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Showing 161 to 180 of 1052 Records
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2011 (4) TMI 1397
Cenvat credit of the Service tax - transportation services provided by the assessee to their staff for pick up and drop from the residence to the factory and vice-versa – Held that:- Service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacturer directly or indirectly in or in relation to the manufacturer of final products or used in relation to activities relating to business - If any of the test is satisfied then the service falls under input service and the manufacturer is eligible to avail Cenvat credit and the Service tax paid on such credit - Transportation/Rent-a-Cab service is provided by the assessee to their employees in order to reach their factory premises in time which has a direct bearing on manufacturing activity - in favour of the assessee
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2011 (4) TMI 1396
Issues:
1. Classification of services as business support services or business auxiliary services.
Analysis:
The High Court judgment pertains to an appeal filed by the Revenue challenging a Tribunal order that held the assessee's activity as falling under "business support service" without any liability to pay service tax. The Tribunal rejected the Revenue's claim that the activity falls under "business auxiliary services" effective from 1-7-2003, leading to a dispute over the classification of services. The primary issue is determining whether the activity carried out by the assessee should be classified as business support services or business auxiliary services, focusing on the classification of the services provided.
The appeal was filed under Section 35G of the Central Excise Act, which allows appeals to the High Court concerning questions related to the rate of duty of excise or the value of goods for assessment purposes. The Court noted that this case falls within the scope of determining questions related to the rate of duty tax, which falls under the exclusive jurisdiction of the Apex Court as per Section 35-L of the Act. Consequently, the High Court deemed the appeal not maintainable and rejected it, granting the Revenue the liberty to approach the Apex Court against the Tribunal's order.
Additionally, the High Court directed the Registry to return the certified copy of the order and other relevant documents to enable the assessee to file an appeal with the Supreme Court. This directive ensures that the necessary paperwork is provided to the assessee for further legal proceedings at the higher judicial level, emphasizing procedural fairness and adherence to legal requirements.
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2011 (4) TMI 1395
Issues:
Challenging Tribunal's order setting aside demand for customs duty, interest, and penalty against assessee and individual officers.
Analysis:
The appeals were filed by the Revenue challenging the Tribunal's decision that set aside the Commissioner of Central Excise's order demanding and confirming basic customs duty, interest, and penalty against the assessee and individual officers. The assessee, a registered company with the Central Excise Department, imported crude sunflower oil and soyabean oil at a concessional rate of Customs duty for use in manufacturing final products. The Revenue alleged that the imported goods did not reach the factory premises but were sent to other refineries, indicating fraudulent concession availing. The authorities found discrepancies and issued a show cause notice proposing confiscation of goods, demanding duty difference, interest, and penalty against the officers. The Tribunal, however, held that the conditions of the rules were complied with, no suppression of facts was proven, and there was collusion on the part of departmental officers. As the show cause notice was defective and not maintainable, the Tribunal set aside the demand for duty, interest, and penalty.
The substantial questions of law considered were: whether collusion with departmental officers absolves suppression of facts, if collusion must be alleged for invoking longer period for proceedings, and if a director can be absolved from penalty due to non-joinder of officers in the show cause notice. The Tribunal's decision was based on the absence of collusion allegations and non-involvement of departmental authorities, leading to the rejection of the demand notice invoking a longer period of limitation. The High Court found that the matter did not relate to the determination of duty rate or goods' value for assessment, thereby falling outside its jurisdiction under Section 35G of the Central Excise Act, 1944 and Section 130 of the Customs Act, 1962. Consequently, the appeals were rejected, with the Revenue advised to approach the Apex Court under the relevant sections for further recourse.
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2011 (4) TMI 1394
The Supreme Court dismissed the appeal as there was no ground for interference with the impugned order. The respondent had paid duty at 16%, so the refund should not be restricted to 8% even though the duty was paid at a higher rate. The appeals were dismissed, and parties were left to bear their own costs.
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2011 (4) TMI 1393
Issues involved: The judgment involves the taxability of advance license benefits and pass book benefits receivable by the assessee for the assessment year 2001-02.
Taxability of advance license benefits:
The Tribunal held that no income accrues until the imports are made and raw materials are consumed, following its earlier orders in the assessee's own case. The Tribunal consistently ruled in favor of the assessee, disregarding the view taken by the Ahmedabad Bench of the Tribunal. The revenue's reliance on the decision of the Ahmedabad Bench was rejected by the Tribunal, emphasizing the consistency of its own decisions. The Tribunal maintained that advance license benefits were not taxable unless goods were imported and raw materials consumed, aligning with its previous orders for various assessment years.
Taxability of pass book benefits:
The Tribunal referred to a judgment by the Hon'ble Bombay High Court, which held that DEPB (Duty Entitlement Passbook) benefits are not assessable in the year of export but in the year when the benefit is actually availed by the assessee. This decision was consistent with the Tribunal's own ruling in the assessee's case for the assessment years 1996-97 and 1997-98. The Tribunal affirmed the decision of the CIT(A) regarding the taxability of pass book benefits, in line with the High Court's judgment and its own precedent.
Conclusion:
The Tribunal dismissed the department's appeal, upholding the decisions of the CIT(A) regarding the taxability of both advance license benefits and pass book benefits. The judgment emphasized the importance of timing in determining the accrual of income from such benefits, aligning with previous rulings and the decision of the Hon'ble Bombay High Court.
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2011 (4) TMI 1392
Issues involved: Appeal against cancellation of penalty u/s 272A(2)(k) of the Income-tax Act, 1961 for non-filing of quarterly TDS statements.
Summary:
The appeal was filed by the Revenue against the cancellation of a penalty imposed u/s 272A(2)(k) of the Income-tax Act, 1961 for the assessment year 2008-09. The penalty was levied due to delays in filing quarterly TDS statements for the financial years 2007-08 and 2008-09. The assessee, a State Government Organization, explained that TDS was being paid through Treasury and was not aware of the requirement to file quarterly statements on time. The ld.CIT(A) cancelled the penalty, considering it a technical default as the tax was deducted and paid on time, and the quarterly statements were filed upon receiving notices. The ITAT upheld the cancellation, stating that the non-filing did not cause revenue loss, and it was a technical breach of rules. The decision was supported by the principle that penalties should not be imposed for technical or venial breaches.
The ITAT observed that the tax was deducted and paid on time by the Treasury Officer, but quarterly statements were delayed due to lack of knowledge, not intentional wrongdoing. The non-filing of statements did not result in revenue loss, and the tax amount was deposited within the prescribed time. The ITAT agreed with the ld.CIT(A) that the penalty was not justified as the default was technical and venial, and the assessee complied upon being informed of the lapse. Citing the decision in Hindustan Steel Ltd. vs. State of Orissa, the ITAT emphasized that penalties should be imposed only for deliberate defiance of law or contumacious conduct, not for technical breaches. Therefore, the ITAT upheld the cancellation of the penalty, concluding that no penalty could be validly levied on the assessee in this case.
In conclusion, the ITAT dismissed the appeal and upheld the decision to cancel the penalty, considering the non-filing of quarterly TDS statements as a technical default that did not warrant penalty imposition.
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2011 (4) TMI 1391
Issues involved:
The judgment involves the issue of addition of interest payments by the Assessing Officer, the justification of disallowance of interest payments, and the decision of the Commissioner of Income-tax (Appeals) regarding the disallowance.
Details of the Judgment:
1. Issue of Addition of Interest Payments:
The Assessing Officer made an addition of &8377; 10,96,266/- out of the interest payments claimed by the assessee. This was based on the observation that the assessee had availed unsecured loans but had not shown any interest receipts, leading to the disallowance of interest payments. The Commissioner of Income-tax (Appeals) held that the Assessing Officer was not justified in disallowing the interest amount and directed the deletion of the disallowance.
2. Justification of Disallowance of Interest Payments:
The Revenue, through the Departmental Representative, supported the Assessing Officer's decision and argued that the disallowance was justified. It was contended that the Commissioner of Income-tax (Appeals) erred in deleting the disallowance without valid reasons. On the other hand, the Counsel for the assessee supported the Commissioner's decision, stating that the deletion of the disallowance was justified.
3. Decision of the Commissioner of Income-tax (Appeals):
The Commissioner of Income-tax (Appeals) reasoned that the investment made by the appellant in the firm was converted into unsecured loans after retirement, and no interest was received during the relevant period. The Commissioner found that the interest disallowance was not justified as the investment was made with the intention to earn income, even though no interest was received. The Commissioner directed the Assessing Officer to delete the disallowance of &8377; 10,93,754/-. The Appellate Tribunal upheld the Commissioner's decision and dismissed the appeal of the Revenue.
In conclusion, the Appellate Tribunal upheld the decision of the Commissioner of Income-tax (Appeals) to delete the disallowance of interest payments, stating that the disallowance was not justified based on the intention of the investment to earn income, even though no interest was received during the relevant period.
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2011 (4) TMI 1390
Issues involved: Determination of entitlement to concessional rate of sales tax on purchase of rubber used in production of compound rubber; validity of notifications issued by respondent State.
Summary:
The Supreme Court considered an appeal against the Kerala High Court's judgment setting aside the Sales Tax Tribunal's decision regarding the appellant's entitlement to a concessional rate of sales tax on rubber used in producing compound rubber. The High Court held the appellant was not eligible for the benefit. The Supreme Court found a crucial technical issue regarding the distinction between "rubber compound" and "compound of rubber" needed further evidence. It noted lack of evidence from the respondent supporting their claim that the appellant's product was "compound of rubber." The Court set aside the High Court's judgment and restored the case for further examination.
Additionally, the appellant had filed writ petitions challenging the validity of notifications issued by the respondent, which were also dismissed by the High Court. As the Supreme Court set aside the earlier judgment, the writ petitions were restored for reconsideration. The parties were allowed to present additional evidence, documents, and affidavits before the High Court. They were also permitted to raise new legal issues and request an early hearing, with the High Court directed to expedite the process within six months.
Furthermore, a significant amount deposited by the appellant in compliance with a previous court order was to remain with the Department until the final decision by the High Court. The parties were granted liberty to seek appropriate orders from the Supreme Court if necessary, after a specified date. The civil appeals were disposed of in accordance with the Court's directives and observations.
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2011 (4) TMI 1389
Issues involved: Adjustment of brought forward losses of non 10A units against the profit of 10A unit before allowing deduction u/s 10A.
The Appellate Tribunal ITAT MUMBAI, in the case concerning the assessment year 2006-07, addressed the dispute raised by the assessee regarding the adjustment of brought forward losses of non 10A units against the income of the 10A unit before allowing deduction u/s 10A. The assessee, engaged in providing I.T. enabled services, had a unit in a software technology park in Mumbai eligible for deduction u/s 10A. Additionally, the assessee had non 10A units with brought forward losses. The Assessing Officer (AO) initially set off the brought forward losses of the non 10A unit against the profit of the 10A unit, resulting in no deduction being allowed u/s 10A. The CIT(A) upheld the AO's decision, leading the assessee to appeal before the tribunal.
During the proceedings, the Learned AR for the assessee contended that the issue was settled in favor of the assessee by a Special Bench decision in the case of Scientific Atlanta Vs ACIT. On the other hand, the Learned DR relied on the orders of the lower authorities.
Upon careful consideration of the contentions and examination of the records, the tribunal referred to the Special Bench decision in the case of Scientific Atlanta Vs ACIT. The tribunal clarified that deduction u/s 10A was not an exemption but a deduction under Chapter III of the Income-tax Act, making the provisions of section 80AB of Chapter VIA inapplicable. It was emphasized that the deduction u/s 10A should be allowed concerning the profit of the eligible unit and not from the gross total income as per Chapter VI A. The tribunal ruled that business losses of non-eligible units cannot be set off against the profits of the undertaking eligible for deduction u/s 10A to determine the deduction allowable. Notably, this decision applied when there was only one eligible undertaking u/s 10A, mirroring the scenario of the present case where there was a single unit eligible for deduction u/s 10A alongside non 10A units with brought forward losses. Consequently, the tribunal set aside the CIT(A)'s order and allowed the assessee's claim.
In conclusion, the tribunal allowed the appeal of the assessee, pronouncing the order in the open court on 20.04.2011.
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2011 (4) TMI 1388
Issues involved: Claim for deduction of bad debts u/s 36(1)(vii) r.w.s. 36(2) of the Income Tax Act, 1961.
Summary:
The Appellate Tribunal ITAT Ahmedabad heard an appeal by the assessee against the order of the ld. C.I.T. (A)-XI, Ahmedabad, regarding a claim for deduction of Rs. 11,81,505/- on account of bad debts. The assessee, a trader in medicines and pharmaceutical drugs, had filed a return declaring income of Rs. 10,46,635/- which was selected for scrutiny. The Assessing Officer disallowed the claim for bad debts as the assessee did not establish that the debts had become bad, citing relevant case law.
On appeal, the Ld. C.I.T.(A) upheld the AO's decision stating that the appellant failed to provide evidence that the debts had become bad, as the appellant maintained contacts with the clients through regular business transactions. The addition made by the AO was confirmed.
The assessee appealed to the ITAT against the findings of the ld. CIT(A), and both parties agreed that the issue was covered by the decision of the Hon'ble Supreme Court in TRF Ltd. vs. CIT. The ITAT, considering the Supreme Court's decision, allowed the claim for deduction of bad debts as the debts had been written off in the books of accounts during the relevant year, in accordance with the provisions of sec. 36(1)(vii) r.w.s. 36(2) of the Act. No other arguments were presented, and the appeal was allowed.
In conclusion, the ITAT ruled in favor of the assessee, allowing the deduction of bad debts u/s 36(1)(vii) r.w.s. 36(2) of the Income Tax Act, 1961.
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2011 (4) TMI 1387
The Delhi High Court upheld the Tribunal's decision regarding the disallowance of expenditure on wages and consumable goods as adhoc without a rational basis. The Assessing Officer did not identify any specific defects in the vouchers, and no expenditure was found to be non-genuine or unrelated to the business. Therefore, the appeal was dismissed as no substantial question of law arose.
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2011 (4) TMI 1386
Nature of income received from letting out the terrace for putting up mobile towers by the telecom companies - HELD THAT:- In present case the assessee has only let out the terrace and the hoarding have been put up by the telecom companies and therefore rental income has arisen from letting out of the terrace and not from letting out of hoarding or towers. The case of the assessee is covered by the decision of the tribunal in case of M/s.Pinto’S Park View Premises Co.op. Housing Society Ltd and in case of Satyam Shivam Sundaram CHS Ltd. Therefore respectfully following the said decisions we set aside the order of CIT(A) and allow the claim of the assessee.
Deduction of maintenance charges paid - HELD THAT:- In the present case, it is not clear whether the rent fixed by the assessee was inclusive of any charges payable for common serviced provided by the society. We therefore restore the issue to the file of AO for passing a fresh order after necessary examination in the light of observations made above and after allowing opportunity of hearing to the assessee.
Nature of income from share transactions - HELD THAT:- In the present case the assessee has been frequently purchasing and selling shares and the sales in all cases have been made after holding the shares for less than 3 months and the overall profit earned has also been small clearly suggesting that the assessee had been selling the shares motivated by profit. In our view, on the facts of the case, the income arising from sale and purchase of shares within the three months period has to be treated as business income and the balance as capital gain. Hence, we confirm the order of CIT(A).
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2011 (4) TMI 1385
Issues involved: Appeal against disallowance of commission paid u/s 40(a)(ia) of the I.T. Act, 1961 for assessment year 2007-08.
Summary:
The assessee, a real estate company, filed a return of income showing &8377; 3,67,58,515, with final taxable income of &8377; 3,77,76,730. The Assessing Officer (AO) disallowed &8377; 7.50 lakhs u/s 40(a)(ia) of the Act due to non-deduction of tax on certain commissions paid to RDX Impex & Sales Promotion Ltd. and SRS Buildcon P. Ltd. The CIT(A) confirmed the disallowance of &8377; 7 lakhs, leading to the assessee's appeal.
The assessee contended that the disallowance was wrongly made as the amount had already been paid and was not payable, citing precedents like Jaipur Vidyut Vitran Nigam Ltd. vs. DCIT and K. Srinivas Naidu vs. ACIT. The Departmental Representative (DR) supported the impugned order.
The Tribunal examined the provisions of section 40(a)(ia) of the Act, emphasizing that the word "payable" does not include "paid." Referring to Jaipur Vidyut Vitran Nigam Ltd., it was held that section 40(a)(ia) applies only to amounts due and outstanding, not to those already paid. As no contrary decision was presented, the Tribunal concluded that the CIT(A) erred in not following the precedent. Therefore, the disallowance of &8377; 7 lakhs was deleted, and the appeal by the assessee was allowed.
In conclusion, the Tribunal found in favor of the assessee, emphasizing the strict construction of section 40(a)(ia) and the distinction between "paid" and "payable" amounts in determining the applicability of tax deduction provisions.
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2011 (4) TMI 1384
Issues Involved:
1. Validity of reassessment proceedings initiated u/s 148 of the Income Tax Act, 1961.
2. Deletion of addition of Rs. 1349.99 lakh on account of prior period expenses.
Summary:
1. Validity of Reassessment Proceedings Initiated u/s 148:
The assessee, a Government of India undertaking, filed its return of income at Nil, which was later revised showing a loss. The original assessment was completed at Nil income after making certain additions. Notice u/s 148 was issued to reassess the income, primarily due to the claim of prior period expenses of Rs. 1349.99 lakhs. The assessee objected, stating that all necessary details were provided during the original assessment, and the reassessment was merely a change of opinion, which is not permissible. The CIT(A) upheld the reassessment proceedings based on the decision in Consolidated Photo & Finvest Ltd. Vs. ACIT. However, the Tribunal found that the reassessment was based on the same material already on record and thus amounted to a change of opinion. The Tribunal relied on the decision in CIT Vs. Eicher Ltd., which held that reassessment on the same facts constitutes a change of opinion and is not permissible. Consequently, the Tribunal reversed the CIT(A)'s decision and allowed the cross-objection filed by the assessee.
2. Deletion of Addition of Rs. 1349.99 Lakh on Account of Prior Period Expenses:
The AO added Rs. 1349.99 lakh on account of prior period expenses, arguing that these expenses could not be allowed under the mercantile system of accounting. The CIT(A) deleted the addition, noting that the assessee consistently followed a practice of accounting for income and expenses based on their crystallization. The CIT(A) observed that the AO had unilaterally added the expenses without considering the corresponding income. The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee's practice was consistent and accepted in previous years. The Tribunal noted that the AO did not dispute the crystallization of these expenses during the year under consideration. Therefore, the Tribunal found no merit in the revenue's appeal and upheld the deletion of the addition.
Conclusion:
The Tribunal dismissed the revenue's appeal and allowed the cross-objection filed by the assessee, holding that the reassessment proceedings were invalid and the addition of Rs. 1349.99 lakh on account of prior period expenses was rightly deleted.
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2011 (4) TMI 1383
Computation of Income from House Property u/s 23(1)(c) - Fair Market value of Vacant portion - Assessee's property remained vacant for not working of the lift so no income was earned - As per CIT(A), assessee is allowed 30% deduction u/s 24, hence ALV of property is taken as ₹ 73241
HELD THAT:- It is noticed that claim of assessee was it made all the efforts to let out the property, but the same could not be let out because the property was situated at 5th floor and the lift was not working.
In a similar issue, in the case of PREMSUDHA EXPORTS (P.) LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 10, MUMBAI [2007 (5) TMI 348 - ITAT MUMBAI], it was held that during the whole year, the assessee made continuous efforts to let out the property and under these circumstances, this property could be called to be let out property. Since the property had been held to be let out property, its annual letting value could only be worked out as per Section 23(1)(c) and since the rent received or receivable from the said property during the year was nil the same was to be taken as the annual value of the property in order to compute the income from house property"
Therefore, we are of the view that since the rent received or receivable from the property in question during the year was nil, the same was to be taken as the annual value of the property in order to compute the income from house property as provided in Section 23(1)(c). We, therefore, set aside the order of the ld.CIT(A)
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2011 (4) TMI 1382
Issues Involved: Disallowance of transportation charges u/s.40(a)(ia) of the Income-tax Act, 1961.
Summary:
The appeal challenged the disallowance of transportation charges paid by the assessee under Section 40(a)(ia) of the Income-tax Act, 1961. The Assessing Officer disallowed a sum of &8377;18,19,264 paid by the assessee to his wife, who owned four trucks, based on the belief that tax deduction at source was required. The assessee contended that the payments made to other truck owners were allowed, and there was no implied contract between the assessee and his wife for transporting goods. The issue revolved around whether the provisions of Section 40(a)(ia) applied to the payments made to the assessee's wife.
The learned Counsel for the assessee argued that the Assessing Officer erred in disallowing the expenses paid to the assessee's wife, as the nature of the transaction did not necessitate tax deduction at source. The Counsel cited various judicial pronouncements to support the contention that TDS should only be deducted when a specific contract exists for transport charges. The Assessing Officer's failure to identify each truck and the lack of evidence for an agreement between the parties were highlighted. The Counsel emphasized that the disallowance under Section 40(a)(ia) was not justified based on the facts presented.
The learned DR opposed the assessee's argument, stating that the payments made to the assessee's wife were rightly disallowed under Section 40(a)(ia) due to the non-deduction of tax at source. The Assessing Officer's decision was supported by the belief that the assessee, as a transport contractor, should have deducted tax on payments made to his wife, who owned four trucks.
The Tribunal analyzed the facts and legal provisions, concluding that the issue was covered by previous judgments. It was established that the payments made to the truck owners did not qualify as sub-contract payments under Section 194C(2) as the individual vehicle owners were simple hirers of the vehicles. The Tribunal found no basis for the tax authorities' reasoning that the payments constituted sub-contract payments. Consequently, the disallowance under Section 40(a)(ia) was deemed unjustified, and the appeal of the assessee was allowed. The Assessing Officer was directed to delete the disallowance made under Section 40(a)(ia).
In conclusion, the Tribunal ruled in favor of the assessee, highlighting that the payments to truck owners did not fall under sub-contract payments, leading to the allowance of the appeal and the deletion of the disallowance under Section 40(a)(ia).
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2011 (4) TMI 1381
The Appellate Tribunal ITAT Mumbai dismissed the Revenue's appeal against the order of the CIT(Appeals) regarding the deletion of disallowance made by the AO for failure to deduct TDS on VSAT, Lease line, and transaction charges under section 40A(ia). The Tribunal upheld the CIT(Appeals) decision based on previous cases and dismissed the Revenue's appeal. (2011 (4) TMI 1381 - ITAT MUMBAI)
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2011 (4) TMI 1380
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Claim of depreciation on LAN, WAN, ATM etc at 60% as against 25% - HELD THAT:- In the present case, we are concerned about the depreciation on LAN, WAN, ATM equipments. During the year under consideration, the assessee has purchased certain equipments in the form of LAN, WAN, ATM etc. apart from computer and other related items. It is not in dispute that LAN, WAN, ATM equipments cannot be used without the computer. In the light of the view, we direct the AO to allow depreciation at the rate of 60% on LAN, WAN and ATM equipments.
In the result, the appeal filed by the Revenue is dismissed.
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2011 (4) TMI 1379
Issues involved: Appeal against disallowance of deduction u/s 80IB(10) for housing project including commercial establishments.
Summary:
Issue 1: Allowance of deduction u/s 80IB(10) for housing project with commercial establishments
The appeal by the Revenue contested the allowance of deduction u/s 80IB(10) disallowed by the A.O. but granted by the CIT(A) for a housing project named Ravindra Arcade. The A.O. disallowed the claim due to the presence of commercial establishments exceeding the permissible limit. However, the CIT(A) held that the deduction was allowable for the entire project as the commercial shops were less than 5% of the housing project. The Revenue argued that the assessee was not eligible for the deduction post the statutory amendment w.e.f. 01.04.2005. The ITAT considered the issue in light of previous cases and upheld the CIT(A)'s decision based on the approval of the project before the specified date, rejecting the Revenue's grounds.
Issue 2: Judicial precedents supporting deduction u/s 80IB(10)
The ITAT referred to the case of Saroj Sales Organization where it was held that separate housing projects with distinct characteristics should not be combined to deny statutory relief. The High Court upheld this decision, emphasizing that the benefit under section 80IB(10) is not restricted to residential units only, and the amendment regarding shops and commercial establishments does not have retrospective application. As the ITAT's order was upheld by the High Court, the Revenue's appeal was dismissed, affirming the allowance of deduction u/s 80IB(10) for the housing project.
In conclusion, the appeal by the Revenue was dismissed, and the order of the CIT(A) granting deduction u/s 80IB(10) for the housing project with commercial establishments was upheld based on judicial precedents and statutory provisions.
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2011 (4) TMI 1377
Issues involved: Appeal against order allowing unpaid electricity duty and tax on sale of electricity under section 43B of the Income-tax Act 1961 for assessment year 2006-2007.
Summary:
The Revenue appealed against the order allowing unpaid electricity duty and tax on sale of electricity under section 43B of the Income-tax Act 1961 for the assessment year 2006-2007. The Revenue contended that the recovery by way of adjustment by the Gujarat Govt. is not equivalent to the sum actually paid by the assessee as required under section 43B. The assessee argued that electricity duty is not recognized as income or expense in the annual accounts, and the amount was adjusted by the Government against subsidies payable. The assessee also claimed that the amount was fully paid before the due date of filing the return. The Commissioner (Appeals) allowed the relief, stating that the recovery by the Government through adjustment is allowable under section 43B. The Tribunal directed the Assessing Officer to verify the actual dates of payment and entries in the books of accounts, and if payments were made before filing the return, they should be allowed.
The Tribunal found that the provisions of section 43B are applicable to the electricity duty and tax on sale of electricity. However, the recovery by the Government through adjustment from grants is allowable under section 43B. The Tribunal directed the Assessing Officer to verify the dates of payment and entries in the books of accounts. If payments were made before filing the return, they should be allowed. The matter was restored to the Assessing Officer for necessary verification, after giving an opportunity to the assessee. The appeal filed by the Revenue was treated as partly allowed for statistical purposes.
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