|
Advanced Search Options
Case Laws
Showing 201 to 220 of 871 Records
-
2012 (5) TMI 676
Issues involved: Appeal against penalty u/s 271(1)(c) of the IT Act for assessment year 2002-03.
Summary:
1. Brief facts: The assessee, a Private Limited Company, faced a drastic fall in gross profit margin during assessment proceedings related to transfer pricing. The Assessing Officer (AO) substituted the net margin for determining Arm's Length Price, resulting in an addition to the income of the assessee. A penalty of Rs. 8,84,000 was imposed u/s 271(1)(c) of the Act, which was confirmed by the CIT(A).
2. Decision of CIT(A): The CIT(A) deleted the penalty, stating that the method adopted by the assessee for determining Arm's Length Price was appropriate. The CIT(A) observed that there was no concealment of income or furnishing of inaccurate particulars, as all relevant facts were disclosed. The penalty was canceled based on judicial opinion that there was no deliberate withholding of information.
3. Arguments: The Departmental Representative (DR) argued for the penalty, citing the significant fall in profit margin. The Authorized Representative (AR) contended that the profit decrease was due to increased material costs, with only a portion purchased from associated enterprises. The AR supported the deletion of the penalty by the CIT(A).
4. Tribunal's Decision: After considering the submissions and evidence, the Tribunal upheld the CIT(A)'s decision to delete the penalty. It was noted that there was no concealment or furnishing of inaccurate particulars by the assessee. The shortfall in profit was attributed to increased raw material costs, with a small portion purchased from associated enterprises. The Tribunal dismissed the appeal of the revenue, affirming the deletion of the penalty.
5. Conclusion: The Tribunal's order dismissing the revenue's appeal against the penalty u/s 271(1)(c) for assessment year 2002-03 was pronounced on 11-05-2012 by the Appellate Tribunal ITAT Ahmedabad.
-
2012 (5) TMI 675
Issues involved: Appeal against denial of renewal of approval u/s 80G of the Income-tax Act.
Summary:
The appeal was filed by the assessee against the order of the Director of Income-tax(Exemption), Hyderabad denying renewal of approval under S.80G of the Income-tax Act. The assessee, a society engaged in charitable work, had obtained registration under S1.2AA and approval under S.80G. The approval was to be valid till 31.3.2010, but due to an amendment, renewal was required. The Director rejected the renewal citing absence of specific clauses in the society's Memorandum and rules. The assessee challenged this decision, demonstrating the existence of relevant clauses. After hearing both parties, the Tribunal found that the Director's objections were not specific and reversed the decision, stating that the clauses in the society's documents met the requirements for approval under S.80G. The Tribunal did not delve into the redundancy of the renewal application due to statutory amendments, focusing on the validity of the Director's reasons for rejection. Consequently, the assessee's appeal was allowed.
Key Points:
- Appeal filed against denial of renewal of approval under S.80G.
- Director cited absence of specific clauses in society's Memorandum and rules.
- Tribunal found Director's objections not specific and reversed the decision.
- Tribunal focused on validity of Director's reasons for rejection.
- Assessee's appeal allowed.
-
2012 (5) TMI 674
Disallowing the loss due to Exchange rate fluctuation to the extent of loan which was not paid during the year - Hld that:- Loss incurred on revenue side on account of foreign exchange fluctuation is allowable
Treat the reimbursement of CST as business receipt for the purpose of claiming exemption u/s 10B.
Insurance claims received do not qualify for the exemption u/s 10B as they are cannot be held to be receipts, derived from the industrial undertakings.
Treat the refund as business receipt for the purposes of claim of exemption under section 10B.
Staff agreement deposit forfeited do not qualify for the exemption u/s 10B as these are not held to be receipts derived from the industrial undertakings.
Treat the refund as business receipt for the purposes of claim of exemption under section 10B.
Disallowing the Deduction u/s 35D in respect of Euro Issue - set aside the order of the CIT(A) and restore the issue to the file of the AO for passing a fresh order after necessary examination in accordance with law, and after allowing opportunity to the assessee.
Disallowing the Interest attributable to Investments made by the company in dividend earning assets - Held that:- Remit the matter back to the file of the AO to recompute the disallowance u/s 14A in the light of the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co.Ltd. vs DCIT (2010 (8) TMI 77 - BOMBAY HIGH COURT ).
Adding back provision for doubtful debts and advances while computing book profits u/s 115JB - Held that:- Adjustments cannot be made once the assessment is to be framed under MAT provisions, hence the addition made by the revenue authorities is deleted.
Exclude excise duty and sales tax from the total turnover for the purpose of computation of deduction u/s 80HHC
-
2012 (5) TMI 673
Issues involved: Levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961.
Summary:
The Appellate Tribunal ITAT Delhi considered the appeal by the assessee against the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. Initially, the ITAT had quashed the penalty due to the lack of specific satisfaction as required under Section 271(1)(c). The Revenue then appealed to the Delhi High Court, which remanded the matter back to the Tribunal for fresh consideration.
In this case, the Assessing Officer had imposed a penalty under Section 271(1)(c) for two additions/disallowances: (i) income from undisclosed sources amounting to Rs. 3,82,636, and (ii) part disallowance of deduction u/s 80HHC, with a difference of Rs. 50,43,499.
The CIT(A) had deleted the first addition of Rs. 3,82,636 in the quantum appeal, rendering the penalty in relation to this addition invalid. The remaining issue was whether the penalty under Section 271(1)(c) could be imposed for the reduction in the deduction claimed under Section 80HHC. The Tribunal referenced the decision of the Hon'ble Apex Court in CIT Vs. Reliance Petroproducts Pvt.Ltd., where it was held that a claim not sustainable in law does not amount to furnishing inaccurate particulars regarding income.
The Tribunal noted that the claim for deduction under Section 80HHC by the assessee was not found to be unsustainable in law. The Assessing Officer had allowed the deduction but recalculated the quantum claimed. As there was no evidence of incorrect or false details provided by the assessee, the Tribunal, following the Apex Court decision, canceled the penalty under Section 271(1)(c).
Ultimately, the appeal of the assessee was allowed, and the decision was pronounced on 25th May 2012.
-
2012 (5) TMI 672
Issues Involved:
1. Addition of Rs. 102,36,11,915 for the assessment year 2001-02.
2. Addition of Rs. 31,88,79,138 for the assessment year 2003-04.
3. Addition of Rs. 5,87,99,000 for the assessment year 2003-04.
4. Reopening of assessment and short deduction of TDS for the assessment year 2003-04.
5. Additions on account of the difference in receipt vis-Ã -vis APTRANSCO for the assessment years 2004-05 and 2005-06.
6. Additions on account of taxes reimbursed by APTRANSCO for the assessment years 2004-05 to 2006-07.
Summary:
1. Addition of Rs. 102,36,11,915 for the assessment year 2001-02:
The main issue was the addition of Rs. 102,36,11,915 made by the assessing officer, treating the entire amount of bills raised by the assessee in terms of the Power Purchase Agreement with APTRANSCO as income, despite disputes and non-receipt of the full amount. The Tribunal noted that the assessee recognized revenue only for amounts admitted by APTRANSCO, citing Accounting Standard 9. The Tribunal held that income does not accrue if there is uncertainty regarding its receipt and deleted the addition of Rs. 84,06,80,727 confirmed by the CIT(A), but clarified that the amount would be taxable in the year it is actually received.
2. Addition of Rs. 31,88,79,138 for the assessment year 2003-04:
The assessing officer added Rs. 31,88,79,138 due to a discrepancy between the units billed and amounts paid by APTRANSCO. The Tribunal found that the assessing officer did not reconcile these amounts with the assessee's books and remanded the issue back to the assessing officer to verify if the amount was already accounted for and offered to tax in the relevant year.
3. Addition of Rs. 5,87,99,000 for the assessment year 2003-04:
The Tribunal deleted the addition of Rs. 5,87,99,000 for reimbursement of taxes by APTRANSCO, noting that the reimbursement was disputed and the matter was pending arbitration. The Tribunal held that income does not accrue until the dispute is resolved.
4. Reopening of assessment and short deduction of TDS for the assessment year 2003-04:
The Tribunal upheld the CIT(A)'s decision that reopening the assessment for short deduction of TDS was incorrect. The Tribunal noted that the correct rate of 5% was applied as per the DTAA with Mauritius, and the provisions of S.147 were not applicable as there was no escapement of income.
5. Additions on account of the difference in receipt vis-Ã -vis APTRANSCO for the assessment years 2004-05 and 2005-06:
The Tribunal deleted the additions of Rs. 2,55,60,283 and Rs. 2,75,15,430 for the assessment years 2004-05 and 2005-06, respectively, noting that the amounts billed were not admitted by APTRANSCO and there was no certainty of receipt.
6. Additions on account of taxes reimbursed by APTRANSCO for the assessment years 2004-05 to 2006-07:
The Tribunal deleted the additions of Rs. 5,90,71,000, Rs. 4,58,04,400, and Rs. 5,06,40,000 for the assessment years 2004-05, 2005-06, and 2006-07, respectively, on the grounds that the reimbursement was disputed and pending arbitration, thus income did not accrue.
Conclusion:
- Assessee's appeals for the assessment years 2001-02 and 2004-05 to 2006-07 were allowed.
- Assessee's appeal for the assessment year 2003-04 was partly allowed.
- Revenue's appeals for the assessment years 2001-02 and 2003-04 were dismissed.
Order pronounced in the court on 18th May, 2012.
-
2012 (5) TMI 671
Issues:
The issues involved in this case are the reduction of leased line expenses and freight expenses from the export turnover while computing deductions u/s 10A and 10B of the Income-tax Act, 1961.
Leased Line Expenses and Freight Expenses:
The appellant contested the reduction of leased line expenses and freight expenses from the export turnover for computing deductions u/s 10A and 10B of the Act. The Assessing Officer (AO) had reduced these expenses from the export turnover during assessment. The CIT(A) upheld this decision, stating that sections 80HHC and 80HHE are different from sections 10A and 10B, and the Explanation for "total turnover" could not be applied in this context. The appellant argued that the issue was decided in their favor in a previous Tribunal decision and by the High Court in another case.
Judicial Interpretation:
The Tribunal referred to a High Court judgment that emphasized the need for uniformity in the components of the formula used to calculate deductions u/s 10A. It highlighted that the legislature intended to exempt profits related to exports and that the apportionment of profits based on turnover was a recognized method. The court clarified that the export turnover should be treated consistently in both the numerator and denominator of the formula, and any exclusions from the export turnover should also apply to the total turnover. The court emphasized that the legislative intent should guide the interpretation of terms like "total turnover" when export turnover is included.
Decision:
Considering the legal position established by the High Court judgment, the Tribunal ruled in favor of the appellant. The Tribunal set aside the CIT(A)'s order and directed the AO to allow the appellant's claim regarding the reduction of leased line expenses and freight expenses from the export turnover for computing deductions u/s 10A and 10B. Consequently, the appeal by the assessee was allowed, and the decision was pronounced on May 22, 2012.
-
2012 (5) TMI 670
Addition made on account of extra consideration received by the assessee - Held that:- We are of the opinion that estimation of 25% of the undisclosed turnover at ₹ 250 per sq. ft. be treated as undisclosed income of the assessee instead of ₹ 100 per sft being the net profit out of the on-money of ₹ 250 per sft., considered by the CIT(A). In other words, Income of the assessee to be considered as ₹ 62.50 per sft being the net profit out of the on-money receipt of ₹ 250 per sft. Thus the appeals of the Revenue are dismissed and assessee’s appeals are partly allowed.
Earning on sale of the land - nature of land - Held that:- Even if the land was developed and was sold after converting into plots with a view to secure the better price it cannot come within the purview of adventure in the nature of trade and business. Further, it is admitted fact that the land in dispute herein is an agricultural land and assessed to land revenue. The earning on sale of the land was in the nature of capital gain and therefore, not assessable as income from business. Accordingly, we are entirely agreement with the findings given by the CIT(A) in his order and the same is confirmed. The grounds raised by the revenue are rejected.
Not giving credit to the balance of cash available in his capacity as the Karta of HUF as on the opening day of the financial year - Held that:- In this case, the assessee filed the return of income on 21.2.2008 and disclosed the entire investment in purchase of agricultural property. The assessee had 50% share in the land. Since the entire investment is disclosed in the return of income filed before the date of search, there is no question of treating the same as undisclosed income in the absence of any evidence to the contrary. More so, due credit has to be given towards opening cash balance available with assessee in his individual capacity as well as HUF as the fund is available for investment in land. Accordingly, this ground is allowed.
Addition u/s 40A - Held that:- Since we have already held elsewhere in this order that the land in dispute is an agricultural land and the provisions of section 40A(3) are not applicable being it is covered by the exception provided in Rule 6DD of the IT Rules. Accordingly, we do not find infirmity in the action of the CIT(A) on this issue. The order of the CIT(A) is confirmed on this issue.
-
2012 (5) TMI 669
Issues Involved:
1. Deletion of addition of Rs. 6,19,680/- by CIT(A) holding share transaction as genuine.
2. General grounds of appeal by the Revenue.
Summary:
Issue 1: Deletion of Addition of Rs. 6,19,680/- by CIT(A) Holding Share Transaction as Genuine
The Revenue appealed against the CIT(A)'s order dated 22.06.2009, which deleted the addition of Rs. 6,19,680/- by holding the share transaction as genuine. The Revenue argued that the CIT(A) ignored the material on record and reversed the findings of the AO, who had concluded that the assessee failed to prove the genuineness of the purchase of shares.
The assessee had declared long-term capital gains from the sale of shares of M/s Sangotri Construction Ltd. and Punjab National Bank, claiming exemption u/s 10(38) of the Act. The AO, based on SEBI's report and other inquiries, concluded that the transactions were bogus, citing artificial volume creation and the involvement of connected entities. The AO added Rs. 6,19,680/- to the assessee's income, claiming the long-term capital gain was fictitious.
The CIT(A) found that the AO's conclusions were based on circumstantial evidence and that there was no conclusive proof that the transactions were ingenuine. The CIT(A) noted that SEBI's report did not specifically declare the assessee's transactions as bogus and that the shares were listed on the Kolkata Stock Exchange. The CIT(A) also highlighted that the purchase and sale prices were consistent with prevailing market rates and that the transactions were executed through a demat account, indicating actual possession of shares by the assessee.
The Tribunal upheld the CIT(A)'s findings, stating that the AO failed to provide cogent and relevant material to prove the transactions as bogus. The Tribunal emphasized that the surrounding circumstances must be strong enough to establish the transactions as ingenuine, which was not the case here. Therefore, the Tribunal dismissed the Revenue's appeal on this ground.
Issue 2: General Grounds of Appeal by the Revenue
The Tribunal found that Ground Nos. 2 and 3 were general in nature and did not require separate adjudication.
Conclusion:
The appeal of the Revenue was dismissed, and the order of the CIT(A) was upheld. The Tribunal found no infirmity in the CIT(A)'s decision to treat the income from the sale of shares as capital gains. The order was pronounced in the Open Court on 17th May 2012.
-
2012 (5) TMI 668
Issues Involved:
1. Treatment of salary income as income from other sources and disallowance of standard deduction u/s 16(1).
2. Disallowance of exemption u/s 54F.
3. Addition due to undervaluation of closing stock of shares.
4. Addition u/s 68 on account of unexplained credits from Sunil Sharma.
5. Addition u/s 68 on account of unexplained credits from Sunila Kedia.
6. Addition u/s 68 on account of unexplained credits from Meera Aggarwal and Neeru Kanodia.
Summary:
1. Treatment of Salary Income:
The assessee's ground regarding the treatment of Rs. 60,000 as income from other sources and disallowance of standard deduction u/s 16(1) amounting to Rs. 20,000 was dismissed as not pressed.
2. Disallowance of Exemption u/s 54F:
The assessee claimed long-term capital gains of Rs. 8,08,034 from the sale of shares and sought exemption u/s 54F. The AO disallowed the claim due to non-production of purchase bills and concluded that the transactions were bogus. The CIT(A) ruled in favor of the assessee, stating that ownership and cost of acquisition of shares were substantiated through balance sheets and confirmations. However, the CIT(A) upheld the AO's denial of exemption u/s 54F due to the assessee owning another house on the date of investment. The Tribunal set aside the matter to the AO for further investigation to determine the genuineness of the share transactions and eligibility for deduction u/s 54F.
3. Addition Due to Undervaluation of Closing Stock:
The AO added Rs. 1,14,103 due to undervaluation of closing stock of shares of M/s. Pentasoft Media, as the assessee included bonus shares in the average cost. The CIT(A) upheld the AO's valuation at cost price or market price, whichever is lower, rejecting the assessee's method. The Tribunal found no infirmity in this decision.
4. Addition u/s 68 on Account of Sunil Sharma:
The AO added Rs. 2,00,000 shown as payable to Sunil Sharma, rejecting the claim that it was for stamp papers purchased on credit. The CIT(A) upheld the addition, noting the lack of evidence and non-compliance with summons. The Tribunal agreed with the CIT(A), emphasizing the absence of corroborative evidence.
5. Addition u/s 68 on Account of Sunila Kedia:
The AO added Rs. 17,000 received from Sunila Kedia, citing unproven creditworthiness. The CIT(A) upheld the addition, doubting the genuineness of the transaction. The Tribunal found no evidence to support the assessee's claim and upheld the CIT(A)'s decision.
6. Addition u/s 68 on Account of Meera Aggarwal and Neeru Kanodia:
The AO added Rs. 40,000 received from Meera Aggarwal and Neeru Kanodia, questioning the identity, creditworthiness, and genuineness of the transactions. The CIT(A) upheld the addition due to lack of evidence. The Tribunal agreed, finding no infirmity in the CIT(A)'s order.
Conclusion:
The assessee's appeal is partly allowed for statistical purposes, and the Revenue's appeal is allowed for statistical purposes. The Tribunal directed the AO to re-examine the genuineness of the share transactions and eligibility for exemption u/s 54F.
-
2012 (5) TMI 667
Issues involved: Appeal against CIT(A) order for assessment year 2007-08.
Facts and Arguments:
The appellant, a retired Labour Officer, inherited agricultural land from his father and sold it to his brother's son. The Assessing Officer valued the land at a higher amount than the actual sale value, and disallowed the appellant's claim of expenses on land improvement. The CIT(A) upheld the Assessing Officer's decision, leading to the current appeal. The appellant argued that the land's remote location and unauthorized possession by a community affected its value. The Assessing Officer relied on the Departmental Valuation Officer's (DVO) report for computing capital gains, while the appellant contested the valuation and disallowance of expenses.
Judgment:
The Tribunal found that the land was possessed by a community for a long time, impacting its market value. Considering the circumstances and the DVO's acknowledgment of adverse possession, the Tribunal adjusted the land's value to Rs. 15 lakhs instead of the DVO's valuation of Rs. 24,76,890. The Tribunal also upheld the disallowance of expenses on land improvement as unsubstantiated. The Assessing Officer was directed to recalculate the capital gains accordingly.
Separate Judgment:
In a related appeal by another individual involved in the land transaction, the Assessing Officer added Rs. 10 lakhs to the individual's income based on bank account credits. The individual claimed the amount was received from the land sale and deposited for dues from the appellant. The Tribunal found discrepancies in the assessment process and directed the Assessing Officer to reexamine the issue and verify the claim for the bank account deposit.
Conclusion:
The appeals were partially allowed, with directions given for recalculating capital gains and reevaluation of the bank account deposit issue.
-
2012 (5) TMI 666
Issues Involved:
1. Initiation of reassessment proceedings.
2. Disallowance of interest on trade advance.
3. Disallowance of motor car expenses.
4. Disallowance of depreciation and interest on motor car loan.
5. Disallowance of sales promotion expenses.
6. Disallowance of travelling expenses.
7. Reduction of depreciation from business profits for deduction u/s 80HHC.
8. Treatment of sample sales as export sales.
9. Disallowance of telephone expenses.
10. Deletion of addition of foreign travel expenses.
Summary:
1. Initiation of reassessment proceedings:
The assessee challenged the initiation of reassessment proceedings. The Tribunal upheld the initiation, stating that the AO relied on judgments from the Supreme Court and Jurisdictional High Court, which constituted tangible material for reassessment. The Tribunal found no fault with the AO's view that income chargeable to tax had escaped assessment within the meaning of section 147.
2. Disallowance of interest on trade advance:
The AO disallowed interest on borrowings, alleging diversion of interest-bearing funds to a sister concern. The Tribunal allowed the assessee's appeal, noting that the assessee had sufficient interest-free funds and that advances were made for business purposes, thus no disallowance was warranted.
3. Disallowance of motor car expenses:
The AO disallowed motor car expenses for cars not registered in the assessee's name and for personal use. The Tribunal partly allowed the assessee's appeal, reducing the disallowance to 10% of total expenses, considering the absence of complete details and personal use by partners.
4. Disallowance of depreciation and interest on motor car loan:
The Tribunal held that disallowance of depreciation on motor cars not registered in the assessee's name was not justified. However, it sustained a 10% disallowance for personal use by partners. The interest on the motor car loan was allowed in full.
5. Disallowance of sales promotion expenses:
The AO disallowed 20% of sales promotion expenses due to lack of proper substantiation. The Tribunal upheld the CIT(A)'s decision to sustain a 10% disallowance, finding it justified given the inadequate substantiation.
6. Disallowance of travelling expenses:
The AO disallowed 20% of travelling expenses due to kutcha bills and vouchers. The Tribunal upheld the CIT(A)'s decision to sustain a 10% disallowance, finding it justified.
7. Reduction of depreciation from business profits for deduction u/s 80HHC:
The Tribunal overturned the CIT(A)'s decision, holding that the entire income was offered as business income and that depreciation had to be allowed u/s 32 against business income. The ground was allowed in favor of the Revenue.
8. Treatment of sample sales as export sales:
The AO excluded sample sales from export turnover due to lack of details. The Tribunal upheld the CIT(A)'s decision to treat sample sales as export sales, noting that the assessee had furnished complete details.
9. Disallowance of telephone expenses:
For AY 2004-05, the AO disallowed a portion of telephone expenses for personal use. The Tribunal upheld the CIT(A)'s decision to sustain a 10% disallowance, finding it justified.
10. Deletion of addition of foreign travel expenses:
The AO disallowed a portion of foreign travel expenses, questioning the business connection. The Tribunal upheld the CIT(A)'s decision to delete the addition, finding no material to controvert the CIT(A)'s finding that the travel was for business purposes.
Conclusion:
The appeals were partly allowed, with specific directions for each issue based on the facts and circumstances of the case.
-
2012 (5) TMI 665
Levying tax @ 48% applicable to non-resident companies as against levy of tax @ 35% to Indian companies - issue is covered against the assessee by orders of the Tribunal(supra) in assessee’s own case, we confirm the action of authorities below by rejecting ground No.1 of appeal taken by the assessee.
Disallow foreign exchange loss on outstanding foreign exchange transactions considering the same as notional loss and not the actual loss to the assessee - Held that:- Increase depreciation are allowable on additional liability arising out of fluctuation in rate of exchange and “actual payment" was not a condition precedent for making necessary adjustment in the carrying cost of the fixed asset acquired in foreign currency. In view of above, we allow ground No.2 of appeal in favour of the assessee
TDS liability - Interest charged by head office and overseas offices to its Indian offices - chargeable to tax in India - Having held that the interest paid by the Indian branch of the assessee Bank to its head office and other branches outside India is not chargeable to tax in India, it follows that the provisions of section 195 would not be attracted and there being no failure to deduct tax at source from the said payment of interest made by the PE, the question of disallowance of the said interest by invoking the provisions of section 40(a)(i) does not arise.
Addition u/s 14A - Held that:- We agree with ld CIT(A) that AO has not proved that investment in shares has been made by the assessee out of interest bearing funds but on the other hands sufficient funds to finance the shares is available with assessee. However, we do not agree with ld A.R. that there was no administrative cost incurred by the assessee for maintaining portfolio of the shares against which assessee has received dividend income of ₹ 13,11,750 which is exempted u/s.10(33) of the Act. We consider it prudent to estimate ₹ 25,000 as cost on account of administrative expenses towards maintaining shares portfolio by the assessee to earn dividend income which is exempted from income tax. Hence, we restrict the disallowance under section 14A of the Act to ₹ 25,000 by modifying the orders of authorities below. Ground No.1 is allowed in part.
Addition of liabilities towards long outstanding DD/cheques - Held that:- Provisions of section 41(1) of the Act will be applicable only when assessee has obtained, whether in cash or in other manner whatsoever an amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by him. Since in the case before us, assessee has not obtained any benefit and the liability is outstanding, we agree that the provisions of section 41(1) of the Act does not attract.
Tax deducted at source in accordance with the Korean laws is also part of assessee’s total income for the assessment year under consideration - Held that:- Decided in favour of revenue
-
2012 (5) TMI 664
Grant of registration u/s 12A rejected - Held that:- We find no merit in the order of the Commissioner of Income Tax in observation that no charitable activity had been undertaken during the financial year 2007-08 and in the subsequent years which is contrary to the finding of Tribunal in para 7 of the order dated 30.7.2010. The order of the Commissioner of Income Tax in rejecting the registration to the assessee while giving effect to the order of the Tribunal under section 12AA r.w.s. 254 of the Act merits to be dismissed for the above said lapses. The assessee having fulfilled the conditions for grant of registration under section 12A of the Act, we hold the assessee entitled to the registration of the trust for carrying out the charitable activities of imparting education. The Commissioner of Income Tax is directed to pass consequential granting registration under section 12AA of the Act to the assessee. The grounds of appeal raised by the assessee are thus allowed.
-
2012 (5) TMI 663
Denying the deduction in respect of depreciation while computing income of the assessee in terms of section 11 - Held that:- We set aside the order of the lower authorities and direct the Assessing Officer to allow the claim of depreciation to the assessee. Thus, the grounds of appeal of the assessee are allowed.
-
2012 (5) TMI 662
Allowable software expenses - Held that:- It is clear that the assessee has spent the amounts for running its software system and not for acquiring any new system. Consumables and others were purchased for servicing the existing net work. This is the same which goes with the servicing as well. Another item is internet charges and small expenditure expended on training. The major amount is spent for IT help desk. It is to be seen that none of these expenses was incurred for acquiring any new system or facility of enduring nature. By the nature of the expenditure itself, it is clear on the face of the records that the expenses incurred were in the nature of revenue expenditure. Therefore, we find that the AO has rightly allowed the claim of the assessee. As such, the finding of the Commissioner, is untenable. Accordingly, the revision order is set aside. - Assessee is allowed.
-
2012 (5) TMI 661
Issues involved: Appeal against orders u/s 201(1) and 201(1A) for assessment years 2001-02 & 2002-03, penalty proceedings u/s 271C r.w.s. 274, and additional grounds challenging the jurisdiction of the Assessing Officer.
Assessment u/s 201(1) and 201(1A): The appellant, a joint venture, made payments to sub-contractors for contract works. The AO raised demands u/s 201(1) and 201(1A) for both years. CIT(A) and ITAT upheld the orders. The appellant argued no sub contract existed between the members. CIT(A) confirmed the penalty order, leading to the appeal.
Penalty Proceedings u/s 271C: Additional CIT proposed penalties for failure to deduct tax u/s 194C. Assessee argued compliance post-demand u/s 201(1) showed cooperation. CIT(A) upheld the penalty. Appellant contended penalties were unjustified due to reasonable belief and cooperation.
Additional Grounds: Appellant raised grounds challenging the jurisdiction of the Assessing Officer, citing limitation issues. The Tribunal did not admit these grounds due to not being raised before lower authorities.
Legal Arguments: Appellant argued the joint venture did not aim to earn income collectively, thus not falling under AOP. Citing Supreme Court decisions, appellant claimed a reasonable cause existed for non-deduction of tax. Various case laws were relied upon to support the argument.
Tribunal Decision: After hearing both parties and considering cited decisions, the Tribunal found the appellant's belief in not deducting tax to be bonafide. Comparisons were drawn with similar cases where penalties were not levied due to reasonable causes. The Tribunal concluded that the conduct of the appellant did not appear contumacious, leading to the deletion of the penalty imposed u/s 271C.
Conclusion: The Tribunal allowed the appeals of the appellant, pronouncing the decision on 04/05/2012.
-
2012 (5) TMI 660
Issues involved: Appeal against deletion of penalty u/s. 271(1)(c) of Income-tax Act, 1961 for assessment year 2004-05.
Summary:
The appeal was filed by the Revenue against the deletion of penalty imposed by the AO u/s. 271(1)(c) of the Income-tax Act, 1961, in relation to the assessment year 2004-05. The case revolved around the assessee writing off a sum of &8377; 19,48,743/- in its books of account towards Cafeteria expenses. The AO disallowed the deduction and imposed a penalty, which was later deleted by the ld. CIT(A) based on the assessee's submissions.
Upon hearing the rival submissions and examining the records, it was noted that the assessee had initially capitalized the expenses related to the Cafeteria project in earlier years but later claimed it as a business loss in the current year when the project was abandoned. The Tribunal observed that the issue was debatable with two possible views, as the assessee had disclosed complete particulars in its return of income. Citing the decision in the case of CIT vs. Reliance Petroproducts (P) Ltd., it was held that making a claim not sustainable in law does not automatically attract a penalty u/s. 271(1)(c).
Considering the facts and circumstances of the case, the Tribunal upheld the deletion of the penalty by the ld. CIT(A) as the issue was debatable and the assessee had made full disclosure. The appeal by the Revenue was dismissed accordingly.
-
2012 (5) TMI 659
Issues involved: Appeal against order of CIT(A) for assessment year 1997-98 regarding belated filing of appeal.
Summary:
The appeal was filed by the assessee against the order of the CIT(A) V, Hyderabad for the assessment year 1997-98, with the main issue revolving around the timeliness of the appeal filing. The assessee contended that the appeal filed on 7.6.2004 was within time, considering the assessment order was received on 6.5.2004 and the subsequent days were holidays. The CIT(A) had presumed the order was served within a week, leading to the conclusion of late filing. The Revenue argued that the law of limitation cannot be disregarded on equitable grounds.
Upon hearing both parties and examining the facts, the Tribunal found that there was no proof of the assessment order being served on any specific day to the assessee. In the absence of evidence to the contrary, the Tribunal accepted the assessee's claim that the order was received on 6.5.2004. As 5th and 6th June, 2004 were holidays, the appeal filed on 7.6.2004 was deemed to be within time. The Tribunal held that the CIT(A) erred in dismissing the appeal based on the presumption of late filing and directed the matter to be reconsidered on its merits. Consequently, the appeal of the assessee was allowed for statistical purposes.
The order was pronounced in the Court on 31.5.2012.
-
2012 (5) TMI 658
Additions on account of unaccounted cash and on account of interest - Held that:- Before us the Revenue has not filed copy of the documents relied upon by the Assessing Officer. Learned counsel for the Revenue submitted that he had asked for the original file/documents, but the same could not be traced out. Statement of Navneet Jhamb has also not been filed. In these circumstances, we do not think that we can examine and go into the question of perversity as alleged and propounded by the counsel for the Revenue. The appeal is accordingly dismissed with no costs.
-
2012 (5) TMI 657
Issues involved: Application for waiver of pre-deposit of duty, interest, and penalty u/s Rule 7 of the Valuation Rules for goods cleared from depot.
Summary:
The applicant filed an application for waiver of pre-deposit of duty, interest, and penalty amounting to Rs. 80,814 concerning the valuation of goods cleared from the depot. The dispute arose due to the application of Rule 7 of the Valuation Rules, which states that the value of excisable goods cleared from a depot shall be based on the normal transaction value of goods sold from such places at or about the same time. The applicant argued that since some goods were sold to independent wholesale buyers at the factory gate and some were cleared to the depot, the sale from the depot should not be considered, making Rule 7 inapplicable.
The Tribunal noted that the appellants had cleared goods both from the factory gate and the depot. Considering the provisions of Rule 7, the Tribunal found that the applicant had not established a case for total waiver. Consequently, the applicants were directed to deposit Rs. 40,000 within six weeks. Upon this deposit, the pre-deposit of the remaining duty, interest, and penalty would be waived, and recovery stayed during the appeal process. Compliance was required to be reported by 30.7.2012.
............
|
9911796707
