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Showing 481 to 500 of 1266 Records
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2012 (10) TMI 795
Service Tax paid on GTA services - Following the decision of court in case of [ INDIA CEMENTS LTD. Versus COMMISSIONER OF C. EX., SALEM, 2007 (3) TMI 83 - CESTAT, CHENNAI] Held that:- In the presence of specific provision providing for treatment of service for which the Assessee is liable to pay Service Tax on out-put services - appellant is eligible for Cenvat credit.
Out-ward transportation - whether the appellant is eligible for the credit of Service Tax paid on out-ward transportation of finished goods from the place of removal during the period from April, 2005 to September, 2005 - Held that:- Credit of Service Tax would be available in respect of Service Tax paid on out-ward transportation of finished goods from the place of removal. Accordingly the entire demand for service tax and penalties imposed cannot be sustained. Therefore, the appeal filed by the Revenue is rejected and cross objection also gets disposed of.
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2012 (10) TMI 794
Stay petitions – Whether Liability of Service tax arise on the services of a Builder himself if he is constructing residential complex – Held that:- As circular dated 21.01.2009 discusses about the issue, which needs reconsideration by the lower authorities after perusing the agreement entered into by the perspective customers or buyers of the flats. As both the lower authorities have not considered the Board Circulars dated 21.01.2009 and 10.02.2012. Appeal remand back to AO for fresh consideration stay granted.
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2012 (10) TMI 793
Demand - Extended period of limitation – Held that:- Error was detected by the department on their own - appellants had made a wrong entry in their ledger accounts and on the basis of wrong entry, earlier show-cause notice was issued. Subsequently, after finalization of the balance sheet the appellant had confirmed that the higher amount shown in the balance sheet was the correct commission amount paid to the foreign service provider. On the higher amount paid, the department sought additional service tax liability - appellant’s plea that the demand is hit by limitation of time cannot be accepted - appellant directed to make pre-deposit
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2012 (10) TMI 792
Permission for Dismantling and beach of ship - Held that:- Concerned authorities are directed to allow the ship in question to beach and to permit the ship owner to proceed with the dismantling of the ship, after complying with all the requirements of the Gujarat Maritime Board, the Gujarat Pollution Control Board and Atomic Energy Regulatory Board, if any toxic wastes embedded in the ship structure are discovered during its dismantling, the concerned authorities shall take immediate steps for their disposal at the cost of the owner of the vessel, M/s. Best Oasis Ltd., or its nominee or nominees. further, in all future cases of a similar nature, the concerned authorities shall strictly comply with the norms laid down in the Basel Convention or any other subsequent provisions that may be adopted by the Central Government in aid of a clean and pollution free maritime environment, before permitting entry of any vessel suspected to be carrying toxic and hazardous material into Indian territorial waters - no order as to costs.
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2012 (10) TMI 791
Addition on account of undisclosed investment u/s 69B - Assessee had acquired land and paid the consideration in F.Y. 2000-01 - Got the possession of land in F.Y. 2000-01 and get registered in the F.Y. 2005-06 - AO has relied on the jantry price or minimum price of land in a particular area - And presumed that the amount expended is more than the amount recorded in the books – AO made addition u/s 69B of difference amount – Held that:- As the provisions of Sec.50C cannot be applied for making addition u/s. 69B. AO has relied on the jantry rates without bringing any material on record to prove that assessee has in fact made investments over and above than that recorded in the books, no addition required to be made. In favour of assessee
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2012 (10) TMI 790
Transfer Pricing – Arm Length Price – Whether assessee is estopped from pleading before the CIT(A) that the comparable taken by it are wrong, whereas same has been accepted by TPO - CIT(A) holding that the 4 comparable selected by the assessee and accepted by the TPO, are not functionally comparable and decides in favour of assessee – Held that:- Following the decision in case of Quark Systems Pvt. Ltd. (2009 (10) TMI 591 - ITAT, CHANDIGARH) that assessee is not estopped from pointing out a mistake in the assessment, for such mistake is the result of evidence adduced by the tax payer. In this case the assessee has demonstrated that prima facie there is a mistake in its taking all these comparables. Appeal decides against revenue.
In respect of retrospective amendment to Sec.92C - Set aside the issue to the file of the CIT(A) for fresh adjudication
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2012 (10) TMI 789
Addition u/s 68 - Assessee purchase the property in the capacity of power of attorney holder - Subsequently, the same property was sold - The sale consideration was received in the form of DD for Rs. 90 lakhs and the remaining amount by way of cash - AO treats payment received by way of DD as the sale consideration – And made addition u/s 68 for the difference amount – Held that:- When the assessee purchased the property the payment made to the seller was debited to the books of accounts and when he sold the same it was credited to the books of account. He paid the taxes also. These very important aspects were neither considered by the AO nor considered by the CIT(A). The assessee had purchased the property for Rs 2,71,42,870/- and sold it at Rs. 90,00,000/- the balance amount has to be considered as a business loss. Issue remits the matter back to the file of the AO to examine the issue afresh in accordance with law. Issue remand back to AO
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2012 (10) TMI 788
Unexplained investments - Difference in valuation shown by the assessee and determined by DVO - reopening of assessment - CIT(A) deleted the addition - Held that:- Assessee has not disputed the fact that except the letter dated 06.06.2008, he did not submit any information or explanation in response to the notices and questionnaire issued by the AO, thus AO had no option but to call the report from the DVO about the valuation of the property purchased by the assessee on 11.8.2005 to verify the consideration declared by the assessee. Therefore, AO rightly proceeded to call the report from the DVO with regard to valuation and verification of the consideration of the property purchased by the assessee.
As per the CIT(A)'s Order the issue was related to the property in Mayurdhawaj Apartments, Patpar Ganj, Delhi, but the issue in the present appeal is related to the property purchased by the assessee in Darya Ganj, New Delhi. Furthermore, the assessee filed a copy of sale deed related to property purchased during the AY 2004-05 before ITAT ‘E’ Bench but on careful perusal of the orders of the authorities below, it is observed that the assessee has not filed a copy of the registered sale deed in his favour either before the authorities below or before us. AO called a DVO report on compelling circumstances and at the same time did not confront the same to the assessee as per provisions of Section 142A(3), thus the impugned order is cryptic and not well-reasoned. Therefore, it is appropriate to restore the issue to the file of AO with a direction to decide the issue de novo following the provisions of Section 142A, inter alia provisions of Section 56(2) - in favour of revenue for statistical purposes.
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2012 (10) TMI 787
Difference in stock submitted to bank and income tax department - CIT(A) deleted the addition - Held that:- Quantitative detail of stock was the same as in the statement submitted to the bank as well as that maintained for finalization of accounts for income tax purposes. The difference occurred only because of difference in valuation method and the same was valued at dealer price for the bank, whereas it was valued at cost or market price, whichever is less, for the balance sheet - there is no evidence that bank had verified the stock physically. AO has not made any independent verification of the books of accounts and stock. He has not pointed any error in the books of accounts and stock. It is a settled law that if two views are possible, the view in favour of the assessee has to be adopted. Under the circumstances, the addition based on stock statement submitted to Bank is not sustainable - in favour of assessee.
Non deduction of tax u/s. 194H - CIT(A) deleted the addition - Held that:- The payments made by the assessee was for services rendered to the distributors of the assessee. Hence, the same would fall under the definition ‘commission or brokerage’ u/s. 194H as decided in M/s Vodafone Essar Cellular Ltd. vs. ACIT [2010 (8) TMI 691 - KERALA HIGH COURT] hence, principally, in agreement with the view taken by the AO on this issue - Considering the submissions of assessee that the payments in this case on many occasions did not cross the threshold limit for deduction of tax u/s. 194H submitting the ledger of discount a/c in the books of assessee. Thus upon careful consideration of the documents in this regard the issue is remitted to the file of the AO to ascertain the exact amount of tax which the assessee was liable to deduct - in favour of Revenue for statistical purposes.
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2012 (10) TMI 786
Franchisee fees - satellite schools which are running under the name and logo of Delhi Public School - CIT(A) deleted the addition - Held that:- As decided in assessee's own case that the amount received by the assessee society from various satellite schools which are running under the name and logo of DPS having a different managerial set up than the assessee DPS society was considered as not liable to tax and additions made by the Assessing Officer in this regard had been deleted following principle of consistency - AO has not brought any substantial or incriminating cause against the assessee society which supported him in his action to consider the fee received from satellite schools liable to be taxed in the hands of assessee society - in favour of assessee.
Depreciation - capital expenditure treated to have been applied for the object of the trust, allowance of depreciation will amount to double deduction - CIT(A) allowed the claim - Held that:- As decided in D.I.T. vs. Vishwa Jagriti Mission [2012 (4) TMI 289 - DELHI HIGH COURT] claim of depreciation on fixed assets utilized for the charitable purposes has to be allowed while arriving at the income available for application to charitable and religious purposes, since the income of the society should be computed on the basis of commercial principles. Claim to depreciation for determination percentage of funds to be applied for purposes of trust is permissible – Not a case of double benefit - in favour of assessee.
No provision for set off losses u/s. 11, 12 & 13 - Held that:- As decided in D.I.T. vs. Raghuvanshi Charitable Trust [2010 (7) TMI 158 - DELHI HIGH COURT] the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against the income earned by the trust in the subsequent year would amount to applying the income of the trust for charitable and religious purposes in the subsequent year in which such adjustment has been made and will have to be excluded from the income of the trust u/s 11(1)(a) - in favour of assessee.
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2012 (10) TMI 785
Difference in gross receipts as per TDS certificates and as declared by assessee - CIT(A) deleted the addition - Held that:- As per the reconciliations submitted by assessee out of gross receipts as per TDS certificates, a sum of ₹ 1,63,93,102/- was received as advance from U.P. Jal Nigam and ₹ 40,00,000/- was received as advance from C & D S Unit of UP Jal Nigam, Baghpat and the same were duly reflected in the balance sheet under the head secured loan. The assessee has also furnished the confirmations in this regard from the respective departments confirming the advance given to the assessee vide its letter dated 17.3.06 & the assessment was framed after considering the reconciliation statement and confirmations furnished by the assessee.
CIT(A) has clearly given a finding that the assessee has submitted its reconciliation of the total turnover and the variation in the receipts as per accounts and that as per the TDS certificates is cogently explained. Based on the reconciliation, the addition in this case is not sustainable - in favour of assessee.
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2012 (10) TMI 784
Deduction u/s 80HHC in respect of DEPB credits - Held that:- Following the order of ITAT in assessee’s sister concern case the issue about calculation of 80HHC in respect of DEPB credits is set aside and restored back to the file of Assessing Officer.
Direction to AO to decided afresh in the light of the decision of Topman Exports Versus Income-tax Officer, (OSD), 14(2), Mumbai [2009 (8) TMI 827 - ITAT MUMBAI] wherein held that the face value of DEPB is chargeable to tax under section 28(iiib) at the time of accrual of income, that is, when the application for DEPB is filed with the competent authority pursuant to exports and profit on sale of DEPB representing the excess of sale proceeds of DEPB over its face value is liable to be considered under section 28(iiid) at the time of its sale - in favour of assessee for statistical purposes.
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2012 (10) TMI 783
Addition towards estimated interest on advances - Held that:- AO disallowed interest @12% per annum on the amount paid to three relatives on loan taken by the assessee on the ground that the assessee paid interest to the bank and on unsecured loans. Neither the date of advances nor the nexus between loans or advances and funds borrowed is evident from the impugned order nor the CIT(A) recorded any findings as to the business expediency of interest free advances or on the nexus between borrowed funds and interest free advances. As the complete facts are not available nor the assessee furnished date(s) of interest free advances or dates of borrowings and nor furnished any material, establishing commercial expediency in advancing aforesaid funds nor the CIT(A) recorded any findings on these aspects, it will be fair and appropriate to set aside the order of the CIT(A) and restore the issue raised in this ground back to his file for deciding the matter afresh in accordance with law - in favour of assessee for statistical purposes.
Payment to MCD towards registration, conversion and parking charges - revenue v/s capital - Held that:- Expenses which are permitted as deductions are such as are made for the purpose of carrying on the business and if a sum is paid by an assessee conducting his business because in conducting it he has acted in a manner which has rendered him liable to penalty for breach of laws, it cannot be claimed as a deductible expense. The assessee is expected to carry on the business in accordance with law. The evasion of law cannot be a trade pursuit. Since in the instant case, MCD demanded the aforesaid compounding charges only when Hon’ble Apex Court directed the MCD to act and seal the premises in view of flagrant violations of various laws including Municipal Laws, Master Plan and other plans besides Environmental laws and indisputably, the assessee misused its property and violated the civic and Environmental laws, it is to be opined that aforesaid charges paid by the assessee to MCD, could not be allowed in view of explanation to sec. 37(1). Thus the issue as to whether expenditure is revenue or capital, becomes academic and therefore, does not survive for our adjudication - against assessee.
Disallowance of 1/5th of expenses - conveyance, vehicle maintenance & telephone expenses - Held that:- Since personal use of cars and telephones by the Karta of the assessee HUF and his family members or staff has not been denied nor it was claimed that the Karta or his family members had any independent vehicles or telephones for personal use, disallowance of 1/5th of the conveyance expenses, expenses on running and maintenance of vehicles as also expenses on telephones/mobiles, in the light of provisions of sec. 38(2) is reasonable - against assessee.
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2012 (10) TMI 782
Unexplained jewellery found in the lockers - search - Held that:- Central Board of Direct Taxes Circular No. 1916, dated May 11,1994, lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by the family members of an assessee belonging to an ordinary Hindu household - not to seize gold jewellery, if it is found to the extent of 500 grams and claimed to be of a married lady. Similarly, to the extent of 250 grams claimed to be belonging of a unmarried lady and 100 grams claimed to be belonging of male member, than no seizure is to be affected.
In the present case value of jewellery surrendered by assessee is 738.570 grams of Rs. 5,64,674/-. The total jewellery treated to be “explained” one is 2888 grams as per the circular
& rest of the jewellery is to be treated as “unexplained” - First Appellate Authority has erred in deleting the total value of jewellery , thus the total addition required to be made by the AO is value of jewellery i.e 139 gms + 234 gms by taking the value at 755 per gm - partly in favour of revenue.
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2012 (10) TMI 781
Sale of agricultural land as an adventure in the nature of trade - Whether "Agriculture Lands" fall with the definition of "Capital Asset" ? - Held that:- The properties are duly shown in the returns more particularly in the wealth-tax return. Thus, AO draw wrong inference by considering the facts in an erroneous manner. He could not bring any material which suggests the dominant intention of the assessee to earn profit by selling the properties at higher rate immediately after the purchase. On the other hand, assessee has demonstrated that she has been making investment in the properties intending to hold them, enjoy their income - in favour of assessee.
The revenue in its grounds of appeal has also pleaded that CIT (Appeals) has deleted the addition by entertaining additional evidence in contravention of Rule 46A of Income-tax Rules, 1962. However, DR was unable to point out which document was produced by the assessee by way of additional evidence. The assessee did not move any application under Rule 46A . The documents considered by the CIT(Appeals) were produced before the Assessing Officer. In view of the above discussion, no merit in the appeal of the revenue - in favour of assessee.
Compensation for delay in handing over the possession of the property - holding charges - Income from property v/s Capital receipt - t in case the developer failed to construct the building then it will pay a compensation of Rs. 50 per sq.ft. of the super area per month to the intending allottee for the period of such delay - initially assessee shown receipt of holding charges as rental income - Held that:- Compensation received form DLF Commercial is a capital receipt - in favour of assessee.
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2012 (10) TMI 780
Repair and maintenance of the office - Capital v/s revenue - Held that:- From perusal of details of the expenses it reveals that all these details pertained to minor repairs carried out in the office. Incurrence of these expenses did not result into any asset of enduring nature. Therefore, CIT(Appeals) has rightly observed that the expenses incurred by the assessee are of revenue nature, which were incurred in order to carry out current repairs in the office as well as on other items so that the office premises can be used more effectively for the purpose of the business - in favour of assessee.
Disallowance of bad debts - amount forfeited by the landlord, on account of notice period rent, outstanding rent, water and electricity charges - Held that:- The assessee has submitted that all these items are of revenue nature as had the security was not adjusted then equal amount would have been paid by the assessee and it could get refund of security. The situation will remain the same. As far as the advance given to the lorry vendor is AO did not investigate the issue with the angle whether it is a revenue expenditure or not & simply disallowed. Thus FAA has considered all other details and thereafter deleted the disallowance no force in the ground of appeal raised by the revenue - in favour of assessee.
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2012 (10) TMI 779
Transfer Pricing Adjustment - working capital adjustments - assessee contested against the comparables selected - Held that:- Assessee has surplus capital from reserve, share capital etc. but still it operates its activity from the borrowed fund, then on the surplus capital, it would earn interest income which is independent to the operation of the company. Such income would be assessed as income from other sources, but the profit margin from the operations would be on lower side because of interest expenses etc. Thus, the working capital as envisaged by the assessee would always effects its profit. If the assessee was not require to use its own working capital then it will be a relevant factor for determining the profit margin and an adjustment to eliminate the disparity would always require. Considering the stand of the learned TPO in assessment years 2007-08 and 2008-09 where benefit of working capital adjustment was granted to the assessee, the plea of the assessee is allowed and set aside the issue to the file of the Assessing Officer with a direction that AO shall grant working capital adjustments after considering the computation filed by the assessee before the DRP - in favour of assessee.
Exclusion Allsec Technology Ltd. from the list of comparables - Held that:- Extracting the filters applied by the assessee for eliminating the non-comparable companies or adjusting their profit margin, the assessee has not applied the filter i.e. the companies who have incurred expenses of more than 5% of its sales on advertisement and marketing which required to be excluded. At this stage, in the absence of any finding, at the level of the TPO or of the learned DRP, it is difficult to verify the version put forth by the the assessee. Apart from this profit margin of any company is dependent upon many factors. By taking into consideration the one aspect, if on excluding the comparables then not a single comparable would be identified. The simple reason is whenever any adjudicating authority would try to carry out a study of the result of any company with a particular angle then the result would be different. The assessee ought to have placed specific details before the TPO and demonstrated how a prejudice had caused to the assessee, if comparables who have incurred more than 5% of sales a expenses towards advertisement and marketing are selected. Therefore no in the contentions of the assessee for excluding of Allsec Technology Ltd. from the list of comparables - against assessee.
Excluding of Maple E-Solution from the list of comparables - Held that:- Maple e Solution has shown 100% loss in financial year 2002-03 but all of a sudden shown profit at 37.38% in financial year 2004-05. In financial year 2008-09, it again shown losses and its profit margin is -65.23%. Considering this aspect, we are of the view that this comparable deserves to be excluded from the list of comparables. With the above observations the issue is set aside back to the file of the Assessing Officer for re adjudication - in favour of assessee.
Filter of 25% transaction with related party of the total revenue - Held that:- In a scheme of Income-tax Act the expression “associate enterprises” is somewhat similar to that of “related party”, defined in section 92A(2)(a) i.e. if an enterprises holds 26% share in the other enterprises then it can be considered as an associate enterprises. Similarly, under sec. 40A(2)(b) interested persons means if a person is having not less than 20% of voting power in a company then such person would be considered as substantial interest in the company. This section relates to examination of the cases where some undue benefit is being extended by a company. These two provisions give an indicator that whenever any issue regarding an interest created in any company is being examined which has influenced over the results of the company then these aspects can be taken as guidance one can safely say that an entity can be taken as uncontrolled, if its related party transaction do not exceed 25% of the total revenue. Thus, no fault in the conclusion of the TPO for applying this filter to the extent of 25% transaction with related party of the total revenue - against assessee.
Very large companies who have a turnover of more than Rs.260 crores cannot be considered as a comparable companies, in view of their huge turnover. Therefore, finding force in the contentions of the assessee and direct the AO to exclude these three comparables and thereafter reworked out the means profit of the comparables - in favour of assessee.
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2012 (10) TMI 778
Jurisdiction power u/s 263 by CIT(A) - Failure of AO to initiate penalty proceedings while completing assessment under Section 143(3) - Held that:- The Assessing Officer while passing the assessment order under Section 143(3) had given an office note that the surrender of the agricultural income which was made by the assessee was subject to no penal action under Section 271(1)(c). A perusal of the same clearly shows that the assessee had made surrender with a clear condition that no penal action under Section 271(1)(c) would be initiated. The office note further depicts that the offer of the assessee was accepted by the department since the department had no documentary evidence against the assessee except the report of the Inspector. Once that was so, the department could not take somersault and seek to levy penalty.
The penalty imposeable under sec. 271(1)(c) or under section 273(b) are independent proceedings then the assessment order. The penalty imposeable under sec. 273-B is to be imposed for false statement of/or failure to pay advance tax. Both these penalties are not dependent upon the assessment order but relying on decision taken in Additional Commissioner Of Income-Tax, Madhya Pradesh Versus Indian Pharmaceuticals [1978 (10) TMI 12 - MADHYA PRADESH HIGH COURT] AO has exercised his discretion for not visiting the assessee with the penalty. His order cannot be termed as erroneous and, therefore, no action under sec. 263 is justifiable - in favour of assessee.
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2012 (10) TMI 777
Penalty u/s 271(1)(c) - addition to income - Held that:- The assessee has given an explanation the amount represents sale of car and recovered from the blues on account of Shri Deepak Seth. The addition was made because supporting documents were not given by the assessee. Its explanation was not found to be false. Only thing is that assessee could not substantiate its explanation with the supporting evidence. Thus, this amount, prima facie, cannot be considered for the purpose of the penalty.
Non deduction of TDS - Held that:- The revenue authorities have not referred any circumstance or past conduct of the assessee which suggests that such type of mistake expressed by the assessee as bona fide cannot happen in its case. Though it is quite difficult to prove or disprove such type of claim with the help of demonstrative evidence but the Assessing Officer who assessed the assessee annually may refer some circumstance which can highlight the antecedents of the assessee or its conduct in earlier or subsequent year to suggest that it was not a bona fide mistake rather it was a deliberate attempt. No such material is available on the record, therefore, we do not have any hesitation to conclude that such type of mistake can happen while filing the return - direction to delete the penalty levy - in favour of assessee.
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2012 (10) TMI 776
Penalty paid to NSE for trading violation - Disallowance - Held that:- The nature of assessee’s business is that it is regulated by NSE and NSE as part of its exercise to keep check on members keep on checking books of accounts from time to time and for violation of procedure and norms generally imposes penalty, which are not in the nature of violation of law and hence cannot be termed as penalty. Moreover, the assessee has been paying these types of penalties from 1998 onwards till 2007-08 and in none of the years the so-called penalty was disallowed. Therefore, the first ground of appeal with respect to penalty for trading violation is allowed - in favour of assessee.
Disallowance of Telephone expenses for personal usage - Held that:- It is clear from the facts of the case that the telephone was installed at the residence of the director and its personal use cannot be denied the disallowance of 20% is very reasonable disallowance which is based upon the facts and circumstances of the case - against assessee.
Disallowance of business promotion expenses - Held that:- The facts of the case that assessee was generally engaged in trading of shares on its own account and had spent an amount of Rs.1,10,615/- as business promotion expenses, keeping in view the facts of the case, the disallowance of 20% is reasonable especially keeping in view the fact that as per assessment order, the assessee had very few clients.
Disallowance of municipal tax - Held that:- It is seen that at the time of sale of property, the seller is required to clear all outstanding dues of municipal taxes if any. The Assessing Officer has made disallowance on the basis that the assessee had sold the property vide agreement to sell dated 29.8.2002 and whereas the date of tax was 19.9.2002 i.e. after the date of agreement to sell. However, AO has not appreciated the fact that past accrued taxes and liabilities before the date of sale has to be borne by the seller. Nor AO has brought out any contrary observation from the agreement to sell from where it could be said that municipal tax was to be paid by the purchaser. Therefore, the disallowance made by the AO and upheld by the Ld CIT(A) was not justified - in favour of assessee.
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9911796707
