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Showing 141 to 160 of 938 Records
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2011 (8) TMI 1245
Issues Involved:
1. Legality of Provisional Attachment Orders dated 21-10-2010.
2. Violation of Article 20 of the Constitution of India.
3. Validity of proceedings under Section 8 of the Prevention of Money-Laundering Act, 2002 (PML Act).
4. Applicability of the PML Act to offenses committed before the amendment to the Schedule of the Act on 01-06-2009.
5. Effect of stay orders on the validity of provisional attachment orders.
Detailed Analysis:
1. Legality of Provisional Attachment Orders dated 21-10-2010:
The petitioners, husband and wife, challenged the legality of the provisional attachment orders issued on 21-10-2010. The court examined whether the Director of Enforcement had adequate material to believe that the petitioners were in possession of proceeds of crime, had been charged with a scheduled offense, and that the proceeds were likely to be concealed or transferred. The court found that the conditions prescribed under Section 5 of the PML Act were satisfied, as the charge against the first petitioner was laid on 22-11-2009, post the amendment of the Schedule on 01-06-2009, which included offenses under Sections 120-B and 420 IPC. Therefore, the provisional attachment order dated 21-10-2010 was held to be valid.
2. Violation of Article 20 of the Constitution of India:
The petitioners contended that the proceedings under the PML Act violated Article 20 of the Constitution, which prohibits conviction or sentence under ex post facto laws. The court referred to the judgment in RAO SHIV BAHADUR SINGH's case, which clarified that Article 20 prohibits only conviction or sentence under ex post facto laws, not the trial itself. Since the present case involved provisional attachment and not conviction or sentence, the court held that Article 20 was not applicable, and the petitioners' contention was dismissed.
3. Validity of Proceedings under Section 8 of the PML Act:
The court noted that the adjudicating authority issued a notice on 07-12-2010 for the petitioners to participate in the adjudication process. The petitioners challenged this under the grounds that the offenses under Sections 120-B and 420 IPC were not part of the Schedule when the alleged offenses were committed. However, the court found that the offenses were included in the Schedule post the amendment on 01-06-2009, and the charge against the first petitioner was laid on 22-11-2009. Therefore, the proceedings under Section 8 of the PML Act were held to be valid.
4. Applicability of the PML Act to Offenses Committed Before the Amendment:
The petitioners argued that the offenses under Sections 120-B and 420 IPC were not part of the Schedule at the time of the alleged commission of the offenses. The court clarified that the PML Act's amendment on 01-06-2009 included these offenses in the Schedule. Since the charge against the first petitioner was laid on 22-11-2009, the court held that the PML Act was applicable to the offenses, and the amendment did not constitute an ex post facto law as it pertained to the regulatory mechanism and not to conviction or sentencing.
5. Effect of Stay Orders on the Validity of Provisional Attachment Orders:
The petitioners contended that the provisional attachment order ceased to have effect after the expiry of 150 days as prescribed under Subsection (1) of Section 5 of the PML Act. The court noted that the adjudicating authority's notice under Subsection (1) of Section 8 was stayed on 10-11-2010, along with the provisional attachment orders. The court applied the principle of "actus curiae neminem gravabit" (an act of the court shall prejudice no one) and declared that the time between 10-11-2010 and the date of the court's decision should be excluded from the 150-day period. Thus, the provisional attachment orders remained valid.
Conclusion:
The writ petition was dismissed, with the court holding that the provisional attachment orders and the proceedings under the PML Act were valid and did not violate Article 20 of the Constitution. The court also clarified that the amendment to the Schedule of the PML Act, including offenses under Sections 120-B and 420 IPC, was applicable to the petitioners. The stay orders did not affect the validity of the provisional attachment orders due to the exclusion of the period during which the stay was in effect.
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2011 (8) TMI 1244
The Delhi High Court dismissed the case as the assessee did not appear, and a decision was made based on the Revenue's counsel's assistance. The decision taken on merits cannot be recalled.
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2011 (8) TMI 1243
Issues involved: Lack of hearing, absence of speaking order, violation of natural justice in finalization of provisional assessments by Deputy Commissioner of Customs.
Summary:
The Petitioners challenged communications from Assistant Commissioner Customs informing them of finalization of provisional assessments by Deputy Commissioner without a hearing or speaking order, violating natural justice principles. Respondents suggested filing an appeal, but admitted lack of hearing. Court held failure to comply with natural justice principles, citing Automotive Tyre Manufactures Asson v. Designated Authority, emphasizing the importance of due process. Orders at issue were set aside, directing Deputy Commissioner to finalize assessments after providing a hearing to Petitioners. Petitioners to appear before Customs authorities with court order for expeditious assessment finalization. Rule made absolute with no costs.
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2011 (8) TMI 1242
Issues Involved:
- Appeal filed by assessee and Revenue against the order of CIT (A)-XVI, Ahmedabad for Assessment Year 2003-04 and 2006-07.
- Common grievance of Revenue in both years regarding deletion of addition made on account of deduction u/s. 80IB.
Assessment Year 2003-04 and 2006-07 - Deduction u/s. 80IB:
- Assessee engaged in trading of shares, securities, equity mutual funds, and manufacturing & selling soft drink concentrate.
- Claimed deduction u/s. 80IB in A.Y. 2003-04. AO found less than 10 workers in manufacturing process, denied deduction.
- CIT (A) held assessee employed more than 10 workers, eligible for deduction u/s. 80IB.
- AO relied on muster roll sheets showing 6-7 workers, denied deduction.
- CIT (A) considered evidence of two units, bottle washing unit workers not in muster roll.
- CIT (A) accepted appellant's arguments, allowed deduction u/s. 80IB.
- ITAT upheld CIT (A)'s decision, dismissed Revenue's appeal.
Disallowance of Salary Expenses:
- As assessee was found to employ more than 10 workers, salary expenses were allowed by CIT (A).
- ITAT found no infirmity in CIT (A)'s decision, dismissed Revenue's appeal on salary expenses.
Cross Appeal - Eligibility for Deduction u/s. 80IB:
- CIT (A) denied claim u/s. 80IB due to lack of positive Gross Total Income after setting off losses.
- ITAT clarified deduction u/s. 80IB limited to available gross total income, not exceeding it.
- Directed matter back to A.O. for re-computing eligible deduction u/s. 80IB.
Interest u/s. 234D:
- ITAT referred to Delhi High Court decision that section 234D applies from A.Y. 2004-05 onwards.
- As A.Y. 2003-04 is under consideration, directed A.O. not to charge interest u/s. 234D.
Conclusion:
- Revenue's appeals dismissed, assessee's appeal partly allowed.
- Order pronounced on 12-08-2011 by ITAT Ahmedabad.
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2011 (8) TMI 1241
Issues involved:
The judgment involves two appeals filed by the Revenue challenging the orders of the CIT(Appeals)-XIV, Ahmedabad related to the allowance of deduction u/s.80IB(10) and the deletion of penalty u/s.271(1)(c) for Assessment Year 2003-04.
A. ITA No.798/Ahd/2009:
The main issue was the allowance of deduction u/s.80IB(10) of the Act amounting to Rs. 66,66,358 for a Real Estate Developer company. The Assessing Officer (AO) objected to the deduction claiming that the company was not the owner of the land on which the project was developed. The CIT(A) reconsidered the claim after the matter was remanded by ITAT Ahmedabad and held that the company was eligible for the deduction as it had control over the project and had developed it at its own cost and risks. The Revenue's appeal was dismissed based on the evidence presented by the assessee and the decisions of Co-ordinate Benches.
B. ITA No.934/Ahd/2009:
The issue in this appeal was the deletion of penalty u/s.271(1)(c) of Rs. 25,00,000 levied by the AO based on the wrong claim of deduction u/s.80IB. The CIT(A) cancelled the penalty stating that the claim was debatable and the appellant had provided necessary details during the assessment proceedings. The Revenue's appeal against the deletion of penalty was dismissed as the addition did not survive and the CIT(A) had rightly deleted the penalty.
In conclusion, both appeals of the Revenue were dismissed by the Appellate Tribunal ITAT Ahmedabad on 5th August 2011.
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2011 (8) TMI 1240
The High Court of Bombay upheld the decision of the Income Tax Appellate Tribunal to delete the penalty under Section 271(1)(c) of the Income Tax Act, 1961. The dispute was regarding the classification of income from a leased property. The court found no fault with the Tribunal's decision and dismissed the appeal with no costs.
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2011 (8) TMI 1239
Issues involved:
The issues involved in the judgment are evasion of service tax, waiver of pre-deposit of service tax, denial of CENVAT credit on capital goods, and imposition of penalty.
Evasion of service tax:
The applicants were engaged in various services but were found to be evading payment of service tax on the services provided to their clients. Proceedings were initiated against them based on intelligence gathered by DGCEI. A show-cause notice was served on the applicants for the demand of service tax for the period from September 2003 to March 2006. The demand of service tax was confirmed along with interest and a penalty of Rs. 6,06,55,417.
Waiver of pre-deposit of service tax:
The applicants sought waiver of pre-deposit of the balance amount of service tax of Rs. 14,61,843 and waiver of the penalty imposed by the impugned order. The advocate for the applicants argued that the applicants had paid a significant portion of the service tax liability before the issuance of the show-cause notice. He also claimed that the adjudicating authority had not considered their claim of CENVAT credit on capital goods. The applicants were willing to make a pre-deposit of Rs. 50 lakhs as penalty within twelve weeks, and on compliance, the balance amount of service tax and penalties would remain stayed during the pendency of the appeal.
Denial of CENVAT credit on capital goods:
The applicants contended that the adjudicating authority had denied them CENVAT credit of Rs. 10 lakhs on capital goods. This denial was a point of contention raised by the applicants in their defense against the demand for service tax and penalty.
Imposition of penalty:
The applicants admitted their liability to pay service tax, which they had paid along with interest. However, they sought waiver of penalty during the pendency of the appeal. The tribunal found that the applicants were duty-bound to pay service tax on time and file returns accordingly. Despite the payment of a significant portion of the service tax liability and penalty, the tribunal did not find grounds for a complete waiver of penalty. The tribunal directed the applicants to make a pre-deposit of Rs. 50 lakhs as penalty within twelve weeks, and upon compliance, the balance amount of service tax and penalties would remain stayed during the appeal process.
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2011 (8) TMI 1238
Validity of assessment u/s 153A r w s 153B - Held that:- CIT(A) was not correct in law in holding that assessment for the previous year in which search took place or requisition was made had to be completed under the normal provisions of the Act.
Considering the above reported decision of the Tribunal, we are of the opinion, the additional ground, which is legal in nature and raised by the assessee’s counsel for the first time before us is admitted and adjudicated in favour of the assessee making the assessment order invalid. Accordingly, the additional ground is allowed.
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2011 (8) TMI 1237
Issues involved: Appeal against penalty u/s 271A of the Income-tax Act, 1961 for assessment year 2006-07.
The appellant, an individual engaged in marketing machine tools and other items, filed a return declaring commission income on a presumptive basis u/s 44AF at 5%. During scrutiny, it was found that section 44AF applied only to retail business, not to the appellant's business. The Assessing Officer determined the net income at &8377; 37,25,096/- and taxable income at &8377; 39,24,680/-, higher than the declared amounts. A penalty of &8377; 25,000/- was imposed for non-maintenance of books of account u/s 44A(2)(i), which was upheld by the Commissioner of Income-tax (Appeals).
The appellant contended that there was a genuine belief that books of account were not required and cooperated in recalculating income upon realizing the error. It was argued that there was a reasonable cause for the failure to maintain regular books of account, and thus, the penalty should be deleted.
After careful consideration, the Tribunal found no reason to uphold the penalty as the appellant's bona fide belief was not disputed. Referring to sections 273B and 271A of the Act, the Tribunal set aside the Commissioner's order and directed the Assessing Officer to delete the penalty of &8377; 25,000/-.
In conclusion, the appellant's appeal was allowed, and the penalty was removed by the Tribunal.
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2011 (8) TMI 1236
Issues Involved:
1. Deletion by the ld. CIT(A) u/s 2(22)(e) of the Income-tax Act, 1961.
2. Assessment of deemed dividend and applicability of section 2(22)(e).
Summary:
Issue 1: Deletion by the ld. CIT(A) u/s 2(22)(e) of the Income-tax Act, 1961
The Revenue's appeal and the assessee's cross-objection pertain to the deletion of an addition made by the AO u/s 2(22)(e) of the Income-tax Act, 1961. The AO had added Rs. 1,12,44,952/- to the assessee's income, alleging tax evasion through a colorable device, citing precedents like Mcdowell Co Ltd (1985) 154 ITR 148. The AO noted that the shareholding patterns of M/s Arora Fabrics Pvt Ltd and M/s Arora Knit Fab Pvt Ltd indicated substantial interest by common shareholders, thus treating the loan from M/s Arora Fabrics Pvt Ltd to the assessee as deemed dividend.
Issue 2: Assessment of deemed dividend and applicability of section 2(22)(e)
The ld. CIT(A) deleted the addition, reasoning that only shareholders can be assessed for deemed dividend u/s 2(22)(e), not the company. The CIT(A) cited judgments such as CIT v. Universal Medicare P. Ltd (2010 190 Taxman 144 (Bom)) and the SB decision in M/s Bhaumik Colours Pvt Ltd (2009) 313 ITR (AT) 146 (Mum) (SB), which support that deemed dividend can only be taxed in the hands of the shareholder, not the recipient company. The CIT(A) also rejected the AO's clubbing of different shareholders' interests to meet the conditions of section 2(22)(e), noting that none of the shareholders individually held the requisite shareholding in both companies.
The Tribunal upheld the CIT(A)'s findings, agreeing that the conditions for deemed dividend u/s 2(22)(e) were not met since the assessee company was not a shareholder in M/s Arora Fabrics Pvt Ltd, and the individual shareholders did not hold substantial interest in both companies. The Tribunal dismissed the Revenue's appeal and the assessee's cross-objection as infructuous.
Conclusion:
The Tribunal concluded that the addition of Rs. 1,12,44,952/- as deemed dividend u/s 2(22)(e) was not justified and upheld the CIT(A)'s order, dismissing both the Revenue's appeal and the assessee's cross-objection.
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2011 (8) TMI 1235
Issues involved: Appeal against CIT(A)'s order sustaining disallowance of expenditure on application software as capital in nature.
Summary:
1. Issue 1 - Disallowance of application software cost:
The appeal was regarding the disallowance of Rs. 1,04,11,829 made by the Assessing Officer (AO) for acquiring intangible assets through application software. The appellant contended that the expenditure was revenue in nature and should be allowed u/s 37(1) of the IT Act. The AO treated the expenditure as capital, relying on specific provisions of section 32(1)(ii). The CIT(A) upheld the AO's decision, leading to the appeal before the ITAT.
2. Facts and Arguments:
The appellant, M/s.Progeon Ltd. (now M/s.Infosys BPO Ltd.), had debited the profit and loss account for the purchase of computer software under different heads totaling Rs. 1,04,11,829. The appellant claimed the software was for day-to-day functioning and should be treated as revenue expenditure. The AO disagreed, considering it an asset with enduring benefit and allowed 60% as depreciation. The CIT(A) upheld the capital nature of the expenditure, leading to the current appeal.
3. Decision and Rationale:
The ITAT considered the appellant's submissions and relevant case laws, including the decision of the Hon'ble Karnataka High Court and the Special Bench (Delhi) of the Tribunal. It was noted that neither the AO nor the CIT(A) discussed the period of the software licenses acquired. In line with the precedents, the ITAT directed the AO to examine the length of each software license acquired by the appellant during the assessment year. The AO was instructed to apply the principles laid down by the High Court and the Special Bench after verifying the period of each software. The appeal was allowed for statistical purposes.
Conclusion:
The ITAT directed a reevaluation by the AO regarding the length of software licenses acquired by the appellant, emphasizing the relevance of the duration of the license period in determining the nature of the expenditure. The decision highlighted the importance of considering the specific circumstances of each case in determining the tax treatment of software expenses.
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2011 (8) TMI 1234
Whether the assessee, UPSRTC is obliged to deduct tax at source under the provision contained in section 194C or 194-I for payments made to the contractors by way of hire charges - Held that:- It is held that the assessee was liable to deduct tax on the payments made to various contractors u/s. 194C only, and that the provision contained in section 194-I is not applicable.
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2011 (8) TMI 1233
Issues Involved:
1. Taxability of receipt on transfer of land.
2. Classification of transactions in shares and mutual funds as capital gains or business income.
Summary:
Issue 1: Taxability of Receipt on Transfer of Land
The Revenue contended that the receipt of Rs. 26,99,76,000 on transfer of land should be taxable, arguing that the assessee is not the "residuary legatee" of late Shri E.F. Dinshaw and that the control, management, and ownership of the properties vest with the assessee. The Revenue suggested that the receipts should be treated either as short-term capital gain or as an adventure in the nature of trade. The Tribunal, following its earlier decision in the assessee's own case (ITA no.4573 and 4424/Mum./2008), dismissed grounds no.2 and 3 of the Revenue's appeal, thereby upholding the Commissioner (Appeals)'s decision that the receipt is non-taxable.
Issue 2: Classification of Transactions in Shares and Mutual Funds
The core issue was whether the assessee's income from the sale of shares and units of mutual funds should be taxed under "Capital Gains" or "Income From Business." The Tribunal examined the facts, noting that the assessee, an industrialist, made investments in shares and mutual funds, primarily through portfolio management schemes (PMS). The assessee's transactions were limited, with investments made in 55 companies and sales in shares of 11 companies. The Tribunal observed that the assessee had no borrowings and the investments were disclosed as such in the accounts year after year, accepted by the Revenue. The Tribunal concluded that the assessee acted as an investor, not a trader, and upheld the Commissioner (Appeals)'s finding that the income should be assessed under "Capital Gains." Consequently, the Tribunal dismissed the Revenue's ground on this issue.
Conclusion:
Both the appeal by the assessee and the appeal by the Revenue were dismissed. The Tribunal upheld the Commissioner (Appeals)'s decisions, treating the receipt on transfer of land as non-taxable and classifying the transactions in shares and mutual funds as capital gains.
Order Pronounced:
The order was pronounced in the open Court on 30.8.2011.
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2011 (8) TMI 1232
1. ISSUES PRESENTED and CONSIDERED The core legal issue in this case was whether the addition of Rs. 5,14,616/- made by the Assessing Officer (AO) under Section 41(1) of the Income Tax Act, 1961, on account of sundry creditors, was justified. Specifically, the question was whether the liabilities shown in the balance sheet, which were old and lacked confirmation from creditors, could be deemed to have ceased to exist, thereby attracting the provisions of Section 41(1). 2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents: Section 41(1) of the Income Tax Act, 1961, deals with the remission or cessation of trading liabilities. It provides that if an allowance or deduction has been made in the assessment for any year in respect of a loss, expenditure, or trading liability incurred by the assessee, and subsequently, during any previous year, the assessee has obtained any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained or the value of benefit accruing shall be deemed to be profits and gains of business or profession and accordingly chargeable to income tax. Precedents considered include: - ITAT Ahmedabad Bench in the case of Shri Nitin S. Garg.
- Hon'ble Madras High Court in Tamilnadu Warehousing Corporation.
- Hon'ble Punjab and Haryana High Court in Smt. Sita Devi Juneja.
- ITAT Ahmedabad Bench in N. R. Chauhan.
- ITAT Lucknow Bench in DCIT Vs Allied Leather Finishers (P) Ltd.
- Hon'ble Rajasthan High Court in CIT Vs Prameshwar Bohra.
- ITAT Mumbai Bench in ACIT Vs VIP Industries.
Court's Interpretation and Reasoning: The Tribunal interpreted that merely because liabilities are outstanding for many years, it cannot be inferred that they have ceased to exist. The liabilities reflected in the balance sheet indicate the acknowledgment of debts by the assessee. The Tribunal emphasized that Section 41(1) is applicable only when there is an actual cessation or remission of liability, not merely due to the passage of time or lack of creditor confirmation. Key Evidence and Findings: The assessee continued to show the amounts in question as liabilities in its balance sheet. The Tribunal found that the AO and CIT(A) did not adequately prove that the liabilities had ceased to exist. The liabilities were carried forward from previous years, and there was no evidence of remission or cessation. Application of Law to Facts: The Tribunal applied the legal principles from the relevant precedents to the facts of the case, concluding that the liabilities shown in the balance sheet could not be treated as ceased merely because they were old and lacked confirmation from creditors. The Tribunal noted that the AO failed to prove that the assessee obtained any benefit from these liabilities by way of remission or cessation. Treatment of Competing Arguments: The Tribunal considered the arguments from both sides. The assessee argued that the liabilities were genuine and continued to exist, while the revenue contended that the lack of confirmations implied cessation. The Tribunal favored the assessee's position, citing the lack of evidence for cessation and the consistent showing of liabilities in the balance sheet. Conclusions: The Tribunal concluded that the provisions of Section 41(1) were not applicable in this case, as there was no cessation or remission of the liabilities. The addition made by the AO was not justified, and the appeal of the assessee was allowed. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: "The liabilities reflected in the balance sheet cannot be treated as cessation of liabilities. Merely because the liabilities are outstanding for last many years, it cannot be inferred that the said liabilities have ceased to exist." Core Principles Established: - Liabilities shown in the balance sheet indicate acknowledgment of debts and cannot be deemed ceased solely due to age or lack of creditor confirmation.
- Section 41(1) requires actual cessation or remission of liability, not just the passage of time.
Final Determinations on Each Issue: The Tribunal set aside the orders of the authorities below and deleted the addition of Rs. 5,14,616/-. The appeal of the assessee was allowed, establishing that the liabilities in question had not ceased to exist and were not subject to taxation under Section 41(1).
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2011 (8) TMI 1231
Issues Involved:
1. Deletion of addition on account of on-money receipt on sale of plots.
2. Direction to take on-money at a specific rate.
3. Validity of retraction of statements.
4. Levy of interest u/s 234B and 234C.
5. Initiation of penalty u/s 271(1)(c).
Summary:
1. Deletion of Addition on Account of On-Money Receipt on Sale of Plots:
The Revenue challenged the deletion of additions made by the AO on account of on-money receipt on the sale of plots. The AO had based the additions on a seized note-book detailing sales transactions, which indicated higher sale prices than those recorded in the books. The CIT(A) directed the AO to adopt an average on-money rate of Rs. 100 per sq. yard, based on a partner's statement, instead of the higher rates noted in the seized documents.
2. Direction to Take On-Money at a Specific Rate:
The CIT(A) directed the AO to apply a uniform rate of Rs. 100 per sq. yard for on-money receipts, based on the partner's admission. The Tribunal held that the AO should confine himself to the specific instances recorded in the seized note-book and not extrapolate the on-money rate to all transactions. The Tribunal emphasized that additions should be based on concrete evidence from the seized documents, not on estimations or presumptions.
3. Validity of Retraction of Statements:
The assessee argued that the retraction of the partner's statement was valid as it was made under pressure and retracted immediately through an affidavit. The Tribunal noted that while an admission is an important piece of evidence, it must be corroborated by other evidence. The Tribunal found that the retraction was supported by an affidavit and no incriminating material was found to substantiate the AO's extrapolation of on-money receipts.
4. Levy of Interest u/s 234B and 234C:
The assessee contended that the levy of interest u/s 234B and 234C was done without affording an opportunity of being heard, violating principles of natural justice. The Tribunal did not specifically adjudicate this issue, treating it as consequential.
5. Initiation of Penalty u/s 271(1)(c):
The assessee challenged the initiation of penalty u/s 271(1)(c) without recording mandatory satisfaction. The Tribunal did not specifically address this issue, treating it as infructuous.
Conclusion:
The Tribunal partly allowed both the Revenue's appeals and the assessee's cross objections. It directed the AO to confine the additions to the specific instances of on-money recorded in the seized documents and not to apply a uniform rate across all transactions. The Tribunal emphasized the need for concrete evidence to support any additions made.
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2011 (8) TMI 1230
Issues:
1. Whether the Tribunal was right in directing the assessing officer to delete the addition of non occupancy charges based on the principle of mutuality.
2. Whether the Tribunal was right in directing the assessing officer to delete the addition of transfer fees/betterment charges based on the principle of mutuality.
3. Whether the Tribunal was right in directing the assessing officer to assess the rental income for letting out the terrace under the head income from house property subject to deduction u/s.24.
Analysis:
1. The first issue raised by the revenue was regarding the addition of non-occupancy charges. The Tribunal directed the assessing officer to delete the addition, citing that the amount was received from members and not occupants, thus applying the principle of mutuality. The revenue contended that previous court decisions favored the assessee on similar grounds, making it inapplicable to entertain this issue. Consequently, the appeal was dismissed concerning this question.
2. The second issue pertained to the addition of transfer fees/betterment charges. The Tribunal also directed the deletion of this addition based on the principle of mutuality. The revenue argued that previous court decisions supported the assessee's position, rendering this issue non-entertainable. Consequently, the appeal was dismissed concerning this question as well.
3. The final issue involved the assessment of rental income for letting out the terrace under the head income from house property, subject to deduction under section 24. The Tribunal allowed the claim of the assessee, following its decisions in previous cases. The revenue did not file appeals against these decisions due to the small tax effect and failed to point out any errors in the ITAT's orders. As a result, the court found no reason to entertain the appeal on this question and dismissed it with no order as to costs.
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2011 (8) TMI 1229
Income received on lease of a portion of terrace of the building and a wall of the building for the purpose of fixing of hoarding, neon sign, etc. - assessable under the head “Income From Business or Profession” or under the head “Income From Other Sources” - Held that:- Allow this ground raised by the assessee directing the Assessing Officer to assess the income in question under the head “Income From House Property”.
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2011 (8) TMI 1228
Disallowance of interest and capital expenditure - Documents seized during the course of search - business by way of bogus unsecured loan - Income from undisclosed sources on receipt of money - deleting the addition u/s.68 - HELD THAT:- In present case, we have no hesitation in deleting the addition made in respect of Fort Royal projects for asst. yr. 2007-08. In regard to Revenue's appeals, additions made by AO on account of on-money receipts for asst. yrs. 2002-03 to 2005-06 were also deleted by CIT(A) with the finding that since assessments for these years had already been completed under s. 143(3) of the Act before the date of search and nothing incriminating was found in course of search or survey in respect of receipt of on-money for these years, completed assessments for these years could not be disturbed and no addition on account of 'on-money' could be made merely on the basis of change of opinion. As the Revenue could not controvert the same.
THAT, no incriminating material or documents were found in course of the search or survey action with respect to the allowability or otherwise of the expenditure or interest expenses for any of the years under consideration. In the original assessments framed under s. 143(3) of the Act for asst. yrs. 2002-03 to 2005-06, the AO after application of mind and detailed scrutiny of accounts had consciously allowed said expenses and interest On loan. However, later on while framing assessments under s. 144/153C for the said years, under identical circumstances vis-a-vis past, the AO opined that a part of such expenses and interest should have been capitalized to WIP. Accordingly, the same was added back by the AO under s. 144/153C merely on the basis of change of opinion in the guise of search assessment. Hence, CIT(A) has rightly deleted this addition. Accordingly, these two common issues of Revenue's appeals in IT(SS)A Nos. 15, 16, 17, 18, 19, 20 and 21/Kol/2011 are dismissed.
THAT, AO alleged that the assessee company was specifically asked for explanation but had not complied. Thus, the said sum of Rs.,10 lacs was added as income of the assessee from undisclosed sources. we find that the allegations and so-called findings of AO serve no purpose as far as assessee is concerned. The AO has observed that 'few layers' had been identified with regard to the source of ₹ 10 lacs received from Toplight Vinimay (P) Ltd. but has not given any details regarding such layers. Further, the AO has failed to prove by bringing on record some cogent evidence that this amount of ₹ 10 lacs had actually been deposited by assessee company directly or indirectly through intermediaries into the account of Toplight Vinimay (P) Ltd. and as such, represented income from undisclosed sources of the assessee. it has successfully proved genuineness and source of loan by furnishing the requisite evidences in the form of IT return and financial statements of Toplight Vinimay (P) Ltd. evidencing receipt of loan for the relevant year and also confirmation of the said party. In view of these facts and circumstances, we confirm the order of CIT(A) deleting the addition and this issue of Revenue's appeal is dismissed.
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2011 (8) TMI 1227
Issues involved: Appeal by department against order of ld. CIT (A) relating to assessment year 2006-07 regarding deletion of addition u/s 50C of the Act.
Summary:
The department objected to the deletion of addition made by the Assessing Officer (AO) by applying provisions of section 50C of the Act. The AO computed capital gain at Rs. 26,36,153/- but adopted deemed full value of consideration at Rs. 30,63,132/- u/s 50C. The appellant contended that since the transfer was through an unregistered agreement to sale, the question of valuation of stamp duty did not arise, making section 50C inapplicable. The appellant relied on legal precedents to support their argument. The ld. CIT (A) considered the appellant's contention and found that section 50C is a special provision for adopting full value of consideration in certain cases where stamp valuation authority assesses the value for stamp duty payment. The ld. CIT (A) allowed the appeal of the assessee on this issue, stating that the amendment to section 50C, effective from 1.10.2009, inserting the word "assessable," is not retrospective and cannot be applied to cases before that date where the property was not registered.
The department appealed to the Tribunal, with the ld. D/R relying on the AO's order and the ld. Counsel of the assessee supporting the ld. CIT (A)'s decision. The Tribunal found that the ld. CIT (A) was justified in allowing the issue in favor of the assessee, citing the decision of ITAT Jodhpur in a similar case. As there was no stamp duty imposed due to the unregistered sale deed, and the amendment to section 50C was not applicable for the assessment year 2006-07, the Tribunal confirmed the ld. CIT (A)'s decision in favor of the assessee. Consequently, the appeal of the department was dismissed, and the order was pronounced on 05.08.2011.
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2011 (8) TMI 1226
Issues involved: Disallowance of expenses claimed u/s 40(a)(ia) of the I.T. Act, 1961 for non-deduction of tax on payments as a transport contractor.
Summary:
The appeal was filed by the assessee against the confirmation of disallowance of expenses claimed under Section 40(a)(ia) of the I.T. Act, 1961 for non-deduction of tax on payments as a transport contractor. The Assessing Officer noted that the assessee had received transport works orders without deducting tax at source, leading to the disallowance of Rs. 2,75,00,000. The first appellate authority upheld the disallowance, stating that no defect was established by the assessee to warrant interference. The assessee argued that no disallowance should be made if tax is deducted in the last month of the previous year and deposited before the due date of filing the return. The assessee also cited various case laws to support their contention. The Tribunal found that the assessee had complied with tax deduction at source requirements and set aside the disallowance, directing the addition to be deleted.
The Tribunal observed that the learned CIT(A) had misdirected himself in considering the accounting treatment given by the assessee, which was clarified by the CBDT. The Tribunal noted that the assessee had deducted tax at source on payments made up to the end of eleven months in the twelfth month of the financial year, as required by law. The Tribunal emphasized that the provisions of Section 40(a)(ia) should be interpreted in a manner that does not lead to unjust enrichment by the State on technical grounds. The Tribunal concluded that the disallowance of Rs. 2,75,00,000 was unjustified and without basis, and therefore directed it to be deleted.
In conclusion, the Tribunal allowed the appeal of the assessee, setting aside the order of the learned CIT(A) and deleting the addition of Rs. 2,75,00,000 made on account of disallowance of expenses claimed under Section 40(a)(ia) of the I.T. Act, 1961.
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9911796707
