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Showing 101 to 120 of 1389 Records
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2014 (7) TMI 1293
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
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
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
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
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
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
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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2014 (7) TMI 1286
Addition u/s 14A r.w.r. 8D - non recording of reasoning for dissatisfaction with regard to the working/claim of the assessee - Held that:- Perusal of the assessment order reveals that the AO has not followed the guidelines of objective satisfaction as laid down by the hon’ble Bombay high Court in the case of Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT) while making the disallowance . He without recording any reasoning for his dissatisfaction with regard to the working/claim of the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act. The ld. CIT(A) also ignored the mandate of the provisions of section 14 A, while confirming the disallowance.
We restore this issue back to the file of the AO with a direction that the AO will give opportunity to the assessee to place on record all the relevant facts including its accounts and then examine the computation/calculation made in this regard by the assessee having regard to the accounts of the assessee. The AO will be at liberty to call for any record/evidences or statement etc. from the assessee as may be required by him for deciding the issue under consideration. After going through the details provided by the assessee, if the AO will be satisfied with the claim/calculation made by the assessee, then he will assess the income accordingly. - Appeal of the assessee is allowed for statistical purposes.
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2014 (7) TMI 1285
Deduction on account of payments made to the retired partners under the provisions of the partnership deed - Constitution of income of firm - Held that:- Issue is squarely covered in favour of the Assessee and against the Revenue by the judgment and order of this Court dated 25.07.2008 in the case of Commissioner of Income Tax v/s M/s C.C. Chokshi & Company [2008 (7) TMI 1055 - BOMBAY HIGH COURT]. We have been shown another order following this judgment and delivered in relation to the same Assessee/ M/s A.F. Ferguson and Company.[2012 (1) TMI 357 - BOMBAY HIGH COURT].
We are of the opinion that simple answer to this contention is that so long as the judgment delivered by this Court and which is final is not set aside by the higher court, it continues to bind us. That appeal is filed against that judgment and which appeal is pending, is no answer. We will go by the binding principle and judicial discipline. In doing so we would be upholding the rule of consistency.
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2014 (7) TMI 1284
Conditional Gift - right to use the property during the lifetime of the donor retained - whether retention of possession of the gifted property for enjoyment by the donor during her life time and the right to receive the rents of the property in any way affected the validity of the gift?
Held that:- There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property. As noticed earlier, Section 123 does not make the delivery of possession of the gifted property essential for validity of a gift.
In the case at hand, the execution of registered gift deed and its attestation by two witnesses is not in dispute. It has also been concurrently held by all the three courts below that the donee had accepted the gift. The recitals in the gift deed also prove transfer of absolute title in the gifted property from the donor to the donee. What is retained is only the right to use the property during the lifetime of the donor which does not in any way affect the transfer of ownership in favour of the donee by the donor.
The High Court was in that view perfectly justified in refusing to interfere with the decree passed in favour of the donee - appeal dismissed.
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2014 (7) TMI 1283
Addition u/s 69A - unexplained source of cash deposits and deposits through cheques in the bank - peak credit addition - admission of the additional evidence by CIT-A in restricting addition - Held that:- AO should have no objection if the additional evidence was entertained by the ld. CIT(A), as the same was first sent to him for verification. If he was not satisfied with the correctness of the assessee’s claim in the light of such fresh evidence, he could have controverted the same.
AO chose to pick up deposit side of the bank accounts, totaled the same and made addition for the equal sum without giving benefit of the amounts withdrawn. In other words, certain amounts were withdrawn, then deposited, again withdrawn and re-deposited. When the position is such that there are certain debits and credits in the bank account, it is wholly impermissible to consider only the deposits in the bank account for the purposes of making addition by totaling ignoring the fact that there are withdrawals of the amount as well. In such a situation, it is a peak amount which is required to be added, which exactly has been done by the ld. CIT(A) in this case. The ld. DR could not point out any infirmity in the calculation of the peak amount, by which the ld. CIT(A) restricted the addition to ₹ 2.80 lac. We, therefore, uphold the impugned order. - Decided against revenue
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2014 (7) TMI 1282
Addition u/s. 36(1)(iii) - interest free advances and outstanding advances - commercial expediency - Held that:- We find that there was opening debit balance of ₹ 4413287/- in case of Jay Ess Exports. No doubt certain purchases have been made from this party but for making purchases fresh payments have been made to this party and at all relevant time, the debit balances has rather increased during the year. We asked the assessee whether any disallowance was made in the earlier year and he admitted that disallowance was made with reference to the debit balance in case of Jay Ess Exports which was not challenged by the assessee. Assessee could not point out why huge advances have to be given to this party at all times, therefore in our opinion, the commercial expediency can not be inferred in this case - Decided against assessee.
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2014 (7) TMI 1281
CENVAT Credit - whether the appellant correctly availed CENVAT credit on certain items including machinery, spares, components and accessories etc. used for construction of various Mill Expansion Plants, embedded on the earth and thereby falling under the category of immovable property which cannot be treated as excisable goods?
Held that:- The Hon’ble Karnataka High Court in the case of ICL Sugars Ltd. [2011 (4) TMI 1065 - KARNATAKA HIGH COURT] allowed the credit on storage tanks as immovable property embedded on earth - Tribunal in the appellant’s own case for earlier period, [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)], after considering the decision of Vandana Global Ltd. (supra), remanded the matter to the adjudicating authority.
Matter remanded to the adjudicating authority for fresh decision in accordance with law - appeal allowed by way of remand.
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2014 (7) TMI 1280
Disallowance of expenditure incurred by the assessee towards making of enrollment cards under Rashtriya Swasthya Bima Yojana (RSBY Scheme) - deferred revenue expenditure - assessee will get enduring benefit out of this investment for years together the AO allowed only 1/10th of the expenditure by amortising the expenses and disallowed the balance - Held that:- As against incurring of approximately ₹ 77/- towards cost of each smart card the assessee received service charge of ₹ 97/- per smart card from the insurer. Further, the finding given by the Ld.CIT(A) that the issue of smart card per se is completely independent line of business for the assessee company from the main business of settling the beneficiaries claimed on behalf of the insurance companies under the RSBY scheme could not be controverted by the Ld. Departmental Representative.
Departmental Representative also could not controvert the finding given by the CIT(A) that the amount received during the year has been shown as income and the assessee has claimed the corresponding expenditure incurred on the printing and issue of smart cards. No infirmity in detailed reasoning given by the CIT(A). Merely because the amount appears to be huge cannot be a ground to disallow the same on the ground of enduring benefit to the assessee when the corresponding revenue earned has been considered as income of the impugned year. - Decided against revenue
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2014 (7) TMI 1279
Addition u/s 54F - investment in respect of residential property has been made by the assessee outside India - Held that:- We find that except in the case of Leena J. Shah vs. ACIT [2005 (11) TMI 386 - ITAT AHMEDABAD] the Tribunal has taken a consistent view that the words “in India” cannot be inserted in section 54F of the Act and as per plain reading of section 54F of the Act, the sale proceeds of capital asset shall be invested in residential house in India or outside India.
We, accordingly, following the judgment of the Hon'ble Apex Court in the case of CIT vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] hold that the view favourable to the assessee taken by various Benches of the Tribunal should be followed and accordingly following the same, we hold that the assessee is entitled for exemption under section 54F. We, therefore, do not find any infirmity in the order of the ld. CIT(A), who has rightly adjudicated the issue in the light of the ratio laid down by the Tribunal in a number of cases. Accordingly, the order of the ld. CIT(A) is confirmed and the appeal of the Revenue is dismissed.
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2014 (7) TMI 1278
Possession of immovable property - The Central Government, by its order under Section 269UD(1) of the Act, on 26.3.1997, purchased the entire premises, including the tenanted premises. - The petitioner seeks to retain the right to reside in the premises on account of her long standing association and attachment with the house, as well as her old age, and consequently desires a settlement with the Appropriate Authority, with payment of appropriate purchase value.
Held that:- The silence of the Act on modes of disposal of property that are pre-emptively purchased under Chapter XX-C cannot be, by any stretch, presumed to limit or constrain the Government’s discretion in disposal of the property.
For the above reasons, the petitioner cannot claim any relief in these proceedings. At the same time, the Court is of the opinion that the CBDT or the appropriate department of the Central Government ought to consider the best manner to dispose of the property, preferably through public auction.
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2014 (7) TMI 1277
Eligible for grant of deduction u/s 10B - whether the unit was actually in existence in the previous year relevant to AY and whether it started manufacture and process of herbal extracts? - Held that:- AO erred in considering only manufacturing expenses for the purpose of arriving at ratio of outsourcing by way of job work of manufacturing activity. This is illogical. CIT(A), in our view, has correctly considered raw material cost, cost of chemicals, packing materials, fuel and power manufacturing expenses as well as manufacturing establishment expenses as total cost of manufacturing and the amount paid towards job works as a percentage of this expenditure and thereafter arriving at 21.27% as the percentage of job work that was out sourced from the total manufacturing cost. This demonstrates that the conclusion of the AO that major portion of manufacturing activity is not conducted in the assessee premises, is factually incorrect. In fact Laila Impex is also an EOU. Thus, we uphold these findings of the first appellate authority and dismiss the grounds raised in this regard. Appeal of the revenue is dismissed.
In the issue of directions of the CIT(A) to the AO to compute the profit of 21.27% of the turnover, as the same is attributable to the outsourcing of manufacture through job works and, then to exclude such profits from the profits eligible for deduction u/s 10B, we hold that the same is contrary to law. No such exclusion is contemplated in the Act. We are supported by the propositions laid down by the Mumbai Bench of Tribunal in the case of Gebbs Infotech Ltd. (2010 (10) TMI 1083 - ITAT MUMBAI). Thus uphold the directions of the learned CIT(A) as in this case also, what was outsourced was a part of the job of manufacturing i.e. step 1 out of the 6 steps or stages of manufacturing activity.
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2014 (7) TMI 1276
Disallowance u/s 40(a)(ia) - expenditure on provision for commission and transportation on which the TDS was made in subsequent previous year - TDS paid on or before the due date of filing of return u/s. 139(1) - Held that:- The first proviso to 40(a)(ia) is applicable when the payment is made before the due date specified u/s 139(1) - here all payments of TDS have been made after 31-03-2009, but the TDS has been deposited before the due date specified in section 139(1) - since TDS has been made after 31-03-2009, we are of the view that the finding of the learned Commissioner of Income-tax (Appeals) on this issue is erroneous and consequently, the same stands reversed and that of the AO restored - thus this appeal of revenue stands allowed.
Disallowance u/s 40(a)(ia) on account of expenditure on interest on which no TDS was deducted - Held that:- Form No. 15G/H has not been produced by the assessee before the learned Commissioner of Income-tax (Appeals) nor even before us - hence the appeal of revenue stand allowed.
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2014 (7) TMI 1275
Deduction u/s 10B - Exclude the freight charges both from Export turnover and Total Turnover, though such an adjustment to the total turnover - Held that:- It appears, the learned Tribunal has followed the decision of the Special Bench in the case of Saksoft Ltd. [2016 (10) TMI 539 - ITAT CHENNAI] on identical issue and the issue was decided in favour of the assessee. It does not appear that the aforesaid decision of the learned Tribunal has been reversed or questioned before any forum. Hence, we think that the learned Tribunal has correctly applied the law following the rule of consistency.
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2014 (7) TMI 1274
The Supreme Court of India ordered the case to be listed again on 12.08.2014. The petitioner, appearing in person, noted the next hearing date, so no formal notice is needed.
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9911796707
