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Showing 181 to 200 of 592 Records
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2012 (3) TMI 551
Issues Involved:
The judgment involves the issue of depreciation allowance claimed by the assessee company for windmills installed in the previous year relevant to the assessment year under appeal, based on the date of commissioning of the generators and the actual generation of electricity.
Depreciation Allowance Issue:
The assessee company claimed depreciation allowance for the assessment year 1995-96 on the ground that the windmill generators were commissioned on 31.3.1995, despite electricity generation starting in June 1995. The Assessing Officer initially rejected the claim, stating that electricity generation began after June 10, 1995. However, the Commissioner of Income-tax(Appeals) accepted the claim based on the certificate of commissioning issued by the Tamil Nadu Electricity Board. The Tribunal set aside this decision and remitted the issue back to the Assessing Officer for reconsideration.
Upon reassessment, the Assessing Officer concluded that the windmills were put to use only on 10.6.1995 when electricity generation commenced, thus denying depreciation for the impugned assessment year. The Commissioner of Income-tax(Appeals) reversed this decision, allowing the depreciation claim. The Revenue appealed this decision before the Tribunal for the second time.
The Tribunal considered a similar case decided by the Hon'ble High Court of Madras, where 100% depreciation was allowed based on the commissioning date of windmills. Applying this precedent, the Tribunal upheld the Commissioner of Income-tax(Appeals)'s decision, stating that the commissioning date satisfied the condition for claiming depreciation, regardless of the actual electricity generation date.
In conclusion, the Tribunal dismissed the Revenue's appeal and the assessee's cross objection, affirming the allowance of depreciation based on the commissioning date of the windmill generators.
Separate Judgement by Judges:
No separate judgment was delivered by the judges in this case.
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2012 (3) TMI 550
Disallowance being 15% of the total winning payments made to punters - Held that:- The Department has not brought anything to show that the facts of the case are any different from that for the AY 2004-05 and 2005-06 covered by the ITAT order. The activity of the Assessee is such that they have to deal daily with numerous individuals in a short span of time when the bettings are on. They accept bets and settle the winning amounts to the winning punters. It will be difficult to maintain complete details about all the persons. The entire payment was through computerized system. The payment was made to the person holding the winning ticket. The Department has not brought to our notice of any instance of payment when there was no winning ticket. In the circumstances, respectfully following the decision of the coordinate bench in the Assessee's own case we delete the ad hoc disallowance of 10% of the total payment for winning bets of less than 2500/- each. The Appeal of the Assessee on this issue is allowed.
Disallowance u/s 40A(3) - Held that:- Sec 40A(3) itself provides that the exceptions will have to be prescribed having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors. Taking all these factors, considering the nature of activity of the Assessee and the necessity for them to pay cash to the winners immediately, we are of the opinion that the condition under Rule 6DD for exemption viz., transactions should have taken place on Bank Holidays should be read down in the case of the Assessee. In this case if the transaction took place beyond the normal Banking Hours on working days and transaction which took place on Sundays and Holidays, it would not attract the provisions of sec 40A(3) and no disallowance can be made in respect of payment made to winning punters beyond the normal banking hours or on Bank Holidays u/s 40A(3). As there will be different banking hours for different banks and branches, the banking hours of the Main Branch of SBI in Hyderabad shall be taken for this purpose. This issue is remitted back to the files of the AO and AO is directed to re-compute the disallowance u/s 40A(3) as per the above disallowance and the Assessee shall furnish the particulars about the timings of the payment of the winnings to punters.
Disallowance in respect of winning payments, each less than ₹ 2500/- deleted.
TDS u/s 194H - amount disallowed under sec 40(a)(ia) as they constituted commission and no tax was deducted at source - Held that:- We find that the TDS Officer by its order dated 6.4.2009 has treated the assessee as assessee in default for not deducting Tax at source and raised the demand u/s 201(1) and 201(1A). It is also been pointed by the AO that at present the assessee itself is making TDS on such payments which proves that the stand of the revenue is correct. The assessee has to establish that it is not acting as Agent of the other Clubs and the amount paid by the assessee to other Race Clubs is only sharing of the profit and not in the nature of collection. The assessee has not brought in detail to prove even in cases of races held in other Clubs, as far as betting in Hyderabad is concerned it is between the punters and the assessee. In these circumstances, we deem it fit to restore the issue to the file of the AO in order to give another opportunity to the assessee to present its case and establish that there is no principal agent relation ship between the two Clubs. The AO shall after examining the details adjudicate in accordance with law.
Demand u/s 201(1) and 201(1A) - addition under sec 40(a)(ia) - amount paid by the assessee to other Race Clubs - Held that:- Assessee itself is making TDS on such payments which proves that the stand of the revenue is correct. The assessee has to establish that it is not acting as Agent of the other Clubs and the amount paid by the assessee to other Race Clubs is only sharing of the profit and not in the nature of collection. The assessee has not brought in detail to prove even in cases of races held in other Clubs, as far as betting in Hyderabad is concerned, it is between the punters and the assessee. In these circumstances, we deem it fit to restore the issue to the file of the AO in order to give another opportunity to the assessee to present its case and establish that there is no principal agent relationship between the two Clubs. The AO shall after examining the details adjudicate in accordance with law
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2012 (3) TMI 549
Issues involved: Impugning the validity of a notice dated 28 March 2007 for reopening an assessment for Assessment Year 200001 under Section 148 of the Income Tax Act, 1961.
Summary:
The petition challenged the validity of a notice dated 28 March 2007 seeking to reopen an assessment for Assessment Year 200001 under Section 148 of the Income Tax Act, 1961. The grounds for reopening the assessment were related to the denial of deduction u/s. 80IA during scrutiny proceedings for A.Y. 200405. The assessment was completed u/s. 143(1), but the deduction claimed by the assessee was turned down. The petition was admitted by a Division Bench, and an interim order restrained the Revenue from further proceedings based on the notice.
The basis for reopening the assessment for A.Y. 200001 was the denial of Section 80IA benefit to the assessee during scrutiny for A.Y. 200405. However, the Income Tax Appellate Tribunal ruled in favor of the assessee for A.Y. 200405, confirming that the assessee was engaged in manufacturing activity of producing Perfumed Hair Oil. The Tribunal's decision was upheld by a Division Bench, which observed that the activity of producing perfumed hair oil constituted manufacturing activity, allowing the assessee to avail deduction under Section 80IB. This decision rendered the basis for reopening the assessment invalid, as the proceedings for A.Y. 200405 had already concluded.
In conclusion, the Court made the Rule absolute by quashing the notice under Section 148 dated 28 March 2007, citing that the basis for reopening the assessment could no longer stand following the Division Bench's decision in the case of the assessee. No costs were awarded in this matter.
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2012 (3) TMI 548
Issues involved: Validity of notice dated 28 March 2007 for reopening assessment under Section 148 of the Income Tax Act, 1961 for Assessment Year 200001.
Summary:
The petition challenged the validity of a notice dated 28 March 2007 seeking to reopen the assessment for Assessment Year 200001 under Section 148 of the Income Tax Act, 1961. The grounds for reopening the assessment were related to the denial of deduction u/s. 80IA during scrutiny proceedings for A.Y. 200405. The petitioner obtained an interim order restraining the Revenue from further proceedings. The basis for reopening the assessment was the denial of Section 80IA benefit to the Assessee during scrutiny proceedings for A.Y. 200405. However, the Income Tax Appellate Tribunal ruled in favor of the Assessee, confirming that the Assessee was engaged in manufacturing activity of producing Perfumed Hair Oil. The Division Bench upheld the Tribunal's decision, stating that the Assessee was entitled to avail deduction under Section 80IB. The same principles applicable to Section 80IB were deemed to apply to Section 80IA. As the proceedings for A.Y. 200405 had attained finality, the basis for reopening the assessment was deemed invalid. Consequently, the notice under Section 148 dated 28 March 2007 was quashed and set aside.
End of Summary
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2012 (3) TMI 547
Issues involved:
1. Appeal against order of CIT(A) for block period assessment years 1996-97 to 1999-2000.
2. Appeal against order of CIT(A) for block period assessment years 1991-92 to 2000-01.
3. Assessment of undisclosed income as long term capital gains.
4. Validity of assessment in absence of known whereabouts of the individual.
5. Adequate opportunity to the assessee during the appeal process.
6. Ownership and possession of the disputed land.
7. Application of Section 2(47) of the IT Act.
8. Legal title of the individual to the inherited land.
Detailed Analysis:
1. The appeals were filed against the orders of CIT(A) for block period assessments. The case involved search and seizure operations under section 132 of the IT Act, 1961 at the residential premises of an individual engaged in real estate business. The Assessing Officer determined undisclosed income as long term capital gains based on seized documents related to the transfer of land.
2. The CIT(A) concluded that the assessee had lawful rights over the land, and the sale deed reflecting the transfer of the property had taken place. The FMV of the property was adopted for cost of acquisition. The CIT(A) upheld the findings of the Assessing Officer regarding undisclosed income for the block period.
3. The assessee raised objections regarding the validity of assessment in the absence of the individual, adequacy of opportunity during appeal, ownership of the land, application of Section 2(47) of the IT Act, and legal title to the inherited land.
4. The Tribunal set aside the matter to the file of the Assessing Officer for re-examination in light of the decision in a related case. The issue of ownership and possession of the land was also remanded for re-examination.
5. The appeals were partly allowed for statistical purposes, and the matter was referred back to the Assessing Officer for re-examination and redetermination in accordance with the law.
This detailed analysis covers the key issues involved in the judgment, the arguments presented, and the final decision of the Tribunal.
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2012 (3) TMI 546
Disallowance of the assessee’s claim of deduction u/s 80IB - Held that:- No evidence was furnished by the assessee before the A.O. in respect of putting up of new unit in assessment year 2001-02, we find that as per the assessment order passed by the A.O. u/s 143(3) for the assessment year 2004-05 and assessment year 2006-07, deduction was allowed by the A.O. to the assessee u/s 80- IB. The A.O. himself has stated in the assessment order that for the unit established by the assessee in assessment year 1994-95, assessee was getting deduction u/s 80-IA up to assessment year 2004-05. If this be so, then for new unit only, deduction was allowed by the A.O. u/s 80-IB in assessment year 2006-07. This goes to show that this fact was very much available in the record of the department that the assessee has established a new unit in assessment year 2001-02 and in respect of this unit, deduction was allowed by the A.O. to the assessee u/s 80-IB in assessment year 2006-07 also. Hence, we do not find any merit in the contention of the Ld. D.R. - Decided in favour of assessee.
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2012 (3) TMI 545
Issues:
1. Interpretation of eligibility for relief u/s 35D for reimbursed amounts incurred by promoters before 1.4.1970.
2. Entitlement to deduction u/s 35D for specific amounts.
3. Eligibility for development rebate on certain amounts.
Issue 1:
The High Court considered whether the Assessee, a Public Limited Company, could claim a deduction u/s 35D for expenditure reimbursed to promoters after 31st March 1970, even though the expenditure was initially incurred by the promoters before 1.4.1970. The Assessing Officer disallowed the claim, stating that since the expenditure was incurred by the Assessee after 31st March 1970, it did not qualify for the deduction u/s 35D. The Court affirmed this view, noting a statutory bar against deduction for expenses incurred before 1.4.1970.
Issue 2:
The Assessee argued that as it was incorporated after the specified date, it could only incur the expenditure after accepting the liability from the promoters, which happened post 31st March 1970. The Revenue contended that since the promoters incurred the expenditure before 31st March 1970, the Assessee's reimbursement did not entitle it to a deduction u/s 35D. The Court analyzed Section 35D, emphasizing the requirement that expenditure must be incurred after 31st March 1970 for the deduction, and noted the distinction between pre and post-incorporation liabilities.
Issue 3:
Regarding the development rebate, the Tribunal had held that the Assessee was not entitled to it on specific amounts. The Court referenced a previous judgment to support the Assessee's position, indicating that the issue was covered by precedent.
The Court's decision was based on the interpretation of statutory provisions and the timing of expenditure in relation to incorporation and acceptance of liability. The judgment clarified the conditions for deductions u/s 35D and highlighted the legal principles regarding pre-incorporation liabilities and income.
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2012 (3) TMI 544
Addition u/s 36 - Held that:- We are of the opinion that the assessee satisfies the conditions stated under section 36(2) and accordingly the Assessing Officer is directed to allow the amounts. Ground No.1.1 is accordingly allowed.
Disallowance under section 40(a)(i) - TDS u/s 195 - Held that:- We are of the opinion that the issue requires detailed examination by the CIT (A). The CIT (A) has not adjudicated whether the amount paid by the assessee was chargeable under the provisions of the act so as to attract the provisions of section 195 and consequently 40(a)(i). The contentions of the assessee with reference to the nature of the payment, applicability of various provisions and the DTAA between India and USA require detailed consideration. Since these aspects were not examined, we are of the opinion that the issue is to be restored to the file of the CIT (A) with a direction to adjudicate the issue on merits accordingly. Therefore, we set aside his order to that extent and restore the issue in Ground No.1.2 to the file of the CIT (A).
Gains arising out of sale of shares/units are treated as business income instead of short term capital gain - Held that:- We were informed that in earlier years when assessee suffered Capital Loss the AO treated them as business loss and Speculation loss. As seen from the paper book placed, the assessee had made specific request to the Assessing Officer to set off speculation losses determined in earlier year’s consequent to change of head from short term capital loss to speculation loss on the same set of transactions. This aspect of the claim has to be examined by the authorities, since earlier year orders were not available on record. Without going into merits of rival contentions, we are of the opinion that the additional ground being a legal ground can be admitted and we order accordingly.
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2012 (3) TMI 543
Issues involved: Imposition of penalty u/s. 271(1)(c) on disallowances of depreciation and legal expenses.
Summary:
Imposition of Penalty u/s. 271(1)(c) on Disallowances of Depreciation:
The appeal arose from the order of Ld. Commissioner of Income Tax for the assessment year 2005-06. The assessee, a partnership firm running an educational institution, claimed depreciation u/s 32 and deduction u/s 24 on a school building that was let out. The assessment resulted in disallowances of depreciation and legal expenses. The assessee contested the penalty u/s. 271(1)(c) by citing various case laws to support their position that there was no concealment of income. However, the penalty was confirmed by the Ld. CIT(A) based on the principle that furnishing inaccurate particulars of income attracts penalty, even if the claim made is not sustainable in law, unless the explanation offered is substantiated or found to be bona fide. The Tribunal upheld the penalty, noting that the double claim on the school building and legal expenses were not bona fide, as there was no admission by the assessee during the assessment proceedings.
Legal Expenses Disallowance and Double Claim on School Building:
The legal expenses were for a loan related to the school building, which was considered capital expenditure. The assessee made a double claim on the school building and legal expenses, which was not allowable as per law. The Tribunal found that the assessee furnished inaccurate particulars of income, leading to the imposition of the penalty u/s. 271(1)(c). The Tribunal held that the penalty proceedings are compensatory in nature, and the principle of responsibility for mistakes committed applies. The Tribunal concluded that the penalty was justified, as the double claim on the school building was not bona fide, and there was no admission by the assessee during the assessment proceedings.
Conclusion:
The Tribunal dismissed the appeal filed by the assessee, upholding the penalty imposed u/s. 271(1)(c) for the disallowances of depreciation and legal expenses. The decision was based on the finding that the assessee furnished inaccurate particulars of income, and the double claim on the school building was not bona fide.
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2012 (3) TMI 542
Issues involved:
The issues involved in the judgment are related to the exemption claimed u/s 10(23C) (via) of the Income Tax Act, 1961, the treatment of corpus donation and its application, application of capital nature and claim of depreciation, satisfaction of conditions for exemption u/s 10(23C)(via), allowing of depreciation resulting in double deduction, and set off of deficit against income leading to double deduction.
Exemption u/s 10(23C) (via):
The assessee, a charitable trust, initially declared a loss and later revised it. The Assessing Officer (AO) completed the assessment at an income of Rs. Nil under section 143(3) (ii) of the Act. On appeal, the ld. CIT(A) directed the AO to allow the exemption u/s 10(23C) (via) of the Act to the assessee. The Revenue challenged this decision, arguing that no claim was made by the assessee for this exemption. However, the Tribunal upheld the decision based on the approval granted by the prescribed authority and previous orders exempting the hospital u/s 10(23C) (via) for earlier assessment years.
Treatment of Corpus Donation and Depreciation:
The Revenue contended that the assessee was enjoying double deduction by claiming deduction for donations towards corpus fund and then treating the same assets as expenditure for purchase and application of income. The Tribunal referred to legal principles laid down by the Supreme Court and held that there was no double deduction claimed by the assessee. The Tribunal distinguished the case from previous judgments and rejected the Revenue's grounds, upholding the ld. CIT(A)'s decision to allow the claim.
Satisfaction of Conditions for Exemption u/s 10(23C)(via):
The Revenue argued that the assessee did not satisfy the conditions laid down in section 10(23C)(via) for the income received by gift for old age home purpose. However, the Tribunal found that the approval granted by the prescribed authority covered the assessment year in question, and the issue was fully covered in favor of the assessee based on a judgment of the Punjab and Haryana High Court. The Tribunal rejected the Revenue's grounds and upheld the ld. CIT(A)'s decision.
Allowing of Depreciation and Set Off of Deficit:
The Revenue raised concerns about allowing depreciation leading to double deduction and set off of deficit against income resulting in double deduction. The Tribunal, following a recent judgment and consistent view, held that there was no double deduction claimed by the assessee. The Tribunal rejected the Revenue's grounds and dismissed the appeal, affirming the ld. CIT(A)'s decision.
In conclusion, the Tribunal upheld the ld. CIT(A)'s decision to allow the exemption u/s 10(23C) (via) to the assessee, finding no double deduction claimed by the assessee in the treatment of corpus donation and depreciation. The Tribunal also confirmed that the conditions for exemption u/s 10(23C)(via) were satisfied and dismissed the Revenue's concerns regarding allowing depreciation and set off of deficit, ruling in favor of the assessee based on legal principles and previous judgments.
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2012 (3) TMI 541
Unexplained loan - Held that:- It was for the assessing Officer to find out whether really the aforesaid 37 persons have lent loan to the Company or not and when the accounts reflects the same as loan received though the account payee cheque such transaction cannot be doubted. Since this aspect has not been considered by the assessing Authority. Revisional Authority as well as the learned Single Judge, we have no other option than to set-aside the order passed by all the authorities and remand the matter to the Assessing Officer for fresh consideration in accordance with law.
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2012 (3) TMI 540
Issues involved: Appeal against order allowing deduction u/s 10B, apparent errors in Tribunal's order regarding pending appeal and lease agreement, request for rectification of errors.
Deduction u/s 10B: The assessee filed a Misc. Application challenging the Tribunal's order allowing deduction u/s 10B for the assessment year 2003-04. The assessee contended that the Tribunal erred in disregarding the fact that the assessee had used machinery exceeding 20% of the total machinery value. The applicant sought rectification of errors in the Tribunal's order, highlighting discrepancies in statements made by the Id. DR and the disposal of the matter of Sakhi Raimondi Valves (India) Ltd. The applicant also emphasized the importance of a contention regarding the deduction under section 10B, which remained undecided. The Tribunal was requested to consider past decisions and rectify the apparent errors in the order.
Apparent Errors in Tribunal's Order: The Tribunal's order contained several apparent errors according to the assessee. The Tribunal's decision to send the matter back to the Assessing Officer for fresh consideration was challenged by the assessee, citing previous decisions and agreements. The assessee argued that the Tribunal's decision was based on incorrect information regarding the pending appeal of Sakhi Raimondi Valves (India) Ltd. and the lease agreement between the parties. The assessee requested the rectification of these errors in the interest of justice. The Tribunal acknowledged the mistakes in the order and recalled it for further hearing, without the need for additional notices to the parties.
Conclusion: The Misc. Application filed by the assessee was allowed, and the Tribunal directed the Registry to post the matter for a hearing on a specified date. The decision was pronounced in the open Court, granting the relief sought by the assessee regarding the errors in the Tribunal's order.
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2012 (3) TMI 539
Issues Involved:
1. Deletion of addition made by the Assessing Officer (AO) by disallowing expenditure incurred for performance of the Akhand Path.
2. Examination of the accounting method of the assessee and alleged defects.
Issue 1: Deletion of Addition by AO for Akhand Path Expenditure
The Revenue challenged the deletion of additions of Rs. 27,60,300/- and Rs. 61,21,800/- made by the AO for the assessment years 2007-08 and 2008-09 respectively. The AO disallowed these expenditures on the grounds that the receipts for Akhand Path were treated as advances and not as income until the performance of the Akhand Path. The AO argued that the expenses should not be booked in the relevant year as the Akhand Path was performed in earlier years.
The assessee contended that the income and expenditure were accounted for as and when they were earned/incurred, following a consistent accounting method. The CIT(A) accepted the assessee's explanation and allowed the claim, noting that the AO did not point out any specific defect or prove any expenditure as false.
Issue 2: Examination of Accounting Method and Alleged Defects
The AO examined the books of accounts and receipts, issuing a show cause notice. The AO's main allegation was that the majority of receipts were general donations and not specifically for Akhand Path, and that the expenses were not allowable as they related to earlier years. The assessee responded that all receipts were for Akhand Path and expenses were booked only after the performance of the Akhand Path.
The CIT(A) considered the assessee's consistent accounting method and the AO's report, which aligned with the assessee's explanation. The CIT(A) found no merit in the AO's disallowance, citing the Supreme Court decision in CIT vs. Realest & Services Ltd. 307 ITR 202 (SC), which supports the consistency of the accounting method unless a change benefits the Revenue.
Conclusion:
The Tribunal dismissed the Revenue's appeals for both assessment years, upholding the CIT(A)'s decision to allow the assessee's claim. The Tribunal found no infirmity in the CIT(A)'s order, noting the absence of any specific defect pointed out by the AO and the consistent accounting method followed by the assessee.
Order:
The appeals of the Revenue in ITA No.382(Asr)/2011 and ITA No.385(Asr)/2011 are dismissed. Order pronounced in the open court on 20th March, 2012.
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2012 (3) TMI 538
Tds u/s 195 - whether the payment of USD 58,000 payable to Verisity Design Inc, USA, for purchase of software was in the nature of royalty and the assessee was required to deduct tax at source and pay the same to the Government? - Held that:- Payment made by the assessee to non-resident companies would amount to royalty within the meaning of Article 12 of the DTAA with the respective countries and there was obligation on the part of the assessee to deduct tax at source u/s. 195 of the I.T. Act. We therefore do not see any infirmity in the order of the ld. CIT(A), as such we do not find any merit in this appeal of the assessee.
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2012 (3) TMI 537
Unexplained credits of the bank account - peak credit addition - Held that:- The money deposited in the bank account was withdrawn either on the same day or on subsequent dates. It is seen that the total addition of the aggregate deposits in the bank account after giving benefit of withdrawals is the peak amount and in that case peak amount is to be added. We find that the assessee has maintained a bank account which is admittedly not disclosed to the revenue and there is no doubt that the deposits in this bank account represents undisclosed income of the assessee to be assessed as undisclosed income but qua only the peak amount. The assessee has filed complete statement of peak deposit and withdrawals which is at ₹ 1,87,247/- and before CIT(A). We are of the view that the CIT(A) has rightly directed the AO to restrict the addition to the extent of peak amount and we confirm the same. This issue of revenue’s appeal is dismissed.
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2012 (3) TMI 536
Issues Involved:
1. Profit on sale of Pent House.
2. Undisclosed profit on sale of land and constructed area.
3. Unrecorded receipts on sale of shop to Shri Premarajan.
4. Unrecorded receipts on sale of shops to Sri Jamaludeen and Shri Muneer.
5. Reduction of profit on sale of land.
6. Addition relating to sale of property located at Thankakkunnu.
Summary:
1. Profit on sale of Pent House:
The revenue challenged the deletion of Rs. 21.00 lakhs by the CIT(A) regarding the profit on the sale of a penthouse. The AO claimed the company only debited Rs. 50.00 lakhs in its books, while the agreed cost was Rs. 71.00 lakhs. The CIT(A) deleted the addition due to lack of seized material and a non-completion certificate. The tribunal found contradictions and directed the AO to re-examine the issue based on seized materials.
2. Undisclosed profit on sale of land and constructed area:
The AO computed an undisclosed profit of Rs. 50,81,874/- based on figures from the assessee's books, without referring to seized materials. The CIT(A) deleted the addition due to the absence of seized material. The tribunal emphasized that block assessments should be based on seized materials and directed the AO to re-examine the issue, considering the terms of the agreement between the assessee and landowners.
3. Unrecorded receipts on sale of shop to Shri Premarajan:
The AO added Rs. 8,22,000/- as suppressed receipts based on bank withdrawals by Shri Premarajan, encashed by the assessee's employee. The CIT(A) deleted the addition, stating the bank account was not part of the seized record. The tribunal upheld the CIT(A)'s decision, noting no seized material suggested over and above payments.
4. Unrecorded receipts on sale of shops to Sri Jamaludeen and Shri Muneer:
The AO added Rs. 50.00 lakhs based on loose papers found during a survey and a sworn statement by Shri V. Muneer admitting on-money payments. The CIT(A) deleted the addition, citing the statement's lack of evidentiary value and reliance on pre-search materials. The tribunal disagreed, stating the statement taken u/s 131 has evidentiary value and the AO's assessment was correct. The tribunal restored the AO's addition of Rs. 50.00 lakhs.
5. Reduction of profit on sale of land:
The AO estimated a profit of Rs. 4,55,420/- on the sale of 41.75 cents of land, which the CIT(A) reduced to Rs. 2,08,750/-. The tribunal found the AO's estimation justified based on seized documents and upheld the CIT(A)'s reduced profit estimation. The assessee's cross objection was dismissed.
6. Addition relating to sale of property located at Thankakkunnu:
The assessee challenged the addition of Rs. 4,90,915/- confirmed by the CIT(A). The tribunal did not find merit in the assessee's contentions and dismissed the cross objection.
Conclusion:
The appeal of the revenue is partly allowed for statistical purposes, and the cross objection filed by the assessee is dismissed.
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2012 (3) TMI 535
Unexplained investment - addition made by AO merely on the basis of stamp valuation adopted by the Registrar for the purpose of registration of the document - Held that:- There is nothing on record to support the finding of the AO for making the addition on account of unexplained investment in property. There is no law to justify the findings of the AO to adopt the stamp valuation for the purpose of making addition in the case of the purchaser. It was a case of search and nothing was found against the assessee if the assessee or his wife made any undisclosed investment in property. According to the ld. DR, the AO has not invoked the provisions of section 50C of the IT Act, but no other provision has been brought to our notice under which such an addition can be made against the assessees. In view of the finding of fact given by the ld. CIT(A) and in absence of any incriminating material against the assessee brought on record for the purpose of making above addition, we do not find any infirmity or illegality in the order of the ld. CIT(A) in deleting the addition.
Addition on account of household expenses - Held that:- No merit in this ground of appeal of the Revenue. The AO purely made estimated addition without bringing any material against the assessee for estimating household expenses. The contention of the ld. counsel for the assessee that in other cases similar additions have been deleted, has not been rebutted through any material on record. In the absence of any material on record in favour of the revenue, we do not find any justification to interfere with the order of the ld. CIT(A). Same is confirmed and thus, the appeal of the Revenue is dismissed.
Unexplained investment in plot at Sirole - Held that:- Since the AO has not brought any evidence on record that the assessee made payment of ₹ 1,30,00,000/- to the seller and no cogent and reliable corroborative evidence have been filed on record, we do not find any justification to interfere with the order of the ld. CIT(A). The finding of fact recorded by the ld. CIT(A) support the contention of the ld. counsel for the assessee that it is not a fit case for taking a contrary view what has already been taken by the ld. CIT(A). Accordingly, we do not find any merit in this ground of appeal of the Revenue. The departmental appeal is, accordingly, dismissed on this ground as well
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2012 (3) TMI 534
Issues Involved: Application for recall of ex parte order due to non-appearance of assessee at the hearing.
Summary:
The Miscellaneous Application was filed by the assessee against the ex parte order passed by ITAT in ITA No.56/Del/2010 for Assessment Year 2006-07, dated 8th March, 2010. The appeal was initially filed through one Authorized Representative but was later transferred to another representative, causing a delay in the transfer of documents. As a result, the assessee could not appear on the scheduled hearing date. The assessee submitted an affidavit stating the change in representation and expressed a strong interest in having the appeal adjudicated.
Upon hearing the arguments from the Senior DR and the Authorized Representative of the assessee, the Tribunal acknowledged the reasonable cause for the non-appearance of the assessee on the hearing date. In accordance with Rule 24 of the Income-tax Appellate Tribunal Rules, 1963, the Tribunal decided to recall the ex parte order dated 08.03.2010 and set the appeal for a new hearing on 30th April, 2012 without issuing a notice. Both parties were informed of this decision during the Open Court session, and the ITAT Registry was directed to make the necessary arrangements.
Consequently, the Miscellaneous Application filed by the assessee was allowed, and the order was pronounced in the Open Court on 2nd March, 2012.
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2012 (3) TMI 533
Issues involved: Assessment of exemption under S.10(23C)(vi) and S.11, investment in chit funds, applicability of S.11(5) and eligibility for exemption under S.11.
Assessment of exemption under S.10(23C)(vi) and S.11:
The appellant, a society running educational institutions, appealed against the CIT(A)'s order denying exemption under S.10(23C)(vi) and S.11 for the assessment year 2005-06. The assessing officer contended that without approval under S.10(23C)(vi), the society was not entitled to exemption under any provision. The appellant argued that being registered under S.12A, S.11 should apply irrespective of S.10(23C) approval. The CIT(A) held that the society could claim exemption under S.11 even without S.10(23C) approval, based on a previous tribunal decision.
Investment in chit funds and applicability of S.11(5):
The assessing officer found that the appellant had invested in chit funds, Srini Chit Funds Private Ltd. and Joseph's Chit Funds Pvt. Ltd., which he deemed a violation of S.11(5). The appellant argued that the investments did not breach S.11(5) as they were for day-to-day operational needs, not fixed deposits. The CIT(A) disagreed, considering the chit fund contributions as investments and ruled that the appellant failed to comply with S.11(5) modes, thus ineligible for S.11 exemption.
Eligibility for exemption under S.11:
The tribunal noted that S.11 to 13 would apply as the appellant lacked S.10(23C) approval. Emphasizing S.13(1)(d), it clarified that any investment not in line with S.11(5) would lead to exemption loss under S.11. The tribunal rejected the argument that S.11(2)(v) applied only when 85% of income was not spent, stating that any non-compliant investment would jeopardize S.11 exemption. Regarding chit fund contributions, the tribunal referred to a precedent emphasizing the need to determine if the activity was savings/investment or loan repayment, directing a reassessment based on the nature of chit fund activities.
In conclusion, the tribunal allowed the appellant's appeal for statistical purposes, highlighting the need for a detailed reassessment of chit fund contributions to ascertain eligibility for exemption under S.11.
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2012 (3) TMI 532
Issues involved: Appeal against demand of service tax under installation, erection, and commissioning service; eligibility for abatement under Notification No.12/2003.
Issue 1: Appeal against demand of service tax under installation, erection, and commissioning service
The appellant contested a show-cause notice demanding service tax for the activity of installation, erection, and commissioning of telecommunication towers. The appellant argued that they were covered under works contract and not liable to pay service tax under erection and commissioning service. The lower authorities found the appellant entitled to abatement on the portion of the contract amount on which they had paid VAT, reducing the service tax demands. The Revenue appealed against the order of abatement, leading to the current appeal.
Issue 2: Eligibility for abatement under Notification No.12/2003
The Revenue argued that the lower authorities did not examine the issue of abatement in light of the amendment under Notification No.12/2003, which clarified that the benefit is available only if no credit of input/input service is availed. Upon review, it was found that there was no evidence to prove that the appellant had availed Cenvat credit of input/input service during the period in question. As a result, the impugned order was upheld, and the appeal by the Revenue was dismissed.
*(Dictated in Court)*
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