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Showing 201 to 220 of 1251 Records
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2012 (12) TMI 1054
Entitled to deduction u/s 54F - capital gain earned on sale of a property - Held that:- Time limit for the purpose of making investment in Capital Gains Account scheme may also be taken as the time limit prescribed u/s 139(4) of the Act. The assessment year under consideration, being assessment year 2005-06, the limitation would expire on 31.3.2007. The compliance of the provisions of sec. 54F (4) should be examined accordingly.
Both the tax authorities have stated that the “agreement for construction” was signed on 04.07.2007. The assessee has filed a copy of the “Construction agreement” before us and the same is found to have been executed on 22-03-2006. Thus, there is an apparent contradiction between the observations made by the tax authorities and the document produced before us. In clause (1) of the agreement filed before us (page 3), it is stated that the developers agree to deliver the Schedule ‘B’ Apartment (flat bearing no. B-1- 2086) by the end of August 2006 (subject to clause (13)). If this fact is true, it is confusing as to how the tax authorities have mentioned the date of construction agreement as 04.7.2007. Both the parties did not offer any explanation about this contradiction. The assessee did not furnish a copy of conveyance deed dated 04.07.2007 also before us and hence we did not have the benefit of examining the same.
This factual aspect requires verification, even though it appears that it may not have any effect on the eligibility of deduction u/s 54F in view of the view expressed by us in the preceding paragraph. However, the Tribunal, being a fact finding authority cannot allow the confusion to continue as it is.
The facts prevailing in the instant case require examination at the end of AO. Accordingly, we set aside the order of Ld CIT(A) and restore the matter to the file of the AO with the direction to examine the matter afresh and decide the issue in the light of discussions made supra. The assessee is free to file any other document/explanation in support of its claim u/s 54F of the Act.
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2012 (12) TMI 1053
The Appellate Tribunal CESTAT Ahmedabad ruled that the appellant's deposit of 25% of the duty liability confirmed by lower authorities was sufficient to hear and dispose of the appeal. The application for waiver of the remaining balance was allowed, and recovery was stayed until the appeal's disposal. The appeal was linked with other related appeals.
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2012 (12) TMI 1052
Refusal for registration u/s 12AA - whether conducting coaching classes for the students would fall within the meaning of "education" u/s 2(15) - Held that - education is processing of training and developing the knowledge, skill, mind and character of students by normal schooling - mere coaching classes may provide some kind of knowledge to the students but that kind of knowledge through coaching classes cannot fall within the meaning of "education" - and hence cannot be construed as charitable activity - the taxpayer is conducting coaching classes - and is not eligible for registration u/s 12AA - Decided against the assessee
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2012 (12) TMI 1051
Issues involved: Appeal against the order of Ld. Commissioner of Income Tax (Appeals)-XXVI, New Delhi dated 24.2.2011 pertaining to assessment year 2007-08.
Issue 1: Excess Cash Found
- During survey, cash of Rs. 842161 was found, but cash book recorded only Rs. 39461.
- Assessee surrendered excess cash but did not disclose it in the return.
- Ld. Commissioner of Income Tax (A) deleted the addition as no detailed inventory of cash found was presented.
- Appellate Tribunal found the inventory of cash was duly prepared and signed by the assessee, upholding the addition.
Issue 2: Renovation Expenses
- Assessing Officer made an addition of Rs. 18,20,000 for shop renovation based on survey statement.
- Ld. Commissioner of Income Tax (A) deleted the addition as no evidence supported the expenditure.
- Appellate Tribunal upheld the deletion, citing lack of corroborative material for the addition.
Issue 3: Excess Stock Found
- Discrepancy of Rs. 8,36,677 in stock valuation was determined during survey.
- Ld. Commissioner of Income Tax (A) allowed a further deduction of 20% on MRP value, reducing the excess stock amount.
- Appellate Tribunal upheld Ld. Commissioner's decision, stating it was reasonable to allow the deduction.
In conclusion, the appeal filed by the Revenue was partly allowed, with the Appellate Tribunal upholding the Ld. Commissioner of Income Tax (A)'s decisions on the issues of excess cash found and renovation expenses, while also supporting the adjustment made in the valuation of excess stock found during the survey.
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2012 (12) TMI 1050
Issues Involved:
1. Addition of Rs. 5,72,03,933/- as premium short accounted.
2. Addition to closing stock for AY 2006-07 amounting to Rs. 1,17,71,039/- to be treated as part of opening stock for AY 2007-08.
3. Acceptance of revised return and allowance of deductions claimed therein.
4. Deletion of interest levied u/s 234A, 234B, and 234C.
5. Deletion of addition of Rs. 47,97,19,585/- and Rs. 2,26,03,642/- on account of difference between sales recorded in the books and sales revenue.
Summary:
(i) Addition of Rs. 5,72,03,933/- as premium short accounted:
No arguments were raised by both parties during the hearing. The CIT(A) directed the Assessing Officer to check the return of income for the subsequent year and delete the inclusion if the addition made in the current year is offered to tax in the subsequent year. This issue raised by the assessee is dismissed.
(ii) Addition to closing stock for AY 2006-07 amounting to Rs. 1,17,71,039/- to be treated as part of opening stock for AY 2007-08:
The assessee argued that the addition of Rs. 1,17,71,039/- confirmed in respect of closing stock as on 31.3.2006 should form part of opening stock as on 01.04.2006. The CIT(A) rejected this additional ground, stating that the shortage of stock claimed by the appellant does not warrant accounting for such shortage as opening stock for AY 2007-08. The assessee's appeal on this ground is dismissed.
(iii) Acceptance of revised return and allowance of deductions claimed therein:
The assessee filed a revised return claiming deduction of Rs. 98,03,505/- on account of arrears of salary and wages and rent. The Assessing Officer held the revised return invalid as it was filed after one year from the end of the assessment year. The CIT(A) upheld this decision. However, the Tribunal restored the issue to the file of the CIT(A) to consider the claim of deduction on merits, allowing this ground for statistical purposes.
(iv) Deletion of interest levied u/s 234A, 234B, and 234C:
The levy of interest is mandatory and consequential. Therefore, this ground is dismissed.
(v) Deletion of addition of Rs. 47,97,19,585/- and Rs. 2,26,03,642/- on account of difference between sales recorded in the books and sales revenue:
The CIT(A) deleted the addition made by the Assessing Officer, stating that the sales were supported by invoices and entries in the books audited by Chartered Accountants. The Tribunal upheld this decision, noting that the addition was not warranted as there was no evidence of realization beyond what was recorded in the books. The department's appeal on this ground is dismissed.
Conclusion:
The appeal filed by the assessee is partly allowed for statistical purposes, and the department's appeal is dismissed.
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2012 (12) TMI 1049
Issues involved: Rectification of order by Appellate Tribunal u/s 254(2) of the Income Tax Act, 1961 based on subsequent decision of Hon'ble Supreme Court regarding DEPB claim for computation of 80HHC deduction.
Summary:
The miscellaneous petition was filed challenging the Tribunal's order dated 26/11/2010, which dismissed the DEPB claim for the purpose of computing 80HHC deduction based on a precedent of the Hon'ble Bombay High Court. The petitioner argued that a recent decision of the Hon'ble Supreme Court in Topman Exports case has reversed this view, making the Tribunal's order rectifiable as per the case of Saurashtra Kutch Stock Exchange.
Upon hearing both sides, it was acknowledged that the Hon'ble Supreme Court's decision in Topman Exports favored the assessee. Referring to a similar judgment by ITAT "C" Bench Ahmedabad in the case of Jay Chemicals Industries Ltd., it was concluded that there was an apparent mistake in the Tribunal's order regarding the DEPB claim for 80HHC deduction. The judgment clarified that only profit on sale of DEPB should be considered for exclusion from business profit, with the face value of DEPB to be considered as costs.
Consequently, the Tribunal rectified the mistake in the impugned order and directed the issue to be re-adjudicated by the Assessing Officer in accordance with the decision of the Hon'ble Apex Court. The ground in question was set aside for fresh decision by the Assessing Officer, leading to the allowance of the miscellaneous application.
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2012 (12) TMI 1048
Issues Involved:
1. Classification of income from sale of shares and mutual funds.
2. Disallowance of commission paid to the whole-time director.
3. Disallowance of business loss on sale of investments.
4. Disallowance of estimated expenses.
Summary:
Issue 1: Classification of Income from Sale of Shares and Mutual Funds
The assessee argued that the income from the sale of shares and mutual funds should be treated as business income due to frequent transactions and short holding periods. The Assessing Officer (AO) and CIT(A) classified this income as short-term capital gains, noting that the investments were shown as long-term investments in the balance sheet. The Tribunal upheld the AO's view, emphasizing that the assessee's classification of shares as investments and the lack of evidence for regular trading activities indicated an investment activity rather than a business activity. The Tribunal referenced Circular No.4 of 2007 and various Supreme Court judgments to support this conclusion.
Issue 2: Disallowance of Commission Paid to Whole-Time Director
The AO disallowed the commission paid to the director, arguing that the company's net profit was below Rs. 20 lakhs when excluding short-term capital gains. The Tribunal disagreed, stating that the total income, including capital gains, should be considered for commission payment. The commission was deemed an allowable expenditure u/s 37(1) of the IT Act, as it was incurred wholly and exclusively for business purposes. The Tribunal directed the AO to recompute the income and allow the commission expenditure from the business income.
Issue 3: Disallowance of Business Loss on Sale of Investments
The AO disallowed the business loss claimed on the sale of investments, treating it as a capital loss. The Tribunal upheld this view, noting that the assessee's classification of shares as investments and the lack of evidence for regular trading activities indicated that the loss was a capital loss, not a business loss.
Issue 4: Disallowance of Estimated Expenses
The AO disallowed Rs. 1,81,430/- as 1/10th of the expenses classified under personal expenses, arguing that no expenses other than the cost of the asset sold were allowable. The Tribunal found this disallowance unjustified, especially since the income was classified as capital gains and not business income. The Tribunal allowed this ground of appeal.
Conclusion:
The appeal was partly allowed, with the Tribunal upholding the classification of income as capital gains and allowing the commission paid to the director and the disallowed estimated expenses. The Tribunal directed the AO to recompute the income accordingly.
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2012 (12) TMI 1047
Disallowance of expenditure u/s 14A - interest expense and management expense - whether expense to be disallowed in relation to exempt income - Held that:- administrative and other expenses are fixed irrespective of the fact whether or not tax free income is earned and therefore, these expenses cannot said to be relatable to exempt income - also there is nothing on record brought out by the AO that the assessee has actually incurred any expenditure in relation to the exempt income - the addition of ₹ 7.05 crores being the proportionate disallowance of interest expenses is deleted - decided in favor of assessee
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2012 (12) TMI 1046
Issues Involved:
1. Deletion of disallowance of excess depreciation claimed on windmill and evacuation charges.
2. Deletion of addition u/s 40(a)(ia) on account of commission paid without TDS.
3. Deletion of disallowance of expenditure u/s 40(a)(ia).
4. Deletion of disallowance of depreciation on DG set and cooling towers.
Summary:
Issue 1: Deletion of Disallowance of Excess Depreciation on Windmill and Evacuation Charges
The Revenue appealed against the deletion of disallowance of excess depreciation of Rs. 13,66,440/- claimed on windmill and Rs. 20,20,000/- on evacuation charges for A.Y. 2008-09. The assessee claimed depreciation at 80% on various components of the windmill, which the A.O. reduced to 15% for certain items. The CIT(A) allowed the assessee's claim, and the Tribunal upheld this decision, referencing the Jodhpur Bench's decision in K.K. Enterprises, Udaipur Vs. DCIT, confirming that foundation and electrical items are integral parts of the windmill and eligible for 80% depreciation. The Tribunal also upheld the CIT(A)'s decision on evacuation charges, stating they are essential for the windmill's operation and thus eligible for 80% depreciation.
Issue 2: Deletion of Addition u/s 40(a)(ia) on Account of Commission Paid Without TDS
For A.Y. 2005-06, the Revenue contested the deletion of Rs. 1,92,584/- added u/s 40(a)(ia) due to delayed TDS deposit on commission paid. The CIT(A) deleted the addition, and the Tribunal upheld this, referencing the Calcutta High Court's decision in CIT Vs. Virgin Creations, which allows expenditure if TDS is deducted before the end of the previous year and paid before the return filing due date.
Issue 3: Deletion of Disallowance of Expenditure u/s 40(a)(ia)
The Revenue appealed against the deletion of Rs. 46,49,403/- disallowed u/s 40(a)(ia) for non-deduction of TDS on clearing and forwarding charges. The CIT(A) deleted the addition, and the Tribunal upheld this, citing CBDT Circular No. 723, which exempts payments to shipping agents of non-resident ship owners from TDS under sections 194C and 195. The Tribunal also referenced various decisions supporting that reimbursement of expenses does not attract TDS.
Issue 4: Deletion of Disallowance of Depreciation on DG Set and Cooling Towers
For A.Y. 2005-06 and 2006-07, the Revenue contested the deletion of disallowance of depreciation on DG set and cooling towers, which the A.O. restricted to 25% instead of 80%. The CIT(A) allowed 80% depreciation, and the Tribunal upheld this, agreeing that the DG set and cooling towers are integral parts of the furnace and eligible for 80% depreciation.
Conclusion:
The Tribunal dismissed all three appeals of the Revenue, upholding the CIT(A)'s decisions on all issues. The order was pronounced on 14.12.2012.
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2012 (12) TMI 1045
Disallowance for provision for privilege leave encashment - Held that - eave encashment is ascertained liability and has been provided on the basis of an actuarial valuation - assessee’s claim for deduction of the provision for privilege leave encashment is not a contingent liability and is to be allowed - Decided in favor of assessee
Disallowance of depreciation on securities - whether investment constitutes stock-in-trade or a capital asset - Held that - whether a particular investment in any security is in the nature of stock-in-trade or otherwise is a question which has to be examined in each case having regard to the nature of transactions, manner of holding - Matter remanded back
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2012 (12) TMI 1044
Issues Involved:
1. Provision for Diminution in Value of Investment
2. Disallowance u/s 14A for Interest on Borrowings and Administrative Expenses
3. Disallowance of Bad Debts Written Off
4. Depreciation on Vehicles Given on Lease
5. Interest Charged u/s 234B, 234C, and 234D
Summary:
1. Provision for Diminution in Value of Investment:
For A.Y. 05-06, the assessee's ground regarding the provision for diminution in value of investment of Rs. 16,77,234/- was not pressed as the CIT(A) had rectified his order. For A.Y. 06-07, the issue of Rs. 47,95,000/- was set aside to the A.O. for verification, directing the A.O. to give a reasonable opportunity of being heard and allow the claim as per law.
2. Disallowance u/s 14A for Interest on Borrowings and Administrative Expenses:
For both A.Y. 05-06 and 06-07, the disallowance u/s 14A was contested. The A.O. had disallowed Rs. 4.47 crores and Rs. 5.22 crores respectively. The CIT(A) partly confirmed the addition, directing the A.O. to work out the interest on the excess investment over own funds. The Tribunal set aside the issue to the A.O. to follow the decision in the assessee's own case for A.Y. 01-02, allowing the appeal for statistical purposes. For administrative expenses, the Tribunal followed its earlier decision, disallowing 1% of the total claim, and set aside the issue to the A.O. for both assessment years.
3. Disallowance of Bad Debts Written Off:
For A.Y. 05-06, the A.O. disallowed Rs. 13,50,40,960/- as the assessee had not proved the debt became bad and did not fulfill the conditions u/s 36(2). The CIT(A) confirmed the addition. The Tribunal, following the Supreme Court decision in T.R.F. Ltd. vs. CIT, allowed the bad debts to the extent of Rs. 13,22,18,530/-, excluding the amount recovered in subsequent years. For A.Y. 06-07, the A.O. was directed to exclude Rs. 28,22,430/- from the income.
4. Depreciation on Vehicles Given on Lease:
For A.Y. 05-06 and 06-07, the A.O. disallowed higher depreciation on vehicles given on lease. The CIT(A) confirmed the addition, relying on the Bombay High Court decision in Kotak Mahindra Finance Ltd. vs. DCIT. The Tribunal, following its earlier decisions in the assessee's own case, allowed the appeal in favor of the assessee, dismissing the revenue's appeal.
5. Interest Charged u/s 234B, 234C, and 234D:
For both assessment years, the issue of charging interest u/s 234B, 234C, and 234D was deemed consequential. The A.O. was directed to take a decision as per law.
Conclusion:
The appeals for both assessment years were partly allowed, with several issues set aside to the A.O. for reconsideration and verification in line with earlier Tribunal decisions and legal precedents.
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2012 (12) TMI 1043
Transactions on sale of shares - whether business income or short term capital gain - Held that:- assessee has held the shares of various companies as investments only - mere fact that some shares have been held for less than 30 days will not by itself make the appellant a trader - assessee has intention of enjoying the appreciation in value of shares and merely that some shares have been sold in less than 1 year, cannot lead to conclusion that he had a different intention in respect of such shares - assessee has used his own funds for the purchase of shares and no borrowed fund was used by the assessee - it is relevant to see the intention of the assessee as to whether the activity amounts to trading activity or investment activity - thus the intention of the assessee is to hold as investment - also volume of transactions would not alter the nature of transaction from investment to trading hence the profits are to be shown as short term capital gains - Decided in favor of assessee
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2012 (12) TMI 1042
Addition in respect of Arm’s Length Price (ALP) determined by the TPO, comprising of two parts towards freight receipts and towards freight payments - Held that:- The assessee shared profit in the ratio of 50:50 both on the payments made by it and the receipts of freight from its AEs. We have perused the submissions and the finding of the CIT(A) on the functions performed, assets employed and risk undertaken by both the AEs in such transactions. DR could not controvert such finding that the functions performed, assets employed and risk undertaken in both the AEs is same. The assessee paid certain sum to its AEs abroad for doing the work similar to which it did for which it received freight revenue from its AEs.
The crux of the matter is that in both the situations, the total receipts are taken on one hand, from which all the expenses incurred in connection with the transportation of cargo in both the countries are excluded. The remaining amount is distributed between the entity of origin country and the entity of destination country in equal share. As the assessee has earned/paid revenue from/to its AEs in the same proportion, in our considered opinion, the transactions have been recorded at arm’s length price and there was no justification for making such addition. We do not see any reason to interfere with the impugned order.
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2012 (12) TMI 1041
Additions by way of Transfer Pricing adjustments on payment of royalty - Held that:- manufacturing of goods by the assessee was in any case not possible without the technical knowhow and assistance from SCJ (Associated Enterprise) in Japan - assessee entered into an agreement for obtaining license to manufacture specified insecticides and pesticides and agreed to pay 5% royalty on the value addition and RBI has approved it - is also not necessary for the assessee to show that any expenditure incurred by him for the purpose of business carried on by him has actually resulted in profit or income either in the same year or in any of the subsequent years - The only condition is that the expenditure should have been incurred "wholly and exclusively" for the purpose of business - since royalty is paid for allowing assessee in utilizing the technical knowhow and the license for manufacturing activity, we are of the opinion that the payment of royalty is wholly and exclusively for the purpose of business - Hence AO to allow the royalty as claimed - following the order of coordinate bench of this Tribunal dated 7th November, 2012 (supra) passed in assessee’s own case - decided in favor of assessee
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2012 (12) TMI 1040
Issues involved: Appeal against penalty u/s 271(1)(c) for difference in stock valuation between bank statement and books of accounts.
Summary:
The appeal was against the penalty imposed u/s 271(1)(c) for a difference in stock valuation between the stock statement provided to the bank and the stock as per books of accounts. The appellant argued that there was no intention to conceal income and that the stock records were maintained accurately. The tribunal noted that a similar issue had been decided in favor of the assessee for the assessment year 2001-02. The tribunal found that the facts were identical in both years, and since the penalty had been deleted for the earlier year based on a High Court judgment, the penalty for the current year was also deleted. The appeal of the assessee was allowed, and the penalty was removed.
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2012 (12) TMI 1039
Cenvat Credit - construction services - Waiver of pre-deposit and penalty - Held that: - setting up modernization, renovation or repairs of a factory premises was covered under input service at the material time - the applicants are able to make out a prima facie case for total waiver of pre-deposit. Therefore, the pre-deposit of dues adjudged is waived and recovery thereof is stayed during the pendency of the appeal - petition allowed.
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2012 (12) TMI 1038
The Appellate Tribunal CESTAT BANGALORE dismissed the appeal due to non-compliance with Section 35F of the Central Excise Act. The appellant failed to pre-deposit the required amount despite directives, leading to the dismissal of the appeal.
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2012 (12) TMI 1037
Issues involved: The judgment involves the treatment of income from amenities as income from house property, specifically focusing on the dispute regarding the nature of rental income derived by the assessee.
Treatment of Income from Amenities:
The assessee filed the return of income admitting total income and claimed depreciation and interest on borrowed capital. However, the Assessing Officer (AO) treated the income from interiors as income from house property and disallowed the claim of depreciation. The CIT(A) upheld the AO's decision based on a previous ITAT judgment in the assessee's own case. The assessee argued that the rent from amenities should be assessed under the head 'income from other sources' and depreciation should be granted. The ITAT, Hyderabad, referred to previous orders and agreements, emphasizing that each case must be decided on its own facts. The Tribunal concluded that the income in question should be treated as 'income from house property' based on the real intention of the parties and the nature of the agreements. Therefore, the appeal of the assessee was dismissed, upholding the CIT(A)'s decision regarding the treatment of income from amenities.
Key Points:
- The assessee admitted hire charges under the head income from business but the AO treated it as income from house property.
- The CIT(A) referred to a previous ITAT judgment in the assessee's own case to support the decision.
- The assessee argued for the treatment of rent from amenities under 'income from other sources' and for granting depreciation.
- The ITAT emphasized the need to consider the real intention of the parties and the nature of agreements in determining the nature of income.
- Based on previous orders and agreements, the ITAT concluded that the income in question should be treated as 'income from house property'.
- The appeal of the assessee was dismissed, upholding the CIT(A)'s decision.
Conclusion:
The ITAT, Hyderabad, upheld the CIT(A)'s decision to treat the income from amenities as 'income from house property' based on the real intention of the parties and the nature of agreements. The appeal of the assessee was dismissed, affirming the action of the AO in treating the income in question as 'income from house property'.
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2012 (12) TMI 1036
Disallowance of interest u/s 36(i)(iii) - Held that:- As far as the advance to M/s Devbhumi Spinning & Weaving Mills is concerned, no purpose for the same was given before the Assessing Officer or the ld. CIT(A). Though before us, it was stated that the same was for the purpose of purchase of property but no evidence was filed before us, therefore, in the absence of any evidence it has to be concluded that money has been diverted for non business purpose. Since the assessee has admittedly borrowed huge amounts on interest, the proportionate interest has to be disallowed in respect of the advances made to M/s Devbhumi Spinning & Weaving Mills - remit the issue relating to the disallowance of interest on account of advance to M/s Balwindra Tools Pvt Ltd to the file of Assessing Officer to examine the iqrarnama filed before the first appellate authority and decide the issue in accordance with law.
Disallowance of expenses of interest u/s 14A - Held that:- Investment made in a firm is to be treated as investment for earning exempt income - after introduction of Section 14A, it was possible to apportion the expenditure between taxable income and exempted income.
The perusal of the assessment order shows as observed earlier, no where before the Assessing Officer or the ld. CIT(A), the assessee has made a specific mention to show which particular funds were borrowed for which particular requirement and in the absence of such specific utilization Rule 8D, would be applicable. Perusal of the assessment order shows that disallowance u/s 14A has been worked out on the basis of Rule 8D which is as observed earlier applicable in case of the assessee. Therefore, we set aside the order of the ld. CIT(A) and restore that of the Assessing Officer.
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2012 (12) TMI 1034
Issues Involved:
1. Condonation of delay in filing the appeal.
2. Eligibility for deduction u/s 80-IB(10) of the Income-tax Act, 1961.
Summary:
1. Condonation of Delay:
The appeal by the assessee was delayed by 486 days. The delay was attributed to the inadvertent misplacement of the appellate order by an employee, Mr. Sambhaji Gulab Puri, as detailed in his affidavit. The Director of the company corroborated this in his affidavit, explaining that the delay was beyond the control of the assessee. The Tribunal referred to the Supreme Court's judgment in Collector, Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471, emphasizing a liberal approach towards condonation of delay when substantial justice is at stake. The Tribunal found the reasons for the delay bona fide and condoned the delay, allowing the appeal to be heard on merits.
2. Deduction u/s 80-IB(10):
The primary issue was the denial of the assessee's claim for deduction u/s 80-IB(10) amounting to Rs. 2,28,38,980/- for the assessment year 2006-07. The Assessing Officer (AO) denied the deduction on the grounds that the built-up area of the shops and commercial establishments in the housing project exceeded the limits specified in section 80-IB(10)(d), which was inserted by the Finance (No. 2) Act, 2004, effective from 1-4-2005. The AO argued that the built-up area of the commercial establishments was 13.26% of the total built-up area, exceeding the permissible limit of 5% or 2000 sq.ft., whichever is less.
The assessee contended that the provisions of section 80-IB(10)(d) were not applicable as the project commenced before 1-4-2005. The Tribunal referred to its earlier decision in the case of G.K. Builders and the Gujarat High Court's decision in Manan Corporation, which supported the assessee's position. The Tribunal also cited the Bombay High Court's judgment in Brahma Associates, which held that the restriction in section 80-IB(10)(d) is prospective and not applicable to projects approved and commenced before 1-4-2005.
The Tribunal concluded that the assessee's project, approved by the Pune Municipal Corporation as a residential-cum-commercial project, was eligible for the deduction u/s 80-IB(10). The Tribunal reversed the CIT(A)'s order and directed the AO to allow the deduction.
Decision:
The appeal of the assessee was allowed, and the decision was pronounced in the open court on 31st December 2012.
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