand draft in these terms to the compounding authority, we permit the petitioner to make a formal request in that regard for the unconditional payment of the aforesaid amount. The compounding authority may, having due regard to the object and purpose of the compounding provisions and to the pendency of these proceedings before this Court since March 2014, take an appropriate view on the application, in accordance with law.
The demand draft which is to be forwarded by the petitioner to the compounding authority shall abide by the final decision of the compounding authority on the application of the petitioner.
We have not interfered with the order of compounding. The orders passed by the Chief General Manager of the Reserve Bank and the communications dated 9 April 2014 and 22 May 2014 are lawful and do not suffer from any illegality.
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2014 (7) TMI 1290 - ITAT INDORE
Addition u/s 69 on the basis of oral statements of the sellers - documentary evidence assuming that the cash deposited in the bank account of the seller was actually received from the assessee over and above the price mentioned in the registered sale deed - Held that:- AO merely believes the oral statements of the sellers and more specifically unreliable witness has been heavily relied upon.
The assessee through its partner has also filed affidavit contradicting the allegations made against the assessee and the statements of the sellers. Wherever cash has been given to the sellers, it has been specifically admitted in the affidavit as is evidenced from page 31 (Bahadur Singh ₹ 3 lacs on 27.7.2006, ₹ 3 lacs on the same date to Leela Bai, ₹ 1 lac on 24.8.2006 to Shri Moti Ram, ₹ 1 lac on 24.8.2006 to Shri Pratap Singh and ₹ 3 lacs on 27.8.2006 to Shri Vikram Singh).
All the transactions made through cash and cheque are duly recorded in the books of accounts maintained by assessee firm in regular course of its business. This factual matrix, contained in the affidavit of the assessee, has not been controverted by the Revenue, therefore, there is no reason to affirm the addition, so made, by the AO.
AO is merely trying to catch the straw in whirlwinds with the help of oral statements of the sellers, ignoring the contents of the registered sale deeds, which are duly signed by the assessee as well as the sellers, in the presence of the witnesses and the registering authorities. It is noteworthy, as argued by the learned Counsel for the assessee also, that the sale was made on 27.7.2006 whereas the cash was deposited by the sellers in their accounts three months thereafter. It is quite unlikely that cash is given after the registration of the property.
Noteworthy that sellers of the land filed return in December, 2009 and signed the affidavit on 31.12.2009. The receipt of cash and cheque are duly mentioned in the sale deed, therefore, it is unbelievable that after the registration of the property is made, the cash is deposited three months thereafter in the accounts of the sellers. Therefore, how it can be presumed that the property was sold at a different rate other than shown in the registered documents.
The source has to be explained by the sellers, in whose accounts, the money was found deposited and not by the assessee. Therefore, the addition clearly seems to be made on presumptive basis.
The mere fact that somebody made statement, by itself, cannot be treated as having resulted in an irrebutable presumption against the assessee. The burden cannot be discharged by the Revenue by merely referring to the statement of the third party and such statement cannot be the sole foundation that the assessee has deliberately suppressed the income. Even otherwise, if the explanation of the assessee is not acceptable, the onus shifts to the Revenue to prove the same with corroborating material. - Decided in favour of assessee.
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2014 (7) TMI 1289 - ITAT KOLKATA
Addition u/s 68 - Creditworthiness & Genuineness of the loan creditors, when all the loan creditors are Income Tax Assessee holding Valid Permanent Account Number - Held that:- The assessee has submitted all the required relevant details. The assessee has also submitted confirmation of the loan creditors, copies of their Income tax returns and their balance sheets. We agree with the submissions of the ld. Counsel of the assessee that income of that particular year cannot be the only criteria for the capacity of the loan given. A perusal of the loan amounts reveal that the loan amounts were not large amounts and hence it cannot be presumed that person filing return showing a smaller income cannot have any saving.
We find that when the details of the loan creditors, PAN nos. and their Income tax returns were available to the AO the ratio of the above judgment mandates that the addition cannot be made without making any enquiry from the AO of the loan creditors. Furthermore, the assessee has submitted all the necessary details. The loan amounts are individually not large amounts. Under these circumstances it cannot be presumed that the loan creditors did not have the capacity to make that loan. In these circumstances respectfully following the decision cited above we set aside the orders of the authorities below and decide the issue in favour of the assessee.
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2014 (7) TMI 1288 - CALCUTTA HIGH COURT
Undisclosed expenditure - allowable business expenditure - tax the gross receipt including the undisclosed receipt at the net rate of 10% which was treated as receipts from undisclosed income under section 69A - Held that:- From the bank account of the assessee maintained with HDFC Bank, it appears that the opening credit balance as on 1st April, 2005 was ₹ 60,854.88p. and the closing balance as on 30th March, 2006 was ₹ 491.97p. It is possible that during the financial year 2005-06 an aggregate sum was deposited, but it is also a fact that during the aforesaid financial year from time to time various payments were made. There is no finding recorded anywhere that this expenditures were not on account of business expenditure. The position which emerges is that the assessee has undisclosed income as well as undisclosed expenditure. Therefore, doing the best, which could be done in the facts and circumstances of the case, CIT (Appeal) held that 10% of the receipts are to be treated as the net profit of the assessee.
The aforesaid view has been affirmed by the learned Tribunal. This was wholly an enquiry into the facts of the case. After going into the facts of the case, the aforesaid view was taken.
Ms. Bhargava, appearing for the appellant has not drawn our attention to any infirmity in the view taken by them. We are, as such, of the opinion that this appeal is altogether unmeritorious.
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2014 (7) TMI 1287 - ITAT KOLKATA
Disallowance as per Rule 8D read with Section 14A - Held that:- Respectfully following the decision of ITAT, Panaji Bench in the case of Sesa Ltd, Panaji, Goa [2013 (9) TMI 233 - ITAT PANAJI] AO merely observed that the administrative expenses disallowed by the assessee is very less but how they are less and how the other expenses incurred by the assessee related to dividend income has not been brought on record. AO has not pointed out expenses excluded by assessee for disallowance has proximate connection with dividend income - Assessing officer before rejecting disallowance computed by assessee must give a clear cut finding having regard to accounts of assessee how other expenditure claimed by assessee out of non exempt income related with exempt income. No discrepancy in claim of assessee was pointed out – Onus of proof lies on Assessing officer - disallowance u/s 14A of Act requires a clear finding of incurring of expenditure and that no disallowance can be made on basis of presumptions – Decided in favor of Assessee.
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