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Showing 141 to 160 of 876 Records
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2010 (2) TMI 1184 - ITAT AHMEDABAD
Bogus Capital gain - ingenuine transactions of shares - AO rejected the assessee’s claim for high price and mere filing of the contract notes could not be accepted as evidence of the genuineness of the transactions, thus assessee has failed to prove the identity of the purchaser - CIT(A) deleted addition - HELD THAT:- CIT(A) has called for the Remand Report and the remand report of the A.O. it was seen that CSE vide their letter had clearly confirmed that the shares of both the companies were listed with the exchange. We find that the genuineness of the transactions of purchase and sales of shares. In the remand report it was clearly mentioned that the transaction has been clearly confirmed by the brokers but also through separate letter issued by the brokers .
We find that the CIT(A) has called for the remand report and the inquiries were conducted to ascertain whether or not transactions even though they were conducted on-line it has been duly reported by exchange as required by the guidelines issued by the SEBI. The AO has furnished report wherein it has been mentioned that the brokers and the depository have confirmed the said share transactions. Therefore, we are of the view that the CIT(A) is justified in deleting the same and our interference is not required.
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2010 (2) TMI 1183 - BOMBAY HIGH COURT
Exemption u/s 11 - expenses incurred for the management of the hospital - capital expenditure - HELD THAT:- In the present case, the AO held that the assessee was not entitled to the benefit of Section 11 on the basis that the capital expenditure of ₹ 12.19 crores was not liable to be taken into account in reckoning as to whether income in excess of 85% had been applied for charitable objects. The Tribunal was justified in holding that the capital assets acquired during the course of the year were in furtherance of the charitable purpose for which the Trust has been constituted. Consequently, the amount of ₹ 12.19 crores towards capital assets is correctly regarded as expenditure incurred in furtherance of the charitable purposes of the Trust. Hence, the Tribunal has correctly come to the conclusion that the net profit of the Trust was not 16.95% as was the reasoning of the AO, but would be between 6 and 7%. The grant of exemption u/s 11 for the assessment year in question was in order. In the circumstances, there is no merit in the appeal which does not raise any substantial question of law. The appeal is dismissed.
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2010 (2) TMI 1182 - BOMBAY HIGH COURT
Notional rent under the deeming provisions of section 23(1)(a) - HELD THAT:- As the Tribunal has relied upon the judgment of this Court in J.K.Investors [2000 (6) TMI 9 - BOMBAY HIGH COURT] in coming to the conclusion that the value of a notional advantage like notional interest on deposit cannot form part of actual rent - no substantial question of law can be said to have arisen, particularly when the Tribunal has followed a judgment of this Court - no effort has been made to urge before this Court that the judgment is distinguishable for any reason.
Investments out of the interest free funds - HELD THAT:- Following the judgment of the Division Bench in CIT vs. Reliance Utilities and Power Ltd.,[2009 (1) TMI 4 - BOMBAY HIGH COURT], the Tribunal held that if the Assessee had funds available, both interest free and loaned, there would be a presumption that the investments were out of the interest free funds if the interest free funds were sufficient to meet the outlay on the investment. In the present case, having regard to the finding of fact that the assessee had sufficient interest free funds, no substantial question of law would arise.
Accrual of the income - fixed deposit - The case of the assessee that the interest on the fixed deposit would accrue only on the date of maturity has been accepted - HELD THAT:- Counsel appearing on behalf of the Revenue has not demonstrated to the Court any reasons as to why the principle laid down in E.D.Sassoon [1954 (5) TMI 2 - SUPREME COURT] by the Supreme Court would not be attracted. In the circumstances, no substantial question of law would arise. The appeal shall accordingly stand dismissed.
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2010 (2) TMI 1181 - ITAT VISAKHAPATNAM
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... ... ..... h the view taken in other years, we reverse the order of Ld CIT(A) relating to the estimation of difference gross profit of ₹ 3,28,865/-. However, we notice from the record that the assessee has provided for 680 MT of oil at the rate of USD 224400. The exchange rate was taken at ₹ 46/- per USD. However, from the invoice No.WINPL/KGR/012 dated 18-07-2003 which is placed at page no.34 of the Paper book compiled by the assessee, we notice that the cost of purchase is USD 210800/- only as against the provision of USD224400/- made by the assessee. Hence the provision made by the assessee is in excess by USD 13600/- which is equivalent to ₹ 6,25,600/-. The AO is directed to add the same in the place of ₹ 1,03,22,400/-. 5. In the result, both the appeals of the assessee and the appeal of the Revenue for the assessment year 2000-01 are dismissed. The appeal of the Revenue for the assessment year 2004-05 is partly allowed. Pronounced accordingly on 25-02-2010.
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2010 (2) TMI 1180 - GUJARAT HIGH COURT
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... ... ..... the fact that the parties from whom the appellant had purchased chemicals and had sold ultimately to ACL were not covered by Section 40A(2) (b) of the Act. The learned CIT(A) has therefore deleted the additions made by the Assessing Officer on account of diversion of the profit. Even the Tribunal has also considered this aspect at great length and arrived at the conclusion that in the facts of the case, and on the basis of the material on record, it does not give rise to a presumption that the goods were sold to ACL at lesser price for diverting the profits that may be earned by the assessee. The Tribunal has therefore confirmed the order passed by the CIT(A) and dismissed the four Appeals. 10.Since both the appellate authorities have recorded their concurrent findings of fact, and after analyzing all the facts and evidence on record, we are of the view that no substantial question of law arises out of the order of the Tribunal. We therefore dismiss all the four Tax Appeals.
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2010 (2) TMI 1179 - ITAT MUMBAI
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... ... ..... the turnover charges were not payable under the law enacted by the Central Government. Therefore, the turnover charges paid by the assessee to the Board fell within the purview of section 43B.” The above decision has also been followed in ITO vs S S J Finance and Securities Pvt Ltd in ITA No.5981 and 5982/Mum/2008 for AY 2005-06 order dated 2nd December, 2009 wherein, one of us (JM) was a party. In the absence of any distinguishing feature brought on record by the revenue, we respectfully following the consistent view of the Tribunal hold that the payment of interest made by the assessee amounting to ₹ 5,85,194/- to SEBI is allowable in the year under consideration and accordingly, we are inclined to uphold the finding of CIT (A) in deleting the disallowance made by the Assessing Officer. Grounds taken by the revenue are, therefore, rejected. 12. In the result, both the appeals stand dismissed. Pronounced in the Open Court today on the 12th day of February 2010.
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2010 (2) TMI 1178 - ITAT MUMBAI
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... ... ..... t to Pune. Whatever the expenses were incurred on account of plant & machinery they were capitalized. However, various other expenses mentioned above have been claimed as revenue in nature. Management of the company is the same and there is unity of control; same funds are used for expansion of business; therefore, it cannot be said that expenses incurred by the assessee were capital in nature. More importantly, it is seen that the unit is already in existence as in the immediately preceding year as well as in the year under consideration there are huge sales of the products manufactured by the assessee. 7 In view of these facts and circumstances, we hold that both the lower authorities were not justified in rejecting the claim of the assessee; accordingly, we allow this ground and direct the AO to accept the expenses claimed as revenue in nature. We order accordingly. 8 In the result, the appeal filed by the assessee is allowed in part. Order pronounced on 11th Feb 2010
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2010 (2) TMI 1177 - CESTAT AHMEDABAD
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... ... ..... present before amendment cannot be held to be leviable to duty, even if the stock is cleared after the date of amendment. In this case the Tribunal has relied on the Apex Court decision in the case of Commissioner vs. Vazir Sultan Tobacco Co. Limited - 1996 (83) ELT 3 (Supreme Court), where in it was held that clearance of goods manufactured prior to levy of duty not being the excisable goods, cannot be called upon to pay duty at the time of clearances of the goods, after levy of duty. 7. We consider that the reliance placed by learned advocate is squarely applicable in the instant case and we hold that stock of bal bearing as on 31.5.2006 i.e. prior to applicability of Notification No.11/2006, are not leviable to any excise duty. Accordingly, the impugned order is set aside. Duty, interest and penalties imposed on all the appellants DBL and Shri Rasik Pandya are set aside and appeals are allowed. Appeal filed by the Revenue is rejected. Dictated and pronounced in the Court.
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2010 (2) TMI 1176 - BOMBAY HIGH COURT
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... ... ..... the ground that production of marble slabs are not a manufacturing activity ? " 2. The principle laid down in the judgment of the Supreme Court in Income Tax /Officer V/s. Arihant Tiles & Marbles P. Ltd. (2010) 320 I.T.R. 79 (S.C.) will be applicable to the facts of the present case. The decision of the Supreme Court will cover the issue against the Revenue. The appeal is accordingly disposed of. The substantial question of law is accordingly answered in terms of the decision of the Supreme Court. There shall be no order as to costs.
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2010 (2) TMI 1175 - RAJASTHAN HIGH COURT
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... ... ..... tters are to be remitted to Division Bench for deciding the same on merits, in accordance with law. We accordingly do so.” 9. In view of the above referred judgment of Full Bench of this Court in Ashok Sharma’s case (supra), which is based on three judgments of the Hon’ble Supreme Court, we are of the view that we are required to answer that question of law which is being formulated and referred to Larger Bench for answer and nothing beyond that. 10. The order dated 20-10-2008 passed by Division Bench, as quoted above, clearly shows that neither any specific point of reference has been made nor any question of law has been formulated to be answered by Larger Bench. In these circumstances, we refrain ourselves to answer the reference. Ordered accordingly. The matter is remitted to the Division Bench for deciding the same on merits, in accordance with law. 11. The parties are directed to appear before the Division Bench on 13-4-2010, as prayed.
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2010 (2) TMI 1174 - ITAT MUMBAI
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... ... ..... reasons 1) We find that range of rates is NASSCOM report is specific to “Customer Care BPO and this is segment in which the assessee falls. Therefore the rate given in NASSCOM is specific and not general. 2) The billing rate per hour of the assessee US 13.09 per hour is in line with the man hour prevalent in the industry as can be verified from page 52 of the Paper book submitted by the assessee. 3) The TPO has selected data of companies which function in entirely different segment which are uncomparable with the assessee’s case and hence the same cannot be adopted. 4. The AM of the margin given by the TPO at 6.28 is incorrect and cannot be relied upon. 14. Hence we are of the opinion that the Comparable Uncontrolled Method (CUP) followed by the assessee company is the most appropriate method in this case and we dismiss the Revenue’s appeal. 15. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on this 18th day of February, 2010.
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2010 (2) TMI 1173 - ITAT AHMEDABAD
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... ... ..... lacs being difference in value of stock and the addition on account of profit has also been sustained, no separate addition is now required to be made. Therefore, addition was rightly deleted by the Learned CIT(Appeals). 21. Next ground of appeal is against deletion of disallowance of ₹ 5,08,942/- on account of interest on money advanced to sisterconcerns. 22. After considering rival submissions, we find that as per the finding of Learned CIT(Appeals), the assessee has sufficient interest-free fund of over ₹ 196.17 lacs and the interest-free advances were given out of such funds. Therefore, in absence of any nexus between borrower of loans and giving interest-free advances, no disallowance on account of proportionate interest is called for. We, therefore, uphold the deletion of disallowance of interest. 23. In the result, the appeal of the assessee is partly allowed and that of Revenue is dismissed. Order signed, dated and pronounced in the Court on 12 / 02 /2010
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2010 (2) TMI 1172 - ITAT AHMEDABAD
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... ... ..... joo she has also given this amount in cash in her account and she has also given amount by cheque. Similarly, Pramodkumar Jajoo has also given the amount by cheque and all the depositors had confirmed the same. We find that in case of Dy.CIT vs. Rohini Builders 256 ITR-360 wherein Gujarat High Court has held that the amount received by account payee cheque the initial burden on proving the credit discharge, source of credit need not to be proved the fact of explanation was not satisfactory would not automatically result into deeming amounts as income of the assessee. We find that we respectfully rely on the decision of Hon. Gujarat High Court. Thus taking into consideration the totality of the facts and circumstances of the case, we find that the assessee has proved the initial burden and the identity of the creditor, capacity of creditor and genuieness of the transaction is proved. Therefore, we allow the appeal of the assessee. Order pronounced in Open Court on 12/02/2010.
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2010 (2) TMI 1171 - ITAT AHMEDABAD
Invoking deeming provisions u/s 69, 69A, 69B &69C - Physical distinction between the accounted stock or unaccounted stock -unexplained investment/expenditure - undeclared business income - HELD THAT:- The first attempt of the assessing authority should be to find out link of undeclared investment/expenditure with the known head, give opportunity to the assessee to establish nexus and if it is satisfactorily established then first such investment should be considered as undeclared receipt under that particular head. It is only where no nexus is established with any head then it should be considered as deemed income u/ss 69, 69A, 69B & 69C as the case may be. It is because when assessee fails to explain satisfactorily the source of such investment the nit should be taxed under section 69, 69A, 69B & 69C as the case may be. It should not be done at the first instance without giving opportunity to the assessee to establish nexus.
Following the decision in the case of Fakir Mohmed Haji Hasan [2000 (8) TMI 44 - GUJARAT HIGH COURT] held that where investment in an asset or expenditure is not identifiable and no nexus was established then with any head of income and thus was not available for set off against any loss under any other head. Therefore, we hold that where asset in which undeclared investment is sought to be taxed is not clearly identifiable or does not have independent identity but is integral and inseparable (mixed) part of declared asset, falling under a particular head, then the difference should be treated as undeclared business income explaining the investment.
To conclude sum being difference in stock is represented by undeclared business income. It does not have a separate physical identity. It is to be only taxed under the head ‘business’. Other assets have separate physical identity being furniture and fixtures, air conditioners etc. They cannot have a direct nexus with business and therefore investment therein has to be considered u/s 69 only.
In view of the above, AO is directed to consider the su as undisclosed business income assessable under the head ‘business’ and other two sums u/s 69. The business income including application of section 40(b) has to be considered accordingly. For calculation of income in view of our above observations, we restore the matter to the file of AO.
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2010 (2) TMI 1170 - ITAT MUMBAI
Rectification of mistake u/s 154 - TP Adjustment - Determination of Arms Length Price - value of international transaction - whether TPO’s order is erroneous because he has applied the net profit margin of 7.25% on the gross sales and followed a complicated procedure to arrive at the amount of adjustment?
HELD THAT:- We partially agree with the submissions of the ld. counsel for the assessee that original TPO’s order is definitely erroneous because he has applied the net profit margin of 7.25% on the gross sales and followed a complicated procedure to arrive at the amount of adjustment.
In simple terms if the sales to Associated Enterprises is taken at ₹ 25 crores and straight way 7.25% margin is applied then approximately total margin would be ₹ 1.81 crores, whereas adjustment has been made at ₹ 2,57,26,138/-.
At the same time we are unable to agree with the order of ld. CIT(A) that no adjustment could have been made. Admittedly, the assessee has no objection that if TNMM was followed and even no objection was raised to the average profit rate of 7.25%. However, as argued that this rate should be taken as only operating profiting which is not correct because TNMM in Rule 10B of Income tax Rules refers to only net profit and, therefore, there is no scope for reducing interest or any other overheads. Here also TPO has at top of the chart where average rate was calculated at page 2 of his order refers to OP/TC%. Therefore, it is not clear whether this margin is net profit or not. Similarly how the cost etc. was distributed by ld. CIT(A) is not clear because detailed figures are not available.
Therefore, in the interest of justice we set aside the order of ld. CIT(A) and remit the matter back to AO with a direction to follow TNMM by working out the average net profit. Further, the adjustment should be worked out on a very simple basis by reducing the net profit declared by the assessee from the gross sales and then divide the same in the controlled and uncontrolled sale and apply the net profit rate.
Appeals are allowed for statistical purposes.
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2010 (2) TMI 1169 - ITAT DELHI
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... ... ..... isfied in these cases. We, therefore, do not see any hurdle in their claim relating to Registration under section 12-AA of Income-tax Act.’ 44. For the reasons stated above, we are of the view that the assessees are entitled to registration under section 12-AA of the Act. We, therefore, direct the ld. CIT to register all the authorities in appeal before us under section 12-AA of the Act.” 6. In view of the above, respectfully following “M/s. Khurja Development Authority” (supra) and “U.P. Awas Evam Vikas Parishad” cited therein, since the Tribunal, in similar cases of local Development Authorities, has held that to be eligible for registration, the matter at hand is remitted to the file of the ld. CIT to decide it de novo in accordance with law, keeping in view the judicial precedents on the issue. 7. In the result, for statistical purposes, the appeal of the assessee is treated as allowed. Order pronounced in the open court on 01.02.2010.
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2010 (2) TMI 1168 - ITAT DELHI
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... ... ..... y. In these circumstances, respectfully following the said order, we hold that the CIT(A) was right in holding that the disallowance of Rsw. 36,59,416/- under section 40a)(i) was not justified. We affirm his order and dismiss the appeal filed by the revenue with no order as to costs.” 7.1 Since the facts are identical. Following the aforesaid precedent, we uphold the order of the ld. CIT(A) and decide the issue in favour of the assessee. 8. In the result the revenue’s appeal stands dismissed. 9. In the Cross Objection filed by the assessee, the assessee has only supported the order of the ld. CIT(A). Since we have already upheld the order of the ld. CIT(A) in Revenue’s appeal above, the Cross Objection filed by the assessee stands infructuous and is dismissed as such. 10. In the result, the appeal filed by the revenue is dismissed and cross objection filed by the assessee being infructuous is also dismissed. Order pronounced in the open court on 10/02/2010.
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2010 (2) TMI 1167 - ITAT DELHI
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... ... ..... behalf of M/s. Perfect Softech P. Ltd. Thus, in fact what has happened is that both M/s. Perfect Softech P. Ltd. and M/s. Enpro Telecom P. Ltd. have adjusted the entries in their books by passing the necessary transfer entries and the corresponding transfer entry being a book entry has also taken place in the assessee’s books. In these circumstances, it cannot be said that the assessee has violated the provisions of Section 269T of the Act. In these circumstances, the explanation given by the assessee is found to be a bona fide explanation and consequently the provisions of Section 273B of the Act would apply and the penalty levied u/s 271E of the Act is held to be rightly deleted by the Ld. CIT(A). In these circumstances, the finding of Ld. CIT(A) in deleting the penalty levied u/s 271E is found to be on right footing and the same is upheld. 6. In the result, the appeal of the revenue is dismissed. 7. This decision was pronounced in the open court on 18th Feb., 2010.
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2010 (2) TMI 1166 - ITAT VISAKHAPATNAM
Exemption u/s 11 - no registration u/s 12A was granted in the name of the assessees - Whether registration u/s 12A was properly granted to the assessee? - error in assessee name in the registration certificate - AO hold that since the claim of exemption of income was raised without having a valid registration in the name of the assessees the assessee has no right or locus-standii to raise such claim and thus rejected - HELD THAT:- We are of the opinion that the error in the name of the assessee appearing in the registration certificate is occurred due to the mistake on account of negligence on the part of the staff of the CIT and not the assessees and as such he cannot be held responsible for the mistake. Thus the benefit of exemption cannot be denied to the assessees for this reasons only. We however, direct the revenue to make necessary correction in the name of the registration certificate granted to the assessee and shall treat it to be granted to SPANDANA (Rural & Urban Development Organisation).
Nature of activities undertaken by the assessees - Micro financing activities - HELD THAT:- We find that the assessee is a society registered with the Registrar of Societies in 1992 in the name of SPANDANA (Rural Development Organisation). Later on certain amendments were made in the objects of the society. The copy of the objects are placed on record and from its perusal, we find the objects of the assessees are almost for charitable activities. We therefore hold that the micro finance activity in the instant case is a charitable activity. Since the registration has already been granted to the assessees u/s 12A assessee is eligible for exemption u/s 11.
We are of the view that by advancing a fund on interest to other organisations, assessee has accomplished its object of micro finance to the socio-economically weaker sections of the society and also to alleviate poverty beside collecting the interest on the advanced loan. Moreover, this fund was advanced for a shorter period and the assessee has also earned an interest thereon which was utilized in micro financing activity to the poor people. We therefore of the view that by joining hands with the banks or financial institutions for procuring funds/loans for its advancement to poor or needy people exemption u/s 11 cannot be denied. We accordingly, set aside the order of the CIT(A) and direct the A.O. to allow the exemption u/s 11.
Disallowance towards provisions of loan loss - In this regard, no argument was advanced during the course of hearing of the appeal. We however carefully examined this ground and we find no infirmity in the order of the CIT(A). This claim can only be allowed either in the case of NBFC or banking institutions. Since the assessee is a charitable society, the provision for loan loss cannot be allowed. Accordingly, we confirm the order of the CIT(A) in this regard and reject the ground of the assessee.
Appeal of the assessee is partly allowed for statistical purpose.
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2010 (2) TMI 1165 - GUJARAT HIGH COURT
Unexplained investment u/s 69C - bogus purchases - HELD THAT:- Assessing Officer has started the discussion on the issue of bogus purchases and ultimately came to the conclusion that though the purchases can be said to be genuine, the payments, however, for such purchases were made by the Assessee in cash, which is unaccounted for. As such, there is no basis for arriving at this conclusion.
Tribunal has rightly held that the purchases made by the Assessee from four different parties are duly recorded, payment for such purchases are also found to be recorded and Revenue has not doubted the genuineness of the sales, rather has accepted the same, there is no allegation of suppression of sale price or suppression of value of closing stock either quantity wise or value wise and there is no allegation of inflation of purchases also.
Tribunal, therefore, came to the conclusion that no addition can be made on either of these counts and the peak arrived at by the CIT (A) is also not justified. Considering the order passed by the Tribunal, we are of the view that, the findings recorded by the Tribunal are based on merit. We, therefore, dismiss both the Appeals.
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