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Showing 361 to 380 of 1328 Records
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2014 (4) TMI 969
Deletion of interest – borrowed funds utilized for non-business purpose – Held that:- The Tribunal have rightly examined in detail the pattern of investment, loans and advances as also considering the fixed assets and cash noted that there was no fresh borrowing and already borrowed funds had reduced from Rs1953 lakhs to Rs.1239 lakhs - The substantial reduction led the tribunal to note that it would not be possible to hold that the borrowed funds were not used for business purpose merely because the investment, loans and advances given to the partners and the debit balance of the partner’s capital account had gone up.
The Tribunal has rightly held that Rs.97.26 lakhs interest free advance were made whereas the assessee had interest free fund to the tune of Rs.95.80 lakhs available with it, only for the remaining sum of Rs.1.46 lakhs, it had confirmed the disallowance of the interest - there is no reason to interfere in the reasonings in absence of any perversity - in absence of any fresh borrowings in A.Y. 2003-2004, reduction of borrowed funds could not be assumed to be for non-business purpose with corresponding advances to the partners in wake of appreciation of entire gamut of facts and details presented before the Revenue authorities – Decided against revenue.
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2014 (4) TMI 968
Addition on account of sale of furniture – personal effects - Held that:- There is no evidence of the user of the bunglow by the assessee for the purpose of his residence or even his family - the CIT(A) have not accepted the additional evidence sought to be adduced before him, and toward which no argument or ground stood raised - there is no evidence with regard to the user of the building for the purpose of own residence – the assets was held for personal user, so as to be excepted from the definition of a capital asset u/s. 2(14) - The assessee shall be entitled to some relief for the cost of the assets which are to be only considered as capital assets - The acquisition of the assets is taken as during the year 1999 at the time the bunglow was given on lease for the first time - while the total sale consideration shall continue to be assessed as that against furnished bunglow, its cost shall be increased by Rs. 2 lacs, taken as expended during the F.Y. 1999-00, considering them as a part of the capital assets sold along with – thus, partial relief granted.
Credit for house-hold and living expenses – Held that:- The nature and source of the credit to the assessee’s account has been explained - The quantum of the living expenses incurred by the assessee has not been questioned - No enquiry has been made to ascertain if the assessee is indeed living with his family, as a joint family, and whether their total household expense, i.e., as incurred by the assessee is in consonance with the needs and the living standards of the extended/joint family - The Revenue cannot merely reject an explanation convert a good explanation into a bad one - The source of the credit is a corresponding debit to the account of the father in the books of UC, a family partnership concern - It is not necessary for the assessee to maintain a loan account of his father, which is an irrelevant consideration - No case for the non-acceptance of the assessee’s explanation is made out – the addition is set aside – Decided in favour of Assessee.
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2014 (4) TMI 967
Restriction of Gross profit addition – Rejection of books of accounts - Held that:- CIT(A) was right in holding that the rejections of books of accounts is not justified - the AO has not pointed out any particular defect in the book account of the assessee - The sole basis for application of provisions of Sec. 145(3), is the purchases and sales to sister concern is not at arm’s length - Instead of examining these transaction u/s 40A(2) of the Act the AO rejected the books of account and estimated the gross profits which is not correct - the profit has to be arrived at based on the books of accounts - the deletion of the CIT(A) of profits estimated based on applying G.P. rate of 6% by AO and consequent addition is upheld - the assessee has not come up in appeal against the addition of Rs 10,00,02,125 - the CIT (A) has not confronted the AO with the details of transactions furnished by the assessee with the sister concern – thus, the matter is remitted back to the AO for fresh verification – Decided in favour of Revenue.
Disallowance on account of interest paid – Held that:- The assessee has sufficient interest free funds - When there are both interest free funds and borrowed funds, it has been held CIT vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - when interest free funds are available, then the presumption would be that such interest free funds were invested or advanced as interest free loans/advances - If the presumption is applied to the facts of this case then no disallowance can be made - the borrowing were a cash credit against stock - the presumption would be that the funds borrowed from the bank was utilized for the purposes for which it is sanctioned by the bank – thus, the disallowance is set aside – Decided in favour of assessee.
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2014 (4) TMI 966
Deletion of disallowance u/s 24 of the Act – Expenses of interest on borrowed capital – Whether the addition cane be made u/s 153A/153C of the Act without any incriminating documents - Held that:- CIT(A)’s order is quite elaborate and he has clearly established nexus between interest on borrowed capital and rental income and as per the provisions of section 24 the same was allowable - in terms of section 24 of the Act the interest paid is allowable as a deduction - there was no infirmity in the order of CIT(A) – No addition can be made u/s 153A/153C in case of completed assessment wherein no incriminating document is found during search, it has been consistently held by the CIT(A) that in respect of completed assessments, no additions can be made u/s 153A in the absence of incriminating material found during search - Decided against Revenue.
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2014 (4) TMI 965
Disallowance of foreign travelling expenses – Held that:- The assessee company had filed a details chart before the FAA about the foreign visits by the officers of the company - Details furnished by the assessee with regard to foreign travel expenses were also available to the FAA - it cannot be held that assessee had not produced any documentary evidence before him - Assessee had taken specific plea in the statement of facts, filed along with the Form No. 35, that AO had not called for any evidence from the assessee-company and passed the order on very next day of the submissions made by the assessee - FAA should have considered all the material before him before arriving at any conclusion - he has not passed the reasoned order – the matter needs further verification by the FAA – thus, the matter is remitted back to the FAA for verification – Decided in favour of Assessee.
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2014 (4) TMI 964
Deemed dividend u/s 2(22)(e) of the Act – Withdrawal of amount - Held that:- The assessee has contributed substantial funds towards “Share Application account” - the assessee is having a running account with the company, wherein the transactions relating to remuneration, rent, salaries etc. are accounted for - the amount refunded to the assessee during June, 2008 and in subsequent months was debited by the company and the same has converted the credit balance into debit balance on certain dates - the assessee has also prepared combined ledger account combining both his Running account and the balance available in the Share Application account - the assessee’s account was always having credit balances, the assessee has not withdrawn any money over and above the money already contributed by him – there was merit in the contentions of the assessee that the “Running account” was wrongly debited with the amounts refunded, instead of debiting the same to the Share Application Account – thus, the assessee should not be penalized for the mistake committed by the company in not accounting the transactions properly - the factual position also shows that there was no intention to avoid payment of taxes by distributing money in the form of loan or dividend instead of distributing the same as dividend.
Relying upon M.D. Jindal Vs. CIT [1986 (4) TMI 17 - CALCUTTA High Court] - the company only possesses the funds belonging to the assessee, if both the Running account and Share application money contributed by the assessee is taken together - the amounts debited to the Running account of the assessee cannot be considered as deemed dividend in terms of the provisions of sec. 2(22)(e) of the Act - they represents money refunded out of the contribution made by the assessee towards Share Application account – thus, the order of the CIT(A) set aside – Decided in favour of Assessee.
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2014 (4) TMI 963
Deemed dividend u/s 2(22)(e) of the Act – Loans received – Held that:- CIT(A) rightly was of the view that the loan/advance was not received by the assesssee company during the year and the AO was not justified in making the addition by invoking the deeming provisions of Section 2(22)(e) of the Act - CIT(A) had set aside the addition – revenue merely relied on the order of the AO - He could not point out any specific error in the order of CIT(A) - revenue could not controvert the finding of the CIT(A) that the amount of Rs. 8 lacs outstanding loan from M/s. Sarjan Financial Pvt. Ltd was the opening balance of the year – revenue could not bring any material to show that any amount was received by the assessee during the previous year relevant to the assessment year from M/s. Sarjan Financial Pvt Ltd as loan or advance – thus, there was no reason to interfere with the order of CIT(A) – Decided against Revenue.
Disallowance u/s 14A of the Act – Restriction out of operating expenses – Held that:- The assessee earned dividend income - The assessee incurred operating expenses - According to the AO since the major income of the assessee was by way of dividend – thus, Rule 8D was not applicable to the assessee, he disallowed proportionate operating expenses by taking the proportionate total exempt income and total income - CIT(A) restricted the disallowance by working out the same in accordance with Rule 8D of the Income Tax Rule, 1962 – revenue could not show any provision of law which empowers the revenue to over-ride the provisions of Rule 8D while working out disallowance u/s 14A of the Act so as to make disallowance of an amount more than the amount worked out as per Rule 8D – there is no reason to interfere with the order of CIT(A) – Decided against Revenue.
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2014 (4) TMI 962
Assessee to be covered u/s 2(15) of the Act or not – Charitable purpose – Education purpose - Whether the CIT(A) has erred in ignoring that the assessee’s predominant objectives are to conduct examinations for the candidates for the Chartered Accountants and to regulate it members and it does not provide any scholastic education – Held that:- Following Institute of Chartered Accountants of India Versus DIT (Exemption) [2010 (10) TMI 502 - ITAT, DELHI] - The Institute as such merely it is receiving coaching fee from students for imparting education, cannot be said to have been carrying on business and accordingly it is not required to maintain separate books of accounts.
The income of the coaching classes earned by the assessee institute is within its objects and its Regulations and further these activities are educational activity within the definition of section 2(15) of the Act – thus, there cannot be activity of business for which separate books of accounts are required to be maintained - The institute is an educational institute and its income will also be exempt u/s 11 as education falls within the meaning of charitable purpose u/s 2(15) of the Act - Revenue could not substantially controvert the proposition and has fairly agreed that the issue stands covered by the Tribunal order in favour of the assessee and against the revenue – thus, there is no reason to interfere in the order of the CIT(A) – Decided against Revenue.
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2014 (4) TMI 961
Admission of additional evidence – Violation of Rule 46A of the Rules – Held that:- The CIT(A) rightly held that the AO could not be said to have allowed in-adequate opportunity to the assessee and that even otherwise, the assessee had been afforded adequate opportunity in the appellate proceedings - The additional evidence was admitted by the CIT(A) on having taking into consideration the totality of the facts and circumstances, there was no error in the action of the CIT(A) – Decided against Revenue.
Deletion made u/s 68 of the Act – Unexplained cash credits – Held that:- The confirmation from the partners of Grover Developers , which confirmation was notarized and was on stamp paper, showed that the assessee had been paid Rs.10 lac and Rs.5lac by cheque on 6/7/2007 & 7/1/08 - The assessee was found to have received cash of Rs.20,50,000/- through Shri Diwan Singh, father of Shri Surender Singh Grover, partner of M/s Grover Developers - The cash flow statement showed withdrawal of cash of Rs.14 lacs on various dates and re-deposit of Rs.10 lacs - the deposits in the bank tallied with the cash advance received by the assessee from the buyers - after having duly taken into consideration CIT(A) deleted the addition - revenue has not been able to dispute the categorical findings of fact recorded by the CIT(A) – Decided against Revenue.
Disallowance of deduction u/s 80C of the Act – Held that:- The assessee had invested the amount to Rs.1 lac through his Axis Bank Account in a term deposit - The merits of the action of the CIT(A) in admitting additional evidence have been discussed - Such investment in a term deposit is eligible for deduction u/s 80C (2) (xxi) of the Act, as correctly held by the CIT(A) – thus, there was no error in the CIT’s action of deleting the disallowance – Decided against Revenue.
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2014 (4) TMI 960
Dismissal of TDS - Amount was not claimed in the return – Applicability of section 155(14) of the Act – Held that:- Assessee contended that the provision of section 155(14) of the Act was brought into statute by Finance Act 2002 w.e.f. 1.6.2002 - the CIT(A) wrongly placed reliance on the provision in the order in disallowing legal contentions of the assessee – thus, the reliance placed by the CIT(A) wrongly placed reliance on the provisions of section 155(14) of the Act which was not applicable to the assessment year of the present case i.e. 2001-02 – Decided in favour of Assessee.
Dismissal of appeal u/s 154/143(1) of the Act – Claim of TDS credit - The provisions of section 155(14) of the Act are not applicable which is related to AY 2001-02 - the assessee company requested to allow additional credit of various TDS certificates which were not claimed while filing the return of income and this request made u/s 154 of the Act was rejected by the AO by holding that the assessee has not claimed the TDS certificate while filing of return which is not a proper and justified approach - claim of the assessee in regard to credit of additional TDS certificates is remitted back to the AO for verification and examination – Decided in favour of Assessee.
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2014 (4) TMI 959
Disallowance of various expenses – Held that:- When the assessee had been maintaining mercantile system of accounting, then provisions based on actuarial calculations are allowable and deductible u/s 37 of the Act - when the assessee made purchases during the previous financial year and shown that amount as receivables in its final account, the amount was carried forward to the financial year and during the same period i.e. AY 2007- 08, additional excise duty was paid to the excise department being excise duty as determined by the Settlement Commission of the Central Excise Department - When the liability was actually crystallized during the relevant financial year in question, then the claim of the assessee is allowable and no disallowance can be made in this regard.
The AO has made a lump sum trading addition by estimating ad hoc income of assessee at Rs.10 lakh after rejection of books of accounts u/s 145(3) of the Act - it is not open to the AO to uphold other disallowances and addition on other counts and on the basis of results of rejected books of accounts - except lump sum ad hoc trading addition of Rs. 10 lakh, other disallowances and addition made thereunder are not sustainable.
Lump sum ad hoc trading addition – Held that:- Since the AO found anomalies and discrepancies in the books of accounts of the assessee and on this basis, the AO rejected books of accounts of the assessee u/s 145(3) of the Act, the AO is empowered to make a trading addition on the basis of best judgment assessment and it should be either based on the previous year or subsequent year results of the assessee or some suitable comparables - the AO has not made any exercise to consider previous or subsequent results of the assessee or any other suitable comparables - estimation of lump sum trading addition was not based on cogent and justified basis – the order of the AO pertaining to estimated trading addition is set aside and the matter is remitted back to the AO for adjudication – Decided in favour of Assessee.
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2014 (4) TMI 958
Waiver of pre-deposit of penalty - penalty imposed under sec. 76, 77 & 78 - Held that:- appellants are paying service tax regularly as provider of banking and financial services. It was only during the audit, it was found certain discrepancy in respect of service tax. The service tax immediately paid along with interest. Thereafter, show-cause notice was issued. In these circumstances, we find that there is no intention on the part of the appellants to evade payment of tax and appellants were under the bonafide belief that the appellants were paying appropriate tax. It was only during the audit, certain discrepancy was found. In view of this, we find that the appellants are not liable for any penalty under sec. 76, 77 & 78 of the Finance Act as per provisions of sec. 80 of the Finance Act. Hence, penalty imposed under the impugned order is set aside - Decided in favour of assessee.
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2014 (4) TMI 957
Penalty under Section 76 & 78 read with Section 80 - Held that:- appellant had not taken the registration initially and took registration only in October 2003. We also note that that even after taking the registration, half yearly returns of service tax were not filed. The service tax returns were filed in 2006 after initiation of the investigation by the revenue. We have also gone through the annexure to the show-cause notice which details the date of payment of service tax as also period involved. We find that except in the case of Business Auxiliary Service where the tax was paid regularly from April 2005 to March 2006, in respect of no other service, the service tax has been paid on due dates. Even wherever the tax amount has been paid, tax has not been paid for the total value of taxable service but only a small part of the service.
A perusal of the said two Sections indicate that penalty is imposable on an assessee in the event of his failure or as enumerated under the two Sections. As elaborated earlier, appellant has been continuously failing to pay service tax even after collecting and has paid the said tax after a long delay. We therefore hold that Section 76 is correctly invoked and penalty under Section 76 is correctly imposed. Similarly we find that ingredients of Section 78 are clearly visible in the present case. There have been suppression of facts as inasmuch as the duty was not paid on time, returns were not filed for years together after the due date and even when the returns were filed after initiation of investigation, these did not represent the facts correctly. We are therefore hold that penalty under Section 78 is also imposable - Decided against assessee.
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2014 (4) TMI 956
Interior decorator service - Held that:- The work order is for leveling of area and preparing of the courtyards and for plantation of trees/shrub and laying pebbles and water fall around lake. The other contract is in respect of maintenance of lawn, providing water supply arrangement and for maintenance of trees and plant including trimming, removing grass shrubs etc. These work order are for execution of work and nowhere these can be considered as advisory or consultancy or technical assistance - Decided in favour of assessee.
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2014 (4) TMI 955
Demand of service tax - import of services - Technical Know how service - Held that:- The service tax is sought to be demanded on the amount being paid by the appellant to BPB, UK in terms of Article 8.2 of their agreement with them. While in terms of the Article 8.1 of the Agreement, the appellant were required to pay a lump sum amount of ₹ 400000 as consideration for technical knowhow provided, within a specified period and the same amount has already been paid, Article 8.2. provides for recurring annual payment @3% of the annual sales turnover for technical services provided by M/s. BPB to the appellant. The technical services being provided are those mentioned in Annexure-II to the agreement, which are expert advice and assistance with identification specification and preparation of linerboard (paper) gypsum and other indigenous raw materials to be used by the appellant in India, the expert advice and assistance during installation, erection and commissioning of the plant and also in the subsequent modifications or addition to the manufacturing plant, expert advice and assistance with the manufacture of the products and jointing compounds and joint filler including occasional supervision and problem solving, expert assistance in marketing of the final products etc. None of these services can be called intellectual property service. demand for the period prior to 18.4.2006 is not sustainable in view of the judgement of Hon’ble Bombay High Court in the case of Indian National Ship-owners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2014 (4) TMI 954
Revision of an order - Taxability u/s 58 of the Value Added Tax Act - whether a judgment of this Court delivered subsequent to the passing of an order of assessment wherein a different view has been taken in respect of taxability, would justify exercise of power u/s 22 of U.P. Sales Tax Act, 1948 on the part of Assessing Authority for revising the already made assessment order –Held That:- Decision in Concrete Spun Pipe Works Versus The Sales Tax Officer, Sector V, Kanpur [1968 (10) TMI 90 - ALLAHABAD HIGH COURT] and Master Construction Co. (P.) Ltd. Versus The State of Orissa and Another [1965 (12) TMI 108 - SUPREME COURT OF INDIA] followed – if the taxing authority while passing order of assessment has given a judgment, exercising his power as a consequence of conscious deliberation then it cannot be said that there is any mistake apparent on the face of record justifying revision of assessment order u/s 22 - The jurisdiction of Assessing Authority is confined to rectification of mistake apparent on the face of record of assessment - When there is a conscious deliberation in making a judgment, question of mistake cannot arise – other aspect that it must be apparent on the face of record that is to say it is not an error which depends for its discovery, elaborate arguments on questions of fact or law - Tribunal is correct and the order passed by Assessing Authority is beyond the purview of Section 22 – Decided against revenue.
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2014 (4) TMI 953
Refund of amount in excess of tax due - whether the assessee should make any demand for interest as a pre-condition for interest on admitted refund – Held that:- Judgment in M/s Bal Govind Bhola Nath Construction Corporation vs. Trade Tax Officer, Sector 1, Allahabad and others [2004 (10) TMI 568 - ALLAHABAD HIGH COURT] followed - Revenue has to itself refund the entire amount, which was sought to be adjusted against the demand for future years and therefore, there was no justification as to why they should not be asked to pay interest also – Section 40(4) is applicable to the extent of the amount for which a request for adjustment has been made and has been adjusted from the future liabilities - The amount, which was found refundable and has been refunded, would attract interest for which the Act does not provide any application or any further demand to be made - In view of the Circular issued by the CCT, UP dated 22.5.2004, the interest is payable on the amount, which is found refundable and which in the present case has actually been refunded by the Revenue – Writ petition disposed of with directions to Revenue to calculate and pay the interest payable to the petitioner on the amount refunded to him - Decided in favour of assessee.
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2014 (4) TMI 952
Liability to pay development tax - Tax rate as Per notification u/s 3-H of the U.P. Trade Tax Act – Determination of Aggregate turnover – Effect of Act being rescinded - Held that:- Applying the principle u/s 18 tax authorities have found that the aggregate determined turnover of the assessee was more than ₹ 37.50 lacs for a period of 9 months and accordingly development tax @ 1% u/s 3-H of the Trade Tax Act - It is no doubt true that the assessee has not discontinued his business - It is also true that because of the Act itself having been rescinded, the business carried on within the ambit of the said Act therefore came to an end on 31st December, 2007 - The discontinuation of the business under the Act after 31.12.2007 was by operation of law - It is also not in dispute that for the period 01.01.2008 to 31.03.2008 the assessee has been assessed under the VAT and his liability for payment of tax has been determined under the said Act itself - The provision of the U.P. Trade Tax Act had not been applied in respect of the said period commencing from 01.01.2008 – There is no illegality in the order of the Tribunal, whereby the aggregate turnover of the assessee has been determined w.r.t. Section 3(2) r/w Section 18 of the Trade Tax Act for the period of 9 months during which he had done his business under the U.P. Trade Tax Act - Revision is dismissed – Decided against assessee.
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2014 (4) TMI 951
Recall of order - Non consideration of full arguments - Held that:- Quite apart from the grievance of the appellant that an important ground/contention raised in written submission was not considered, we notice that the appellant had not remained present before the Tribunal but had merely sent a request letter to decide the appeal on merits after considering the synopsis and compilation already filed. To avoid further complications the counsel for the appellant stated that if the appeal is remanded before the Tribunal for fresh consideration, the appellant would appear in person or through his authorized representative and canvas all available arguments before the Tribunal. - Matter remanded back for fresh consideration - Decided in favour of assessee.
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2014 (4) TMI 950
Fraudulent availment of CENVAT Credit - Violation of principle of natural justice - Held that:- Impugned order passed is in violation of the Principles of Natural Justice. The notice was issued on 30.07.2007. 7 days' time has been allowed to file the reply. Certain documents had been relied upon in the show cause notice. it is stated that the said show cause notice has been received by the petitioner on 3rd September, 2007, therefore, the petitioner has 7 days' time to file the reply. According to the petitioner, the reply was filed on 6.09.2007. In paragraph 20 of the writ petition, it is stated that the reply of the show cause notice was filed, which has been replied by the paragraph 18 that the reply was not filed within time. It is further stated that it has been replied on 6th September, 2007 when the order was passed. Thus, in the counter affidavit, it is admitted that the reply has been received on 6th September, 2007. It is unfortunate that even though, the reply was received on 6th September, 2007 but in the impugned order, it is alleged that no reply has been filed and no request has been made for the personal hearing. - impugned order has been passed in gross violation of Principles of Natural Justice and therefore, is not sustainable and is liable to be set aside - Decided in favour of assessee.
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9911796707
