|
Advanced Search Options
Case Laws
Showing 41 to 60 of 628 Records
-
2011 (12) TMI 757
Issues Involved:1. Allocation of common expenses for 80IB deduction. 2. Deduction u/s 80IB in respect of profit on sale and development of land. 3. Deletion of addition made u/s 14A in respect of expenditure relating to earning of exempt income. Summary:1. Allocation of Common Expenses for 80IB Deduction:The revenue challenged the CIT(A)'s decision on the allocation of common expenses for 80IB deduction. The AO had allocated overhead expenses based on turnover, while the assessee used the cost incurred during the year. The CIT(A) followed the Tribunal's order for AY 2005-06, which favored the cost basis. The Tribunal upheld the CIT(A)'s decision, stating that the cost/expenditure basis is more reasonable than the turnover basis. Thus, ground nos. 2 and 3 raised by the revenue were dismissed. 2. Deduction u/s 80IB in Respect of Profit on Sale and Development of Land:The AO excluded profits from the sale of undivided interest in land while computing deduction u/s 80IB for certain projects. The CIT(A), following the Tribunal's order for AY 2005-06, ruled in favor of the assessee, stating that the profits from the sale of undivided interest in land should not be excluded. The Tribunal upheld this decision, dismissing ground no. 4 raised by the revenue. 3. Deletion of Addition Made u/s 14A in Respect of Expenditure Relating to Earning of Exempt Income:For AY 2007-08, the AO applied Rule 8D and disallowed a sum of Rs. 12,51,750/- as expenditure related to exempt income. The CIT(A) allowed the assessee's appeal, citing the absence of evidence of actual expenditure incurred. The Tribunal noted that Rule 8D applies from AY 2008-09 and remitted the matter back to the AO to determine if any expenditure was incurred in relation to the exempt income, following the Bombay High Court's judgment in Godrej and Boyce Mfg. Co. Ltd. v DCIT. Thus, ground no. 5 was allowed for statistical purposes. Conclusion:The appeal for AY 2006-07 was dismissed, while the appeal for AY 2007-08 was partly allowed for statistical purposes.
-
2011 (12) TMI 756
Issues involved: Petition for wrongful arrest and detention of corpus Ishwarbhai Dahyabhai Patni.
Summary:
1. The wife of Ishwarbhai Dahyabhai Patni filed a petition seeking his release, as the criminal case against him had been disposed of back in 2008, rendering his arrest without authority under the law. The police failed to provide any information on pending appeals or orders from higher forums, leading to the conclusion that the arrest was unjustified.
2. Despite the disposal of the case in 2008, this information was not brought to the attention of the Magistrate or the Sessions Judge during bail applications, resulting in the rejection of bail. The court criticized the lack of diligence on the part of the APP and police in resisting the bail applications based on incorrect premises.
3. The court ordered the immediate release of Ishwarbhai Dahyabhai Patni, who was produced before the court, as his detention was deemed unlawful. The seriousness of effecting an arrest for a case that had been terminated three years prior was highlighted, with the applicant waiving any claim for compensation for wrongful arrest.
4. The court directed the Secretary of the Home Department to examine the matter, take remedial measures to prevent such incidents in the future, and report back within three months. Failure to submit the report would result in further court action. The petition was disposed of, and the rule was made absolute.
5. The learned APP was tasked with communicating the court's order to the Secretary of the Home Department for necessary action.
-
2011 (12) TMI 755
Issues Involved:
The judgment involves the issue of whether interest income earned by the assessee should be considered as "Income from Business" or "Income from Other Sources."
Issue 1: Classification of Interest Income
The assessee, a company owned by the Government of Maharashtra for tourism development, received interest on grants deposited in fixed deposits. The Assessing Officer (AO) treated the interest income as "Income from Other Sources," while the assessee claimed it to be business income. The CIT(A) upheld the AO's decision. The assessee argued that the interest was directly connected to its business activities as per Ministry of Tourism directions. Citing various judicial pronouncements, the assessee contended that interest income from such deposits should be considered as "Income from Business." However, the Departmental Representative (D.R) relied on a Bombay High Court case to support the AO's decision. The Tribunal dismissed the appeal, stating that the interest income did not have a direct relationship with the business activity, hence classifying it as "Income from Other Sources."
Significant Legal References:
- CIT Vs. A.P. Industrial Infrastructure Corporation Ltd.
- CIT Vs. Lok Holdings Ltd.
- CIT v. Paramount Premium P. Ltd.
- CIT Vs. Shree Panchaganga Sahakari Sakhar Karkhana Ltd.
- CIT Vs. Producin (P) Ltd.
- Commissioner of Income-tax Vs. Indo Swiss Jewels Ltd.
- CIT vs. Swani Spice Mills Pvt. Ltd.
- CIT Vs. Asian Star Co. Ltd.
- Tuticorin Alkali Chemicals & Fertilizers Ltd. Vs. CIT
- CIT Vs. Bokaro Steel Ltd.
- CIT Vs. Karnataka Power Corpn.
- Bongaigaon Refinery & Petrochemicals Ltd. Vs. CIT
- CIT Vs. Govinda Choudhury & Sons
- CIT Vs. Karnal Co-operative Sugar Mills Ltd.
- CIT Vs. Autokast Ltd.
- CIT Vs. Goldtex Furnishing Industries
- CIT Vs. Cosmos International
- Kashmir Arts Vs. CIT
- CIT Vs. Ravi Ratna Exports (P) Ltd.
- Pandian Chemicals Ltd. Vs. CIT
Issue 2: Deduction for Write-off of Stores and Spares
The assessee also raised a ground regarding the denial of a deduction of Rs. 7,00,000 for the write-off of stores and spares. However, this ground was not pressed by the assessee and was dismissed as not pressed.
Issue 3: Depreciation Claim on Stores and Spares
In an alternative argument, the assessee contended that depreciation claim on stores and spares treated as capital assets should be allowed. However, this issue was not specifically addressed in the judgment, as the primary focus was on the classification of interest income.
In conclusion, the Appellate Tribunal upheld the decision to classify the interest income as "Income from Other Sources," dismissing the appeal by the assessee. The issues regarding the deduction for write-off of stores and spares and the depreciation claim on stores and spares were not extensively discussed in the judgment due to the primary dispute over the classification of interest income.
-
2011 (12) TMI 754
The judgment was passed by the Allahabad High Court in the case involving Shubham Agrawal, Bharat Ji Agrawal, and Piyush Agrawal as petitioners against the respondent C.S.C. The citation is 2011 (12) TMI 754. The order refers to a previous order in Writ (Tax) No. 1484 of 2007 involving I.T.C. Limited vs. State of UP and others.
-
2011 (12) TMI 753
Issues involved: Petition for quashing investigation notices and summons u/s 235 of Companies Act, 1956; Application for stay of operation of summons dated 1.12.2011.
Judgment Details:
Petition for Quashing Investigation Notices and Summons:
The petitioner filed a petition seeking to quash notices and summons issued under Section 235 of the Companies Act, 1956. The petitioner contended that no order for investigation could have been passed without a written order from the Registrar of Companies u/s 234(1) of the Act. The respondents opposed the petition, asserting their authority to conduct investigations under the Act. The Court directed the respondents to file a counter affidavit within four weeks, with a rejoinder allowed before the next hearing on 21st February, 2012.
Application for Stay of Operation of Summons:
Another application was filed by the petitioner requesting a stay on the operation of the summons dated 1.12.2011. The petitioner claimed to have furnished the requested documents to the respondents, which was disputed by the respondents. The respondents highlighted that certain documents were still pending, affecting the investigative process. The petitioner agreed to provide most documents except for specific ones. The Court granted four weeks to the respondents to file a reply and directed the petitioner to furnish specified documents within two weeks to avoid coercive action under Section 243 of the Act until the next hearing date.
Conclusion:
The Court allowed the exemption in one application and provided directions for document submission in the other, ensuring a fair process in the investigation under the Companies Act, 1956.
-
2011 (12) TMI 752
The Supreme Court of India granted leave to the petitioner and issued notice on the appellant's prayer for interim relief. The operation of the impugned judgment and the government order dated 11.5.2009 were stayed. The petitioner must serve the respondents before the next hearing to maintain the interim order.
-
2011 (12) TMI 751
Issues Involved:
1. Legality of the High Court's order setting aside the Additional Sessions Judge's decision.
2. Allegations of conspiracy and fraud.
3. Suppression of facts by the complainant.
4. Compliance with Section 202 of the Code of Criminal Procedure.
5. Admissibility and consideration of documents at the revisional stage.
Summary:
1. Legality of the High Court's Order:
The Supreme Court examined the Special Leave Petitions challenging the High Court's order dated 6th May 2011, which set aside the Additional Sessions Judge's decision and restored the order of the Additional Chief Metropolitan Magistrate taking cognizance of offences allegedly committed by the Petitioners. The High Court concluded that the Additional Sessions Judge erred in setting aside the summoning order based on a photocopy of a document produced at the revisional stage.
2. Allegations of Conspiracy and Fraud:
The complainant, Respondent No. 1, filed a criminal complaint alleging offences u/s 417, 420, 465, 467, 468, 471 read with Section 120B of IPC, claiming the Petitioners conspired to defraud him. The Additional Chief Metropolitan Magistrate took cognizance and issued process against the accused. The Additional Sessions Judge initially set aside this order, concluding that the alleged fraud was ratified in a subsequent meeting on 19th July 2005.
3. Suppression of Facts by the Complainant:
The Additional Sessions Judge found fault with the complainant for allegedly suppressing the fact of a complaint filed before the Additional Chief Metropolitan Magistrate at Bangalore. However, the High Court noted that the Bangalore complaint had been quashed by the Karnataka High Court, and thus, there was no suppression of material information.
4. Compliance with Section 202 of the Code of Criminal Procedure:
The High Court held that the provisions of Section 202 of the Code of Criminal Procedure were complied with by the Magistrate while taking cognizance and issuing process. The Additional Sessions Judge's contrary conclusion was found to be erroneous.
5. Admissibility and Consideration of Documents at the Revisional Stage:
The High Court criticized the Additional Sessions Judge for relying on a photocopy of the minutes of the meeting dated 19th July 2005, which was produced for the first time at the revisional stage. The High Court emphasized that such documents could not be considered without proper proof and verification of their genuineness. The Supreme Court upheld this view, stating that the accused could not introduce documents at the revisional stage unless they were of unimpeachable character and legally admissible.
Conclusion:
The Supreme Court dismissed the Special Leave Petitions, affirming the High Court's order. The Court reiterated that the complainant's allegations, if taken at face value, made out a prima facie case against the accused, justifying the issuance of process by the Magistrate. The Court also emphasized that the accused could present their defense and relevant documents at the proper stage during the trial.
-
2011 (12) TMI 750
Issues involved: Appeal against denial of exemption u/s 11 of the Income-tax Act, 1961.
Summary:
1. The appeal was filed by the revenue against the denial of exemption u/s 11 of the Income-tax Act, 1961 by the Assessing Officer (AO) based on the grounds that the trust was created for the benefit of a particular religious community or caste, contravening sec. 13(1)(b) of the Act.
2. The Commissioner of Income-tax (Appeals) allowed the assessee's case, citing previous Tribunal decisions in favor of the assessee for different assessment years, directing the AO to grant exemption u/s 11 and allow all expenses claimed by the assessee.
3. The ITAT, Delhi Bench 'C', New Delhi upheld the CIT(A)'s decision, following previous Tribunal orders confirming the assessee's entitlement to tax exemption u/s 11, despite the Department's appeal to the High Court. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the revenue's appeal.
Judgment: The ITAT upheld the CIT(A)'s decision to grant exemption u/s 11 of the Act, following previous Tribunal orders in favor of the assessee and dismissing the revenue's appeal.
-
2011 (12) TMI 749
Issues Involved: Appeal against order allowing exemption u/s 11 of the Income Tax Act for a society working towards benefit of a particular community.
Summary:
Issue 1: Exemption u/s 11 of the Income Tax Act
The Assessing Officer (AO) denied the claim for exemption u/s 11 of the Act to the society, stating violation of sec. 13(1)(b) based on the society's activities benefiting a particular community. However, the CIT (A) allowed the claim based on ITAT decisions in the assessee's own case for previous assessment years. The ITAT upheld the CIT (A)'s decision, citing consistency in previous rulings and similarity in facts and circumstances. Consequently, the appeal against the exemption u/s 11 was dismissed.
Issue 2: Additional Grounds
No additional grounds were raised during the appeal, leading to the dismissal of the second ground as well.
In conclusion, the appeal was dismissed by the ITAT Delhi, upholding the exemption u/s 11 of the Income Tax Act for the society in question based on previous rulings and consistency in decisions.
-
2011 (12) TMI 748
Issues Involved:
1. Disallowance u/s 40(a)(i)
2. Computation of deduction u/s 80-IA
3. Addition towards suppression of sales
4. Addition towards understatement of closing stock
5. Disallowance of bad debts
Summary:
1. Disallowance u/s 40(a)(i):
The first issue pertains to the disallowance of Rs. 87,72,280/- u/s 40(a)(i) for non-deduction of TDS on export commission paid to overseas agents. The assessee argued that the payments were made for services rendered outside India and thus not chargeable to tax in India. The CIT(A) deleted the disallowance, citing that the overseas agents had no PE in India and the services were rendered entirely outside India. The Tribunal upheld this decision, referencing its own prior ruling in the assessee's case for AY 2006-07 and the Supreme Court decision in GE India Technology Centre Pvt Ltd Vs. CIT (327 ITR 456).
2. Computation of deduction u/s 80-IA:
The second issue involves whether losses and unabsorbed depreciation from earlier years should be notionally brought forward and set off while computing deduction u/s 80-IA. The CIT(A) directed the AO to rework the deduction without setting off losses on a notional basis, following the jurisdictional High Court decision in Velayudhaswamy Spinning Mills Ltd. vs. ACIT (231 CTR 368). The Tribunal confirmed this, emphasizing that once losses are set off in earlier years, they cannot be notionally brought forward.
3. Addition towards suppression of sales:
The third issue concerns the addition of Rs. 17,94,93,705/- towards alleged suppression of sales. The AO added this amount due to discrepancies between the sales ledger and invoices. The CIT(A) deleted the addition, noting that the assessee's accounts were audited by the CAG and no suppression was found. The Tribunal upheld this deletion, agreeing with the CIT(A)'s findings.
4. Addition towards understatement of closing stock:
The fourth issue relates to the addition of Rs. 4,45,67,775/- for understatement of closing stock. The AO made this addition on a presumptive basis, arguing that continuous production indicated the presence of finished goods stock. The CIT(A) deleted the addition, explaining that the production on the last days of the accounting year was accounted for as "work in progress." The Tribunal confirmed this deletion, noting that the accounts were audited and no discrepancies were found.
5. Disallowance of bad debts:
The final issue involves the disallowance of Rs. 87,36,000/- claimed as bad debts. The AO disallowed the claim, but the CIT(A) deleted the disallowance, stating that post-01.04.1989, there is no requirement to prove that the debt has actually become bad, as long as it is written off in the books. The Tribunal upheld this deletion, referencing the Supreme Court decision in T.R.F. Ltd. vs. CIT (323 ITR 397).
Conclusion:
The Tribunal dismissed the Revenue's appeal, confirming the CIT(A)'s deletions and directions on all issues. The order was pronounced in the open Court on 02.12.2011.
-
2011 (12) TMI 747
Issues Involved:
1. Deduction under Section 80IB.
2. Disallowance of salary and wages.
3. Indexation on UTI deep discount bonds.
Detailed Analysis:
Issue 1: Deduction under Section 80IB
The first issue revolves around the deletion of the addition of Rs. 2,06,49,280/- made on account of Deduction under Section 80IB. The Assessing Officer (A.O.) had found that the assessee was not eligible for the deduction as the number of workers attending the factory and working in the manufacturing process was less than 10. However, the CIT(A) deleted this addition, and the Tribunal upheld this decision based on its previous rulings in the assessee's own case for the assessment years 2003-04 and 2006-07. The Tribunal found that the A.O. had only considered workers engaged in one unit, whereas the assessee had another washing unit of the same activity. The workers from both units should have been considered, and the CIT(A)'s findings were supported by the wages register, attendance register, and inspection reports from the factory and ESI inspectors. Thus, the Tribunal concluded that the assessee was eligible for the deduction under Section 80IB, and the addition made by the A.O. was rightly deleted by the CIT(A).
Issue 2: Disallowance of Salary and Wages
The second issue pertains to the deletion of the addition of Rs. 1,50,000/- each towards salary and wages disallowed by the A.O. The Tribunal noted that the CIT(A) had allowed the actual salary expenses incurred on the workers since it was established that the assessee was employing more than 10 workers. This finding was in line with the Tribunal's decision on the first issue regarding the number of workers. The Tribunal found no reason to interfere with the CIT(A)'s order, and thus, the ground raised by the revenue was rejected.
Issue 3: Indexation on UTI Deep Discount Bonds
The third issue concerns the allowance of indexation on UTI deep discount bonds, which was disallowed by the A.O. while computing income from capital gains. The A.O. had noted that the assessee had claimed a Long Term Capital Loss by applying indexation to the cost of acquisition of UTI MIP 99 units, which were converted into tax-free bonds. The A.O. disallowed the indexation benefit, invoking the 3rd proviso to Section 48, which excludes bonds and debentures from the benefit of indexation. The CIT(A) allowed the indexation benefit by following a Tribunal decision in the case of Maanaraj Trading Pvt. Ltd.
Upon review, the Tribunal examined the definitions and characteristics of bonds and debentures as discussed in various legal and commercial dictionaries and the Income Tax Act. The Tribunal concluded that UTI MIP 99 units qualify as bonds because they bind UTI to pay a fixed sum annually and repay the capital amount after a fixed term, similar to fixed deposits and National Savings Certificates. Since the Tribunal in the Maanaraj Trading case did not address whether UTI MIP units are bonds, the Tribunal in the present case decided independently that UTI MIP 99 units are indeed bonds. Consequently, the assessee was not eligible for indexation benefits as per the 3rd proviso to Section 48. Therefore, the Tribunal allowed the revenue's appeal on this ground.
Conclusion:
The appeal of the revenue was partly allowed. The Tribunal upheld the CIT(A)'s order on the issues of deduction under Section 80IB and disallowance of salary and wages but reversed the CIT(A)'s order on the issue of indexation on UTI deep discount bonds, thereby disallowing the indexation benefit.
-
2011 (12) TMI 746
Issues involved: Interpretation of Section 6 and Section 54F, applicability of TDS benefit, stay of coercive steps by Revenue.
Interpretation of Section 6 and Section 54F: The petitioner raised concerns regarding the residential status of the assessee and the Assessing Officer's alleged ignorance of the Explanation of Section 6. Additionally, the petitioner highlighted a tribunal decision in their favor regarding the interpretation of Section 54F. On the other hand, the respondent cited another tribunal decision favoring the Revenue, stating that the purchased property is located abroad, not in India.
Applicability of TDS benefit: The petitioner claimed entitlement to the benefit of TDS amounting to Rs. 2.04 crores that was deducted. This claim was made in relation to the ongoing proceedings and the pending first appeal before the Appellate Authority.
Stay of coercive steps by Revenue: The court ordered a stay on further coercive actions by the Revenue until the next hearing date, subject to the petitioner depositing specified amounts at different intervals. The petitioner was also instructed to ensure that their immovable property is not sold, transferred, or encumbered during this period, with the attachment order remaining in place but no further steps for sale being taken.
Procedural directions: The court directed the filing of a counter affidavit within 6 weeks, with a rejoinder affidavit to be filed within 6 weeks after the counter affidavit is served. The case was listed for the next hearing on 7th March, 2012, with copies of the order to be provided to both parties.
-
2011 (12) TMI 745
Issues Involved:
1. Retrospective application of Section 12AA(3).
2. Genuineness of the activities of the institution.
3. Compliance with the objects of the institution.
4. Examination of financial transactions and expenditures.
5. Validity of the cancellation of registration under Section 12AA.
Issue-wise Detailed Analysis:
1. Retrospective Application of Section 12AA(3):
The primary issue was whether the power to withdraw registration under Section 12AA(3) could be applied retrospectively. The Tribunal noted that the power to withdraw registration was introduced in the statute books w.e.f. 1-10-2004 and further amended w.e.f. 1-6-2010 to include registrations obtained under Section 12A. The Tribunal concluded that the cancellation of registration granted vide order dated 8-1-2002 for assessment year 2001-02 onwards was bad in law as the provision was not clarificatory or explanatory and thus could not be applied retrospectively. This stance was supported by several judicial precedents, including *Director of IT (Exemptions) v. Mool Chand Khairati Ram Trust* and *Oxford Academy for Career Development v. Chief CIT*.
2. Genuineness of the Activities of the Institution:
The Tribunal examined whether the activities of the institution were genuine and carried out in accordance with its objects. It noted that the assessee was running various educational institutions affiliated with different universities and government authorities, and there was no dispute about the object of the institution, which was to impart education. The Tribunal emphasized that issues such as expenditure on advertisements, benefits provided to office bearers, and surplus generation were irrelevant for examining the genuineness of activities for the purpose of cancellation of registration under Section 12AA(3). It cited cases like *Maharashtra Academy of Engineering & Educational Research (MAEER) v. CIT* to support this view.
3. Compliance with the Objects of the Institution:
The Tribunal observed that the CIT's various observations regarding advertisement expenses, benefits to office bearers, and surplus generation did not indicate that the activities were not in accordance with the institution's objects. It reiterated that the motive of education is charitable, and surplus generated and utilized for the objects of the trust could not be grounds for cancellation of registration. The Tribunal referred to judicial precedents such as *Chaturvedi Har Prasad Educational Society v. CIT* and *H.P. Government Energy Development Agency v. CIT* to substantiate this point.
4. Examination of Financial Transactions and Expenditures:
The Tribunal scrutinized the CIT's detailed observations on the income and expenditure account and balance sheet, which highlighted that expenditures and advances were not for the purpose of running educational institutions but for the benefit of specified persons under Section 13(3). The Tribunal held that these observations were to be considered by the AO at the assessment stage for computing the income of the trust and not for the purpose of cancelling registration. It cited cases like *CIT v. Red Rose School* and *Guru Gobind Singh Educational Society v. CIT* to support this view.
5. Validity of the Cancellation of Registration under Section 12AA:
The Tribunal concluded that the CIT was not justified in cancelling the registration under Section 12AA(3). It noted that the Chief CIT had granted exemption under Section 10(23C)(vi) after considering the objections raised in the earlier order and the order of CIT withdrawing the registration. The Tribunal emphasized that the registration could only be cancelled if the activities were not genuine or not carried out in accordance with the objects of the institution, which was not the case here. It referenced the Tribunal's decisions in cases like *Maharashtra Academy of Engineering & Educational Research (MAEER) v. CIT* and *Chaturvedi Har Prasad Educational Society v. CIT* to reinforce its decision.
Conclusion:
The Tribunal allowed the appeal of the assessee, holding that the CIT was not justified in cancelling the registration under Section 12AA(3). The order passed by the CIT was cancelled, and the appeal was allowed.
-
2011 (12) TMI 744
Issues involved: Appeal against orders of Commissioner of Income Tax(Appeals) under sections 143(3) read with 153A and 153C for assessment years 2002-03, 2004-05, 2005-06, 2006-07, 2007-08, and 2008-09.
Assessment Year 2002-03:
- Issue: Addition connected with purchase of agricultural land by friend.
- Details: Assessee contends addition was related to friend's land purchase.
Assessment Year 2004-05:
- Issues:
1. Addition in respect of jiggarthanda sales.
2. Net profit estimation at 15% deemed excessive.
3. Amount related to family settlement.
- Details: Assessee challenges additions and profit estimation, citing excessive and incorrect assessments.
Assessment Year 2005-06:
- Issue: Net profit estimate at 15% and sales related to jiggarthanda.
- Details: Assessee disputes profit estimate and sales quantum.
Assessment Year 2006-07:
- Issue: Addition sustained in respect of sales.
- Details: Assessee contests addition related to sales.
Assessment Year 2007-08:
- Issues:
1. Profit estimate.
2. Advance payment for property purchase.
3. Addition related to stamp duty.
- Details: Assessee disputes profit estimate, advance payment, and stamp duty addition.
Assessment Year 2008-09:
- Issue: Estimate addition in respect of sales related to jiggarthanda and restaurant.
- Details: Assessee challenges addition in sales estimation.
Common Grounds for Smt. Uma Maheswari:
- Issues: Estimation of jiggarthanda sales and net profit at 15% for assessment years 2004-05, 2005-06, 2006-07, 2007-08, and 2008-09.
- Details: Contention against sales and profit estimation by Commissioner of Income Tax(Appeals).
The Tribunal dismissed the appeals after considering the arguments presented by both parties. The search revealed undisclosed business and investment transactions, leading to additions under different heads. The Commissioner of Income Tax(Appeals) upheld additions in restaurant and jiggarthanda sales, modifying profit estimation to 15% from 20%. The Tribunal found the pattern of sales suppression established by seized materials, justifying the estimate-based additions. The plea for telescoping individual additions against suppressed sales was rejected due to lack of nexus. The Tribunal upheld the individual additions based on materials collected during the search. Ultimately, the appeals were dismissed on 8th December 2011 in Chennai.
-
2011 (12) TMI 743
Issues involved: Appeal against order restricting disallowance u/s 14A of the Income Tax Act for A.Y. 2007-08.
Summary:
The Revenue challenged the CIT(A)'s decision to limit the disallowance u/s 14A to &8377; 47,99,527/- instead of &8377; 3,67,72,335/- as determined by the Assessing Officer (A.O.). The A.O. found that the assessee earned exempt dividend income and had borrowed interest-bearing funds for investments. The assessee claimed to have voluntarily disallowed &8377; 47,99,527/- u/a 14A, providing a breakdown of borrowed and invested amounts to show a direct nexus. However, the A.O. disagreed, calculating the disallowance at &8377; 4,15,71,862/-. The CIT(A) reviewed the case, noting a one-to-one nexus between interest paid and received, and ruled in favor of the assessee, deleting the A.O.'s addition. The ITAT upheld the CIT(A)'s decision, dismissing the Revenue's appeal.
The ITAT found that the assessee demonstrated a clear link between interest paid to lenders and received from borrowers, supporting the claim that only the interest paid on funds borrowed from Sonata Investments P. Ltd. for investing in exempt income-generating shares could be disallowed u/s 14A. As there was no evidence to refute the CIT(A)'s factual findings on the nexus between interest payments and receipts, the ITAT upheld the CIT(A)'s decision, dismissing the Revenue's appeal.
-
2011 (12) TMI 742
Issues Involved:
The judgment involves multiple appeals, with one appeal by the department for the assessment year 2008-09 and the remaining appeals by the assessee for various assessment years. The main issues include addition deletions, application of provisions under section 145(3), GP rate adjustments, unverifiable purchases, cash purchases, and disallowance of expenses.
Assessment Year 2008-09:
- The department's appeal was against deleting an addition of Rs. 48,16,027 out of a total addition of Rs. 1,00,39,000.
- The assessee's appeal included grounds against sustaining an addition of Rs. 52,22,973 out of the total addition.
- The Tribunal found that the addition in the present assessee's case should be deleted based on similar reasoning applied in other related cases.
Remaining Grounds for 2008-09:
- Grounds related to survey actions, trading additions, application of section 145(3), GP rate adjustments, and unverifiable purchases were dismissed or allowed based on similar findings in related cases.
Assessment Year 2003-04:
- Issues included the application of section 145(3), trading additions, unverifiable purchases, cash purchases, and expense disallowances.
- The Tribunal directed the AO to recalculate trading additions based on revised GP rates and allowed the assessee's grounds related to unverifiable purchases and expenses.
Assessment Year 2004-05:
- Similar issues as in 2003-04 were addressed, with directions to apply revised GP rates and allowance of grounds related to unverifiable purchases and expenses.
Assessment Year 2005-06:
- The Tribunal directed recalculations of trading additions based on revised GP rates and allowed the assessee's grounds related to unverifiable purchases and expenses.
Assessment Year 2007-08:
- Similar issues were addressed, with directions to apply revised GP rates and allowance of grounds related to unverifiable purchases and expenses.
Conclusion:
The Tribunal dismissed the department's appeal and partially allowed the assessee's appeals across the various assessment years, based on the specific issues and findings discussed in each case.
-
2011 (12) TMI 741
Issues Involved:
The judgment involves the issue of deductibility of late delivery charges as a business expense u/s 37(1) of the Income Tax Act, 1961.
Issue 1: Deductibility of Late Delivery Charges
The Revenue appealed against the CIT(A) order allowing the deduction of late delivery charges as a business expense for A.Y. 2006-07. The AO disallowed the amount of &8377; 13,65,267/- as a penalty for late delivery of goods. The assessee explained that the charges were compensatory in nature due to breach of contractual obligations. The CIT(A) considered previous findings in the assessee's favor and deleted the addition made by the AO.
The Tribunal upheld the CIT(A)'s decision, distinguishing between penalties for breach of law and compensation for late delivery. It noted that the occurrence of late delivery was not disputed, and such charges were inherent risks in business operations. The Tribunal found the charges compensatory and allowable as a business expense u/s 37(1) of the Income Tax Act, 1961.
In conclusion, the Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s order, stating that the late delivery charges were compensatory in nature and allowable as a business expense. The decision was based on the distinction between penalties for breach of law and compensation for late delivery, as well as previous findings in the assessee's favor.
-
2011 (12) TMI 740
Issues involved: Assessment of unexplained cash deposits in bank account u/s 69A of the Income Tax Act for the assessment year 2006-07.
Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income-Tax (Appeals)-XXX, Kolkata for the assessment year 2006-07. The Assessing Officer noted that the assessee had deposited cash of Rs. 15,98,356 into a bank account with Standard Chartered Bank during the period 01.04.2005 to 31.03.2006. The assessee explained that the bank account was controlled by a third party as the assessee was a broker agent of a firm and only received commission. However, the Assessing Officer raised queries regarding the business activity and made an addition of Rs. 15,98,356 due to lack of verifiable details.
The CIT(A) confirmed the Assessing Officer's action, stating that the assessee failed to provide evidence of business activity to substantiate the deposits in the bank account. The assessee then presented a bank account statement showing regular cash deposits and withdrawals for business purposes. Citing previous tribunal decisions, the assessee argued that only the peak credit should be added, not the entire deposits.
The Tribunal considered the submissions and held that if there are regular deposits and withdrawals from an undisclosed bank account, only the peak credit can be added if both transactions are from the same source. Referring to previous cases, the Tribunal restricted the addition to the peak credit amount of Rs. 16,15,261, emphasizing the need for verification of peak credit statement by the Assessing Officer. As no other unexplained investments were found, the withdrawals were presumed to be utilized for payments, and deposits were likely from sale proceeds. The matter was remanded to the Assessing Officer for examination of the peak credit statement.
In conclusion, the appeal filed by the assessee was allowed for statistical purposes, and the order was pronounced on 30/12/2011.
-
2011 (12) TMI 739
Issues involved: Admission of additional evidence in the form of lease agreements for two buildings taken on lease by the assessee, treatment of repair expenses as capital expenditure.
Admission of additional evidence: The assessee appealed against the order of the CIT(A) for the assessment year 2007-08, seeking admission of lease agreements as additional evidence. The dispute was regarding the disallowance of repair expenses amounting to Rs. 42,15,041 treated as capital expenditure by the Assessing Officer. The assessee argued that the repair expenditure was not capital in nature, as evidenced by details in the paper book. The lease agreements were crucial to determine the nature of the expenditure. The ITAT admitted the additional evidence of lease deeds, emphasizing the importance of the lease deed in determining the nature of the expenditure. The matter was remanded back to the Assessing Officer for fresh adjudication in light of the lease deed.
Treatment of repair expenses: The Assessing Officer disallowed the repair expenses as capital expenditure, leading to the appeal by the assessee. The assessee contended that the repairs were necessary due to the poor condition of the leased properties, which were old and unsuitable for the business. The nature of the expenditure was argued to be repair expenditure, not capital expenditure. The ITAT acknowledged the need to refer to the lease deed to ascertain the nature of the expenditure, highlighting the importance of the lease agreement in determining whether the expenditure was revenue or capital in nature. The matter was remanded to the Assessing Officer for reevaluation in light of the lease deed and any additional evidence provided by the assessee.
Conclusion: The ITAT allowed the assessee's appeal for statistical purposes, emphasizing the importance of considering the lease agreements in determining the nature of the repair expenses. The matter was remanded back to the Assessing Officer for fresh adjudication based on the lease deed and any other evidence the assessee wished to present.
-
2011 (12) TMI 738
Issues Involved:
1. Determination of market value for stamp duty purposes.
2. Applicability of guideline value for properties abutting Bharathi Ula Road.
3. Alleged violation of Section 47-A(8) of the Indian Stamp Act, 1899.
4. Consideration of various factors by the Appellate Authority.
Summary:
1. Determination of Market Value for Stamp Duty Purposes:
The appellant purchased 16.13 acres of house sites with 5 old bungalows for Rs. 17,61,00,000/- at Rs. 250/- per sq.ft. The Sub-Registrar fixed the value at Rs. 1,091/- per sq.ft. and referred the matter to the Special Deputy Collector (Stamps) u/s 47-A(1) of the Indian Stamp Act. The Special Deputy Collector fixed the market value at Rs. 525/- per sq.ft. and directed the appellant to pay Rs. 1,52,90,432/- towards deficit stamp duty. The appellant's appeal to the Chief Controlling Revenue Authority was dismissed, confirming the order and directing payment of the deficit stamp duty with interest.
2. Applicability of Guideline Value for Properties Abutting Bharathi Ula Road:
The appellant argued that the guideline value for properties on Bharathi Ula Road should not apply to the subject property, which is larger and undeveloped, with only a negligible portion abutting Bharathi Ula Road. The court noted that the subject property is primarily accessible through Thiruvalluvar Nagar, where the guideline value is Rs. 250/- per sq.ft., and not Bharathi Ula Road.
3. Alleged Violation of Section 47-A(8) of the Indian Stamp Act, 1899:
The appellant contended that the orders were violative of Section 47-A(8) as they were not afforded a reasonable opportunity of being heard. The court found that the Special Deputy Collector's order did not justify the reasons for fixing the market value at Rs. 525/- per sq.ft. when the guideline value for Thiruvalluvar Nagar was Rs. 250/- per sq.ft.
4. Consideration of Various Factors by the Appellate Authority:
The appellant argued that the Appellate Authority failed to consider factors like location, proximity to roads, amenities, and development activities as provided under Rule 5(b) & (c) of the Prevention of Under Valuation of Instruments Rules, 1968. The court observed that the larger extent of the property lies in Thiruvalluvar Nagar and should be valued accordingly.
Conclusion:
The court allowed the appeal, setting aside the orders of the first and second respondents. The appellant was directed to pay a deficit stamp duty of Rs. 29,559/- within four weeks. Consequently, connected Miscellaneous Petitions were closed with no costs.
........
|
9911796707
