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Showing 481 to 500 of 1621 Records
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2016 (5) TMI 1144
Reopening of assessment - salary income - addition on repayment of sign on bonus back - whether the provision of Act permit deduction were the assessee voluntarily resigned from Barclays Bank and joined Deutsche Bank violating the pre-conditions of employment to stay with Barclays Bank for a period of one year? - Held that:- The assessee has received the amount during his employment and there exists employer and employee relationship and sign-inbonus cannot treated as capital receipt. We found on the basis of submissions that the assessee has voluntarily resigned from Barclays Bank and was not a forced termination of employment. As per service certificate of bank and the assessee has left the bank on his own accord. The submissions of the Revenue being the amount repaid by the assessee to the Barclays Bank was reimbursed by new employer Deutsche Bank. The assessee joined Deutsche Bank due to attractive pay package and separate amount was provided for refund of sign-on-bonus. On the perusal of provisions of Sec. 17(1) of the Act, there are no explanation were assessee should reduce refund of sign-on-bonus. Considering the apparent facts, terms of employment, characteristic of sign on bonus and the service certificate of Barclays Bank were assessee has voluntarily left the service. We are of the opinion that ld. Commissioner of Income Tax (Appeals) has examined the issue in detail based on the observations of the Assessing Officer and the provisions of law. Therefore, we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) and uphold the same. - Decided against assessee.
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2016 (5) TMI 1143
Addition on account of undisclosed income - Held that:- Revenue failed to collect any other material during the course of survey, and accordingly, on the basis of the statement given without oath, addition cannot be made. Therefore, the ld.CIT(A) has rightly deleted the addition.
Exclusion of undisclosed income from the book profit computed under section 115JB - Held that:- This ground deserves to be rejected simply for two reasons, viz. addition of ₹ 2.00 crores has already been deleted, therefore, there cannot be any adjustment, and (b) the accounts of the assessee are prepared in accordance with Part-II of the Schedule-IV of the Companies Act, 1956. Any adjustment can be made in the book profit only with regard to the items provided in clause (a) to (ha) appended with Explanation to section 115JB. No adjustment has been provided in section 115JB. The AO has no power to tinker with the accounts of the assessee, which have been prepared in accordance with Part-II of schedule-VI to the Companies Act. The ld.CIT(A) has assigned these two reasons, for buttressing his conclusion on the second reasoning, the ld.CIT(A) put reliance upon the judgment of the Hon’ble Supreme Court in the case of Apollo Tyres Ltd. Vs. CIT, (2002 (5) TMI 5 - SUPREME Court ). In view of the above discussion, we do not find any merit in this appeal of the Revenue
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2016 (5) TMI 1142
Penalty levied under section 271(1)(c) - provision for bad and doubtful debts created - whether penalty order was time-barred? - Held that:- The assessee has raised this plea on the ground that the orders served upon the CIT-II is to be construed as sufficient service, because, taking of the order is an internal mechanism between different officials of the Department. As far as this proposition is concerned, we do not find any merit in the contentions of the ld.counsel for the assessee. The order of the ITAT ought to have been served on CIT-III who has jurisdiction over the AO having jurisdiction over the assessee. If the order was served to a different CIT, who did not have the jurisdiction over the assessee, then it could not be assumed that service was effected properly, and the limitation commence from the service of that order. The ld.CIT(A) has rightly rejected this contention of the assessee.
The assessee had created provision for bad and doubtful debts. This provision was created on the strength of Hon’ble Gujarat High Court’s decision in the case of Sarangpura Cotton Mfg. Co. Ltd.Vs. CIT, (1982 (6) TMI 23 - GUJARAT High Court ). It has filed its return on 31.12.1999. The amendment was applied with retrospective effect. By operation of this amended law, the claim of the bad debts cannot be made by creating a provision for bad and doubtful debts. Accordingly, the claim of the assessee becomes untenable, and the claim was withdrawn during the course of assessment proceedings. In such situation, there cannot be any allegation against the assessee that it has furnished inaccurate particulars. The AO has not specified charge against the assessee either in the assessment order or in the penalty order, whether the assessee has furnished inaccurate particulars or concealed the income. For the purpose of reference, we have drawn an inference that impliedly it is furnishing of inaccurate particulars, otherwise, the AO has not charged he assessee with specific allegation. The assessee has taken a specific plea to this effect before the ld.CIT(A). The ld.CIT(A) has recorded a finding that the claim of the assessee became untenable by virtue of retrospective operation of law, otherwise, the assessee could have demonstrated the allowance of its claim. According to us, the assessee has not furnished any inaccurate particulars, which can expose it to the penalty proceedings under section 271(1)(c) of the Act. The ld.CIT(A) has rightly deleted the penalty - Decided in favour of assessee.
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2016 (5) TMI 1141
TDS u/s 194H - payments in the form of discounts/rebates/incentives on MRP given by the assessee to the distributors in the course of selling its goods - whether the relationship between the assessee and distributors is in the nature of principal to principal and that therefore the assessee-company was not liable to deduct tax at source under section 194H? - Held that:- Following the decision of the Coordinate Bench of the Tribunal in the assessee’s own case for assessment years 2009-10 & 2010- 11 we hold that the discount on MRP granted by the assessee to distributors at the time of sale of the drugs/medicines (i.e. goods) does not fall within the ambit of section 194H of the Act and therefore no tax was required to be deducted at source thereon and therefore the assessee cannot be held to be an assessee in default under section 201(1) of the Act and charged interest under section 201(1A) of the Act.- Decided against revenue
TDS u/s 194J - ‘Assessee in default’ for not deducting tax at source on sitting fees paid to the Directors - Held that:- We find that the issue of whether or not the assesseecompany is liable to deduct tax at source (TDS) under section 194J(ba) of the Act in respect of sitting fees paid to Directors as per the amendment thereto w.e.f. 01.07.2012 has been considered and held in favour of the assessee by the Coordinate Bench of this Tribunal in the assessee’s own case for assessment years 2009-10 and 2010-11, thus we hold that since the instant appeal is for A.Y. 2010-11 which is prior to A.Y. 2013-14, from when the amendment to section 194J(ba) comes into force w.e.f. 01.07.2012, we hold that no tax is deductible at source on payment of sitting fees to Directors and the assessee cannot be held as ‘assessee in default’ under section 201(1) of the Act or be charged interest under section 201(1a) of the Act. - Decided against revenue
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2016 (5) TMI 1140
Rejection of books of accounts - Computation of gross business receipts - Held that:- A.O. rejected the books of accounts and estimated income at 10%. The Ld. CIT(A) reduced it to 6.5% without recording any reasons, simply by following the Tribunal decision, which is not relevant. In the case of estimation, of facts and circumstances of each case has to be examined. In the present case after considering the assessment order as well as CIT(A) order and also details filed before us, we are of the opinion that estimation at 8% on gross receipts instead of 6.5% on gross receipts is to be adopted. In view of the above, we set aside the order passed by the Ld. CIT(A). We direct the A.O. to adopt estimation at 8% on gross receipts for the assessment year 2008-09 as well as 2009-10 also.
Treatment of interest receipts on FDRs as ‘income from other sources’ - CIT(A) by considering the submissions of the assessee, he has treated it as a business income - Held that:- The assessee is not able to substantiate before us to show that the deposits made by the assessee are for the purpose of business. Therefore, it cannot be said that the interest income received by the assessee from the bank deposits is income from business. Therefore, we hold that interest received by the assessee is ‘income from other sources’ and we accordingly reverse the order of the CIT(A).
Excess claim of expenditure under head “Seigniorage & Sales Tax” disallowed - Held that:- The books of accounts of the assessee are not relied, it was rejected by the Assessing Officer and now, based on the reliance on the same books for the purposes of making further additions is improper and unjust. The estimation of income takes care of irregularities committed by the assessee, but making further additions amount to double addition which is not permitted by law. The Ld. CIT(A) after considering the explanation of the assessee, he has observed that once the income is estimated, no other addition is permissible on the basis of rejected books and as such the impugned addition made by the A.O. is set aside and allowed the claim of the assessee.
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2016 (5) TMI 1139
Treatment of grant-in-aid towards salary & PF as taxable - received for the payment of arrears of PF of the employees, salary and wages of employees - Held that:- AO made the addition of grant in aid for ₹ 48,22,698/- in the assessment year 2003-04 but the AO in the assessment year 2004-05 has allowed the relief of grant-in-aid for ₹ 44 Lacs. From the facts of the case we find that grant in aid for ₹ 48,22,698/- pertaining to the assessment year 2003-04 was allowed in the immediate subsequent assessment year 2004-05 for ₹ 44 Lacs. The learned AR has produced the copies of the assessment orders for the AYs 2003-04 and 2004- 05 in support of its claim and the same are placed on the record. Similarly, we also find that the grant-in-aid received by the assessee in the assessment year 2004-05 was not disallowed by the AO. The ld. DR failed to bring anything on record contrary to the argument of the ld. AR and he left the issue to the discretion of the Bench. In view of above and in the interest of justice, we are inclined to treat the grant-in-aid as capital in nature therefore it is not liable to tax. Accordingly we reverse the order of the lower authorities and ground raised by the assessee is allowed.
Disallowance of employees contribution under the PF Act - Held that:- We find that the AO has made the addition of the amount of the employee contribution as there was a delay in payment to PF authorities. However, from the assessment order we find that all the payment of employees contribution were made before the due date of filing of Income Tax Return as specified u/s.139(1) of the Act. Now, this issue stands covered in favour of assessee and against the Revenue by the decision of Hon’ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT]
Disallowance of interest paid for delayed deposit of PF - Held that:- Interest paid on the late deposit of PF is compensatory in nature therefore it should not be disallowed on the ground of treating the same as penal in nature, therefore, it is entitled for deduction while computing the profit under the business head. In this view of the matter, we reverse the action of Authorities below and ground raised by assessee in appeal is allowed.
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2016 (5) TMI 1138
Carried forward depreciation and loss - CIT(A) allowing the business loss to set off against the income of assessment year 2001-02 i.e. beyond eight years without appreciating the provisions of section 72(3) of the Act - whether the mistake committed by the auditor in the assessment year 2000-01 can be rectified in the assessment year 2001-02? - Held that:- AO while framing the assessment on the assessee should apply the provisions of the income tax act correctly. The assessee should not be deprived from the benefit of the provisions of the income tax act on account on the mistake committed by the auditor of the company. In this connection we are also putting our reliance in the decision of Hon’ble Supreme Court in the case of CIT v. Manmohan Das (1965 (11) TMI 33 - SUPREME Court ) wherein has held whether the loss in any year may be carried forward to the following year and set off against the profits and gains of the subsequent year under section 24(2) has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year. A decision recorded by the Income-tax Officer who computes the loss in the previous year that the loss cannot be set off against the income of the subsequent year is not binding on the assessee. Relying on the aforesaid judgments, we have no hesitation in upholding the order of learned CIT(A).
Whether unabsorbed depreciation up to the Assessment Year 1996-97 will be added to the depreciation allowance of 1997-98 and that such unabsorbed depreciation could be carried forward for set off for a maximum period of eight years from the Assessment year 1997- 98 - Held that:- Any unabsorbed depreciation available to an assessee on 1st day of April, 2002 (A. Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No. 14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from assessment year 1997-98 up to the assessment year 2001- 02 got carried forward to the assessment year2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent yeas, without any limit whatsoever.
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2016 (5) TMI 1137
Penalty under Sections 271D and 271E - period of limitation - Held that:- The impugned orders levying the penalties under Sections 271D and 271E of the Act are barred by limitation because the penalty order should have been passed not later than 30.06.2012, however, in the present case, the penalty orders were passed by the ld. Addl. Commissioner of Income Tax, Central Range-2, New Delhi on 15.06.2013 - Decided in favour of assessee
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2016 (5) TMI 1136
Sales tax incentive and excise incentive treated as revenue receipt - Held that:- CIT(A) did not has erred in law and on facts in deleting the addition treating sales tax incentive as revenue receipt by the Assessing Officer.
Non exclusion of debt redemption fund from the book profit for the purpose of computing book profits under section 115JB - Held that:- The mere fact that a Debenture Redemption Reserve is labeled as a reserve will not render it as a reserve in the true sense or meaning of that concept. An amount which is retained by way of providing for a known liability is not a reserve. Consequently, the Tribunal was correct in holding that the amount which was set apart as a Debenture Redemption Reserve is not a reserve within the meaning of Explanation (b) to Section 115JA of the Income Tax Act, 1961.
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2016 (5) TMI 1135
Disallowance of commission and ex-gratia paid to the Directors claimed u/s 37(1) by wrongly invoking the provisions of Section 36(1)(ii) - Held that:- Disallowance of remuneration paid to the directors u/s 36(1)(ii) was not justified.
Disallowance of royalty paid - revenue v/s capital expenditure - Held that:- The decision of Hon’ble Apex Court in the case of Alembic Chemical Works Co.Ltd. (1989 (3) TMI 5 - SUPREME Court) relied upon by the learned counsel also supports the case of the assessee. Respectfully following the same, we direct that the royalty should be treated as a revenue expenditure and, accordingly, we delete the disallowance made by the Assessing Officer by capitalizing 25% of the royalty expenditure.
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2016 (5) TMI 1134
Disallowance of provision for bad and doubtful debts made under section 36(1)(viia)(b) for provisions for Non-Performing Assets - Held that:- CIT(A) has rightly held that the provisions for Non-Performing Assets cannot be equated with provision for bad and doubtful debts and since such provisions was not made, the assessee is not entitled for deduction, we find no infirmity in the order passed by the ld. CIT(A) - Decided against assessee.
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2016 (5) TMI 1133
Reopening of assessment - addition made in the hands of assessee in respect of cash and stock of wine - Held that:- Under the provisions of the Act itself, it is provided that where the assessee has failed to furnish return of income for any of the assessment years, then the Assessing Officer, as per reasons recorded in this behalf can initiate proceedings of assessment under section 147 of the Act. Accordingly, we find no merit in the claim of assessee in this regard and the same is dismissed.
The claim of assessee before the Assessing Officer was that it had received sum of ₹ 4,43,000/- on account of sale of truck / mini bus and in respect of balance, it claimed that it was cultivating the land of two different persons and receiving agricultural income. However, the assessee failed to establish its claim with any evidence. The statements of persons were recorded, which were at variance with the claim of assessee. Further, the assessee could not produce any proper evidence of leasing out of the agricultural land by the owners of land and in the absence of same, the claim of assessee was not accepted by the Assessing Officer. Similarly, with regard to sale of equipment, the assessee failed to furnish complete evidence and the said claim was also not accepted.
The assessee had fabricated various documents produced before the Assessing Officer and the assessee claims to have accumulated cash from sale of agricultural produce as back as 11.05.2009 (Rs.1,97,829/-), 20.04.2009 (Rs.1,25,000/-), 21.04.2009 (Rs.75,000/-) and 01.11.2009 (Rs.1,32,300/-). Similarly, the assessee claims to have received loan of ₹ 2 lakhs on 06.02.2009 and ₹ 2,43,000/- on 23.11.2009 and keeping in view of his social status and financial position of the assessee, the CIT(A) was of the view that it was highly improbable that the assessee would keep the said cash. Further, in the statement recorded before the Police Department on 24.11.2009, the assessee had not explained the source of cash out of agricultural income and loans / advances. The CIT(A) has held that the cash was out of sale of liquor and has confirmed the addition in the hands of assessee. The learned Authorized Representative for the assessee has failed to controvert the findings of authorities below and in the absence of any explanation furnished in this regard or any evidence to prove its stand, we find no merit in the claim of assessee - Decided against assessee
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2016 (5) TMI 1132
Penalty u/s. 271(1)(c) - claim of exemption of salary in India as per Article 16(1) of the Treaty disallowed - assessee is a "Resident and Ordinarily Resident" individual - Held that:- Mensrea was a essential requirement of penalty u/s 271(1)(c). If the contention of the revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature. See CIT vs. Reliance Petro Products Ltd.[2010 (3) TMI 80 - SUPREME COURT ]. Mere making the claim which is not sustainable in law, itself would not amount to furnishing of inaccurate particulars of income - Decided in favour of assessee
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2016 (5) TMI 1131
Charitable trust - whether the assessee is to be assessed as a charitable trust deriving income from property held under trust wholly for charitable purposes and more specifically for the object of general public utility or to be assessed as a trust carrying on business activities? - Held that:- CIT vs. Gujarat Maritime Board, reported in (2007 (12) TMI 7 - SUPREME COURT OF INDIA ), wherein the Hon’ble Apex Court has observed that the appellant is established for the predominant purposes of development of minor ports within the State of Gujarat, the management and control of the Board is essentially with the State Government and there is no profit motive, as indicated by the provisions of section 73, 74 and 75 of the 1981 Act. The income earned by the Board is deployed for the development of minor ports in the State of Gujarat and therefore, they are entitled to be registered as charitable trust u/s 12A of the Income-tax Act, 1961. Therefore, respectfully following the decision of Hon’ble Apex Court and the Co-ordinate Bench, Ahmedabad in assessee’s own case, we are inclined to believe that the assessee is a charitable trust carrying on activity of advancement of public utility without any profit motive and is required to be assessed as per the provisions of Section 11(1) of the Income-tax Act, 1961. - Decided in favour of assessee
Revenue expenditure as application of income by way of payment to the Gujarat Government towards waterfront/royalty charges - Held that:- the assessee, being a charitable trust u/s 12A, was certainly under legal obligation to make payment to the State Government towards waterfront/royalty charges which was inevitable for the functioning of the assessee-trust and such payment was made towards the object of the trust embedded in the Gujarat Maritime Board Act, 1981 and certainly these payments which have been made to the State Government have been applied for the public welfare projects which in this case is waterfront project. Therefore, the assessee is eligible to claim as application of income against the gross income received and the same should be accounted while calculating 85% of the gross income which needs to be applied for charitable activities by the assessee-trust.
Applacabilty of provision of sec 43B - Held that:- As profit earned by the assessee are not subject to tax being out of the ambit of provisions of Section 11(4) of the Income-tax Act and the income of the organization being exempt as per the provisions of Section 11(1) of the Incometax Act, this ground has become redundant and accordingly the provisions of Section 43B of the Act are not applicable on the payment above
Clubbing income under two provisions of Section 22(1) of the Act and also u/s 11(4) - Held that:- From going through the above referred provisions of Section 11(1) and Section 11(4) of the Act, we are able to understand that Section 11(4) of the Act is applicable when the ”property held under trust” includes a business undertaking so held and the Assessing Officer have power to determine the income of such business undertaking in accordance with the provisions of the Act and where any such income so determined is in excess of income as shown in the accounts of the undertaking, then such excess income shall be deemed to have been not applied for charitable purposes. However, in the case of the assessee, we have already decided that the assessee is carrying on charitable activities without profit motive and the income is to be calculated as per the provisions of Section 11(1) of the Act and therefore, ld. CIT(A) has erred in calculating the income u/s 11(1) and 11(4) of the Act and therefore, in our view, subject to our adjudication of other grounds of this appeal, the income of the assessee is to be assessed as per the provisions of Section 11(1) of the Act.
Addition as notional income on account of premium of Alang plots - Held that:- As already held that the assessee is not carrying on any business activity, rather carrying on charitable activities in the form of providing services relating to general public utility which in the case before us relates to maintaining of ports in the State of Gujarat. We further observe that both the lower authorities have not appreciated the fact that the accounts of the assessee were being maintained on cash basis upto Financial Year 2001-02 and certainly in the case of the assessee who carries on cash basis of accounting of what is received in a year has to be accounted for and there is no concept of bifurcating or apportioning any advance premium received. Further, it is also undisputed fact that the appellant-Board was covered under the provisions of Section 10(20A) of the Act as a Local Authority upto Assessment Year 2002-03 and the income was exempt under this section and certainly whatever amount which have been received prior to 01.04.2002 gets covered therein. Therefore, in our view, no addition was called for of ₹ 12,92,00,000/- on account of Revenue recognition of the premium received on allotment of plots by way of spreading the revenue for a period of 10/20-25 years on the basis of AG(Audit) Report.
Granting deduction for accumulation u/s 11(1) of the Act only on net surplus and not on its gross receipts - Held that:- From going through the decision of the Hon’ble Apex Court in the case of CIT vs. Programme for Community Organization (2000 (11) TMI 4 - SUPREME Court ), it is crystal clear that calculation of 15% as mentioned in provisions of Section 11(1A) have to be applied on the gross income of the assessee and not the net surplus. Therefore, in our view, in the case of the assessee, 15% has to be calculated on gross income for the year, i.e., ₹ 221.19 crores and not on the net surplus of ₹ 64.96 crores.
Disallowance of deduction in relation to increase in the fixed assets being application of income - Held that:- There remains no dispute because the ld. CIT(A), while determining the income u/s 11(1) of the Act, has himself allowed the addition to fixed assets at ₹ 20,68,73,986/- as deduction towards application of income and therefore, this substantive ground needs no further adjudication on this ground relating to allowability of deduction in relation to increase in the fixed assets being application of income amounting to ₹ 20,68,73,968/-, as it has already decided in favour of the assessee by ld. CIT(A) and therefore no interference is called for in the ld. CIT(A)’s order for this ground.
Eligibility for deduction of depreciation as per Income-tax Act while determining the income under the provisions of Section 11(1) - Held that:- If the depreciation is not allowed as a necessary deduction in computing the income of the charitable/religious trusts, then there would be no way to preserve the corpus of the trust and therefore, a charitable/religious trust is entitled to depreciation in respect of the assets owned by it. In the present case, due to the variation of figures of depreciation as per Income-tax Act in between the assessee as well as Department, it will be appropriate to set aside the matter to the file of the ld. Assessing Officer for the limited purpose of calculating the correct amount of deprecation as per Income-tax Act for the year under appeal. It is needless to mention that proper opportunity of being heard to be given to the assessee and both the parties should arrive at a consonance on the correct figure of depreciation as per Income-tax Act and the same should be allowed as application of income for the purposes of determining income u/s 11(1) of the Act.
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2016 (5) TMI 1130
Reopening of assessment - addition u/s 68 - Held that:- prior to reopening of the assessment, the Assessing Officer has to apply his mind to the materials available to conclude that he has reasoned to believe that income of the assessee has escaped assessment. It has been further held that unless that basic jurisdictional requirement is satisfied, a postmortem exercise of analyzing material produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the present case, the A.O. has not verified the information before banking upon it. We thus respectfully hold that the initiation of reopening proceedings was not valid in the present case in absence of application of mind on the part of the Assessing Officer. As discussed above, the Assessing Officer has initiated the reopening proceedings solely based upon the information received from the Investigation Wing of the Department that the assessee was one of the beneficiaries and two entries from the entry operator. The issue raised in the ground under consideration is thus decided in favour of the assessee with this finding that the Assessing Officer was not justified to acquire jurisdiction to initiate reopening proceedings and the action of the Assessing Officer in this regard was not valid. The assessment framed in furtherance to the said initiation of reopening proceedings is thus also held as void ab initio and is quashed as such. - Decided in favor of assessee
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2016 (5) TMI 1129
Reopening of assessment - non-deduction of TDS - Held that:- If the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued.In our opinion, the assessment was re-opened to consider the issue of non-deduction of TDS and we do not find any infirmity in reopening assessment , which was duly re-opened after recording the reasons, s such we confirm the same. - Decided against assessee.
Disallowance u/s.40(a)(ia) - Held that:- The issue in dispute is squarely covered by the decision of Co-ordinate Bench of Tribunal in the case of Shri N.Palanivelu Vs. ITO [2015 (10) TMI 1415 - ITAT CHENNAI] wherein held that section 40(a)(ia) is not applicable when there is no outstanding balance at the end of the close of the year relevant to the assessment year in respect of these payments. However, the assessee has not brought on record, the details of outstanding expenses or schedule of sundry creditors showing whether the impugned amount is outstanding at the end of the close of the previous year relevant to the assessment year either in the name of the party or outstanding expenses. Hence, in the interest of justice, we are remitting the issue back to the file of the Assessing Officer with direction to verify the claim of the assessee and the assessee shall place necessary evidence in support of his claim.
Disallowance u/s 14A - Held that:- Assessee has considerable investments at the opening as well the close of the year under consideration. Therefore, the portion of expenditure attributable to the investments made by the assessee has to be computed as per Rule 8D of the I.T Rules. Therefore, the Assessing Officer was of the opinion that it is a clear diversion of interest bearing funds to other purposes. The assessee would be entitled to claim deduction of interest under section 36(1)(iii) of the Act on the borrowed funds utilized for business purpose. The only benefit the assessee derived was the dividend income which was not assessable under the Act, we are of the opinion that the disallowance under section 14A of the Act was squarely attracted and the Assessing Officer has rightly disallowed the claim. - Decided against assessee
Treatment to rent received from two properties - income from house property or business income - Held that:- As decided in assessee's own case for assessment year 2005-06 to 2008-09 that income from the above properties to be assessed as business income and not as income from house property. - Decided against revenue
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2016 (5) TMI 1128
Disallowance u/s 14A - AO considered the investments yielding taxable income and also investments not yielding taxable income to apply the formula in Rule 8D of I.T Rules - Held that:- The interest paid by the assessee on borrowings, which are used for specific purpose cannot be considered for the purpose of computing disallowance u/s.14A r.w.rule 8D. Similarly investments, which are yielding taxable income also, cannot be considered while applying the ( B ) in the formula specified in Rule-8D. - Decided in favour of assessee.
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2016 (5) TMI 1127
Validity of assessment under section 153C - addition made under section 69A on account of unexplained gift received by the assessee - Held that:- In the absence of the recording of satisfaction by the AO of the searched person before initiating proceedings against third person u/s 153C, the condition of section 153C has not been satisfied in the present case and there is no jurisdiction to sustain the proceeding under section 153C initiated by the authorities below against the assessee. The order passed under section 153C is therefore set aside and the proceedings under section 153 C are directed to be quashed. Therefore all the additions made in the assessment order also stands deleted. - Decided in favour of assessee
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2016 (5) TMI 1126
Reopening of assessment - disallow the expenditure in terms of Section 14A - Held that:- In the present case, it is not the case of assessee that the AO was not made any addition by invoking the provisions of the section 14A of the Act. Being so, the contention of the assessee was that there is no addition for which the assessment was reopened, is not correct. There is an addition by the AO on the reasons recorded that is by invoking the provisions of the section 14A of the Act and being so; the AO can travel beyond he reasons recorded for making the addition as disallowance in re-opening the assessment also. - Decided against assessee
Disallowance u/s.80IB - Held that:- The assessee is not entitled for deduction u/s.80-IB of the Act in respect of its unit at Pallavaram unit which is manufacturing rubber contraceptives as the assessee’s produce manufactured is an item covered by Item Nos.27& 28 of Eleventh Schedule of the ‘Act’ being a rubber fitting. Accordingly, we hold that the CIT(A) has rightly upheld the rejection of assessee’s claim of deduction/s 80IB of the Act.- Decided against assessee
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2016 (5) TMI 1125
Eligibility of Cenvat credit of service tax - outward freight charges involved for clearance of finished products from the factory and up to the delivery effected at the customer's end/premises as per contractual terms agreed upon between the parties - Non-compliance of CBEC Circular dated 23.08.2007 but no evidence for the same - period involved from January 2005 to November 2007 and December 2007 to November 2008 - Held that:- in view of the decision of Karnataka High Court in the case of CCE Vs. ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] which is an uphelded decision of Larger Bench of the CESTAT reported in [2009 (5) TMI 48 - CESTAT, BANGALORE], it has been clearly upheld that the service tax paid on GTA services utilized for outward transportation of final product is allowable for the period prior to 01.04.2008 as per the definition of input services as contained in Rule 2(l) of the Cenvat Credit Rules and this appeal pertains to the period prior to 01.04.2008 only and the period after 01.04.2008 the appellant himself has reversed the credit of cenvat on GTA. Therefore, the impugned order is not sustainable. - Decided in favour of appellant
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