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Showing 341 to 360 of 1580 Records

2013 (10) TMI 1240 - ITAT HYDERABAD

Exemption u/s 10B – The assessee failed to furnish the approval of the Board appointed by the Central Government in exercise of power conferred by section 14 of the Industries - The assessee also failed to submit the ratification by the Development Commissioner as envisaged in the Instruction dated March 9, 2009 - Held that:- The assessee produced the registration from Software Technology Park of India which was notified by the Ministry of Commerce, Government of India vide Notification No. 33/(RE)/92-97 dated March 22, 1994. The notification states that the Software Technology Park (STP) Scheme is a 100 per cent. export-oriented undertaking scheme – The registration certificate was produced only before CIT(A) but not before AO – The issue set aside for fresh adjudication after consideration of necessary material.
2013 (10) TMI 1239 - CESTAT BANGALORE

Translation service - Business support service - Demand of service tax - Stay application - Held that:- during the course of investigation, the appellant s representative had stated that they had consulted legal experts and received an opinion that the service provided by them is not covered by the ‘business support service’. Further, in the definition of ‘business support service’ also, the translation as such does not figure as an individual category but has been held to be covered by other transaction processes. The appellant seem to have interpreted this term to mean the one similar to the earlier transactions mentioned in the service and basically they seem to think that translation is not a transaction. In our opinion, this kind of opinions and consideration of definition and consultation with legal experts can give a feeling that they are not liable to pay tax even though a tax payer who is responsible for paying, assessing service qualifying same and paying the tax, cannot be considered and cannot be allowed to take such a view without proper consultation and without proper appreciation of the facts - Prima facie case not in favour of assessee - Stay granted patially.
2013 (10) TMI 1238 - ALLAHABAD HIGH COURT

Classification as Revenue or Capital Expenditure – Expenses for transmission - Establishment and maintenance expenditure – Disallowance of Rs.14,92,70,091/- by the assessing officer as capital expenditure – Held that:- In the facts and circumstances of the case and also as matter of general practice adopted by all electricity boards to bifurcate its establishment and general expenses in between capital and revenue expenses depending on the extent of capital work going on in each particular unit/division. It is only in respect of construction and the maintenance units where major part of work is maintenance of distribution, the assessee uniformly adopted 12/1/2% of such expenditure as capital expenses - In other electricity boards much lesser percentage of expenses is being capitalised in similar circumstances and at the same time the assessee having adopted the uniform method of capitalizing 12/1/2% of the expenditure ever since study undertaken by the Board in the year 1968, the accounts prepared by the assessee should have been accepted – Decided against the Revenue.
2013 (10) TMI 1237 - ALLAHABAD HIGH COURT

Deduction u/s 80HH of the Income Tax Act - Non-furnishing of Form-C along with return of income – Held that:- Reliance has been placed upon the judgment of Hon’ble Andhra Pradesh High Court in the case of Commissioner of Income Tax Vs. Hemsons Industries [2001 (7) TMI 109 - ANDHRA PRADESH High Court], wherein it has been held that the mere fact that the assessee failed to enclose the audit report along with the return itself would not disentitle it the benefit under Section 80 HH of the Act, if it files the audit report before the assessment order is passed.
If the accounts have not been audited, Form-C, even it is submitted subsequently may not be accepted for benefit. The non-furnishing of Form-C along with return of income where the accounts have been actually audited by filing the return is a technical defect for which the assessee cannot be denied the benefit of deduction under Section 80HH of the Act, if the defect is removed subsequently - In the present case, we find from the assessment order that the audited balance sheet was filed and was relied on by the AO for making assessment. The assessee in response to the notice under Section 154 of the Act, filed Form 10C, in which no defect was found by the AO – Decided against the Revenue.
2013 (10) TMI 1236 - BOMBAY HIGH COURT

Genuineness of long term capital loss - tax planning - Whether transaction of transferring the shares of the group companies at low price causing long term capital loss and sale of shares of Mackhinon & Mackenzie Co. Ltd., at high price, making short term capital gains, thereby setting off the short term capital gains against the long term capital loss, is a colourable device to evade tax – Held that:- Price at which the Respondents had purchased the shares and thereafter has sold the shares, is not in dispute - The transaction in respect of the sale of shares of Hede Navigation Ltd, resulting in long term capital loss had preceded the transaction involving the short term capital gains selling the shares of Mackinon & Mackenzie Ltd. The Commissioner also noted that the loss transactions therefore cannot be said to have been influenced by the gain transactions - Assessment Officer has not disputed about any of the transactions that have been duly completed under the law nor that the consideration received was not the market price. It is further noted that the shares of Mackinon & Mackenzie Ltd., were sold at the price quoted at the Stock Exchange whereas low price of M/s. Hede Navigation Ltd., shares at the rate of 10 paisa per share stands explained by the fact admitted by the Assessing Officer that the said Company was in red. The Commissioner also noted that even in case the second transaction had not taken place, the long term capital loss would have been accepted by the Assessing Officer and the Company would have been allowed to carry forward the said loss - Where transactions were genuine, such long term capital loss can be allowed to be set off.
In the Mcdowells case [2009 (5) TMI 27 - SUPREME COURT ], it has been held that approach of both the corporate and tax laws, particularly in the matter of corporate taxation, generally is founded on separate entity principle i.e. treat a company as a separate person. The Income Tax Act, 1961, in the matter of corporate taxation, is founded on the principle of the independence of companies and other entities subject to income tax. Companies and other entities are viewed as economic entities with legal independence vis-à-vis their shareholders/participants. It is fairly well accepted that a subsidiary and its parent are totally distinct taxpayers. Consequently, the entities subject to income tax are taxed on profits derived by them on stand-alone basis, irrespective of their actual degree of economic independence and regardless of whether profits are reserved or distributed to the shareholders/participants. Furthermore, shareholders/participants that are subject to (personal or corporate) income tax, are generally taxed on profits derived in consideration of their shareholding/ participations, such as capital gains. Nowadays, it is fairly well settled that for tax treaty purposes a subsidiary and its parent are also totally separate and distinct taxpayers.
In the present case, Tribunal has not committed any error in coming to the conclusion that the transaction arrived at by the Respondents was legitimate within the framework of law. As such, there is nothing on record to assume that the transaction was dubious and that the exercise was to avoid tax by a colourable device. The Tribunal found that the transactions were in accordance with law and have been duly implemented – Decided against the Revenue.
2013 (10) TMI 1235 - KERALA HIGH COURT

Genuineness of loan - additions made in the absence of confirmation letters from the parties - Held that:- the persons who appeared before the authorities have confirmed having given loans to the assessee in their sworn statements. Once such statements had been given and merely because they have not given any confirmation letter, the said credits cannot be excluded appears to be wrong. - decided against the revenue.
Disallowance of Commission paid - Increase the commission from 1% to 2.5% - AO had permitted commission in the absence of any other evidence to prove the same at 1% of the total turnover taking into account the commission paid by similar agencies. - Held that:- It is not in dispute that none of the vouchers produced by the assessee was signed by any of the persons who had received the commission. Therefore, normally such amounts are to be added to the income of the assessee. For deletion of such income, necessarily evidence has to be adduced. No evidence worth appreciating was available other than a general contention that commission had been paid - Assessing Officer permitted allowance of 1% as commission and there is no any reason for the appellate authority to have increased the said commission to 2.5% - Such an approach has been made purely based on surmises – Decided in favor of Revenue.
2013 (10) TMI 1234 - GUJARAT HIGH COURT

Dismissal of appeal solely on the ground that the departmental representative when asked could not point out any infirmities in the order of the learned CIT(A) – Non-speaking order passed by the Hon’ble Tribunal – Held that:- Ld. Tribunal has not given its own independent finding with respect to the order passed by the CIT(A) impugned before it. It appears that there is no independent application of mind by the learned tribunal with respect to the order passed by the CIT(A) impugned in the appeal before it. The impugned order passed by the tribunal is absolutely a nonspeaking order with respect to legality and validity of the order passed by the CIT(A) impugned in the appeal before it. Under the circumstances, the impugned order passed by the ITAT cannot be sustained and the same deserves to be quashed and set aside - Matter is restored to file of learned tribunal for fresh adjudication on merits – Decided in favor of Revenue.
2013 (10) TMI 1233 - KERALA HIGH COURT

Validity of revisionary order u/s 263 passed by the CIT – Held that:- Order of the Commissioner passed under Section 263 of the Act is a detailed order discussing each of the nine points raised by the revisional authority - Ultimately, following the decision of Apex Court in Malabar Industrial Co. Ltd. v. CIT [ 2000 (2) TMI 10 - SUPREME Court], Tribunal also confirmed the opinion of the Commissioner that there was no application of mind while considering the assessment under Section 143(3) of the Act, therefore, it is not only erroneous, but also prejudicial to the interest of revenue – Decided against the Assessee.
2013 (10) TMI 1232 - KERALA HIGH COURT

Interest on refund u/s 244A of the Income Tax Act – Interest to be computed from which date i.e. from the date when self assessment tax paid or from the date of deposit in pursuance of demand u/s 156 - Held that:- No differentiation can be made to the provision of section 244A(1) and explanation does not give a different meaning at all. Any amount due to the assessee under the Act mentioned in section 244(1) clearly takes in all forms of refund, either self assessed tax or tax paid as per notice under Section 156 of the Act – Decided against the Revenue.
2013 (10) TMI 1231 - KERALA HIGH COURT

Depreciation on amount paid to retiring partner as goodwill from the partnership firm - During the course of its business new partners were introduced and all partners, one after the other, retired from the partnership firm in the successive years - Held that:- When one partner retires from the business, there is no severance of status so far as the partnership is concerned, as the retiring partner would take his capital investment and retire from partnership and the others continue to carry on the business. By adopting this method, four partners, who decided to go out of the business, have not transferred the entire business concern to the new partners, but have chosen to continue for some time and at their leisure, they retired from partnership one after the other. Therefore, the assets and liabilities of the firm continued as such without any change including tangible and intangible. Share of the capital came to be paid to the retiring partner and it cannot be treated as cost paid to the retiring partner towards acquisition of any right from him.
Partner who retire from the partnership firm takes its initial investment and profit, if any, payable to him. Similarly, if he is accountable for any loss in a particular assessment year, that would also be worked out at the time of retiring from partnership business - In view of the matter, there is no transfer of any interest and the money paid is only towards the share of the capital invested by that partner along with some profit - Therefore, the question of each year some money paid towards the goodwill would not arise in the facts of the present case, therefore, the Income Tax Appellate Tribunal was justified in disallowing goodwill claimed by the appellant assessee – Decided against the Assessee.
2013 (10) TMI 1230 - MADRAS HIGH COURT

Best judgment assessment u/s 144 of the Income Tax Act - Assessee not maintaining any books of accounts nor filing profit and loss account and balance sheet – Held that:- Assessment does not suffers on account of the absence of any opportunity granted to it by the Assessing Officer before passing the order under Section 144 of the Act - Profit margin in the earlier years to refix the income at 5% of the gross turnover. Consequently, no any justification in the Tribunal straightaway restoring the assessment at 8% of the gross turnover without any discussion on the merits of the Commissioner of Income Tax (Appeals) order – Matter restored to the Commissioner(Appeals) – Decided in favor of Assessee.
2013 (10) TMI 1229 - HIMACHAL PRADESH HIGH COURT

TDS to be deducted u/s 194C - payment to contractor during the course of business of plying, hiring or leasing goods carriages in the event the contractor furnishes his Permanent Account Number - The Income Tax Officer (TDS) relying on Section 44AE, in particular second explanation there-under, has held that the petitioner, in law, will have to be treated as owner and was, therefore, liable to set apart the requisite amount as has been demanded in terms of order dated 28th March, 2013. – Held that:- Since the demand is in respect of subsequent period after 1st October, 2009, prima-facie, there can be no difficulty in accepting the stand of the petitioner that the petitioner was bound by the provisions of Section 194C(6) of the Act. Reliance, placed by the department on Section 44AE, seems to be inapposite as that provision is independent provision and moreso the non-obstante clause is with reference to Sections 28 to 43C and not 194C(6) of the Act as such - Section 194C(6) is an independent provision which was binding on the petitioner and prohibition from deducting the amount from the account of the contractor
2013 (10) TMI 1228 - MADRAS HIGH COURT

Whether demurrage and dead freight are to be allowed while calculating the relief under Sec.80 HHC for the assessment year 1996-97 – Held that:- Revenue does not dispute the fact that the assessee had exported molasses worth Rs.6,14,87,164/-. The Revenue also does not dispute the fact that there was an agreement between the assessee and the foreign buyer as regards the liability of either of the party on demurrage, as per which, the demurrage and dead freight was payable by the assessee on account of its delay in boarding of Molasses and consequently, the charges payable thereon were to be paid by the assessee. Accordingly, the foreign company deducted the amount towards demurrage and dead freight and remitted the balance amount to the assessee. This does not mean that the sale consideration was anything less than Rs.6,14,87,164/- for the purpose of claiming deduction under 80 HHC of the Act. There is nothing on material to show that the parties had agreed that the balance after adjusting demurrage and dead freight charges alone would be the safe consideration – Decided against the Revenue.
2013 (10) TMI 1227 - DELHI HIGH COURT

Reassessment under section 147 – Notice issued u/s 148 for the re-opening of assessment - payment of managerial remuneration in excess of the prescribed limit which was not approved by the central government - disclosure in the balance sheet – Held that:- Assessee/petitioner had disclosed full and true material particulars and had discharge its obligations under law. Material facts were stated and it is not a case where inference had to be deduced or some application of mind was required to understand and deduce any other fact. There was nothing hidden or imbedded in the document or the accounts.
It is not the case of the Assessing Officer that any material had come to its possession or knowledge post the assessment under Section 143(3) of the Income Tax Act. The factual material was already before the Assessing Officer and had been fully and truly disclosed by the petitioner. The Revenue thus had to satisfy the additional requirement as mentioned in condition No. (v) as laid down by the judgment in Usha International case [2012 (9) TMI 767 - DELHI HIGH COURT] i.e. there was failure or omission on the part of the Assessee to disclose full and true material facts – In the present case, there is no such failure of disclosure – Decided in favor of Assessee.
2013 (10) TMI 1226 - PUNJAB AND HARYANA HIGH COURT

Power to reduce or waive penalty under section 273A - power of CIT to reduce penalty where income was surrendered voluntarily – Held that:- Perusal of Section 273-A of the Act, reveals that the case of the petitioner falls under Section 273-A(1)(ii)(a)(b) of the Act and, therefore, required the Commissioner of Income Tax to consider if the petitioner disclosed income prior to issuance of notice under Section 139(2) of the Act voluntarily and made full disclosure of her income in good faith etc. Section 273-A of the Act commences with the words "notwithstanding anything contained in this Act" thereby postulating that the Commissioner shall while considering an application under Section 273-A of the Act, confine his consideration to factors referred to in Section 273-A of the Act and to no other factor. Thus, if the Commissioner while exercising power under Section 273-A of the Act places sole reliance upon grounds that led to imposition of penalty and interest, such an exercise of power, would in essence, be contrary to power conferred by Section 273-A of the Act. While exercising power under Section 273-A of the Act the Commissioner is required to confine his consideration to factors set out in the sub-sections of Section 273-A of the Act and to no other factor.
2013 (10) TMI 1225 - KARNATAKA HIGH COURT

Nature of expenditure – Capital or revenue expenditure – Expenditure is made on acquisition of software – Held that:- When the life of a computer or software is less than two years and as such, the right to use it for a limited period, the fee paid for acquisition of the said right is allowable as revenue expenditure and these softwares if they are licensed for a particular period, for utilizing the same for the subsequent years fresh licence fee is to be paid. Therefore, when the software is fitted to a computer system to work, it enhances the efficiency of the operation. It is an aid in manufacturing process rather than the tool itself. Though certain application is an enduring benefit, it does not result into acquisition of any capital asset. It merely enhances the productivity or efficiency and, therefore, it has to be treated as revenue expenditure – Decided against the Revenue.
Addition of provision made for doubtful debts while computing book profit u/s 115JA – Held that:- The Explanation to the section states for the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under subsection (2) as increased by the amount mentioned in the Explanation. One such amount is in sub-clause (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities – Reliance has been placed on the judgment in the case of COMMISSIONER OF INCOME TAX AND OTHERS VERSUS M/s WEIZMANN HOMES LTD. [2013 (5) TMI 123 - KARNATAKA HIGH COURT] - Said amount is to be added to the book profit – Decided in favor of Revenue.
Interest u/s 234B of the Income tax act – Held that:- Reliance has been placed upon the judgment of the Hon’ble Supreme Court in the case of Rolta India Ltd. reported in [2011 (1) TMI 5 - SUPREME COURT OF INDIA] – Also, as per Circular No. 13 of 2001, it has been clarified that section 115JB is a self-contained code and thus, all companies were liable for payment of advance tax under section 115JB and, consequently, the provisions of sections 234B and 234C imposing interest on default in payment of advance tax were also applicable – Decided in favor of Revenue.
2013 (10) TMI 1224 - PUNJAB AND HARYANA HIGH COURT

Revision u/s 263 - technical educational trust - AO allowed the exemption - CIT revised the assessment order and disallowed the exemption o the ground that information collected by the Assessing Officer was not considered by him after due application of mind - Held that:- Families of the trustees have been paid interest whereas in terms of the deed of trust, the members of the trust are not to be paid any benefit or profit from the trust. It was also found that the Assessing Officer has failed to examine the issue of deduction of tax at source while crediting interest to the family members of the trustees. Similarly, it was found that 50 per cent. of the development fund has been utilised whereas the balance was to be utilised after ten years. The Commissioner found that there is no data of creation of development fund and the year-wise break up of opening balance is also not available – Therefore, no exemption u/s 11 – Decided against the Assessee
The assessee has disputed the show-cause notice justifying the return filed. It was never the stand of the assessee that even if the said aspects are taken into consideration, still the income of the assessee would be nil. In the absence of any plea that the additions made will not cause loss to the Revenue, we find that the appellant cannot be permitted to raise such questions in appeal without there being any factual basis. - Decided against the assessee.
2013 (10) TMI 1223 - CALCUTTA HIGH COURT

Whether rebate under Section 88E in respect of securities transaction tax is admissible in a case where the income is assessed under the concept of minimum alternative tax under Section 115 JB of the Income Tax Act – Held that:- Reliance has been placed on the Commissioner of Income Tax vs. M/s. Horizon Capital Ltd.[ 2011 (10) TMI 489 - KARNATAKA HIGH COURT], wherein it was held that contention that this benefit is not available to the assessee whose total income is assessed under Section 115JB has no substance - When the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, the tax paid under Section 88E is given deduction, by way of rebate, under Section 87 of the Act. This is the legislative intent. That is a promise to give deduction of the tax already paid – Decided against the Revenue.
2013 (10) TMI 1222 - CALCUTTA HIGH COURT

Disallowance u/s 40(a)(ia) – TDS deduction u/s 194C - payment to sub-contractors being transporters – filing of Form No. 15J on the basis of Form I - Held that:- The assessee was served with a show-cause notice as to why the amount paid to the sub-contractors on account transportation charges should not be disallowed. The assessee in reply never took the point that it did not or could not in law deduct the tax because Form No. 15-I had been submitted by the transporters. Therefore, the case that the assessee had submitted Form No. 15J on the basis of Form No. 15-I received from the transporters was inconsistent with the reply given to the show-cause notice by the assessee himself. In the absence of any satisfactory explanation as to why was this case not made out in reply to the show-cause notice, the contention that such Form 15J had been submitted on the basis of Form 15-I lost credibility.
The Commissioner of Income-tax (Appeals) did not go into the relevant questions and straightaway proceeded to hold that Form No. 15-I were received by the appellant from the transporters and on the strength of those Forms he did not deduct the tax. This was not even the case of the assessee in reply to the show-cause notice. Under sub-rule 2, the Commissioner of Income-tax (Appeals) is required to record in writing the reasons for admission of the additional evidence. The Commissioner of Income-tax (Appeals) did not do so – Decided in favor of Revenue.
2013 (10) TMI 1221 - BOMBAY HIGH COURT

Whether penalty levied under section 271(1)(c) in respect of disallowance made on account of curtailment of deduction under section 80-IB of the Income-tax Act, is correct – Held that:- The Assessing officer curtailed the deduction claimed under section 80-IB of the Act and consequent thereto levied penalty on account of curtailment of deduction - It was an instance of disallowance of a claim and not a case of concealment of income or furnishing inaccurate particulars of income – Penalty not to be levied – Decided against the Revenue.
Whether penalty levied under section 271(1)(c) in respect of disallowance made on account of duty draw back and dividend income from foreign companies offered to tax only when the case was selected for scrutiny is justified – Held that:- Amount of duty draw back and dividend income from foreign companies was offered to tax by the assessee voluntarily and not after detection on the part of the Assessing Officer – Penalty not to be allowed – Decided against the Revenue.