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Showing 401 to 420 of 1168 Records
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2012 (7) TMI 776
Demand of service tax - Society of ex-servicemen - service of Security Agency - definition of Security Agency was changed w.e.f. 18.4.2006 referring "any person" engaged in the business of rendering services instead of 'commercial concern'. With effect from 18.4.06, they have started paying service tax – Held that:- Society of ex-servicemen engaged in providing security services so as to provide reemployment of ex-servicemen, cannot be held to be a commercial concern. Security agency services rendered by commercial concern was liable to pay service tax and the appellant not being a commercial concern, cannot be held to be liable to pay tax
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2012 (7) TMI 775
Deduction u/s 32AB while computing the eligible profits and gains for the purpose of working out the deduction u/s 80HH and 80I - assessee's contention that relief under Section 32AB has nothing to do with the profits and gains derived from the industrial undertaking - Held that:- Section 80HH shows that from the gross total income, deduction at a particular percentage is granted under the said Section to the eligible assessee from the profits and gains derived from that industrial undertaking - the phrase "derived from", being narrower and in contradistinction to the term "attributable to" income which do not have a direct nexus to the industrial undertaking, cannot be regarded as having been derived from the industrial undertaking.
the scheme of deduction under Chapter VIA and the decisions of the Apex Court in M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT]no hesitation in holding that the relief under Section 32AB, relatable to plant and machinery installed in other units, could not be deducted from the profits of the new industrial undertaking for the purpose of computing the relief under Section 80HH and 80I.
Computation of Section 80AB - Held that:- Not all the profits and gains of the assessee's business forming part of Section 32AB, would be included under Section 80HH. For the purpose of deduction under Section 80HH and 80I, necessarily one has to undertake the exercise of identifying from the book profits, the income derived from the industrial undertaking qualifying for relief under Section 80HH, included in the working of Section 32AB so as to consider it for computation as per Section 80AB - remit the matter back to the Assessing Officer working out the relief under Section 32AB.
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2012 (7) TMI 774
Addition under Section 69 of the Income Tax Act - unexplained investments in shares – alleged that assessees had not explained the nature and source of acquisition for the purchase of shares - grievance of the assessees herein is that without giving any adequate opportunity to explain the nature of holding of the shares arising under a family arrangement, the assessment had been held against the assessees – Held that:- Present assessees before this Court are parties to the family arrangement, based on which the other assessees' case stood remanded back to the Assessing Officer for de novo consideration, in fitness of things, the proper course herein would be to set aside the orders of the Tribunal in these appeals also and remand the matter back to the Assessing Authority to consider the claim of the assessees along with the claim of the other assessees – matter remanded
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2012 (7) TMI 773
Writ petition - attachment of the Savings Bank Accounts – petitioner submitted that there is absolutely no rhyme or reason on the part of the respondents in causing the bank account of the minors to be attached - account maintained by the petitioners with the respondents 3 and 4 is not being operated by the minors and the nature of transactions clearly reveal that it is part of the running business by the concerned firm - attempt of the petitioners to club the above liability in respect of different firms, as explained by the respondents 1 and 2 in their statement, by filing the present writ petition is not liable to be entertained - no merit in the writ petition - writ petition is dismissed
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2012 (7) TMI 772
Determination of assessee's Residential status - Held that:- Going abroad for the purpose of employment only means that the visit and stay abroad should not be for other purposes such as a tourist, or for medical treatment or for studies or the like. Going abroad for the purpose of employment therefore means going abroad to take up employment or any avocation which takes in self-employment like business or profession. Thus taking up own business by the assessee abroad satisfies the condition of going abroad for the purpose of employment covered by Explanation (a) to section 6(1)(c). Therefore the Tribunal has rightly held that for the purpose of the Explanation, employment includes self employment like business or profession taken up by the assessee abroad - The determinative test for the status of Non Resident being number of days of stay in India and in assessee's case in these three years, the days of stay being less than 182 days; the status to be applied in this case is to be held as Non Resident as claimed by assessee. Thus, the assessee will be liable to tax on income accrued in India only. The assessee's grounds in this behalf are allowed.
Addition on account of unexplained source of funds - hand written page containing debit and credit entries in assessee's account with Deutsch Bank, Singapore - Held that:- Assessee has demonstrated that paper contains details of transfer of his own funds from foreign bank accounts maintained for the investment and business activities carried out in those countries - admittedly the assessee being a non-resident claims to have activities and bank accounts in these countries, thus in these circumstances the burden to prove that assessee's explanation if false or the receipts outside India were as a result of any income which accrued in India was on the Department which AO has failed to discharge the burden and no adverse material has been brought on record - remittances from the assessee's own account outside India to Indian bank accounts cannot be taxed u/s 68 - in favour of assessee.
Addition on account unaccounted cash credits - Held that:- Share capital and loans had been received by C-I India from its holding company Y2K Systems Ltd Mauritius through banking channels - C1 India has been held as a separate entity held by department by way of assessments as it is not been held to be a Benami concern of the assessee. The addition have been made on account of Share application moneys and loan in both the cases i.e. assessee and C1 India without examining the relevant aspects like identity, creditworthiness, issues about genuineness of transaction and the issue of separate status of the entities - in favour of assessee.
Alleged income from arms deals made on account of searches - Held that:- there is a presumption in law that the person from whom the document is found is the owner of the document. The Department should discharge their burden before seeking to tax the assessee on the basis of documents found from Dr. M.V. Rao or shri Mohan sambhaji Jagtap. Since the assessee has not been provided necessary material including their statements, opportunity of cross examination and hearing based thereon, interest of justice will be served if the issues about income from commission/ business of dealings in arms are decided afresh by AO in the light of these observations - in favour of assessee by way of remand.
Addition in respect of the estranged wife of assessee - Held that:- Unable to uphold this addition inasmuch as both were separated by way of deed of settlement and the payments based thereon on were already made - the addition has been made not based on any evidence or incriminating material, indicating that any payment was made out of books. The sole basis of addition is an assumption that there was some unwritten understanding between the assessee and his estranged wife, therefore, it has been assumed that lesser amount for support was paid by the assessee as compared to earlier years - addition being only on presumptions, there being no material what so ever, the addition is deleted - in favour of assessee.
Unexplained expenditure on the wedding ceremony of assessee's daughter - Held that:- The assessee and his wife are assessed to tax and are persons of means. The reconciliation of availability of cash in hand of ₹ 53.66 lacs with the assessee and his wife has been ignored by AO without giving any reasons - that proper factual verification has not been done by AO. Besides the issue of availability of cash with assessee and his wife needs to be considered in the light of CIT Versus Kulwant Rai [2007 (2) TMI 185 - DELHI HIGH COURT ]- in favour of assessee for statistical purpose.
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2012 (7) TMI 771
Admissibility of TDS on tip to the employees - Held that:- The issue is decided in favour of Revenue relying on CIT v. ITC Ltd [2011 (5) TMI 310 - DELHI HIGH COURT] - as the assessee acted in a bona fide manner therefore no penalty can be imposed on the assessee u/s 221 - as the exact quantum of the default needs to be computed it would, therefore, be necessary to remand the matter to the AO computing the exact quantum of default and the interest payable.
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2012 (7) TMI 770
Addition made on the basis of percentage of completion method as per revised Accounting Standard-7 (AS-7) - CIT(A) deleted the addition holding that AS-9 is applicable - the method of accounting employed by the assessee is ‘Completed Contract Method’ - Held that:- As per the revised AS-7 of 2002 which is effective from 01/04/2003, a project completion method has been recognized and AS-7 has not approved completed contract method, although with certain riders, but in a situation when a contractor is also working as a developer, then the basis for recognition of Revenue should be relied on AS 9.
AS-9 has prescribed that the recognition of Revenue requires that Revenue is measurable and that at the time of rendering of service it would not be unreasonable to expect ultimate collection. Where the ability to assess the ultimate collection with reasonable certainty is lacking, then Revenue recognition is to be postponed to the extent of uncertainty involved. It has therefore been prescribed vide para-9 that it is appropriate to recognize revenue only when it is reasonably certain that the ultimate collection will be made.
As per the statement made from the side of the assessee, it was wrong on the part of the AO to assess the income irrespective of the year of completion of project when the amount received in advance has not reached certainty and that too the AO has merely estimated 10% as the recognition of Revenue of the construction contract, without assigning any specific basis of such an estimation, the such an estimation is not approved, resultantly the view taken by the ld.CIT(A) is upheld - in favour of assessee.
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2012 (7) TMI 769
Disallowance of depreciation on electric fittings - Held that:- As both the parties have not brought on record details of the Asset under question so as the issue can be completely adjudicated - thus it shall be in the interest of the justice to restore this issue back to the file of AO for proper verification.
Addition on account of deemed dividend - Held that:- It is the definition of dividend which is enlarged by the deeming provision of s.2(22)(e) and not that of “shareholder” and, therefore, a concern which is given loan or advance by a company cannot be treated as shareholder/member of the latter simply because a shareholder of the lender company holding voting power of 10 per cent or more therein has substantial interest in such concern, and such loan or advance cannot be treated as deemed dividend under s.2(22)(e) at the hands of such a concern - the loan obtained by assessee-company in the “N” Trust had 20% share holding from a company in which “N” Trust had 10% share holding, could not be taxed as deemed dividend u/s.2(22)(e) since “N” Trust was only a registered shareholder and not a beneficial shareholder - in favour of assessee.
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2012 (7) TMI 768
Penalty u/s. 271(1)(c) of the Act - disallowance of adjustment/set off of short term capital loss incurred in sham transaction of purchase and sale of shares – Held that:- Addition made on account of transaction has been deleted - assessee had made claim of short term loss, and merely claim of the assessee has been rejected by the Assessing Officer would not be sufficient to levy of the penalty - penalty provisions u/s. 271(1)(c) of the Act can not be invoked solely on the ground that a claim made in terms of income is rejected by the AO - Assessment proceedings and penalty proceedings are distinct and independent - Revenue’s appeal is dismissed
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2012 (7) TMI 767
Addition on account of cash credits us. 68 of the Act - disallowance of interest thereon - CIT(A) for rejected the ground of appeal simply on the basis that the depositors who are summoned were leady member and they could not earn the income as claimed by them in the return of income - Revenue has not placed anything on record showing that those lady depositors were not having any source of income - lady depositors are assessed to tax and income tax return filed by them was duly accepted by the Department – addition deleted - assessee’s appeal is allowed.
Addition on account of household withdrawal – assumptions and presumptions - assumption regarding inadequacy is drawn on the basis of the expenditure that any ordinary middle-class family is likely to incur in course of the year. Therefore, simply because the AO did not bring any material evidence on record to show that household expenses had been incurred from out of unaccounted income, the addition cannot be deleted. The presumption made by the AO and estimation made was very much realistic - factum of earning and withdrawal of money by the parent is not taken into account - addition reduced from Rs.73,000/- to Rs.48,000 - Assessing Officer is directed to re-compute the same accordingly - assessee’s appeal is partly allowed.
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2012 (7) TMI 766
Penalty U/s. 271(1)(c) of the Act – alleged that assessee was not able to substantiate its wrong claim of technical know-how - Assessing Officer while framing assessment for the year under consideration disallowed assessee’s claim for royalty payment under the provisions of Section 40(a)(ia) of the Act and also disallowed 1/6th of Technical know-how expenses under the provisions of Se4ction 35AB of the Act - CIT(A) deleted the disallowance of claim of deduction u/s. 35AB of the Act - mere making of the claim which is not sustainable in law, by itself will not amount to furnishing inaccurate particulars of income - Revenue’s appeal is dismissed
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2012 (7) TMI 765
Disallowance out of interest expenses - The assessee had voluntarily disallowed interest of Rs.2,52,278/- u/s. 14A - Held that:- Disallowance that the assessee could not make out a case that there was any commercial expediency to take the loan at higher rate @ 12% and giving loan @ 9% CIT(A) had not examined whether the advances given by the assessee were out of interest free fund or from the interest bearing borrowed capital - as the assessee has demonstrated that the advances were out of interest free funds available with him no addition was called for in respect of the advances given to Shri Boney N Dalal and Niranjan V Dalal. In respect of Mohit Overseas (P) Ltd. that the assessee had been giving as well as taking loan from the said party and interest was being paid and charged at the same rate, therefore we find force into the contention of the assessee that such transactions were for business purposes. In view of this, no addition was called for - in favour of assessee.
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2012 (7) TMI 764
Challenging the penalty levy u/s.271(1)(c) - Held that:- Considering the conduct of the assessee company at the assessment / re-assessment stage revised return was filed under which income u/s.115JB was declared and the normal provision but assessee did not add back the provision for risk inventory - It was only when the A.O. pointed out in the reassessment proceedings then the assessee agreed for the disallowance of the provisions for risk inventory. The above factual matrix clearly show that the intention of the assessee company was not bonafide - assessee submission that in the earlier year such a provision was added back in the computation of income which again show that the omission for not adding back the provision this year is not a bonafide mistake - When the assessee in computation of income claim expenses/provisions not allowable as deductions, the assessee is liable to pay penalty - against assessee.
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2012 (7) TMI 763
Additions u/s 145A and allowing deductions - assessee filed copies of tax audited report of the current year as well as the last year to show that the assessee has been following the exclusive method of accounting and thereafter prepared adjustments u/s 145A regularly - claim of the assessee was correct – In favor of assessee
Disallowance of bad debt - assessee’s contention was that the bad debts now claimed were part of its income in earlier years which has also been admitted by the A.O. and the same have been now written off in their books of accounts and this is sufficient for claiming deduction for bad debts – Held that:- As only two conditions are required to be satisfied for claiming deduction for bad debts; one is that it should have been part of income in the earlier year and that it should be existing and it should be written off in the books of accounts. Since both these conditions are fulfilled in this case, ld. CIT(A) has rightly allowed the claim of the bad debts of the assessee – In favor of assessee
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2012 (7) TMI 762
Addition made on account of unaccounted investments - Held that:- Losses incurred by the respondent company by the sales of certain shares in two companies belonging to the same group were trading losses, the Appellate Tribunal treated the respondent company as a dealer in shares for the relevant year as in the earlier years it had been so treated by the Department, found that there was nothing on record which would suggest that the acquisition and sale of those shares was for anything other than commercial purposes, considered that the mere circumstance that those shares were shown by the respondent as investments in its balance-sheet was not conclusive, pointed out that there was nothing to show that the purchase of the shares had anything to do with the control of the companies concerned, and relied upon the circumstance that the sales were at market rates or at going rates - Misc. Application filed by the assessee seeking recalling of the order of the Tribunal for rectification u/s 254(2) does not have any merit.
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2012 (7) TMI 761
Unverifiable purchases - addition by estimating the gross profit (G.P.) rate at 30% - Held that:- On accepting the assessee's trading results, i.e., except qua unverifiable purchases (Rs. 8.34 lacs) which have already disclosed a gross profit at the reflected rate of 18.62% on those purchases additional gross profit of 5% on such purchases would be justified, so that an addition to that extent becomes sustainable. The gross profit rate is with reference to the sales, i.e., as relatable to such purchases (approximated at 75% of sales), which is worked out at Rs. 11.12 lacs (834199 x 100/75), so that the trading addition works out to Rs. 55613/- [i.e., Rs. 11.12 lacs x 5%].
Adhoc addition in each of the two proprietary concerns - It is apparent that the same is without relation to the assessee's disclosed trading results, which are progressive, as well as the quantum of unverifiable purchases, thus there is no basis for disturbing the assessee's trading results for the year, which have been itself accepted despite the rejection of books of accounts in respect of the intervening year.
Disallowance effected @ 10% qua certain expenses, viz. on staff welfare, conveyance, telephone, repair and maintenance, general office expenses. The reason stated, which is the same for all the assessment years, is lack of proper supporting vouchers, being self-made, and without proper authentication - where a disallowance qua such expenses has been made earlier, or subject to examination under sec. 143(3) assessment there can be no review of the matter in sec. 153A proceedings
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2012 (7) TMI 760
Disallowing the claim for deduction u/s 80 P (2)(a)(i) - interest income from providing of credit facilities to its members - Held that:- As both the parties has not brought on record copy of Memorandum of Association and Articles of Association of the assessee-society nor produced copy of returns as filed by the assessee nor the relevant audit reports. In the absence of the above documents it is not possible to adjudicate the issue completely - as issue requires verification of records and therefore, the issue should be restored to the file of the AO for proper verification - in favour of assessee for statistical purposes.
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2012 (7) TMI 759
Addition as unexplained cash - CIT(A) deleted the addition - Held that:- It is an admitted fact that assessee company has accepted the fact that the cash belong to the company. Hence, once when the amount has been assessed in the hands of assessee company no infirmity in the CIT(A)’s finding that addition in the hands of the assessee on protective basis is not required.
The documents seized during the survey operation from the premises of the assessee show difference between cash balance as per the cash book & the ledger account of the imprest account - The books of account maintained in the computer emanated during the course of search support the contention of the assessee in respect of the transactions made through the imprest account & how the imprest account is merged with the final accounts. There was a cash withdrawal of Rs.30,00,000/- just a month before the cash found - as revenue has failed to bring anything on record which could show that money withdrawn from bank was spent somewhere else. The purpose for which the money was carrying out to Goa is well explained.
Additions made only on the basis of statements recorded during operation u/s 133A may be liable to be quashed in absence of any corroborative evidence - There was no doubt about the fact that the seized money was belonging to the assessee only. The proceedings u/s 153C r.w.s. 153A has to be taken in the case of assessee only.
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2012 (7) TMI 758
Re-assessment order u/s. 143(3)/147 - Held that:- It is well settled law that unless the return of income already filed and disposed of notice for reassessment u/s. 148 cannot be issued - no reassessment proceedings can be initiated so long as the assessment proceedings pending on the basis of the return already filed are not terminated. In this case, it is admitted fact that the AO could have issued notice u/s. 143(2) at the time of reopening of the assessment. Therefore, reassessment proceedings are invalid, as the time of issuance of notice u/s. 143(2) had not expired - in favour of assessee.
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2012 (7) TMI 757
Addition on account of variation of closing stock - machinery lying in closing stock - assessee contended that average price of the machines could not be taken - Held that:- No reason to dispute the fact that the machines lying in stock were sold to M/s. Finolex Cables Limited for Rs.30,72,000 as AO did not provide any evidence in support of its contentions the machines lying in stock were different than the ones supplied to M/s. Finolex Cables Limited.
The Single Spoolers Type S 631 -2 numbers, which are part of the finished goods valued at Rs.13,32,448 were sold to Finolex Cables Ltd. sale invoice bearing Rs.30,72,000 in the month of October, 2007 and not in the month of April, 2007. Considering the G.P. rate of 17.8% in respect of the said machines and also considering the sale price of Rs.30,72,000, the finished pronlduct valued at Rs.13,32,448 is certainly a case of under valuation. Therefore the said order of the CIT(A) is reasonable and it does not call for any interference - in favour of assessee.
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