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Showing 281 to 300 of 1442 Records
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2014 (2) TMI 1164
Non deduction of TDS - Vicarious liability - Held that:- Departmental Representative did not have much to say beyond placing her reliance on the orders of the authorities below and contending that on merit of the case the assessee ought to have deducted tax at source. That plea of hers is not relevant in the context in as much as TDS liability is only a vicarious liability. In the circumstances in which principal liability is discharged, vicarious liability does not survive. In any event, the issue also seems to be covered, on merits, in favour of the assessee by decision of Hon’ble Punjab & Haryana High Court in the case of CIT vs. Bharat Sanchar Nigam Limited (2013 (3) TMI 199 - PUNJAB & HARYANA HIGH COURT). During the course of remanded proceeding s the Assessing Officer shall examine this aspect of the matter as well. - Decided in favour of assessee.
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2014 (2) TMI 1163
Disallowance of expenses - Proof of expenses not submitted - Held that:- As the assessee could not furnish bills and vouchers of expenses, the AO disallowed the same by observing that provisions were made for unascertained liabilities - As per the details of provisions so made in respect to of various expenditure, it appears that these expenditures were related to the business carried on by the assessee. However, since the assessee failed to submit bills/voucher of these expenditures as well as TDS, if any, deducted at source, the AO has disallowed the same by observing that these were unascertained liabilities. There is no dispute to the fact that expenditure can be allowed as deduction under Income Tax Act as provided under Sections 32 & 37 of the IT Act. Such expenditures are required to be proved as having been incurred wholly and exclusively for the purpose of business dully supported by bills and vouchers. Mere provision of expenses cannot be allowed unless same is ascertained and quantified with reference to the bills of expenses. Since assessee is required to follow mercantile system of accounting, only the expenditure accrued and pertaining to the year under consideration can be allowed.
The AO has also disallowed 50% of expenditure on ad-hoc basis. These expenditures were in the nature of staff welfare, conveyance and travelling. The ad-hoc disallowance was made on the plea that there was substantial increase in the expenditure in the month of March, 2006 and assessee could not satisfactorily explain the reasons for increase. We found that before making ad-hoc disallowance of 50%, the AO has not pinpointed any of the expenditure which was not properly vouched or not supported by bills etc. It is also not in dispute that expenditures were incurred for the purpose of business. Genuineness of expenses were also not doubted. Keeping in view the totality of the facts and circumstances of the case, we direct the AO to restrict the disallowance of these expenditures to the extent of 20% in place of 50% disallowed by the AO. - Decided partly in favour of assessee.
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2014 (2) TMI 1162
Undisclosed income - Receipt of gift disclosed during search proceedings - Held that:- Admittedly no proceeding is pending before the Assessing Officer or any other authority for these assessment years. The Assessing Officer has a right to issue a notice u/s 148 or a notice u/s 143(2) in every case, if the period of limitation permits him to do so, and if the other conditions specified in the Act, are satisfied. Just because an authority has a right of initiating certain proceedings, it does not follow that assessment proceedings are open and are pending as on the date of search. In our view, when the Assessing Officer has not issued a notice u/s 143(2) as on the date of search, it follows that no proceeding is pending. - As no assessment was pending in the impugned assessment years, there is no abatement. Admittedly, there is no material found during the course of search, much less incriminating material. Under these circumstances, we uphold the order of the first appellate authority who followeds the order of the ITAT in the case of Kusum Gupta (2013 (11) TMI 665 - ITAT DELHI) and held that the addition made by the Assessing Officer is erroneous. - Decided in favour of assessee.
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2014 (2) TMI 1161
Validity of CIT(A)'s order - Held that:- There is no longer any debate on the aspect that there was no independent reasoning given by the CIT(A) in the impugned order as he has merely recorded the submissions advanced on behalf of the assessee. The impugned order is not in consonance with the Statutory requirement of setting out reasons for coming to the conclusion as the same are found missing. Section 250(6) specifically mandates the said requirement. It is seen that there is nothing in the impugned order to throw light on the aspect as to what reasons prevailed in the mind of the Ld. CIT(A) to grant relief. In the absence of the same the correctness of the order cannot be considered. - Matter remanded back - Decided in favour of Revenue.
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2014 (2) TMI 1160
Addition on account of low GP rate - rejection of books of accounts - Held that:- Once we have held that the books of account were not properly maintained by the assessee which otherwise deserved to be rejected then the income is required to be computed by considering the appropriate gross profit rate on the total sales. As the calculation so made by the A.O are admittedly in correct, we are of the considered opinion that it would be in the interest of justice if the impugned order, sustaining the disallowance, is set aside and the matter is restored to the file of A.O. We order accordingly and direct him to compute correct rate of gross profits for the year in question and the earlier years and thereafter decide afresh as to what GP rate should be applied to the amount of sales by considering the entire because and circumstances of the case. Needless to say the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings.- Decided in favour of assessee for statistical purpose.
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2014 (2) TMI 1159
Assessment u/s 158BD - whether belated initiation and completion of assessment was liable to be quashed? - Held that:- Dispute is about the fabrication charges not offered to tax amounting to ₹ 4,35,300/-. A period of six years from the end of the relevant assessment year ends on 31.3.2003. As against that, the notice u/s 158BD was issued on 1.9.2002. It shows that the date of such notice is well within the period of six years as prescribed u/s 149. In such a situation, it cannot be held that the initiation of proceedings u/s 158BD was time barred. - Decided against assessee.
No satisfaction was recorded - Held that:- We are confronted with a situation in which Shri Ashish Soni availed the services from the assessee for which a consideration of ₹ 4,35,300/- was agreed upon. The said sum was not included by him in his expenditure, for which the Assessing Officer made addition u/s 69C as ‘Unexplained expenditure’. Such expenditure of Shri Ashish Soni was the income of the assessee, who failed to reflect this amount in her return. It shows that the income arising from being ledger of M/s Apoorve Apparels, is the income of the assessee and expenditure of M/s Aproove Apparels. Since, such expenditure was not recorded by Shri Ashish Soni in his books of account, it was to be considered as unexplained expenditure u/s 69C and simultaneously it was to be considered as the income of the assessee as it constituted a receipt in her hands. Thus, there is no question of recording satisfaction by the A.O of Shri Ashish Soni is relatable to the assessee in question alone and not Shri Ashish Soni. - Decided against assessee.
Unexplained expenditure - Held that:- Once the Tribunal has held that Shri Ashish Soni incurred expenditure of ₹ 4,35,300/- and showed only a sum of ₹ 55,300/- in books, the natural corollary which follows is that the equal amount will have to be considered as receipt in the hands of the assessee. As only a sum of ₹ 55,300/- was recorded against the entry of ₹ 4,35,300/-, there was unexplained expenditure in the hands of Shri Ashish Soni and undisclosed income in the hands of the assessee to the tune of ₹ 3,80,000/-. We, therefore, hold that addition to the tune of ₹ 3,80,000/- requires confirmation.
Contention of the ld. AR that the entire amount of ₹ 4,35,300/- cannot be included in the assessee’s total income and only profit margin therefrom should be added, is again devoid of any force. No material has been placed on record to demonstrate that the assessee did not account for certain expenditure in her books account for which she rendered job services to M/s Soni & Associates for a sum of ₹ 4,35,300/-. In such a case, it is gross receipt and not the profit element therein, which escaped taxation and is hence liable to tax. The impugned order is accordingly modified and the addition is sustained at ₹ 3,80,000/-. - Decided partly in favour of assessee.
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2014 (2) TMI 1158
Unexplained credits of interest accrued - CIT(A) deleted the addition - Held that:- AO has not taxed the principal amount of ₹ 25,56,316/- for the Assessment Year under consideration though he has asked the assessee to explain the credit balance of ₹ 25,56,316/- as on 31.03.2001, thus when the principal amount has not been taxed in the hands of the assessee for the relevant Assessment Year, then how can the AO tax the assessee on the purported interest accrued on the basis of a figure written on piece of paper (Rs. 4,00,000/- and ₹ 2,27,000/-) and certain dates appearing against it (10.04.1999 and 27.04.1999). Even if for argument sake the interest accrued on the said amount (Rs.6,27,000) was ₹ 5,48,900/- then it would amount to an interest rate of more than 87.54% which is too high an interest and it is common knowledge that in business dealings no one gives such a high interest. And moreover the said amount of ₹ 6,22,700/- also does not pertain to this relevant Assessment Year under consideration too. - Decided in favour of assessee.
Unexplained opening cash balance - income from undisclosed sources - CIT(A) deleted the addition - Held that:- It is evident from the records that the assessee was not having a bank account and therefore the assessee had explained the reason to keep cash at home. The assessee's cash flow statement reveals that the had a balance of ₹ 3,62,155/- as on 01.04.2000, which is the same amount reflected as his closing balance on 31.03.2000. Since this amount of ₹ 3,62,155/- was related to the Assessment Year 2000-01, the same could not have been taxed for the relevant Assessment Year under consideration i.e., 2001-02. Therefore, we do not find any infirmity in the order of ld CIT(A) to delete the said addition of ₹ 3,62,155/- on account of opening cash balance as on 01.04.2000. - Decided in favour of assessee.
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2014 (2) TMI 1157
Disallowance of interest u/s 36(1)(iii) - Assessee has sufficient funds - held that:- Following decision of assessee's own previous case [2012 (9) TMI 228 - ITAT, AGRA] - The assessee has sufficient capital, profit and interest-free funds available with him for the purpose of investment. No nexus between the borrowed funds and interest free funds has been established by the AO on record. Therefore, the addition would be unjustified in the year under consideration. - Accordingly, the orders of the authorities below on this issue are set aside and the addition is deleted - it is clear that the assessee has sufficient capital, profit and interest free funds available with him for the purpose of giving interest free loans to the above named persons (sons). No nexus between the borrowed funds and interest free loans have been established by the AO on record. Therefore, disallowance of interest u/s. 36(1)(iii) of the IT Act on proportionate basis is wholly unjustified. We following the earlier order of the Tribunal dated 20.07.2012 set aside the orders of the authorities below and delete the addition of ₹ 1,06,800 - Decided in favour of assessee.
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2014 (2) TMI 1156
Business Income or short term capital gain - profit on transactions of shares - Held that:- CIT(A) has very elaborately dealt with the appeals of assessee and has examined all the objections raised by the Assessing Officer and has rightly held the income as short term capital gain instead of business income and we do not find any infirmity in the same. The case law relied upon by Ld DR do not have similar facts and circumstances. The contention of Ld DR that in succeeding years assessments were completed u/s 143(1) therefore assessee cannot claim the benefit of continuity also does not carry much force as for all practical purposes. Assessments u/s 143(1) remains assessment and moreover otherwise also assessee has strong case in her favour as she had been classifying the cost of shares as investment and not as stock in trade which is important indication of intention of the assessee. - Decided against Revenue.
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2014 (2) TMI 1155
Denial of CENVAT Credit - Capital goods - whether various iron and steel items like MS Plate, HR Plate, MS channel, angles, etc. are entitled to avail the benefit of CENVAT credit of duty paid on the same - Held that:- if such goods are used for supporting structurals, they will not be entitled to CENVAT credit, but if the same are used for fabrication of machines installed in the factory, the benefit of CENVAT credit would be available. - Commissioner (Appeals) has, after considering the documentary evidence before him, given a categorical finding that such items have been used for making equipments and parts of rolling mills. He has also examined Schematic Diagram of Rolling Mill & Layout of Rolling Mill with regard to the uses of these items in the factory of the production. As such, he has held that in as much as the items in question were used for fabrication of the machines, the respondents are entitled to the CENVAT credit - Decided against Revenue.
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2014 (2) TMI 1154
Levy of interest under sections 234B and 234C - disallowance of the claim of deduction under section 80-IB(10) as such the book profit - Held that:- It is pertinent to mention that the decision of the hon'ble apex court in the case of Rolta India Ltd. [2011 (1) TMI 5 - SUPREME COURT OF INDIA] has been passed on January 7, 2011. However, during the relevant assessment year under consideration, the law on this point has been governed by the decision of the hon'ble apex court in the case of CIT v. Kwality Biscuits Ltd. [2006 (4) TMI 121 - SUPREME Court] according to which no interest has chargeable under sections 234B and 234C for non-payment of minimum alternate tax in advance. Since this difference in the legal position as applicable to the case of the assessee has not been appreciated by the authorities below, we are of the considered view that the authorities below are not justified in confirming/ levying the interest under sections 234B and 234C of the Act and hence the same are deleted - Decided in favour of assessee.
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2014 (2) TMI 1153
Disallowance u/s 40 - whether the learned Commissioner of Income-tax (Appeals) was justified in deleting the disallowance made under section 40(a)(ia) of the Act for non- deduction of tax at source under section 194J of the Act on the hospital charges paid by it, by disregarding Circular No. 8 of 2009 dated November 24, 2009 issued by the Central Board of Direct Taxes - Held that:- As per assessee's own previous case assessee is only facilitating the payments by insurer to the insured for availing of the medical facilities. The assessee has not rendered any professional services to the insurer or insured and only collecting the amount from the insurer and passing it on to various hospitals who were providing medical services to the insured. Since, there is no claim of expenditure by the assessee, disallowance under section 40(a)(ia) as was done by the Assessing Officer does not arise. It may be different issue that the amounts paid may be covered by the provisions of section 194J as was held by the hon'ble Karnataka High Court in the case of Medi Assist India TPA P. Ltd. v. Deputy CIT Bangalore (2009 (8) TMI 85 - HIGH COURT OF KARNATAKA), relied upon by the Assessing Officer. In that case, the provisions of section 201 was applicable but certainly disallowance under section 40(a)(ia) does not arise as the assessee is not claiming any such expenditure in its profit and loss account. Moreover, the Revenue accepted the order of the Commissioner of Income-tax (Appeals) in the earlier year - No reason to interfere with the order of the learned Commissioner of Income- tax (Appeals) - Decided against Revenue.
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2014 (2) TMI 1152
Unexplained investment under sec. 69B - whether addition can be made on the basis of estimated value determined by the DVO? - Held that:- AO did not point out any defects in the books of account of the assessee. He simply observed that assessee was asked to explained the investment made in the properties. The assessee has produced the books of account and other details. AO observed that since assessee failed to give explanation about the investment, therefore, it was referred to the DVO. We could appreciate the case of the Assessing Officer, had he made reference to any documents indicating the alleged unexplained investment and thereafter confronted the assessee, but he has simply observed that assessee failed to explain the investment, therefore, he made a reference to the DVO. He has not rejected the book results of the assessee by pointing out defects. Thus the assessing authority could not have referred the matter to the Departmental Valuation Officer (DVO) without the books of account being rejected. - Decided in favour of assessee.
Royalty income - addition to income - Held that:- There is no basis to assume receipt of royalty income, more so, in assessment year 2003-04, in the case of Relax Pharmaceutical Pvt. Ltd.,a related concern, Learned CIT(Appeals) has deleted the exclusion of 1% of the net profit on account of alleged royalty payment. In the case of assessee, there is no such evidence on the record, therefore, this addition is not sustainable. Learned CIT(Appeals) has rightly deleted the addition in both the years. - Decided in favour of assessee.
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2014 (2) TMI 1151
Penalty u/s. 271(1)(c) - AO made addition u/s. 41(1) on account of remission / cessation of trading liability - nonproduction of evidences of payments due u/s. 43-B - CIT(A) canceled penalty levy - Held that:- No justification to interfere with the order of the ld. CIT(A) in cancelling the penalty. It is not in dispute that the assessee has been, able to offer an explanation which should not be found to be bogus or false. Hon’ble Supreme Court in the case of CIT vs. Sugauli Sugar Works Pvt. Ltd., [1999 (2) TMI 5 - SUPREME Court] held that unilateral action cannot bring about a cessation or remission of liability. In this case, since the assessee has shown outstanding balances carried forward from the earlier years and even carried forward in the subsequent assessment year, would show that the provisions of section 41(1) may not be attracted in the case of the assessee. The addition is thus based upon legal interpretation of provisions of section 41(1) of the IT Act and on mere surrender of amount by the assessee for taxation and the reasons given for such surrender was on account of heavy losses accumulated in the year under consideration. The ld. CIT(A) was, therefore, justified in holding that even the addition is doubtful in nature. It is, therefore, clear that the assessee has bona fide explanation and is supported by the above judgments cited. Therefore, it is not a fit case of levy of penalty u/s. 271(1)(c) of the IT Act.
Similarly, it was find that Dharmada was not expenditure of this year and it was merely carried forward from the earlier years. On mere disallowance of expenses u/s. 43B of the IT Act, penalty would not be leviable as per judgment of Madras High Court in the case of MSK Construction Pvt. Ltd. (supra). The assessee has been further able to explain that the major item of disallowance u/s. 43B was addition on account of service tax on processing charges payable of ₹ 2,20,997/-, which amount was not payable as service tax and was, therefore, offered for taxation in subsequent year by the assessee. These facts would clearly disclose that the assessee has not furnished any inaccurate particulars of income and has also not concealed the particulars of income. The ld. CIT(A) was, therefore, justified in canceling the penalty. - Decided in favour of assessee.
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2014 (2) TMI 1150
Disallowance of higher rate of depreciation - Whether the medical diagnostic imaging equipment installed by the assessee could be considered in the nature of SPECT gamma camera and if so, entitled to for depreciation at 40 per cent - Held that:- The PET/CT scan is very much used in the treatment of cancer. The PET/CT scan gives both anatomic and metabolic information to assess the present condition of cancer growth in a patient. This instrument is useful not only in detecting cancer but also in treating the cancer by making a proper assessment of the condition of the patient. The PET/CT scan is also very essential in assessing the condition of patients suffering from cancer even at the advanced stage. This imaging technology is used not only in the treatment of cancer but also in the treatment of heart diseases and neurological diseases, as the PET/CT scan delivers the condition of vascular system of a patient. - The PET/CT scan is entitled for higher rate of depreciation at 40 per cent. - Decided against Revenue.
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2014 (2) TMI 1149
Disallowance u/s 14A read with rule 8D - Held tha:- Court observe movement in the investment-which is stated to be in mutual funds, portfolio, so that there has been acquisition as well as disposal of investments during the year. In fact, even as stated by the Tribunal per its said order, the decision-making in its respect (investment) is located at the higher echelons of the management, and which would only be upon expending time and resources. The assessee has clearly not discharged the said initial onus in the instant case, so that the Revenue could not be faulted with for applying rule 8D, which in fact stands applied by the assessee as well, albeit in part - authorised representative, though factually not incorrect while stating before us that the matter stands remitted by the Tribunal back to the file of the Assessing Officer for that year, has in fact, we are afraid to say, mis-represented the facts, inasmuch as the said restoration was only for the limited purpose of working the correct amount of disallowance under rule 8D, observing a difference in the said working (refer paragraph 6.3 of its order). No such conflict or uncertainty inflicts the amount per rule 8D(2)(iii) for the current year, its working at the impugned amount of ₹ 1,29,783 having been furnished by the assessee itself. - Disallowance confirmed - Decided against assessee.
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2014 (2) TMI 1148
Denial of exemption claim - Tripura Incentive Scheme, 1995 - Withdrawal of scheme - Promissory estoppel - Held that:- The doctrine of promissory estoppel can only apply in those cases where the person, who claims that the State is estopped from withdrawing a benefit/concession granted to him, has to plead and prove that he acted on the promise held out to him and changed his position to his disadvantage which has given rise to equities in his favour and, therefore, the State is estopped from withdrawing the concessions. In the present petitions, when the units were set up the Notification of 1990 was in force. It only granted exemption of tax up to March 31, 1995. There was no promise held out to the petitioners that they would be given any benefit after 1995. Therefore, they set up the industries prior to March 31, 1995 knowing fully well that the benefit would be available to them only till March 31, 1995.
The industries were set up before the Incentive Scheme of 1995 was even published. Therefore, there is no question of the promissory estoppel being applicable in the present case because the petitioners did not set up the industry on the basis of the Incentive Scheme of 1995. Hence this principle is not at all applicable to the facts of the present cases. - State is well within its power to otherwise withdraw all concessions which may have granted to the industries and, therefore, we find no merit in the petitions - Petition disposed of.
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2014 (2) TMI 1147
Violation of principles of natural justice - Alternate remedy - Maintainability of appeal - Held that:- Since disputed questions of fact are involved, the petitioner should avail of the alternative remedy of appeal against the order passed by the Designated Officer. - We are not inclined to entertain this petition against the assessment order as it does not fulfil any of the broad outlines noticed in assessee's own previous case [2012 (1) TMI 133 - PUNJAB AND HARYANA HIGH COURT] - we refrain from interfering with the assessment order and dispose of the writ petition by relegating the petitioner to challenge the assessment order before the appellate authority. - Decided against assessee.
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2014 (2) TMI 1146
Refusal to adjust the additional security/penalty/composition money collected at the check-gate on excess load of coal or limestone in all the pending and future assessment - Held that:- what is not answered by the respondents is that how additional security paid by the dealers at the check-posts in respect of excess coal loaded/transported can be left accounted. It is admitted fact that the additional security as mentioned above is realized by the tax authorities at the check-posts. This court is of the considered view that if the dealer is made to pay the entire tax and penalty as per assessment finally made, if the security is not adjusted, the same is either liable to be refunded or to be carried forward for the next assessment year. - writ petition is deserved to be disposed of with the observation that if the assessee is made to pay separately entire tax/penalty/composition money in terms of the final assessment without adjusting the additional security paid by the petitioner at the check-post on the excess load of coal, such security shall be refundable to the concerned dealer under section 9(2) of the CST Act, 1956 as amended by Act 61 of 1972 read with section 49 of the Meghalaya Value Added Tax Act, 2003. - Writ disposed of.
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2014 (2) TMI 1145
Action u/s 29 - Levy of tax with interest under TST Act - Held that:- There is no direction by the Commissioner of Taxes to the Superintendent of Taxes to take action under section 29 of the TST Act. It has only given liberty to the assessing officer to take such action. We may make it clear that such action can be taken only if permissible under law and in accordance with the limitation prescribed under law. - Section clearly debars the revisional authority from passing an order which is prejudicial to the petitioner, but this is not an order prejudicial to the petitioner inasmuch as only liberty has been granted to the Superintendent of Taxes to take action. It is for the Superintendent of Taxes to decide whether action should be taken under section 29 or not. It also appears to us that this order was passed because of the offer made by the petitioner himself that he is willing to compound the offence under section 32(1)(b) of the TST Act. Compounding can only take place if an offence is made out and when the petitioner himself stated that he wanted to compound the matter, he was in a sense agreeing that action can be taken under section 29. Therefore, this part of the order can not be said to be prejudicial to the rights of the petitioner. - Decided against Assessee.
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