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Showing 101 to 120 of 1066 Records
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2014 (10) TMI 974 - TELANGANA AND ANDHRA PRADESH HIGH COURT
Exemption to section 10B - connection with activity of export - the interest earned in respect of bank deposits kept for opening letters of credit - Held that:- Obtaining of letters of credit is an essential activity for undertaking exports and the deposit of amounts for that purpose is a condition precedent. If the deposits so made have yielded interest, it certainly is attributable to or can be said to be derived from the activity of export
Unless the amount is referable to the activity of the concerned industry and it has close nexus with such activity, it cannot be brought under the purview of section 80HH of the Act
Thus setting aside the order of the Tribunal, in so far as it relates to items (b) and (c) claimed by the respondent, viz. :
"(b) Interest given by the banks in respect of the moneys received by the said banks on behalf of the assessee-company against the pub lic issue of shares ; and
(c) Interest earned in respect of the temporary intercorporate deposits kept by the assessee-company with other companies, out of the proceeds of the public issue of shares."
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2014 (10) TMI 973 - ITAT MUMBAI
Disallowance of deduction u/s 80IB(10) on income from leave & license fees and Miscellaneous Income - Held that:- Considering the fact that the unsold flats, being stock-in-trade of the housing project, being the immediate source of the impugned rental income, we find direct nexus of the said income to the housing project on hand. Therefore, the said income is derived from the housing project, making the income eligible for deduction u/s 80IB(10) of the Act. Therefore, the conclusions drawn by the CIT (A) are not sustainable in law. - Decided in favour of assessee
Regarding the miscellaneous income as held by the Revenue Authorities as ineligible income for the purpose of deduction u/s 80IB(10) we find, the Income Tax Authorities has not gone into the facts relating to this income. As per the Ld Counsel, the same constitutes reimbursements of maintenance charges by the flat owners. This is the reimbursement of expenses incurred by the assessee to the housing society of the housing project. Such reimbursement does not constitute income of the assessee. The Revenue Authorities have wrongly held it as income and treated the same as ineligible for claim of deduction - this matter should visit the file of the AO for fresh adjudication after analyzing the relevant facts. - Decided in favour of assessee for statistical purposes.
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2014 (10) TMI 972 - HIMACHAL PRADESH HIGH COURT
TDS u/s 194A - whether accident claim cases and the compensation awarded under the Motor Vehicles Act cannot be said to be taxable income? - Held that:- he Circular, dated 14.10.2011, issued by the Income Tax Authorities, whereby deduction of income tax has been ordered on the award amount and interest accrued on the deposits made under the orders of the Court in Motor Accident Claims cases, is quashed and in case any such deduction has been made by respondents, they are directed to refund the same, with interest at the rate of 12% from the date of deduction till payment, within six weeks from today.
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2014 (10) TMI 971 - CESTAT MUMBAI
Liability of service tax - Notional interest accrued on security deposits for renting of immovable property - Held that: - this issue has been extensively considered by this Tribunal in the case of Magarpatta Township Developers & Construction Co. [2014 (9) TMI 461 - CESTAT MUMBAI], wherein this Tribunal held that notional interest on security deposit cannot be added to rent agreed upon between the parties for the purpose of levy of service tax for renting of immovable property - appellant is not required to pay service tax on notional interest on security deposit under the category of renting of immovable property service - appeal allowed - decided in favor of appellant.
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2014 (10) TMI 970 - ITAT PUNE
Deduction claimed u/s 80IB (10) - partial completion certificate received - Held that:- It is an admitted fact that the facts and circumstances of the present case are identical to the facts and circumstances in the earlier years i.e. assessment years 2008-09 and 2009-10 and following the same parity of reasoning, we hold that the assessee is entitled to claim of deduction under section 80IB (10) of the Act in relation to the profits derived from the housing project Harsh Paradise.
Second residential unit allotted in the same project to two members of the said family - Applicability of the amended provisions of sub section (f) to section 80IB (10) of the Act - Held that:- The amended provisions having been introduced on a later date cannot be applied to the transactions completed before the said provisions were introduced were amended as the assessee cannot be expected to do deeds which are impossible.
Applying the ratio laid down by the Hon'ble Supreme Court in the case of Krishnaswamy S. Pd. v. Union of India (2006 (2) TMI 75 - SUPREME Court) and in the case of CIT Vs. Revathi Equipment Ltd. (2007 (6) TMI 154 - MADRAS HIGH COURT), we hold that the assessee is entitled to claim of deduction under section 80IB (10) of the Act in respect of the flat allotted to Mrs. Nalini Andar i.e. second residential unit allotted in the same project to two members of the said family.
The amended clause (f) to section 80IB (10) of the Act are to be applied w.e.f. 19-08-2009 and cannot be used to deny the deduction under section 80IB (10)in respect of the residential unit allotted 14 prior to the coming into operation of amended provisions i.e. clause (f) inserted to section 80IB (10) of the Act. - Decided against revenue
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2014 (10) TMI 969 - KARNATAKA HIGH COURT
Having regard to the seriousness of the allegations made against the appellant which were found to be correct by the authorities, the Tribunal was justified in passing the impugned order - There is nothing like res judicata or parity in the matter of granting interim orders in particular regarding pre-deposit - appeal dismissed.
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2014 (10) TMI 968 - ITAT MUMBAI
Profit on sale of investments not liable to be taxed in the hands of the assessee - Rule-5 applicability - assessee carries on insurance business - Held that:- A co-joint reading of Secton-44 to the First Schedule, it is clear that the profit and gains of the present assessee are to be computed in accordance with Rule-5 as applicable to the relevant year. A plain reading of this rule signifies that the profit as disclosed in the annual accounts, prepared in accordance with relevant Schedule of insurance Act, is to be taken as total income, subject to the adjustment, specifically provided in clauses (a) and (c). Clause (b) was omitted by the Finance Act 1988, w.e.f. 1.4.1989. The only effect of section 44 is that the operation of provisions referred to therein are excluded in the case of an assessee who carries on insurance business and in whose case the provisions of Rule-2 of the First Schedule are attracted.
Section 44 is a special provision enshrined in the Act for ascertaining the profit and gains of an assessee carrying on the business of insurance. Thus it can be said that special provision overrides the general provision. In view of this legal position the amount of profit, as disclosed by the P&L Account are to be drawn as per the insurance Act.
The Hon'ble Apex Court in Britannia industries Ltd.(2005 (10) TMI 30 - SUPREME Court) reiterated the same principle holding that expenditure towards rent, repairs, maintenance of guest house, used in connection with the business, is to be disallowed u/s. 37(4) of the Act because this is a specific provision overriding the general provision. This rule has been expressly incorporated in section 44 of the Act by specifically providing interalia that nothing contained in the provisions of section 28 to 43B shall apply to the profits and gains of business of insurance which shall be computed in accordance with rules contained in the First Schedule. We find no infirmity, on the issue, in the conclusion drawn by the ld. CIT(A). - Decided against revenue
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2014 (10) TMI 967 - ITAT MUMBAI
Disallowing depreciation on fixed assets to assessee trust - Held that:- We find that the assessee has given sufficient reasons for claiming the same, in support, certificates were filed which were also before the lower authorities. The assessee is running a hospital. The assets which have outlived their lives cannot be sold as scrap as per the rules governing the hospital, the assessee was left with no choice but to claim the same as additional depreciation. The Hon’ble High Court of Bombay in the case of Institute of Banking Personnel Selection (2003 (7) TMI 52 - BOMBAY High Court) has laid down the ratio that the income of the Trust is required to be computed u/s. 11 on commercial principles.
Claim of carry forward of deficit to be set off against the income of the subsequent years - Held that:- As the income has to be computed on commercial principles like business loss which is allowed to be carried forward and set off with the profit of subsequent years. Similarly, the deficit in the case of a trust is allowed to be carried forward to be set off in subsequent years. That being so, findings of the Ld. CIT(A) need no interference. - Decided against revenue
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2014 (10) TMI 966 - CESTAT MUMBAI
Principles of Natural Justice - the appellants were not supplied the relied upon documents, the cross examination was not conducted and most of the written submissions were even not referred in the impugned order - penalty u/s 112(a) and 114A of CA, 1962 - Held that: - the relied upon documents were not supplied to the appellants except to Shri Kejal Mehta. The demand was confirmed against M/s. Samudri International, M/s Mayur enterprises and M/s Madhu Enterprises on the basis of statements of Shri Bhumish Shah and Shri kejal Mehta. Shri Alpesh Shah is the proprietor of M/s Samudri International and Bhupendra Ravani is the proprietor of M/s Mayur Enterprises and M/s Madhu Enterprises. It is very surprising that the statements of persons against whom the custom duty demand was confirmed were never recorded, even the said importers were not made confronted with the statements of Shri Bhumish Shah and Shri Kejal Mehta. In such a situation it becomes necessary that the cross examination must be granted.
There is gross violation of principle of natural justice in passing the adjudicating order, therefore such order deserves to be set aside and remanded - appeal allowed by way of remand.
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2014 (10) TMI 965 - CESTAT DELHI
Condonation of delay - time limitation - Held that: - there is no explanation at to whether inspite of period of one month and five days, no COD application stand filed by the appellant. Inasmuch as the appeal is admittedly beyond the normal period of limitation, we find no reason to keep the same on record - appeal is dismissed as barred by limitation.
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2014 (10) TMI 964 - GUJARAT HIGH COURT
Application before appropriate forum - Held that:- Petitioner does not press this application and seeks permission to withdraw the same, as his client intends to file an appropriate application before the appropriate forum. If such application is filed before the appropriate forum, the same may be taken into consideration and decided in accordance with law
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2014 (10) TMI 963 - ITAT PUNE
Tax the capital gain as short term capital gain - whether the tax rate specified in section 112 for long term capital gain was not applicable to the capital gain computed under section 50 in respect of long term asset? - Held that:- n the present case, it is not in dispute that the office premises which was sold by the assessee was a part of the business asset and section 50 is applicable as assessee had claimed depreciation on the same. We are unable to accept the submission of the Ld. Counsel that in the case of Ace Builders Pvt. Ltd. (2005 (3) TMI 36 - BOMBAY High Court) the Hon’ble High Court has held that even capital gain is computed in the manner prescribed u/s.50 in that case also, the same is to be treated as long term capital gain.
It is clear from the language used by the legislature that if the long term capital gain is computed then it will suffer the tax @20% as against the normal rate of income tax. Moreover, in the Ace Builders Pvt. Ltd., (supra) their Lordships have explained that if the capital gain is computed as provided u/s.50 then the capital gains tax will be charged as if such capital gain has arisen out of short term capital asset. We have to interpret the judgement or decision as a whole and we cannot interpret in the piecemeal to understand the ratio decidendi.
Counsel has also relied on the decision in the case of M/s. P.D. Kunte & Co. (Regd.) (2005 (3) TMI 36 - BOMBAY High Court). It is true that in said case the assessee had taken Ground No.2 which is analogous to the plea of the assessee. But on perusal of the said order, we find that the said ground remained to be adjudicated and there is no decision on this issue. We are not therefore inclined to rely upon the decision in the case of M/s. P.D. Kunte & Co. (Regd.) (Supra). We accordingly approve the interpretation made by the Ld.CIT(A) of section 50 and section 112 and confirm the order on this issue before us. Accordingly, the grounds taken by the assessee are dismissed.
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2014 (10) TMI 962 - ITAT JODHPUR
Addition on suspicion based on the statement of a third party - Held that:- We have found that share application money of ₹ 50 lakhs was invested by M/s. Moderate Credit Corporation Ltd., a listed company, which fact is evident from the record. This investment is found to have been made through account payee cheque and has been refunded in the similar manner when the project was dropped. The statement of Shri Aseem Gupta recorded behind the back of the assessee cannot be relied on in the case of a third party. His statement does not specifically mention the name of the assessee-company. There is no iota of evidence to suggest that either directly or indirectly any cash or unaccounted money of the assessee had flown to the share applicant company or vice versa. The share applicant has confirmed its deposit. Therefore, any share application money when the applicant is identified and has confirmed its deposit with the assessee-company, cannot be added in the assessee-company’s hand, as per the settled position of the law. - Decided against revenue.
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2014 (10) TMI 961 - ITAT, PUNE
Deduction claimed u/s. 80IA in respect of profit earned from the project Godawari Lift Irrigation Scheme developed by the Govt. of Andhra Pradesh - Held that:- As decided in assessee's own case [2014 (9) TMI 1065 - ITAT PUNE] we are not inclined to interfere with the finding of CIT(A) who has deleted the disallowances u/s.80IA of the Act in respect of profit earned from the project Godawari Lift Irrigation Scheme and Guthpa Lift Irrigation Scheme respectively.
Disallowance of the warranty provision - Held that:- CIT(A) has rightly decided the issue in the light of judgement of the Hon’ble Supreme Court in the case of Rotork Control India P. Ltd. (2009 (5) TMI 16 - SUPREME COURT OF INDIA). We uphold the same.
Disallowance u/s.40(a)(ia) - assessee has not deducted tax at source on payment of commission to the Non-executive Directors - Held that:- The issue before us is with regard to commission paid to director. The issue has to be looked into its facts and circumstances which needs deep probe into the matter. So, in the interest of justice, we restore this issue to the Assessing Officer with a direction to decide the same as per fact and law after providing due opportunity of being heard to the assessee.
Computation of Book profit u/s.115JB - Held that:- We are not inclined to interfere with the finding of CIT(A) who has upheld the addition made by the Assessing Officer to the Book Profit as defined under Explanation to section 115JB. We uphold the same.
Medical expenses reimbursed to employees and payment of Fringe Benefit Tax - Held that:- Since the CBDT has issued clarification that reimbursement of medical expenses up to ₹ 15,000/- is taxable as a fringe benefit in the hands of the employer, the Assessing Officer following the Circular has rightly treated the reimbursement of medical expenses to employees and non-working directors of the company as a fringe benefit under section 115 WB(2)(E) of the Act. Accordingly, the action of the Assessing Officer on this ground is upheld.
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2014 (10) TMI 960 - ITAT, AMRITSAR
Trading addition - Held that:- There is no dispute to the fact that the A.O. has not pointed out any defect in the books of account and the books of account have not been rejected by invoking provisions of Section 145(3) of the Act. Even if this ground has not been raised before the learned CIT(A) or even before us in the grounds of appeal, the fact remains that no books of account have been rejected by invoking the provisions of Section 145(3) of the Act and therefore, the trading results will be deemed to have been accepted by the A.O. Therefore, no additions can be made by the A.O. - Decided in favour of assessee.
Addition u/s 68 - establish genuineness of the loans - Held that:- Though the creditor does not appear to be taxable during the years of the savings, and therefore by perusing the earnings and expenses of the family, and assessee not being the income tax assessee, thus of the view that the creditor being the real sister of the assessee must have given ₹ 1,00,000/- loan by depositing cash in her bank account. The assessee had proved the identity, creditworthiness and genuineness of the transaction and therefore, he has discharged his onus and therefore, no addition is called for and the addition sustained by learned CIT(A) is directed to be deleted along with the interest of ₹ 11,047/-. The order of learned CIT(A) is reversed and the addition of ₹ 1,11,047/- is directed to be deleted. Thus, the ground no. 2 raised by the assessee is allowed.
Addition of cash credit in the name of Smt. Salochna Devi - Held that:- The creditor Smt. Salochna Devi is the mother of the assessee who is the widow lady of around 67 years has furnished the affidavit confirming the loan given to the assessee by making a cash deposit of ₹ 60,000/-. She is not an income tax assessee. She has stated in her statement before the A.O. of doing book binding business from where she earns ₹ 70,000/- to 80,000/- per annum, is not disputed. The said cash was given to the assessee, who deposited the same in the creditor’s account from where cheque has been taken. She has also stated that she is living with her son. In this circumstances and facts of the case, I am of the view that the assessee has proved the identity, creditworthiness and genuineness of the transaction and accordingly no addition of ₹ 60,000/- is called for alongwith the interest of ₹ 7,200/-. - Decided in favour of assessee.
Addition of expenses on account of low withdrawals - Held that:- A.O. has estimated the expenses on account of withdrawals at ₹ 12,000/- per month, but no basis of the same has been given while estimating the same. Though, the assessee is living in his own house in a small town which has been explained by the assessee and in the circumstances and facts of the case, no addition is warranted. Accordingly, the order of the learned CIT(A) on this very ground is reversed and the A.O. is directed to delete the addition so made and sustained by learned CIT(A). Also as the additions made by the A.O. on account of withdrawals have been deleted hereinabove, there is no question of setting off the same against the cash credit. - Decided in favour of assessee.
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2014 (10) TMI 959 - CESTAT NEW DELHI
Whether supply of ready mix concrete and carrying out the ancillary and incidental activities of pouring, pumping and laying of concrete would call for service tax liability or not? - Held that: - Tribunal in the case of GMK Concrete Mixing Pvt. Ltd. v. CST, Delhi [2011 (11) TMI 425 - CESTAT, NEW DELHI] has held that the entire exercise is sale of ready mix concrete and there is no service element involved so as to create service tax liability against the assessee - appeal allowed - decided in favor of appellant.
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2014 (10) TMI 958 - SUPREME COURT
Auction for sale - properties owned by a company under liquidation and there has been price fixation by the Company Court - Held that: - There can be no speck of doubt that the properties of a company under liquidation when sold, there has to be a proper auction, a fair one. It must fetch the maximum price. It takes care of statutory dues, dues of the workmen and the creditors. It has its own public character. In any case, it cannot be allowed to be sold for a song. The estimated price given by Gitco is more than ₹ 66 crores for 113 plots, which are free.
We direct M/s Star and Associates to deposit a sum of ₹ 20 crores by the end of November 2014 and another ₹ 40 crores by 15-3-2015 before the Registry of this Court - the rest of the plots in respect of which there is an order of status quo by this Court or which are sub judice before the appellate court on the company side before the High Court, needless to say, shall be dealt with at the subsequent date - SLP allowed in part.
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2014 (10) TMI 957 - ITAT MUMBAI
Taxability relating to conversion of unpaid interest on SBI loan into a “fresh term loan” - disallowance invoking Explanation 3A of sec. 43B - Held that:- We notice that the ld. AR has furnished many factual details, which have not been examined at all by the tax authorities. Further, the ld. AR has rightly pointed out that Explanation 3A shall apply only for those payments for which the deduction had been allowed in assessment year 1996-97 and in the earlier years on accrual basis. However, since the Ld A.R has furnished various factual details and since they have not been examined by the tax authorities, we are of the view that this issue requires fresh consideration at the end of the AO. Accordingly, we set aside the order of the ld. CIT(A) on this issue and restore the same to the file of AO for his fresh examination in the light of discussion made supra. The AO is directed to examine the factual details furnished by the ld. AR and take appropriate decision in accordance with law after providing necessary opportunity of being heard to the assessee.
Rejection of claim of set off of brought forward unabsorbed depreciation claimed against “Short Term Capital Gain” and “Long Term Capital Gain” - AO disallowed the said claim on the reasoning that unabsorbed depreciation, though gets merged with the current depreciation, can be carried forward indefinitely and can be set off only against “profit and gains” and not against any other income - Held that:- Unabsorbed depreciation can be set off against the “Business Income” or against the income derived from any “other source”, on the reasoning that the treatment given to current year depreciation would equally apply to brought forward depreciation also. Thus we set aside the order of ld. CIT(A) and direct the AO to allow the set off of unabsorbed depreciation against capital gains. See Suresh Industries (P) Ltd V/s ACIT (2012 (11) TMI 674 - ITAT MUMBAI) and DCIT V/s Akay Flavours and Aromatics (P) Ltd (2010 (9) TMI 1123 - ITAT COCHIN) - Decided in favour of assessee.
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2014 (10) TMI 956 - APPELLATE TRIBUNAL, PREVENTION OF MONEY LAUNDERING ACT AT NEW DELHI
Admission of additional documents - pleas of the respondent not to take the documents on record and not to consider them - Held that:- Considering the documents it is apparent that there cannot be doubt about the genuineness of these documents. The plea of the respondent is that the documents are not relevant. However, this plea of the respondent cannot be accepted. The contention of the applicant is that the properties which have been attached had not been acquired from the proceeds of crime. In these circumstances, the copies of bank accounts and income-tax returns will be relevant and it cannot be inferred at this stage that the applicant has not been able to discharge his burden. The contents of the documents and whether they establish that the applicant did not have proceeds of crime can be inferred only after the documents are taken on record and considered in view of the pleas and contentions of the applicant.
Therefore, the pleas of the respondent not to take the documents on record and not to consider them cannot be accepted. For the foregoing reasons the application is allowed and additional documents are taken on record subject to payment of ₹ 2,000/- as cost to the learned counsel for the respondent.
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2014 (10) TMI 955 - ITAT MUMBAI
Non allowance of loss on sale of securities - Adhoc disallowance of expenses - Held that:- The Tribunal had decided the issue against the assessee while deciding the appeal for the earlier years as held there is no dispute that provisions of section 73 Explanation can be applied where a company deals in purchase and sale of shares of other companies. However there are two exceptions provided in the said Explanation and undisputedly the assessee does not fall -within the ambit of those two exceptions. The only argument of the learned counsel for the assessee is that such purchase and sale of securities were effected only for testing the working of the website to ensure that the same functions within any glitches. We do not find merit in such submission since the assessee is continuously carrying on the purchase and sale of shares as informed to us by the learned counsel for the assessee. Further, the assessee itself is showing such transactions as part of its business activity. Therefore, there is no reason to take any contrary view. In our view, the CIT(A) has rightly upheld the order of the Assessing Officer treating the same as speculation loss - Decided against assessee
Disallowance of bad debts - Held that:- We find that after 01.04. 1989,the only requirement of writing off of bad debt is entries in the books of accounts by the assessee concerned. It has not to prove the justification of its action i.e.writing off,once it makes necessary entries in the P & L account. The Hon’ble Apex Court in the matter of T.R.F. Ltd. (2010 (2) TMI 211 - SUPREME COURT) had laid down the above basic principle and same is being followed by various Courts. Respectfully following the same we decide ground no.2 in favour of the assessee.
Depreciation on BSE Membership Card - Held that:- We find that in the matter of Techno Shares and Stocks Ltd [2010 (9) TMI 6 - SUPREME COURT OF INDIA] has held - “on a consideration of the BSE rules, that the right of membership was a "business or commercial right" and could be said to be owned by the assessee and used for business purposes in terms of section 32(1)(ii). The right of membership, which included the right of nomination, was a "licence" or "akin to a licence" which was one of the items which fell in section 32(1)(ii). The right to participate in the market had an economic and money value. It was an expense incurred by the assessee which satisfied the test of being a "licence" or "any other business or commercial right of similar nature" in terms of section 32(1)(ii).” - Decided against AO
Addition of expenditure attributable to speculative business - AO had made a disallowance of ₹ 5 lakhs, that was reduced to ₹ 2.5 lakhs by the FAA - Held that:- While deciding the issue in the appeal filed by the assessee,we have held that the Tribunal had in the earlier years decided the issue of speculation loss against the assessee. But, reduction in disallowance made by the FAA was upheld by the Tribunal. Following the order of the Tribunal for the year 2003-04,we uphold the order of the FAA and decide ground no.2 against the AO.
Disallowance of client Assistance Charges(CAC) paid to ICICI Bank - AO had disallowance as he was of the opinion that the payment was made to a party covered by the provisions of section 40(A)(2)(b) - Held that:- We find that he has not given the basis as how he arrived at the conclusion that ICICI Bank,the receiver of the payment,was a party covered by the provisions of the said section.For invoking the provisions of 40A regarding related party,it has to be proved that the assessee had incurred an expenditure by making payment to the person referred to in clause (b). We find that the AO had presumed that payment was made to related party.He has also not explained as how the payment was excess or unreasonable.For arriving at such a conclusion,he should have compared the case with similar type of cases and proved that the payment was above normal practice of the trade.He has not made any attempt to prove the fact.In these circumstances,in our opinion,the order of the AO was rightly reversed by the FAA.
There is no yardstick mentioned by the AG or CIT(A) as to what is fair market value of the goods, services or facilities for which the payment is made. Further nothing has been brought on record to show that the expenditure in question was excessive or unreasonable considering legitimate needs of the business or profession of the assessee or benefit by or accruing to the assessee. The fact that the assessee has its own infrastructure or that it has incurred huge advertisement expenses cannot be a ground to make the disallowance. In fact, infrastructure pointed out by the Assessing Officer is only with regard to facilities of trading. The Assessing Officer has totally ignored the fact that the customers were procured only through network of ICICI Bank Ltd., across the country. The rendering of services by ICICI Bank Ltd., which have already set out above, contributed to the business of the assessee and payment of commission, in our view was fully justified. - Decided in favour of assessee.
Disallowance of expenses on software development - Held that:- We find that as far as incurring of expenditure is concerned the AO has doubted it. He was of the opinion that same was of capital nature.From the records it is clear that the assessee had made payment to HCL Comnet Ltd. and CWIP amounting to ₹ 27,72,471/-,for development of software programme, but the project could not materialise,that no depreciation was allowed with regard to the payment in question. We are of the opinion that the expenditure incurred by the assessee was incurred for carrying out the business for the year under consideration and it suffered a loss in the transaction. - Decided in favour of assessee.
Penalty u/s 271(1)(c) - assessee had treated share transaction under the business head,whereas the AO was of the opinion that same were covered by the provisions of section 73 - Held that:- Penalty as per the provisions of section 271(1)(c) is not automatic.Addition or disallowance during the assessment proceedings or their confirmation in appellate proceedings do not and should not result in invoking the penal provisions in a mechanical manner.Before imposing penalty for furnishing of inaccurate particulars it has to be seen that the claim made by the assessee was false or not bona fide. In the matter before us,the assessee had treated share transaction under the business head,whereas the AO was of the opinion that same were covered by the provisions of section 73.Thus,there were two possible views about the transaction in question and the assessee had followed one of the views.It is said that if a wrong claim is made by an assesse and explanation is offered then in the absence of a finding that the assessee had failed to prove such explanation was bona fide, no penalty can be imposed. - Decided in favour of assessee.
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