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Showing 141 to 160 of 644 Records
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2005 (1) TMI 613 - ITAT BANGALORE
Charitable or religious trust ... ... ... ... ..... tated that the said land was purchased for setting up an agricultural college-cum-research centre and at times it was also stated that it was purchased to start a vedic school or to provide medical facilities in the neighbourhood by setting up a dispensary, etc. 7. Having regard to the totality of circumstances, I find that there is no violation of either of the provisions of sections 13(2)(a) and 13(2)(g) for denial of exemption under sections 11 and 12 of the Act. The books of account show that it is the property of the trust and moreover the entire proceeds are duly accounted for by the trust and attendant circumstances do not show that the subsequent sale is also for an inadequate consideration. I, therefore, do not approve the action of the Assessing Officer in denying the exemption under sections 11 and 12 of the Act and also subjecting the assessee to tax at maximum marginal rate. The Assessing Officer is directed accordingly. 8. In the result, the appeals are allowed.
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2005 (1) TMI 612 - CESTAT, NEW DELHI
Interest and penalty - Valuation ... ... ... ... ..... ee merit in the contention that the interest and penalty is not sustainable for the reason that they were under the bona fide that tooling cost was not required to be included in the assessable value of their products and during the period in dispute there were conflicting judicial decisions and it was only in March 2000 that the Larger Bench of the tribunal held in the case of Mutual Industries Ltd. v. Collector of Central Excise, Mumbai - 2000 (117) E.L.T. 578 held that proportionate cost of moulds supplied free by customers and used in the manufacture of finished goods was required to be included in the assessable value of the goods manufactured by the appellants. We also note that in similar circumstances in the case of Bright Brothers Ltd. v. CCE, Mumbai II - 2004 (61) R.L.T. 679, the Tribunal accepted the plea of bona fide belief and set aside the interest and penalties. In the result, appeal No. E/4450/04 is partly allowed while appeal No. E/4451/04 is allowed in toto.
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2005 (1) TMI 611 - CESTAT, NEW DELHI
Ice cream and dessert mix cleared in liquid form – Classification of ... ... ... ... ..... f the Revenue is that this is not an ice cream, therefore, it cannot be classifiable under Heading 2105 of the Tariff. 5. emsp The contention of the respondent is that they are clearing this liquid in bulk quantity and that too without any brand, therefore, in alternative they are claiming the classification under Heading No. 2108.99 of the Central Excise Tariff. 6. emsp In this case the respondent are clearing ice cream and dessert mix in liquid form, which is further used in the manufacture of ice cream and softy. These facts are not disputed by the Revenue. The Heading No. 2105 of Central Excise Tariff cover ice cream and other edible ice. Whereas Heading No. 21.08 of the Tariff include edible preparations not elsewhere specified. As liquid mixture which is cleared by the appellant is used in the manufacture of ice cream. Therefore, we find no infirmity in the impugned order. The appeal filed by the Revenue is dismissed. (Dictated and pronounced in open Court on 27-1-2005)
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2005 (1) TMI 610 - ITAT DELHI
Deduction of tax at source - Time Limitation for recovery of tax dues u/s 201(1) and 201(1A) - Reasonableness of delay in passing orders - Nature of interest - HELD THAT:- We are of the view that for the following reasons the plea of the assessee that the orders in his case under sections 201(1) and 201(1A) should be declared as void on account of having become barred by limitation should not be accepted :—
(i)There is no doubt that the Hon’ble High Court have in the case of CIT v. Blackwood Hodge (India) (P.) Ltd. [1969 (2) TMI 59 - CALCUTTA HIGH COURT] and in the case of British Airways v. CIT [1989 (9) TMI 6 - CALCUTTA HIGH COURT] clearly held that the argument of the assessee that the amount of tax deducted at source had become irrecoverable being barred by limitation cannot be sustained. In the various decisions relied upon by the learned counsel of the assessee, this proposition is not in dispute. However, on the facts of the cases before them, the Tribunal have held that the orders under sections 201(1) and 201(1A) having been made by the Assessing Officer after the expiry of 4 years from the end of the financial year, should be treated as having been made beyond a reasonable period and, therefore, for that reason should also be treated as barred by limitation. In this view of the matter, it can by no means be held that there is an infallible time-limit of four years from the end of the financial year in operation in respect of every order under sections 201(1) and 201(1A) made or to be made by the Assessing Officer.
(ii)Factual background in the appeals before us is vastly different and distinguishable from the facts of the cases relied upon by the assessee. We see considerable force in the contention of the learned DR that there was no unreasonable delay on the part of the Assessing Officer. The assessee made certain payments to its employees on different counts but did not deduct tax at source. This fact was not highlighted by the assessee in certificate of tax deduction at source issued in Form No. 16. The Assessing Officer was thus left unaware of the facts relating to non-deduction of tax at source by the assessee. After the Assessing Officer became aware of the facts of the case, he acted promptly. The Assessing Officer cannot be defaulted for not having acted upon the facts that were not placed before him and which he could not have enquired into or obtained in the ordinary course.
Any failure or lapse on the part of the Assessing Officer has not even been alleged, left alone established. In these circumstances it is difficult to hold the impugned orders as barred by limitation. Reference in this respect is also invited to the order of the Tribunal in Lakshmi Gnaneswara Enterprises & Financiers v. ITO [1999 (2) TMI 105 - ITAT HYDERABAD-B]).
(iii)There is no time-limit laid down under the provisions of Income-tax Act for orders under sections 201(1) and 201(1A). The Tribunal does not enjoy the same powers as Hon’ble Supreme Court under Article 142 of the Constitution of India to pass such orders as deemed fit for doing complete justice in the matter before them. That being so, the extreme view as to the illegality of an order passed by the authority in the absence of statutory support should be taken only in rare cases where the authority acted in complete disregard of reasonability. We do not find any such circumstance existing in these appeals so as to warrant the action of annulment of the orders under sections 201(1) and 201(1A) made by the Assessing Officer.
Thus, we reject the assessee’s plea as to the orders being illegal on account of having been made beyond the time-limit in the eyes of law.
During the course of hearing before us both the parties agreed that the issues involved and their respective arguments thereupon are the same as presented before us during the course of elaborate hearing in relation to assessee’s appeals in TDS Appeal Nos. 50 and 51 (Del)/95 for financial year 1992-93. Accordingly our findings on various aspects of the matter and issues are the same. Following that order we hold that all the orders u/s 201(1) made by the Assessing Officer should be cancelled. At the same time, levy of interest u/s 201(1A) is upheld for each assessment year subject to re-computation in accordance with our directions contained in the order in the case of the assessee in TDS Appeal Nos. 50 and 51 (Del)/95.
The Tribunal concluded that the orders u/s 201(1) should be cancelled, while the levy of interest u/s 201(1A) was upheld subject to re-computation. The assessee's appeals regarding orders u/s 201(1) were allowed, and the revenue's appeals were dismissed.
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2005 (1) TMI 609 - ITAT BANGALORE
Deduction of tax at source - Payments made in respect of rent and other services - Assessee in default - Penalty levied u/s 271C - HELD THAT:- In the present case, the assessee itself has called the payment as ‘rent’. Therefore, looking to the nature of payment, we are of the considered view that the payment made by the assessee to M/s. Wipro Ltd. was ‘rent’. Hence, section 194-I was to be applied. It is a fact that the assessee failed to deduct tax as required u/s 194(1) of the Act. Therefore, interest u/s 201(1A) is leviable for such default. However, in this case, M/s. Wipro Ltd. [2002 (8) TMI 258 - ITAT BANGALORE] has already paid the tax which was otherwise to be deducted by the assessee. Therefore, according to the assessee, there was no default.
In our opinion, since the amount of tax has already been paid by the recipient, i.e., M/s. Wipro Ltd., the ITO (TDS) was justified in holding that there was no tax demand against the assessee. Although the assessee is to be treated as defaulter. However, since the assessee is a defaulter within the meaning of section 201 of the Act, hence, levy of interest was justified u/s 201(1A) of the Act, for the period of default. Before us, no details are available as to when the payment of tax was made by Wipro Ltd. Therefore, we uphold the order of levy of interest u/s 201(1A) of the Act. However, the matter is sent back to the Assessing Officer for fresh computation of the amount of interest. The interest has to be levied up to the period of non-payment of tax. No interest is to be levied from the date when tax was paid by Wipro Ltd.
Payment of shared services and support services - Looking to the nature of expenditure, we are of the view that the payments made by the assessee do not come within the purview of section 194J of the Act because the assessee did not make any payment as fees for professional and technical services. Therefore, in our opinion, the assessee cannot be held as defaulter in respect of the payments made for support services and shared services. Accordingly, we direct the ITO (TDS) not to levy interest u/s 201(1A) in respect of these payments for the assessment year 1998-99.
Penalty under section 271C - Looking to the facts of the case, we find that the amount of tax was already paid by Wipro Ltd. Therefore, the ITO (TDS) raised nil demand against the assessee. That being the position, we are of the view that there was no reason for levy of penalty for the default. Accordingly, we direct the Assessing Officer to delete the penalties.
In the result, Appeals are partly allowed and ITA are allowed.
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2005 (1) TMI 608 - ITAT CHENNAI
Deductions - Royalty, etc., from certain foreign companies ... ... ... ... ..... case of Malabar Industrial Co. Ltd. v. CIT 2000 243 ITR 83. With regard to the merits, we have already discussed this issue in detail in the above-noted appeal and have decided the same in favour of the assessee. In these circumstances, we quash the order passed by the CIT under section 263 of the Act. Thus, both the appeals filed by the assessee are allowed. 12. I.T.A. Nos. 448 and 449/Mds./98 - After the order under section 263 was passed, the Assessing Officer passed fresh orders and deduction was allowed to the assessee under section 80HHE and the deduction allowed under section 80-O was withdrawn. The learned CIT(Appeals) reversed the situation and directed the Assessing Officer to allow deduction under section 80-O. We have already adjudicated this issue in detail in the above-noted appeal and following that decision, these two appeals of the revenue are dismissed. 13. In the result, the departmental appeals are dismissed while the assessee rsquo s appeals are allowed.
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2005 (1) TMI 607 - ITAT MUMBAI
Mutual concern ... ... ... ... ..... se rsquo is a structure of permanent character which is structurally severable from other tenements and it includes a house used for business. No authority has been brought to our notice to suggest that the Notifications issued by the Government of Maharashtra were applicable only to residential flats and not to the tenements in a premises co-operative society. In our view, the term lsquo housing society rsquo as used in the said Notifications is wide enough to include a lsquo premises society rsquo also. Keeping in view the spirit and philosophy of the co-operative movement and law in this country as well as the underlying object which the aforesaid Notifications issued by the Government of Maharashtra seek to achieve, we hold that the term lsquo housing society rsquo in the said Notifications is wide enough to include lsquo premises society rsquo also. The submissions of the assessee in this behalf are, therefore, rejected. 14. The appeal filed by the assessee is dismissed.
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2005 (1) TMI 606 - ITAT, MUMBAI
Business income ... ... ... ... ..... priate action to modify the assessments of other years also to the extent it is necessary to carry out this order. Ground No. 2 is treated as allowed for statistical purposes. 24. Apropos Ground No. 3, it has been held in a catena of cases that levy of interest under section 234B is mandatory, automatic and follows by operation of law CIT v. Anjum M.H. Ghaswala 2001 252 ITR 1 (SC). Levy of interest is consequential. We have already set aside the orders of the Departmental authorities and restored the matter to the file of the Assessing Officer for making a fresh assessment in terms of the directions given above. Ground No. 3 does not therefore survive. The Assessing Officer is directed to levy interest on the income that may be assessed as a result of the assessment order to be framed in pursuance of this order. Ground No. 3 is treated as allowed for statistical purposes. 25. The appeal filed by the assessee is treated as partly allowed in terms of the directions given above.
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2005 (1) TMI 605 - ITAT MUMBAI
Jurisdiction to tax income in the second round of appeal - On remand - Disallowance of repair expenses - ownership of assets - hire charges and late fee charges in respect of trucks - additional ground - Addition of license fee - HELD THAT:- There is no denying fact that the power of the CIT(A) in the course of its appellate jurisdiction are co-terminous with the powers of the Assessing Officer, and the CIT(A) can do what the Assessing Officer could does but has not done, this applies in a reverse way as well. In other words, the CIT(A) cannot do what the Assessing Officer could not have done. He does not get the jurisdiction to do certain act for which the Assessing Officer did not have the jurisdiction.
In the present case, in second round the jurisdiction of the Assessing Officer was limited to the issue of ownership of assets and nothing else. In the present case nothing prevented the department to initiate revision proceeding u/s 263 or to initiate action u/s 147 if it was of the view that notional truck hire income was also liable to be taxed, which had not been taxed by the Assessing Officer in the original assessment. Thus, we hold that the CIT(A) had no jurisdiction to give direction to the Assessing Officer to tax the hire charges income and late fee income in the hands of the assessee. We therefore, hold that on merit no addition is called for on account of such hire charges income. As a result, the first ground taken by the assessee is allowed.
Allowed Deprecation on leased truck and prove the ownership of truck:- The lessee stopped paying the rent and they did not return the trucks as well. Due to this reason the assessee did not offer any lease rental income in its return. However, since the assets continued to remain employed in leasing business, the assessee continued to claim depreciation on the said leased trucks amounting to Rs. 14,48,353.
The learned Departmental Representative read over the relevant portion of the order of the Assessing Officer to support his argument. At this stage, attention of the learned Departmental Representative was drawn by the Bench to the apparent contradiction in the stand taken by the department, more specifically by the Assessing Officer and by the CIT(A). While the Assessing Officer denied the claim of depreciation on the reasoning that there were no trucks in existence and there were no users of the trucks during the year, the CIT(A), in fact enhanced the assessment by seeking to tax the hire income supposed to have been accrued to the assessee due to user of such trucks. On our query how to reconcile the two different stands taken by the department, the learned Departmental Representative submitted that he sticks to the decision of the Assessing Officer.
The assessee has submitted the lease agreement before the Assessing Officer and has submitted registration certificate before CIT(A) in the name of the assessee to prove that its ownership over the trucks. Unfortunately, the learned CIT(A) after accepting these evidence and recording this fact, did not conclude the matter further. Under these circumstances, we are of the view that the issue should go back to the CIT(A) to decide the ground taken by the assessee. Accordingly, we set aside the matter back to the file of the CIT(A) to adjudicate the same.
Repairs damage - Whether any liability/loss could said to have arisen in the previous year by the assessee on account of repairs/damage keeping in view the litigation between the assessee and M/s. ITC - We must first make it clear that the disallowance of the claim by the Assessing Officer and CIT(A) is not on the basis that the liability was of capital nature. Thus, so far as the nature of expenditure is concerned, the liability was on the revenue field.
On perusal of the suit filed by M/s. ITC against the assessee, it becomes clear that not only ITC had flatly denied having anything to do with the liability for the repairs, but the assessee itself had agreed to carry out the repairs. This is clear from the fact as reflected in the suit, more specifically. This fact is duly supported by the actual correspondences exchanged between the assessee and M/s. ITC. We have also perused such correspondences, which are annexed as various Exhibits in the said plaints. What emerges on perusal of all these record is that it was purely to safeguard its own business interest that the assessee had volunteered to undertake the work of repairs so as to avoid any delay and loss of profit.
In any case, the legal position of allowability of a liability, on its accrual, even if not paid or extactly quantified, during the year, is too well settled to necessitate citing plethora of judgments which have been relied and mentioned in the legal note submitted by the learned counsel of the assessee. The assessee has also referred to numerous judgments and various aspects especially the judgment of the Hon’ble Supreme Court in the case of Calcutta Co. Ltd. v. CIT [1959 (5) TMI 3 - SUPREME COURT], is worth mentioning.
Thus, expenditure for repairs is clearly allowable. Accordingly, the Assessing Officer is directed to allow the same. We may make it clear that if at all, subsequently, the liability of the assessee is found to be less than claimed and allowed in this year, the department will be free to bring to tax the difference in accordance with the law. In this way, interest of the revenue is adequately safeguarded.
Addition on account of licence fee - Assessing Officer is not competent to raise a new issue while giving effect to a specific direction given by the CIT(A). We are of the opinion that this issue requires examination on merit also. Therefore, issue was set aside and restored back to the file of the CIT(A) to decide afresh.
In the result, for statistical purposes the appeal is treated as allowed.
-
2005 (1) TMI 604 - ITAT MUMBAI
Capital gains ... ... ... ... ..... ty was not a sine qua non. It depends upon the exercise of the option by the debenture holders. Nomenclature is not decisive. This was the first and foremost submission of the learned Counsel. It applies with equal force to premium also. Admittedly 10 premium was payable on redemption of debenture. This was nothing but interest. The amount was fully secured in the form of loan mortgage of all assets of the Company. Trustees were appointed to safeguard the rights of the debenture holders. In the present case, we find that the assessee was holding debentures. He sold the debentures before the date fixed for conversion. As such in our opinion, the case of the assessee falls within the ambit of the third proviso to section 48 of the Act. We have perused the impugned order. In our opinion the CIT(A) took a correct view in the matter and his order calls for no interference on this count. Accordingly we uphold the same. 10. In the result, the appeal of the assessee stands dismissed.
-
2005 (1) TMI 603 - ITAT MUMBAI
Deduction of tax at source ... ... ... ... ..... ll expenses including airfare, boarding, lodging etc. were directly incurred by Tata Iron and Steel Co., therefore, we are of the considered opinion that in the interest of justice, the matter should go back to the Assessing Officer to examine this assertion of the assessee that the expenses were directly incurred by the assessee-company and not reimbursed to the foreign parties or their technicians and accordingly we set aside the order of learned CIT(A) and restore the matter to the file of the Assessing Officer to decide the issue afresh after examining the contention of the assessee regarding direct incurring of expenditure and then pass necessary order as per law in the light of the judgment in the case of Tata Engg. and Locomotive Co. Ltd. (supra) and Tribunal order in the case of Tata Iron and Steel Co. (supra) after providing adequate opportunity of being heard to the assessee. 8. In the result, all these appeals of the assessee stand allowed for statistical purposes.
-
2005 (1) TMI 602 - ITAT MUMBAI
... ...
... ... ..... to ignore the contents of affidavit without adopting due process of law. We also find that in order to qualify for relief under section 80-I(2)(iv) of the Act one of the condition is that the undertaking must have employed 10 or more workers in manufacturing process carried on with the aid of power. The employment of 10 or more workers for substantial part of the year is sufficient compliance to the requirement. The undertaking had employed more than 10 workers for 9 months of the year as in CIT v. Taluja Enterprises (P.) Ltd. 2001 250 ITR 675 (Delhi). Similar view has also been taken by Hon rsquo ble Bombay High Court in CIT v. Harit Synthetic Fabrics (P.) Ltd. 1986 162 ITR 6402 following the case in Taluja Enterprises (P.) Ltd. (supra). In view of above discussion, we are not inclined to concur with the finding of authorities below. Same are set aside and the Assessing Officer is directed to grant relief under section 80-I of the Act. 5. As a result, the appeal is allowed.
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2005 (1) TMI 601 - ITAT DELHI
... ...
... ... ..... ) the Revenue is in appeal before us. The Ld. Departmental Representative relied on the order of the Assessing Officer. 25. We are of the view that the order of the CIT(A) in this regard does not call for any interference. Admittedly, A-One Tours and Travels was an independent entity. It is not the case of Assessing Officer that the lease between the assessee and A-One Tours and Travels was a devise to avoid tax. As a tenant with a right to sub-lease, the A-One Tours and Travels was at liberty to let out the property at such sum as it desired. The assessee as landlord was however bound by the terms of lease and was entitled to recover only a sum of Rs. 3,000 per month as per the lease agreement. There is no basis for the Assessing Officer to have applied any fiction and in coming to the conclusion that the monthly rent received by the assessee was Rs. 1,60,000. Consequently these grounds of appeal are dismissed. 26. In the result the appeals by the Revenue are partly allowed.
-
2005 (1) TMI 600 - ITAT DELHI
Challenged the Revision order passed u/s 263 - Of orders prejudicial to interests of revenue - bad debts and deviation from provisions of section 145A - HELD THAT:- In our view it has been rightly pointed out by the learned counsel for the assessee that in this case the accounts of the assessee had been audited and the return of income was backed by an elaborate Tax Audit Report on various points relating to the assessment. The assessee has been assessed year after year and the past history of the case contained nothing to provoke intensive investigation into the facts of the case. The learned counsel has placed assessment orders for various assessment years prior to the completion of the assessment order in question by the Assessing Officer and compared against them, there does not appear to be any prima facie case that the learned Assessing Officer was oblivious of his responsibilities while completing assessment u/s 143(3), as alleged by the learned CIT. The learned CIT has stated that the assessment has been completed in routine manner, but he has not pointed out that any extraordinary circumstances existed so as to warrant assessment proceedings in an extraordinary manner in this case.
As to the examination of the facts and bringing material on record, it is quite possible that the learned CIT would have liked it in more depth and detail. From that it does not follow that the learned Assessing Officer did not perform his task properly. While it is true that on the particular facts and the circumstances of a case want of enquiry and examination of facts on the part of the Assessing Officer in itself may render the assessment order erroneous and prejudicial to the interest of revenue, but it is not that if an assessment order suffers from some deficiency from the perfectionist point of view that order is erroneous and prejudicial to the interest of revenue. We, therefore, do not see much substance in various general observations of the learned CIT in relation to the Assessing Officer carrying out enquiring in a routine or perfunctory manner.
In the case before us, we find that the assessment order has been made by the Assessing Officer in accordance with the past history of the case. For the main objection raised by the learned CIT in relation to royalty allowed by the Assessing Officer no prima facie case has been made out that the view taken by the Assessing Officer is erroneous. We, therefore, hold that the impugned order u/s 263 is not legally sustainable. We quash the order u/s 263 and allow this appeal filed by the assessee.
-
2005 (1) TMI 599 - ITAT DELHI
Collection and recovery of tax ... ... ... ... ..... listed on 7-1-2005. The hurried action of Assessing Officer in recovering on 6-1-2005 indirectly shows that recovery was deliberately to frustrate the process of stay before the Tribunal. Therefore, considering the peculiar facts and circumstances of the case and the legal position stated above, we are of the view that Assessing Officer was highly improbable and erroneous in his approach in issuing the notice of attachment under section 226(3) and obtaining the demand draft from the bank. Accordingly, we grant stay against the aforesaid recovery for a period of six months from the date of application for grant of the stay or till the disposal of appeal, whichever is earlier and also direct the Assessing Officer not to encash the demand draft obtained by him from the bank. In case, it has been encashed, the Assessing Officer is directed to refund the entire amount immediately. The appeal would come for hearing on 5th April, 2005. 3. In the result, Stay Application is allowed.
-
2005 (1) TMI 598 - ITAT BANGALORE
Deemed assessee in default - Levy of interest - failure to deduct tax as required u/s 195 - Payments made to several USA based companies - public charitable trust - Providing end to end communication facility to various companies - HELD THAT:- The assessee cannot be considered as a public sector undertaking also as the public sector undertakings are set up for commercial consideration and not for charitable objectives, the beneficiaries of which are public at large. The status of assessee as charitable trust itself goes against the principle to hold it as a public sector undertaking or a Government Department as Government of India is not beneficially interested in the assessee trust. It is only monitoring the activities of the assessee trust so that the major objectives of Government to grant benefits to units registered with STPI are properly monitored. We accordingly hold that the assessee is not a Government Department or a public sector undertaking so as to obtain necessary approval from the Committee on Disputes.
In view of the submissions by both the counsels and in the absence of any contrary decisions, respectfully following the order of ITAT, in the case of Wipro Ltd. v. ITO [2003 (4) TMI 223 - ITAT BANGALORE-C] to which one of us (AM) is a signatory, we hold that the assessee was not required to deduct tax u/s 195 in respect of payments made to various USA based companies mentioned above. Accordingly, we hold that the assessee is not required to be treated as an assessee in default u/s 201(1) of the Act. Since the assessee is not treated as an assessee in default u/s 201(1) of the Act, no interest is also chargeable u/s 201(1A) of the Act.
In the result, all the appeals are allowed.
-
2005 (1) TMI 597 - ITAT DELHI
Capital gains ... ... ... ... ..... DLF Universal Pvt. Ltd. However, the parties arrived at a compromise under which original terms of deal were modified and the assessee has been given residential plot 1850 sq. yard/acre instead of 1600 sq. yard per acre and have been paid an additional amount of Rs. 1 crore 75 lakhs in addition to the previous amount already paid to the assessee. It seems that these facts has not been taken into consideration by the authorities below while deciding the main issue. In the facts and circumstances of the case, we are of the view that in the interest of justice, the matter needs so be set aside and restore to the file of the Assessing Officer who may examine the matter afresh in accordance with law keeping in view both the agreements, the original agreement dated 8-2-1993 and the settlement made in 1997. Needless to mention that rsquo s the assessee may be given reasonable opportunity of being heard. 7. In the result, the appeal of the revenue is allowed for statistical purposes.
-
2005 (1) TMI 596 - ITAT MUMBAI
Double taxation relief ... ... ... ... ..... and SRK Consulting Engineers and Scientists v. CIT 1998 230 ITR 206 (AAR). However, in both the cases, there is no mention of the DTAA between India and the country concerned. And therefore, the ratio of these decisions does not help the Assessing Officer in bringing to tax the said amount as lsquo fees for included services rsquo as defined in article 12 of the DTAA with USA. At any rate, it is well-settled that the provisions of DTAA override the provisions of the Income-tax Act and therefore the present case is governed by the provisions of DTAA with USA and not by the provisions of the Income-tax Act, 1961. On these facts, I hold that a sum of Rs. 1,72,92,500 is not liable to tax as income in the hands of the appellant-firm and the same is deleted. For the reasons already stated by us, we are in full agreement with the finding of the ld. CIT(A). Accordingly, his orders for both the assessment years are confirmed. 9. In the result, the departmental appeals stand dismissed.
-
2005 (1) TMI 595 - ITAT MUMBAI
Capital gains - Cost of acquisition - taxability of receipts on account of sale of additional floor space index - ‘transferable development rights’ (TDRs) under the ‘Development Control Regulations for Greater Mumbai 1991’- HELD THAT:- The CIT(A)’s observations that this right cannot be said to be without any cost of acquisition because the TDRs have been received on surrender of reserved plot to the Government is ex facie incorrect inasmuch as what we are really concerned with is the right to receive the TDR on the plot owned by the assessee, and not with the right to receive the TDR from the Government. The person getting TDRs from the Government has to surrender the reserved plot but the person on whose plot such TDRs can be used, as is the case we are in seisin of, does not do anything more than owning the ‘receiving plot’. The costs incurred by a third party for acquiring the TDR has nothing to do with the right to availing the said TDR on assessee’s plot. Similarly, the costs of plot and costs of construction are also not the cost of acquisition of these rights. What the assessee has transferred is not the plot or the building, but a right parting with which does not result in parting with land or building. The costs of obtaining BMC approval for the building plan can also not be said to be the costs of acquisition of these rights as these rights do not arise by the virtue of getting these approvals but by the virtue of a legal right independent thereof.
The law is trite, and there is no dispute on the said position, that when an asset has no cost of acquisition, the gains on sale or transfer of same cannot be brought to tax. The law laid down by the Hon’ble Supreme Court in the case of CIT v. B.C. Srinivasa Setty [1981 (2) TMI 1 - SUPREME COURT] clearly holds so. Thus, we are of the considered view that the receipts on sale of assignment of rights to receive TDRs are not liable to tax. The authorities below erred in law and on facts in holding to the contrary.
Thus, we direct the Assessing Officer to delete the addition in the hands of the assessee. The Assessing Officer, however, will consider reducing the cost of acquisition of the related plot and building by the said amount, as and when and in case the assessee sells the same, partly or fully, and the capital gains are required to be computed in respect of the same.
In the result, the appeal is allowed in the terms indicated above.
-
2005 (1) TMI 594 - ITAT CHENNAI
... ...
... ... ..... y not be necessary to go into the question of nexus between the deposit and the business of the assessee for the purpose of classification of interest receipt. As we have already discussed, the payment of interest was for the purpose of business and not for earning interest income. There was no nexus between the receipt of interest and payment of interest. The assessee might have borrowed the money for the purpose of export business. Therefore, the payment of interest on such borrowal may be deducted while computing the profit of the business. However, it cannot be deducted from the interest received. 11. In view of the above discussion, in our opinion, the lower authorities have rightly excluded 90 of the gross interest received by the assessee for the purpose of deduction under section 80HHC. We do not find any infirmity in the order of the first Appellate Authority. Accordingly, we confirm the same. 12. In the result, both the appeals filed by the assessee stand dismissed.
............
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