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Showing 381 to 400 of 848 Records
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2010 (10) TMI 854
Deduction claimed u/s 80P(2)(a)(iii) - disallowance on the ground that law has been amended with retrospective effect, when the issue of validity of retrospective amendment is pending before the Hon'ble Supreme Court in the appellants' own case - Held that:- As assessee claimed deduction of income from marketing produce of the farmers without showing that the said produce was grown by the farmers. In view of the amendment which has been upheld by Hon'ble Supreme Court in National Agricultural Co-operative Marketing Federation [2003 (3) TMI 3 - SUPREME Court] the assessee was not entitled to the deduction - in favour of the revenue.
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2010 (10) TMI 853
Levy of interest u/s 234B and 234C - Whether in the absence of any direction in the assessment order for levy of interest AO could charge such interest while computing the tax liability? - Held that:- It has been held in Anjum Ghaswala and others [2001 (10) TMI 4 - SUPREME Court] that levy of interest u/s 234B and 234C is mandatory.Mere non-mention of levy of interest in the order of assessment cannot render the said statutory provision nugatory. The interest being mandatory and not discretionary, the recovery thereof does not depend on the language of the assessment order - in favour of the revenue.
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2010 (10) TMI 852
Disallowance under section 40(a)(iii) - non eduction of tds - amount of salaries paid in foreign currency to the employees - Indian and Netherlands DTAA - Held that:- The salary payment can be said to be earned in India only if the corresponding services are rendered in India. In other words, if the services are rendered outside India, for which salary has been paid, then the income cannot be said to accrue or arise in India. Further, since in the instant case services are rendered outside India in respect of which the employees received salary outside India, it cannot be said that the same accrue or arise in India - See CIT v. Avtar Singh Wadhawan [2000 (11) TMI 116 - BOMBAY High Court] wherein the assessee had worked outside the India he received salary outside India from an Indian employer namely Shipping Corporation of India & the Bombay High Court on these facts held that since the place where the services are rendered is relevant for determining chargeability of the tax, no tax would be payable on the salary received on the services rendered outside India. In favour of assessee.
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2010 (10) TMI 851
Reassessment proceedings - AO had not deducted the capital receipt from the block of assets while making computation of income – Held that:- The facts on record clearly reveal that this is the third round of litigation in respect of the same subject-matter. Before issuing the notice for reopening, reasons were recorded wherein it is clearly stated that the AO without applying his mind, in this aspect of the issue, accepted the claim of the assessee. If the material facts are disclosed by the petitioner truly and fully and if the AO did not apply his mind it is not fault of the petitioner which can lead the AO to issue notice of reopening within the period of 4 years. The reasons recorded further reveal that the AO had not deducted the said capital receipt from the block of assets while making computation of income. Here also it is not alleged that there is failure on the part of the assessee to disclose all material facts truly and fully and if the mistake is committed by assessee (sic AO), on this basis notice of reopening cannot be issued, especially when all throughout all necessary facts are on record and several proceedings were initiated in the past in respect of the same subject-matter - the action of the AO in issuing the notice of reopening, in the background of all previous proceedings initiated by the Revenue, is not justified.
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2010 (10) TMI 850
Scope of provisions of s. 143(2)(i) - net addition of Rs. 1.89 lac made as income from house property - Held that:- If an AO has reason to believe that an assessee has made a claim of any loss, exemption, deduction, allowance or relief which is inadmissible, he will issue a notice under the new cl. (i) of sub-s. (2) of s. 143. The notice should specify the claim and call upon the assessee to produce evidence and particulars in support thereof. After hearing such evidence and considering such particulars, he will make an assessment of total income or loss under the cl. (i) of sub-s. (3) of s. 143, limiting himself to the claims he had set out to verify. If he feels that the case requires further scrutiny on other issues, he will be free to issue a notice initiating comprehensive scrutiny of the return, as is being done presently. Based on the assessment made by the AO, the officer has also initiated penalty as bad in law. Since the addition made by the AO itself is deleted by the Tribunal reccordig a fact that there was no claim made by the assessee with regard to income from house property or the deduction related thereto. In the absence of any such claim, the Tribunal opined, there was no question of assuming the jurisdiction on the basis that such a claim was inadmissible. In favour of assessee.
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2010 (10) TMI 849
Non-service of notice u/s 148 - case of the assessee that when Mr. Khanna appeared before the Assessing Officer, he was not even informed at that stage that the proceedings were reopen in respect of the assessment year in question pursuant to notice u/s 148. Even a copy of that notice was not served upon him when he appeared - Held that:- One has to proceed on the premise that no notice under section 148 of the Act was ever served upon the assessees or even given to them when Mr. Khanna appeared before the Assessing Officer. When there is complete absence of service of notice under section 148 of the Act, the consequence in law is that the entire proceedings for reopening the assessment would be void. Therefore, merely because Mr. Khanna had appeared before the Assessing Officer when he was called upon to do so by service of notice under section 143(2) of the Act would not validate the assessment and nullify the effect of non-service of notice under section 148 of the Act, no merit in these appeals and accordingly dismissed the same.
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2010 (10) TMI 848
Shortage of stock - Tribunal held that the stock of rectified spirit of 33,980 litres worth Rs.16,00,000/- missing in the premises of the assessee as directed by the search party which was included in the books of account's cannot be treated as the income of the assessee? - Held that:- In the light of physical verification of the stock by the search party in the presence of responsible and knowledgable officials, which was confirmed by the letter of the Executive Director later, would only go to show that after due deliberations the explanation was given. Therefore, the appellate authority CIT (a) was justified in concluding that the explanation given by the assessee subsequently cannot be accepted as the truth. It is a just and proper conclusion and thus the shortage of rectified spirit as on the date of search was correctly determined.
The order of the Tribunal indicated that it was based only on the explanation given by the assessee nearly six months later. In the absence of any material indicating that at the relevant point of time excise officials had an occasion to certify the stocks in the course of their regular vigil over the premises of the assessee, the conclusion of the appellate Tribunal is only based on imagination and surmises - substantial questions of law answered in favour of the revenue holding that the Tribunal was not justified in placing reliance on extraneous material.
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2010 (10) TMI 847
Date of acquisition of the property - Held that:- It is the contention of the appellant that the appellant had held the property for a period of more than three years which is disputed by the revenue and since there is no finding as to the date of acquisition by any of the authorities below, it would be appropriate to remand the matter to the ITAT for the purpose of determining the actual date of acquisition of the property and then to decide the matter afresh. The learned Counsel for the parties also state that the matter back is remanded back the question as to whether the profit arising out of a sale was in the nature of business profit or the capital gain should also be decided afresh by the ITAT which was accepted.
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2010 (10) TMI 846
Set off of the brought forward losses of the State Bank of Jaipur - Carry forward and set off of losses in case of change in constitution of firm - Held that:- Provisions u/s 78(2) do not entitle the assessee to carry forward and set off losses of State Bank of Jaipur because requisite precondition that succeeding company should have derived such losses by way of inheritance has not been fulfilled and for that limited purpose, two companies shall have to be treated two different persons and not same person. Even if in law a company is treated as jurisdictional person, nevertheless, for the purpose of Section 78(2), they would not be the same assessee after merger of two companies as after merger of State Bank of Jaipur with State Bank of Bikaner and with re-christening of the company as State Bank of Bikaner and Jaipur, it cannot be treated to be same "assessee" for income-tax purpose.
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2010 (10) TMI 845
Violation of the provisions of the FEMA - interception of Skoda car somewhere in the Wayanad District and on search of the vehicle they recovered an amount of 88,00,000/- in cash from the said vehicle - according to the respondents the total tax liability tentatively fixed for three financial years, i.e. 2007-08, 2008-09 and 2009-2010 is Rs.49,86,393/- and the respondents are of the opinion that the appellant would also be liable to pay penalty for an amount of Rs.10,37,940/- - Held that:- It is not very clear from the record nor the respondents is able to make any statement regarding the time frame required for completing the assessment against the appellant. We are informed that the total amount lying with the respondents as on 28.7.2010, the date on which the statement in the writ petition was filed, is Rs.1,03,79,468/-, i.e. the seized amount of Rs.88,00,000/- plus the interest accrued thereon. We are also informed that pursuant to the order of the learned Single Judge the respondents have already released the amount in excess of Rs.65,00,000/- out of the above mentioned amount. In the circumstances, we deem it appropriate to modify the judgment under appeal directing the respondents to retain only an amount of Rs.40,00,000/- and release the balance amount subject to the condition that the appellant furnishes security either by way of producing bank guarantee or immovable property security to the satisfaction of the third respondent for an amount of Rs.25,00,000/-.
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2010 (10) TMI 844
Assessment of income - whether the Tribunal was justified in holding that assessee cannot be separately assessed for the income from a hospital merely because it was not entitled to exemption under section 10(23C)(via) – respondent-assessee is a hospital owned and managed by a society granted registration as a charitable institution u/s 12A - Held that:- As society is engaged in several charitable activities, including running of Old Age Home for the poor, Training Institute for Mentally Challenged, and a hospital for rendering medical assistance to the poor. Even if one of the branches of operations leads to gain or profit, still the society is entitled to exemption, if the funds were applied for other charitable purposes, the claim of exemption or liability should have been considered at the hands of the person who owns and manages the hospital, which is a society, hospital is run by the society which is a charitable institution. Inspite of the claim made by the assessee, the Assessing Officer has not considered whether the institution, that is, the assessee, namely, society, runs the institution for the purposes for which it was granted exemption under section 12A. On the other hand, even the return filed is not seen considered by the Assessing Officer in the assessment of the society. All what the Tribunal has held is that separate exemption need be claimed by the society for the hospital when it is assessable for all other income which does not arise here because of section 12A registration granted to the society. We are in complete agreement with the finding of the Tribunal on this issue. However, if there is violation of the scheme of exemption granted under section 12A it is always open to the department to bring to tax such of the income that could be assessed under the Act after issuing notice to the assessee, Appeals are dismissed with these observations
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2010 (10) TMI 843
Deduction under s. 80HHC - Whether the Tribunal was justified in deleting, in order to ascertain deduction under s. 80HHC, the profit derived from all the businesses cannot be taken into consideration and it is only the profit from eligible business, i.e., export business alone should be taken into consideration? - Held that:- The finding of the Tribunal that for the purpose of calculating deduction under s. 80HHC, it is only the profits from the eligible business, the turnover of the eligible business is to be taken into consideration is contrary to the scheme of s. 80HHC and the circular No. 564, dt. 5th July, 1990. The finding is when the assessee has maintained separate accounts for different units and the assessee is having a number of businesses, then deduction is to be ascertained in respect of eligible business and if separate accounts for such eligible business then deduction is to be computed on the basis of profit from such eligible business and export turnover and total turnover of such business. This finding is ex facie contrary to the definition clause contained in the Explanation where the total turnover is explicitly defined for the purposes of this section. In law there is no distinction between an assessee maintaining separate accounts in respect of each business or the assessee maintaining one account. When once the income from all the businesses is pooled together and constitutes a total income, only the profits derived from all those businesses also should form the components of the profits of business. The Tribunal seems to have been very much carried away by the fact that the assessee has maintained separate accounts for his each business which in law makes no difference - in favour of the assessee and against the Revenue.
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2010 (10) TMI 828
Profit of the sale of the firm for the assessment year 1995-96 - whether not assessable to capital gains tax u/s 45(1) or section 45(4) - AO held that the income which was received by accepting the highest bid of Rs.92 crores was paid to the erstwhile 9 partners and highest bid was offered by erstwhile 3 partners and it is also clear that the firm M/s.MGBW had dissolved on 6.12.1987 itself and it was not in existence thereafter and returns were being filed by the erstwhile partners in view of the direction issued by this court in the Company Petition as referred to above and the Assessing Officer has passed an order of protective assessment against the firm represented by its partners - Held that:- The firm-MGBW was dissolved on 6.12.1987 and that the outgoing partners of the firm are liable for capital gain u/s 45(1) of the Act and not the firm and in view of the said findings thereunder, thus to hold that the order passed by the ITAT is justified and does not call for interference in those appeals - substantial questions of law against the revenue and in favour of the assessee
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2010 (10) TMI 820
Notice issued under section 12AA(3) - petitioner submits that, the impugned notice is wholly without jurisdiction, inasmuch as, there is no direction in any order of the Income-tax Appellate Tribunal, Cuttack Bench, Cuttack, authorizing the issue of the impugned notice - Held that:- Though power has been vested under section 12AA(3) in the Commissioner of Income-tax to safeguard the interests of the Revenue, but such power vested in him can only to be exercised by him on a clear-cut satisfaction of the circumstances for exercise of such power. Although, the Tribunal's order quashed an earlier order of the Commissioner dated December 15, 2006, under section 12AA(3) the same order also clarified that such power "should be utilized quite cautiously and consciously". Therefore, no hesitation to direct of the impugned notice dated September 24, 2009 issued under section 12AA(3) vide annexure 1 to the writ petition and we order accordingly - writ application is allowed.
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2010 (10) TMI 818
Principle of transfer pricing - notice was issued under section 148 - writ petition filled on question of jurisdiction – Held that:- On going through the papers it is find that foundational facts are required to be established which could not have been done by way of writ petition. Thus the assessee should be relegated to adopt proceedings, which are pending, as of date, before various authorities under the Act.
Direct these authorities to expeditiously hear and dis-pose of pending proceedings as early as possible.
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2010 (10) TMI 816
Profit from sale of shares - Capital gain or business income - Held that:- It is settled law that an assessee can make investment in shares as well as trade in shares - The profit from sale of investment would be assessed as long-term capital gain and profit from trading would be assessed as business income - Therefore, merely because, the assessee entered into certain intra-day transactions, that would not make profit from realisation of the investment as business income - Considering the totality of facts and applying the guidelines laid down by the hon'ble apex court in the case of Raja Bahadur Visheshwara Singh v. CIT [1960 (12) TMI 12 - SUPREME Court] & Rewashanker A. Kothari [2006 (1) TMI 80 - GUJARAT High Court] it is held that profit from sale of shares was rightly shown by the assessee as income from capital gain - Direct the Assessing Officer to assess the same as capital gain and not as business income - Accordingly, the assessee's appeal is allowed.
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2010 (10) TMI 814
Reopening of assessment - Business income Vs. House property - Time barred - Penalty - Held that:- Section 147 authorizes the AO to assess or reassess income chargeable to tax, when, he has reason to believe that income for any assessment year has escaped assessment. In the instant case, the observation of the AO to the effect that by claiming the returned income under wrong head, the assessee has claimed excess depreciation, which is not permissible in case of income is assessable under the head "Income from House property". This is a sufficient reason to believe that income of the assessee has escaped assessment, which is sufficient to empower the AO to reopen the assessment by issue of notice u/s 148. No infirmity in the order of the CIT(A) for confirming the action of the AO for reopening the assessment when the same was made with reference to intimation passed u/s 143(1) as AO is free to initiate proceedings u/s 147 and failure to take steps u/s 143(3) will not render the AO powerless to initiate reassessment proceedings even when intimation u/s 143(1) had been issued.
Leave and licence income - chargeable under the head "Income from house property " OR "Business income" - Held that:- Following the latest decision of Commissioner Of Income-Tax Versus Shambhu Investment Pvt. Ltd. [2001 (3) TMI 77 - CALCUTTA High Court] proposition of law laid down therein are applicable to the facts of instant case, confirming the action of the CIT(A) for taxing the rental income as "income from house property".
Regarding interest u/s 234D - Held that:- No interest is chargeable u/s 234D prior to the assessment year 2004-05
Regarding Penalty - AO has initiated penalty proceedings for the income escaped assessment due to taxing of rental income as income from house property - since no penalty has been levied and it was just initiation, no interference is required by the Tribunal at this juncture - Appeals are allowed
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2010 (10) TMI 813
Disallowance u/s.14A - Rule 8D - Held that:- The issue is similar to A.Y.2002.2003 appeal filed by the assessee wherein it has been held that prior to assessment year 2008-09, Rule 8D was not applicable. However, the disallowance is warranted under section 14A of the Act - Since facts are identical therefore it is covered by the order of ITAT in assessee’s own case, we follow the same. The AO is directed accordingly
Capital or revenue expenditure - Disallowance made by the AO has been examined by the CIT(A) and found that ₹ 41362/is only capital in nature which on account of purchase of converter. Balance amount of expenditures pertain to revenue account - After considering the discussions made by the ITAT in AY 2002-03 no error in the order of the CIT(A).We confirm the order of the CIT(A)
Regarding Research & Development expenses - initially the assessee started to incur R&D expenditure on behalf of third party but finally on subsequent events after the end of the previous year, the assessee treated those expenditures for its business purposes - can such expenditure is allowable under section 35(2AB) or under section 37(1) in the first year itself? - Held that:- As that ultimately products developed by incurring R&D expenditures were registered in the name of assessee, which is related to assessee’s business and accordingly in fact used by assessee for its business purposes - Once it is found that the expenditures are allowable same are allowable under respective provisions as in the case under consideration under section 35(2AB) or under section 37(1) as the case may be, in accordance with law - The AO shall provide reasonable opportunity of hearing to the assessee
Addition u/s 41(1) - Held that:- The issue is covered in favour of the assessee by the order in the case Dsa Engineers (Bombay) VS ITO [2009 (3) TMI 646 - ITAT MUMBAI] where in it was held that if the assessee has not written off the liabilities reflected in sundry creditors account it was not open to the AO to make addition invoking section 41(1) of the Act without proving that there was cessation of liabilities. As find that in this case AO invoked section 41(1) merely on the ground that the liabilities were three years old thus the order of the AO is not sustainable. In favour of assessee.
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2010 (10) TMI 812
Addition made on account of excess consumption of furnace oil - attempt was made by assessee for reappreciation of evidence which is not permissible. As noticed earlier, all the three authorities have concurrently come to the conclusion that in the stock of consumption of furnace oil in the pre-survey period as compared to post-survey period there was substantial difference and the assessee could not offer any satisfactory explanation for the said difference. Once that was so, the addition made by the Assessing Officer and sustained by the appellate authorities cannot be faulted, substantial question of law is answered against the assessee, appeal is dismissed.
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2010 (10) TMI 808
Block assessment - unaccounted sales - First appellate authority took the view that the undisclosed income estimated by the Assessing Officer works out to 60 to 85 per cent of the turnover. Surprisingly, he does not state what is the basis of his adopting the turnover of the assessee for each year of the block period which are not stated in the order. - Held that:- neither the CIT (Appeals) nor the Tribunal has considered the appeal in the way they ought to have done, that is by analysing the evidentiary value of the seized documents and the statements recorded and check whether the conclusions drawn by the Assessing Officer based on the evidence is tenable or not. When there is no proper exercise of jurisdiction by the first appellate authority, particularly in a case of block assessment, where undisclosed income has to be assessed based on evidence gathered on inspection, in terms of section 158BB(1) of the Act, the recourse open to us is only to set aside the orders issued in appeal by the Tribunal and that of the first appellate authority and remand the matter to the CIT (Appeals), for fresh decision.
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