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Case Laws
Showing 361 to 380 of 863 Records
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2008 (2) TMI 589
TDS on interest – compulsory acquisition – delayed payment of compensation - deduction of income-tax on interest payable under section 28 or 34 of the Land Acquisition Act – Held that: - it is clear that the apex court has held in unequivocal terms that the interest received on belated payment of compensation is a revenue receipt exigible to income-tax and it is income and the claimants are liable to pay the tax as provided under the relevant provisions of the Income-tax Act. – TDS is liable to be deducted at source – order of trial court reversed.
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2008 (2) TMI 588
Cash Credit – The assessee filed his return for the assessment year which was processed under section 143(1) of the Act, and a refund was granted to him. Assessing Officer had made an addition of Rs. 68,000/-. On revision the commissioner came to the conclusion that the Assessing Officer had wrongly accepted the explanation with regard to an amount of Rs. 3,08,000 and therefore, directed the assessing officer to make an addition of Rs. 3,08,000 being unexplained investment over and above the addition of Rs. 68,000 already made as income from undisclosed sources. This was upheld by the Tribunal. Held that- both the Commissioner and the Tribunal had categorically found that in the facts and circumstances of the case, the Assessing Officer had wrongly accepted that the amount was received by the assessee from S and D, because the fact was totally contrary to the stand taken by the assessee and the evidence and material produced by the assessee himself. The addition was justified.
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2008 (2) TMI 586
Intercorporate Dividend- The Assessing Officer made recomputation making partial disallowance of the claim on the ground that the assessee would have incurred some expenditure for earning the dividend income. The Tribunal found that there is no basis for estimating expenditure and reducing the same from the dividend income in respect of which section 80M relief is claimed by the assessee. Held that- the amount of dividend and disallowance involved being negligible there was no ground to interfere with the order of Tribunal. Dismiss the appeal.
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2008 (2) TMI 584
Order- the Director General of Service Tax has no inherent jurisdiction to entertain an appeal against the order of the Lower Authorities and pass appropriate orders. Held that- order recalled and writ petition directed to be listed for hearing on merits.
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2008 (2) TMI 582
Barred by Limitation- The appeal preferred by the petitioner herein was dismissed by the Commissioner of Customs and Central Excise (Appeals) Goa on the ground that the appeal was barred by limitation. Held that- Considering the first proviso to Section 120(A), the Commissioner (Appeals), is directed to hear the matter and dispose of the same according to law.
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2008 (2) TMI 579
Business loss- The assessee with an intention to promote M/s. MIC Auto Ancillaries Limited had purchased shares of the said company for a sum of Rs. 45,52,870. After holding such shares for a period of eight years, it thought it fit to sell the same. Ultimately the said shares held by the assessee of M/s. MIC Auto Ancillaries Limited were sold for a price of Rs.15,96,000 thereby it was put to a net loss of Rs. 29,56,870. the Assessing Officer has disallowed share loss on the ground of that it is capital loss. The Commissioner (Appeals) and Tribunal held that holding of shares by the assessee in pursuance of its object should be treated as for the purpose of business and accordingly held any loss on sale of such share should be treated as business loss and not capital loss. Held that- the sale is made on a huge loss thus it is business loss.
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2008 (2) TMI 576
Assessment- The notice under section 143 of the Act was issued and served on the assessee as the assessee had failed to file the return. Section 139(4) of the Act required the assessee to furnish the return within 31 days from the date of issuance of such notice. The assessment of the assessee was completed under section 143, treating the status of the assessee as association of person under section 184(5) of the Act on the ground that there was default committed by the assessee as mentioned u/s 144 of the Act, and the assessee’s claim of remuneration and interest were disallowed. The Commissioner (Appeals) allow the assessee’s appeal but on further appeal by Department, the Tribunal held that the assessing authority was right in treating the assessee as an association of person. Held that- the Assessing officer had not passed a best judgment assessment u/s 144 which he ought to have done if there was any failure as mentioned in section 144 clearly led to an inference that there was no failure as mentioned in section 144. The Tribunal was not right in treating the appellant as an association of person.
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2008 (2) TMI 574
Penalty- concealment- Held that- assessee disclosed this amount under the amnesty scheme, it is seen that such disclosure was after search and detection of deposit by the Department. The declaration for the purpose of avoiding penalty should be voluntary and before detection of the concealed income by the Department. Since in this case assessee conceded income after the Department detected the same, the assessee cannot avoid penalty. Thus the appeal has dismissed.
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2008 (2) TMI 571
Business Expenditure- The Assessing Officer made adjustments and issued an intimation under section 143(1) (a) of the Act in relation to various items disallowable under section 43B of the Act, one of them being Rs. 41,65,12,181, being the amount of electricity duty payable to the State Government by the assessee on sale of electric power. The assessee moved an application under section 154 of the Act on September 30, 1992, relying on a letter issued by the Under Secretary to the Government of India, Energy and Petrochemicals Department to contend that the electricity duty payable had been adjusted against other amounts receivable from the Government and, hence, the adjustment made under section 143(1)(a) of the Act and the levy of additional tax under section143(1A) of the Act was not warranted. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals) but did not succeed. Tribunal passed the order in favour of assessee. Held that- On the basis of the decision of Ahmedabad Electricity Company Ltd. v ITO where in it is held that electricity duty on sale of electricity has to be considered as an inadmissible item under section 43B of the Act, thus it is in favour of revenue and against the assessee.
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2008 (2) TMI 568
Reassessment notice - Tribunal has further held that the contention of the assessee that the approval of the Deputy Commissioner was not obtained by the Income-tax Officer before issuance of notice has not been controverted by the learned Departmental representative and on this and other reasons it is held that the notice is not in conformity with the section and is without jurisdiction. - In our opinion, this is a clear finding and under section 151(2) prior approval of the concerned authority before issuance of notice is required. Considering the finding recorded by the Income-tax Appellate Tribunal under section 151, it is not necessary to discuss the finding on the point of issue of notice under section 292B.
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2008 (2) TMI 567
“Whether Tribunal is justified in upholding the order passed by the learned Commissioner of Income-tax (Appeals) by holding that the impugned adjustment made by the Assessing Officer was outside the purview of section 143(1)(a) of the Income-tax Act? – Special deduction under section 80HHC claimed with false declaration that audit report furnished – order u/s 143(1)(a) rejecting claim - Obviously, therefore, it cannot be said that the impugned adjustment made by the Assessing Officer was outside the purview of section 143(1)(a). Admittedly, fresh assessment has been made under section 143(1) (B), consequent upon the revised return having been filed under seclion 139(5), and according to the proviso to section 143(1B), even in such an eventuality, the liability of additional tax does survive, the question as framed is required to be answered against the assessee and in favour of the Revenue.
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2008 (2) TMI 566
Assessment - Assessee contended that while making the assessment under section 143(1) (a), it was not open to the Assessing Officer to make additions with respect to the deductions claimed by the assessee under sections 80HH and 8O-I in the return, as the question as to whether the assessee was entitled to claim the deduction or not was a debatable/controversial issue and, therefore, if at all the Assessing Officer wanted to make additions, recourse was required to be had to the procedure provided under section 143(3) and 143(2) – The authorities below have negatived this contention mainly on the ground that the controversy had already been settled by this court (Rajasthan High Court) in the case of CIT v. Loonkar Tools Pvt. Ltd. - Assessee does not have right ot claim that uniformed about judgement – judgment operative form date it is pronounced - it cannot be said that as on the date of filing of the return, the issue was at all a debatable issue, so as to disentitle the Assessing Officer to make any addition on that count, while making assessment under section 143(1) (a).
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2008 (2) TMI 557
“1. Whether Tribunal was justified in law in holding that the capital gains is part of the book profits under section 115J of the Income-tax Act, 1961? - 2. Whether there were materials for the Appellate Tribunal to hold that even though section 115J is a deeming provision the long-term capital gain which itself is deemed income and which is saved by the operation of section 54E is liable to be included in the book profit under section 115J of the Act?” - We, answer the questions raised against the assessee and uphold the order of the Tribunal. The appeal is accordingly dismissed.
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2008 (2) TMI 554
Interpretation and applicability of exemption Notification No. 64/95-C.E - When the specific allegation on facts is made by Revenue against the assessee in the show cause for denying to assessee the benefit then there has to be a categorical finding recorded by the Tribunal one way or the other on this issue. It is only then one can decide as to whether assessee rightly claimed exemption or not? In other words, in order to come to a conclusion as to whether assessee has on facts complied with the requirement of exemption notification or not the Tribunal has to record a categorical finding of fact namely whether goods in question were supplied to Indian Navy by the assessee and secondly, whether these goods were supplied as stores for consumption on board a vessel of Indian Navy. - , when the Commissioner of Appeals recorded a categorical finding of fact in favour of assessee then the appeal of Revenue could have been allowed only by reversing and recording reverse categorical finding of fact by the Tribunal. – there is no finding by tribunal on material issues - we allow the appeal and set aside the impugned order of Tribunal. - the case is remanded to Tribunal for deciding the appeal on merits
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2008 (2) TMI 553
Requirement of MRP on the wholesale package which contained 10 retail packages of 20 cigarettes each - packages covered by Rule 29 of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 would be outside the purview of retail sale as under that Rule retail prices are not required to be mentioned on the package. - The packages covered by Rule 29 would be outside the purview of the retail sales as under that Rule retail prices are not required to be mentioned on the package. However, again those packages which enjoy the exemption under Rule 34 shall also be outside the scope of Section 4-A of the Act as the Rules do not apply to the said packages. - it is clear that the prosecution in the instant case is misconceived as there was no requirement for the wholesale package in question to mention the maximum retail price. – petition is alowed
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2008 (2) TMI 546
Charitable institution – exemption claimed - whether the appellant was entitled to exemption on the ground of mutuality? In other words, the claim is that the appellant’s benefit of the floor charges collected from members goes back to the same members, and so much so, based on principles of mutuality appellant’s income is entitled to exemption. The Tribunal has found that the appellant was not giving any benefit to its members and floor charges were collected pertaining to trade of shares on behalf of outsiders by the members Therefore, the claim of mutuality was turned down by the Tribunal. - Petitioner’s institution does not qualify for exemption by virtue of the bar contained in section 11(4A) - Tribunal found that the appellant comes within the mischief of section 11(4A) of the Income-tax Act, we do not find any ground to interfere with Tribunal’s order. Moreover, since disallowance of exemption is based on findings of facts, there is no substantial question of law arising put of the Tribunal’s order.
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2008 (2) TMI 542
Issues involved: Appeal against order u/s 263 of the IT Act for the assessment year 2005-06.
Grounds raised by the assessee:
1. Lack of proper opportunity u/s 263, violation of natural justice.
2. AO already considered and decided on the issues during penalty proceedings u/s 271(1)(c).
Assessee's arguments:
- CIT did not provide proper opportunity for hearing.
- CIT did not verify if notice was served to the assessee.
- CIT did not follow the requirements of s. 263.
- AO already found no penalty leviable based on Expln. 5(2) to s. 271(1)(c) and relevant case law.
Departmental Representative's stance:
Supports CIT's order and seeks dismissal of the appeal.
Key points from the judgment:
- CIT's order u/s 263 challenged for lack of proper opportunity given to the assessee.
- CIT's failure to verify service of notice and follow s. 263 requirements highlighted.
- Assessee offered additional income during search, which was later included in the return in response to notice u/s 148.
- AO found no penalty leviable based on Expln. 5(2) to s. 271(1)(c) and relevant case law.
- CIT's haste in passing the order without proper opportunity to the assessee noted.
- Tribunal sets aside CIT's order, allowing the appeal of the assessee.
This summary provides a detailed overview of the issues involved, the arguments presented by both parties, and the key points from the judgment, focusing on the lack of proper opportunity given to the assessee and the failure to follow the legal requirements under s. 263.
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2008 (2) TMI 541
Violation of the CBDT Instruction - assuming the jurisdiction u/s 143(2) - Disallowance out of Keyman Insurance Policy and out of the selling and administrative expenses - Addition of setting off brought forward losses on the basis of return earlier filed.
Violation of the CBDT Instruction - assuming the jurisdiction u/s 143(2) - As per the interpretation of the Addl. CIT, if action plan for financial year 2005-06 published is considered for returns for the asst. yr. 2004-05, then no time was available for selection for scrutiny cases of the asst. yr. 2004-05 except belated returns under s. 139(4). Even as per that instruction for the financial year 2005-06, the case is not fit for scrutiny. The judicial decisions relied upon by the learned counsel for the assessee clearly support the case of the assessee.
In our considered view the CBDT instructions are binding on the Revenue authorities and, therefore, in this case, the selection for scrutiny of the case has not been as per the Board instructions referred to above. In view of the above we hold that the learned AO erred in assuming the jurisdiction under s. 143(2) of the Act in contravention of the CBDT instructions and in completing the assessment under s. 144 which is bad in law and the learned CIT(A) erred in confirming the order of the AO. The orders of the Revenue authorities are set aside.
Disallowance out of Keyman Insurance Policy and out of the selling and administrative expenses - While the Act is amended in many places to the effect that the amount received will be taxable, it is nowhere provided that the premium paid on the Keyman Insurance Policy is allowable as business expenditure except by a circular of CBDT.
The Circular No. 762 is binding on the Revenue authorities. The assessee's counsel has filed the xerox copies of the premium paid in respect of these policies. thus, we are of the considered opinion that the premium paid by the assessee on the Keyman Insurance Policy is allowable as business expenditure. We direct the AO to allow the claim of the assessee subject to verification of the premium paid by the assessee company.
It is also seen that the net profit disclosed by the assessee for the year under consideration is better as compared to the earlier years. Since all the expenses are verifiable and vouched and no other disallowances are made by the AO, we do not find any justification for the AO to disallow out of selling and administrative expenses. No convincing reasons are given by the Revenue authorities to make the disallowance and confirm the same. The disallowance made by the AO is on ad hoc basis under the assessment framed under s. 144. Thus, since no disallowance is called for the AO is directed to delete the same.
Addition of setting off brought forward losses on the basis of return earlier filed - No evidences produced - It is clear that the AO is directed to allow the claim of the assessee subject to verification. The learned CIT(A) has given only directions to verity the correctness of the claim of the assessee and not allowed the claim of the assessee. The ld DR also submitted that the appeal is infructuous, In our view, the appeal of the Revenue is to be dismissed as infructuous and the same is dismissed as such.
In the result, the appeal of the assessee is allowed whereas the appeal of the Revenue is dismissed.
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2008 (2) TMI 536
Issues Involved:
1. Exemption under Section 11 of the IT Act, 1961.
2. Violation of principles of natural justice.
3. Applicability of judgments in similar cases.
4. Jurisdiction of CIT(A) in deleting additions.
Detailed Analysis:
1. Exemption under Section 11 of the IT Act, 1961:
The primary issue raised by the Department was that the CIT(A) erred in allowing the assessee exemption under Section 11 of the IT Act, 1961. The AO observed that the clauses in the Articles of Association regarding the declaration of dividend and distribution of profit violated the requirements of Section 11, which mandates that property be held for charitable or religious purposes benefiting the public. The AO held that the assessee was not entitled to exemption under Section 11 due to these provisions. The CIT(A), however, allowed the exemption, noting that the assessee had retrospectively deleted the clauses regarding the declaration of dividends. The Tribunal found that the CIT(A) misinterpreted the retrospective application of the amendments and that the original Articles of Association did not prohibit the distribution of dividends, thus violating Section 11.
2. Violation of Principles of Natural Justice:
The Department raised an additional ground that the CIT(A) passed the appellate order without giving an opportunity of being heard to the AO, violating the principles of natural justice. However, this ground was not pressed by the Departmental Representative and was thus rejected.
3. Applicability of Judgments in Similar Cases:
The Department contended that the CIT(A) failed to appreciate the applicability of the judgments in the cases of Delhi Stock Exchange Association Ltd. v. CIT and CIT v. Kamla Town Trust. The AO relied on these judgments to deny the exemption under Section 11, arguing that the presence of clauses for dividend distribution indicated an element of private gain. The CIT(A) distinguished these cases, stating that the amendments to the Articles of Association were made retrospectively. The Tribunal, however, found that the CIT(A) misinterpreted the retrospective application and that the cited judgments were indeed applicable, as the amendments could not be applied retrospectively to claim exemption under Section 11.
4. Jurisdiction of CIT(A) in Deleting Additions:
The Department argued that the CIT(A) exceeded his jurisdiction by deleting additions that were confirmed by a predecessor CIT(A) and not appealed by the Department. The CIT(A) held that the AO did not correctly follow the directions of the Tribunal, which had stated that the AO should confine himself to the issue of exemption under Section 11 and not make additions on issues that had attained finality. The Tribunal found that the CIT(A) erred in going beyond the Tribunal's directions and that the additions deleted on merits had become final as the Department did not appeal against them.
Conclusion:
The Tribunal allowed all eight appeals filed by the Department, finding that the CIT(A) erred in granting the exemption under Section 11, misinterpreted the retrospective application of amendments, and exceeded jurisdiction by deleting confirmed additions. The Tribunal upheld the AO's findings and restored the assessments.
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2008 (2) TMI 535
Issues involved:
Cross-appeals filed against CIT(A) order for asst. yr. 1999-2000.
Issue 1: Admission of additional evidence under r. 46A
- Assessee appealed for admission of fresh evidence regarding compensation amount.
- CIT(A) declined admission citing lack of specification of relevant sub-clause of r. 46A.
- Assessee, an agriculturist, pleaded for admission due to lack of awareness of IT Act provisions.
- Tribunal held that CIT(A) should have admitted fresh evidence for substantial justice.
- Order set aside, issue restored to CIT(A) for redeciding with fresh evidence.
Issue 2: Computation of long-term capital gains based on fair market value
- AO computed gains at Rs. 114 per Maria, CIT(A) directed computation at Rs. 2,000 per Maria.
- Tribunal noted similar case precedent where cost was accepted at Rs. 2,000 per Maria.
- Upheld CIT(A) order, rejected appeals of both assessee and Revenue on this issue.
In summary, the Tribunal allowed the first issue related to admission of additional evidence under r. 46A, setting aside CIT(A) order and directing redeciding with fresh evidence. The second issue regarding computation of long-term capital gains based on fair market value was upheld in line with precedent, dismissing appeals from both parties.
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