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Income Tax - Case Laws
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2011 (4) TMI 1373
Deduction u/s 80IB - Commercial Area - Assessee was engaged in the construction of two buildings known as ‘Amurt Dham’ and ‘Vidhi Complex’ - As per AO, in Project Vidhi Complex there was commercial area and since it was not a building project in the sense consisting of only buildings for residential purposes, the deduction was not to be allowed - Assessee contended there is no commercial area in vidhi complex but in Amrut Dham project for which deduction is not claimed
HELD THAT:- AO will verify the sanctioned plan to find out if the Project Vidhi Complex has any commercial area.The fact that commercial area in the form of shops exist in the buildings Amrut Dham which is part of the same sanctioned layout, but not forming part of the housing project Vidhi Complex, for which deduction u/s.80-IB(10) is claimed will not in any manner vitiate the claim for deduction u/s.80- IB(10).
Decision of SAROJ SALES ORGANISATION. VERSUS INCOME-TAX OFFICER. [2008 (1) TMI 420 - ITAT BOMBAY-E] supports the view that the existence of commercial area for the project for which deduction u/s.80-IB(10) is claimed alone should be seen though commercial area is built in the same sanctioned layout but in a different project. On verification, if commercial area is found to exist in the project Vidhi Complex AO will also verify if such area is within the permitted limits as laid down in Sec.80-IB(10).AO is accordingly to directed to verify the facts in this regard and while considering the claim for deduction u/s.80-IB(10)
Total area of the plot on which the project was constructed - Condition for allowing deduction u/s.80-IB(10) of the Act is that the project is on the size of a plot of land which has a minimum area of one acre - whether the area given for the purpose of forming DP road has to be excluded or included for the purpose of calculating the size of the plot on which the housing project has been constructed? - CIT(A) held plot is less than one acre, Also, project is not sanctioned by KDMC, thus not eligible for deduction - HELD THAT:- We find that in the case of UMIYA ENTERPRISES VERSUS INCOME TAX OFFICER-WARD-3 (3) , KALYAN (W) [2010 (2) TMI 1187 - ITAT MUMBAI] has considered this issue, wherein it was held that there is no condition in the clause (b) of Section 80IB (10) that recreation area has to be excluded while examining whether the plot is of the size of one acre or less. For the purpose of clause (b) of section 80IB(10), the plot area has been taken at 4189 sq. metres, if not at 4600 sq. metres, even on this basis, the size of the plot is more than one acre. In our opinion, the CIT(A) committed an error in simply excluding 656.75 sq.metres from the area of 4600 sq.metres without appreciating that the exclusion is only for the purpose of D.P. Road which does not reduce the size of the plot as a whole.
In view of the decision of the Tribunal referred above we are of the view that the order of the CIT(A) on this issue has to be reversed. We direct accordingly. Assessee would be entitled to deduction under section 10 IB(10) of the Act subject to the verification of the existence of commercial area in the project Vidhi Complex. The fact that the commercial complex exists in the Amurt Dham Project would not be relevant for denying the claiming of the assessee for deduction under section 80IB(10) of the Act for the Project Vidhi Complex.
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2011 (4) TMI 1372
... ... ... ... ..... that at the time of original assessment the assessee has disclosed all particulars regarding share capital money. A.O. had also obtained confirmation from the investors by sending letter u/s 133(6). In the reasons recorded there is no mention that assessee did not make a full and true disclosure of material facts. The reopening was done merely on the basis of information received from investigation wing. As per ratio emanating from above said Jurisdictional High Court decision, on the facts and circumstances of the case reopening is not valid. Hence we hold that the reopening was not valid. 11. Revenue’s Appeal - Since we have quashed the reassessment on jurisdictional ground, adjudication of revenue’s appeal on the merits of the case have become academic and the same are not being dealt with. 12. In the result the assessee’s Cross Objection is allowed and the Revenue’s appeal is treated as infructuous. Order pronounced in the Open Court on 20.4.2011.
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2011 (4) TMI 1371
... ... ... ... ..... 43(2) of the I.T. Act before finalization of the assessment u/s 143(3) of the I.T. Act. Therefore, the case relied by the learned D. R. is distinguishable on facts. Since we have decided the legal issue raised by the assessee vide ground No. 4 of the Cross Objection in his favour, therefore, no finding has been given on the other issues raised by the assessee on merit. Similarly no findings are required to be given in the appeal of the Department wherein the issue relates to the deletion of addition on merit because we have allowed the appeal of the assessee on the issue of limitation, i.e. service of notice u/s 143(2) of the I.T. Act and since the notice u/s 143(2) of the Act has not been served on the assessee, the assessment is held to be invalid. As such we do not see any merit in the appeal of the Department. 12. In the result, the Cross Objection of the assessee is allowed and the appeal of the Department is dismissed. (Order pronounced in the open court on 08/04/2011)
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2011 (4) TMI 1370
... ... ... ... ..... reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”. o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “Due Process”. Under the circumstances, the impugned order is set aside. Proceedings are remanded to the Tribunal for fresh consideration and disposal in accordance with law after giving its reasons. We have not expressed any opinion on merits of the issue decided by the CIT (A).
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2011 (4) TMI 1369
... ... ... ... ..... usively for the purpose of business. Moreover, the books of account of the assessee have been audited. The auditors have not pointed out that expenditure was in the nature of personal expenses of the directors. In the case of a company the affairs are managed by its directors and employees. No doubt, expenditure incurred for non-business purposes cannot be allowed even if it is incurred by the Dire4ctors. o p /o p For this purpose, the Assessing Officer has to make out the case. o p /o p Therefore, the expenditure incurred by the directors for the purpose of business could not be disallowed. There is nothing in the assessment order to suggest that expenditure incurred by the assessee was not in the nature of business expenditure. o p /o p Accordingly, we do not find any infirmity in the order of Ld. CIT(A) deleting the addition. o p /o p 6. In the result, the appeal filed by the revenue is dismissed. o p /o p 8. Order pronounced in the open court on 13th Apr., 2011. o p /o p
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2011 (4) TMI 1368
... ... ... ... ..... acts and, therefore, assessee was not liable to deduct tax at source as per the provisions of s. 194C(2) from the payments made to the lorry owners and consequently, provisions of s. 40(a)(ia) were not applicable to such payments. 12. As regards car parking charges, Assessing Officer has not brought on record any evidence to show that there was a contractual payment or any sort of payment which was covered u/s 40(a) of the Act. In view of the specific findings given by the ITAT in the case of Mytrhi Transport Corporation (supra), we respectfully follow the decision of the ITAT in the said case and in the light of that we find no infirmity in the order of the CIT(A) as his decision is in consonance with the decision of the ITAT in the said case, therefore, the order of CIT(A) on this count is her by upheld. Accordingly, this ground of revenue is dismissed. 13. In the result, appeal of the revenue is partly allowed. Pronounced in the open court on this day of 29th April, 2011.
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2011 (4) TMI 1367
... ... ... ... ..... T(A) allowed the claim of the assessee. The revenue is in appeal before us. The Ld. Counsel submitted that this issue stands fully covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Brahma Associates 239 CTR (Bom)30. 3. We have also heard the Ld. DR in this case. It is not in dispute that the assessee’s project was commenced prior to 01.04.2005. In the case of Brahma Associates (supra), the Hon'ble High Court has held that the amendment introduced to section 80IB is in prospective in operation. In the present case, admittedly the project of the assessee’s is commenced in December, 2003. Hence in our opinion, the amendment introduced to section 80IB(10) in spite of the 5 restriction on the commercial area is not applicable. We find no reason to interfere with the order of the Ld. CIT(A). 4. In the result, the Revenue’s appeal is dismissed. Order pronounced on this 27th day of April, 2011.
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2011 (4) TMI 1366
... ... ... ... ..... ce any evidence in support of its claim. We, therefore, do not see any reason to interfere in the addition so made by the Assessing Officer for which assessee could neither substantiate this stand either before the CIT(A) or before the Tribunal. 124. In the result, the appeal of the Revenue is allowed in part where as the Cross objection filed by the assessee is dismissed. 125. In the result, appeal filed by the Revenue in I.T(SS).A.Nos.57 to 63/Ind/2008 are allowed in part, whereas cross objections No. 40 to 46/Ind/2008 filed by the assessee are dismissed. Appeal filed by the Revenue vide I.T.(SS).A.Nos. 230 to 236/Ind/2008 are allowed in part, whereas the cross objections filed by the assessee in C.O.Nos. 131 to 137/Ind/2008 are dismissed. Appeal filed by the Revenue in I.T.(SS).A.No. 56/Ind/2008 is allowed in part whereas cross objection filed by the assessee is dismissed in terms indicated hereinabove. This order has been pronounced in the open court on 29th April, 2011.
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2011 (4) TMI 1365
... ... ... ... ..... onsidering the 15 of unproved payments for disallowance on the reason that there is a chance of inflating expenditure of unproved payments. We are applying the disallowance of 15 of the unproved expenditure considering the past history of the assessee, general rate of income earned in this line of business and presumptive rate of tax u/s 44AD of the Income Tax Act, 1961. To sum up, this issue is set aside to the file of assessing officer for the limited purpose to exclude the payments covered by TDS and confirmation letters out of ₹ 2,29,72,845/- and to consider 15 of the balance amount for disallowance. 21. Coming to the second ground regarding the valuation of closing work-in-progress, we direct the Assessing Officer to value the closing work-in-progress in the same manner as in the earlier year which has been followed by the assessee consistently. 22. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 24th April, 2011.
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2011 (4) TMI 1364
Unexplained cash credit - sale of shares - The AO treated the transaction as ingenuine and bogus by observing that the assessee used colourable device in connivance with stock brokers to introduce the assessee’s undisclosed income in the guise of transactions in penny stock of Bolton Properties and Blue Chip. He, therefore, rejected the contention of the assessee and treated the sale consideration of Shares of ₹ 39,80,980/- as unexplained cash credit and made the addition. Likewise, in HUF’s case also the AO rejected the assessee’s claim and treated the LTCG of ₹ 68,89,850/- as unexplained cash credit on the self same reasoning. In appeal, the Ld. CIT(A) deleted both the additions by stating that since the appellant has furnished satisfactory evidence in support of the purchase and sale of shares, the AO is not correct in assessing capital gain as unexplained credit u/s. 68.
HELD THAT:- In this view of the matter and in the absence of any contrary material brought on record by the revenue at the time of hearing before us, we do not find any infirmity in the order of the Ld. CIT(A) and the same is hereby upheld.
the appeal of the revenue in respect of individual assessee is concerned - the assesee claimed interest expenditure of ₹ 1,68,592/- on the loan. At the time of assessment proceedings, the AO asked for details regarding the nexus between the loan taken and the investments made. Since the assessee filed no explanation before the AO, he disallowed the interest claimed of ₹ 1,68,592/-. In appeal, the Ld. CIT(A) directed the AO to delete the addition. Aggrieved, the revenue is now in appeal before us. HELD THAT:- since the assessee failed to file any explanation and details regarding the nexus between the loan taken and the investments made. In appeal, while allowed the assessee’s claim, by the Ld. CIT(A). In the absence of any controverting material brought on record by the revenue authorities to rebut the finding of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. This ground of appeal of the revenue is dismissed.
Disallowance on account of depreciation - HELD THAT:- We find that since the assessee failed to furnish necessary details regarding acquisition, transportation, installation and use of plant and machinery, the Assessing Officer has disallowed the depreciation as claimed by the assessee. In appeal, the Ld. CIT(A) while allowing the assessee’s ground of appeal. In the absence of any controverting material brought on record by the revenue authorities to rebut the finding of the Ld. CIT(A), we do not find any infirmity in his order and the same is hereby upheld. This ground of appeal of the revenue is dismissed.
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2011 (4) TMI 1363
... ... ... ... ..... see, and which were vacant during the entire previous year. It has been held by the Tribunal in one of the orders cited above that the Municipal Corporation also fixes the annual value on the basis of the cost of construction of the building. The assessee has furnished the certificates given by the Brihanmumbai Mahanagarpalika showing the rateable value of the flats and these certificates were enclosed to the return of income. The calculation of the assessee was based on these certificates. In the light of these certificates the Assessing Officer was not justified in redetermining the annual letting value of the flats on the basis of the Times of India property chart. We accordingly uphold the assessee’s contentions and direct the Assessing Officer to accept the income returned by the assessee in respect of Capri and Kodinar. The ground is allowed. 11. In the result, the appeal of the assessee is allowed. No costs. Order pronounced in the Open Court on 27th April 2011.
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2011 (4) TMI 1362
... ... ... ... ..... f purchase and sale of shares, in the instant case, deserves to be considered as investment and profit thereon has to be assessed to tax under the head ‘capital gains’. We direct the Assessing Officer accordingly. o p /o p 10 Since the facts of the instant case are identical to the facts in the case of Nagindas P Sheth (HUF) (supra), therefore, following the decision of the coordinate Bench of the Tribunal, we hold that transactions of purchase and sale of shares by the assessee, in the instant case, has to be treated as investment and profit thereon has to be assessed to tax under the head ‘capital gains”. We hold and direct accordingly. The grounds raised by the revenue in its appeal are accordingly dismissed and the grounds raised by the assessee in the CO are allowed. o p /o p 11 In the result, the appeal filed by the revenue is dismissed and the CO filed by the assessee is allowed. o p /o p Order pronounced on the 27th,day of April 2011. o p /o p
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2011 (4) TMI 1361
... ... ... ... ..... of the interest was a must which has been considered by invoking the ratio of the decision of Hon’ble Apex Court in the cases of Titucorin Alkali Chemicals & Fertilisers Ltd., and Bokaro Steel Ltd (supra). 7. In view of our finding of facts and on the basis of submissions of the learned Counsel for the assessee, we are inclined to hold that the amount of interest for the Assessment Year 2006-07 being ₹3,28,734 and ₹7,81,383 for the Assessment Year 2007-08 cannot be taxed as income from other sources. The treatment as returned by the assessee by capitalizing and reducing the preoperative expenses is appropriate and allowed. 8. Be that as it may, the learned Counsel agreed to the proposition that if considered the issue on merits, the additional ground raised in the Assessment Year 2006-07 with respect to validity of enhancement would remain of academic interest only is not deliberated upon. 9. In the result, the appeals filed by the assessee are allowed.
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2011 (4) TMI 1360
... ... ... ... ..... take in the orders of the CIT(A) in following the decision of the Hyderabad Bench of the Tribunal in the case of Vasavi Academy of Education and directing the assessing officer to verify the aspect of donation, capitation fee etc. and further directing that if it is found that besides fulfilling other prerequisites for exemption under S.11, the assessees have not charged any money by whatever name it is called, i.e. donation, building fund, auditorium fee etc, over and above the prescribed fee for the admission of students, the assessees would be entitled for exemption under S.11, even though the notifications under S.10(23C)(vi) of the Act have not been received by them. There being no mistake in the orders of the CIT(A) on this issue, we confirm the same and the grounds of the assessees in their cross objections are rejected. 10. In the result, appeals of the Revenue as well as the cross objections of the assessees are dismissed. Order pronounced in the court on 13.04.2011
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2011 (4) TMI 1359
... ... ... ... ..... t and therefore, amount payable to the Government shown in the balance sheet cannot be added as income of the assessee. On the other hand, Ld. Sr. DR supported the order of the Assessing Officer. 9. We have hard both the parties and gone through the material available on record. There is no dispute that the amount of charity shown in the balance sheet has not been charged to P & L account. The net profit is to be appropriated under various heads one of which is charity fund which is to be paid to U P Government as per requirement of law. Therefore the amount of ₹ 1,52,336/- cannot be added as income of the assessee as the same has not been charged to P & L account. In view of these provisions, Ld. CIT(A) was justified in deleting the addition. Accordingly, we do not find any infirmity in the order passed by Ld. CIT(A) in deleting the addition. 10. In the result, appeal filed by the Revenue is dismissed. 11. Order pronounced in the open court on 29th Apr., 2011.
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2011 (4) TMI 1358
... ... ... ... ..... t become irrecoverable as portrayed by the assessee. Moreover, the assessee had not shown the whopping sum of ₹ 32.5 lakhs being business expenditure in its balance sheet, however, finding a place in its computation of income. 7.4. Taking into account all the facts and circumstances of the issue as deliberated upon in the fore-going paragraphs, we are of the firm view that the assessee’s claim of ₹ 32.5 lakhs being business expenditure u/s 37 of the Act was not an allowable deduction and the authorities below were quite justified in their stand which requires no intervention by this Bench, It is ordered accordingly. 7.5. Before parting with, we have duly perused the other case laws on which the assessee had placed its faith and of the considered view that they were distinguishable and were not applicable to the facts of the issue on hand. 8. In the result, the assessee’s appeal is dismissed. Pronounced in the open court on this 8th day of April, 2011.
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2011 (4) TMI 1357
... ... ... ... ..... t, and there is no dispute about this fact. He further argued that prior to 01.06.2010, the Ld. D.I.T had no powers to cancel the registration granted u/s.12A of the Act. The Ld. Counsel refereed to the Sub-sec.(3) to Sec. 12A. We have also heard the Ld. DR. 4. Sub-section 3 to section 12A has been amended by the Finance Act, 2010 with effect from 01.06.2010, and in consequences of the said amendment, the D.I.T or the Ld. CIT (A) has been vested with power to cancel the registration granted u/s.12A of the Act. Hence, only from 01.06.10, the Ld. DIT has power to cancel registration granted under sec. 12A of the Act. We, therefore, hold that the order passed by the Ld. D.I.T dated 07.09.2009, is bad in law and without due authority of law. We accordingly, cancel impugned order as the Ld. DIT has no power on that day to cancel the registration granted u/s. 12A of the Act. 5. In the result, the assessee’s appeal is allowed. Order pronounced on this 27th day of April, 2011.
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2011 (4) TMI 1356
... ... ... ... ..... owever make it clear that the issue is considered only in the light of the specific provisions of Chapter XIV-B of the Act. We leave the question as to whether the impugned disallowance can be made in the regular assessment, open. Such disallowance are already subject-matter of appeal in some of the assessment years comprised in the block period and the question regarding the disallowances in such proceedings is left open for consideration in accordance with law, uninfluenced by any observations that we have made in this order. 55. In view of the conclusions as above we allow ground Nos. 1 to 4. Ground No. 5 regarding charging of interest and ground No. 6 regarding disallowance of financial charges for asst. yrs. 1998-99 to 2000-01 on the ground that they were already disallowed by the assessee in its computation of total income for those years, will not survive in view of our conclusions on ground Nos. 1 to 4. 56. In the result, the appeal by the assessee is partly allowed.
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2011 (4) TMI 1355
... ... ... ... ..... lement of turnover and therefore has to be excluded from the total turnover while computing deduction under section 80HHC. Respectfully following the said judgment of Hon’ble Supreme Court we confirm the order of CIT(A) and dismiss the ground raised by the revenue. 4. The cross objection of the assessee in CO No.147/M/2007 for A.Y.2003-04. The only dispute raised by the assessee in the cross objection is regarding levy of interest under section 234B and 234C. The Learned AR for the assessee at the time of the hearing submitted that levy of interest was only consequential. He did not dispute the liability on account of levy of interest. We therefore dismiss the cross objections raised by the assessee. The AO, however, will recompute the interest at the time of giving effect to this order. 5. In the result the cross appeals for both the years are partly allowed whereas the cross objection of the assessee is dismissed. 6. Order was pronounced in the open court 20.04.2011.
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2011 (4) TMI 1354
... ... ... ... ..... 19. Learned representatives of both the parties submitted that these grounds are same as have been considered in assessment year 2003-04. Therefore, order in that case may be followed in this year as well. 20. On consideration of the above facts and on going through the impugned order, we find that all the grounds are same as have been considered in assessment year 2003-04. By following the same order, the alternate claim of the assessee on ground No.1 is restored to the file of the A O for reconsideration as directed above. Rest of the ground No.1 is accordingly dismissed. Ground No.2 of the appeal of the assessee is allowed as directed above. Grounds No.3 and 4 are restored to the file of the A O for reconsideration as directed above. 21. In the result, appeal of the assessee is partly allowed as indicated above. 22. No other point is argued or pressed. 23. In the result, both the appeals of the assessee are allowed partly. Order pronounced in the open Court on 8-04-2011.
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