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Showing 181 to 200 of 851 Records

• 2011 (6) TMI 864
  
  Issues Involved:
  1. Validity of the order under section 154/155 of the IT Act.
  2. Limitation period for passing the order under section 154/155.
  3. Rectification of debatable issues under section 154/155.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of the Order under Section 154/155 of the IT Act:
  The assessee contended that the CIT(A) erred in confirming the validity of the order under section 154/155, treating the purported mistakes as mistakes apparent from the records. The AO had issued a notice under section 154 to rectify an alleged mistake in the computation of deduction under section 80HHC, which the assessee objected to, claiming there was no mistake in the original computation. The CIT(A) upheld the AO's action, relying on the Supreme Court decisions in Hind Wire Industries Ltd. vs. CIT and Waldies Ltd. vs. CIT, which allowed rectification with reference to the last order where the mistake occurred.
  
  2. Limitation Period for Passing the Order under Section 154/155:
  The primary argument from the assessee was that the rectification order dated 10.03.2000 was beyond the statutory period of four years from the original assessment order dated 29.03.1995. The CIT(A) rejected this argument, stating that the four-year limitation period should be calculated from the date of the last rectification order, which was 5.12.1997. The CIT(A) cited the Supreme Court's ruling in Hind Wire Industries Ltd. vs. CIT, which stated that the time limit for rectification should be reckoned from the date of the order sought to be amended, including amended or rectified orders.
  
  3. Rectification of Debatable Issues under Section 154/155:
  The assessee argued that the issues covered by the order under section 154 were debatable and could not be termed as mistakes apparent from the record. The CIT(A) disagreed, maintaining that the rectification was valid and within the authority vested under the Act. The tribunal, however, found that the mistake pointed out in the rectification order arose from the original assessment order dated 29.03.1995 and not from any subsequent rectification orders. Therefore, the limitation period should be reckoned from the original order, making the rectification order dated 10.03.2000 barred by limitation.
  
  Conclusion:
  The tribunal concluded that the rectification order dated 10.03.2000 was barred by limitation as it was beyond four years from the original assessment order dated 29.03.1995. The tribunal quashed the orders of the lower authorities, treating them as barred by limitation under section 154(7) of the IT Act. The appeal of the assessee was allowed.
  
  Order Pronounced:
  The order was pronounced in the open court on 24.06.2011.

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• 2011 (6) TMI 863
  
  Issues Involved:
  1. Denial of exemption u/s 11 of the IT Act.
  2. Filing of return in incorrect form.
  3. Non-submission of audit report in Form No. 10B.
  4. Validity of assessment order based on incorrect return form.
  
  Summary:
  
  1. Denial of exemption u/s 11 of the IT Act:
  The AO denied exemption u/s 11 of the IT Act and taxed the gross receipt of Rs. 7,68,43,040/- without granting deduction of the expenditure of Rs. 8,41,77,633/-. The AO observed that the assessee failed to furnish the audit report in Form No. 10B, a compulsory requirement for eligibility of exemption u/s 11A as stated in section 12A(b) of the IT Act read with Rule 17B of the IT Rules. The AO concluded that the assessee did not fulfill the conditions of Sec. 12A of the IT Act required for claiming exemption u/s 11 and 12 of the IT Act.
  
  2. Filing of return in incorrect form:
  The AO noticed that the assessee filed its return of income in Form No.1 instead of Form No.3A as required by IT Rules. The assessee explained that due to technical issues with the computer program, it was unable to file the return in Form No.3A and instead filed it in Form No.1. The assessee claimed to have filed the return in Form No.3A by hand delivery along with the Auditor's report in Form No.10B, but the AO found no evidence of this in the records.
  
  3. Non-submission of audit report in Form No. 10B:
  The assessee contended that it had submitted the audit report in Form No.10B along with the return in Form No.3A by hand delivery. The learned CIT(A) accepted the audit report at the appellate stage, citing various judicial precedents that allow for the audit report to be submitted before the assessment is over. The learned CIT(A) directed the AO to accept the audit report and grant exemption to the assessee.
  
  4. Validity of assessment order based on incorrect return form:
  The assessee raised an additional ground that the assessment order based on ITR 1 was invalid as the correct form should have been Form No.3A. The learned CIT(A) rejected this additional ground, stating that the main ground of appeal had been allowed and the assessee had consistently filed returns in Form No.3A in past and subsequent years.
  
  Conclusion:
  The learned CIT(A) directed the AO to accept the audit report from the assessee and grant exemption u/s 11 of the IT Act, considering the audit report was filed at the appellate stage and the procedural issues faced by the assessee. The appellate authority's decision was based on judicial precedents that allow for the audit report to be submitted at any stage before the assessment is completed. The departmental appeal was dismissed, confirming the findings of the learned CIT(A).

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• 2011 (6) TMI 862
  
  Issues involved: Whether the ITAT was justified in setting aside the order passed by the CIT u/s 263 of the Income Tax Act, 1961.
  
  Comprehensive Details:
  
  Issue 1: Assessment of Long Term Capital Gains
  
  The assessee company, a Non-Banking Finance Company, received payments on account of goodwill from M/s. Sun Life Assurance Company of Canada for joint venture partnership. The assessee offered the goodwill amounts for taxation as long term capital gains. The assessment was initially completed u/s 143(1)(a) and later scrutinized under u/s 143(3) read with Section 144, where the long term capital gains were accepted. Subsequently, the CIT invoked u/s 263 directing a reassessment to determine the nature of payments made by Sun Life Assurance Company. The ITAT set aside the CIT's order u/s 263.
  
  Issue 2: Findings of the ITAT
  
  The ITAT found that the Assessing Officer had made a detailed assessment considering the disclosure of goodwill received by the assessee. It concluded that the Assessing Officer had examined the joint venture agreement, the nature of payments, and the accounting treatment. The ITAT held that the decision of the Assessing Officer was based on due application of mind, and the CIT's invocation of u/s 263 was deemed a change of opinion, not sustainable in law. Based on these findings, the appeal was dismissed.
  
  This judgment revolves around the dispute regarding the assessment of long term capital gains by the assessee company and the subsequent intervention by the CIT u/s 263 of the Income Tax Act, 1961. The ITAT's decision to set aside the CIT's order was based on the finding that the Assessing Officer had already considered and examined the relevant aspects related to the goodwill payments received by the assessee. The ITAT concluded that the CIT's intervention was merely a change of opinion and not justified under the law. As a result, the appeal was dismissed, upholding the decision of the ITAT.

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• 2011 (6) TMI 861
  
  Issues involved: Assessment of unexplained cash credit u/s 68 of the Income Tax Act, 1961 based on share application money received by the assessee company.
  
  Summary:
  The appeal was filed by the Revenue against the Order of the Income-tax Appellate Tribunal, 'B' Bench, Kolkata, dismissing the appeal related to the assessment year 2006-07 concerning the treatment of share application money as unexplained cash credit. The Assessing Officer considered a portion of the share application money as unexplained cash credit due to concerns regarding the parties' addresses, lack of fixed assets, and absence of formalities in raising share capital.
  
  The Commissioner of Income-tax (Appeals) overturned the Assessing Officer's decision, noting that the share applicants/companies were tax-assessed, provided PAN details, I.T. returns, audited balance sheets, and bank statements. The Commissioner highlighted that multiple companies registered at the same address were legally permissible, refuting the Assessing Officer's doubts.
  
  The Tribunal upheld the Commissioner's decision, leading to the Revenue's appeal before the High Court. After reviewing the case and arguments presented by the Revenue's advocate, the Court agreed with the Tribunal's findings. It was observed that the Assessing Officer failed to prove that the share applicants lacked the means to invest, as the share capital receipts were properly recorded in the assessee company's books and the applicants' audited accounts.
  
  Consequently, the Court found no defects in the Tribunal's order and no substantial legal errors warranting interference. The appeal was summarily dismissed, with instructions to provide a certified copy of the order to the concerned parties.

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• 2011 (6) TMI 860
  
  Issues Involved:
  1. Addition of Rs. 56,49,077/- in respect of bad debts written off.
  2. Depreciation of Rs. 9,89,487/- on Rs. 39,57,950/-.
  3. Disallowance of deduction of Rs. 13,59,000/- representing the amount of stock written off.
  4. Disallowance of deduction of Rs. 37,61,506/- in respect of selling and distribution expenses.
  5. Addition of notional interest of Rs. 7,54,394/-.
  6. Disallowance of Rs. 5,370/- representing penalty for delayed payment of PF.
  7. Levy of interest u/s 234B and 234D of the IT Act.
  
  Issue-wise Detailed Analysis:
  
  1. Addition of Rs. 56,49,077/- in respect of bad debts written off:
  The assessee challenged the addition of Rs. 56,49,077/- for bad debts written off, arguing that the write-off is allowable under section 36(1)(vii) of the IT Act. The AO rejected the claim, stating that the assessee failed to provide sufficient reasons for writing off the debts, especially since most debtors were government entities. The CIT(A) upheld this decision, noting that the assessee did not provide evidence to show that the debts had become irrecoverable. However, the Tribunal referred to the Supreme Court's decision in T.R.F. Ltd., which clarified that post-April 1, 1989, it is sufficient if the bad debt is written off as irrecoverable in the accounts. Consequently, the Tribunal set aside the orders of the authorities below and remitted the matter back to the AO for reconsideration in light of the Supreme Court's decision.
  
  2. Depreciation of Rs. 9,89,487/- on Rs. 39,57,950/-:
  The assessee did not press this ground of appeal since the CIT(A) had already directed the AO to verify the claim. Consequently, this ground was dismissed as not pressed.
  
  3. Disallowance of deduction of Rs. 13,59,000/- representing the amount of stock written off:
  The AO disallowed the claim for writing off obsolete stock, stating that the assessee did not provide supporting evidence or a technical report. The CIT(A) upheld this decision, noting that some items were issued just three months before the accounting year and could not be considered obsolete. The Tribunal found no justification to interfere with these findings, as the claim was unsupported by evidence.
  
  4. Disallowance of deduction of Rs. 37,61,506/- in respect of selling and distribution expenses:
  The AO disallowed the claim for selling and distribution expenses, noting that the assessee failed to provide evidence of services rendered by Mr. Larsing M. The CIT(A) upheld this decision, emphasizing that the assessee did not prove the genuineness of the expenditure. The Tribunal agreed, stating that the assessee failed to discharge the onus of proving the business purpose of the expenditure.
  
  5. Addition of notional interest of Rs. 7,54,394/-:
  The AO added notional interest on advances given to associate concerns, arguing that the assessee paid heavy interest on borrowed funds while giving interest-free advances. The CIT(A) upheld this addition. However, the Tribunal found the disallowance unjustified, noting that the assessee had sufficient profits to cover the advances and that no notional interest could be charged. The Tribunal set aside the orders of the authorities below and deleted the addition.
  
  6. Disallowance of Rs. 5,370/- representing penalty for delayed payment of PF:
  The CIT(A) disallowed the deduction for penalty on delayed payment of PF, which the assessee did not contest. The Tribunal found no justification to interfere with this decision, and the ground was dismissed.
  
  7. Levy of interest u/s 234B and 234D of the IT Act:
  The interest levied under sections 234B and 234D was considered consequential. The Tribunal dismissed this ground, noting that it was not argued or pressed.
  
  Conclusion:
  The appeal of the assessee was partly allowed, with the Tribunal setting aside certain additions and remitting the matter back to the AO for reconsideration, while upholding other disallowances. The order was pronounced in the open Court on 17-06-2011.

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• 2011 (6) TMI 859
  
  The High Court of Bombay dismissed the appeal regarding the disallowance of interest under Section 80M of the Income Tax Act, 1961 for the assessment year 1992-93. The ITAT deleted the disallowance, stating there was no nexus between borrowed funds and investments, and the assessee had sufficient funds for investments. The Tribunal's decision was based on factual findings, and no substantial question of law arose. The appeal was dismissed with no costs.

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• 2011 (6) TMI 858
  
  Issues involved: Appeal against deletion of addition of Long Term Capital Gain by the ld. CIT(Appeals).
  
  Issue 1: Nature of land sold and applicability of capital gain tax
  
  - The assessee sold two properties claiming them to be agricultural lands not exigible for capital gain tax.
  - The A.O. considered the lands as commercial plots based on an opinion obtained from SRO, Thiruporur.
  - The A.O. noted the absence of Chitta, Adangal, and VAO certificate regarding the nature of the land.
  - Assessee produced Chitta and Adangal certificate to support the claim that the lands were agricultural.
  - The A.O. deputed an Inspector for spot enquiry who reported no agricultural operations in the lands for several years.
  - Ld. CIT(Appeals) concluded that the lands were agricultural and not subject to capital gain tax.
  - The Revenue contended that the lands were non-agricultural as they were later converted into plots by buyers and had a high-rise building.
  - The Tribunal found that the lands were outside municipal limits and agricultural operations were carried out, supporting the deletion of the addition.
  
  Decision: The appeal filed by the Revenue was dismissed, upholding the deletion of the addition of Long Term Capital Gain by the ld. CIT(Appeals).

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• 2011 (6) TMI 857
  
  Issues involved: Disallowance of consultancy charges payments and restoration of verification of books of accounts for assessment year 2004-05.
  
  Consultancy Charges Payments Disallowance:
  The Assessing Officer disallowed consultancy charges payments of Rs. 15,05,178 due to lack of information on the nature of services provided and their relevance to the business. The Ld. Commissioner of Income Tax (Appeals) overturned this disallowance, stating that the Assessing Officer did not properly examine the details and disregarded the claim without sufficient justification. The matter was remitted back to the Assessing Officer for a fresh consideration, with the directive to provide the assessee with a fair hearing.
  
  Verification of Books of Accounts:
  The Assessing Officer disallowed expenses amounting to Rs. 96,78,133, citing the non-production of books of accounts and vouchers by the assessee. The Ld. Commissioner of Income Tax (Appeals) noted that the books of accounts were indeed produced for verification and remitted the issue back to the Assessing Officer for limited verification. The Revenue challenged this decision, arguing that the Ld. Commissioner of Income Tax (Appeals) lacked the authority to remit the matter post-1.6.2001. However, the tribunal upheld the decision, emphasizing that the remittance was for the specific purpose of verifying the books of accounts and did not exceed the Ld. Commissioner of Income Tax (Appeals)' jurisdiction.
  
  In conclusion, the appeal by the Revenue was partly allowed for statistical purposes, with the tribunal upholding the decision to remit the issues back to the Assessing Officer for fresh consideration based on the additional evidence and verification of books of accounts provided by the assessee.

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• 2011 (6) TMI 856
  
  Issues involved: Dispute over tenancy rights and property ownership, validity of injunction orders, appeal jurisdiction under Article 227.
  
  1. Dispute over tenancy rights and property ownership:
  The petitioners claimed to be tenants paying rent under a Rent Deed with respondent nos. 2 & 3. The suit for declaration and injunction was filed regarding the property in dispute, which was under question whether it belonged to the respondents or Nagar Nigam, Jaipur. Various court orders were passed, including an interim injunction in favor of the petitioners, which was later set aside by the District Judge and further upheld by the High Court. The courts found that the Nigam had the right to get the disputed property vacated, and any tenancy had been terminated in 1987. The High Court affirmed the District Judge's order, stating it correctly appreciated the governing principles in the dispute.
  
  2. Validity of injunction orders:
  The petitioners filed Special Leave Petitions challenging the High Court's order dismissing their appeal against the District Judge's decision. The learned Single Judge and Division Bench decisions were also under scrutiny. The counsel for the petitioners did not press the argument against the Division Bench's order, acknowledging that no appeal could lie against the Single Judge's decision. The Supreme Court found no reason to interfere with the discretion exercised by the Single Judge in dismissing the injunction application, considering the facts and evidence presented.
  
  3. Appeal jurisdiction under Article 227:
  The Division Bench of the High Court dismissed the LPA as not maintainable, as no appeal could lie against the Single Judge's order exercising revisional jurisdiction under Article 227. The Special Leave Petitions were filed against the Single Judge's order and the Division Bench's decision. The Supreme Court upheld the Single Judge's order and directed the petitioners to vacate the premises by a specified date, subject to filing an undertaking. Failure to file the undertaking within two weeks would result in the dismissal of the special leave petitions.

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• 2011 (6) TMI 855
  

  Higher deduction u/s 80IB - Interest and Remuneration paid to Partners - AO was of the opinion that firm had not provided the interest and remuneration to the partners so as to claim higher deduction u/s 80IB on its profits - HELD THAT:- CIT(A) held that "Identical issue has been decided in the case of husband of the appellant, the other partner in firm holding 50% share for the AY 2006-07. The terms of partnership deed are not so worded so as to make payment of interest on capital and remuneration to partners as mandatory. It is also not rebutted by the AO that no interest or remuneration has been received by the appellant in earlier years also. This income has not accrued or arisen to the assessee. Therefore, the addition is deleted"

  In view of the above, we do not find any infirmity in the findings of the CIT(A), as the same are based on proper appreciation of the legal and factual position of the case.

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• 2011 (6) TMI 854
  
  Issues Involved:
  1. Addition u/s 40(a)(ia) for non-deduction or late deposit of TDS.
  2. Deletion of addition after rejecting the assessee's books of accounts.
  
  Summary:
  
  Issue 1: Addition u/s 40(a)(ia) for non-deduction or late deposit of TDS

  The assessee contended that TDS was deposited before the due date of filing the return, except for Rs. 85,850/- on which no tax was deducted. The assessee cited the ITAT 'B' Bench decision in Shri Kanubhai Ramjibhai Vs. ITO, which held that the amendment to Section 40(a)(ia) by the Finance Act, 2010 is retrospective. The Tribunal agreed, stating that the amendment is remedial and designed to eliminate unintended consequences, thus applicable retrospectively from 1st April 2005. The Tribunal directed the AO to examine the payment of TDS and disallow only those amounts where TDS was either not deducted or not deposited before the due date of filing the return. The AO was instructed to re-adjudicate after giving the assessee an opportunity to be heard.

  Issue 2: Deletion of addition after rejecting the assessee's books of accounts

  The Revenue's appeal contended that the CIT(A) erred in deleting the addition of Rs. 12,14,189/- made after rejecting the assessee's books of accounts. The assessee argued that it followed the project completion method, and the project was not completed during the year under consideration. The Tribunal noted that the Revenue accepted this method in preceding and subsequent years and that the project was not substantially completed during the year in question. The Tribunal found no infirmity in the CIT(A)'s order deleting the addition made by the AO and rejected this ground of the Revenue's appeal.

  Conclusion:

  The assessee's appeal was deemed allowed for statistical purposes, while the Revenue's appeal was dismissed. The order was pronounced in Open Court on 17th June 2011.

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• 2011 (6) TMI 853
  

  Subsidy with respect to Sales Tax payable - Tribunal holding that the subsidy received by the assessee cannot be reduced from written down value for purpose of computing depreciation of wind mills - Tribunal committed no error in deciding the issue in favour of the assessee.

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• 2011 (6) TMI 852
  
  The ITAT Delhi allowed the assessee's Misc. application against the order dated 19th July, 2010 for assessment year 2002-03. The assessee was granted a fresh adjudication due to non-attendance on 19th July, 2010, which was deemed to be for a valid reason. The appeal was rescheduled for hearing on 19th September, 2011 without issuing any notice.

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• 2011 (6) TMI 851
  
  Issues involved: Reopening of assessment u/s 147 and addition of share application money u/s 68.
  
  Reopening of assessment u/s 147:
  The revenue appealed against the Ld. CIT(A)'s order regarding the reopening of assessment for the assessment year 2002-03. The AO issued a notice u/s 148 based on information indicating that certain companies provided accommodation entries to the assessee. The Ld. CIT(A) held that there was no material with the AO to conclude that income had escaped assessment. The Tribunal noted that the AO is required to form a prima facie opinion before issuing a notice u/s 148, and in this case, the information from the investigation wing provided sufficient grounds for reopening. The Tribunal set aside the Ld. CIT(A)'s finding and upheld the reopening of assessment.
  
  Addition of share application money u/s 68:
  The revenue contested the deletion of the addition of &8377; 9 lakh by the Ld. CIT(A). The assessee received share application money from 12 entities, out of which the AO disbelieved the contribution of three companies. The Tribunal, after considering the details submitted by the assessee and relevant case law, found that the assessee had proven the identity of the share application money and had discharged its onus. It was noted that the AO did not conduct a proper inquiry and relied solely on information from the DIT Investigation. The Tribunal, following the decision of the Hon'ble Delhi High Court, upheld the Ld. CIT(A)'s deletion of the addition, as the assessee had provided sufficient evidence to support the legitimacy of the transactions.
  

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• 2011 (6) TMI 850
  
  Issues Involved:
  1. Deletion of addition made on account of share application money u/s 68.
  2. Deletion of addition made on account of commission u/s 68.
  3. Application of the Supreme Court judgment in the case of Lovely Exports (P) Ltd.
  4. Deletion of addition on account of contribution in AOP on protective basis.
  
  Summary:
  
  1. Deletion of Addition on Account of Share Application Money u/s 68:
  The Revenue challenged the deletion of additions made on account of share application money for assessment years 2003-04 and 2004-05. The AO initiated proceedings u/s 147 based on information from the investigation wing that the assessee had taken accommodation entries disguised as share application money. Summons issued to verify the genuineness and creditworthiness of the companies were returned with remarks "No such firm." The AO treated the transactions as non-genuine and made additions u/s 68. The assessee provided documentary evidence, including share application forms, confirmations, and PAN details. The CIT (A) deleted the additions, relying on the Supreme Court's decision in Lovely Exports (P) Ltd., stating that the AO did not conduct any enquiry to prove that the money was the assessee's undisclosed income. The Tribunal upheld the CIT (A)'s decision, confirming that the identity of the shareholders was established and the AO could not make additions merely based on the investigation wing's report.
  
  2. Deletion of Addition on Account of Commission u/s 68:
  The AO added amounts as commission allegedly paid to entry operators. Since the Tribunal confirmed the deletion of share application money, the addition of commission, being consequential, was also deleted. The CIT (A) was justified in deleting the addition on account of commission for obtaining accommodation entries.
  
  3. Application of the Supreme Court Judgment in Lovely Exports (P) Ltd.:
  The Revenue argued that the CIT (A) erred in applying the judgment of the Supreme Court in Lovely Exports (P) Ltd., which they claimed was not applicable in cases involving mechanisms to introduce unaccounted money through accommodation entries. The Tribunal, however, upheld the CIT (A)'s reliance on the Lovely Exports case, stating that the AO did not provide any evidence to suggest that the money received was the assessee's undisclosed income.
  
  4. Deletion of Addition on Account of Contribution in AOP on Protective Basis:
  For assessment year 2004-05, the AO made a protective addition of Rs. 40,00,000/- on account of contribution in AOP. The assessee explained that the funds were invested through normal banking channels and provided evidence of the transactions. The CIT (A) noted that the source of the Rs. 40,00,000/- was from share capital received from various parties and routed through banking channels. The Tribunal upheld the CIT (A)'s decision, confirming that the source of deposit was proved, and no protective addition could be made.
  
  Conclusion:
  Both appeals filed by the Revenue were dismissed, and the order pronounced in the open court on 10th June 2011 confirmed the deletion of additions made by the AO.

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• 2011 (6) TMI 849
  
  Issues involved: Appeal against rejection of registration under Section 12AA and denial of approval under Section 80G by Commissioner of Income Tax-I, Madurai.
  
  Summary:
  The appeals were filed by the assessee against the orders of the Commissioner of Income Tax-I, Madurai, rejecting the application for registration under Section 12AA of the Income-tax Rules, 1962, and denying approval under Section 80G of the Act. The assessee's counsel argued that despite appearing before the Commissioner, they were unable to produce certain documents due to audit work difficulties. The Commissioner refused registration and approval citing failure to establish the genuineness of the Trust and charitable activities as per the Trust deed terms. The Departmental Representative did not object to the matter being reconsidered by the Commissioner.
  
  Upon review, the Appellate Tribunal found that the rejection was solely based on the lack of documentary evidence regarding charitable activities, without any finding that the Trust's objects were noncharitable. The Tribunal concluded that the matter needed further examination by the Commissioner. The orders refusing registration and approval were set aside, and the issues were remitted back to the Commissioner for fresh consideration. The Tribunal emphasized the need for the assessee to cooperate and provide necessary documents to prove the genuineness of its activities. The Commissioner was directed to pass orders in accordance with the law.
  
  As a result, both appeals filed by the assessee were allowed for statistical purposes. The order was pronounced in open court on the Ninth Day of June, 2011.

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• 2011 (6) TMI 848
  
  Issues involved:
  The judgment involves three appeals by the Revenue against the orders of the Ld. CIT (A)-I, Bangalore for the assessment years 2005-06, 2006-07, and 2007-08, primarily focusing on the allowance of deduction u/s 80-IB (10) and the fulfillment of conditions for the same.
  
  I. ITA No.387/10 - A.Y 2005-06:
  The main issue was whether the deduction u/s 80-IB (10) was allowable when the conditions were not fulfilled by the assessee, specifically regarding the commencement of construction work before obtaining approval from local authorities.
  
  II. ITA No.388 & 822/10 - A.Y 2006-07 & 2007-08:
  The crux of the matter for these assessment years was the allowance of deduction u/s 80-IB (10) without furnishing relevant details and evidence in support of the claim, and the discrepancy between the approval date and the actual commencement of the project.
  
  Judgment Details:
  The Appellate Tribunal, after considering the arguments of both parties, upheld the Ld. CIT (A)'s decision that the assessee was entitled to deduction u/s 80IB (10) for all the assessment years under challenge. The Tribunal emphasized the importance of the approval date of the project, as per the provisions of the Act, and cited relevant case laws to support their decision. They concluded that the Ld. CIT (A) had made a justified decision based on the facts and legal precedents presented.
  
  The Tribunal highlighted that the approval date of the project by the competent authority was crucial, not the date of communication, and referenced judgments by the Bombay High Court to support their stance. They noted that the Revenue's argument regarding the project's approval date and the commencement of construction work did not hold ground based on the legal provisions and precedents cited.
  
  In conclusion, the Tribunal dismissed the Revenue's appeals for all the assessment years under challenge, affirming the decision that the assessee was entitled to deduction u/s 80IB (10) based on the facts and legal interpretations presented. The judgment was pronounced on June 22, 2011.

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• 2011 (6) TMI 847
  
  Issues involved:
  The judgment deals with a Misc. Application seeking rectification/modification of a common order passed by the ITAT Hyderabad in relation to deduction claim under section 80HHE for assessment years 2003-04, 2004-05, and 2002-03.
  
  Deduction Claim under Section 80HHE:
  The assessee claimed deduction under section 80HHE based on two alternate grounds: export of 'customized electronic data' and engagement in data processing activity. The assessee contended that it fell under the first ground as the exported data was customized electronic data, supported by documents showing complex analysis generated by expensive software. The assessee argued that sending customized electronic data qualified for deduction u/s 80HHE, citing a Tribunal order in a similar case. However, the Departmental Representative opposed the rectification, stating no apparent mistake in the Tribunal's order. The Tribunal, after considering all submissions and case laws, found no error in its order and rejected the application, emphasizing that reviewing its own order was impermissible under the Income-tax Act.
  
  Conclusion:
  The ITAT Hyderabad dismissed the Misc. Application filed by the assessee seeking rectification/modification of the common order related to the deduction claim under section 80HHE for the assessment years 2003-04, 2004-05, and 2002-03. The Tribunal found no apparent mistake in its order and rejected the application, stating that reviewing its own order was not permissible under the Income-tax Act.

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• 2011 (6) TMI 846
  
  Issues involved: The issues involved in the judgment are rejection of book result, addition in valuation of closing stock of polished diamonds, addition of estimate of GP rate, disallowance of foreign travel expenses, and confirmation of disallowance of telephone expenses.
  
  Rejection of book result: The appellant challenged the rejection of book result by the Commissioner of Income Tax(Appeals) on the grounds of not maintaining qualitative details with regard to diamonds. The Assessing Officer (AO) had made additions to the income based on the rejection of the books of accounts and the GP rate disclosed by the assessee. The ITAT referred to a similar case and held that qualitative details of each piece of diamond are not necessary for income computation. The ITAT deleted the addition to the trading result but sustained the addition to the closing stock valuation.
  
  Addition in valuation of closing stock: The AO worked out the valuation of the closing stock of polished diamonds based on certain calculations as detailed in the assessment order. The assessee failed to provide details of the valuation of the closing stock, leading to the AO's determination of the value. The ITAT upheld the AO's valuation of the closing stock and directed that it would be considered as the opening stock of the next year.
  
  Disallowed foreign travel expenses: The appellant contested the disallowance of foreign travel expenses amounting to &8377; 32,000, arguing that the expenses were fully vouched and verifiable. The ITAT found no justification for the 10% ad hoc disallowance and deleted the disallowance.
  
  Disallowed telephone expenses: The AO disallowed 10% of the telephone expenses totaling &8377; 44,000, which the appellant challenged. The ITAT upheld the disallowance, considering the nature of the export business and the possibility of personal use of the telephone.
  
  In conclusion, the ITAT partly allowed the appellant's appeal, deleting the disallowance of foreign travel expenses but confirming the disallowance of 10% of telephone expenses.

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• 2011 (6) TMI 845
  
  The Bombay High Court upheld the Tribunal's decision to delete the penalty under Section 271(1)(c) of the Income Tax Act, 1961, stating that the sale and purchase of shares were genuine and not bogus transactions. The appeals were dismissed with no costs.

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