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Showing 381 to 400 of 1404 Records
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2016 (10) TMI 1024
Assessment u/s 153A - addition on basis of seized papers - Held that:- When dumb documents like the present loose sheets of papers are recovered and the Revenue wants to make use of it, the onus rests on the Revenue to collect cogent evidence to corroborate the noting therein. The Revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized papers reveal the unaccounted on-money receipts of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewellery or investments outside the books of account was found in course of search in the case of assessee. Thus, the impugned addition was made by the AO on grossly inadequate material or rather no material at all and as such, deserves to be deleted. Hence, we are of the view that an assessment carried out in pursuance of search, no addition can be made simply on the basis of uncorroborated noting in loose papers found during search because the addition on account of alleged on-money receipts made simply on the basis of uncorroborated noting and scribbling on loose sheets of papers made by some unidentified person and having no evidentiary value, is unsustainable and bad-in-law. - Decided in favour of assessee.
Addition made on account of extrapolation of alleged on-money receipts purportedly recorded in loose sheets of papers - differences in the BMC built up area and built up area as per agreement - Held that:- The differences are on account of valid reasons and the assessee has not made any contradictory claims in respect of saleable area of flats. But, we are of the view that, since, we have given a find that the impugned papers do not contain recordings of any on-money receipt by the assessee, the question of extrapolating on-money receipts on the basis thereof does not arise. Even otherwise, we are in agreement with the argument of assessee that additions in search assessments are required to be made on the basis of tangible evidence and not solely on the basis of estimations and extrapolation theory. Thus, we delete the addition made on account of extrapolation of alleged on-money receipts purportedly recorded in loose sheets of papers. Accordingly, this issue of extrapolation in all the three years is allowed in favour of the assessee and against the Revenue.
Addition on account of unaccounted money on account of extrapolation and validity of method of accounting followed by the assessee - Held that:- As up to 31-03-2008 the sale agreements entered into were approximately in respect of 60% of the flats only. It further shows that the agreed sale consideration for all the flats for which sale agreements were entered into comes to ₹ 175.03 crores. The agreed sale consideration for the flats for which the agreement were executed before 31.03.08 is ₹ 66.49 crores out of this agreed transfer consideration the amount received 31.03.08 by way of advance is ₹ 47.27 crores. Thus the amount received up to 31.03.08 by way of advance in regard to the flats for which sale agreements had been entered into is less than 25% of the expected sale consideration for all the flats. Further, the fact that the construction of the project was not completed up to 31.03.2008 has also been discussed with corroborating evidences in the preceding paragraphs. Thus, in light of the aforesaid discussion we are of the view that no income was recognizable from the impugned project for AY 2008-09 under project completion method followed by the assessee. Hence, the issue relating to the method of accounting followed by the assessee is allowed. Further, we have already held that the seized documents marked as Annexure A-1, pages 1 to 19 are held as dumb documents and even otherwise, the assessee explained the entries, no addition on account of receipt of moneys on extrapolation can be added in the hands of the assessee. Accordingly this issue of the assessee’s appeals is allowed and the issue of Revenue’s appeals is dismissed.
Disallowance of compensation and interest paid to Videocon Group - Held that:-no incriminating material or documents were found in course of the search at any of the premises of group concerns or premises of the assessee company with respect to the allowability or otherwise of the impugned compensation or interest expenses. In the original assessment framed u/s 143(3) of the Act for AY 2006-07, the AO after application of mind and detailed scrutiny of accounts had consciously allowed the said expenses. However, later on while framing assessments u/s 153A of the Act, under identical circumstances vis-a-vis the past, the AO opined that such expenses were not allowable u/s 37(1) of the Act. Accordingly, the same was illegally added back by the AO u/s 143(3) r. w. s. 153A of the Act merely on the basis of change of opinion in the guise of search assessment. Such an action is vitiated in law. It is an accepted principle of law that the AO does not have jurisdiction to review his own order. As such, since between the date of the order of original assessments u/s 143(3) of the Act and the date of framing assessment u/s 153A of the Act, no new material had come on record, no fresh information had been received in respect of the impugned compensation and interest expenses, the A.O could not add back items of regular assessment on the basis of mere change of opinion by resorting to materials already on record at the time of original assessment merely because a search action had been undertaken in the group case - Decided in favour of assessee
Disallowing proportionate expenses incurred for constructing saleable area for alleged bogus tenants - Held that:- It is not a case where the assessee has been found having constructed the property in violation of the sanctioned plan or the relevant provisions of law governing the activity. It is also not the case where any part of the costs incurred on construction of the property has been found to be illegal, non-genuine or incurred for extraneous purposes. It is a case where the construction is legal and as per plan. The entire construction cost claimed by the assessee has actually been incurred by it on construction of the property. There is however, surplus constructed area intended for the occupiers of the erstwhile property. Since the claim of some of the occupiers was not found admissible, the surplus area has been transferred to the assessee for a consideration. Subsequently, the surplus area has been dealt with by the assessee in a commercial manner and the sale consideration for the same has been duly accounted for as and when so required. It is therefore, perfectly clear that the entire amount incurred on the construction of the property is legal, genuine and in accordance with law and therefore admissible as business expenditure. Since the entire sale consideration for the impugned surplus area (which was later on transferred to the assessee for a consideration) has been duly accounted for as and when sold by the assessee, the corresponding construction cost is also perfectly allowable as business expenditure. Further, the amount paid to MHADA is also in the nature of cost of construction and admissible as business expenditure. The provisions of MHADA Act do not, in any manner, provide for its treatment as anything in the nature of penal payment. The payment is neither in the nature of fine nor in the nature of penalty. It is not attributable to any irregularity or infringement of law. The claim is therefore properly admissible for deduction as business expenditure.- Decided in favour of assessee
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2016 (10) TMI 1023
Valuation - discount - whether the discounts received by the assessee much after purchase from the supplier would have to be deemed as turn over as per Explanation VII to Section 2(ii) of the Kerala Value Added Tax Act or whether it would have to be treated as either a 'cash discount' or 'trade discount'? - Held that: - the assessee has suffered loss and they have received certain amounts from their suppliers, without which the assessee would not have been able to recoup the loss suffered by it. The conditions that are to be present for applying the mandate of Explanation VII to Section 2(ii) thus being obvious from the accounts of the assessee, any explanation to the nature of the amounts received by it, in the absence of specific and' clinching evidence/documents to prove such nature, would be of no avail - the amounts received by the assessee, which they call 'discounts' are, in fact, the amounts that would fall within the ambit of Explanation VII to Section 2(ii) and hence liable to be added to the turnover.
Revision allowed - decided in favor of revisionist.
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2016 (10) TMI 1022
Assessment u/s 153A - Deemed dividend addition u/s 2(22)(e) - Held that:- There was no material found during the search which promoted the Assessing Officer to make such additions. Additions according to the Assessing Officer, therefore, were not justified. - Decided in favour of assessee.
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2016 (10) TMI 1021
Addition for earning exempt income under Section 14A read with Rule 8D(2)(iii) - Held that:- It is not case where regular activities were undertaken by the Assessee in respect of the investments to earn income therefrom, there was no basis for the AO to hold that the expenditure as disclosed by the Assessee towards earning exempt income was insufficient. - Decided in favour of assessee.
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2016 (10) TMI 1020
Addition on account of cess of green leaf - Held that:- Rule 8 of the Income-tax Rules, 1962, requires that the computation is to be made as if by fiction the entire income out of the tea grown and manufactured as income assessable under the Income-tax Act, 1961 – Held that entire amount paid as cess on green leaf seems to be eligible for deduction. See CIT Vs. AFT Industries Ltd [2004 (7) TMI 81 - CALCUTTA High Court ]
Disallowance on account of notional interest on loan advanced - Held that:- Keeping in view of the fact that the Tribunal has set aside the matter to the file of the AO in the preceding years we set aside the issue to the file or the AO for the year under consideration also with the direction to decide the issue afresh in the light of the peculiar facts narrated by the Id. Counsel for the assessee after giving due opportunity to the assessee of being heard as per law.
Additional depreciation claim - Held that:- Similar to the issue on hand was adjudicated in case M/s. Binaguri Tea Co. Pvt. Ltd., Kolkata [2013 (3) TMI 146 - ITAT KOLKATA] as referring to Explanation 7 to Section 43(6)reads as under:-
“Explanation 7:- For the purpose of this clause, where the income of an assessee is derived, in part from agriculture and in part from business chargeable to income-tax under the head “profits and gain of business or profession”, from computing the written down value of assets acquired before the previous year, the total amount of depreciation shall be computed as if the entire income is derived from the business of assessee under the head “profits and gain of business or profession” and the depreciation so computed shall be deemed to be the depreciation actually allowed under this Act”.
This Explanation has been inserted by Finance ( No.2) Act w.e.f 2009. It creates a deeming fiction affecting substantive computation provision determining actual tax liability. Therefore, ld. CIT(Appeals) has rightly treated it to be prospective. We, accordingly, uphold the order of ld. CIT(Appeals)to allow the claim of depreciation
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2016 (10) TMI 1019
Addition of undervaluation of closing stock - Held that:- Assessee has been following FIFO method for valuation of its stocks in all earlier and subsequent years and no addition has ever been made. The assessment order was passed u/s 143(3) for A.Y. 2009-10 accepting FIFO method of stock valuation. It is further noted that assessee had submitted copies of bills and other evidences to justify valuation based upon FIFO method. Further, nothing wrong could be pointed out by the Ld. DR in the detailed and well reasoned findings of Ld. CIT(A). Further, it is noted by us that closing stock of the impugned year had become opening stock of the next year. Thus, viewed from this angle also, overall tax effect taking both the years into account will be tax-neutral. - Decided in favour of assessee
Addition of commission expenses - Held that:- As decided in assessee's own case in previous AY the findings by the ld. CIT(A) are based on bald claims, de hors any material on record. Merely making general statements, without basis in any material on record, which has moved the ld. CIT(A), would not prove a claim. His taking cognizance of the copies of the confirmations, i.e., which are inadmissible in evidence, cannot also to be regarded as valid. Even no finding qua commission to Parul Bahirwani, a relative, stands issued. We, accordingly, vacating his findings, restore the matter back to the file of the A.O. to allow the assessee an opportunity to present its case before him. The A.O. shall, on his part, proceed reasonably; that being the hallmark of any good assessment, sustainable in law.
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2016 (10) TMI 1018
Reversal of CENVAT credit - clearance of capital goods after use and no removal as such - CENVAT credit taken on such capital goods is allowed on a graded scale w.e.f. 13.11.2007 - Held that: - Proposition of the appellant is correct on both counts as not cleared as such as well as Legislature has not intended the denial prior to 13.11.2007 - reliance placed in the case of Commissioner Central Excise Commissionerate Versus M/s Raghav Alloys Ltd. [2010 (4) TMI 294 - PUNJAB & HARYANA HIGH COURT], where on similar issue it was held that Insertion of proviso w.e.f. 13.11.2007 makes it clear that there is difference between machines cleared without putting into use and cleared after use - CENVAT credit allowed - appeal allowed - decided in favor of assessee.
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2016 (10) TMI 1017
Cum-duty benefit - the goods were claimed by the respondent-assessee during the relevant period without including the duty element, whether the assessee was not entitled to cum-duty benefit? - Held that: - The Tribunal, found on a reading of the provisions of Section 4(1) of the Central Excise Act and specially the explanation appended thereto that the assessee was entitled to cum-duty benefit. Since the taxes were paid by the respondent-assessee on the goods as per the explanation to Section 4(1), the assessee was entitled to cum-duty benefit - decided in favor of respondent-assessee - appeal dismissed.
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2016 (10) TMI 1016
Whether the completion of assessment has to be made within the time stipulated and it was found that there is no warrant for such an interpretation especially since the words employed was 'proceed to determine' which indicated only a proceeding to be initiated and not the assessment itself completed? -
Held that: - the statute provides for self assessment and the provision for assessment of escaped turnover specifically provides a limitation of five years within which the proceedings to determine the escaped turnover had to be initiated. The power of extension conferred on the Deputy Commissioner was with respect to the completion of assessment, which has no relevance to the initiation of the proceedings as such. In such circumstance, Section 25B of the K.V.A.T. Act has to be held to be redundant insofar as the period provided under Section 25(1). Obviously, it is a mistake occurred in drafting which, however, being explicit and clear and not being in any manner ambiguous, would not be open for any purposive interpretation by this Court. The Government would be advised to look into the said provision and make suitable amendments. The amendments, if so made, definitely would not revive the cause of action in the present case; where a right has accrued and the liability to reassessment having been extinguished.
The Assessing Officer would issue fresh orders of assessment within a period of one month from the date of receipt of the certified copy of the judgment only dealing with the specific instances of escaped turnover taken up in Exts.P1 and P2 - petition allowed.
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2016 (10) TMI 1015
Imposition of penalty u/s 48 (5) of the Act - the goods had been purchased from a dealer in Kanpur and had been despatched for sale to a dealer situate at Jaunpur. It was further sought to be explained that since the Jaunpur dealer did not accept the goods, they were, subsequent to their release, sold to another dealer on 18 July 2011 - discrepancy in the weight of goods - whether the circumstances which weighed with and were relied upon by the assessing authority would justify the imposition of penalty under Section 48 (5) of the Act? - Held that: - neither the assessing authority nor for that matter the Tribunal has entered any finding as to whether the goods which were seized were actually accounted for in the books of accounts of the dealer or not. The assessing authority, as noted above, primarily rested his order on the various discrepancies which according to him came to light from the explanation put forth by the dealer and the statement of the driver who was accompanying the vehicle. In the opinion of this Court, these discrepancies would not of their own and standing alone satisfy the enquiry which the authority is liable to undertake in order to sustain the levy of penalty under Section 48 (5) of the 2008 Act - this Court is of the considered view that the matter would merit a remand for fresh consideration by the assessing authority - revision allowed by way of remand.
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2016 (10) TMI 1014
Disallowance u/s 14A read with rule 8D - Held that:- We find that the case of the assessee is squarely covered by the decision of the various High Courts. The Hon’ble Delhi High Court in the case of Joint Investment Private Limited reported in [2015 (3) TMI 155 - DELHI HIGH COURT ] has held that section 14 of the Act or rule 8D cannot be interpreted so as to mean that the entire tax exempt income of the assessee is to be disallowed. That the window for disallowance is indicated in Section 14A and is only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. This proportion or portion of the tax exempt income surely cannot swallow the entire amount of tax exempt income.
The Hon’ble Delhi High Court in the case of “M/s Cheminvest Ltd. vs. CIT” (2015 (9) TMI 238 - DELHI HIGH COURT) wherein also the assessee had made strategic investments in subsidiaries/Group Companies for retaining control over them but has not received any dividend income from such investments, has held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year and that the expression ‘does not form part of the total income’, in section 14A of the Act envisages that there should be an actual receipt of income which is not included in the total income during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income
Thus we are of the view that no disallowance under section 14A is attracted in this case. - Decided in favour of assessee
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2016 (10) TMI 1013
Addition made u/s.68 - genuineness of transaction - capacity of the creditors - Held that:- In support of the genuineness of the transaction, not only the assessee filed the affidavits of 20 persons but each of the 20 persons appeared before the Assessing Officer in compliance to the summons issued u/s.131 of the Act and duly confirmed the genuineness of transaction before the Assessing officer.
AO has merely stated that the creditors had meager income without bringing on record any material in support of the same. Such vague and unspecific and unsubstantiated observation has no value in the eyes of law. Therefore, considering the entirety of the facts of the case, find that the explanation of the assessee which was a plausible explanation was rejected by the Assessing Officer merely on the basis of suspicion or doubt and without bringing on record any positive material even after examining all the 20 persons under section 131 of the Act. A plausible explanation offered by the assessee cannot be so rejected by the Assessing Officer without bringing even an iota of material on record and even pointing out any inconsistency in the statement of the creditors recorded u/s.131 of the Act. See Sreelekha Banerjee vs CIT (1963 (3) TMI 47 - SUPREME COURT) wherein, held that the department cannot by merely rejecting unreasonably a good explanation convert good proof into no proof. - Decided in favour of assessee
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2016 (10) TMI 1012
Review application - judgement of The Commissioner Commercial Tax, U.P. Lucknow Versus S/S. Sri Supreme Freight Carriers Pvt. Ltd. [2017 (1) TMI 578 - ALLAHABAD HIGH COURT], sought for revision on the issue that no seizure can be effected in no mans land - Held that: - In the opinion of this Court, the same does not qualify as a ground for review inasmuch as the proposition in respect of which Sri Gupta relies upon the judgment was duly noted. Even otherwise, this Court does not find any observation in the judgment rendered by the learned Single Judge in Panch Kanya Road Carriers which may support the contention so advanced by Sri Gupta - application rejected.
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2016 (10) TMI 1011
Maintainability of the writ petitions before this Court - Held that:- As investigation presently carried on by the enforcement Directorate against the petitioners is relatable and referable to 2G Spectrum Case and consequently, this Court has no jurisdiction to entertain these writ petitions, is acceptable.
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2016 (10) TMI 1010
Imposition of penalty u/s 77(8) of the Rajasthan Sales Tax Act, 1994 - excess physical stock found, than what was recorded in books - the stock of Namkeen on spot verification was 6422 kg whereas in the books it was weighted at 3892 kg only and, therefore, there was excess stock of 2530 kg - Held that: - the assessee failed to discharge the onus immediately as soon as the survey took place and the onus as noticed earlier was to bring to the notice of the higher officials of the Revenue, if something wrong happened in the survey proceedings and such having not been brought, the onus has not been discharged.
It is settled law that once the officer conducting survey on the basis of the very own statements of the respondent assessee having accepted the guilt/charge, having accepted about the excess stock and has no explanation to offer, it may not be proper for the court to enter upon merits of the controversy at all and unless it is demonstrated that the penalty proceedings initiated and imposed, is mala fide, perverse, based on no evidence, misreading of evidence or which a reasonable man could not form or that the person concerned was not given due opportunity, resulting in prejudice, said proceedings need no interference.
Penalty upheld - petition allowed - decided in favor of Revenue.
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2016 (10) TMI 1009
Survey - Non accounted stock - Evasion of tax - Penalty - Held that: -On analysing the statements, it clearly proves that a reasonable chance of hearing was given by the AO to the assessee to explain the unrecorded/unaccounted stock found of 90 cartons Pack Chain (Zip) but the assessee gave statement on oath which has been analysed. There is no occasion to say that these statements were given under pressure or on account of coercion. Mere saying is not sufficient that too before the Appellate Authorities - If the assessee had to retract/resile with the so-called statements recorded at the time of survey on oath, the assessee ought to have informed the higher officials by an affidavit or/and other acceptable evidence about coercion/pressure tactics having been inflicted on the assessee at the time of survey - Decided against the assessee.
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2016 (10) TMI 1008
Export of goods - jurisdiction of authority passing order - the decision in the case of M/s NVR Forgings Versus Union of India and others [2016 (5) TMI 7 - PUNJAB AND HARYANA HIGH COURT], contested - delay condoned - SLP dismissed.
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2016 (10) TMI 1007
The authorities have passed final order and therefore, draft amendment is required to be moved so that the respondents may have copies of the draft amendment and they file reply dealing with the contentions of the draft amendment - Held that: - Draft amendment is granted. The same shall be carried out - request for adjournment accepted.
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2016 (10) TMI 1006
Penalty u/s 271AAA r.w.s. 274 - requirement to pay the due taxes on the undisclosed income before the due date of filing of return of income - Held that:- For the purpose of claiming immunity from penalty there is no requirement of paying taxes on the undisclosed income before the due date of return of income under section 139 (1) of the Act. Further it is not disputed that the assessee had paid taxes on the undisclosed income surrendered in the statement made under section 132(4) of the Act. The manner of earning the income and its substantiation thereof has also been accepted by the Ld. CIT(A) and is not the matter of dispute. The assessee therefore has fulfilled all the conditions required for claiming immunity from the levy of penalty under the provisions of section 271 AAA of the Act. Moreover we find that in the case of other assessees belonging to the same group, the Ld CIT(A) accepted the contentions of the assessee, wherein besides other pleadings made, the assessee relied upon the aforestated apex court decision in the case of Gebilal Kanhaiyalal (2012 (9) TMI 297 - SUPREME COURT) on the impugned issue, and deleted the penalty levied. Further, admittedly ,no appeal has been filed by the Revenue against the said orders of the CIT(A).
Thus we set aside the order of the Ld. CIT(A) and delete the penalty levied under section 271AAA - Decided in favour of assessee.
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2016 (10) TMI 1005
Income from business - Warehousing Receipts - Nature of income - Income from House property OR busniss income - Held that:- Hon’ble Supreme Court in M/s. Rayala Corporation Pvt. Ltd. Vs. ACIT (2016 (8) TMI 522 - SUPREME COURT ) had held that in the facts of the said case where the assessee company had only one business and that was of leasing its property and earning rent therefrom; on such factual aspect, it was held that rental income was taxable under the head ‘Profits & Gains of business and profession’. It was further held by the Hon’ble Supreme Court that where the business of company was to lease its property to earn rent and therefore the income so earned was to be treated as its ‘Business income’. Following the said ratio laid down by the Hon’ble Supreme Court and in view of the ratio laid down by the Pune Bench of Tribunal in M/s. Nutan Warehousing Company Pvt. Ltd. Vs. DCIT (2006 (8) TMI 286 - ITAT PUNE-A ), thus hold that the warehousing receipts are to be assessed as ‘Income from business’ in the hands of assessee
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