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Showing 321 to 340 of 1442 Records

• 2014 (2) TMI 1124
  

  Deletion of addition made u/s 68 of the Act – Unexplained credits – Onus to prove the genuineness - Whether the ITAT has erred in giving relief on account of addition being unexplained credits on wrong appreciation of law and without any basis substituting its own satisfaction in place of AO's satisfaction despite the fact that the assessee company has not discharged the onus as provided in Section 68 of the I.T. Act, 1961 – Held that:- Both the CIT(A) and the Tribunal had noted that the assessee had established all the three aspects by producing, during the course of the assessment, necessary documentary material such as the share application forms, copies of bank accounts, income tax returns and balance sheet – Relying upon Commissioner of Income Tax Vs. Lovely Exports (P) Ltd. 2008 (1) TMI 575 - SUPREME COURT OF INDIA] - the assessee had discharged the onus of establishing the identity, credit worthiness and genuineness of the transactions which had formed the basis of the addition that was made under Section 68 - whether the documentary materials which had been produced by the assessee were sufficient to displace the onus is a matter to be decided upon the facts of each case - Both the CIT(A) and the Tribunal having held that the assessee had duly discharged the onus, thus, there is no substantial question of law arises – Decided against Revenue.

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• 2014 (2) TMI 1123
  

  Broken period interest on securities – Claim of Expenditure - Banking business – Held that:- The decision in M/s. Indian Bank Versus The Deputy Commissioner of Income-tax Special Range-I [2012 (12) TMI 418 - MADRAS HIGH COURT] followed - payment of extra interest through M/s.Chandrakala & Co to various PSUs as entitled for deduction - the amount paid to the PSUs were properly accounted for disclosing before the Income Tax Authorities - the assessee was entitled to claim deduction on the expenditure incurred by way of payment of broken period interest - Decided in favour of Assessee.

  Validity of the reopening of assessment u/s 147 of the Act - Power of the AO to reopening of assessment u/s 147 of the Act – Held that:- The decision in Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] followed – there was no materials placed by the Assessing Officer for assumption of jurisdiction under Section 147 proceedings - Thus, in the absence of any material, the contention of the revenue cannot be accepted that the reopening u/s 147 of the act was within the parameters – thus, the order of the ITAT set aside – Decided in favour of Assessee.

  Levy of additional tax u/s 143(1A) – Held that:- The levy of additional tax in respect of computation under Section 115J of the Income Tax Act is already a subject matter in an appeal filed by the assessee and that the present assessment is not concerned about computation under Section 115J of the Income Tax Act, but under the regular procedure, the question of thus adding additional tax in the regular assessment proceedings does not arise – thus, the demand of additional tax under Section 143(1A) of the Income Tax Act on the regular assessment proceedings does not arise – Decided in favour of Assessee.

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• 2014 (2) TMI 1122
  

  Waiver of pre-deposit - stay - Partial hearing of appeal before CIT(A) – Application for unconditional stay of balance demand of tax rejected – Held that:- There was considerable substance in the submissions made by the Petitioner that both the Assistant Commissioner of Income Tax and the Commissioner of Income Tax have ignored the parameters laid down in KEC International Limited Vs. B.R.Balkrishnan and others [2001 (3) TMI 32 - BOMBAY High Court] - It is apparent that neither the Assistant Commissioner of Income Tax nor the Commissioner of Income Tax has referred to the Petitioner's case nor has given some short prima facie reasons for requiring the Petitioner to deposit 50% of the tax liability - Prima facie, there appears to be substance in the Petitioner's contention that in view of specific provision for deduction of tax on account of brokerage being provided in Section 194H of the Act, the occasion to apply Section 194J of the Act would not arise.

  The Petitioner's alternative submission that if subbrokerage paid by the Petitioner to its holding company is considered excessive or unreasonable, then in that event, as in the earlier years the sub-brokerage paid @ 50% be allowed as an admissible expenditure - On that basis, the Petitioner would not be liable to pay anything more than about Rs.60.00 lakhs based on the detailed calculations given by the Petitioner – thus, interim stay on recovery is granted during the pendency of appeal before the CIT(A) – Decided in favour of Assessee.

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• 2014 (2) TMI 1121
  

  Validity of Miscellaneous application filed by stranger – Held that:- The Assessee rightly contended that ITAT entertained the application from a stranger and reviewed it resultantly passed an order without the notice to the appellant which is contrary to law - The order passed by the Tribunal set aside with a direction to rehear the application moved by Sheshnarayan – Decided in favour of Assessee.

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• 2014 (2) TMI 1120
  

  Charging of interest u/s 139(8) and 215/217 of the Act – Effect of amendment u/s 139(8) w.e.f. AY 1985-86 - Whether the ITAT is right in law in reversing the order of the learned DCIT(A) who upheld the order of the Assessing Officer passed under Section 154 holding that no mistake was apparent from records – Held that:- The decision in COMMISSIONER OF INCOME-TAX Versus KD. PRABHAKAR (HUF) [2007 (8) TMI 335 - PUNJAB AND HARYANA HIGH COURT] followed – the amendment was applicable from 1985-86 and subsequent years – thus, the interest for the assessment year 1981-82 is not valid – Decided against Revenue.

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• 2014 (2) TMI 1119
  

  Refusal for rectification of order u/s 254(2) of the Act – Addition made u/s 68 of the Act – Held that:- The ITAT's order clearly show that the ground of appeal in respect of the addition was general and did not advert to a double entry or a double taxation - As held in Omar Salay Mohamed Sait V. CIT [1959 (3) TMI 2 - SUPREME Court] the Tribunal is duty-bound to consider all the grounds, the evidence pro and con, the contentions of the parties before it and all other material brought to its notice in a judicial spirit and should not feel incommoded by technicalities - It would be placing an impossible burden on the Tribunal if it is ordained to rule upon aspects and contentions which were not raised by the parties before it or to deal with pleadings, evidence or material to which its pointed attention was not drawn in the course of the proceedings, and which lies buried in the forest of papers filed by the parties.

  Whether there was a double addition is a factual question and the Tribunal can deal with it only upon its attention being drawn to it by the aggrieved party - the Tribunal is not expected to unearth evidence or material to which its attention was not drawn by the parties, nor to explore the arena to find out what possible contentions the parties could have taken, and grant them relief on the basis of such an expedition in exercise of the limited jurisdiction u/s 254(2) which confers upon the Tribunal only a power to rectify a mistake apparent from the record and not to indulge in a review – Decided against Assessee.

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• 2014 (2) TMI 1118
  

  Search u/s 132 of the Act - Block Assessment – Reference made to DVO for valuation u/s 133(6) of the Act - Notice under Section 158-BD of the Act issued – Held that:- During the course of search, no incriminating documents were traced – As on the date of search, the building was not completed and there was no income from the building - There was no positive comments from the DVO with regard to suppression of material facts by the assessee which would amount to undisclosed income - The difference in the cost of construction cannot constitute undisclosed income for the block period - On verification of the revised report submitted by the DVO, the differences between the valuation of the assessee- Firm and the DVO is less than 15% - There is no specific finding by the Assessing Officer with regard to any concealment - there was no material found during the search indicating that there were expenses incurred on construction by the assessee that were not recorded in the books of accounts - In the absence of any seized material and solely on the basis of the report of the DVO, there cannot be any finding with regard to the undisclosed income - No material has been found at the time of search for initiating proceedings under Section 158-BD of the Act.

  Rectification of mistake u/s 154 of the Act – Held that:- Solely on the basis of the Valuation report, block assessment cannot be made - it is not open to the appellant to tax again in the guise of undisclosed income – Relying upon the decision in the case of M/s. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA]- the undisclosed income unearthed as a result of search - The scope and its ambit is limited in that sense to materials unearthed during the search - The Appellate Authority as well as the Tribunal after considering the matter in detail corrected the mistake committed by the Assessing Officer – thus, there was no infirmity or irregularity in the order passed by the Appellate Authority and the Tribunal – Decided against Revenue.

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• 2014 (2) TMI 1117
  

  Nature of Capital gain – LTCG or STCG – Sale of residential property – Held that:- The decision in Vinod Kumar Jain v. Commissioner of Income Tax, Ludhiana and others [2010 (9) TMI 850 - Punjab and Haryana High Court] and Circular No.471, dated 15.10.1986 followed - The allottee gets title to the property on the issuance of an allotment letter and the payment of instalments is only a consequential action upon which the delivery of possession flows - the provisions of Sections 2(14), 2(29A) and 2(42A) encompasses within its ambit those cases of capital asset which are held by an assessee.

  The flat was allotted to the appellant on 07.06.1986, vide letter conveyed to the assessee on 30.06.1986 - The assessee paid the first installment on 04.07.1986, thereby conferring a right upon the appellant to hold a flat, which was later identified and possession delivered on a later date - The mere fact that possession was delivered later, does not detract from the fact that the allottee was conferred a right to hold property on issuance of an allotment letter - The payment of balance installments, identification of a particular flat and delivery of possession are consequential acts, that relate back to and arise from the rights conferred by the allotment letter – thus, the ITAT has erred in holding that the transaction does not envisage a long term capital gain – Decided in favour of Assessee.

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• 2014 (2) TMI 1116
  

  Maintainability of Revision petition u/s 264 of the Act – Held that:- The decision in C. Parikh & Co. vs. Commissioner of Income Tax, Baroda 1979 (7) TMI 50 - GUJARAT High Court] followed - scope of revision under Section 264 is wider and different than the scope of revisionary powers exercised by the Commissioner under Section 263 - an order/ intimation passed under Section 143(1) passed by the Assessing Authority is equally an order, which can be questioned and be made subject matter of revision under Section 264 before the commissioner for deciding the issues raised by the assessee on merits.

  Indeed the expression “In the case of any order other than an order to which Section 263 apply”, occurring in Section 264, would include an order/intimation passed under Section 143(1) and hence, it can be made subject matter of challenge in Revision by the assessee before Commissioner under Section 264 of the Act - In order to raise any kind of grievance after the issue is dealt with by the Assessing Authority, one of the remedies available to the assessee in such circumstances, apart from any other remedy as may be available under the Act, is to invoke the revisionary powers of Commissioner under Section 264 of the Act against such grievance to call upon the Commissioner to examine the same on merits in its revisionary jurisdiction in accordance with law – thus, the order of the Commissioner set aside – the matter remitted back to the Commissioner to decide the revision on merits – Decided in favour of Assessee.

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• 2014 (2) TMI 1115
  

  Relief of liability on account of interest expense - Calculation of book profit U/s. 115JB of the Act - Changeability of interest u/s. 234A, 234B and 234C of the Act - Held that:- Matter remitted back to the CIT(A) for fresh consideration - Decided in favour of Assessee.

  Correctness of taxability of income in the hands of the company - Held that:- The assessee cannot be permitted to blow hot and cold - the matter is subjudice before the Hon'ble Supreme Court and thus it cannot be said that the facts are settled finally - None of the issues were taken up before the AO or the CIT(A) and hence it cannot be said that the facts concerning the so called legal issue are already on the record of the Tax Authorities - The expression "Record" means the record of the year under consideration and not the history of the assessee spanning over several years - Since the issue was not urged before the Tax Authorities and the facts concerning the same are not established or available before the AO/CIT(A), the assessee cannot be permitted to raise additional ground for the first time before the Tribunal - the facts were not on record of the Tax Authorities for the assessment year - the assessee is making counter claims would suggest that the facts are not finally settled and on such an issue additional ground cannot be admitted - Decided partly in favour of Assessee.

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• 2014 (2) TMI 1114
  

  Disallowance of the additional depreciation u/s 32(1)(iia) of the Act - Held that:- The decision in Deputy Commissioner of Income-tax, Circle 3(1), New Delhi Versus Cosmo Films Ltd.[2012 (9) TMI 281 - ITAT DELHI] followed - The additional benefit in the form of additional allowance u/s 32(1)(iia) is one time benefit to encourage the industrialization - This additional benefit is to give impetus to industrialization and the basic intention and purpose of these provisions can be reasonably and liberally held that the assessee deserves to get the benefit in full when there is no restriction in the statute to deny the benefit of balance of 50% when the new plant and machinery were acquired and use for less than 180 days - One time benefit extended to assessee has been earned in the year of acquisition of new plant and machinery - In section 32(1)(iia), the expression used is "shall be allowed" - Thus, the assessee had earned the benefit as soon as he had purchased the new plant and machinery in full but it is restricted to 50% in that particular year on account of period of usages - Such restrictions cannot divest the statutory right - Law does not prohibit that balance 50% will not be allowed in succeeding year - The extra depreciation allowable u/s 32(1)(iia) in an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50% on account of usage - The so earned incentive must be made available in the subsequent year - The overall deduction of depreciation u/s 32 shall definitely not exceed the total cost of plant and machinery - thus, the order is set aside and the authority directed to extend the benefit - Decided in favour of Assessee.

  Disallowance made u/s 14A of the Act - Held that:- The assessee had not claimed any exempt income - provisions of section 14A were applicable in that year and AO was entitle to make disallowance - But, he should not have invoked the provisions of Rule 8D - thus, the matter remitted back to the AO for fresh adjudication - Decided partly in favour of Assessee.

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• 2014 (2) TMI 1113
  

  Claim of depreciation - Road constructed by the assessee – Held that:- The decision in Commissioner of Income Tax Versus M/s Noida Toll Bridge Co Ltd [ 2012 (10) TMI 841 - ALLAHABAD HIGH COURT] followed - The assessee is entitled to the depreciation claimed on Building - BOT Bridge - the depreciation represents the diminution in value of a capital asset when applied to the parties of making profit or gain - The land is held on lease and the road as capital asset has been built on it with exclusive ownership of the road, and the bridge in the assessee-company for the concession period, and which also includes the right to collect tolls and to regulate use of the bridge - Section 32 would apply for the purpose of providing depreciation to be worked out in accordance with the law – thus, the order of the CIT(A) upheld – Decided against Revenue.

  Disallowance of interest on mobilization advances – Held that:- CIT(A) was of the view that in mercantile system of accounting which is a system of accounting specified u/s. 145 of the I.T. Act, the liabilities and income that accrue have to be taken into account for arriving at the profits - The accrued incomes even if not received has to be taken into account - Liabilities that have fallen due has at the end of the accounting year have to be provided for - The CIT(A) pointed out that the provisions such as 43B or 40(2) and such like statutory disallowances are applicable - Disallowance made by the AO cannot be sustained and CIT(A) was correct in allowing the amount.

  Quantification of interest – Held that:- The method of quantification of interest payable on mobilization advances was not examined by the CIT(A) – thus, the matter for the limited purpose of quantification is remitted back to the AO – Decided partly in favor Assessee.

  Disallowance under section 14A of the Act – Held that:- The order of the CIT(A) is reasonable and according to the facts on record - the AO did not examine the issue under section 14A at all - May be he wanted to invoke the provisions of section 36(1)(iii) i.e., diversion of funds borrowed for the purpose of business for non-business activities - The CIT(A) confirmation of disallowance of interest on diversion of ₹ 13.32 crores was also on similar lines, even though stated to have been done under section 14A - disallowance of the interest pertaining to ₹ 13.32 crores stated to have been invested out of borrowed funds, as accepted in earlier years, should have been considered under section 36(1)(iii), which is the relevant section applicable to the above amount - even though the disallowance was wrongly considered under section 14A – the assessee has accepted diversion of borrowed funds to the extent of the above amount in earlier years – thus, the interest on that amount has to be disallowed, if not under section 14A but under section 36(1)(iii) – Decided against both assessee and revenue.

  Allowance of TDS credit – Held that:- There was no merit in the revenue ground - Obviously on the system of accounting being followed by the assessee, in earlier years TDS credit was given on the mobilization advances - The department cannot deny the credit when the assessee is following the system consistently from earlier years - What is required to be done is only reconciliation of the mobilization advances and TDS claims, so that there is no double claim in any of the years – Decided against Revenue.

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• 2014 (2) TMI 1112
  

  Inflated expenditure – Held that:- The AO and CIT(A) erred in resorting to mathematical jugglery so as to deny the expenditure claimed by the assessee - There is no basis for AO disallowance of the so called inflated expenditure and CIT(A) also did not apply his mind in restricting the amount on an adhoc basis to Rs.1 crore and Rs.1.10 crores without any basis – Relying upon CIT vs. Dalmia Cement (Bharat) Ltd. [2001 (9) TMI 48 - DELHI High Court ] - Without doing anything on record, this sort of disallowance of expenditure claimed by the assessee cannot be accepted or justified - thus, the disallowance of expenditure resorted by the Assessing Officer is cancelled - AO is directed to allow expenditure as claimed – Decided in favour of Assessee.

  Disallowance u/s 40(a)(ia) of the Act - Non genuine expenditure – Held that:- The payments made to M/s. Apollo Consulting Services Corporation USA does not come within the purview of provisions of section 195 – payments made to M/s. Apollo Consulting Services Corporation USA cannot be treated as fees for included services within the meaning of Article 12(4)(b) of DTAA and provisions of section 90(2) are applicable even if the payments constitute fees for technical services under section 9(1)(vii) - Since they are not chargeable under the IT Act, provisions of section 195 are not attracted and assessee has no liability to deduct tax at source - the CIT(A) did not consider fit enough to consider the issue of genuineness of the expenditure, when there are already findings on the issue which was examined in detail by the CIT(A) in another proceeding – thus, it cannot be held that the expenditure is not genuine – there is no merit in the appeal of the revenue – Decided in favour of assessee.

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• 2014 (2) TMI 1111
  

  Disallowance of 'in- house Research and Development activities' and capital expenditure of R&D – Held that:- As per the powers and duties of the employees Scientists B to G level are entrusted with work related to policy making formulation and implementation of plan segments in the field of scientific and industrial research and Scientist-G is specifically delegated for exercising powers of Head of the Department as the Secretary – thus, there is no reason not to accept the certificate given by 'Scientist-G' just because it is not signed as 'Secretary, DSIR' - the authorities are directed to accept the certificate and allow the claim as made by the assessee – Decided in favour of Assessee.

  100% depreciation on pollution control equipment – Held that:- The findings of the CIT(A) is upheld - Since the assessee has installed pollution control equipment, as per Appendix-III of the new depreciation schedule, assessee is entitled for depreciation at 100% on the assets capitalized before 30th September and 50% on the balance of the capitalized installed after 30th September – Decided against Revenue.

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• 2014 (2) TMI 1110
  

  Denial of deduction in respect of accrued leave salaries – Held that:- The decision in Commissioner of Income-tax Versus West Coast Paper Mills Ltd.[1991 (3) TMI 386 - BOMBAY HIGH COURT] followed - There was no reason for not allowing the claim on the basis of changed method so far as the change was concerned and on the earlier method if the liability in regard thereto had not already been allowed as deduction – thus, the assessee was entitled to the deduction in the year – the AO is directed to allow the claim of leave salary – Decided in favour of Assessee.

  Recovery of Guest House Expenses under Rule 6D of the Rules – Held that:- As decided in assessee’s own case for the previous assessment years, the user of guest house facilities provided by the company to the employees of the company in connection with discharge of their official duties does not alter the basic character of the expenditure - Ultimately such expenses are connected with the travelling by such employees and, therefore, should be treated accordingly, irrespective of the fact that such employees stayed in the guest house of the company - the AO is directed to allow the deduction of amount received from parent departments as expenditure in the nature of travelling expenses and in accordance with Rule 6D of the IT Rules – Decided in favour of Assessee.

  Disallowance made under Rule 6B of the Rules – Expenditure on Calendars and Diaries – Held that:- The decision in Commissioner Of Income-Tax Versus Allana Sons Private Limited [1993 (4) TMI 13 - BOMBAY High Court] followed - presentation articles bearing the logo of the assessee would fall within the ambit of Rule 6B as expenditure in the nature of advertisement – Decided against Assessee.

  Disallowance of Annual General Meeting Expenses – Held that:- As decided in assessee’s own case for the previous assessment years - the definition of entertainment expenditure was inserted by the Finance Act, 1983 with retrospective effect from 1. 4. 1976 - the expenditure incurred on serving tea, coffee and soft drinks is covered by the Explanation 2 to section 37(2A)/(37(2) - In the Explanation 2 it is stipulated that the expenditure on provision of hospitality of every kind by the assessee to any person whether by way of provision of food or beverages or in any other manner, whatsoever, would be entertainment expenditure – Decided against Assessee.

  Disallowance of expenditure u/s 37(2A) of the Act – Expenses on tea and coffee served to visitors –Held that:- As decided in assessee’s own case for the previous assessment years, the Tribunal made a disallowance of 25% of entertainment expenses on this ground would be reasonable –thus, the AO is directed to restrict the disallowance to 25% of the expenses - Decided partly in favour of Assessee.

  Disallowance u/s 37(2A)of the Act - Business meetings and conferences of the employees – Expenditure on food at employees get together – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that as per Explanation 1 to section 37(2A), the entertainment expenditure includes the amount of any disallowance in the nature of entertainment allowance paid to the employee - the entertainment expenditure also includes the expenditure incurred by the employee for the purpose of business or profession – Decided against Assessee.

  Disallowance u/s 40A (5) of the Act - Deemed perquisites – Held that:- The disallowance was estimated by it on account of non-availability of information readily at the time of furnishing of the returns, that the auditors had also not quantify the disallowance u/s. 40A(5) – the quantification of the expenses incurred towards maintenance of property, sweeper, wages, repairs, depreciation, soft furnishings etc. were correct - The decision in Lubrizol India Limited Versus Commissioner Of Income-Tax [1990 (7) TMI 45 - BOMBAY High Court] followed – the estimate of disallowance u/s. 40A(5) as made by the CIT(A) is proper and has to be upheld – Decided against Assessee.

  Expenditure on Partly Convertible Debenture – Held that:- The decision Brooke Bond India Limited Versus Commissioner of Income-Tax [1997 (2) TMI 11 - SUPREME Court] followed - the expenditure incurred by a company in connection with the issue of shares with a view to increase its share capital was directly related to the expansion of the capital base of the company and was a capital expenditure even though it might incidentally help in the business of the company and in the profit making, that the action of the AO was as per the provisions of law – Decided against Assessee.

  Disallowance of Tata Steel Rural Development Society (TSRDS) expenditure – Disallowance of Annual Contribution to Steel Plants' Sports Board and Tata Sports Club - Contributions to various Institutions - Contribution to the society for sports and stadium – Contribution made to Beldih and United clubs Held that:- The decision in TELCO ITA/6003 to 6008/Mum/98 followed – the payments were made keeping in mind business expediency viz. , to have a motivated work force – thus, the expenditure in question has to be allowed as a deduction u/s. 37(1) – MOU makes the facts and circumstances of the case peculiar – thus, the deduction is to be allowed – Decided in favour of Assessee.

  Disallowance u/s 35D of the Act - Fees paid to consultants for feasibility studies – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the expenditure incurred on report for increasing production capacity and future development – thus, the expenditure was not a capital expenditure and allowed deduction of same as a revenue expenditure –Decided in favour of Assessee.

  Disallowance of allowances - Investment Allowance and Extra Shift Allowance on Town Division assets, investment allowance on various items Plant and Machinery and Investment Allowance on items of P&M of Tubes Division – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the main works and the township formed an integral part of the whole industrial complex, one of which cannot exist without the other - the plant and machinery installed even for providing the necessary facilities to the employees which does not apparently have any connection with the manufacturing activity is directly needed for the running of the priority industry - investment allowance is admissible to the assessee on the plant and machinery in the Town Division, particularly when on the items like light and fan installations the assessee had itself not claimed any investment allowance - additional depreciation, extra shift allowance and investment allowance are admissible to the assessee on the plant and machinery in the Town Division – Decided in favour of Assessee.

  Deduction u/s 35(1)(iii) of the Act - Contribution to Xavier Labour Relations Institute – Held that:- contribution to XLRI is allowable on the same principles that we have followed in allowing the earlier grounds, but same is subject to production of evidence of payment of contribution by the assessee – thus, the matter remitted back to the AO for verification – Decided partly in favour of Assessee.

  Bad and doubtful debts written off – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the write off of the debt as bad has to be construed as a bonafide write off - It was based on commercial providence – the deduction claimed is allowed – Decided in favour of Assessee.

  Restriction of claim made u/s. 80HHC of the Act – Held that:- The decision in Karimjee (P.) Ltd. Versus Deputy Commissioner of Income-Tax And Another [2002 (9) TMI 5 - SUPREME Court] followed - the assessee should be allowed to have an opportunity to create the reserve for the additional amount – thus, the matter remitted back to the AO for adjudication – Decided partly in favour of Assessee.

  Allowability of deduction on account of provision for leave salaries – Allowability of 20% of initial contribution as deduction - Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the department had not challenged the order of the Tribunal before the Hon'ble High Court while filing appeal for that AY – the whole of initial contribution to the ASF was deductible u/s. 36(1 )(iv) in computing the business income of the assessee in the year of contribution itself, that there was no provision in the Act which stipulated disallowance of a part of the contribution to ASF and spreading over the balance amount over a period of five years - Decided against Revenue.

  Deduction on account of guarantee amount paid to Ahmedabad Advance Mills Ltd. (AAML) – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the assessee in terms of the agreement entered into a commercial transaction and thereby incurred expenses in first three years, that commercial expediency compelled the assessee to make the payment, that the sums paid by the assessee to AAML were admissible as deduction - the transactions with the AAML were in the revenue field – Decided against Revenue.

  Payment for holiday plan at hotels as guest house expenses u/s 37(4) of the Act – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the assessee had employed more than 100 whole time employees during the previous year and the hotels were used exclusively for the benefit of the employees while on leave - the assessee's case was covered by the second proviso to section 37(4) and the expenditure incurred could not be called as expenditure incurred on the maintenance of a guest house – Decided against Revenue.

  Allowability of remuneration to chairman and MD – Held that:- FAA held that the assessee had denied having provided any furniture or air conditioners at the residence of the CMD, that the power was supplied to the CMD from its own resources, that the car was provided to him for official purposes only, that the assessee had provided accommodation to the CMD but rent was collected from him - the assessee had admitted that accommodation let out to him was maintained by it - the estimation made by the AO towards perquisites was deleted - the FAA has given a categorical finding of fact that certain facilities were not provided to the CMD and rent was collected from him – Decided against Revenue.

  Contribution to Tata Services for maintenance of Horniman Circle gardens as an advertising campaign – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the contribution was towards beautification of the garden – the assessee along with the other companies was allowed to put up their logos in and around the garden - the expenditure was incurred on advertisement campaign – Decided against Revenue.

  Investment allowance and Extra shift allowance on town division, Investment allowance on P& M installed at stock yard and Investment allowance on various items of P&M – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that The investment allowance is admissible to the assessee on the plant and machinery in the Town Division, particularly when on the items like light and fan installations the assessee had itself not claimed any investment allowance - additional depredation, extra shift allowance and investment allowance are admissible to the assessee on the plant and machinery in the Town Division – Decided against Revenue.

  Investment Allowance on P&M of stock yard – Held that:- As decided in assessee’s own case for the previous assessment years, it has been decided that the claim of the assessee on account of investment allowance on railway sidings at stock yard allowed - in absence of any contrary material brought to notice against the decision of the Tribunal- there was no infirmity in the order of the CIT(A)allowing the investment allowance on the plant and machinery installed by the assessee in the stock yard – Decided against Revenue.

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• 2014 (2) TMI 1109
  

  Denial of deduction u/s 80IA of the Act - Reversal of provision made and written back – Held that:- Section 80IA is a code by itself and not dependent upon other provisions of the Act - sub-section 5 of S.80IA has an overriding effect and excludes application of any other provision of the Act - the eligible business is generation of electricity - only profits derived from any activity directly linked with generation of electricity would be eligible for deduction u/s 80IA - the amount written back on account of reversal of provision made in financial year 2006-07 cannot be held to be a profit derived from eligible business for computing deduction under S.80IA – there is no reason to interfere in the findings of the CIT(A) in the respect – Decided against Assessee.

  Deduction allowed u/s 80IA of the Act on sale of waste oil – Held that:- There was no infirmity in the order of the CIT(A) - waste oil is bye-product or waste product in the process of generation of power and has direct link with the eligible business of the assessee – Thus, the CIT(A) was justified in holding that income from sale of waste oil will be eligible for deduction under S.80-IA of the Act – Decided against Revenue.

  Netting of excess premium paid against refund of premium – Exclusion from income the differential amount for computing deduction u/s 80- IA of the Act – Held that:- The CIT(A) has allowed the netting off following the order passed by his predecessor in assessee's own case for the assessment year 2002-03 and 2006-07 - The Tribunal in M/s GVK INDUSTRIES LTD Versus ASSTT COMMISSIONER OF INCOME TAX [2012 (6) TMI 573 - ITAT HYDERABAD] has upheld the order of the CIT(A) – the benefit of netting of the excess premium received against the insurance premium amount paid during the year, for taking into account only the differential amount for exclusion from the income eligible for relief under S.80IA of the Act – Decided against Revenue.

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• 2014 (2) TMI 1108
  

  Set off of loss u/s 70(1) of the Act - Whether the assessee being partner in a partnership firm is entitled to set off the loss of firm qua his share (unabsorbed depreciation) against his other business income (in individual capacity) as per the provisions of section 70(1) of the Act – Held that:- AO held that the partnership firm is a separate entity and the assessee who is a partner cannot claim depreciation on the asset of the firm in view of the provision of section 32 of the Act, while computing his individual income - the AO disallowed the claim of unabsorbed depreciation while computing the income of the assessee - The Apellant is not justified in setting off proportionate share of unasborbed depreciation of his partnership firm from his income.

  If the partners have got other than the share income from that firm, such allocated depreciation shall be set off against their respective income of that year from any other source - But with amendment in provisions of the Act as regards to taxation of firms w.e.f. 01.04.1993 i.e. for and from AY 1993-94 the concept of registered firm was abandoned and it is the same position as a member of AOP or BOI that of the partner of the firm - The profits of partnership firm are itself taxed and whatever remains will be distributed among partners to the extent of proportion of their shares as tax free share – The decision in ITO Vs. Ch. Atchaiah [1995 (12) TMI 1 - SUPREME Court] relied upon - The firms as assessed u/s. 184 and 185 of the Act w.e.f. 01.04.1993 because the profit of the firm is taxed in the hands of the firm and share of the partner is never taxable in their individual assessment – thus, the assessee is not eligible to claim unabsorbed depreciation of the firm against incomes of the assessee who is partner of the firm and assessed in individual capacity – Decided against Assessee.

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• 2014 (2) TMI 1107
  

  Deletion of Penalty u/s 271(1)(c) of the Act – Disallowance of claim of TDR purchase expenses - Held that:- Assessee contended that it has consumed the base land FSI in the projects already completed by it and the balance portion of the project shall be completed on the basis of TDR purchased by it - When the assessee is computing income on the completed projects, it is not known as to how it could claim land cost pertaining to unfinished projects against those completed projects - When it was pointed out to the assessee that its claim is not correct, the assessee has accepted for the addition of a part of land cost proportionate to uncompleted project.

  The assessee has made an inaccurate or erroneous claim of land cost in its return of income, which has resulted in furnishing of inaccurate particulars of income - Further, the assessee has offered an explanation with regard to this claim, but has failed to substantiate it by bringing any material on record - the assessee has failed to prove that the explanation was bona find one - It is also not the case of the assessee that the claim was in accordance with the accounting practice regularly followed by it or in the trade circles – thus, the assessee has failed to discharge the burden placed upon him under Explanation 1 to sec. 271 of the Act - the assessee shall be deemed to have concealed particulars of income in respect of this addition – the order of CIT(A) set aside in respect of the addition also and the penalty levied by the AO is restored – Decided in favour of Revenue.

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• 2014 (2) TMI 1106
  

  Valuation of the property - Property sold by the assessee – Held that:- There is lot of variation on the guideline value furnished by the Sub-Registrar and adopted by the Assessing Officer to that of the value adopted by the assessee of registered valuer's valuation –the guideline value of the Registration Department regarding valuation of the property has evidentiary value and they are only intended to give information or instruction to the registering authorities but the guideline value alone is not a deciding factor - the Department has not made any independent investigation and collected any information with respect to any sale transaction in neighbouring land for determining the fair market value of the land and simply adopted the guideline value as provided by the Sub-Registrar and accepted by the Assessing Officer for determining the fair market value, which in our opinion, is found to be incorrect – thus, the order of the CIT(A) set aside and the matter remitted back to the AO for examination – Decided in favour of Assessee.

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• 2014 (2) TMI 1105
  

  Condonation of delay - Resignation of officer in-charge of matter - Held that:- The only ground adduced in the COD application is that Shri Hiresh Dhakan, who was dealing with the mater left the company and therefore, nobody else was aware of the pendency of the appeal and only when Mr. Pinglay joined in May 2013 the matter was brought to the notice. There is no explanation why after Mr. Hiresh Dhakan left anybody else could take necessary action in filing the appeal. Even after Mr. Pinglay joined in May 2003, there is a delay of six months and the appeal has been relied only in 18/10/2013. From the records, it is seen that Mr. Pinglay was with the appellant firm all through and therefore, the excuse offered is only an afterthought and cannot be accepted. Thus, there is no satisfactory explanation for the delay - Condonation denied.

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