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Showing 181 to 200 of 576 Records
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2005 (10) TMI 432 - ITAT MUMBAI
Salary - Perquisites, Unexplained moneys, etc. ... ... ... ... ..... ovation expenses incurred by the company and this issue has already been examined by us in the assessee rsquo s appeal in foregoing paras in which we have categorically held that on account of renovation by the tenant in the property, the ALV of property in the hands of the owner cannot be increased. Accordingly, we, reject this ground of the revenue. 25. So far as ground No. 2 is concerned which relates to electricity perquisites, this issue was also examined by us while dealing with the issue of the perquisites in the hands of the assessees on account of renovation and providing furniture rsquo s and electricity charges etc., and we restore the issue to the file of the Assessing Officer to re-compute the perquisite as per rule 3 of the I.T. Rules. We, therefore, find no jurisdiction to adjudicate this issue again. Accordingly, this issue is restored to the file of the Assessing Officer. 26. In result, these appeals of the revenue are partly allowed for statistical purposes.
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2005 (10) TMI 431 - ITAT MUMBAI
Method of accounting ... ... ... ... ..... the view that since we have set aside the orders of the CIT(A) and restore the matter to the file of the Assessing Officer to determine the year of completion of project and to compute the profit. The liabilities which might have been settled by now be also taken into account while computing the profits. If the dispute is not settled the provision should be made to meet the liability if the unsold portion of this constructed area is failed to take care of this liability. Accordingly, the issue is also restored to the file of the Assessing Officer to determine the nature of liabilities whether it is accrued against the original project or the additional project and if it is found to be accrued to on account of original project, it should be adjusted against the profit of the original project, otherwise, it would be adjusted against the profit of the additional project. We, therefore, order accordingly. 23. In result, appeals of the revenue are allowed for statistical purposes.
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2005 (10) TMI 430 - ITAT AHMEDABAD
Block assessment in search cases ... ... ... ... ..... ssees is that Explanation (b) to section 158BA(2) does not prescribe any time-limit before or after which the regular assessment was to be made and it is, therefore, to be taken as if any income assessed by way of regular assessment is to be excluded. We do not find any substance in this contention of the assessees because what has to be excluded is income assessed by way of regular assessment under section 143 or 144 or 147 which has been concluded prior to the date of commencement of the search or date of requisition. It is this assessment which is mentioned in section 158BB(1)(a) that is contemplated by Explanation below section 158BA(2) and the total income assessed in any regular assessment is not to be included if the assessment was made prior to the date of commencement of search or date of requisition. In view of the above, the appeals of the assessees have no merit. They are, accordingly, to be dismissed. 12. In the result, the appeals of the assessees are dismissed.
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2005 (10) TMI 429 - ITAT AGRA
Unexplained investments ... ... ... ... ..... hand and Co. New Delhi, Selina Publisher rsquo s, New Delhi. Complete details including dates, bill numbers, number and names of the textbooks alongwith purchase price are given there. Simply because the accountant was careless in recording the books of account of the assessee is no reason to reject this unaccounted outside evidence. Once the closing stock of the immediately preceding assessment year is taken into consideration, which is supported by way of documentation there is no reason as to why the same should not be taken as a opening stock in the year under consideration. Accordingly, after a careful consideration of the entire facts and circumstances of the case as well as the settled legal position with regard to closing stock of the preceding assessment year to be taken as the opening stock of the subsequent assessment year, I am of the view that the ground raised by the assessee deserves to be allowed. 16. In the result, the appeal filed by the assessee is allowed.
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2005 (10) TMI 428 - ITAT MUMBAI
Business expenditure ... ... ... ... ..... cer has allowed certain part of the claim made by the assessee and has disallowed the remaining part of the claim made by the assessee. It testifies that the assessing authority has examined each set of payments made by the assessee-company and allowed wherever he held that such payments were in accordance with law and disallowed wherever he found that the payments were not in accordance with law. Therefore, the application of mind is writ large on the face of the assessment order itself. Therefore, in the facts and circumstances of the case, we find that the order of the Commissioner under section 263 is not maintainable. The point brought out by the Commissioner is only an opinion different from that of the assessing authority which is not a sound reason to invoke the provisions of section 263. 12. Therefore, we annul the revision order passed by the Commissioner in this case. The appeal filed by the assessee is allowed. 13. In result, the appeal of the assessee is allowed.
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2005 (10) TMI 427 - ITAT DELHI
Salaries - Perquisites, Capital gains ... ... ... ... ..... norm and auto norm made by the employer from the base pay of the assessee in lieu of free housing and transport facility provided in India as per the terms of employment is in fact a reduction in the pay and, therefore, not liable to tax in India. The said reduction from the base pay will also not from the base for determination of the perquisites. 2nd point of difference That the profit/benefit (difference between the price of shares at the time of exercise of the option and the pre-determined price) derived by the assessee on account of exercise of stock options granted to the assessee in terms of his employment is liable to tax (as perquisite under section 17(1)(iii), of the Income-tax Act, 1961) and that there was no capital gain derived by the assessee on the sale of shares as the sale price and the price on the date of exercise of the option was same. 25. The matter may now be placed before the Regular Bench for passing an order in accordance with the majority opinion.
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2005 (10) TMI 426 - ITAT MUMBAI
Dividend income, Business expenditure, Deduction-Inter-corporate dividends ... ... ... ... ..... tody charges are relatable to earning of dividend. We do not find any merit. The above expenses on account of salary paid to staff are not directly relatable to earning of dividend. So also payments of stamp duty, transfer fees and safe custody are not relatable to earning of dividend. They may be relatable to acquisition of share but not to dividend being earned. Since the CIT(A) has restored the issue to the file of the Assessing Officer with a direction to give a clear finding about the expenditure incurred for earning the dividend income, we modify his order and direct the Assessing Officer to keep in mind the above decision of the jurisdictional High Court while determining the actual expenses that incurred for earning the dividend income, which would be required to be deducted from the gross dividend for the purposes of granting deduction under section 80M of the Act. This ground is treated as allowed to the above extent. 10. In the result, the appeal is partly allowed.
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2005 (10) TMI 425 - ITAT MUMBAI
Losses - In speculation business ... ... ... ... ..... dia, regarding the accounting for the badla transaction has been placed on record. One of the query reads as under mdash Whether this badla transaction should be shown as investments or as loans and advances and whether in Profit and Loss account the same should be shown as purchase and sale or, only differential income should be accounted for. The opinion of the committee was that The badla transaction should be shown as loans and advances and in Profit and Loss account, the additional margin i.e. badla should be accounted for as income . 8. From the above facts it is clear that the order of the first appellate authority does not call for any interference on the facts and circumstances of the case. Appeal by the revenue fails and dismissed. Assessment year 1995-96 9. Coming to the assessment year 1995-96, the facts are identical, hence appeal by the revenue for assessment year 1995-96 also fails and dismissed. 10. In the result, both the appeals of the revenue are dismissed.
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2005 (10) TMI 424 - ITAT MUMBAI
Business disallowance, Employees’ contribution, Deductions - Exporters ... ... ... ... ..... eld that service charges is not derived from industrial undertaking, therefore, not entitled to deduction under section 80-I of the Income-tax Act, 1961. However, we find considerable force in alternative contention of the ld. Counsel for the assessee that only net income from service and interest be excluded. Therefore, if it is true, interest-bearing funds were utilized for earning interest income, then, interest paid to that extent would have to be allowed as set of against interest income. Similarly, amounts spent in earning service charges are also required to be set off against service charges received. In the present case, no such exercise was done by any of the authorities below. Therefore, the order of the CIT(A) is set aside and the matter is restored back to the Assessing Officer for limited purposes of verifying the above facts and fresh adjudication in the light of guidance provided by us. 11. In the result, for statistical purposes, the appeal is partly allowed.
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2005 (10) TMI 423 - ITAT MUMBAI
Free trade zone ... ... ... ... ..... the claim is to be allowed. The CIT(A) remanded the matter back to the file of Assessing Officer for verification and to allow the claim of the assessee if it is found that the above claim is correct. 32. We find no flaw in the direction of the CIT(A) since the Tribunal is constantly taking the view that if the payment is made within the due date, the claim of the assessee is to be allowed. 33. The assessee has taken an additional ground, which reads as under mdash Without prejudice to the appellant rsquo s claim for deduction under section 10A of the Income-tax Act, alternatively it is submitted that the appellant ought to be allowed a deduction under section 80HHC of the Income-tax Act, in respect of exports carried out at the Sachin Unit. 34. Since we have decided the issue on the main ground in assessee rsquo s favour, it is not necessary for us to deal with this additional ground as such. 35. In the result, appeal of the assessee stands allowed for statistical purposes.
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2005 (10) TMI 422 - ITAT MUMBAI
Deductions - Exporters ... ... ... ... ..... ly kept any stock register prior to search as observed elsewhere in this appeal and appeal filed by the department. The Assessing Officer will decide the issue on the basis of original stock register if any kept by assessee. 21. The next ground is about claim of business loss of Rs. 88,72,947 on account of confiscation of stock by custom authorities. We find that the assessee has contested the issue before custom authorities and final decision has not yet come. Let this issue be decided after final order by custom authorities. For deciding this issue, the decision of Hon rsquo ble Gujarat High Court in Fakir Mohmed Hazi Hasan rsquo s case (supra) may be kept in view. The order from custom authorities on the issue of confiscation will be obtained and considered. The assessee will be given opportunity of being heard in the matter. Thus, this ground of assessee is allowed for statistical purposes. 22. In the result, the appeal of the assessee is allowed for statistical purposes.
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2005 (10) TMI 421 - ITAT BANGALORE
Business expenditure - Cash credits - Block assessment in search cases - unaccounted receipts of three incomplete projects - whether section 68 is applicable to any entry in document or whether document can be called as book - bribe payments.
HELD THAT:- From the definition of undisclosed income, it is clear that income based on any entry in the books of account or document can be treated as undisclosed income. The Legislature in section 158B(b) has used the words ‘books of account or documents’. Hence these two words do not carry the same meaning. A document may necessarily be not a book of account. Section 68 is applicable to any entry credited in the books of account. Section 158BB(2) has not enlarged the application of section 68 to an entry credited in the document. Books of account are not defined in Income-tax Act and hence, the word is to be interpreted as it is understood in common parlance. As per decision of Punjab High Court in the case of CIT v. Kartar Singh [1970] 77 ITR 338 , books of account may include memorandum books. For the purposes of Explanation 5 to section 27(1)(c), books of account would mean these books of account whose main object is to provide credible data and information to file tax returns.
Section 68 is a deeming provision and it is to be strictly interpreted. Applicability of section 68 cannot be enlarged. Hence, section 68 is not applicable in respect of any entry in document. The Assessing Officer at page 18 of the order has mentioned that he is adding Rs. 38,12,790 as these are credits in the documents maintained by the assessee and hence, treated as unexplained credits under section 68 of the I.T. Act. Such document cannot be treated as book and section 68 is applicable in respect of entry in book. Therefore, the Assessing Officer was not justified in including it under section 68 of I.T. Act.
Keeping in view the discussion on the issue of addition, it is held that the Assessing Officer was not justified in including the same u/s 68 of I.T. Act as that section has no application for an entry credited in document particularly when the amount received has been considered as available for explaining the unaccounted expenses. The action of the learned CIT(A) in deleting the addition is confirmed.
Bribe Payment - In the instant case, the seized material indicate that payments are bribe. Such payments are in contravention of provisions of prevention of Corruption Act. Shri Raja Datta vide question No. 54 was asked as to why such bribe payment be not disallowed. Shri Raja Datta has not rebutted in his answer that these payments were not bribe. He stated on 20-2-2002 in answer to question No. 54 that if I.T. Act does not permit allowance of such expenditure then he has no objection for adding the same to his undisclosed income. In view of such factual position that payments represented bribe and considering the Explanation to section 37(1), it is held that learned CIT(A) was not justified in allowing the expenses. On this issue, the order of CIT(A) is reversed and that of Assessing Officer is restored.
Undisclosed income of the block period - In the instant case, the returned income is reflected from the books of account and sale of property stands disclosed by virtue of filing application u/s 230A. Such income as shown in return is not undisclosed income as defined in section 158B(b) and income also stands disclosed by way of filing return u/s 139(4). Section 158BB(ca) mentions that no return of income is filed. While in the instant case return of income has been filed u/s 139(4). Hence, on this issue order of CIT(A) is confirmed and grounds of Appeal Nos. 11 and 13 are dismissed.
In the result, all the appeals are partly allowed.
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2005 (10) TMI 420 - ITAT DELHI
Deemed dividend ... ... ... ... ..... ety by the assessee, being its Managing Director. The manner in which the amount is released and the nature of security are considerations for the respective Court but the same is an irrelevant factor for the revenue authorities. The fact remains that the amount is disputed. Thus, on facts also, we do not find any cogent reasons to consider the said objection as relevant for the dispute on hand. 12. In the result, in view of the aforesaid discussion, in our view since the amount of Rs. 39,67,620, out of which the impugned amount of Rs. 15 lakhs has been issued to the assessee, cannot be considered as constituting part of the accumulated profits of the company as envisaged in section 2(22)(e ) of the Act. Thus, the provisions of section 2(22)( e) are inapplicable to the amount of Rs. 15 lakhs in the hands of the assessee before us. As a result, we set aside the order of the CIT (A) and direct the Assessing Officer to delete the addition. Appeal of the assessee is thus allowed.
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2005 (10) TMI 419 - ITAT MUMBAI
Income - Deemed to accrue or arise in India ... ... ... ... ..... to remit the matter of the file of the Assessing Officer for adjudication de novo on taxability of each receipt by the foreign entity, on the touchstone of the principles set out in the relevant double taxation avoidance agreement, wherever such agreements are entered into by the Government of India. The Assessing Officer shall give due and fair opportunity of hearing to the assessee and decide the matter by way of a speaking order. We order so. For this limited purpose, the matter stands restored to the file of the Assessing Officer with the directions as above. 10. As regards appeals regarding levy of interest under section 201(1A), this issue is only consequential in nature. In case the assessee is held to be liable to pay demand under section 201(1) read with section 195, to that extent, the demand under section 201(1) read with section 195 shall also stand restored. 11. In the result, all the four appeals are allowed for statistical purposes in the terms indicated above.
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2005 (10) TMI 418 - ITAT BANGALORE
Special allowance ... ... ... ... ..... f the Act in respect of conveyance allowance/additional conveyance allowance upon satisfying the conditions that such allowances have actually been spent for the purpose for which they were given. The Life Insurance Corporation is not liable to deduct tax at source to the extent such conveyance allowance/additional conveyance allowance is exempt under rule 2BB. In the present case, we find that the amount granted is additional conveyance, which is prescribed in rule 2BB. As per the certificate of LIC, the additional conveyance allowance was granted wholly, necessarily and exclusively in performance of duties. The assessee has produced necessary bills and evidence in support of his contention that expenses are actually incurred for that purpose. We accordingly hold that the assessee is entitled to exemption under section 10(14) of the Act. We accordingly, delete the addition of Rs. 2,13,016 received towards additional conveyance allowance. In the result, the appeal is allowed.
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2005 (10) TMI 417 - ITAT MUMBAI
Business income, Bonus or commission ... ... ... ... ..... the firm holding 40 per cent share in the business. Aggrieved by the above order, assessee is in appeal before us. 17. We heard rival submissions. Considering the rival submissions we find no material to disturb the order of the first appellate authority as rightly noted by the revenue authorities, assessee has not established well, why the commission was necessitated at all. He is an employee of the assessee and getting salary and also bonus. In these circumstances the learned CIT(A) was justified in making disallowance on estimated basis. However, in the absence of any material considering the fact that Shri Krishna Thakkar was 40 per cent shareholder of the business. The learned CIT(A) reduced the disallowance to Rs. 2,00,000, it is an estimated deduction. We had no reason to disturb the order of the first appellate authority on the point. Appeal by the assessee on this ground fails and hence, dismissed. 18. In the result, the appeal by the assessee stands allowed in part.
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2005 (10) TMI 416 - ITAT MUMBAI
Double taxation relief - Whether or not the CIT(A) was justified in holding that the monies received by these companies from India branch office of McKinsey & Co. Inc. constitute "fees for included services" within the meanings of article 12(4) of the India-US treaty, and, are accordingly liable to be taxed in India - HELD THAT:- The nature of assessee’s activities is furnishing of geographical specific data and information inputs, which are commercial and industrial information in nature. This fact is clear from my perusal of the copies of e-mail communications, and attachments thereto, exchanged between the appellant-companies and McKinsey India. In any event, there is no material before me to suggest that the payment is for any such services which enable the recipients of these services to apply the technology.
The onus is on the revenue to demonstrate that the assessee has a taxable income even under the DTAA. This onus, in my considered view, has not been discharged by the revenue in the present case. Merely because the assessees have rendered certain consultancy services to the McKinsey India does not by itself can be reason enough to conclude that the consideration for such consultancy services is taxable in India under article 12(4)(b) as ‘fees for included services’. As for the non-technical consultancy services, as I will now point out, it is specifically agreed to between the Governments of India and the USA that such services shall not be covered by article 14(2)(b). In the protocol note attached to and forming part of the aforesaid DTAA, Government of India has confirmed that memorandum of understanding between India and USA with regard to interpretation of article 12 (royalties and fees for included services) also represents the views of the Indian Government.
It is clear that so far as the India-US tax treaty is concerned, consultancy services, which are not technical in nature, cannot be treated as ‘fees for included services’. The stand taken by the revenue, right from the assessment stage, is that the services rendered by the appellant-companies are ‘consultancy services’, though non-technical, and for that reason the consideration for these services is taxable as ‘fees for included services’.
In fact, the Assessing Officer specifically observes that "the fees received by the assessee in respect of the services (which are consultancy/ advisory services with no technology in it) rendered fall in the category of ‘fees for included services’ in terms of clause (4) of article 12". There is an inherent contradiction in this stand. Even if the services are consultancy services but are non-technical in nature, the same cannot be held to taxable under article 12(4)( b), since the MoU, relevant extracts from which have been reproduced above, specifically provides that, "under paragraph 4(b), consultancy services which are not of, a technical nature cannot be included services". As I have taken note of in the preceding paragraph, what is supplied by the appellant-companies to McKinsey India is nothing but geographical specific data and information inputs which are commercial and industrial information in nature.
I am of the considered view that the CIT(A) indeed erred in holding that the monies received by the appellant-companies from McKinsey India constitute "fees for included services" within the meanings of Article 12(4) of the India-US treaty, and are accordingly liable to be taxed in India. In my view, the payments in question, for the detailed reasons set out above, cannot be treated as ‘fees for included services’. Since the appellant-companies do not have any permanent establishment in India, the incomes so arising to them in India cannot be taxed under Article 7 as ‘business profits’ either. Therefore, I direct the Assessing Officer delete the impugned additions. The assessees get relief accordingly.
In the result, all the six appeals are allowed.
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2005 (10) TMI 415 - CESTAT, CHENNAI
Appellate order - Evidence - Coal - Exemption order - Interpretation of - Natural justice ... ... ... ... ..... They along with the superiors whom they referred to, under oath before the criminal court were turning the quasi-judicial process into a mockery. Their depositions before the criminal court brought the episode to a disgraceful finale for quasi-judicial functionaries under the Customs Act. 12. emsp Ld. Commissioner (Appeals) has adequately examined the scope of the exemption order and has reached a correct conclusion. Her observation that the language of the exemption order is plain and offers no semantic challenge is eminently well-founded. It is true that she has also drawn support from the Criminal Court rsquo s judgment. But this aspect can be ignored inasmuch as ld. Commissioner (Appeals) has independently examined the scope of applicability of the exemption order to the facts of the case and has arrived at a correct finding. We do not find any reason to interfere with the impugned order. The Revenue rsquo s appeals are dismissed. (Pronounced in open Court on 31-10-2005)
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2005 (10) TMI 414 - CESTAT, CHENNAI
Smuggled goods - Evidence - Statement - Penalty and confiscation - Redemption fine ... ... ... ... ..... the other hand, Ld. Counsel has argued that, having regard to the liberal policy of the Government in relation to import of gold, redemption could be allowed in respect of smuggled gold. He has also claimed support from case law. It appears, the lower authorities did not examine the redeemability of the gold biscuits in question. Hence, I am of the view that this aspect of the case needs to be looked into by the original authority. 9. emsp In the result, the order of confiscation (not absolute) of the gold biscuits in question is upheld and the penalties imposed on the appellants are sustained to the extent of Rs. 5,000/- each. The question whether the gold biscuits could be allowed to be redeemed against payment of appropriate redemption fine is remanded to the original authority for adjudication in accordance with law (including case law) and the principles of natural justice. 10. emsp The appeals are disposed of in the above terms. (Pronounced in open court on 25-10-2005)
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2005 (10) TMI 413 - CESTAT, NEW DELHI
Demand - Non-fulfilment of export obligations ... ... ... ... ..... at certificate but nothing has been done. As the certificate has been produced by the appellant regarding non-availment of Modvat credit on inputs in the manufacture of goods which were exported and the revenue is not disputing the certificate the benefit is denied only on the ground it is not countersigned by the Central Excise Authorities. As appellant produced the necessary certificate as per the condition of notification, thereafter revenue cannot deny the benefit of notification and confirmed the demand without verifying the certificate-produced by the appellant. In these circumstances, I find it is a fit case for reconsideration by the adjudicating authority. The matter is remanded to adjudicating authority after setting aside the impugned order to pass an appropriate order after verifying the certificate produced by the appellant and after granting an opportunity for hearing to the appellant. The appeal is disposed of by way of remand. Order dictated in the Open Court.
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