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Showing 461 to 480 of 1621 Records
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2016 (5) TMI 1164
Applicability of provisions of section 80P - whether the appellant is a "co- operative bank" which is a "primary agricultural credit society"? - Are the provisions of section 80P of the Income-tax Act excluded in terms of sub-section (4) of that section ; from application in relation to the Kerala State Co-operative Agricultural and Rural Development Bank Limited ; governed by the provisions of the Kerala State Co-operative (Agricultural and Rural Development Banks) Act, 1984 ; hereinafter, the 'CARDB Act' ? - Held that:- The condition in sub-clause (2) of clause (cciv) of section 5 of the Banking Regulation Act is to the effect that a primary co-operative society should not be one which permits admission of any other co-operative society as member, to be a "primary agricultural credit society". The provisions of the Kerala Co-operative Land Mortgage Banks Act, 1960 and of the CARDB Act show that the appellant Kerala State Co-operative Agricultural and Rural Development Bank Limited may admit a primary bank as its member. "Primary bank" as defined in section 2(h) of the CARDB Act means, among other things, a co-operative society. Therefore, the appellant does not satisfy the condition prescribed in sub-clause (2) of clause (cciv) of section 5 of the Banking Regulation Act and hence, it is not a co- operative bank which is a primary agricultural credit society.
In view of the aforesaid conclusion, we answer the question formulated above holding that the assessee does not fall within sub-section (4) of section 80P of the Income-tax Act for the assessment year in question. Hence, the impugned decision of the Tribunal does not warrant interference - Decided against assessee
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2016 (5) TMI 1163
Levy penalty u/s 271(1)(c) - undisclosed capital gain - assessee has sold the property during the financial year 2007-08 and computed the capital gain for the assessment year 2009-10 for which no satisfactory explanations has been offered - Held that:-AO dealing with the matter is to consider whether the explanations offered by the assessee or the person as the case may be is reasonable and as regards the reason was on account of reasonable cause. In the present case on hand, on perusal of the available records, we find that the assessee has voluntarily disclosed the capital gains for the assessment year 2009-10 on transfer of immovable property. Whether the particular capital gain is taxable for the assessment year 2008-09 or 2009-10 is a finding of fact which needs to be examined with reference to the facts available on record. The assessee proved that he had handed over the possession of the property in the financial year 2009-10. It is also undisputed fact that he had disclosed the capital gain for the A.Y. 2009-10. Penalty u/s 271(1)(c) of the Act could be imposed when all the necessary facts were not disclosed by the assessee before the assessing officer. We further noticed that when the facts was brought to the notice of the assessee, the assessee has accepted the proposal mooted by the A.O. and offered the capital gain in respect of 3 sale deeds for the assessment year 2008- 09. Therefore, the A.O. was not correct in coming to the conclusion that the assessee has concealed the particulars of income for the assessment year 2008-09.
In the present case on hand, the assessee has disclosed necessary facts, before the A.O. before the assessment was reopened for the impugned assessment year. Therefore, we are of the view that it is not a fit case for levy of penalty for concealment of income or furnishing inaccurate particulars of income. Therefore, we direct the A.O. to delete the penalty levied u/s 271(1)(c) of the Act. - Decided in favour of assessee
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2016 (5) TMI 1162
Revision u/s 263 - CIT has taken the view that the assessing officer has completed the assessments without making proper enquiries with regard to the incriminating documents - Held that:- It cannot be held that the assessing officer did not carry out enquiry or verification which should have been done, since the facts and circumstances of the case and the incriminating document was not considered to be strong by the AO to implicate the assessee. Thus, we are of the view that the assessing officer has taken a plausible view in the facts and circumstances of the case. Even though the Ld Pr. CIT has drawn certain adverse inferences from the document, yet it can seen that they are debatable in nature. Further, as noticed earlier, the Ld Pr. CIT has not brought any material on record by making enquiries or verifications to substantiate his inferences. He has also not shown that the view taken by him is not sustainable in law. Thus, we are of the view that the Ld Pr. CIT has passed the impugned revision orders only to carry out fishing and roving enquiries with the objective of substituting his views with that of the AO. Hence we are of the view that the Ld Pr. CIT was not justified was not correct in law in holding that the impugned assessment orders were erroneous.
At the time of hearing, it was pointed out to Ld D.R that there are references to various names such as Mumbai Naveen, Ravi Mumbai, Vijaya Mum, Sanjeev Shetty etc. Further the entries are dated from March 99 to February, 2012. Under these set of facts, a specific question was asked to Ld D.R as to how these entries can transalate into income in the hands of the assessee, since the same lists out payments made to various persons on various dates. Unless it is established that these payments can be taken as income in the hands of the assessee, they cannot be assessed in his hands. In that case, it cannot be said that these entries would cause any prejudice to the interests of the revenue, if they are not assessable in the hands of the assessee. The Ld D.R replied that these aspects require examination at the end of the assessing officer. The said stand taken by the department clearly shows that they are also not sure as to whether these entries could be considered as income in the hands of the assessee. Further, we notice that the Ld Pr. CIT has not brought on record any material to show that these amounts were paid to the assessee or on his behalf. Even if it is considered for a moment that the assessee could be linked with it, without showing that the entries noted down in the impugned document results in income in the hands of the assessee, in our considered view, it cannot be said that the assessment orders passed by the AO could be taken as prejudicial to the interests of the revenue. Accordingly we are of the view that the revision orders passed by Ld Pr. CIT falls on this ground also. - Decided in favour of assessee.
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2016 (5) TMI 1161
Reopening of assessment - information received from the Directorate of Income Tax (Investigation) - Held that:- After going through the reasons recorded by the AO, we are of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - Decided in favor of the Assessee
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2016 (5) TMI 1160
Addition u/s 68 - unsecured loans received - Held that:- The appellant has been able to prove the identity, genuineness and creditworthiness of Sanjay Patel HUF, Jayaben Patel and Bharti Patel repeatedly and certainly, when there is a provision of showing income @ 8% on the civil construction receipts u/s 44AD of the Act, then the parties taking sub-contract work are free enough to get themselves covered under the provisions embedded in the Statute. The ld. Assessing Officer has not raised any doubt in the books of accounts as the same have not been rejected u/s 145(3) of the Act and no specific defect in the actual working of the appellant has been pointed out in its books of accounts and above all construction work has been completed to the satisfaction of contract awarders, then in such situation ld. Assessing Officer was not correct in making the addition of ₹ 20,01,300/-. We accordingly delete the same - Decided in favour of assessee.
Disallowance in respect of interest paid to depositors - Held that:- The same is consequential, because as we have already held that no addition is called for towards the unsecured loans of ₹ 20,01,300, then certainly assessee will be eligible for claiming interest of ₹ 3,79,616/- in respect of interest paid to depositors. - Decided in favour of assessee.
Disallowance @ 15% of the labour expenses paid to five sub-contractors being related parties u/s 40A(2)(a) - Held that:- . For making any such addition, it will be necessary for the Assessing Officer to scrutinize the reasonableness of the expenditure and to exercise his judgment in a reasonable and fair manner and to satisfy that there is no attempt to evade taxes. In the case of the assessee, there has been no such exercise done by the Assessing Officer by way of scrutinizing the expenditure paid to the related parties and comparing the rates with the available market rates and further to ascertain that these related parties has been paid on a higher rate or excess amount in comparison to the general market rate. We also observe that the detailed ratewise chart is available on record which the related parties has provided to the assessee on the basis of which work has been awarded to them and the same have been completed to the satisfaction of the contract awarders. We also observe that no disallowance on payment to sub-contractors to related parties have been made u/s 40A(2)(b) of the Act during the assessment proceedings completed u/s 143(3) of the Act for Assessment Year 2005-06 and 2006-07. In such situation, when there is a complete absence of specific working which should have been carried on by the ld. Assessing Officer to arrive at a decision that excessive payments have been made to the related parties in comparison with the fair market rates as well as comparison with the rates of work awarded by the appellant to its other sub-contractors and also in the given situation when the books of accounts have not been rejected and all other expenditures have been accepted without pointing out any error, then in such situation estimated addition should not be called for. We, therefore, delete the addition - Decided in favour of assessee.
Disallowance made u/s 40(ia) - Non deduction of tds u/s 194H on the deemed commission payment made - Held that:- We failed to understand that how such type of addition or disallowance can be made by ld. Assessing Officer without appreciating the fact that the complete value of contract received by PIPL from the Government has been shown as revenue in its books of accounts and thereafter complete contract has been sub-contracted to the appellant at 89.5% of the contract price by way of which 10.5% remained with PIPL as a part of its profit which have been subjected to tax. Further 89.5% of the contract price has been shown as Revenue by the appellant and together with this sub-contract, the appellant has carried on other contract work also and gross turnover of ₹ 5,19,71,858/- has been achieved by the appellant during the year under appeal and a net profit of ₹ 16,52,490/- has been shown in its return of income. There is no justification given by the ld. Assessing Officer that on what basis deemed commission payment has been calculated at ₹ 43,18,175/- and going a step further how can a provision of Section 40(a)(ia) can be applied for non-deduction of deduction u/s 194H of the Act on this deemed commission of ₹ 43,18,175/-, even when no such expenditure has been claimed by the assessee in its profit and loss account.- Decided in favour of assessee.
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2016 (5) TMI 1159
Reopening of assessment - delayed payment of PF and claim of deduction u/s.80IB without furnishing the full certificate of Form 10CCB along with return of income - Held that:- Since admittedly in the instant case the notice u/s.148 has been issued beyond a period of 4 years from the end of the relevant assessment year and there is no allegation by the AO in the reasons recorded for such reopening that there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, therefore, following the decision of the Tribunal in assessee’s own case for A.Y. 2005-06 we hold that the notice issued by the AO u/s.148 in the instant case is void ab-initio. The grounds raised by the assessee on the issue of validity of reopening is thus decided in favour of the assessee.
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2016 (5) TMI 1158
Lease receipts received - assessed under the head ‘business’ or ‘house property’ - Held that:- The Government of Andhra Pradesh has allotted 150 acres of the appellant for development of Biotechnology Park, the appellant developed the Park, constructed the premises, provided required facilities and is exploiting the entire premises as a commercial venture. Therefore, the income is to be assessed under the head ‘business income’.
We arrive at irresistible conclusion that in this case, letting of the properties is in fact is the business of the assessee. The assessee therefore, rightly disclosed the income under the Head Income from Business. It cannot be treated as ‘income from the house property’. - Decided in favour of assessee
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2016 (5) TMI 1157
Addition on account of entries found noted during the course of survey - Admission in statement during search - Held that:- The additional income offered at ₹ 9,38,50,009/- is computed on the basis of a document prepared at the end of the previous year relevant to assessment year under appeal and the loose paper under reference contained the entries prior to the end of the previous year, thus the same stood covered in the memoranda state of affairs as at 31.03.2008 and any further addition is not warranted. It is therefore, contended by ld. counsel that the Ld. CIT(A) has rightly deleted the addition and thus the order of Ld. CIT(A) deserves to be uphold on this score. - Decided against revenue
Adhoc disallowance of expenses - Held that:- It is to be borne in mind that department cannot chose both i.e. tax the assessee on enhanced surrendered and further go on adding separate entry one by one on assumptions. The fair course will be to take each entry, quantify each and make separate addition for each. It is very unjustified to add the surrender and further add each item, this amount to double jeopardy which is not permissible. Looking at the entirety of circumstances and fact that the assessee enhanced his surrender from ₹ 3,50,42,961/- to ₹ 9,38,50,009/-; the fact that the balance sheet reflects the sum total of his transactions as on 01.04.2008, it is not justifiable to add the totals of both the balance sheets. On verification of both the balance sheets it emerge that the one filed for income tax purposes is part of and incorporated in the one found during the course of survey. Therefore, in our considered view, the addition of ₹ 2,13,15,248/- as excess liabilities has been rightly deleted by ld. CIT(A). His order on this issue is upheld - Decided against revenue
Addition of interest income - Held that:- Shri Rajendra Ji Was debtor who has squared up his account with the assessee as on 01.04.2008. Ld. DR could not dispel such factual findings. Further it is found that assesee’s cash balance as per balance sheet is ₹ 18,20,852/- and this amount being the interest income of the assessee during the year has been included in this cash balance on the basis of which the surrender has been made. In our considered view the impugned addition of ₹ 3,45,000/- has been rightly deleted by ld. CIT(A), which order deserves to be upheld - Decided against revenue
Surrender of undisclosed income towards investment and expenditure - Held that:- As the facts emerge sworn statement of NLA has been duly endorsed by the assessee to the effect that the investment in the impugned property was made by the son NLA a fact which is uncontroverted and clinches the issue in favour of the assessee. There is no material to suggest that investment in this behalf was made by assesssee. During survey proceedings in respect of loose papers including page 5 of Exhibit A-14 assessee son, in reply to question No. 18 of the statement categorically stated that these entries related to the purchases of plot of land in his own name for a total consideration of ₹ 45,40,200/-. In reply to question No. 23 also NLA admitted amount ₹ 30,40,200/- as his undisclosed investment. In our view without dislodging NLA’s clear statement,, ld. AO made an addition of ₹ 32,43,730/- in this behalf in the hands of assessee on surmises. There is no merit in sustaining the addition on the basis of AO’s vague observation. Since the impugned investment was owned by son by an uncontroverted sworn statement, there is no reason to expect assessee to offer or tax it in his hands. Thus there is no substance in inferring or assuming that assessee went back on his statement. In view of these facts and circumstances we hold that revenue has failed to substantiate that undisclosed investment is made by assesse based on any cogent evidence, reason or logic.- Decided against revenue
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2016 (5) TMI 1156
Whether summons issued by the respondent-authority is devoid of any merit and substance - right to be accompanied by the Lawyers - Petitioner is neither a Director nor a post holder in M/s Netshelter Marketing Limited - Respondent contended that there are several allegations against the petitioner. Several cheques vouchers of payment of service tax have been prepared. Huge amount of cenvat credit has been availed to the tune of ₹ 3.20 crores approximately and so far investigation which has been carried out shows involvement of this petitioner and other persons who are avoiding, coming to the respondent authority under one or other pretext.
Held that:- no reason found to entertain this writ petition mainly for the various facts and reasons. Therefore, in view of those facts and reasons, this writ petition is hereby, dismissed with a cost of ₹ 1,00,000/( Rs. one lakhs only). The amount shall be deposited by this petitioner within a period of fifteen days from today before the Member Secretary, Jharkhand State Legal Services Authority, Nyaya Sadan, Doranda, Ranchi. - Decided against the petitioner
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2016 (5) TMI 1155
Premium paid for securing “Keyman Insurance Policy” - Addition of premium paid on the life of partners and debited to the profit and loss account as Keyman Insurance Premium of the assessee firm - Held that:- The Bombay High Court delving into identical issue in Commissioner of Income Tax v. B.N. Exports [2010 (3) TMI 186 - BOMBAY HIGH COURT ] after noticing the relevant statutory provisions and the Board Circular No. 762 dated 18th February, 1998 issued by the Central Board of Direct Taxes on the issue had held that the premium paid for a 'Keyman Insurance Policy' is allowable as business expenditure under Section 37(1) of the Act. It was further noted that the object and purpose of the said policy is to protect the business against a financial set back which may occur as a result of a premature death, to the business or professional organization. There is no rational basis to confine the allowability of the expenditure incurred on the premium paid towards such a policy only to a situation where the policy is in respect of the life of an employee. The said policy when obtained to secure the life of a partner against a disruption of the business is equally for the benefit of the partnership business which may be affected as a result of premature death of a partner. Thus, the premium on the 'Keyman Insurance Policy' of partner of the firm is wholly and exclusively for the purposes of business and is allowable as business expenditure - Decided in favour of assessee
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2016 (5) TMI 1154
Reopening of assessment - sale price of the shares - certain shares were held by the Assessee for a period less than 12 months - Held that:- The queries raised by the AO and the submissions made by the Assessee in response thereto amply bear out that the AO had examined the WSSPA, the revised WSSPA and the letter dated 27th December 2006 issued by SEBI to revise the public offer price for PLL shares from ₹ 152 per share to ₹ 190 per share. In these given facts, there could be no dispute that the AO had examined all relevant facts with regard to the sale price of the shares in question and had made the assessment accordingly.
Insofar as the allegations that certain shares were held by the Assessee for a period less than 12 months is concerned, the same is disputed by the Assessee. During the course of proceedings, Mr Salil Aggarwal, learned counsel for the Assessee has handed over a statement of shareholding as enclosed with the Assessee's letter dated 12th August, 2009. This statement clearly discloses various dates on which subject shares were acquired by the Assessee. This indicates that certain shares had been acquired by the Assessee by way of a gift. Undisputedly, for the purposes of considering whether the same were long-term capital assets or not, the date on which the donor acquired the shares is relevant and not the date on which the Assessee aquired the shares in question. In any view of the matter, it is not disputed that the statement of shareholding indicating the dates on which the subject shares were acquired was provided to the AO in response to the queries raised by him. Thus, it cannot be accepted that the AO did not consider the same while making the assessment order. Thus, it is apparent that the present case is one where the issuance of the impugned notice is occasioned by a change of opinion, which given the scope of Section 147-148 of the Act, is impermissible. - Decided in favour of assessee.
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2016 (5) TMI 1153
Deduction u/s 80P(2)(a)(i) denied - interest received from employees who are not the members of the assessee-Society - Held that:- The Tribunal while accepting the appeal of the revenue and adjudicating the issue against the assessee had clearly noticed that the benefit under Section 80P(2)(a)(i) of the Act is available to the assessee where the interest is earned from the core activity of the assessee-Society and the interest earned from employees would not fall for such deduction under Section 80P(2)(a)(i) of the Act.
Even the interest earned from employees cannot be said to be core activity of the society and, therefore, in our opinion, interest earned from employees is not eligible for deduction u/s 80P(2)(a)(i) - Decided against assessee
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2016 (5) TMI 1152
Disallowance of interest relatable to investment in capital-work-in-progress - ITAT deleted the addition - Held that:- Under the proviso to Section 36(1)(iii) of the Act inserted by Finance Act, 2003 w.e.f. 2004-05, it is provided that such amount of interest paid in respect of capital borrowed for acquisition of assets for the period beginning from the date on which the said capital was borrowed for the acquisition of assets till the date the same are first put to use, such interest is required to be disallowed as deduction.
Examining the factual matrix herein, the total work in progress as on 31.3.2005 was ₹ 364.44 lacs which comprised of ₹ 331.68 lacs as the opening balance in the account and ₹ 32.76 lacs was added during the year. There was no loan which was outstanding as on 31.3.2004 and 31.3.2005 and none of the interest bearing funds were utilized for the investment in the said opening work in progress.
Similar issue of disallowance of interest on account of investment in the capital work in progress had come before the Tribunal in assessee's own case relating to assessment year 2004-05 and the Tribunal upholding the order of CIT (A) held that no interest bearing capital was invested in the aforesaid capital work in progress, which is opening balance for the year under consideration. In view thereof, the Tribunal upheld the order of CIT(A) by recording that there is no merit in disallowing the interest attributable to the opening capital work in progress of ₹ 331.68 lacs. Further, the Tribunal also recorded that the assessee during the year had made an addition of ₹ 36.27 lacs to the said capital work in progress and claimed not to have borrowed any fresh loan during the relevant period. Nothing was produced by the revenue to show to the contrary. Thus, the deletion of addition of ₹ 56,48,840/- by the CIT(A) was upheld by the Tribunal correctly - Decided against revenue
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2016 (5) TMI 1151
Validity of assessment - whether time period specified under Section 144(C) (4) read with Section 144(C)(3) adhered or not - penalty u/s 271(1)() - Petitioner's specific case is that the final assessment order was not passed on the date mentioned therein, i.e., 22nd April, 2014 and was probably antedated in order to avoid the expiry of the period of limitation as stipulated under Section 144(C)(4) of the Act read with Section 144(C)(3) of the Act - Held that:- In the instant case, when the Assessee sought to inspect the file to see whether there was any entry in the despatch register, he was not allowed such inspection. It now transpires that there was no such despatch register available which would have shown the date of despatch of the final assessment order and proof of service of such assessment order. Therefore, going by the ratio of the decision of the Supreme Court in Collector of Central Excise, Madras v M.M. Rubber and Co. (1991 (9) TMI 71 - SUPREME COURT OF INDIA), in the instant case it was incumbent on the Department to demonstrate that the AO who passed the assessment order ceased to have any control over such order and that it left his hand soon after it was passed. The Department having failed to do so, a presumption has to be drawn that the final assessment order was not passed within the time period specified under Section 144(C) (4) read with Section 144(C)(3) of the Act.
In that view of the matter, the impugned assessment order dated 22nd April, 2013 under Section 143(3) of the Act and the consequent penalty order dated 26th June, 2013 under Section 271(1)(c) of the Act and the notice dated 22nd April, 2014 under Section 221 of the Act are hereby quashed. - Decided in favour of assessee
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2016 (5) TMI 1150
Addition on account of cessation of liability under Section 41(1) - Held that:- Examining of the facts of the present case reveals that, it is not the case of the Department that, any benefit in respect of such trading liability was taken by the assessee but, the Revenue contends that since the burden was not discharged of existence of the liability, it be treated as cessation of the liability and therefore, Section 41(1) could be invoked. Further, stand of the Revenue is that, when in respect of debt in question, confirmation was called for, a letter was produced of the creditor with its address but, when the same was verified, the report was that, party could not be traced and therefore, it was not verifiable.
In our view, even if we accept the contention of the Revenue that the party could not be traced and therefore debt could not be verified then also, by no stretch of imagination can it be held that it would satisfy the requirement of cessation of liability.
In legal parlance, merely because the creditor could not be traced on the date when the verification was made, same is not a ground to conclude that there was cessation of the liability. Cessation of the liability has to be cessation in law, of the debt to be paid by the assessee to the creditor. The debt is recoverable even if the creditor has expired, by the legal heirs of the deceased creditor. Under the circumstances, in the present case, it can hardly be said that the liability had ceased. If the liability had not ceased or the benefit was not taken by the assessee in respect of such trade liability, in our view, the conditions precedent were not satisfied for invoking Section 41(1) of the Act in the instant case. - Decided in favour of assessee.
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2016 (5) TMI 1149
TDS u/s 194J - whether analysis and distribution (SLDC) of electricity by KPTCL from generation point to the consumers of the assessee involving utilization of sophisticated machineries, involvement of technical expertise, application of science, services of Engineers, engagement of qualified technicians and trained, skilled personal/manpower doesnot amount to technical services? - Held that:- The scheme of the Act contemplates mechanism to set right the error, if any committed by the Assessing Officer. We cannot give our acceptability to the arguments advanced by the revenue contrary to the well established machinery provided under the Act. It is an attempt to deviate from the scheme of the Act, having noticed that the substantial questions of law raise d in these appeals are answered against the revenue in identical cases referred to above i.e., nature of services or transaction entered into between the assessee and KPTCL are not in the nature of technical services to attract the provisions of Section 194-J of the Act.
It is not a chance litigation to switch over to a different provision alien to proceedings initiated. It is also discerned that this point was at no point of time raised, considered and examined by the authorities. Sections 194-J and 194-I are two independent provisions which operate in different fields. It is not possible to import the existence or the consideration of any point not raised and adjudicated before the authorities or the Tribunal, much against the principles of natural justice and that too at this juncture in the appeal proceedings under the fiscal statute. The arguments advanced on behalf of the revenue deserve to be rejected and accordingly they are rejected.
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2016 (5) TMI 1148
Genuity of gift from father - transaction routed from Bahrain to Singapore to India - Held that:- Tribunal was satisfied that the assessee had not discharged her burden by proving the creditworthiness of her father, the identity of the parties and the genuineness of the transaction and on facts, we fully endorse that conclusion. One is also at a loss to understand why, if her father was stationed in Bahrain as claimed by the appellant and if he wanted to gift his salary income earned in that country to his daughter living in India, he should transfer the amount to Singapore and then to India, instead of directly transferring the amount from Bahrain itself. It was in the aforesaid circumstances that the Tribunal confirmed the order of the Commissioner of Income Tax (Appeals), upholding the addition. The findings entered into by the Tribunal are entirely factual and on facts, once the theory of gift by father is rejected, the question of Section 56(2) of the Act does not arise at all.
Unexplained bank deposit - Held that:- Tribunal has noted that in the absence of any details with regard to earning of income and the persons from whom the money was received, the Assessing Officer has rightly treated the entire amount as income. Insofar as the unexplained credit to the extent of ₹ 10,77,219/- is concerned, the Tribunal has taken note of the fact that the assessee has shown the same as loan from others in the cash flow statement. However, having regard to the fact that the assessee had not explained the identity of the persons from whom the loan was allegedly availed of, the creditworthiness of his creditors and the genuineness of the transaction, the Tribunal confirmed the order of the Assessing Officer, taking the aforesaid amount as income of the assessee.
Tribunal has also confirmed the repayment made to the HDFC Bank, as income of the assessee, for the reason that even such payment could not be explained by the assessee before the lower authorities. Insofar as ₹ 2,91,600/- is concerned, the Tribunal agreed with the assessee that the same cannot be added to his income. With respect to ₹ 5,00,000/- incurred by the assessee towards foreign travel expenses is concerned, the Tribunal has held that the source of such expenditure was neither disclosed before the Assessing Officer nor disclosed in his cash flow statement. It was for that reason the Tribunal confirmed the addition to the extent of ₹ 5,00,000/-.
Addition on account of unexplained investment - Held that:- The Tribunal has held that the said issue had already been contested in the appeal in relation to the assessment year 2002-03, where the Tribunal has ordered deletion of amounts withdrawn from the bank. Since facts were identical, similar view was taken with respect to these assessment years also and accordingly the Tribunal has ordered deletion of addition to the extent of amounts withdrawn from the bank. We are satisfied that the aforesaid being the factual background, the findings in Tribunal's order are entirely factual and these appeals do not give rise to any question of law
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2016 (5) TMI 1147
Repayment of liabilities of the donor - allowability u/s 24(b) - whether borrowed capital was not utilised for acquiring the property? - Held that:- Mortgage loan and other liabilities repaid by the assessee, to the extent it has improved his right to title and interest in the property should be considered as cost of improvement incurred by the assessee. The government valuer has fixed the value of the property at ₹ 47,62,000/-, as mentioned at page 29 para 9 of the registered gift deed. The factors which went into the valuation are not known. The principle laid down by the Hon’ble Supreme Court in RM. Arunachalam Versus Commissioner of Income-Tax [1997 (7) TMI 5 - SUPREME Court ] that, amounts paid by the donee to discharge the liabilities which resulted in his right, title and interest of the assessee in the property being improved has to be taken as cost of improvement is to be applied and this ground of the assessee should be allowed. No contrary decision is brought to our notice by the Ld.D.R.
Submissions made by the assessee that the loans and liabilities repaid was only to improve and perfect his title to the property, and not otherwise, and that all these loans and other liabilities are attached to this property is not factually disputed by the Revenue. Keeping in view the legal position laid down by the Hon’ble Apex Court, we direct the A.O. to consider the repayment of liabilities of the donor, made by the assessee as that which is incurred to perfect his title of the property and thus it is cost of improvement and consequentially the borrowings made for the same is to be taken as that which is for incurring the cost of improvement of the property and consequentially the interest expenditure incurred should be allowable u/s 24(b) of the Act. - Decided in favour of assessee.
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2016 (5) TMI 1146
Addition u/s 69A - whether the assessee has explained source and genuineness of the seized amount having been belonging to its sister concern during the assessment proceedings? - Held that:- No plausible explanation has come on record during the assessment proceedings or thereafter as to why the cash book, subsequently relied upon by the assessee, has not been produced before the AO particularly when the assessee company along with its sister concern was operating from the aforesaid office
Moreover when the cash book of the year under consideration was suppressed by the assessee intentionally at the time of search and seizure, as is evident from the copy of panchnama, nor produced the same during the assessment proceedings, earlier cash books produced by the assessee company are of no support to its case. The assessee has failed to prove the source of the cash of ₹ 70,00,000/- found and seized from its premises on the basis of search and seizure conducted on 12.08.2007. So, the CIT (A) has rightly dismissed the assessee’s appeal.
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2016 (5) TMI 1145
Penalty u/s 271D - Held that:- No penalty can be levied u/s 271D of the Act, when the loan is accepted by acknowledgement of debt by passing journal entries in the books of accounts. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has not doubted the genuineness of the transactions. The firm has accepted loan from the partners and also explained sources. Moreover, the repayment of loan is made to a nationalized bank. Under these circumstances, the A.O. was not correct in levying penalty u/s 271D of the Act. Therefore, we direct the A.O. to delete the penalty levied u/s 271D of the Act. - Decided in favour of assessee
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