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Showing 381 to 400 of 1585 Records
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2015 (8) TMI 1213
Dis-allowance of insurance claim written off - Held that:- It appears that theft was committed on 10th of September, 1989. Insurance was claimed by the assessee which was rejected by the insurance company in the next year mainly for the reason that there was no theft of plant and machinery or the raw materials. This amount was written off in the year 1993-94. Thus, in the assessment year 1993-94 no theft was committed, but, it was in the year 1989 and, therefore, rightly A.O. as well as the Commissioner (Appeals) have dis-allowed the insurance claim written off. ITAT has failed to appreciate that the theft was committed in the year 1989, whereas, the claim was written off in the assessment year 1993-94, despite the claim was rejected by the insurance company in the very next year of the theft and, therefore, such amount of insurance claim ought to be added in the income of the assessee. - Decided in favor of revenue.
Additions made u/s 40A(3) - ITAT upholding the order of the CIT(A) in restricting the additions made u/s 40A(3) to 20% of the cash purchases in excess of ₹ 10,000/- Held that:- In the facts of the present case, 175 vouchers were also fabricated, because no vouchers were signed for the receipts of such cash. Moreover, Section 40A(3) of the Income Tax Act, 1961 imposes a limit of 20% of disallowance of the total cash transaction which was brought into effect from 1st of April, 1996, whereas, prior thereto, there were no such limit of 20%. The present matter is pertaining to assessment year 1993-94 and, hence, the 20% limit which was brought into force from 1st of April, 1996 is not applicable. These aspects of the matter have not been properly appreciated by the Commissioner (Appeals), nor by ITAT, nor even exception/conditions referred to in Rule 6DD of the Income Tax Rules 1962 have been proved by the respondent-assessee. - Decided in favor of revenue.
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2015 (8) TMI 1212
Penalty under Section 271(1)(c) - compensation "in lieu of giving up their right" received - CIT(A) deleted penalty confirmed by ITAT - Held that:- The Court finds that in the present case the order of the CIT (A) explaining why Section 271(1)(c) is not attracted in the facts and circumstances of the case merits no interference. The issue that arose for determination in the quantum appeal does appear to have been debatable as is evident from the narration of facts. There was a reference made by the Assessee itself in the note of computation, that pursuant to the settlement agreement with Schneider, it had received compensation "in lieu of giving up their right under Press Note 18, which debarred the collaborator from carrying out business in India, without the permission of JV partners". The compensation was also "in lieu of agreeing not to use the name after an interim period i.e. to give up the benefit over a period of time of being known in the market as a joint venture partner of TE". Secondly, the Assessee armed itself with a legal opinion. These facts are sufficient to distinguish the present case from the facts in Zoom Communication (2010 (5) TMI 34 - DELHI HIGH COURT ) where the Court observed that apart from a making wrong claim, the Assessee did so not on the basis of any advice given to it by an auditor or tax expert. Even in MAK Data (2013 (11) TMI 14 - SUPREME COURT) the Supreme Court held on facts that the Assessee there had no intention to declare its true income and no explanation was offered by it for the concealment of income.
In the facts of the present case, the Court is satisfied that no error of law was committed either by the CIT (A) or the ITAT in holding that Explanation 1 to Section 271(1)(c) of the Act was not attracted. This was not a case of an Assessee furnishing inaccurate particulars. - Decided in favour of assessee.
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2015 (8) TMI 1211
Validity of assessment proceedings under Section 143 (3) read with Section 158BC - satisfaction had not been recorded during the course of assessment proceedings in respect of the person searched i.e. SAPL - rectification of mistake - Held that:- It was on recall application filed by the Revenue to recall the order dated 14th March, 2012 that the Tribunal realized that the proceedings in respect of the person searched i.e. SAPL has been completed on 28th February 2005 while the notice to the Petitioner was issued on 20th April 2004 i.e. during the pendency of the Assessment proceedings of SAPL. It was in that view that the Tribunal proceeded to hold that it had committed a mistake in as much as it had given a finding of the impugned satisfaction not being recorded during the course of proceeding of SAPL without ascertaining the date of completion of proceedings in respect of SAPL. The observations made by the Tribunal that the issue raised by the Revenue would amount to review during the course of hearing of the Revenue's application of recall of the order dated 14th March 2012 has to be seen in the light of the further observations of the Tribunal in the order dated 30th August, 2013 that it had committed a mistake and therefore exdebito justice, it was obliged to correct a mistake in having proceeded on fundamentally incorrect basis.
The issue does not stand concluded by virtue of the order of recall dated 30th August 2013. This would only enable the parties to putforth their views on correct facts. There is basis for the Tribunal to recall it's order dated 14th March 2012 as it does appear that the Tribunal had proceeded on a factual erroneous basis. We do not see what prejudice is being caused to the Petitioner in attending hearing before the Tribunal and arguing the matter on merits. The Tribunal has withdrawn it's order dated 14th March 2012 as stated in it's order dated 30th August 2013 for a mistake committed by it while passing order dated 14th March 2012. One more fact which cannot be lost sight of is that the period to file an appeal from the order dated 14th March, 2012 to this Court under Section 260A of the Act has long expired. Thus allowing the Petition at this late stage in the present facts may lead to injustice as it would revive the order dated 14th March, 2012 against which an appeal would be time barred. This of course, is not the basis for rejecting the Petition which we have dismissed on merits. However, this delay is just one more factor not to exercise our extra ordinary jurisdiction of writs.
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2015 (8) TMI 1210
Unaccounted cash payment - addition on the basis of seized documents - ITAT consequently held that there was no basis for sustaining the addition in respect of alleged cash transactions referred to in the document in the hands of the Assessee - Held that:- Revenue having taken a conscious decision to initiate proceedings against Inmon under Section 147/143 (3) of the Act, and having in those proceedings added the entire cash amount aforementioned in the hands of Inmon, must pursue those proceedings to their logical end. There is no factual or legal basis for seeking to add the same cash amount in the hands of both Inmon and the Respondent Assessee for the same AY. Further, nothing has been placed before the Court by the Revenue to doubt the correctness of the factual findings of the ITAT in respect of the document qua the Respondent Assessee. No substantial question of law arises for examination. - Decided against revenue.
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2015 (8) TMI 1209
Unexplained investment in stock - CIT(A) deleted the addition under section 69 - Held that:- Commissioner of Income-tax (Appeals) has particularly referred to the decision of the hon'ble Punjab and Haryana High Court in the case of Chauhan Papers P. Ltd. [2006 (10) TMI 426 - PUNJAB & HARYANA HIGH COURT] wherein it was held that if stock statement is made on estimate basis then addition is not called for. As observed earlier the assessee has merely given statement of monthly stock on the basis of a rough estimate by incorporating monthly purchases and sales and, therefore, that statement cannot be made the basis of addition. If there was a difference in stock, the differences should have been ascertained as at the end of the year then possibly the Assessing Officer could have made addition which has not been done. Therefore, we find nothing wrong with the order of the Commissioner of Income-tax (Appeals) and we confirm the same. - Decided against revenue.
Disallowance of proportionate interest with regard to debit balance in the name of its related concern - Held that:- Commissioner of Income-tax (Appeals) has correctly noted the fact that once it is a case of sale then even if the amount has not been received it cannot be construed as a case of diversion of funds. In any case one of the partner of M/s. Vibhor Sood and Bros., i.e., Smt. Kiran Sood has also given a loan of ₹ 10 lakhs to the assessee-firm.Therefore, we find nothing wrong with the order of the learned Commissioner of Income-tax (Appeals) and we confirm the same.- Decided against revenue.
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2015 (8) TMI 1208
Rejection of books of accounts - net profit assessed at 12 per cent. of the gross receipts and income was accordingly computed - Held that:- The authorities below have given the reasons for rejection of the books of account. The assessee has failed to verify the genuineness of the opening and closing balance of labour payable. The details called for by the Assessing Officer were not furnished. The assessee failed to justify the quantitative and qualitative details of the closing stock. The queries raised by the Assessing Officer were not properly addressed. Therefore, these were the sufficient reasons for rejection of the books of account by the Assessing Officer. The findings given by the Assessing Officer are thus, not rebutted by the assessee to the satisfaction of the authorities below. Even during the course of arguments, assessee could not specify as to what is the illegality in the orders of the authorities below in rejecting the books of account. Therefore, considering the findings of fact recorded by the authorities below for rejection of the books of account, we do not find any justification to interfere with their orders for rejection of the books of account. The cross-objection of the assessee is therefore, liable to be dismissed on this ground. - Decided against assessee.
Reasonableness of the profit rate applied by the authorities below - Held that:- AO has applied the profit rate of 12 per cent. for estimating the income of the assessee, however the history of the assessee suggests that the assessee at the maximum has shown net profit rate of 3.17 per cent. Therefore, considering the totality of the facts and circumstances, history of the assessee and objections raised by the Assessing Officer for rejection of the books of account, it would be reasonable and appropriate to apply profit rate of 8 per cent. as against 5 per cent. applied by the learned Commissioner of Income-tax (Appeals) because the Commissioner of Income-tax (Appeals) has failed to note that substantial defects have been pointed out in maintenance of the books of account which could not give the true picture of the profit earned by the assessee. Decided partly in favour of revenue.
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2015 (8) TMI 1207
Revision u/s 263 - as per CIT(A) AO in the present case failed to examine correct facts relating to export agency commission paid to the non-residents which were actually paid for various market services partaking the character of technical services - Held that:- The AO in the present case failed to examine the correct facts relating to the Export Agency Commission paid to the non-residents which were actually paid for various market service partaking the character of "technical services". AO has not examined the commission paid to various agents with regard to nature of services rendered by them, procurement of orders by them, agreements entered into with them etc. and applicability of provisions of section 40(a)(i) read with section 9(1)(vii) of the Act while completing the assessment.
The order passed by the Assessing Officer under section 143(3) read with section 147 allowing the claim of the assessee without examining the payments made to non-resident agents towards sales commission and applicability of provisions of section 40(a)(i) read with section 9(1)(vii) of the Act is certainly an order passed erroneously and prejudicial to the interests of the Revenue. Therefore, we hold that the Commissioner of Income Tax rightly invoked the provisions under section 263 of the Act directing the Assessing Officer to complete the assessment afresh after providing effective opportunity to the assessee. - Decided against assessee.
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2015 (8) TMI 1206
Computation of capital gains - whether indexed cost of acquisition has to be computed with reference to the year in which the previous owner was held the assessee as held by CIT(A) or the year in which the assessee become owner by way of inheritance? - Held that:- The object of giving relief to an assessee by allowing indexation is with a view to offset the effect of inflation. As per the CBDT Circular No.636 dated 31/8/1992 a fair method of allowing relief by way of indexation is to link it to the period of holding the asset. The said circular further provides that the cost of acquisition and the cost of improvement have to be inflated to arrive at . The indexed cost of acquisition and the indexed cost of improvement and then deduct the same from the sale consideration to arrive at the long term capital gains. If indexation is linked to the period of holding the asset and in the case of an assessee covered under Section 49(1) of the Act, the period of holding the asset has to be determined by including the period for which the said asset was held by the previous owner, then obviously in arriving at the indexation, the first year in which the said asset was held by the previous owner would be the first year for which the said asset was held by the assessee. See CIT v. Manjula J. Shah [2011 (10) TMI 406 - BOMBAY HIGH COURT]
The expression “held by the assessee” used in Explanation (iii) to Section 48 has to be understood in the context and harmoniously with other Sections. The cost of acquisition stipulated in Section 49 means the cost for which the previous owner had acquired the property. The term “held by the assessee” should be interpreted to include the period during which the property was held by the previous owner. See Arun Shungloo Trust v. CIT [2012 (2) TMI 259 - DELHI HIGH COURT ] - Decided in favour of assessee.
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2015 (8) TMI 1205
Treatment of expenditure incurred on repairs and maintenance as capital expenditure - Held that:- A perusal of the bills exhibited in the paper book show that the expenses have been incurred for the purchase of G.P. sheets, M. S. Angles, M. S. Channels and M. S. Beams. This clearly show that old hoardings were replaced by new hoarding with new structure. Our view is also fortified by the fact that the assessee has also incurred expenditure on fabrication of hoarding structures on the terrace. Obviously, the expenditures have been incurred for obtaining new advantages. The assessee has made new hoarding and supporting for the hoarding, the entire frame and foundations have been reconstructed which is evident from the bills on record. Thus we decline to interfere with the findings of the Ld. CIT(A) on treatment of expenditure incurred on repairs and maintenance as capital expenditure - Decided against assessee.
Charge on income - payment was diversion of income by overriding title - Held that:- The Undisputed fact is that in order to retire Shri Neville J. Mistry and to admit PTV and STV as partners with MS and KTV, it was agreed to pay ₹ 30 lakhs to Neville J. Mistry. Since the assessee was not having sufficient funds, the money was taken from TDV. It was agreed that on payment of said ₹ 30 lakhs Neville J. Mistry will retire from the firm. As per the agreement, Rs., 30 lakhs was given by TDV to MS, PTV, STV and KTV. A bare perusal of this would show that TDV had given loan to four persons. The loan was secured by a charge on the income of M/s. Fizza Publicity (assessee). ₹ 13.70 lakhs paid by the assessee is nothing but the repayment of loan for and on behalf of the 4 persons. In our understanding of the fact and the law, this is nothing but the application of income has rightly held by the Ld. CIT(A). - Decided against assessee.
Disallowance u/s. 43B on account of Service tax payable - the amount has not been paid before the due date of filing the return. - Held that:- The assessee has debited the entire sum of ₹ 18,44,091/- to its profit and loss account therefore the fact of the case are clearly distinguishable from the facts of the decision relied upon by theLd. Counsel. We also find that the Tribunal has considered the decision of the Co-ordinate Bench in the case of ACIT Vs Real Image Media Technologies (P) Ltd.(2007 (12) TMI 263 - ITAT MADRAS-C) which has been considered by the Ld. CIT(A) and rightly distinguished. Since the assessee has claimed the deduction in respect of the entire amount of service tax, the disallowance made by the AO and confirmed by the Ld. CIT(A) is upheld - Decided against assessee.
Disallowance of electricity expenses - Held that:- Revenue authorities have grossly failed in understanding the facts of the case. It is the say of the Ld. Counsel that the electricity expenses pertain to the electricity on hoarding sites and not to the company premises used by the assessee along with others. As the facts have not been properly appreciated by the lower authorities, in the interest of justice and fair play, we restore this issue to the file of the AO. The assessee is directed to furnish necessary details before the AO and the AO is directed to decide the issue afresh - Decided in favour of assessee for statistical purposes.
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2015 (8) TMI 1204
Claim of exemption under section 54 denied - no purchase deed was executed by the builder and that there was only an allotment letter issued - Held that:- As per the Revenue the advance could be returned at any time and, therefore, the assessee may lose the exemption under section 54 of the Act. In our considered opinion, the aforesaid does not militate against assessee’s claim for exemption in the instant assessment year, as there is no evidence that the advance has been returned. In case, if it is found that the advance has been returned, it would certainly call for forfeiture of the assessee’s claim under section 54 of the Act. In such a situation, the proviso below section 54(2) of the Act would apply whereby it is prescribed that such amount shall be charged under section 45 as income of the previous year, in which the period of three years from the date of the transfer of the original asset expires. The aforesaid provisions also does not justify the action of the Assessing Officer in denying the claim of exemption under section 54 in the instant assessment year.
The assessee can be said to have complied with the requirement of section 54 of the Act; and, the exemption has been incorrectly denied by the lower authorities. As a matter of passing, we may also mention here the reliance placed by Ld. Representative of the assessee on the decision of our Coordinate Bench in the case of Shri Khemchand Fagwani vs. ITO, [2015 (8) TMI 1019 - ITAT MUMBAI] wherein also claim of exemption under section 54 of the Act was allowed under similar circumstances. In the light of the precedent, we find no reason to deny the claim under section 54 of the Act. - Decided in favour of assessee.
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2015 (8) TMI 1203
Bogus purchases - deletion of 75% of bogus purchases by CIT(A) - matter further travelled to the Hon’ble Bombay High Court, wherein set aside the order of the ITAT insofar as it relates to disallowance of purchases and restored the matter back to the file of ITAT for fresh consideration of the issue - Held that:- After considering the assessee's affidavit, the Hon'ble High Court restored the matter back to the file of the Tribunal for fresh consideration by considering the assessee's plea that the assessee has furnished PAN of eight parties from whom purchases have been made by the assessee. However, details of such PAN No. of eight parties do not find any mentioned in the orders of the lower authorities nor in the orders of the tribunal passed on earlier occasions. Genuineness of purchase can be verified only after examining the assessment records of these parties as per PAN No. details filed through affidavit, before Hon’ble High Court. For this purpose both the Id. AR and Id. DR fairly conceded that the matter may be restored to the file of the A. O. for re-examining the alleged purchases in the light of the fact that all the eight parties from whom purchases was made are having PAN.
Thus we restore the matter back to the file of the A. O. for deciding the genuineness of the purchases made from eight parties having PAN as supplied by the assessee before the Hon'ble High court as per the affidavit dated 31.12.2011, as reproduced above. - Decided in favour of assessee and revenue for statistical purposes.
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2015 (8) TMI 1202
Sale of shares - assessment as Capital Gains or Business income - AY 2007-08 - Held that:- The gains arising on its sale should be assessed as Short term capital gains only. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to assess the gains arising on sale of shares of M/s Adani Enterprises Limited under the head “Income from Capital gains”.- Decided in favour of assessee.
Disallowance of foreign travel expenses - Held that:- It is well settled that the expenditure need not produce revenue immediately, since it is usual that these expenditure may bear fruits in future. The assessee has also submitted that these expenses have not been incurred by the directors, but the representatives of the assessee company who hold high educational qualification, meaning thereby the element of personal expenditure is also ruled out. Hence, we are of the view that the tax authorities are not right in law in holding that the travelling expenses are capital/pre-operative in nature. Accordingly we set aside the order of Ld CIT(A) on this issue and direct the AO to allow the deduction towards foreign travel expenses.- Decided in favour of assessee.
Assessment of Short term capital gain arising on sale of shares as business income - AY 2008-09 - Held that:- The assessee has accumulated the shares initially in instalments and later sold them in instalments. As in last year, no interest bearing funds have been used and average holding period is about 180 days. The assessee has held the same as its investment. The assessee has declared the gains under the head business in respect of shares held as trading asset. All these factors support the contention of the assessee that the shares of M/s Balaji Telefilm Ltd were held as investment. Accordingly, we hold that the tax authorities are not justified in assessing the profit generated on sale of shares of M/s Balaji Telefilm Ltd as business income, that too, without bringing any other material on record. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to assess the same under the head “Short term Capital Gain”.- Decided in favour of assessee.
Disallowance made u/s 14A - Held that:- The provisions of Rule 8D should not applied in the instant case, since the disallowance computed under Rule 8D works out to disproportionately higher figure of ₹ 13,57,011/-. Hence, considering the facts discussed above, we are of the view that the disallowance of ₹ 2,07,022/- made by the assessee does not call for any interference. In view of the above, we set aside the order of Ld CIT(A) on this issue and direct the AO to restrict the disallowance u/s 14A of the Act to the amount disallowed by the assessee. - Decided in favour of assessee.
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2015 (8) TMI 1201
Disallowance u/s 14A - CIT(A) deleted the addition - Held that:- Nothing has been brought on record by the AO to hold why the suo moto disallowance made by the assessee u/s 14A on facts could not be accepted. On consideration thereof it is seen that in the peculiar facts and circumstances of the case where the AO has not recorded his finding as to why he was not satisfied by the correctness of assessee’s claim of expenditure. No distinguishing facts and circumstances has been pointed out by the Ld. Sr. DR. In assessee’s own case in 2008-09 wherein it was held that Rule 8D cannot be applied for want of recording of requisite satisfaction by the AO it was submitted that facts and circumstances being identical, the departmental appeal on identical fact had been dismissed - Decided against revenue.
Addition on commission paid to the Managing Director of the assessee company, u/s 36(1)(ii)- Held that:- As decided in assessee's own case for 2007-08 & 2008-09 as per section 17(1) of the Act, the term “salary” includes any, fees, commission, perquisites or profit in lieu salary, All the sums are taxable under the head “salary” only. These two directors, while filing the return of income, declared not only the salary but commission also as part of income under the head “salary” The same are assessed as such. Therefore, it is incorrect to hold that bonus or commission shall not form part of salary or remuneration. In accordance with the provisions of section 36(1)(ii) any sum paid to an employee as bonus or commission for services rendered where such sum would, not have been payable to him as profit or dividend if it had not been paid as bonus or commission is allowable. The sum paid to the directors is as an employee of the company. The bonus or commission payable for the services rendered and are in accordance with the terms or employment. The directors are not only shareholders of the company. Therefore, it cannot be said that if the commission was not paid, such sum would have been paid to the employees as profit or dividend. Thus, the exception provided in section 36(1)(ii) do not apply. In such circumstances the amount payable as commission are allowable u/s 36(1)(ii) of the Act. - Decided in favour of assessee.
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2015 (8) TMI 1200
Principle of mutuality - Co-operative Society - Disallowance of deduction u/s. 80P - Revenue has denied deduction on the profits earned by assessee from consumer and garments division on the ground that such activities are akin to the activities of consumer society - Held that:- It is an admitted position that these activities were carried out by the assessee for several years and no objection whatsoever was raised by the Department on this count. The assessee has been consistently following the same method of accounting and the nature of activities carried out in the past, as well as, in subsequent assessment years is same. It was only during the impugned assessment year and the following assessment year that the Revenue has raised dispute with respect to profits from consumer goods and garments division
We are of the considered view that since the turnover from the consumer divisions as compared to the total turnover of the assessee is miniscule, it would not change the nature of activities of Co-operative Society. The assessee Co-operative Society is primarily engaged in providing credit facilities to its members and it is for the benefit for members that consumer division and cloth division have been included in the activities of the society. By providing such facilities to its members it cannot be said that the assessee is engaged in trading of consumer goods on commercial basis. The profits arising from aforesaid divisions are not liable to be taxed under the principle of mutuality. Any income generated from facilities, amenities, privileges provided to the members in accordance with the bye-laws and regulations of the society is exempt on the principle of mutuality. See CIT Vs. Ranchi Club Ltd. [1991 (9) TMI 52 - PATNA High Court] - Decided in favour of assessee
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2015 (8) TMI 1199
Contingent liability disallowed - Held that:- Provision should be made for all known liabilities and losses even though the amount cannot be determined with certainty. In this case, the assessee is not disputing the liability at all. The assessee is disputing only quantification of demand raised by the electricity board. Therefore, in our view incurring of liability is certain and it is not contingent. Only quantification is to be made as to how much expenditure to be incurred on electricity charges. In the circumstances, we hold that expenditure is allowable expenditure. - Decided in favour of assessee.
TDS on reimbursement of expenses - Held that:- There is no categorical finding that expenses were all only reimbursements made by the assessee. No such categorical finding is coming out from the orders of the lower authorities. The alternative submission of the assessee that the provisions of section 40(a)(ia) have no application for the payments made within the accounting year in view of the decision of the hon'ble Allahabad High Court in the case of CIT v. Vector Shipping Services Pvt. Ltd. [2013 (7) TMI 622 - ALLAHABAD HIGH COURT ] is accepted, as this Tribunal is consistently holding such view. Therefore, for limited purpose of examining as to whether all these payments were made within the accounting year, this issue is remitted back to the file of the Assessing Officer - Decided in favour of assessee for statistical purposes.
Disallowing the bad debts written off - Held that:- Following the decision of the hon'ble Supreme Court in the case of T. R. F. Ltd. [2010 (2) TMI 211 - SUPREME COURT ] we direct the Assessing Officer to delete the disallowance of bad debts of ₹ 18,440 which was written off by the assessee in the books of account.- Decided in favour of assessee
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2015 (8) TMI 1198
Additions u/s 41(1) on account of cessation of liability - Held that:- It is not a case where the CIT(A), in the absence or because of the failure of the assessee to provide addresses, confirmations etc. from the alleged creditors, has assumed that the liability has ceased to exist, but he himself made further enquiries to find out the alleged creditors through the official machinery. When he had satisfied himself that neither in the last so many years those parties had ever been seen by anybody, nor any known address of them was available, there was never any demand of payment by any of the above named parties from the assessee for the last more than 10 years, no income tax returns had been filed by them, only then he concluded that the liability of the assessee, in fact, had ceased to exist. In our view, merely because the assessee now has offered the said amount as income, that itself, does not support the case of the assessee that the liability had not ceased to exist in the year under consideration, rather, this fact supports, the case of the Revenue that even after passing of further 5 years from the date of assessment, the assessee could not trace his creditors. We, therefore, do not find any infirmity in the well-reasoned order of the Ld. CIT(A) in this respect. There being no merit in the appeal of the assessee, the same is accordingly dismissed - Decided against assessee.
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2015 (8) TMI 1197
Expenditure on purchase of Audio Rights - revenue v/s capital expenditure - Held that:- We concur with the finding of the learned CIT(A) that the assessee is a manufacture of music and the new material is the master plate which can be obtained only by way of assignment of copyrights. Since the assignment of copy rights and the amount paid is for procuring new material and to ensure its smooth and legal supply as understood in the commercial parlance, the expenditure is Revenue in nature.
The master plate of one movie cannot be used for another and for every movie a new and different master plate is required; indicating that the master plate is nothing more than raw material. From the factual matrix of the case on hand, we find that the master plate of a movie is only a new material from which copies are produced on cassettes for that movie only and being material to the evaluation of the gross profit derived from the manufacture and sale of copies / cassettes, would, in our considered view, be construed as Revenue expenditure. - Decided in favour of assessee.
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2015 (8) TMI 1196
Penalty proceedings under Section 271(1)(c) - assessee offered an amount voluntarily - Held that:- In penalty proceedings, the burden was always on the revenue to prove concealment and a finding reached in the quantum appeal that a particular income is liable to be added as income of the assessee is not binding in penalty proceedings. In this case, the A.O. imposed the penalty based on the statement recorded under Section 131 of the Act and thereafter, the assessee has submitted detailed reply with regard to the nature of business under what circumstance the amount was offered as the additional income. The A.O. without enquiry/investigation to verify the correctness of the explanation given by the assessee, he has simply rejected the explanation given by the assessee and imposed the statement given by the Managing Partner of the company during the course of survey.
Keeping in view the facts and circumstances of the case and also following the above said judicial precedence, we are of the opinion that this is not a fit case to levy penalty under Section 271(1)(c) - See CIT v. S. Khader Khan Son (2013 (6) TMI 305 - SUPREME COURT ) - Decided in favour of assessee.
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2015 (8) TMI 1195
Penalty under section 272B - not quoting PAN in the appeal filed before the CIT(A), - Held that:- The department has brought no material before us to show that the assessee was allotted PAN by the AO as per the provisions of sub-section (2) of section 139A of the Act.
Further, as per the provisions of section 273B, penalty under section 272B is not leviable, if the alleged default was for reasonable cause.We further find from the challan of Tribunal fee, attached with the appeal memo that the assessee has quoted PAN therein.
We further find that no material was brought before us to show that the assessee was informed by the department of her PAN and legal requirement of putting PAN at any time so that it can be inferred that the default was willful or bona fide. Keeping in view the entire facts, in our considered view, the default on the part of the assessee was because of her ignorance and not because of any mala fide intention, and therefore, we delete the penalty levied under section 272B of the Act. - Decided in favour of assessee.
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2015 (8) TMI 1194
Premium paid on Keyman Insurance - disallowance of excess premium and added to the income - CIT(A) following his predecessors order in assessee’s own case for A.Y. 06-07 decided the issue in favour of Assessee - Held that:- CIT(A) while granting the relief has noted that the premium paid in the current financial year was the second installment and the first installment of premium paid in A.Y. 05-06 by the Assessee has been accepted and not disputed by Revenue. Before us, the Revenue could not controvert the findings of CIT(A), nor could he bring any decision of High Court in its support. We also find that the Hon. Bombay High Court in the case of CIT vs. B.N. Exports (2010 (3) TMI 186 - BOMBAY HIGH COURT) has held that premium on the Keyman Insurance Policy of partner of the firm is wholly and exclusively for the purposes of business and is allowable as business expenditure. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus this ground of Revenue is dismissed. - Decided in favour of assessee.
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