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Case Laws
Showing 201 to 220 of 1621 Records
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2016 (5) TMI 1426
Addition u/s 68 - unexplained cash credit - burden of proof - Held that:- Provisions of sec. 68 places initial burden of proof upon the assessee. In the instant cases, there is no dispute between the parties that the identity of the loan creditors has been established. Even though the assessing officer has expressed doubt about the credit worthiness of the creditors on the basis of low income reported by them, yet the Ld CIT(A) has rightly appreciated the fact that these companies have used their own capital funds for advancing loan to the assessee company. The quantum of own funds held by these companies has also been discussed by Ld CIT(A). In our view, the Ld CIT(A) was justified in holding that the income declared by these loan companies are not the criteria, but the source for giving the loans to the assessee company is the determinative of the credit worthiness. Thus, the Ld CIT(A) has rightly held that the credit worthiness of the loan creditors has also been established.
The Courts have held that the assessee is required to discharge the initial burden of proof placed on his shoulders. In the instant case, we are of the view that the assessee has discharged the initial onus placed upon it. Hence the burden of proof gets shifted to the assessing officer. Tax authorities have not discharged the burden of proof shifted upon their shoulders by bringing any material on record to disprove the claim of the assessee - Decided against revenue
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2016 (5) TMI 1425
Disallowance u/s. 14A - non-recording of satisfaction - Held that:- We find that the issue on the argument of non-recording of satisfaction deserves to be dismissed as from the perusal of the assessment order it could be seen that the AO had clearly recorded his satisfaction that interest relatable to all investment income from which does not or shall not form part of total income is to be considered and no scrip wise investment as considered by the assessee.
Accordingly, he proceeded to adopt Rule 8D(2) of the Rules but it is well settled that only investment yielding exempt income are to be considered for the purpose of Rule 8D(2)(ii) and (iii) of the Rules. Accordingly, we direct the Ld. AO to restrict the disallowance u/s. 14A read with Rule 8D of the Rules after considering only investments yielding dividend income. In any case, we direct that the disallowance to be worked out thereon shall not exceed the income which does not form part of the total income. - Decided partly in favour of assessee for statistical purposes.
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2016 (5) TMI 1424
Penalty u/s 271(1)(c) - disallowances made on account of non deduction of TDS - Held that:- We find that it is an undisputed fact that penalty was imposed by the Assessing Officer for disallowance made u/s 40(a)(ia) of the Act for non deduction of tax on various payments. This fact is verifiable from the penalty order itself. We further find that the Hon’ble ITAT, Hyderabad Bench in the case of ACIT, Circle3(1), VS. Seaways Shipping Ltd., Secundrabad [2011 (6) TMI 816 - ITAT HYDERABAD] has deleted the similar penalties imposed by the authorities below. - Decided in favour of assessee.
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2016 (5) TMI 1423
Dispense with the requirement of convening the meetings of their equity shareholders and unsecured creditors and for convening the meetings of the secured creditors of the transferor company no. 1 and the transferee company to consider and approve, with or without modification, the proposed Scheme of Arrangement. Quorum need to be assured. The Chairpersons and Alternate Chairpersons shall ensure that the proxy registers are properly maintained.
The Chairpersons and Alternate Chairpersons shall ensure that notices for convening the aforesaid meetings of the secured creditors of the transferor company no.1 and the transferee company, along with copies of the Scheme of Arrangement and the statement under Section 393 of the Companies Act, 1956, shall be sent to the secured creditors of the transferor company no.1 and the transferee company by registered post, courier as well by hand at their registered or last known addresses at least 21 days before the date appointed for the meetings, in their presence or in the presence of their authorized representatives.
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2016 (5) TMI 1422
Addition u/s 68 - unaccounted money belonging to the assessee company - Held that:- AO has made the addition on suspicion which is based on the statements of third party Shri Aseem Kumar Gupta, admittedly, recorded in the back of the assessee. It has come on record that the share application money of ₹ 50,00,000/- was received from Moderate Credit Corporation Ltd., a listed company. It is not disputed before this court that the investment made was received by account payee cheque and the same was refunded by an account payee cheque when the company dropped its project. In the considered opinion of this court, in absence of any cogent evidence on record establishing that the money shown to have received as share application money, was as a matter of fact, unaccounted money belonging to the assessee company, the finding arrived at by the AO, which is based on suspicion, has rightly been held not sustainable in the eyes of law. - Decided in favour of assessee
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2016 (5) TMI 1421
Addition of interest income which was not offered to tax - TDS u/s 194A - Held that:- There is no change in the method of accounting which is mercantile system of accounting as is evident from the audit report in Form 3CA and 3CD. The assessee in fact does not have any right to receive such hypothetical income which has been shown as interest accrued but not due. As a matter of fact, the liability becomes due only when it is accompanied by the corresponding liability of the other party to pay the amount and therefore, in view of our findings hereinabove, and facts of the present case, interest which has been shown as interest accrued but not due, being hypothetical income, cannot be made a subject of levy of tax.
It is settled issue that income accrues only when the right to receive is acquired and the right can be said to have been acquired when an enforceable debt is created in favour of the assessee. Therefore, the income which has not been received and not acknowledged or which has not been acknowledged as payable to the assessee, cannot be taxed. In the circumstances and facts of the case, the Ld. CIT(A) is not justified in confirming the action of the Assessing Officer in taxing the income. - Decided in favour of assessee.
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2016 (5) TMI 1420
Addition on account of suppressed receipts - Additions on the basis of 26AS statement - Held that:- The issue is no more res integra in view of the Coordinate Bench decision in the case of ITO vs. Shri Basant Kumar [2015 (11) TMI 1127 - ITAT DELHI] were on identical facts held that there is no material to come to the conclusion that assessee ever received any such coupons or payments nor the same are reflected in his books of accounts or bank statements. The fact that these payments are made by coupons and vouchers etc. can also not be put against the assessee since the assessee never received the same and there is no evidence to the contrary. Apparently, entire confusion has started from the fact that, perhaps as a measure of abundant caution, Vodafone deducted tax at source in respect of the vouchers etc and, for whatever reasons, stated, the name of distributor as collective recipient of entire sum. On these facts, in our considered view, learned CIT(A) was quite justified in deleting the impugned addition. We approve his conclusions, and decline to interfere in the matter. - Decided in favour of assessee.
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2016 (5) TMI 1419
Cancellation of examination - commission of various offences pursuant to a large scale conspiracy in the context of the examination - FIR came to be registered against several persons including students and some employees of the State of Madhya Pradesh who were working in the administration of the BOARD - Held that:- In view of the divergence of opinion in terms of separate judgments pronounced by us in these appeals today, the Registry is directed to place the papers before Hon'ble the Chief Justice of India for appropriate further orders.
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2016 (5) TMI 1418
Violations of import conditions - case of Revenue is that the respondent failed to demonstrate that the cars were in fact used for transporting the foreign guests of the hotel - Whether the respondent violated the conditions attached to the import of cars for use in the hotel business? - Held that: - the Department was unable to show any stipulation in any notification issued by the Central Board of Excise and Customs or any other notification specifically requiring the imported cars to be used only for transporting foreign guests of the hotel - as long as foreign exchange is earned by the hotel and the imported cars are being used, there cannot said to be a violation of any statutory requirement - appeal dismissed.
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2016 (5) TMI 1417
Disallowance u/s. 14A - sufficiency of own funds - Held that:- The assessee has demonstrated that own funds available with it is more than the investment made hence there is no requirement of making any disallowance out of interest expenditure. The view taken by the assessee is supported by the decision of Hon'ble High Court rendered in the case of CIT Vs. HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT ). Further the assessee has made fresh investment in two mutual funds and most of the shares have been brought forward from the earlier year. Under these set of facts, we are of the view that the disallowance u/s. 14A may be restricted to 2% of the dividend income earned by the assessee
Addition made to the value of closing stock by invoking provisions of section 145A - Held that:- Assessee invited our attention to the paper book, wherein the assessee has prepared the profit and loss account both under exclusive method and inclusive method. Through this statement, the assessee has demonstrated that Net profit disclosed by the assessee remains the same under both methods. This statement shows that there would be no effect on the profit even if exclusive method is followed. We noticed that the Assessing Officer has not examined this statement put forth by the assessee.Accordingly, we are of the view that this issue requires fresh examination at the end of the Assessing Officer
Disallowance of corporate membership fees - Held that:- This issue is covered in favour of the assessee by the decision of Hon'ble Delhi High Court in the case of Samtel Colour Ltd. (2009 (1) TMI 26 - DELHI HIGH COURT ) and also by the decision of P&H High Court in the case of M/s. Groz Beckert Asia Ltd. (2013 (2) TMI 375 - PUNJAB & HARYANA HIGH COURT).
Setting off of brought forward losses and unabsorbed depreciation - Held that:- We direct the Assessing Officer to examine the contentions of the assessee and allow relief in accordance with law.
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2016 (5) TMI 1416
Disallowance of proportionate interest and indirect expenditure u/s. 14A - Held that:- Considering the facts and circumstances of the case and also respectfully following the coordinate bench decision in assessee's own case for the earlier period, we are of the opinion that the CIT(A) has rightly deleted the additions made towards proportionate interest and upheld the additions made towards indirect expenditure. We do not see any error or infirmity in the order passed by the CIT(A). Hence, we inclined to uphold the order passed by the CIT(A) and reject the ground raised by the assessee as well as revenue.
Disallowance of expenditure under the head repairs and maintenance - Held that:- A.O. was right in disallowing certain expenditure under the head repairs and maintenance as capital expenditure by depending upon the functions and characteristics of each item of machinery. The CIT(A) after examining the each item, had given relief to the items which are considered to be revenue in nature and upheld the action of the A.O. wherever the expenditure are in the nature of capital in nature. The CIT(A) has discussed each and every item of disallowances made by the A.O. and given his findings how a particular item is plant and machinery which constitute capital in nature or a particular item is replacement of parts of existing machinery which constitute revenue in nature. We do not see any error or infirmity in the order passed by the CIT(A). Hence, we inclined to uphold the order of the CIT(A) and reject the ground raised by the assessee as well as revenue.
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2016 (5) TMI 1415
Validity of re–opening of assessment u/s 147 - escapement of assessment pertains to share transactions made through Gold Star Finvest Securities Ltd. - Held that:- Assessee in her letter dated 7th November 2012, while objecting to the re–opening of assessment had specifically brought to the notice of the Assessing Officer that she has not indulged in any share transactions through Gold Star Finvest Securities Ltd. However, the Assessing Officer while completing the assessment has not referred to any share transactions through Gold Star Finvest Securities Ltd. but has referred to share transactions made through Mahasagar Securities Pvt. Ltd., which according to the Assessing Officer is an accommodation entry. If the reasons recorded are juxtaposed to the facts stated in the assessment order, it becomes clear that subject matter of re–opening as per reasons recorded and as per assessment are at variance. While in the reasons recorded for re–opening the assessment, the Assessing Officer has referred to accommodation entries provided by Gold Star Finvest Securities Ltd. in the assessment order, the Assessing Officer has referred to accommodation entries provided by Mahasagar Securities Pvt. Ltd. Therefore, in our view, the impugned assessment order has no nexus to the reasons recorded for re–opening the assessment - Decided in favour of assessee.
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2016 (5) TMI 1414
Bogus share transactions - Reopening of assessment - intimation given by the investigation wing that the assessee was one of the beneficiaries of the fraudulent billings done by - Mr.Mukesh M Choksi who admitted being indulged in the fraudulent billing of shares and securities - Held that:- We find from the record that the assessee has purchased 12000 shares of M/s. Talent Infoways Ltd. for a total consideration of ₹ 17,417/- and the share certificates were received in the physical form which were dematerialized in the name of the assessee and ultimately sold on 29.3.2005.
As assessee held the shares for more than 12 months and the gain resulting from the sale of shares was to be exempt under the Act as being long term under the relevant provisions of Act. The AO rejected the claim of the assessee on the basis of such statement and came to the conclusion that these transactions entered by the assessee were bogus as the same made through Mr.Mukesh Choksi and his associate concern. It is clear that the only basis of rejection of claim of the assessee was statement of Mr.Mukesh M Choksi given during the course of search and seizure action. Similar issue came up for consideration before the co-ordinate bench of the Tribunal in the case of Ulka Vijay Salvi (2015 (11) TMI 1724 - ITAT MUMBAI) under the identical facts and the tribunal decided the issue in favour of the assessee by holding that the sale and purchase can not be doubted just on the basis of statement of the third party. - Decided in favour of assessee.
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2016 (5) TMI 1413
Additional income offered voluntarily - return of income filed in response to notice u/s 153A - Addition made on the basis of declaration offered by the assessee during the search proceeding - Held that:- As noticed that in the case of Bhoomi Construction Project Vs ACIT [2015 (6) TMI 5 - ITAT MUMBAI] there is no finding that the assessee has been following percentage completion method regularly since beginning or in any other project. There is no such evidence or documents which have been found during the course of search indicating that the assessee had been following percentage completion method regularly. If the assessee has been following one of the recognized methods as prescribed by AS-9, then it cannot be held that the Revenue can impose a different method upon the assessee unless there is a finding of fact that such a method is not reflecting the true profits of the assessee. Now it has also been brought on record by the ld. Counsel that in the subsequent year i.e. in the year of completion of the project in A.Y. 2012-13, the Revenue itself has accepted the project completion method for recognition of revenue and accordingly, has assessed the income of the project on the same method. Thus, a contrary view cannot be taken for this year. - Decided against revenue.
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2016 (5) TMI 1412
TPA - selection of comparable - Held that:- Assessee company characterized itself as a provider of software and development services to its Associated Enterprises (AEs) and selected TNMM as the most appropriate method, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Apportioning certain expenses that are specifically incurred in respect of the non-STP units to the STP units of the assessee and thereby reducing the deduction available to the said STP units - Held that:- We are of the considered view that the AO has correctly made the apportionment between STP and STP units and as such, there is no scope in interfering the findings returned by the AO/DRP. Hence, ground determined against assessee.
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2016 (5) TMI 1411
Addition u/s 14A - disallowance the interest expenditure - Held that:- In the instant case investment made in subsidiary company for strategic investment i.e. for commercial expediency or investment or stock in trade is in question. Assessing Officer disallowed the interest expenditure to the tune of ₹ 84,20,803/- for A.Y. of 2004-05 and an amount of ₹ 7,70,012/- for the A.Y.2005-06. But in connection with the strategic investment in the subsidiary company the law is not quite clear that if any company made an investment in subsidiary company for commercial expediency or investment or stock in trade for any purpose of controlling interest in other companies then interest paid to such parties would not be taxable u/s.36(1)(iii) of the Act. In view of the above mentioned law appeal of the appellant are hereby allowed and Assessing Officer is hereby directed to re-calculate the expenditure incurred towards the dividend income by excluding the investment made for controlling interest in the other companies while computing average value of investment. Appeal of the assessee are hereby allowed for statistical purpose.
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2016 (5) TMI 1410
Maintainability of appeal - monetary limit - Held that:- Taking note of the CBDT Circular dt. 10/12/2015 and the tax effect which indisputably in the instant case is less than ₹ 20 lac, much less than what has been prescribed for filing appeal before the High Courts, deserves to be dismissed as not pressed. However, it is made clear that the substantial questions of law raised in the instant appeals, if any, are left open to be examined in an appropriate proceeding, if arises in future. At the same time we consider it appropriate to observe that if the appeal falls in any of the exceptions as referred to in the Circular dt. 10/12/2015, the Revenue will be at liberty to move an application for recalling of the order if so advised.
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2016 (5) TMI 1409
Biding - reserve price sale eligibility - Himachal Tourism inviting bids from interested parties for outright purchase of sites located at three places in Himachal Pradesh including Café Aabshar in District Solan situated at 3 kilometers from town named Kandaghat - Held that:- Mr. Bakshi, learned Advocate is right in his submission that no reserve price was fixed while inviting bids from interested parties. The Expert Committee may have indicated a figure as reserve price, however, the advertisement did not indicate any. Precisely for this reason, even the bid given by respondent No.1 was far below the figure of ₹ 30,78,000/-. The High Court was clearly in error in accepting this plea on behalf of respondent No.1 Now, the question that remains to be considered is whether requirement to furnish Annual Turnover and Net Worth for last three years was a mandatory condition for infraction of which the bid made by the appellant had to be rejected.
We, therefore, allow this Appeal and set aside the decisions rendered by the Single Judge and the Division Bench of the High Court in the present matter. The Letter of Intent dated 02.03.2010 and consequent Sale Deed dated 31.03.2010 in favor of the appellant are held valid and correct.
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2016 (5) TMI 1408
Estimation of net profit rate of 2% made by the AO as against 0.15% offered by the assessee on the ‘gross receipts’ - Held that:- On the perusal of the impugned orders and on similar other decisions as relied before us, we find that the Tribunal has upheld the net profit rate of 0.15%.
Thus, consistent with the view taken in various similar matters, we also uphold the rate of commission / net profit rate from such activity at 0.15%. Accordingly, this issue is decided in favour of the assessee.
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2016 (5) TMI 1407
Interest on adjustment of cash seized against advance tax liability - Held that:- The Special Leave Petition is dismissed.
HC has held that [2015 (9) TMI 139 - PUNJAB & HARYANA HIGH COURT] the assessee was entitled to have the cash seized adjusted against its advance tax dues. Assessee would be liable to pay interest under Section 234C upto the date of the letter dated 20.02.2008 addressed by it to the department requesting the adjustment of the amount seized against its liability. This issue is decided in favour of the appellant by the judgment of another Division Bench of this Court dated 22.07.2010 in the case of Commissioner of Income Tax vs. Arun Kapoor, (2010 (7) TMI 610 - Punjab and Haryana High Court). The liability under Section 234C shall be computed in accordance with this judgment.
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9911796707
