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Showing 401 to 420 of 1234 Records

• 2012 (9) TMI 844 - DELHI HIGH COURT
  

  Remand matter to CIT(A) by Tribunal - assessment of fringe benefit - Held that:- As at this stage it would be essential to notice that the assessee claims that it was unaware of the order passed by the CIT(A) dismissing its Appeal No.157/2008-09, since it was disposed of ex-parte. It would be in the fitness of things that if the assessee approaches the Tribunal with an appeal against the said order the same would be considered having regard to the totality of the facts and if any application for condonation of delay is made the same shall be considered and the appeal will be heard.

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• 2012 (9) TMI 843 - DELHI HIGH COURT
  

  Capital expenditure incurred out of anonymous donation - ITAT grant the benefit of exemption to undisclosed income to the assessee - Held that:- The donations received by the assessee are not anonymous donations. The details in respect of the name and address are available in possession of the AO in the form of the name and address are available in possession of the AO in the form of donation receipts, which were impounded in the course of survey - The discrepancy in respect of the amount of Rs.2,49,000/- has occurred on account of computer malfunctioning, but the details as above are available in the donation receipts. Therefore, no donation can be said to be anonymous.

  The income tax authorities were not right in holding that the amount received by the assessee as donations was not “anonymous donations” within the meaning of Section 11(3) because the receipts issued by the assessee trust were still in the custody of the department as the receipt books were impounded in the course of the survey and no confirmations were required to be filed by the assessee. In these circumstances the Tribunal held that Section 68 cannot be applied as the amount has already been shown by the assessee as income - no substantial question of law arises out of the order of the Tribunal - in favour of assessee.

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• 2012 (9) TMI 842 - DELHI HIGH COURT
  

  Deduction paid as upfront fee and bank charges - disallowance u/s 40 (a) (ii) - ITAT allowed the claim - Held that:- As per section 35AB that deduction is permissible in respect of any lump sum consideration for acquiring any know-how for use for the purposes of the assessee’s business. “Consideration” in section 35AB is to be understood in the sense in which it has been used in the Indian Contract Act. Therefore the word “consideration” would include the entire obligation of the assessee, without which the assessee would not be able to acquire the know-how.

  Having no reason to disagree with, and the language of Section-40 (a) (ii) - which in our opinion is expansive enough to cover payments of the kind as the Court has now to deal with – we feel that no substantial question of law arises for consideration - in favour of assessee.

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• 2012 (9) TMI 841 - SUPREME COURT
  

  Investment allowance u/s 32A(2)(b)(iii) - Refrigerator, Cooking Range and Fans installed in its Factory Canteen - Held that:- The Canteen may be a part of production Unit or Factory, however, it cannot fall under sub-clause (iii) which refers to any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article specified in the Eleventh Schedule.

  The Canteen cannot be said to be an `industrial undertaking' as it does not manufacture or produce any article or thing, as required under clause (iii). disallowance u/s 32A(2)(b)(iii) warranted - in favour of revenue.

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• 2012 (9) TMI 840 - GUJARAT HIGH COURT
  

  Pendency of assessment proceedings - Application before Settlement Commission accepted - assessment years 2005-06 to 2008-09 - revenue petition challenging the order of Settlement Commission - Held that:- As with effect from 1.6.2007, significant changes were made in the definition of the term "case" defined under section 245A(b) defining the term "case" would cover only those situations where an assessment is pending before the AO or it is still possible for him to pass any order of assessment.

  Accepting the proposition that even where by efflux of time, it is not open for the Assessing Officer to pass an order of assessment, merely because the return was accepted under section 143(1), the case of the assessee should be deemed to be pending for assessment only because the final order of assessment under section 143(3) was not passed, would run counter to the statutory amendments made in section 245A(b) - In the present case, the facts are not in dispute at all. For the assessment years 2005-06 to 2008-09, assessments had become time barred without any notice under section 143(2). Even final time limit for passing the orders even if such notices were issued had expired by the time the assessee filed his application for settlement before the Commission. The assessee's application qua these years, therefore, was not maintainable, ought not to have been accepted. Thus, the Settlement Commission erred in holding to the contrary in the impugned order. The impugned order to such an extent is, therefore, set aside - Request of the assessee that the material disclosed along with the settlement application should not be used in the normal assessments, cannot be accepted without full examination of such a request - petition allowed - in favour of revenue.

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• 2012 (9) TMI 839 - SUPREME COURT
  

  Rectification - Deduction u/s 80IA - notice u/s 154 as claim of deduction allowed inadvertently before setting off the earlier years losses from the profits and gains of the industrial undertaking - Held that:- Section 154 is not applicable in this case as that the provisions of Chapter VIA dealing with quantification of deductions have been amended at least eleven times. Moreover, even Section 80IA, was earlier preceded by Sections 80HH and 80I, which has resulted in plethora of cases. In fact, some of the amendments have been enacted even after the judgment of this Court in the case of Kotagiri Industrial Co-operative Tea Factory Ltd. (1997 (3) TMI 1 - SUPREME COURT) delivered on 5.3.1997 relying on which claim was dismissed.

  In the circumstances the view that one cannot say that this is a case of a patent mistake. The assessee followed the judgment of the Madhya Pradesh High Court in K. N. Oil Industries (1996 (7) TMI 101 - MADHYA PRADESH HIGH COURT)wherein the High Court held that losses of earlier years were not deductible from the total income for purposes of computation of special deduction under Sections 80HH and 80I. Hence, the assessee is right in submitting that the issue involved a moot question of law, particularly at the relevant time (assessment year 1997-98) - in favour of assessee.

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• 2012 (9) TMI 838 - DELHI HIGH COURT
  

  Non remanding the matter to AO for providing opportunity to the assessee to furnish relevant documents - Held that:- The assessment order is bereft of any discussion as to what were the materials adverse to the assessee and what was the inference that could be drawn in the light of those materials and documents. Resultantly these matters have to be remitted for fresh consideration by the AO who shall proceed to make available the necessary documents, adverse to the assessee, and proceed in accordance with Section 69A.

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• 2012 (9) TMI 837 - ITAT MUMBAI
  

  Re-opening of assessment u/s 147/148 - Held that:- As during the course of assessment proceedings for A.Y 2004-05 AO noticed that there were certain discrepancies in the bank account leading to a belief that certain income had escaped assessment in the hands of the assessee which was not denied by the assessee - as all these assessments were framed under section 143(1) there is no infirmity in the order passed by CIT(A) vide which validity of reassessment proceedings has been upheld - against assessee.

  Estimation of 5% agency income in the hands of the assessee - Treating appellant as Permanent Establishment of a Foreign Company - Held that:- As the existence of the foreign party and its genuineness has not been doubted by the AO as the assessee apart from receiving separate funds has also imported goods from the said party for its own trade no material placed on record by the revenue to establish the same - As right from the beginning it is the case of the assessee that the said amount was placed with it in "Trust" and assessee has been submitting the accounts of the same to the said party which did not have any objection upon such spending. In the account also no commission has been charged by the assessee. Therefore, the addition is made simply on the basis of presumption, which is not sustainable. Therefore, the addition in respect of assessment years 2000-01 to 2002-03 is deleted - in favour of assessee.

  Disallowance of 20% of expenses - "telephone, postage, courier, sales promotions and conveyance" - Held that:- There is no dispute to the fact that the assessee has not been able to produce all documentary evidences to establish that the entire expenditure has been incurred by the assessee under the above heads for its business purposes. It is a fact that the assessee has also undertaken promotional activities to promote brand products of M/s. Miraj PTE Ltd in India and the receipt as well as expenditure have not been routed through P&L account of the assessee. Substance in the observations of CIT(A) that a part of expenditure claimed by the assessee under the above heads could be for the purpose of promotional activities for the purposes of promotional activities. As decided in CIT v. Calcutta Agency Ltd.(1950 (12) TMI 4 - SUPREME COURT) that if the assessee fails to establish the fact of necessary documents to claim for deduction under section 37(1), the claim is not admissible. Thus disallowance of 20% as confirmed by CIT(A) out of the expenses claimed by the assessee is reasonable - against assessee.

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• 2012 (9) TMI 836 - ITAT DELHI
  

  Addition on account of alleged excess cash as per cash flow statement, alleged bogus advance liability, unsecured loans, unexplained investment and dis-allowance of long term capital loss - Held that:- It is found that initially the case was built by AO on the basis of statement of affairs filed by assessee on the basis of which AO prepared cash flow statement and added back the shortage of cash as his income. Similarly on this basis only the AO had added back amount claimed as advance from Tawri Colonizers. Instead during investigations u/s 133(6) M/s Tawri Colonizers had claimed to carry liability. These amounts were also added by AO. These additions were deleted/reduced by CIT(A) on the basis that these represented amounts received from M/s Tawri Colonizers being part of sale consideration. If that be the case then these should have been shown as credits in the statement of affairs of assessee for calculation of short cash in hand and consequent addition should have been upheld by CIT(A).

  Similarly, calculation of long term capital gain has been done on the basis of rate adopted u/s 50C whereas from the facts of the case it emerges that assessee along with his brothers had sold whole land to the company, then how assessee had shown in his return a single piece of land measuring 100.64 sq. yds. The findings of AO and CIT(A) are contradictory in nature. Therefore, we are of the view that the whole issue should be examined by AO afresh -Appeals filed by the assessee as well as by revenue are allowed for statistical purposes.

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• 2012 (9) TMI 835 - ITAT DELHI
  

  One time Commission income - Business income or unexplained income u/s 68 taxable under the head income from other sources - assessee engaged in business of share trading for last 25 years had suffered losses heavy losses during last few years - Held that:- It is observed that assessee had been suffering heavy losses during last few years in this regular trade and suddenly, during the year under consideration, the assessee received huge commission. Assessing Officer has elaborately dealt with his apprehension in the assessment order and has treated the same as unexplained income. CIT(A) in his order has not addressed the observations made by the AO and instead had allowed the claim of the assessee simply on the basis of facts that assessee had been filing income tax returns for a long period and commission income has been credited in the books of accounts and books of accounts are subject to the audit u/s 44AB. Since, before CIT(A), assessee had not been able to rebut any of the observations made by AO. Moreover, the order of CIT(A) is not a speaking order therefore, case is set aside to the CIT(A) for fresh adjudication - Decided in favor of Revenue for statistical purposes

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• 2012 (9) TMI 834 - ITAT MUMBAI
  

  Penalty u/s 271(1)(c) - search and seizure - penalty levied in respect of additions made due to filing of inaccurate particulars of income and the resultant attempt to conceal its true income chargeable to tax - Held that:- In respect of addition made on account of payment of sub-brokerage to Mr Jain on ground of ingenuity of transaction it is observed that Mr jain entered into a contract for the purchase of unit of UTI totaling to Rs. 13.48 crores, surprisingly without paying a single rupee as margin money and amount of 15 lakhs became due to him on sale of such units. It is observed that assessee has grossly failed to substantiate its explanation and establish the genuineness of the transaction. Also, assuming yet not accepting, in this transaction also assessee must have received brokerage and the profit on the above said transactions is earned by Mr Jain, which the assessee has paid to Mr Jain, then , how can this payment of Rs.15 lacs be claimed as expenses by the assessee. In view of aforesaid, penalty is confirmed

  Payment of sub-brokerage to Shri Rana - fixed monthly payments - Held that:- Brokerage is always paid as a fixed percentage agreed by the party on the value of the transaction. However, in the instant case, the payment is majorly uniform throughout the year. Though payments have been paid by account payee cheque, but the assessee has failed to substantiate as to why a fixed sum of money has been paid to a sub – broker. Genuineness of the transaction has not been proved by bringing any cogent material on record. Penalty confirmed.

  Payment to D&Co - cash method of accounting - dis-allowance on ground that cheque was not cleared before the end of the accounting year - Held that:- No penalty can be levied on this dis-allowance which is only based on the accounting principles.

  Payment to R&Co. - difference in security - Held that:- Whatever has been brought on record has only confirmed the payment but the genuineness of the transaction has not been proved. Even the bank advice and the confirmation filed do not have the details of transaction nor any contract note has been filed or brought on record. As the assessee has grossly failed to substantiate its explanantion on each account and is hit by explanation 1B of sec 271[1][c] - Decided partly against assessee

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• 2012 (9) TMI 833 - ITAT MUMBAI
  

  Block-assessment - search and seizure - addition made on account of undisclosed investment based on the entries found on the seized documents - Held that:- From records it is observed that there was justification for AO for coming to the conclusion that the figures were coded and CIT(A) was not justified in concluding that AO had acted on presumptions. In case, there is material to show that the figures are coded, the computation of income from the transactions has to be done on the basis of real figures and not coded figures. We are therefore, unable to sustain the order of CIT(A) in allowing relief to the assessee and same is therefore, set aside and addition is upheld.

  Addition as unaccounted sales - whether the entire sales should be added to the total income or only GP on the sales - Held that:- Once certain sales are found as unaccounted in the books, the assessee has to explain the investment in the corresponding purchases. In case the purchases are accounted, the entire sales had to be added to the trading account and in case sales as well as corresponding purchases both are unaccounted then, in addition to GP, the corresponding investment i.e. purchase value is also required to be added. Thus, in either case the total sales will have to be treated as undisclosed income. CIT(A) has not given any basis as to why only GP should be added. Order of CIT(A) set aside and addition made by the AO is confirmed.

  Addition on account of undisclosed stock - assessee had explained the stock as belonging to M/s. P Corporation - AO did not accept the explanation as figures were not matching - CIT(A) while deleting addition observed that discrepancy found represented the stock position of different dates - Held that:- In case no date is mentioned the document has to be taken as of the current date unless the assessee explains with evidence that the same related to earlier period. Therefore, the transactions had to be treated as part of the block period. The assessee had not produced any evidence to show that the said stock was part of the common business and had already been declared in the common accounts. addition made by AO is confirmed - Decided in favor of Revenue

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• 2012 (9) TMI 832 - ITAT MUMBAI
  

  Trading addition - rejection of books of account - authenticity of labour charges - partial payment in cheque, partial by cash - non-confirmation by laborers - CIT(A) while making trading addition observed that no addition can be made u/s 69C and only possibility is to reject the books of accounts and estimate the income - Held that:- It is not in dispute that the A.O. neither rejected the books of accounts u/s 145 nor applied the percentage of profit on the gross receipt. CIT(A) without giving any opportunity of being heard to the assessee has rejected the books of account. In the absence of any finding recorded by the CIT(A) that he is not satisfied about the correctness or completeness of the accounts of the assessee or that the method of accounting has not been regularly followed by the assessee, CIT(A) was not justified in rejecting the books of accounts and in estimating the profit. This being so, and keeping in view that the outstanding payment made by the assessee during April, 2006 to October, 2006 was not disbelieved by the A.O., addition sustained by CIT(A) is not sustainable in law and accordingly the same is deleted.

  Addition u/s 68 - unsecured loans - non-confirmation - Held that:- It is observed that assessee at this stage has filed the same along with the PAN with a request to admit the same as an additional evidence. Matter remitted back to decide the same afresh - Decided partly in favor of assessee

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• 2012 (9) TMI 831 - ITAT MUMBAI
  

  Determination of annual letting value (ALV) in terms of section 23(1) - as per Municipal Valuation or market value as contended by Revenue - assessee owns two commercial premises, however, no income from house property was shown in the return of income on ground that neither the property nor any part of the said property was let out during the year - Held that:- It has not been disputed that both the properties have not been let out at all and, therefore, annual value has to be determined as per section 23(1)(a). From the plain reading of the section, it would be seen that nowhere it has been provided that market rent is to be applied for the purpose of determining ALV. Rather, it envisages that “property might reasonably be expected to let from year to year”. For the purpose of Section 23(1)(a), the municipal valuation has been held to be correct value for determining ALV by various Courts. Assessing Officer directed to adopt the municipal valuation/rateable value adopted by the municipal authorities - Decided in favor of assessee

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• 2012 (9) TMI 830 - ITAT CHENNAI
  

  Validity of revisionary order passed u/s 263 on 19-3-2012, setting aside reassessment order passed on 18-11-2009 u/s 143(3), r.w.s. 147 - period of limitation - assessee submitted that the assessment for 2002-2003 was completed u/s 143(1) by intimation dated 28.02.2003 and as such the period of limitation u/s 263 expired on 31.03.2005, being 2 years from the end of the FY in which the assessment was originally completed - Held that:- Contention of the assessee that the limitation for the purpose of the impugned revision order should be reckoned with the earlier order passed u/s 143(1), is not sustainable in law. This is because section 143(1) does not permit an Assessing Officer to make any addition or dis-allowance, and thus cannot be a basis for examining whether the final assessment order passed by the AO is erroneous or prejudicial to the interests of the Revenue. Moreover any proceeding of an authority under the Income-tax Act is amenable to the revisional jurisdiction of the Commissioner of Income-tax. Therefore, assessment order passed by the AO u/s 143(3), r.w.s.147, by itself is independently amenable to the revisional jurisdiction of the CIT - Ground of assessee rejected

  On merits it is held that Section 14A, read with Rule 8D, is not applicable to the impugned AY 2002-03. In view of aforesaid, revision order is not sustainable in law. Moreover, while examining the reassessment order in the light of section 14A, the CIT has not made any prima facie finding that in fact the assessee had incurred expenditure to earn the tax-free income and that expenditure has been claimed as a deduction in computing its taxable income. Hence, impugned revision order passed by the CIT is not sustainable on facts also - Decided in favor of assessee.

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• 2012 (9) TMI 829 - ALLAHABAD HIGH COURT
  

  Appeal against order of Tribunal setting aside the order passed by CIT on the ground that CIT has nowhere recorded his satisfaction, but it was the satisfaction of Income-tax Officer (Technical), who is not competent to revise order u/s 263 - Held that:- Provisions of Section 299-BB deals with the procedure for service of notice and in case, there is a defective service of notice, it provides that if the assessee has cooperated, it will not be open for him to raise the plea, whereas in the instant case, it is not the case of the service of notice, but the initial issuance of notice, which has not been signed by the competent authority as a finding has been recorded by the Tribunal that the notice has been issued under the signature of Income-tax officer (Technical), whereas in view of the provisions of powers u/s 263 (1), it is only the CIT to issue notice. Order of Tribunal upheld.

  It is also relevant that pleas can be raised only out of the judgment passed by the Tribunal or other authorities, but the plea, which was not raised at any stage, cannot be raised for the first time before this Court. No other arguments have been advanced in respect of other questions framed in the memo of appeal.

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• 2012 (9) TMI 828 - ITAT, PUNE
  

  Whether transacting in shares/mutual funds by engaging a Portfolio Management Services(PMS) held as an investment or trading activity – AO treat trading in shares by PMS provider is to be seen as one which has been done on behalf of the assessee and all the transactions carried out through the PMS provider were short term in nature with the motive of selling the shares at higher rates and booking profits – Held that:- As envisages that what the assessee was looking for by engaging the services of an expert, namely, the PMS provider, was appreciation and maximization of wealth and not merely en-cashing of profits with a view of a trader. Therefore, investments carried out by the assessee through the PMS provider do not result in a gain assessable as business income. - Decision in favour of assessee

  Annual value of property u/s 23 under head house property - Assessee had declared its annual value at NIL by applying Sec.23(1)(c) on the ground that such property remained vacant during the year under consideration - Annual value of the property was adopted on the basis of fair rent of ₹ 20,000/- per month and after allowing statutory deduction of 30% u/s 24, income chargeable under the head house property was computed at ₹ 1,68,000/ - Held that:- As concluded from the facts in the case allowing the benefit of Sec 23(1)(c) to the assessee, it is for the assessee to establish that the property was intended to be let and it remained vacant in the absence of it being occupied by a tenant. Therefore, it cannot be made out that the property was “intended to be let out”. Appeal decides in favour of revenue.

  Disallowance of expenditure incurred on earning exempt income u/s 14A - Whether the provisions of Sec. 14A are applicable to the expenses incurred in the course of its business merely because earning dividend income when there was no material brought to show that incurred expenditure for earning dividend income which is exempted from taxation – Held that:- Following the decision in case of CCI Ltd (2012 (4) TMI 282 - KARNATAKA HIGH COURT) when assessee has not retained shares with the intention of earning dividend income and dividend income is incidental to the business of sale of shares, it cannot be said that the expenditure incurred in acquiring the shares has to be apportioned to the extent of dividend income so as to be disallowed. Appeal decides in favour of assessee

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• 2012 (9) TMI 827 - ITAT, MUMBAI
  

  Unexplained cash credits u/s 68 – AO added the entire amount from sale of shares as income from undisclosed sources – Held that:- As the purchase of shares, sold during the respective assessment years was already disclosed by the assessee in her regular books of account as well as in the returns of income filed. AO made the addition mainly relying on the statement of a broker. The AO was relying on the statement of a person, the onus was on the AO to enforce the attendance of that person for cross examination of the assessee but no such opportunity was provided in spite of the fact that the assessee requested to cross examine the share broker who earlier had confirmed but later on contradicted the confirmatory letter. Therefore appeal decides in favour of assessee

  Addition on account of low household withdrawal - AO had noted that certain invoices of expenditure were found from the premises of the assessee during the search - Held that:- income of the assessee AO had considered withdrawal made by the assessee only-he completely ignored the withdrawals made by the husband of the assessee. The assessee, her husband and HUF were withdrawing sufficient amounts in all the five assessment years under consideration. Therefore appeal decides in favour of assessee.

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• 2012 (9) TMI 826 - ITAT, MUMBAI
  

  Deduction u/s 43B – Whether deduction u/s 43B can be claimed for pre-paid expenses – AO reject the said claim on ground that only expenses incurred during the year can be allowed u/s 43B – Held that:- As these amounts in respect of which deduction has been claimed are covered u/s 43B and have actually been paid during the year. Thus, the sum which is actually paid irrespective of the year in which the liability to pay such sum had incurred even according to the method of accounting regularly employed by the assessee, has to be allowed in view of the provisions of Sec 43B. Assessee also contended that these amounts which have been debited in the profit and loss account has not been claimed in the subsequent year and has been accepted by the department as well as by the assessee. Therefore deduction allowed. Issue decides in favour of assessee

  Taxability of Advance licence benefit receivable - The benefit of concession in custom duty during import goods - Imports were not done during the accounting year and, therefore, no benefits is derived - The entries made in the P&L are notional in nature as the same represents the notional value of benefits under EXIM – Held that:- Following the in assessee own case for another assessment years, the issue is decided against the department.

  Disallowance u/s 43B - PF and employees contribution to the Provident Fund and EPF paid beyond the due date but before the end of the previous year – Held that:- Following the decision of the Tribunal in the earlier years, that no disallowance is called for as the same is covered by the decision of the Alom Extrusions Ltd (2009 (11) TMI 27 - SUPREME COURT), wherein it has been held that the amendment in second proviso is with retrospective effect. Therefore, the amendment takes retrospective effect and accordingly any contribution to approved PF paid before the filing of the return has to be allowed as a deduction. Decision in favour of assessee

  Whether Excise Duty and Sales Tax is part of total turnover while computing deduction u/s 80HHC – Held that:- Following the decision in case of Lakshmi Machine Works(2007 (4) TMI 202 - SUPREME COURT) wherein it was held that excise duty and sales tax would not have an element of turnover and they ought not to be included in the total turnover or export turnover. Appeal decides in favour of assessee

  Whether other income is a part of total turnover while computing deduction u/s 80HHC - AO has included the items of other income like dividend, interest, royalty and technical fees, rent, sales-tax refund etc as part of turnover - Since, the Hon’ble Supreme Court also has confirmed in the case of Laxmi Machine Works that even excise duty and sales tax which do not have any element of profit cannot be included in the total turnover, similar logic also applies to the other incomes which does not have any bearing on the export turnover and total turnover, while working out the deduction under section 80HHC. Appeal decides in favour of revenue

  Exclusion of export proceeds not realized within Six months from the total turnover for the purpose of deduction u/s 80HHC – Held that:- Following the decision in case of Abad Fisheries (2002 (8) TMI 95 - KERALA HIGH COURT) wherein the Hon’ble High Court held that if the exports sales proceeds which could not be brought into India in convertible foreign exchange and could not be included in the profits, the same cannot also be included in the total turnover for the purpose of computation u/s 80HHC. Decision in favour of assessee

  Whether Profits of foreign branch is part of the turnover while calculating deduction u/s 80HHC – AO while computing the deduction u/s 80HHC has not reduced the profit of foreign while computing the profits of the business as per Clause (baa) of Explanation Section 80HHC(4B) – Held that:- From the reading of the said clause, it is abundantly clear that the profit of the foreign branch has to be reduced and if there is any loss, that should be added back. Issue decided in favour of assessee

  Deduction u/s 80IB - Profit of the unit calculated without deducting the losses incurred by the other units – Following the decision in case of Canara Workshops Ltd. (1986 (7) TMI 5 - SUPREME COURT) and ITAT in earlier years in assessee own case and decided in favour of assessee. Appeal decides in favour of assessee

  Deduction of penalty under Sales Tax Act – Assessee contended that nature of fines and penalties, were compensatory in nature – Held that:- Following the decision in case of Lachmandas Mathuradas (1997 (12) TMI 16 - SUPREME COURT) which was a penalty levied u/s 45(6) of Gujarat Sales Tax Act, is compensatory in nature and not in the nature of penal violation. Decision in favour of assessee

  Deduction in respect of advances written off – Assessee invest in a project turned out to be non-viable and was thus abandoned before any installation took place – Said expenditure incurred for development of the project was written off during the current assessment year - AO treated the said expenditure as capital expenditure and disallowed the same – Assessee contended that the said expenses incurred were mostly revenue in nature relating to travelling, salary and other administrative expenses – Held that:- Following the decision in the case of Indo Rama Synthetics (I) Ltd (2009 (9) TMI 635 - DELHI HIGH COURT) if the advances are completely in the nature of salary, wages and other administrative expenses as contended by assessee, then the same is to be treated as revenue expenditure. However, this finding is purely subject to verification by the AO. Appeal decided in favour of assessee subject to verification by AO

  Deduction of demerger expense u/s 35DD - AO did not grant deduction u/s 35DD in respect of 1/5th pertaining to the relevant AY on the ground that the said expenses were not debited in accounts for the AY – Held that:- Assessee incurs an expenditure on or after 1st day of April, 1999, wholly and exclusively for the purpose of amalgamation or demerger of an undertaking, the assessee shall be allowed the deduction of an amount equal to one-fifth of such expenditure for each of five successive previous years beginning with the previous year in which the amalgamation or de-merger takes place. Hence, 1/5th of the expenditure has to be allowed in this year which is beginning of the previous year in which de-merger has taken place. Appeal decides in favour of assessee

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• 2012 (9) TMI 825 - ITAT, BANGALORE
  

  Deemed dividend u/s 2(22)(e) - Assessee held 97.83% shares in the company from which advance was received against sale of property - Assessee furnished a copy of the agreement to sell before the AO – Held that:- As the advance received by the assessee from the company in which she is a substantial shareholder, was for a transaction relating to sale of property, the deeming provisions of Sec. 2(22)(e) of the Act were not applicable. If the advance was not in the nature of lending money, it cannot be held as dividend. In the present case, the assessee received the advance against sale of property belonging to her, therefore the transaction could not be brought under the provisions of Sec. 2(22)(e). Appeal decides in favour of assessee

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