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2013 (6) TMI 752 - ANDHRA PRADESH HIGH COURT
... ... ... ... ..... capital goods. The finding was recorded vis-à-vis the plea raised by the appellant herein in paragraph 3 of the reply to the show cause notice. The adjudicating authority also found that no evidence was produced by the appellant in support of the plea. It was for the first time before the appellate authority, some photographs were produced and the appellate authority, having seen the photographs, allowed the appeal. The learned Tribunal held that the photographs were not sufficient evidence to hold that the aforesaid goods are capital goods. It was observed by the Tribunal that there is nothing to indicate that the photographs were crosschecked with any other material, nor the photographer was examined to ascertain the veracity of the plea. In the circumstances, when the Tribunal has recorded that there is no evidence, we do not think that any question of law is involved in this matter. 3. Accordingly, this appeal is dismissed. There will be no order as to costs.
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2013 (6) TMI 751 - ITAT PUNE
Revision u/s 263 - Deemed dividend under Section 2(22)(e) - whether the loans/advances given to the shareholders in the earlier years which are assessable as 'deemed dividend' in the hands of the respective shareholders in the past years, should be reduced from the surplus while determining the 'accumulated profits' in the hands of the company during the year under consideration? - Held that:- The advances or loans made in earlier years to the shareholders need to be reduced from the 'accumulated profits', for computing the 'accumulated profits' for current year, irrespective of whether the prior loans were assessed as 'deemed dividend' under Section 2(22)(e) of the Act or not. Accordingly, the 'accumulated profits' as on 31.03.2002 of the company was ₹ 1,94,62,774/- and the loans/advances on even date to the shareholders holding in excess of 10% voting power was ₹ 3,73,65,065/- and in this manner, it was submitted that there was no 'accumulated profits' as on 31.03.2002. The aforesaid proposition has been accepted by the Assessing Officer in the assessment order dated 12.06.2007 inasmuch as the Assessing Officer considered only the profits that accrued during the period from 01.04.2002 to 31.03.2003 amounting to ₹ 2,61,19,957/- for the purposes of computing the amount assessable under Section 2(22)(e) of the Act. In our considered opinion, the Assessing Officer made no mistake in excluding the sum of ₹ 1,94,62,774/- while determining the 'accumulated profits' for the purposes of computing the amount assessable under Section 2(22)(e) of the Act,
Commissioner has differed with the legal position accepted by the Assessing Officer without any justifiable reason. In fact, it would be in fitness to things to observe that the view adopted by the Assessing Officer on the aforesaid aspect was a possible view which is supported by judicial pronouncements and the Commissioner has not found it erroneous on the basis of any contrary judgment or legal position. Notably, the invoking of Section 263 of the Act can be justified only where the Commissioner is able to establish that the order passed by the Assessing Officer is erroneous in the eye of law so as to cause prejudice to the interest of the Revenue. In the present case, where the Assessing Officer has adopted a possible view, based on legal precedents, and the Commissioner is denuded from exercising his power under Section 263 of the Act.
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2013 (6) TMI 750 - ITAT CHANDIGARH
... ... ... ... ..... in the certified seeds by the client of the petitioner, the proviso to the said section would come into operation. Thus the petitioner's activity assists the sale of certified seeds and is " in relation to any trade, commerce or business" and therefore its activity cannot be held to be a "charitable purpose" . In view of the facts of the present case being identical to the facts of the Hon'ble Andhra Pradesh High Court in Andhra Pradesh State Seeds Certification Agency (supra) and applying the said ratio we hold that the activity carried on by the assessee is not for charitable purpose and hence the assessee is not entitled to the registration under section 12A of the Act. We uphold the order of the Commissioner of Income Tax passed under section 12AA of the Act in refusing to grant registration to the assessee society. The ground of appeal raised by the assessee is thus dismissed. 12. In the result, the appeal filed by the assessee is dismissed.
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2013 (6) TMI 749 - ITAT DELHI
... ... ... ... ..... necessary that a view is arrived at after taking into consideration the relevant facts. We considered it necessary in the light of the arguments advanced before the Bench that the AO shall examine the position of double taxation vis-à-vis the amounts which already stood offered to tax u/s Fringe Benefit Tax. The past position can be considered but simply because it was not challenged in the earlier year is not a good enough reason to resort to ad hocism the AO is directed to ascertain the correct facts and then decided the issue in accordance with law by way of speaking order after giving the assessee a reasonable opportunity of being heard. The impugned order as such is set aside, ground no-1 of the assessee and ground no-2 of the revenue are allowed for statistical purposes. 12. In the result, the appeal of the revenue is partly allowed and the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open court on 21st of June 2013.
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2013 (6) TMI 748 - ITAT AGRA
... ... ... ... ..... r of the assessee, to maintain consistency, we follow the above order of I.T.A.T. and in view of that we delete the addition of ₹ 38,09,500/- made by the A.O., being the addition of ₹ 38,00,000/- on account of shares and ₹ 9,500/- on account of estimated commission. In view of principle of consistency which we have followed, the decisions cited by the ld. D.R. and Revenue does not help them. 23. Further, the judgements relied upon by the ld. Departmental Representative are distinguishable on facts as those judgements have been decided by the Court considering the facts of respective cases which are not similar to the facts of the case under consideration. The case under consideration has been decided after detailed discussions on the issue and after considering the facts of the case. 24. Other grounds relating to charging of interest which are consequential in nature. 25. In the result, appeal of the assessee is allowed. (Order pronounced in the open Court)
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2013 (6) TMI 747 - KARNATAKA HIGH COURT
... ... ... ... ..... he writ petition was pending in W.P. No. 33818/2002, the order of assessment had already completed and there was demand to make payment of the customs duty. At leas while disposing of the said writ petition, the first respondent could have sought such a permission. No such permission has been obtained by the respondent. 20. When the Supreme Court has dismissed the special leave petition the order of assessment has become final. Therefore, question of reopening the said order on the ground of renewal of licence by a later date would not arise at all, in other words, we are of the view that allowing of the writ petition by the learned Single Judge relying upon extension of the licence period is nothing but setting aside the order of the court which according to us, is impermissible while exercising writ jurisdiction. 21. Accordingly, these appeals are allowed and the order of the learned Single Judge passed in W.P. No. 18425/2005, dated 30-7-2009 is hereby set aside.
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2013 (6) TMI 746 - ITAT- DELHI
ALP in respect of transactions of software development segment entered into by the assessee with its associate enterprise - comparability -
Denial of set off of loss in eligible unit against the profits of non eligible unit. We thus while setting aside the orders of the authorities below in this regard direct the AO to allow the claimed set off
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2013 (6) TMI 745 - ITAT MUMBAI
... ... ... ... ..... ent.” In view of the above order of the Co-ordinate Bench of the Tribunal and considering the facts that similar issues are involved in the appeals in respect of which stay is sought for (supra), we grant stay till 23.11.2013, the date to which the stay granted by the order dated 24.5.2013 is in force. Since the appeals in similar matters are already fixed on 14.8.2013, we direct the registry to fix the appeals under consideration being ITA Nos.4035, 4036, 4037, 4038, 4040, 4041/Mum/2013 on 14.8.2013 before the Regular “I” Bench. Since above date was indicated after hearing of the stay applications in the presence of the representative of both the parties, it was indicated that no notice of date of hearing would be sent. 7. In the results, all the stay applications of the assessee are allowed granting the stay up to 23.11.2013. The registry is directed to fix the appeals on 14.8.2013 before Regular Bench. Order pronounced in the open Court on 28th June 2013
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2013 (6) TMI 744 - ITAT LUCKNOW
Non deduction of TDS on payment of interest to Indian of Management, Lucknow - demand under section 201(1) and 201(1A) - Held that:- We find that it is a settled legal position now that once recipients have paid tax on income embedded in these payments, and in the light of Hon’ble Supreme Court’s decision in the case of Hindustan Coca Cola Beverages Pvt Ltd Vs CIT (2007 (8) TMI 12 - SUPREME COURT OF INDIA) the taxes cannot once again be recovered from the tax deductor.
In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same. The provisions to make good the shortfall in collection of taxes may thus end up being invoked even when there is no shortfall in fact. On the other hand, once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. It is not the revenue’s case before us that, on the facts of this case, such an exercise by the Assessing Officer is not possible. It does put an additional burden on the Assessing Officer before he can invoke Section 201(1).
As far as levy of interest under section 201(1A) is concerned, this interest is admittedly a compensatory interest in nature and it seeks to compensate the revenue for delay in realization of taxes. Hon’ble Bombay High Court, in the case of Bennett Coleman & Co Ltd Vs ITO (1984 (11) TMI 58 - BOMBAY High Court ) has held so. Therefore, levy of interest under section 201(1A) is applicable whether or not the assessee was at fault. However, since it is only compensatory in nature it is applicable for the period of the date on which tax was required to be deducted till the date when tax was eventually paid. However, in a case in which the recipient of income had no tax liability embedded in such payments, there will obviously be no question of delay in realization of taxes and the provisions of section 201(1A) will not come into play at all. The computation of interest is to be redone in the light of this legal position.
The matter thus stands restored to the file of the Assessing Officer for fresh adjudication in accordance with the law
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2013 (6) TMI 743 - ITAT MUMBAI
... ... ... ... ..... of the Tribunal on this issue. Each case is, therefore, to be based on its own factual situation. The undisputed facts on record show that during the year the assessee has transacted in 23 items. The average holding period in 9 scrips wherein the assessee has earned ₹ 72,51,783/- itself show that the holding period is sufficient to establish that the assessee is an investor. Further in the case of CIT Vs Gopal Purohit (supra), the Hon’ble Jurisdictional High Court has clearly laid down the ratio that it was open to the assessee to maintain two separate portfolios one relating to investment and another relating to business in dealing in shares. Considering the facts in the light of the decision of the Jurisdictional High Court, we do not find any reason to tamper with the findings of the Ld. CIT(A). Accordingly, the appeal of the Revenue is dismissed. 9. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 07/06/2013.
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2013 (6) TMI 742 - ITAT JODHPUR
... ... ... ... ..... ich is placed on record. 2.7 The ld. D.R. for the revenue supported the order of the Assessing Officer but could not controvert the aforesaid contention of the ld. counsel for the assessee. 2.8 After considering the submissions of both the parties and the materials available on record, it is noticed that the ld. CIT(A) allowed the claim of the assessee by following the decision of this bench of Tribunal in the aforesaid referred to order dated 31-01-2013 in the case of Suraj Exports India and others vs ITO, Ward-2, Churu and others in ITA No336/Jodh/2011 and others wherein by following the judgement of Hon'ble Supreme Court in the cases of Topman Exports vs CIT, 67 DTR 185 and ACG Associated Capsules Pvt. Ltd. vs CIT, 67 DTR 205, the issue had been decided in favour of the assessee. We therefore, do not see any infirmity in the order of the ld. CIT(A) 3.0 In the result, the appeal filed by the Revenue is dismissed. (Order Pronounced in the Open Court on this 26-06-2013.)
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2013 (6) TMI 741 - ITAT CHENNAI
... ... ... ... ..... ade by the assessee under different heads of expenditure. He should examine all the surrounding circumstances including the area where the operations were carried out, to whom the payments were made and whether any other exigencies existed at the time of payments. It is only after excluding all such exigencies that would be covered by Rule 6DD, the Assessing Officer can confirm the balance of disallowance, if any. Accordingly, this issue is set aside and remitted back to the Assessing Officer for fresh disposal in accordance with law. 11. The second ground raised by the assessee is regarding the levy of interest under sections 234B and 234C of the Act. The said ground is rhetoric and is liable to be rejected. 12. The appeal filed by the assessee for the assessment year 2008-09 is partly successful. 13. In result, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is partly allowed. Orders pronounced on Friday, the 21st of June, 2013 at Chennai.
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2013 (6) TMI 740 - ITAT CHENNAI
Disallowance made under section 40(a)(ia) - Held that:- In this case and in respect of other payments another issue to be looked into is whether these payments are contractual payments or instant/adhoc payments against various services obtained. As no details are available on record, the issue of disallowance under section 40(a)(ia) is remitted back to the Assessing Officer for considering the issue afresh in the light of the relevant decisions. Wherever the payments were made without deducting any tax, where TDS is liable, then of course the Assessing Officer shall invoke the provisions of section 40(a)(ia). But, in cases even if no TDS was made if the payments do not come within the purview of TDS, no disallowance can be made. Likewise, in the case of shortfall in deduction, again there cannot be any disallowance. Accordingly, this issue is remitted back to the Assessing Officer for reconsideration and deciding the issue in accordance with law.
Development expenses - Held that:- Commissioner of Income-tax(Appeals) is justified in deleting the addition made by the Assessing Officer. The addition has been made by the Assessing Officer on general observations and on adhoc basis. He has not applied his mind in analyzing the real working pattern of the assessee and the profit rate disclosed by the assessee and he has not made any comparative study.
Disallowance under section 40A(3) - Held that:- Usually the land owners will not expect cheque or banking instruments as part of consideration and they insist that money should be paid before signing the documents before the Sub-Registrar. An assessee cannot swim against that inevitable practice in a particular line of transaction. It is not possible for the assessee to purchase land from the villagers by giving cheques and drafts when the villagers are insisting for cash payments. Therefore, it is to be seen that it is only in such circumstances where the assessee could not make payment through banking instruments that it had made the payments in cash and that was for reasons beyond its control. Rule 6DD applies in such circumstances. Where it is impossible to purchase land otherwise than by making cash, it is not proper to say that the situation is not covered by Rule 6DD.In the facts and circumstances of the case we delete the disallowance confirmed by the Commissioner of Income-tax(Appeals). The addition is accordingly deleted.
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2013 (6) TMI 739 - ITAT HYDERABAD
Income from suppressed sales has to be considered in the hands of Shri Jagadamba Pearl Dealers.
Estimation of income - Held that:- Comparative income offered to tax to various dealers in this line of business at Monalisa Pearls average @3.61%, Mansarovar Pearls (India) Pvt Ltd , average @ 1.25% Spectrum Pearls, average @ 0.16%.
Gifts received by the appellant - Held that:- We direct the Assessing Officer to delete the addition placing reliance on the judgment of the Hon’ble Supreme Court in the case of CIT vs. K. Mohanakala [2007 (5) TMI 192 - SUPREME Court ] wherein the Supreme Court has held that “in case where the explanation offered by the assessee about the nature and source of the sums found credited in the books is not satisfactory there is, primafacie, evidence against the assessee, viz. the receipt of money. The burden is on the assessee to rebut the same, and, if he fails to rebut it, it can be held against the assessee that it was a receipt of an income nature.
Allowance of interest paid by the partner - Addition u/section 14A - Held that:- It is noticed that deduction was claimed in respect of interest paid by partner on the capital withdrawn by the assessee for the purpose of investment in another firm. Interest paid to the partner must necessarily be added in the computation of his total business income. There is no provision made in the Act for deduction of interest paid by the partner to the firm. Hence, interest adjusted on the debit balance of the account of the partners in the books of a firm is not deductible while computing the income of the assessee. Interest paid on the debit balance of capital account by partner not for business purpose, cannot be allowed as business expenditure, though, interest income received from firm treated as business income. Further, we make it clear that in view of the judgment of jurisdictional High Court in the case of CIT Vs. T.V. Ramanaiah & Sons (1984 (10) TMI 20 - ANDHRA PRADESH High Court) wherein it was held that interest paid by the partner should be adjusted against the interest credited to the partners in the firm, if any. Accordingly, we direct the AO if there is any interest receipt and interest payment by the assessee to the same firm, to the extent it should be set off and not to be disallowed. Accordingly, this ground is partly allowed and also to that extent, the orders of the lower authorities have been modified.
Unaccounted cash - Held that:- We remit this issue to the file of Assessing Officer to verify whether the cash balance has been recorded in the books of Sri Jagadamba Pearl Dealers and if so the Assessing Officer cannot add it in the hands of Ravinder Kumar. This ground is allowed for statistical purposes.
Unaccounted jewellery - Held that:- We gave a finding at para No. 23 to 26 that the income generated from unaccounted sales has to be assessed in the hands of the affirm. Being so, we are of the opinion that the gold jewelry found in the hands of the assessee Shri Ravinder Kumar has to be considered as it is acquired by him out of the drawings from unaccounted income from suppressed sales in the firm. Therefore, in the interest of justice due telescoping to be given otherwise it amounts to double addition viz., once in the firm on account of unaccounted income and another in the firm on account of unaccounted assets found during the course of search. Being so, we allow this ground of appeal
Determination of income - undisclosed turnover - Held that:- The average G.P. for these years from 2004-05 to 2009-10 worked out at 28.05%. As reasonable expenditure was given in the block period at 4%, in our opinion, it is reasonable to allow the expenditure out of the estimated gross profit at 8.05% considering the inflation theory. Accordingly, out of estimated gross profit rate of 28.05%, we direct the AO to give deduction at 8.05% towards further undisclosed expenditure and limit the undisclosed income at 20% of the undisclosed turnover and determine the income accordingly. This ground raised by the assessee in its appeals is partly allowed.
Additions on the basis of planted documents - Held that:- No addition can be made solely on the basis of the seized unwritten note book/loose slips, which are dumb documents and the same were disowned by the assessee and there being no other corroborative material to show that the transaction reflected in seized loose slips actually belong to the assessee. Accordingly, deletion of addition by the CIT(A) is justified.
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2013 (6) TMI 738 - GUJARAT HIGH COURT
... ... ... ... ..... cation to condone the delay, inclusive of additional affidavit, we are of the opinion that the delay has been sufficiently explained and the applicant should be given an opportunity to submit the case on merits. 4.01. Considering the decision of the Hon'ble Supreme Court in the case of CIT Vs. West Bengal Infrastructure Development Finance Corporation Ltd., reported in (2011) 334 ITR 269 (SC), as the revenue effect is very much and the effect of the judgement of the tribunal would be permanent, present application deserves consideration and the delay is required to be condoned, however, on imposing reasonable costs upon the applicant to be paid to the respondent. 5.00. In view of the above and for the reasons stated above, present application is allowed. The delay caused in preferring the appeal is hereby condoned on condition that the applicant shall pay costs of ₹ 10,000/- to the opponent which shall be done latest by 31/7/2013. Rule is made absolute accordingly.
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2013 (6) TMI 737 - ITAT MUMBAI
Validity of proceeding initiated under section 147 - assessee declaring Nil income after claiming deduction under section 80IA - Held that:- Held that:- Remit the mater back to the file of Assessing Officer who shall examine the issue afresh after considering the contract document as a whole and all other evidence that may be submitted by the assessee to demonstrate the fact that the assessee has actually developed the infrastructure facilities by undertaking the activities of design, development, engineering, construction, maintenance, financial involvement, defect correction of the contract during the warranty period. If the assessee will be able to establish such facts by supporting evidence, then, the assessee would be entitled to the deduction under section 80IA(4) of the Act. With the aforesaid observations, we set aside the Order of the CIT(A) and direct the Assessing Officer to decide the issue afresh by keeping in view of our observations made hereinabove.
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2013 (6) TMI 736 - ITAT RAJKOT
Exemption u/s 11 - Held that:- On perusal of trust deed, it is noticed that there is no clause in the trust deed imposing legal obligation on the assessee-trust or its members to hold income of the assessee-trust only for charitable purpose. There is no clause in the trust deed by which the element of private gain is excluded. Similarly, there is no clause in the trust-deed to show that the profits would not be divided or distributed among the members at any time or at the time of dissolution. In the absence of such a clause, it is difficult to treat the assessee-trust as a charitable trust because it is possible for the members of the trust, upon its dissolution, to divide the remaining funds among trustees.
In view of the foregoing, it is considered appropriate to set aside the order passed by the Ld Commissioner of Income-tax and restore the matter to his file so that reasonable time is made available to the assessee-trust to amend the trust deed and also enable the Commissioner of Income-tax to take a reasonable view in the matter in conformity with law. The assessee-trust can amend the trust deed within a period of three months from the date of receipt of this order failing which the Commissioner shall be free to pass such order as he considers appropriate in the matter.
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2013 (6) TMI 735 - ITAT DELHI
... ... ... ... ..... such.” 7. In the present case, clause 3.2 of agreement with Vikram Electric Equipment Pvt. Ltd. is same as was in the appeal no.1953 relied upon by Ld. AR and here also a total 27 acres was to be procured failing which no payment was to accrue to Vikram Electric Equipment Pvt. Ltd. In the present case land was acquired to the extent of 23.11875 acres as is apparent on page 7 of assessment order. As in the case law relied upon by Ld. AR in the present case also, the assessee has not made any sales and has declared the cost of land in its Balance Sheet and has not claimed any expenses on this account in its profit and loss account. Therefore, the facts and circumstances of the present appeal are similar, to the facts and circumstances of ITA No. 1953 relied upon by Ld. AR and hence, following the above order of ITAT we also allow the appeal of the assessee. In view of the above, the appeal filed by the assessee is allowed. Order pronounced in Open Court on 21st /06/ 2013
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2013 (6) TMI 734 - GUJARAT HIGH COURT
Tax Appeal is admitted on the following substantial questions of law:-
"(B) Whether the Tribunal is right in law and on facts in reversing the order passed by the CIT(A) and thereby deleting the disallowance of ₹ 5,00,000/- in respect of depreciation on multimodal project, Ambaji?
(C) Whether the Tribunal is right in law and on facts in confirming the order passed by the CIT(A) in restricting the addition on account of prior period expenses to ₹ 43,81,470/- and granting relief of ₹ 1,09,89,354/-?"
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2013 (6) TMI 733 - ITAT CHENNAI
Eligibility to claim depreciation as an application of income for the purpose of claiming exemption under Section 11 allowed.
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