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Showing 281 to 300 of 1244 Records
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2013 (7) TMI 965
Issues involved: Challenge to disallowance of interest u/s. 40(a)(ia) of the IT Act for non-deduction of TDS on interest payments to Tata Capital Ltd. and Tata Motor Finance Ltd. for the assessment year 2009-10.
Summary:
Issue 1: Disallowance of interest u/s. 40(a)(ia)
The assessee appealed against the disallowance of interest amounting to Rs. 18,02,893 u/s. 40(a)(ia) for failure to deduct TDS on interest payments to Tata Capital Ltd. and Tata Motor Finance Ltd. The AO made the addition as the assessee admitted to not deducting TDS due to inadvertent mistake. The assessee contended that disallowance should apply to expenditure payable at year-end, not on amounts already paid without tax deduction, citing a decision of ITAT Special Bench in Merilyn Shipping & Transports vs. ACIT. However, the ld. CIT(A) upheld the addition, noting that the assessee admitted to the non-deduction of tax. The ITAT found no merit in the appeal, emphasizing that once the Special Bench decision was stayed by the High Court, it no longer applied in favor of the assessee. Therefore, the appeal was dismissed, and the addition was confirmed.
Conclusion:
The appeal challenging the disallowance of interest u/s. 40(a)(ia) for non-deduction of TDS on interest payments was dismissed, as the assessee's admission of non-compliance with TDS requirements rendered the Special Bench decision inapplicable following the stay by the High Court.
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2013 (7) TMI 964
Issues involved:
The appeal for condonation of delay in filing against the order under section 263 of the Income Tax Act, 1961.
Condonaion of Delay:
The appeal was filed by the assessee against the order dated 28th Aug., 2012 of the CIT, Bikaner, which was belated by 6 days. The assessee submitted an application for condonation of delay stating reasonable cause for the delay, which was supported by an affidavit. After hearing both parties, the delay was condoned and the appeal was admitted.
Grounds of Appeal:
The main ground raised in the appeal was that the CIT erred in invoking section 263 of the IT Act, 1961, setting aside the assessment made under section 143(3) as neither erroneous nor prejudicial to the interest of Revenue.
Case Background:
The assessee declared total income of Rs. 120 and agricultural income of Rs. 2,75,000. The assessment was completed under section 143(3) based on the income declared. The CIT initiated proceedings under section 263 due to lack of proper enquiry regarding a cash deposit of Rs. 15,92,500 made by the assessee.
Assessee's Submissions:
The assessee explained that the cash was given by his mother-in-law for land purchase, supported by detailed family and financial background. However, the CIT found the explanation unsatisfactory and directed fresh enquiry by the AO.
Arguments and Precedents:
The assessee argued that the AO had conducted detailed enquiries and passed the assessment order after due consideration of relevant material. Citing various case laws, the assessee contended that the assessment order was not erroneous or prejudicial to Revenue.
Decision and Analysis:
The Tribunal noted that the AO had made proper enquiries during the assessment proceedings and had taken a possible view. Quoting the powers of the CIT under section 263, it was emphasized that mere disagreement with the assessment method does not warrant revision. Relying on Supreme Court precedent, the Tribunal allowed the appeal, setting aside the CIT's order and restoring the assessment order passed by the AO.
Conclusion:
The appeal was allowed in favor of the assessee, with the Tribunal finding that the assessment order under section 143(3) was not erroneous or prejudicial to Revenue, thereby rejecting the CIT's decision under section 263.
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2013 (7) TMI 963
Addition u/s 40(a)(ia) - Held that:- The majority views expressed in the case of Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM ] that the disallowance u/s. 40(a)(ia) applies only to amounts payable as on 31st March of the previous year on which the TDS has not been deducted and no disallowance to be made in respect of sums paid during the previous year without deducting TDS are not acceptable. The submissions advanced by learned advocates have already been dealt with and rejected.
TDS u/s 194C - Held that:- We find force in the argument of the Learned Counsel that Sec. 194C has undergone amendment w.e.f. 01-06-2007 by the Finance Act, 2007. In our opinion, this aspect has not been examined by the authorities below. We, therefore, restore the grounds taken by the assessee in the Cross Objection to the file of the Assessing Officer to decide the same. Needless to say that the assessee should be given an opportunity of being heard as per the principles of natural justice
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2013 (7) TMI 962
Issues Involved:
1. Applicability of the Supreme Court's decision in Liberty India for disallowing duty drawback under Section 10BA.
2. Determination of whether duty drawback can be considered as business income for the purpose of Section 10BA.
Detailed Analysis:
1. Applicability of the Supreme Court's Decision in Liberty India:
The primary issue revolves around whether the decision of the Hon'ble Supreme Court in the case of Liberty India (317 ITR 218) is applicable for disallowing the duty drawback received by the assessee when computing the deduction under Section 10BA of the Income Tax Act, 1961. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] both relied on this decision to conclude that duty drawback is not derived from industrial undertaking activities and should be assessed as income from other sources.
The CIT(A) upheld the AO's view, emphasizing that export incentives like duty drawback are not derived from manufacturing activities and thus should not be included in the business income for the purpose of Section 10BA. The CIT(A) referenced the Supreme Court's ruling in Liberty India, which held that such incentives are not part of the business income under Sections 80I/80IA, and applied the same reasoning to Section 10BA.
2. Determination of Duty Drawback as Business Income:
The assessee argued that the Liberty India case is not applicable because Section 10BA and Section 80HHC have specific formulas for computing profits derived from exports, unlike Section 80IA. The assessee cited various judgments, including those from the Rajasthan High Court and the ITAT Mumbai Bench, which supported the view that duty drawback and DEPB credits are considered business income under Section 28(iiid) and (iiie).
The ITAT Jodhpur Bench, in a similar case (M/s Suraj Exports India vs. ITO), had previously held that the Liberty India decision does not apply to Section 10BA. The Tribunal noted that Section 10BA and Section 80HHC are more closely related, and the interpretation of "derived from" in Section 80HHC should apply to Section 10BA. The Tribunal cited the Supreme Court's decisions in Topman Exports vs. CIT and ACG Associated Capsules Pvt. Ltd. vs. CIT, which clarified that DEPB credits are considered business income.
The Tribunal also referenced the Mumbai Bench's decision in Arts and Crafts Exports vs. ITO, which held that DEPB and duty drawback are business incomes eligible for deduction under Section 10BA. The Tribunal emphasized that Section 10BA(4) provides a specific method for computing profits derived from exports, which includes business income as defined under Section 28.
Conclusion:
The ITAT Jodhpur Bench concluded that the facts of the present case are similar to those in M/s Suraj Exports India. Following the precedent set in that case, the Tribunal held that the assessee is eligible for deduction under Section 10BA, including the duty drawback as business income. The Tribunal set aside the CIT(A)'s order and directed the AO to allow the assessee's claim.
Result:
The appeal of the assessee was allowed, and the AO was directed to include the duty drawback as business income for the purpose of Section 10BA deduction. The decision was pronounced in the open court on 31/07/2013.
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2013 (7) TMI 961
Issues involved: Reopening of assessments, existence of Permanent Establishment, attribution of profits to the Permanent Establishment, levy of interest u/s 234B of the Income Tax Act.
Reopening of assessments: The Assessing Officer initiated reassessment proceedings on 22 entities of G.E.Group by issuing notices u/s 148 of the Income Tax Act for the AYs 2000-2001 to 2006-07. The Assessing Officer completed assessments u/s 143(3) read with S.147 of the Act after rejecting objections to the reopening of assessments.
Existence of Permanent Establishment: The Assessing Officer held that the 22 GE Overseas entities have a Permanent Establishment in India, including a dependent agency Permanent Establishment in the form of G.E.India Industrial P.Ltd. Profit was attributed to the Permanent Establishment and brought to tax, with interest levied u/s 234A and S. 234B of the Act.
Attribution of profits to the Permanent Establishment: The Ld.Commissioner of Income Tax (Appeals) confirmed the action of the Assessing Officer on the issues of reopening of assessments, existence of Permanent Establishment, and attribution of profits to the Permanent Establishment. However, the Ld.Commissioner decided in favor of the assessee on the issue of levy of interest u/s 234B based on a binding judgment of the Jurisdictional High Court.
Levy of interest u/s 234B: The Revenue appealed the deletion of interest levied by the Assessing Officer u/s 234B of the Act by the Ld.Commissioner of Income Tax (Appeals). The issue revolved around the mandatory nature of interest u/s 234B and the applicability of relevant legal provisions and court judgments.
Judgment: The Tribunal upheld the decision of the Ld.Commissioner of Income Tax (Appeals) based on the binding judgment of the Jurisdictional High Court. The Tribunal found that interest u/s 234B was not leviable in the present case due to the obligations under S.195 of the Act regarding deduction of tax at source for non-resident companies. The Tribunal referenced various legal decisions and concluded that the Revenue's appeal was dismissed, affirming the order of the First Appellate Authority.
Separate Judgment: No separate judgment was delivered by the judges in this case.
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2013 (7) TMI 960
Addition on account of long term capital gains - Held that:- The perusal of the provisions of the agreement indicates that the amount of ₹ 20 crore is the maximum amount that could be received by the assessee’s group which comprises of initial consideration and the deferred consideration. It also indicates that there is no guarantee for the receipt of this maximum amount by the assessee’s group. In view of that matter, we find merit in the contention of the senior counsel for the assessee that what is to be taxed is the gain received or accrued and not the notional/ hypothetical income as decided by the Hon’ble Supreme Court in the case of K.P. Varghese vs. ITO (1981 (9) TMI 1 - SUPREME Court).
It is an established legal proposition that as per the provisions of capital gain, the amount can be brought to tax either on receipt basis or accrual basis. As regards the decision of the Supreme Court in the case of CIT vs. George Henderson & Co. Ltd and the decision of the ITAT in Mrs. Alpana Piramal case relied on by the Ld.DR, it is our considered view that these decisions have no application as the ratios in the said cases are applicable when the dispute relates to adopting the full value consideration vis-a-vis the sale value consideration which is not the case of the AO in this instant case as the maximum cap provided in the agreement cannot be equated neither with sale value consideration nor with the full value consideration since the said maximum cap is neither received nor accrued for the purposes of calculating the capital gains. In view of that matter, we do not find any infirmity in the order of the Ld.CIT(A) and the same is upheld.
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2013 (7) TMI 959
Issues involved: Appeal against deletion of addition made u/s. 41(1) of the Act in respect of outstanding creditors.
Summary:
The Revenue appealed against the order of the Ld. CIT(A)-12, Mumbai pertaining to A.Y. 2007-08, raising two substantive grounds of appeal. The grievance was that the Ld. CIT(A) erred in deleting the addition made u/s. 41(1) of the Act regarding outstanding creditors. The AO added the entire amount of sundry creditors u/s. 41(1) due to balances carried forward for the last 3 years with no transactions. The assessee explained financial difficulties and disputes with old creditors for non-repayment. The Ld. CIT(A) observed that cessation of liability occurs only when the amount is written back to the profit and loss account and if not offered to tax, the AO cannot tax it under Sec. 41(1). The Ld. CIT(A) emphasized the necessity of establishing the cessation of liability and noted that complete payments were made to 5 parties. Consequently, the Ld. CIT(A) concluded that the AO was unjustified in invoking Sec. 41(1) and deleted the addition.
The Revenue contended against the Ld. CIT(A)'s finding, arguing that additional evidence admitted was against Rule 46A. The Ld. Counsel for the assessee reiterated their submissions. Upon review, it was found that the AO made additions based solely on liabilities outstanding for over 3 years, which cannot be the sole ground for invoking Sec. 41(1) as time-barring trading liabilities do not necessarily indicate remission or cessation. The AO's error in invoking Sec. 41(1) was highlighted, stating that the law of limitation bars the remedy but does not extinguish the liability. The Tribunal upheld the Ld. CIT(A)'s decision, dismissing the Revenue's appeal.
In conclusion, the Tribunal dismissed the appeal filed by the Revenue, emphasizing that time-barring liabilities do not automatically warrant invocation of Sec. 41(1) as the law of limitation does not extinguish the liability.
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2013 (7) TMI 958
Addition u/s 40(a)(ia) - Held that:- The provisions of Sec.40(a)(ia) of the Act, by the Finance Act, 2010 is retrospective from 1.4.2005. Consequently, any payment of tax deducted at source during previous years relevant to and from AY 05-06 can be made to the Government on or before the due date for filing return of income u/s.139(1) of the Act. If payments are made as aforesaid, then no deduction u/s.40(a)(ia) of the Act can be made. Admittedly in the present case, the Assessee had deposited the tax deducted at source on or before the due date for filing return of income u/s.139(1) of the Act and therefore the impugned disallowance deserves to be deleted. We order accordingly and allow the appeal by the Assessee.
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2013 (7) TMI 957
Denial of exemption claimed under sec. 54F - Held that:- On perusal of section 54F(1) and sub-section (4), it reveals that these sections do not put any restriction that only capital gain would be utilized for purchase of the new house. The law permits utilization of capital gain within the specified time, the assessee may use such funds for other purposes and may find resources from other source for investment in time. The section provides investment in a house prior to one year of the transfer of long term capital assets. It will make it clear that if the transfer has not taken place then from where the funds would come for making the investment. The investment must be from some other sources and when assessee would receive sales consideration on transfer of a long term capital assets, he will claim set off of the capital gains against the investment already made for the purpose of exemption under sec. 54F.
Revenue Authorities have erred in holding that assessee is not entitled for exemption under sec. 54F(1) of the Income-tax Act, 1961 for a sum of ₹ 121,32,636. The investment of the assessee is more than the capital gain earned by him. Therefore, we allow the appeal of the assessee and delete the addition of ₹ 121,32,636 in the total income of the assessee under the head "long term capital gain".
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2013 (7) TMI 956
Issues Involved:
1. Disallowance of depreciation on plant and machinery received as a grant/subsidy from National Dairy Development Board (NDDB).
2. Application of Explanation 10 to section 43(1) of the Income Tax Act to assets acquired and grants received prior to 1-4-1999.
3. Relevance of the Supreme Court decision in Saharanpur Electric Supply Co. Ltd. to the facts of the case.
4. Deductibility of subsidy from the actual cost u/s 43(1) for depreciation purposes.
Summary:
Issue 1: Disallowance of Depreciation on Grant/Subsidy
The Assessee, a company incorporated u/s 25 of the Companies Act, 1956, engaged in milk processing and marketing, claimed depreciation on plant and machinery received as a grant/subsidy from NDDB. The Assessing Officer disallowed the claim, stating that no capital asset was transferred to the Assessee by NDDB. The CIT(A) upheld the disallowance, confirming that the grant portion should be deducted from the actual cost of assets for depreciation purposes.
Issue 2: Application of Explanation 10 to Section 43(1)
The Assessee argued that Explanation 10 to section 43(1) should not apply to assets acquired and grants received prior to 1-4-1999. However, CIT(A) held that Explanation 10, effective from 1-4-1999, applies irrespective of the year of acquisition of assets or the year of disbursement of the grant. The Tribunal agreed, stating that the cost relatable to the subsidy should not be included in the actual cost of the asset from AY 1999-2000 onwards.
Issue 3: Relevance of Supreme Court Decision in Saharanpur Electric Supply Co. Ltd.
The CIT(A) relied on the Supreme Court decision in Saharanpur Electric Supply Co. Ltd., which the Assessee contended was not applicable. The Tribunal found the decision relevant, noting that it supports the principle that the actual cost of assets can be altered in later years for depreciation purposes.
Issue 4: Deductibility of Subsidy from Actual Cost u/s 43(1)
The Assessee claimed that the subsidy should not be deducted from the actual cost of assets u/s 43(1). However, CIT(A) and the Tribunal held that even prior to the insertion of Explanation 10, subsidies received for specific purposes of meeting a portion of the cost of assets were to be deducted from the actual cost for depreciation purposes, as per CBDT Circular No. 190 dated 1.3.1976.
Conclusion:
The Tribunal dismissed the Assessee's appeal, upholding the CIT(A)'s order that the grant portion should be deducted from the actual cost of assets for depreciation purposes, in line with Explanation 10 to section 43(1) and relevant judicial precedents. The appeal was pronounced dismissed in open court on 12-07-2013.
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2013 (7) TMI 955
Issues involved: Appeal against orders disallowing Keyman Insurance Policy Premium for assessment years 2004-05, 2005-06, and 2006-07.
Adjudication of Keyman Insurance Policy Premium Allowability:
The assessee appealed against disallowance of Keyman Insurance Policy Premium paid for the brother, claiming he was a deemed employee handling business activities. The AO rejected the claim citing eligibility norms for Keyman insurance policy. However, the Tribunal referred to a Bombay High Court decision stating that Keyman Insurance Policy isn't limited to employment contracts but includes individuals connected to the business. The CBDT circular clarified that such premiums are allowable business expenditures to protect against financial setbacks. The Tribunal found the premium expenditure wholly for business purposes, overturning the AO's disallowance for all three years.
Applicability of Bombay High Court Decision:
The Tribunal applied the Bombay High Court decision to the present case, emphasizing that the brother's involvement in business activities and the power of attorney supported the claim. The wider interpretation of "connected with the business" under section 10(10D) covered the premium paid for the brother's role in the business. As no adverse material contradicted the assessee's contentions, the disallowance was deemed unwarranted for all three years, leading to the allowance of the common issue.
Conclusion:
While other grounds were not pressed, the appeals were partly allowed based on the Tribunal's decision to permit the Keyman Insurance Policy Premium for all three years. The disallowance made by the AO was overturned, and the appeals were partly allowed accordingly.
Judgment Pronounced: 02/07/2013
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2013 (7) TMI 954
Issues:
Appeals against orders of Ld. CIT(A) for A.Yrs. 2002-03 and 2005-06 - Interpretation of section 244A - Treatment of interest portion in tax refund.
Analysis:
1. Interpretation of Section 244A:
The appeals before the Appellate Tribunal ITAT Mumbai involved the interpretation of section 244A concerning the entitlement of the assessee to simple interest on tax refunds. The Revenue contended that the direction given by the Ld. CIT(A) was contrary to the provision of section 244A. Specifically, the issue revolved around whether the assessee should be entitled to simple interest or if the interest portion should be excluded from the tax refund. The Ld. Counsel for the assessee highlighted that the Ld. CIT(A) had followed the order for A.Y. 1997-98, which was upheld by the Tribunal in the assessee's favor. The Tribunal, after considering the submissions and the previous decision, dismissed the Revenue's appeal for both years, citing the precedent set in the A.Y. 1997-98 case.
2. Consistency with Previous Tribunal Decision:
The Ld. Counsel for the assessee pointed out that the Ld. CIT(A) had followed the order for A.Y. 1997-98, which was upheld by the Tribunal in the assessee's favor. The Tribunal noted that the Ld. Departmental Representative failed to provide any contrary facts or decisions on record to challenge the consistency with the previous decision. Consequently, the Tribunal, in line with the precedent set in the A.Y. 1997-98 case, dismissed the Revenue's appeals for both A.Yrs. 2002-03 and 2005-06. The decision was based on the Tribunal's previous ruling in favor of the assessee regarding the treatment of interest portion in tax refunds.
3. Final Decision and Dismissal of Appeals:
After careful consideration of the submissions and the previous decision of the Tribunal in the assessee's favor for A.Y. 1997-98, the Appellate Tribunal ITAT Mumbai pronounced the order dismissing the appeals filed by the Revenue against the orders of Ld. CIT(A) for A.Yrs. 2002-03 and 2005-06. The Tribunal's decision was based on the consistent interpretation and application of the provisions of section 244A in line with the precedent established in the A.Y. 1997-98 case. The appeals were disposed of based on the principle of following the previous Tribunal decision and upholding the assessee's entitlement to interest on tax refunds as per the law.
This comprehensive analysis highlights the key issues, arguments presented, previous decisions relied upon, and the final decision rendered by the Appellate Tribunal ITAT Mumbai in the cited judgment.
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2013 (7) TMI 953
Denial of benefit of carry forward of short term capital loss and denial of carry forward of speculation loss - AO did not allow the carry forward losses by observing that the assessee has not claimed in the return filed originally - Held that:- In this case though in the return filed originally the claim of loss was not claimed, however, during the assessment proceeding a letter was filed before the AO to consider the same. As stated above, in view of the decision of the Hon’ble Apex Court in Goetz (India) Ltd. Vs. CIT [2006 (3) TMI 75 - SUPREME Court ], the AO has not considered the claim of the assessee. CIT(A) also did not consider the claim of the assessee and confirmed the action of the AO. In my considered view, the learned CIT(A) should have considered the issue on merit as before the appellate authority a legal claim can be made.
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2013 (7) TMI 952
Enterprises engaged in infrastructure development - Deduction u/s 80IA(4) - Assessee is engaged in development of infrastructure facilities and has carried out certain contract works allotted by State Governments. He claimed deduction u/s. 80IA. AO concluded that assessee is not the owner of the infrastructure facilities and has executed the work merely as contractor. Accordingly, the deduction claimed u/s. 80IA was disallowed. - HELD THAT: - There is an intrinsic difference between developing an infrastructure facility and executing a works contract and deduction under said section would not be available in case of execution of works contract. If the assessee utilised its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facilities, it cannot be considered as a mere works contract but has to be considered as a development of infrastructure facilities.
Relying on the judgement of - NCC-ECCI (JV) VERSUS INCOME TAX OFFICER, WARD 6 (3) HYDERABAD [2013 (6) TMI 737 - ITAT MUMBAI], it was said that the contractor and the developer cannot be viewed differently. Every contractor may not be a developer, but every developer developing infrastructure facilities on behalf of the Government is a contractor.
The principal idea behind granting deduction was to achieve rapid growth in infrastructure development with private participation, thus AO was ordered to re-examine the facts.
Decision in the cases of - COMMISSIONER OF INCOME-TAX VERSUS RADHE DEVELOPERS [2011 (12) TMI 248 - GUJARAT HIGH COURT] and M/S. SUSHEE HITECH CONSTRUCTIONS P. LTD. (NOW KNOWN AS SUSHEE INFRA P. LTD.) VERSUS INCOME-TAX OFFICER, WARD 3(2), HYDERABAD [2013 (6) TMI 599 - ITAT HYDERABAD], relied upon.
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2013 (7) TMI 951
TDS u/s 195 - Disallowance of overseas agents commission paid without deducting tax at source - Held that:- It is not disputed that assessee had produced declarations from the concerned agents stating that they were not having any establishment in India. It seems Assessing Officer disbelieved such declaration for a reason that it did not have a government authentication. In our opinion, there is no such requirement under the Act. When assessee had obtained confirmation from the non-resident agents that they were not having any establishment in India, it could be disbelieved only if there were any circumstances, which would negate such assertion. In any case, there is no dispute that the agents were canvassing sales for the assessee for customers abroad.
Assessee had every reason to hold a bona fide belief that the payments made to the non-resident were not chargeable to tax under the provisions of the Act. It could not be fastened with consequences arising out of a non-deduction of any such tax. - Decided in favour of assessee
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2013 (7) TMI 950
Bogus share transaction - whether the entire sale proceeds of the shares received by these assessees can be treated as an income from undisclosed sources? - reliance placed by the AO on the evidence without affording opportunity to the assessee to cross-examine - Held that:- AO has failed to establish a clear case against the assessees that the share transactions, on which the long-term capital gains have been declared, are sham and camouflage - reliance placed by the AO on the evidence without affording opportunity to the assessee to cross-examine the three brokers who have allegedly denied the issuance of the contract notes also goes in favour of the assessees on the well settled judicial principles that no evidence should be used against the assessee unless the assessee has been given opportunity to cross-examine the deponents.
As admittedly all the sales are routed through the demat account, charge of manipulation by the AO is totally baseless. Once the documentary evidence is filed by the assessee pointing out some minor discrepancies and without affording opportunity to cross-examine the said brokers has no weightage as evidence in the judicial proceedings.
The charge of sharp rise in the share prices without proper financial footing of the investee companies is general charge and is not established by the AO. We also hold that merely because there is a delay in converting the physical shares into electronic form i.e. the demat account, that cannot be the criteria to hold that the shares transactions are arranged and camouflaged as in all the cases the assessees have recorded their share transactions in the regular books of account prior to the date of search. There was heavy burden on the AO to destroy the claim of the assessee but except going on the general philosophy, nothing has been made out by the AO to show that the claim of the assessee in respect of the sale of shares is not correct. We, therefore, hold that both the authorities below are not justified in holding that the entire sale proceeds shown by the assessee are out of sham and bogus arranged share transactions. - Decided in favour of these assessee.
Addition of the alleged payment of commission @ 6 per cent is also without any merit and accordingly grounds are also decided in favour of these assessee.
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2013 (7) TMI 949
Bogus Purchases - Concealment of Income - Rejection of Accounts u/s 145(3) - Onus of Proof on Assessee - The Assessing Officer found that the assessee had not maintained any stock register. Also, purchases were unverifiable and there were serious defects in the books of account. Confirmation, PAN and acknowledgment of return was furnished by the assessee to prove the genuineness of the purchases. - HELD THAT-: Assessee has failed to discharge its burden to prove that the purchases are genuine. This burden could not have been shifted on the revenue merely by providing their Permanent Account Number/acknowledgement of return or showing that the payments in respect of such accommodation entries were made by cheque. Investigation by Assessing officer was in compliance with Section 144 of the act, thus appeal by assessee is rejected.
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2013 (7) TMI 948
Applicability of provisions of Sec. 50C - Held that:- In the interest of justice and fair play, we restore this issue back to the files of the AO. The AO is directed to verify whether the impugned land was a leasehold land in the hands of the assessee and what has been transferred is only leasehold rights. The assessee is directed to file all necessary related documents/evidences before the AO. The AO is expected to give a reasonable opportunity of being heard to the assessee. If the AO is convinced that what has been transferred is a leasehold right, then the issue is to be decided in the light of the decision of the Tribunal in the case of Atul G. Puranik (2011 (5) TMI 576 - ITAT, Mumbai ).
Disallowance of exemption claimed by the assessee u/s. 54EC - Held that:- The claim has been denied because the assessee has invested in the REC Bonds beyond the period of limitation prescribed under the said section. It is the say of the Ld. Counsel that such Bonds were not available during the period of limitation, therefore, the assessee could not have purchased the Bonds within the specified period. Therefore, we restore this issue also back to the files of the AO. The AO is directed to verify whether REC bonds were available during the period of limitation and if the Bonds were not available, then the assessee cannot be penalized for doing something impossible to perform because REC Bonds are Government Bonds and if they are not available in the market, the Revenue cannot expect the assessee to fulfill the conditions of Sec. 54EC of the Act.
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2013 (7) TMI 947
Issues Involved:
The judgment involves the issue of registration u/s 12AA of the Act as a charitable institution based on the activities conducted by the assessee trust.
Summary:
Issue 1: Registration u/s 12AA of the Act as a charitable institution
The appeal was against the rejection of the application for registration u/s 12AA of the Act as a charitable institution. The assessee trust was established with the object of promoting ayurveda research, organizing seminars, workshops, and classes for imparting knowledge about ayurveda, as well as contributing towards medical research in ayurveda. The ld.representative argued that the trust conducted various schemes in furtherance of its charitable object, including medical camps. On the contrary, the ld.DR contended that the trust's activities were commercial in nature, primarily intended to promote the sales of ayurvedic products manufactured by a related company. The Tribunal noted that the Commissioner must satisfy himself about the genuineness of the trust's activities and its charitable object before granting registration u/s 12AA. The Tribunal found discrepancies in the details provided regarding the seminars and camps conducted by the trust, and remitted the issue back to the Commissioner for re-examination based on additional material that may be filed by the assessee.
The Tribunal emphasized the need for a thorough examination of the charitable activities conducted by the trust, particularly the medical camps and seminars, to determine the eligibility for registration u/s 12AA. The Tribunal highlighted the importance of verifying the genuine charitable nature of the activities, especially in cases where there are commercial interests involved. The order of the Commissioner was set aside, and the matter was remitted back for re-examination in light of the specific activities conducted by the trust. The Commissioner was directed to make a decision based on a comprehensive review of the material provided by the assessee.
In conclusion, the appeal of the assessee was allowed for statistical purposes, and the matter was referred back to the Commissioner for a detailed reassessment in accordance with the law.
Order pronounced in the open court on 26th July 2013.
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2013 (7) TMI 946
Issues involved: Classification of services under 'Business Auxiliary Services' and requirement of pre-deposit for appeal.
Classification of services: The appellant entered into a Franchise Agreement with another company, providing premises, infrastructure, and manpower in exchange for a guaranteed amount or a percentage of turnover. The department classified the services as 'Business Auxiliary Services' and demanded payment. However, upon reviewing the agreement, the Tribunal found that the activity was primarily renting of immovable property, not falling under Business Auxiliary Services. The Tribunal decided to remand the matter to the lower appellate authority for reconsideration without requiring any pre-deposit.
Requirement of pre-deposit: The lower appellate authority had directed the appellant to make a pre-deposit of a certain amount along with interest, which the appellant failed to comply with, leading to the dismissal of the appeal. The Tribunal, after determining the nature of the services provided, allowed the appeal by remanding the case for further consideration without insisting on any pre-deposit.
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9911796707
