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Showing 501 to 520 of 925 Records
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2011 (9) TMI 754
DTAA between India and UK - Whether reinsurance brokerage/ commission is a Fees for technical services - it is clear that Article 13(4) emphasis on rendering any technical or consultancy services, which are ancillary and subsidiary to the application for enjoyment of any right, property or information for which a payment is received, or made available technical knowledge, experience, skill, know-how or processes or consist of the development and transfer of technical plan or technical design - In the present case, the New India Insurance Co. or other Insurance Company in India, who avails the services of the assessee as a broker in the process of the re-insurance of the risk is left with no technical knowledge, experience, skill, know-how or processes so as to bring the services rendered by the assessee within the ambit of Article 13(4)(c) of the Treaty - Held that: the payment received by the assessee in consideration for rendering intermediary or advisory services in the process of selecting re-insurer, cannot be qualified to be in the nature of fees for technical services as contemplated under Article 13(4)(c) of the DTAA between India & UK. - Decided in favor of the assessee
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2011 (9) TMI 753
Undisclosed income - the first and foremost requirement in respect of cash credit is to establish the identity of the creditor - Held that: the creditor of the assessee is a registered company which subsequently transferred its activities to Mumbai and changed its bank account, the address of which was available and even subsequently, the loan in question was paid back to the said creditor through the account payee cheque - the address of the said deponent is also available from the materials placed before the Assessing Officer and the said affidavit was in all respect made by complying with the formalities prescribed by law - the director of the creditors of the assessee affirmed affidavit before the Assessing Officer confirming the loan transaction which was effected to account payee cheques and the address of the bank in the transferred address was also available - Decided in favor of the assessee
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2011 (9) TMI 752
Deemed dividend u/s 2(22(e) - while rejected the revenue's appeal, HC held that:- Even if the shareholders are common of two companies but the fact remains that the assessee is a separate juristic entity. The assessee is assessed to income tax separately than its shareholders. The loan has been advanced to a company who is not a shareholder of M/s Ankur Agro Pvt. Ltd. - Revenue appeal dismissed.
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2011 (9) TMI 751
Block assessment - Search - Undisclosed Income - Validity of notice issued under 158BC for assessment under 158BD - Held that: - When proceedings are initiated in terms of Section 158BC against a person who is covered under Section 158BD and the notice to be issued is prescribed under the Act and in the absence of any prescription of a notice in a prescribed manner under Section 158BD the only notice that requires to be issued both under Sections 158B and 158BD is the notice which is prescribed. It is the notice prescribed under Section 158BC. Therefore, the contention that the assessment is under Section 158BD whereas notice issued under Section 158BC and therefore the entire proceedings in pursuance of such notice is void and is untenable. - Decided in favor of revenue.
Undisclosed income versus opening capital - block assessment - held that:- the said opening capital accrue to the assessees at a point of time anterior to the commencement of the block period, it cannot be treated as undisclosed income at all. The Tribunal was justified in directing deletion under that head.
Estimation of income under block assessment - held that:- When the Assessing Officer was calculating the gross sale receipts at the rate of Rs. 37/- per square feet, he forgot to take into consideration the cost of formation of layout, roads, drinking water and other expenses and other amenities. As is clear from his order, he has taken the cost of land as undisclosed and then made this calculation and reduced the cost of land and according to him the balance is the income which represents the undisclosed income. Therefore, the Tribunal was justified in setting aside the said finding.
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2011 (9) TMI 750
Applicability of 40A(7) - assessee being a sick unit - gratuity to those who went for voluntary retirement - Held That:- Provision to tune of 32,63,863 was the actual amount payable during the relevant accounting year. - while Section 40A (7) of the Act deals with deduction on the provision made, Section 43B of the Act is with reference to the deduction on actual payment. As far as the present case is concerned, the assessee's case falls under Section 40A(7) of the Act. - Given the fact that Section 40A(7)(b) of the Act contemplates deduction in respect of the provision made, not only for the purpose of contribution towards the approved gratuity fund, but equally so for the purpose of payment of gratuity payable during the year, rightly the Commissioner of Income Tax (Appeals) granted the relief. - Thus 40A(7) was applicable - decided in favor of assessee.
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2011 (9) TMI 748
Cenvat credit - rent-a-cab service, tour operator service and security - Tribunal in the case of C.C.E., Jaipur-II v. J.K. Cement Works (2009 -TMI - 33571 - CESTAT NEW DELHI) has held that rent-a-cab service used for bringing employees to the factory and dropping them back to their residence is covered by the definition of input service As regards the security, there is no dispute that the same has been availed security to the factory. Security service for security of the property of the factory is an essential activity for any manufacturer and, hence, in our view the same is covered by the term “activities related to the business,” and therefore, this service would also be covered by the definition of input service and would be eligible for Cenvat credit - Decided in favor of the assessee
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2011 (9) TMI 747
Waiver of pre-deposit - Business Exhibition Service - ld. counsel for the assessee would argue that this cannot be termed as rendering of “Business Exhibition Service” as the objective is to showcase the achievements of the government, there is no running away from the fact that stalls are also allotted to small traders and artisans in which they sell/promote/showcase/market their product or service - stay granted partly.
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2011 (9) TMI 746
Deduction u/s 80IA - activity of producing sharpener blades and Glue and lead - The fact that the excisable products are exempt from the payment of excise duty cannot be a ground to hold that the products in question are not manufactured by the assessee - Deduction u/s 80IA allowed - Decided in favor of the asessee
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2011 (9) TMI 745
Construction Business - deletion of 8% of the work in progress from assessment of income. - "Project Completed Method OR Completed Contract Method" - Books of account maintained - Held That:- Once the books of account were maintained, it is the 'Project Completion method' which has to be followed. - In view of H.M. Constructions (2001 -TMI - 57617 - ITAT BANGALORE ), the defects pointed out do not relate to the receipts, income, method of accounting and also work in progress, project completion method to be followed.
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2011 (9) TMI 744
Capital gain vs. business income - assessee had sold certain shares held as investments and gains arising on account of sale of these shares were offered as long term capital gains/short term capital gains, as the case may be - in the case of Commissioner of Income Tax V/s. Gopal Purohit (2010 (1) TMI 7 - ITAT BOMBAY-G) has held that it is open to an assessee to trade in the shares and also to invest in shares and wherever, the shares are held as investment, then the income arising on sale of those shares are liable to be assessed as long term/short term capital gains - Decided in favor of the assessee
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2011 (9) TMI 739
Petition for winding up of companies - on the ground that it failed to discharge its liability to a tune of Rs. 1,57,01,080 - The petitioner abruptly stopped the installation and erection works of the transformer and thereby caused much delay in the expansion programme, which caused great loss and irreparable damage to the respondent-company - It is to be noted that there are two indents emanating from the respondent-company - One is purchase order and another is work order - Though the respondent-company pleaded that it paid some more amount other than Rs. 45,55,000 it has not placed any material on record to substantiate the same - Exchange of e-mails between the parties clearly establish that the respondent-company accepted its liability to pay Rs. 1,57,01,080 towards the value of the transformer supplied by the petitioner - It is well-settled that the power to order winding up of a company is contained under the Companies Act and is conferred on the court.
Winding up and arbitration clause - held that:- Existence of arbitration clause is not a ground to dismiss the application seeking an order of winding up of the respondent-company. - Accordingly, the company petition is admitted
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2011 (9) TMI 738
Valuation - Assessee exclusive agent in India - Discount given in lieu of commission - Discount to independent importer is available only in case of competition, new customers etc. Discount to related buyer is without any basis - Held That:- There is no error in the order of the Commissioner (Appeals) giving adjustment for difference in commercial level to the extent of 5% as the third party imports are at actual user level whereas goods imported by the subsidiary are at distributor level. Decided against assessee.
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2011 (9) TMI 737
Demand - Rent-a-Cab - Notification No. 9/2004-S.T., dated 9-7-2004 - In the matter of cum-duty benefit, the fact that the amount realized by the appellant is cum duty is not disputed by the Revenue - It appears likely that the supplementary bills may not have been paid by IFFCO and therefore, this fact has to be verified by the adjudicating authority and if the supplementary bills are not paid by M/s. IFFCO, the benefit of cum duty should be extended to the appellant Regarding penalty - Basically penalties under Sections 76 and 78 are for the same offence which principle has been recognized by amendment done w.e.f. 10-5-2008 by Finance Act, 2008 by adding a proviso under Section 78 - In this case the penalties imposed in the adjudication orders are based on quantum of duty worked out without following judicial principles and he could not have paid 25% of duty determined in the order-in-original - Appeal is allowed by way of remand
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2011 (9) TMI 736
Demand - Security agency - Time limitation - In reply to the notice, the appellants denied that they were a security agency as defined under Section 65(94) of the Finance Act inasmuch as they were not a commercial concern engaged in any activity for profit - In the process, they manufactured surplus bricks than the actual number required by them for their own use and inasmuch as there was danger of these bricks getting deteriorated they disposed of the same from time to time to the outside parties - Hon’ble Supreme Court decision discussed by us though rendered under the Sales Tax Act, the details and circumstances for holding the organisation as commercial concern or otherwise, throw light on the issue as to what can be held to be regular business activity so as to be liable to tax - Held that: the said declaration of law would be applicable only for the period prior to 18-4-2006 inasmuch as the definition of ‘security agency’ thereafter was amended and the security service provided by any person were made liable to service tax - This amendment in the definition also supports our view that prior to 18-4-2006 legislature intended to tax security services provided by only commercial concern and not by organisations other than commercial concerns - Decided in favor of the assessee
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2011 (9) TMI 733
Penalty u/s 271(1)(c) - Furnishing inaccurate particulars of income - In the present case the declaration made by the assessee in the return of income was that the amount of Rs.17,00,000/represents the long term capital gain arising on surrender of tenancy rights and accordingly the assessee paid taxes under the head 'income from capital gains' at the rate of 20% - The penalty is imposed not because the amount offered by the assessee has been assessed under a heading other than the heading declared by the assessee, but the penalty has been levied on account of the fact that the declaration made by the assessee regarding the source from which the income and Rs.17,00,000/has been earned has been found to be incorrect - Decided against the assessee
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2011 (9) TMI 732
Capital loss on the sale of the foreign cars - Cars purchased from sister concern and leased out to the lessees were subsequently sold to the lessees - Revenue do not deny the genuineness of lease - Held That:- when the sale of the cars itself flow from the terms of the lease agreement and the terms of the agreement thus not questioned by the Revenue, the mere fact that the cars were sold at a price so low and that the lessees could subsequently sell the car for a higher price would not defeat the claim of the assessee for capital loss. Appeal Dismissed.
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2011 (9) TMI 731
Re-assessment under 147 subsequent to intimation under 143(1) - re-opening on audit objections - Held That:- 143(1) is not an assessment but an intimation only, thus question of change of opinion, did not arise. The Supreme Court also held that with Section 147 permitting the Officer to assess or reassess the income chargeable to tax when he has reason to believe income escaping assessment, the mere failure to take steps under Section 143(3) would not render the Assessing Officer powerless to initiate reassessment proceedings under Section 147 of the Act even when intimation under Section 143(1) had been issued. Decided against asssessee.
Land on Lease - Constructed Commercial complex and received rental income - only activity during 91-92 - no exploitation of business assets - Income from "House Property" or "Business Income" - Held That:- In view of East India Housing and Land Development Trust Ltd Vs CIT (1960 (11) TMI 7 - SUPREME Court), when the rental income falls within the specific head of income from house property, the mere fact of the assessee having business in letting out the property as stated in its memorandum, by itself, will not conclusively point out that the income is nothing but business income. Inference to be drawn from facts of each case. Court held it as rental income.
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2011 (9) TMI 730
Issues:
1. Disallowance of expenditure incurred by the assessee on interest paid on funds borrowed for making investments generating tax-free income.
Analysis:
The main issue in this judgment revolves around the disallowance of expenditure incurred by the assessee on interest paid on funds borrowed for making investments that generate tax-free income. The Tribunal's decision to cancel this disallowance is challenged by the Revenue. The Tribunal primarily focused on the applicability of Section 14A of the Income Tax Act concerning free bonds purchased to meet the Statutory Liquidity Ratio (SLR) by the respondent Bank. However, the disallowance in question pertains not only to investments in tax-free bonds but also to funds raised for purchasing shares of companies, the income from which is exempt from tax under Section 10(23G) of the Income Tax Act.
The High Court's judgment refers to a previous decision in CIT v. Catholic Syrian Bank Ltd. where a similar issue was addressed. The respondent/assessee argues that the current case involving investment in tax-free bonds to meet SLR requirements is distinguishable from the previous judgment. The Court, however, rejects this argument, stating that the purpose or object of the investment does not impact the operation of Section 14A of the Income Tax Act. The Court emphasizes that any expenditure incurred for earning tax-free income is not an allowable deduction under this section. Therefore, the Court holds that even though tax-free bonds were purchased to meet SLR requirements, the interest and other expenditures incurred on borrowings for such investments must be disallowed.
Consequently, the High Court allows the appeal filed by the Revenue by overturning the Tribunal's decision and that of the First Appellate Authority. The disallowance under Section 14A of the Income Tax Act for expenditure incurred on borrowings for investments in tax-free bonds and other investments generating non-taxable income is reinstated.
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2011 (9) TMI 729
Business income or House property - Assessing Officer pointed out that in the wealth tax proceedings the assessee had taken the plea that the unsold flats as shown in stock-in-trade were not assets for the purpose of Wealth Tax Act and, hence, not taxable under the said Act - if the subject matter of stock-in-trade was not unsold flats simplicitor, but were plants, machinery, godown, etc. and in those circumstances it could be reasonably argued that income by exploiting those stock-in-trade would come under the purview of income from business - the reasoning assigned by the Tribunal if the subject matter of stock-in-trade was not unsold flats simplicitor, but were plants, machinery, godown, etc. and in those circumstances it could be reasonably argued that income by exploiting those stock-in-trade would come under the purview of income from business - the unsold flats being house property, pure and simple and having fallen under the head, income from house property, as provided in section 22 of the Act, in our opinion, Commissioner of Income-tax (Appeals) rightly held that the rental income of such property should be assessed under section 22 of the Act - Decided in favor of the assessee
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2011 (9) TMI 728
Determination of perquisite value - Rule 3 - Where an employer takes residential premises on rent by giving security deposit for the benefit of employees, whether the notional interest on such security deposit is liable to be included in the perquisite value of the accommodation given to the assessee employee is the question raised in this appeal - on a plain reading of Rule 3, it is seen that the perquisite value of the residential accommodation provided by the employer is to be computed on actual amount of lease rental paid or payable by the employer and not on notional basis - the actual amount of lease rent paid by the employer is less than 10% of the salary of the Assessee and therefore, the decision of the ITAT in holding that the actual amount of lease rent paid by the employer should be taken into consideration while computing the perquisite value of the residential accommodation cannot be faulted - Appeal is dismissed
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