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Case Laws
Showing 141 to 160 of 1706 Records
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2016 (7) TMI 1572
Disallowance for provision for bad & doubtful debts - deduction u/s 36(1)(viia) to be restricted to actual provision made in the books - AO disallowed the deduction as claimed by assessee over and above the provision created in assessee’s books of account and added to the total income of the assessee - HELD THAT:- Assessee fairly acceded that the issue is already covered in favour of Revenue. The relevant extract of the case STATE BANK OF PATIALA vs. COMMISSIONER OF INCOME TAX & ANR [2004 (5) TMI 12 - PUNJAB AND HARYANA HIGH COURT] as held for making of a provision for bad and doubtful debts equal to the amount mentioned in s. 36(1)(viia) is a must for claiming such deduction. In the present case, the assessee has not made any provision in the books of account for the assessment year under consideration - Assessee claiming deduction for bad debt under unamended s. 36(1)(viia) but after amendment enhancing the deduction in the return by making up the shortfall in the provision in the balance sheet of subsequent year, the claim to the extent of enhancement is not allowable - Decided against assessee.
Disallowance invoking the Rule 8D(2)(iii) of section 14A - HELD THAT:- In the instant case since the assessee is a dealer in share, therefore the rigorous provision u/s 14A r.w.s 8D of the IT Rule shall not be applied with respect to share held by way of stock-in-trade. In this connection, whether assessee is a dealer in share or not we are placing our reliance in the case of UNITED COMMERCIAL BANK [1999 (9) TMI 4 - SUPREME COURT] respectfully where it has been held that the assessee is dealer in shares.
Thus holding the bank as dealer in shares/ securities and consequently no disallowance is warranted on the shares/securities held as stock in trade. Accordingly we reverse the orders of Authorities Below and allow the ground raised by assessee.
Disallowance of provision of leave encashment u/s. 43B - HELD THAT:- Provision for leave encashment that this issue is pending before Hon’ble Supreme Court in the case of Exide Industries Ltd. Vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] and fairly conceded that subsequently Hon'ble Supreme Court has stayed this judgment of Hon'ble jurisdictional High Court.
Assessee fairly stated that let Hon'ble Supreme Court decide the issue and by that time the matter can be remitted back to the file of AO for fresh adjudication in term of the decision of Hon'ble Supreme Court. On this, Ld. CIT DR has not objected to the same. Accordingly, we set aside this issue to the file of the AO to await the decision of Hon'ble Supreme Court and decide the issue accordingly. This issue of assessee’s appeals is remitted back to the file of AO and allowed for statistical purposes.
MAT applicability u/s 115JB to company established under the Companies Act, 1956 - HELD THAT:- in view of the legislative change brought about by the introduction of Explanation 3 in section 115JB of the Act by the Finance Act, 2012 , the assessee's contention in fact stands more fortified. The Explanation 3 to section 115JB makes it evidently clear that section 115JB is applicable only to entities registered and recognized to be companies under the Companies Act, 1956. Since the assessee is not a company within the meaning of Companies Act, 1956, section 211(2) and proviso thereon is not applicable and therefore consequently we hold that the provisions of section 115JB of the Act are also not applicable.
Direction to AO for re-computation of the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years - AO to recompute the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years after giving effect to this appeal.
Assessment disallowed on the ground that no revised return was filed - HELD THAT:- Assessee is very much entitled make a legal claim without filing the revised return of income. We uphold the order of Ld. CIT(A) and this ground of Revenue’s appeal is dismissed.
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2016 (7) TMI 1571
Subsidy from Central Government on account of ‘interest refund’ - Revenue or capital receipt - Whether subsidy was granted towards reducing interest burden of the assessee and received after the commencement of business? - HELD THAT:- In order to sustain competitiveness in the domestic as well as international markets and overall long-term viability of the industry, the concerned Ministry adopted the TUFS scheme envisaging Technology Upgradation of the Industry. Hence, the subsidy received in this regard falls into capital field.
we find that the assessee received interest as refund from Central Government, as per the scheme formulated to encourage additional investments in order to become competitive and cost effective and to provide financial support for capital outlay for expansion and modernisation and by following order of M/S GLOSTER JUTE MILLS LTD [ 2014 (7) TMI 172 - ITAT KOLKATA] held that the subsidy received for modernising assessee’s existing infrastructure is capital in nature - we dismiss the ground no-1 raised by the Revenue.
Allowance of unabsorbed depreciation and business of 100% EOU Unit (100% exemption u/s10B) against the taxable income of the assessee from other unit - HELD THAT:- In the present case, the Coordinate Bench observed that the similar issues have been decided in favour of assessee by this Tribunal in earlier years and no order as such brought to our notice that the Hon’ble Jurisdictional High Court has reversed the order of the Tribunal. In view of the same, we find no merit in the order of CIT(Appeals) and accordingly, ground no-2 raised by the Revenue is dismissed.
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2016 (7) TMI 1570
Unexplained expenditure - addition u/s 68 - addition on protective basis - HELD THAT:- Issues under consideration have not been decided by the AO in a proper manner and facts have not been appreciated in a judicious manner. We find that the confirmations have not been verified by the lower authorities. We further find that the ld. CIT(A) has passed the order without providing the assessee due opportunity of being heard.
On the basis of foregoing discussion and careful perusal of the operative part of the CIT(A)’s conclusion, it is amply clear that the ld. CIT(A) has decided the issue in haste by passing a cryptic order which is not sustainable. We further note that the ld. CIT(A) has also not properly considered the submissions and facts of the case and simply followed the AO’s conclusion and dismissed the appeals of the assessee. We further note that the CIT(A) too has not given due opportunity of being heard to the assessee.DR has supported the order of the CIT(A). However, he raised no serious objection if the appeal is restored to the file of AO for fresh adjudication of first appeal - restore the grounds of appeal raised by the assessee in all the three appeals to the file of the AO for fresh adjudication - Appeals of the assessee stand allowed for statistical purposes.
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2016 (7) TMI 1569
Maintainability of suit - specific performance while filing the earlier suit not filed - fresh injunction suit - whether owing to the appellant/plaintiff having omitted to sue for the relief of specific performance while filing the earlier suit, the appellant/plaintiff was precluded from afterwards suing for the relief of specific performance? - HELD THAT:- As per the own case of the appellant/plaintiff, (i) the date fixed in the bayana agreement of which specific performance was sought, was end of January, 2012; (ii) the appellant/plaintiff had approached the respondent/defendant for performing her part of the agreement to sell but the respondent/defendant had refused; (iii) the appellant/plaintiff had also got issued a legal notice to the respondent/defendant to perform her part of the agreement and in response thereto also the respondent/defendant had refused to perform her part of the agreement; (iv) that the respondent/defendant had become dishonest and was wanting to evict the appellant/plaintiff from the suit property of which possession had been given in pursuance to the agreement to sell and to sell the suit property to defeat the agreement of sale thereof in plaintiff's favor - It is not the case of the appellant/plaintiff that after the institution of the earlier suit for injunction she had approached the respondent/defendant to perform her part of the agreement or that the respondent/defendant had refused or that anything else had happened after the institution of the suit for injunction which may have furnished a cause of action for the suit for specific performance - Rather it is the express case of the appellant/plaintiff that she was filing the suit for specific performance after withdrawing the earlier suit for permanent injunction with liberty to file a fresh suit.
The question is answered in favour of the respondent/defendant and against the appellant/plaintiff and also it is held that the suit from which this appeal arises was barred by Order II Rule 2 of CPC.
Whether the liberty granted "to file fresh suit" at the time when the earlier suit was withdrawn is confined to a fresh suit for the same relief which was claimed in the earlier suit or entitles the appellant/plaintiff to in the fresh suit also add the relief of specific performance of agreement to sell? - HELD THAT:- The suit from which this appeal arises was being taken up along with a suit for ejectment of the appellant/plaintiff from the premises filed by the respondent/defendant. The agreement to sell of which the appellant/plaintiff claims specific performance is not a registered one. The appellant/plaintiff cannot thus be said to be in possession of the premises in part performance of the agreement to sell and benefit of Section 53A of the Transfer of Property Act, 1881 would thus not be available.
Thus, while allowing the appeal, it is clarified (i) that the pendency of the suit for specific performance will not come in the way of the suit for ejectment filed by the respondent/defendant against the appellant/plaintiff and/or in execution of the decree therein; and, (ii) it will be open to the respondent/defendant to apply to the Trial Court for an order that the provisions of Section 52 of the Transfer of Property Act, 1881 and the principle of lis pendens would not be attracted by the pendency of the suit for specific performance.
Appeal allowed.
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2016 (7) TMI 1568
Nature of expenses - annual payment being franchise fees paid to BCCI to participate in the Indian Premier League (IPL) - Revenue or capital expenditure - HELD THAT:- As relying on M/S DECCAN CHARGERS SPORTING VENTURES LTD. (AMALGAMATED WITH DECCAN CHRONICLE HOLDINGS LTD) [2015 (12) TMI 1279 - ITAT HYDERABAD] we do not find any merit for treating the assessee’s claim as capital expenditure, which is essentially revenue in nature. Accordingly we set aside the order of lower authorities and direct the AO to allow assessee’s claim of revenue expenditure. As we have already decided ground no.1 in assessee’s favour by holding that annual payment of ₹ 447.60 crores being franchise fees paid to BCCI to participate in IPL was revenue in nature, therefore, allowable during the year under consideration, we are not going to assessee’s alternate claim of allowing depreciation on the entire value of intangible rights, which is also supported by the decision of co-ordinate bench in case of India Cements Limited, India Cements Limited [2016 (1) TMI 1028 - ITAT CHENNAI]
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2016 (7) TMI 1567
Disallowance u/s 14A r.w.r. 8D(2)(iii) - investments made by assessee were of strategic nature as these were not made with the purpose of earning any dividend on the investments but were prompted by strategic considerations in order to gain control over these subsidiaries/sister concern and thus should not be considered for the purpose of calculating the disallowance u/s 8D(2)(iii) - HELD THAT:- Assessee has made investments in the subsidiary companies to the tune of ₹ 16.61 crores which in our opinion should not be considered for the purpose of working out the disallowance under section 14A read with rule 8D (2)(iii). Respectfully following the ratio of INTERGLOBE ENTERPRISES LTD. [2014 (4) TMI 269 - ITAT DELHI] set aside the order of CIT(A) and direct the AO to verify the strategic investment and recalculate the disallowance accordingly by not considering the investments made in subsidiary companies/sister concern. - Appeal of the assessee stands allowed for statistical purposes.
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2016 (7) TMI 1566
Addition on account of set off of loss claimed in transactions of shares F&O - HELD THAT:- In view of the submissions of the learned DR wherein he has agreed that the loss from shares and futures was covered by section 43(5)(d) of the Act and was not speculation loss and hence, an allowable deduction against the business income, we find no good reason to interfere with the order of the learned CIT(A) which is confirmed. Therefore, the ground of appeal of the revenue is dismissed.
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2016 (7) TMI 1565
TP Adjustment - Comparable selection - ITAT rejected three comparables Aptico Limited, Global, Procurement Consultants Limited and TSR Darashaw Limited as they were functionally dissimilar - HELD THAT:- Heard Revenue, and having perused Rule 10B(3)(ii) of the Income Tax Rules, 1962 read with Section 92 C of the Income Tax Act 1961 the Court is not persuaded to hold that the first issue urged gives rise to a substantial question of law requiring examination by the Court.
Scope of the powers of the ITAT while hearing an appeal - point now urged by the Revenue is that if three of the nine comparables are to be excluded, then the ITAT ought to suo motu have required the TP adjustment exercise to be undertaken afresh by the TPO since the TP adjustment based on six comparables that were to some extent functionally dissimilar to the Assessee could not have reflected the correct picture as far as the determination of ALP was concerned - HELD THAT:- Admittedly, during the AY in question there was no provision in the Act permitting the Revenue to appeal against the inclusion or exclusion of a comparable by the TPO. which is affirmed by the DRP. While the Assessee had a remedy by filing an objection before the ITAT, the Revenue could not during the relevant AY, do so. It has been urged on the strength of the decision of this Court in Commission of Income Tax v. Jansampark Advertising and Marketing Limited [2015 (3) TMI 410 - DELHI HIGH COURT] that in such circumstances it is incumbent upon the ITAT to exercise suo motu powers and in the interest of justice direct the exercise of TP adjustment to be undertaken afresh.
The Court is unable to agree with the above submissions. As rightly pointed out by the ITAT, the statutory scheme at the relevant time did not envisage permitting the Revenue to prefer an objection in the circumstances pointed out hereinabove. The circumstances under which certain observations were made by this Court in Jansampark (supra) concerned an inquiry to be undertaken in proceedings initiated under Section 147/148 of the Act in order to find out the genuineness of the creditors, their credit worthiness etc.
There is no comparison with the facts on hand. The Finance Act, 2016 has is done away with the above provision of the Act that permitted the Revenue to file objections against the order of DRP.
In the present case we are concerned with AY is 2010-11 when there was no such provision permitting the filing of cross objection by the Department. It was introduced by the Finance Act, 2012 and again removed under the Finance Act, 2016. Clearly, there is legislative policy governing the insertion of the said provision in Finance Act, 2012 and its deletion in Finance Act, 2016. This Court is not inclined to frame a question on the above issue urged by the Revenue.
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2016 (7) TMI 1564
Disallowance of Prior Period expenditure - HELD THAT:- As decided in ADANI ENTERPRISES LTD. [2016 (7) TMI 1250 - GUJARAT HIGH COURT] expenditure of ₹ 67.88lacs is a fraction of the total income of the assessee company declared at ₹ 105.88 crores. Further, even the Revenue does not dispute that the company would be taxed at the same rate in the present assessment year or during earlier year. It is also not disputed that prior period income was declared by the assessee during the current year which is also accepted by the Revenue. No question of law therefore, arises
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2016 (7) TMI 1563
Deduction u/s 80HHC - Tribunal holding that turnover of all independent businesses are to be clubbed and thereby rejecting the assessee's contention that turnover of only export business is required to be taken into consideration - HELD THAT:- In view of the various decisions of the hon'ble Supreme Court and the Explanation to the sections, the interpretation put forward by the Tribunal is required to be accepted. See K. RAVINDRANATHAN NAIR [2007 (11) TMI 10 - SUPREME COURT] and JOSE THOMAS. [2001 (11) TMI 73 - KERALA HIGH COURT] - Consequently, the issue raised in this appeal is answered in favour of the Department and against the assessee.
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2016 (7) TMI 1562
Maintainability of petition - availability of alternative remedy - grant of exemption to the petitioner for payment of tax by the notification issued to department - HELD THAT:- It is well settled principle of law that availability of alternative remedy is not a bar in exercise of writ jurisdiction for issuance of writ of certiorary, however, if there is factual dispute then certainly the court can refuse to entertain the writ petition.
There is a factual dispute involved for determination to the effect that whether the petitioner is eligible to get exemption from payment of tax and that can very well be decided by the appellate authority. It would not be just and proper to decide the controversy at this stage because some factual aspects have to be considered by the authority - Petition disposed off.
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2016 (7) TMI 1561
Exemption u/s 11 - whether the assessee trust is entitled to the claim of depreciation on capital assets, expenditure in respect of which has already been claimed by the assessee as application of income - HELD THAT:- Hon’ble Bombay High Court in the case of “CIT vs. Institute of Banking Personnel Selection” [2003 (7) TMI 52 - BOMBAY HIGH COURT] has held that a trust can claim deprecation on assets, even if, cost of assets has been fully allowed as application of income under section 11 of the Act in past years and that there is no question of double deduction in allowing the depreciation in respect of assets acquired and used by the trust.
Assessment t of trust - Assessee trust entitlement to claim the carry forward and set off of deficit of earlier years on account of excess expenditure/application of income - in the case of “DIT(E) vs. Najam Baug Trust” [2015 (1) TMI 1438 - BOMBAY HIGH COURT ] has, while relying upon the decision in the case of “Institute of Banking Personnel Selection” (supra) has held that the assessee is entitled to claim carry forward losses/deficit on account of excess expenditure/application of income in earlier years. We further find that the Tribunal has also discussed in the own case of assessee, the effect of the amendment brought vide Finance (No.2) Act, 2014 in section 11(6) of the Act wherein it has been provided that depreciation will not be allowed while computing application of income w.e.f. April 1, 2015. The Tribunal while relying upon the decision of the Hon’ble Delhi High Court in the case of “Indra Prasstha Cancer Society” [2014 (11) TMI 733 - DELHI HIGH COURT] that the amended provisions are applicable w.e.f. the assessment year 2015-16 and the same will not have any applicability for the assessment years prior to A.Y. 2015-16. The Ld. D.R. has also fairly admitted that both the issues are squarely covered in favour of the assessee
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2016 (7) TMI 1560
Adjournment of the case - Winding up of company - non-payment of principal amount - HELD THAT:- The fact remains that sufficient opportunity has been granted to the respondent file a reply on merits, and also to comply with other directions regarding the disclosure of pertinent facts with regard to the functioning, assets and indebtedness of the company. There has been no effective response by the respondent in this behalf.
The petition is admitted and the Official Liquidator attached to this Court is appointed as the Provisional Liquidator. He is directed to take over all the assets, books of accounts and records of the company forthwith. The citations be published in the Delhi editions of the newspapers ‘Statesman’ (English) and ‘Veer Arjun’ (Hindi), as well as in the Delhi Gazette, at least 14 days prior to the next date of hearing. The cost of publication is to be borne by the petitioner who shall tentatively deposit a sum of 75,000/- with the Official Liquidator within 2 weeks, subject to any further amounts that may be called for by the liquidator for this purpose, if required.
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2016 (7) TMI 1559
Revision u/s 263 - by order passed u/s 127 CIT transferred the cases to the present Assessing Officer who completed the assessment on 30th March, 2014, as they were getting barred by limitation at the returned income filed by the assessee without making any enquiry - AO may have made enquiry in these cases but due to paucity of time the present AO did not have time to look into the voluminous material and form opinion before making the assessment - HELD THAT:- In short time from 29.03.2014 to 30.03.2014, it was practically impossible for the Assessing Officer to have examined the returns of the assessee vis- vis the details and particulars filed in support of the returns and form an opinion and frame a detailed assessment order on the issues in the returns of income. Therefore, we have no hesitation in accepting the arguments of the ld. Departmental Representative and upholding the present orders passed u/s 263 of the Income-tax Act, 1961, by the Commissioner of Income-tax. Thus, the grounds of appeal in all the appeals under consideration are dismissed. - Decided against assessee.
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2016 (7) TMI 1558
Depreciation on goodwill being intangible assets - HELD THAT:- After considering the relevant records, orders of authorities below, we find that the similar issue has been decided by the FAA for the assessment year 2008-09 in favour of the assessee holding that the assessee was entitled to depreciation on goodwill by following the decision of Apex Court in the case of Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] . - Decided against revenue.
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2016 (7) TMI 1557
Interest on loan given to sister concern u/s 36(1) - CIT(A) restricting the rate of interest @ 9% from 15% applied by the A.O - whether the loans were given by the assessee as a measure of commercial expediency ? - Nexus between the interest bearing funds and advance made - HELD THAT:- As U/s 36, the interest paid in respect of capital borrowed for the purposes of business or profession is allowed to be deducted. As per Section 36(1)(iii) of the Act, a) there must be borrowing of capita by the assessee The assessee must have paid the interest in the the capital borrowed and c) The borrowed capital borrowed was by the assessee for the purposes of business or profession, then only the assessee is entitled to the deduction.
From perusal of the balance sheet, it is clear that though there is increase in share capital but simultaneously, there is also increase in the loan and the fixed assets of the assessee company, therefore, in our view, the assessee was required to prove whether on the date of making investment or giving the interest free amount to the sister concern, the assessee was having sufficient interest free funds available with it. For that purposes, the assessee should demonstrate from its cash flow statement and bank account that it has date-wise availability of interest free funds on the date of making advances to the sister concern. In our view, the assessee has failed to prove on the date of making investment in M/s Autopal Industries Limited that it has interest free funds available with it. No material was produced before AO despite the remand order of the Tribunal to substantiate the availability of surplus fund .
Whether some business connection or strategical investment was required to be made by the assessee by providing the interest free borrowed capital to M/s Autopal Industries Limited i.e. to prove the commercial expediency in lending the amount? - As relying on Hero Cycle Pvt. Ltd. Vs. CIT [2015 (11) TMI 1314 - SUPREME COURT] will come to the irresistible conclusion that the assessee has failed to prove the business connection with the amount given as loan and advances to the assessee. As per page 32 of the paper book, the loan has been utilized by the M/s Autopal Industries for repayment to Pennar Peterson Ltd. and government dues like PF/ESI/Excise/Electric bill, payment to employees and payment towards imported goods. In our view, none of the usages of advance by the M/s Autopal Industries proves business interest with that of the business of the assessee. In fact in the written submissions it is mentioned that “there was labour unrest in M/s Autopal Industries from 17.8.1996 during which the production was hampered therefore the assessee company had tried to help the said the M/s Autopal Industries “In our view submission of the assessee, that it tried to help M/s Autopal Industries on account of labour unrest was not supported by any document or record. Moreover the unrest in 1996 does not give any cause to advance the huge amount to M/s Autopal Industries 1999-2000 and 2000-2001. The records shows, contrary to the submissions, M/s Autopal Industries utilized the amount for other purposes (not for settlement of dues of labour except ₹ 19.46 lakh). It is expected from a prudent business man like the assessee in term of Hon’ble Supreme court judgment, to make use of the funds on the basis of commercial principle and should not waste good money against the bad money. No commercial expediency has been shown by the assessee for giving such a huge advances after taking advances from the financial institutions on paying the interest. In view thereof, the appeal of the assessee is required to be dismissed.
Tribunal is duty bound to decide the issue as it thinks fit and appropriate in accordance with facts and circumstances of the case. In our view, what is provided U/s 36, the deduction on the amount of interest paid on the capital borrowed for the purposes for business or profession. The provision is made applicable on the “capital borrowed”and has not restricted to the “capital borrowed during the year”. If we agree to the proportion of the ld AR, then it will amount to rewriting the provisions of law. The Tribunal being a creation of statute is bound to adhere to the law laid down in the statute book and is not within its liberty to make the additions by way of judicial order in the statute book. If we accept the argument of the ld counsel for the assessee whereby if we held that the interest shall be disallowed on the capital borrowed during the assessment year then the entire thrust and purpose of the provision will disappear and make the provision redundant. In view thereof, the submission of the ld AR whereby he sought to restrict the disallowance only for the amount borrowed during the assessment year, is not acceptable. Even otherwise the tribunal is also governed by its earlier remand order, where on such submissions were referred or addressed. Hence, the appeal of the assessee is dismissed on this ground.
AY - 2001-02 - Assessee company has failed to prove the nexus between the interest bearing funds and advance made by it to the M/s Autopal Industries. It has also failed to prove the business connection with the amount given as loan and advance. The facts narrated by assessee is general in nature. The assessee has not submitted any documentary evidence to prove the contention that the loan amount was given for the purpose of business, for which, it is clear from the facts above that the assessee made loan and advance for non business purposes. The ld CIT(A) has confirmed 9% interest charge instead of 15% applied by the ld Assessing Officer. From the above facts and circumstances, in our view, no new facts has been narrated by the ld DR before us, therefore, we uphold the order of the ld CIT(A)
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2016 (7) TMI 1556
TDS u/s 194H OR 194J - Disallowance of sub-brokerage - CIT(A) restricted the allowance to 50% as excessive and unreasonable within the meaning of Sec. 40A(2)(b) - HELD THAT:- As decided in own case [2016 (2) TMI 383 - ITAT MUMBAI] we hold that the provisions of Sec. 194H are attracted to the payments made towards sub-brokerage but not the provisions of Sec. 194J and we reverse the order of the Ld. CIT(A) in holding that provisions of Sec. 40A(2) are attracted. The grounds raised by the assessee are allowed.
Admission of additional evidence - No opportunity was given to the Assessing Officer - violation of Rule 46A - HELD THAT:- Admittedly, the assessee filed additional evidences before the Ld. CIT(A) in respect of 3 creditors and Ld. CIT(A) called for comments of the Assessing Officer and the Assessing Officer forwarded the remand report on other issue without commenting anything on the creditors. In such circumstances, the ground of the revenue that no opportunity was given to the Assessing Officer and therefore there is a violation of Rule 46A is wrong and cannot be sustained. This ground of the revenue is rejected.
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2016 (7) TMI 1555
Validity of the assessment framed u/s 147 - Unexplained donation/capitation fees - HELD THAT:- In this case the Assessing Officer has initiated the proceedings on the basis of the letter from DDIT(Inv.). The assessment has not been reopened just for the sake of verification of the payment of capitation fees but the Assessing Officer has stated that he has the reason to believe that the income to the tune of ₹ 23lac has escaped assessment for the assessment year 2007-08. It has been held by Hon'ble Supreme Court in the case of Income Tax Officer vs. Lakhmani Mewal Das [1976 (3) TMI 1 - SUPREME COURT] that the court cannot look into the sufficiency of the reasons. The reasons for the formation of the belief for reopening of an assessment must have a rational connection or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular assessment year. Bonafide of the reasons can be looked into by this Tribunal. It is a case where, in our opinion, the reasons recorded are bonafide.
In this case the assessee has asked the Assessing Officer which is apparent from para 8.1 of the assessment order to make available the person who has made the entries in the documents, which were seized from Santosh Medical College, Ghaziabad i.e. the third party and to produce the same to cross examine him.
AO instead of providing the said party to the assessee for his cross examination, asked the assessee to bring a certificate from the college i.e. from that third party that no cash payment of ₹ 23,00,500/- was made by the assessee at the time of admission of his son. This action of AO clearly proves that the addition has been made by the Assessing Officer on the basis of the evidence found from the third party and as has been recorded by the third party. It is undisputed fact that the documents on the basis of which addition has been made in the case of the assessee were not found from the assessee. The entries are also not in the hand writing of the assessee in the documents found during the course of search at the third party. It is a case where the third party has mentioned the name of the assessee. Therefore, the third party are the evidence of the Revenue for making the addition in the hands of the assessee. The Revenue is bound to produce these witnesses when the assessee asked for his cross examination as in our opinion, the statement and the documents of the third party was the witness of the Revenue. No contrary decision was brought to our knowledge. Decidion of M/S ANDAMAN TIMBER INDUSTRIES LTD. [2005 (3) TMI 763 - SC ORDER] is binding on us. Appeal of the assessee stands partly allowed.
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2016 (7) TMI 1554
Monetary limit - maintainability of appeal in High Court - low tax effect - HELD THAT:- In the present case, the tax effect is ₹ 9.17 lakhs as mentioned in paragraph 10 of the Appeal Memo.
In view of the above, Mr. Suresh Kumar, learned Counsel appearing for the Revenue does not press the present Appeal.
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2016 (7) TMI 1553
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Assessee did not deny the fact of incurring expenditure for managing the investments which are in relation to earning of exempt income. The investments have huge potential in giving or earning exempt income like dividend income in the assessment year under consideration or also in the future years.
After considering various decisions and case of Cheminvest Ltd. vs. ITO [2009 (8) TMI 126 - ITAT DELHI-B] wherein, it was held that disallowance under section 14A can be made even in the year where no exempt income has been earned or received by the assessee. The Hon'ble High Court of Bombay in the case of M/s. Godrej & Boyce. Mfg. Co. Ltd. v. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] held that the Assessing Officer is duty bound to determine the expenditure which had been incurred in relation to income which did not form part of the total income. In view of the above, we find no infirmity in the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed.
Addition towards deferred revenue income - taxation of the time shares sold comprising 55% of the time share value which was treated by the assessee as advance subscription towards customers facilities in the accounts - AO was of the view that the entire sale amount including 55% is taxable in the year of receipt - AO made the disallowance only on the ground that similar issue for earlier assessment year is pending before the Hon’ble High Court - HELD THAT:- Assessee furnished decision of the ITAT D Bench Chennai in assessee’s own case for the assessment years 2002-03, 2006-07, 2007-08 and 2008-09 [2012 (8) TMI 1171 - ITAT CHENNAI] wherein ITAT allowed the claim of the assessee to defer the income in the subsequent years on the basis of the ITAT Chennai B Bench (Special Bench) in the case of M/s Mahindra Holidays & Resorts(India) Ltd. [2010 (5) TMI 524 - ITAT, CHENNAI] . By following the decision of the Tribunal, the ld. CIT(A) directed the Assessing Officer to delete the addition. The ld. DR could file any decision having reversed or modified the orders of the Tribunal. Just because, the Department has filed an appeal against the order of the Tribunal, we cannot take a different view on this account. - Decided against revenue.
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9911796707
