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Showing 61 to 80 of 1051 Records
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2013 (1) TMI 1008
Issues Involved:
1. Taxability of advertisement revenues earned by Satellite Television Asian Region Advertising Sales BV (SAS BV) in the hands of the assessee.
2. Basis of taxation (accrual vs. receipt) of advertisement income.
3. Taxability of revenues from NBC Asia CV Limited as fees for technical services.
4. Levy of interest u/s 234A, 234B, and 234C.
5. Deletion of penalty u/s 271(1)(c).
Summary:
1. Taxability of Advertisement Revenues (AY 1998-1999 & 1999-2000):
The Tribunal held that SAS BV cannot be considered a conduit for the assessee. The advertisement revenues earned by SAS BV should not be taxed in the hands of the assessee. The Tribunal relied on its previous decisions and found no income accrued or arisen to the assessee-company under the head advertisement revenue during the assessment years under consideration. Hence, the order of the CIT(A) was reversed.
2. Basis of Taxation (AY 1998-1999, 1999-2000 & 2000-2001):
The Tribunal decided that the advertisement revenues should be taxed on a receipt basis rather than on an accrual basis. This decision was based on previous Tribunal orders and the CBDT Circular No.742, which recognized the peculiarity and specialty of such transactions. The Tribunal upheld the assessee's method of accounting on a receipt basis.
3. Taxability of Revenues from NBC Asia CV Limited (AY 1999-2000):
The Tribunal ruled in favor of the assessee, holding that the revenues earned from NBC Asia CV Limited for services rendered outside India are not taxable in India as fees for technical services u/s 9(1)(vii) of the Act. This decision was based on the Hon'ble Delhi High Court's judgment in the case of Asia Satellite Telecommunications Company Ltd.
4. Levy of Interest u/s 234A, 234B, and 234C (AY 1998-1999, 1999-2000 & 2000-2001):
The Tribunal confirmed the CIT(A)'s order deleting the interest charged u/s 234A, 234B, and 234C. It was held that the assessee could not be penalized for the fault of another party (i.e., non-deduction of tax at source by the payer). The Tribunal also referred to the case of NGC Network Asia LLC, where it was held that interest u/s 234A, 234B, and 234C is not applicable to non-residents.
5. Deletion of Penalty u/s 271(1)(c) (AY 1998-1999 & 1999-2000):
The Tribunal upheld the CIT(A)'s decision to delete the penalty imposed by the AO u/s 271(1)(c). It was found that the assessee had a bona fide belief that the income was to be taxed in the hands of SAS BV, and there was no intention to avoid tax. The issue was debatable, and hence, penalty u/s 271(1)(c) was not warranted.
Conclusion:
The appeals filed by the assessee for AY 1998-1999 and 1999-2000 were allowed, and the appeals filed by the AO for AY 1998-1999, 1999-2000, and 2000-2001, including the penalty appeals, were dismissed.
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2013 (1) TMI 1007
Issues Involved:
1. Jurisdiction under Section 263 of the Income Tax Act.
2. Set-off of unabsorbed depreciation.
3. Transfer of undertaking and valuation.
4. Computation of depreciation.
5. 100% depreciation on Boiler.
6. Option under Rule 5(1A).
7. Deduction of profits under Section 115J.
8. Computation of loss on sale of shares.
Summary of the Judgment:
1. Jurisdiction under Section 263 of the Income Tax Act:
The assessee challenged the jurisdiction of the Commissioner of Income Tax (CIT) under section 263 of the Income Tax Act, 1961, arguing that the scrutiny assessment was completed u/s 143(3) read with section 147 after examining the books of accounts and other documents. The CIT held that the assessment order was erroneous and prejudicial to the interest of the revenue. The tribunal upheld the CIT's jurisdiction, noting that the Assessing Officer (AO) had not applied his mind to the issues at hand, resulting in a 'no opinion' scenario rather than 'one of the possible opinions'.
2. Set-off of Unabsorbed Depreciation:
The CIT held that unabsorbed depreciation could only be set off against the profits and gains of business or profession. The tribunal noted that the AO had failed to examine the set-off of unabsorbed depreciation against capital gains. The CIT(A) later allowed the set-off of unabsorbed depreciation against capital gains, supported by the Hon'ble Jurisdictional High Court's decision in CIT vs. Pioneer Asia Packing (P) Ltd., which held that unabsorbed depreciation from prior to 1996-97 could be set off against capital gains.
3. Transfer of Undertaking and Valuation:
The CIT questioned the arm's length nature of the transfer of the undertaking to its subsidiary. The tribunal observed that the valuation was approved by the Madras High Court and supported by a valuation from Tata Economic Consultancy Services. The CIT's order was upheld, directing the AO to reassess the valuation.
4. Computation of Depreciation:
The CIT held that the AO had not computed the depreciation correctly in respect of assets transferred to its subsidiary. The tribunal noted that the AO had failed to verify the depreciation claim and directed a fresh assessment. The CIT(A) later confirmed the AO's findings, restricting the assessee's claim of depreciation by apportioning it according to the number of days the assets were used.
5. 100% Depreciation on Boiler:
The CIT held that the AO had wrongly allowed the claim for 100% depreciation on a boiler. The tribunal observed that the AO had not verified the claim and directed a fresh assessment.
6. Option under Rule 5(1A):
The CIT held that the option under Rule 5(1A) had not been obtained. The tribunal noted that the AO had failed to verify this and directed a fresh assessment.
7. Deduction of Profits under Section 115J:
The CIT held that the AO had wrongly allowed the claim for deduction of profits of the cogeneration power division in computing the Minimum Alternate Tax (MAT) under Section 115JA. The tribunal upheld the CIT's direction for a fresh assessment.
8. Computation of Loss on Sale of Shares:
The CIT held that the loss on the sale of shares of Kothari Sugars and Chemicals Ltd was not computed correctly. The tribunal observed that the AO had not verified the computation and directed a fresh assessment.
Conclusion:
The tribunal dismissed all three appeals (I.T.A. Nos. 635/Mds/2010, 791/Mds/2012, and 816/Mds/2012), upholding the CIT's directions for fresh assessments and confirming the CIT(A)'s findings on various issues. The CIT was found to have rightly directed the AO to proceed afresh in accordance with the law.
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2013 (1) TMI 1006
Issues involved: Interpretation of Sections 10A and 10B of the Income Tax Act, failure of CIT(A) and Tribunal to consider alternative claim for entitlement under Section 10A.
Summary:
The High Court judgment addressed the issue of entitlement to benefits under Sections 10A and 10B of the Income Tax Act. The applicant had succeeded before the Tribunal in claiming benefits under Section 10B based on STP clearance/approval under Section 10A. However, the Court ruled that separate regimes exist for Section 10A and Section 10B, negating the plea for approval under Section 10B based on Section 10A approval. The applicant contended that the CIT(A) and Tribunal had not considered the alternative claim for entitlement under Section 10A. The Court directed the Tribunal to review the relevant documents and ascertain if the applicant is entitled to the benefits of Section 10A. The previous judgment was modified, and the Tribunal was instructed to pass appropriate orders after hearing both parties.
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2013 (1) TMI 1005
Issues involved: Appeal against order dated 21.03.2012 passed by ld. CIT(A)-II, Agra for Assessment Year 2008-09.
Summary:
The appellant, a Civil Contractor, declared income of &8377; 1,49,790/-. The Assessing Officer (A.O.) noticed discrepancies in the declared income and production of vouchers. The A.O. applied 8% N.P. rate and added interest income of &8377; 3,37,886/-. The CIT(A) upheld the A.O.'s order based on precedents. The appellant argued that interest income was part of business income, citing a previous case. The Tribunal found in favor of the appellant, following the precedent, and deleted the separate addition of interest income.
The Tribunal confirmed the order of Revenue Authorities applying 8% N.P. rate but deleted the separate addition of interest income. The appellant was granted relief of &8377; 3,37,886/-. It was clarified that the assessed income should not be less than the income declared in the return.
In conclusion, the appeal was partly allowed, with the separate addition of interest income being deleted, in line with the appellant's previous case for A.Y. 2007-08.
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2013 (1) TMI 1004
Issues involved: Appeal against estimation of profits from business & profession and addition of unsecured loans.
Estimation of profits from business & profession:
The assessee, engaged in trading of milk and earning commission, declared net profit of 6.69% of total sales for A.Y. 2007-08. AO estimated profit at 15% based on discrepancies in sales figures. Assessee argued for profit estimation at 8% citing circular from Maharashtra Rajya Sahakari Dhood Mahasnagh limiting gross profit margin to 5%. CIT(A) rejected book results and estimated profit at 8% based on past years' results. Assessee contended that 8% estimation was excessive and unreasonable. Tribunal estimated profit at 5% of total sales, considering the fixed profit margin by the federation.
Addition of unsecured loans:
Assessee showed unsecured loan of &8377; 19,607 from a friend without furnishing confirmation letter. AO added the amount u/s 68 of the Act for lack of proof of identity, genuineness, and creditworthiness. CIT(A) upheld the addition, and the Tribunal rejected the ground due to lack of material proving the creditor's identity.
The Tribunal partly allowed the appeal, estimating profit at 5% of total sales and rejecting the addition of unsecured loans due to insufficient evidence of the creditor's identity.
Order pronounced on 31st January, 2013.
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2013 (1) TMI 1003
Issues Involved:
1. Compliance with Section 42 of the N.D.P.S. Act.
2. Evaluation of evidence, particularly the absence of public witnesses.
3. Consideration of the appellant's age and the passage of time since the occurrence.
Summary:
Compliance with Section 42 of the N.D.P.S. Act:
The primary issue in this appeal was the non-compliance with Section 42 of the N.D.P.S. Act. The court noted that the Sub Inspector received information at the police station but did not reduce it to writing nor sent it to his superior, which is a mandatory requirement. The court referenced the Constitution Bench decision in *Karnail Singh Vs. State of Haryana* and subsequent cases, emphasizing that total non-compliance with Section 42(1) and (2) is impermissible. The court found that the prosecution failed to produce the G.D. where the information was allegedly recorded, leading to an adverse inference against the prosecution. This non-compliance rendered the recovery illegal and the conviction unsustainable.
Evaluation of Evidence:
The appellant argued that the evidence of D.W. 1 was not properly appreciated and that there was no public witness to support the prosecution's version. The court held that the absence of public witnesses does not automatically discredit the evidence of police witnesses. The evidence of police witnesses should be evaluated in the same manner as that of any other witness. The court found the police witnesses' evidence reliable and noted that people often avoid becoming witnesses to crimes.
Consideration of Appellant's Age and Passage of Time:
The appellant's counsel argued that given the appellant's age (72 years) and the passage of 22 years since the occurrence, no useful purpose would be served by sending him to jail. However, the court's decision to set aside the conviction was primarily based on the non-compliance with Section 42 of the N.D.P.S. Act rather than the appellant's age or the passage of time.
Conclusion:
The appeal was allowed, and the judgment and order dated 4.11.1992 passed by IIIrd Additional District & Sessions Judge, Barabanki, were set aside. The appellant was ordered to be set at liberty, and his bail bonds were canceled. The office was directed to send back the lower court record forthwith to the concerned court.
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2013 (1) TMI 1002
Issues Involved:
The issue involves the interpretation of whether additions made under Section 69 of the Income-tax Act, 1961 can be the basis for imposing a penalty under Section 271(1)(c) of the Act.
Facts:
A search and seizure operation was conducted, resulting in the recovery of incriminating material. The Assessing Officer made various additions to the income, including unaccounted investments, extra profit, repair receipts, and unexplained investments. Penalty proceedings were initiated under Section 271(1)(c) of the Act. The assessee contended that no concealment had occurred, but the Assessing Officer imposed a penalty of Rs. 1,90,000. The first Appellate Authority deleted the penalty for extra profit but upheld penalties for other additions. Both the assessee and the Revenue appealed to the Income Tax Appellate Tribunal, which canceled the penalties related to certain additions under Section 69A, citing them as deeming provisions.
Judgment:
The High Court considered the arguments presented by both parties. The Revenue contended that as the assessee failed to provide explanations for the additions under Section 69A, the penalties should not have been deleted. The Tribunal's decision was supported by the counsel for the respondent. The Court noted that the assessee did not offer a satisfactory explanation for the unrecorded payment of Rs. 37,000 made by bank draft. In the absence of a plausible explanation, the Court inferred that the assessee had concealed income. The Court held that the burden was on the assessee to prove no concealment, and the Tribunal erred in deleting the penalties solely based on Section 69A being a deeming provision.
Conclusion:
The Court answered the question referred in the negative, favoring the Revenue and against the assessee.
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2013 (1) TMI 1001
Issues Involved:
1. Addition on account of provision for gratuity.
2. Addition on account of cash loss during a fire.
3. Addition u/s 41(1).
4. Addition u/s 14A.
5. Disallowance of bad debts.
6. Disallowance of foreign travel expenses of Director's wife.
7. Disallowance of foreign travel expenses on estimated basis.
Summary:
1. Addition on account of provision for gratuity:
The Department appealed against the deletion of Rs. 3,62,096/- made on account of disallowance being provision of gratuity. The CIT(A) allowed the assessee's claim, observing that the amount was claimed on an actual payment basis and not as a provision. The Tribunal upheld the CIT(A)'s findings, noting that the Department did not controvert the facts presented by the assessee. Thus, this ground was dismissed.
2. Addition on account of cash loss during a fire:
The Department contested the deletion of Rs. 6,86,253/- on account of cash loss during a fire. The CIT(A) admitted additional evidence under Rule 46A(4) and allowed the claim, noting no adverse inference by the AO. The Tribunal found no reason to interfere with the CIT(A)'s order as the Department did not provide evidence to the contrary. This ground was dismissed.
3. Addition u/s 41(1):
The assessee appealed against the addition of Rs. 3,54,201/- u/s 41(1) for some credit balance outstanding. The CIT(A) confirmed the addition, but the Tribunal set aside the order, noting that the assessee had not written back these amounts in the Profit & Loss Account, indicating no remission or cessation of liability. This ground was allowed.
4. Addition u/s 14A:
The assessee contested the addition of Rs. 16,13,623/- u/s 14A. The Tribunal restored the issue to the AO for verification of the quantification of disallowance, based on the assessee's submission that the disallowance should have been Rs. 13,68,231/-. This ground was allowed for statistical purposes.
5. Disallowance of bad debts:
The assessee appealed against the disallowance of Rs. 2,04,091/- of bad debts. The Tribunal restored the matter to the AO to examine the claim in light of the submissions made, noting that the fire incident and the recording of sales in the Accounts Department were not disputed. This ground was allowed for statistical purposes.
6. Disallowance of foreign travel expenses of Director's wife:
The assessee contested the disallowance of Rs. 2,90,020/- for the foreign travel expenses of Mrs. Priti Saraf. The Tribunal upheld the CIT(A)'s order, noting that the assessee did not establish any business connection with the foreign travel. This ground was dismissed.
7. Disallowance of foreign travel expenses on estimated basis:
The assessee appealed against the disallowance of Rs. 85,269/- out of foreign travel expenses on an estimated basis. The Tribunal set aside the CIT(A)'s order, noting that all expenses incurred during foreign visits for business purposes should be treated as business expenses, and no ad-hoc disallowance was justified. This ground was allowed.
Conclusion:
The Assessee's appeal was partly allowed for statistical purposes, and the Department's appeal was dismissed.
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2013 (1) TMI 1000
Issues involved: Suit for recovery of possession and mesne profits/damages for use and occupation of a flat in Delhi.
Summary:
1. The plaintiff filed a suit seeking possession of a portion of a flat in Delhi from the defendants, who are family members. The defendants, in their written statement, denied the allegations and claimed rights based on contributions to the purchase of the flat. The court found that such contributions do not grant rights to possession.
2. During the hearing, the defendants' counsel argued that the plaintiff did not approach the court with clean hands, alleging false statements regarding harassment. The court clarified that such arguments do not constitute a defense to a suit for possession, emphasizing that possession rights are not discretionary.
3. The defendants provided a document claiming rights in the property, but the court ruled that it did not grant them the right to retain possession. The court held that only the demise of the plaintiff would allow inheritance rights, not prior claims based on contributions to purchase consideration.
4. The defendants raised issues of undervaluation of the suit and mentioned a Memorandum of Understanding (MoU) among family members, but failed to provide details or pleadings to support their claims. The court denied the request for an adjournment to amend the written statement, decreeing the suit in favor of the plaintiff for possession and mesne profits.
5. The court granted liberty to the plaintiff to apply for an inquiry into mesne profits if the defendants resist the execution of the decree. Costs were awarded to the plaintiff, and the decree was confined to defendants No. 1 and 2 due to the minority of defendants No. 3 and 4.
6. The defendants expressed willingness to vacate the flat after a specified period, and were granted liberty to file affidavits to that effect for further consideration by the court.
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2013 (1) TMI 999
Issues Involved:
1. Confirmation of Death Sentence
2. Quantum of Sentence
3. Applicability of "Rarest of Rare" Doctrine
4. Balancing Aggravating and Mitigating Circumstances
5. Possibility of Reformation and Rehabilitation
Summary:
Issue 1: Confirmation of Death Sentence
The appeals were filed against the High Court's judgment confirming the death sentence imposed by the Sessions Judge, Ludhiana. The High Court accepted the murder reference and confirmed the death sentence for the appellant who had committed the murder of his wife and daughter.
Issue 2: Quantum of Sentence
The Supreme Court confined its notice to the question of the quantum of sentence. The appellant's counsel's plea to re-examine the merits of the case was rejected, focusing only on the sentence.
Issue 3: Applicability of "Rarest of Rare" Doctrine
The Supreme Court evaluated whether the case fell under the "rarest of rare" category, which would justify the death penalty. The Court noted that the High Court did not find any mitigating circumstances and deemed the crime as falling within the "rarest of rare" cases. However, the Supreme Court emphasized that brutality alone is not sufficient to categorize a case under the "rarest of rare" doctrine.
Issue 4: Balancing Aggravating and Mitigating Circumstances
The trial court and the High Court cited several aggravating factors, including the appellant's previous conviction for raping his daughter and the brutal manner of the murders. The Supreme Court, however, considered mitigating factors such as the appellant's age, poverty, and the possibility of reformation. The Court referred to precedents like Bachan Singh vs. State of Punjab and Machhi Singh vs. State of Punjab, which stress the need to balance aggravating and mitigating circumstances.
Issue 5: Possibility of Reformation and Rehabilitation
The Supreme Court highlighted the importance of considering the potential for reformation and rehabilitation before imposing the death penalty. The Court found that the appellant's family had not completely renounced him, indicating a possibility for reformation. Consequently, the Court opined that the case did not warrant the death penalty and modified the sentence to rigorous imprisonment for life.
Conclusion:
The Supreme Court concluded that the appellant should undergo rigorous imprisonment for life, subject to any remission granted by the appropriate Government under Section 432 of the Code of Criminal Procedure, with further checks under Section 433-A of the Code. The appeals were disposed of on these terms.
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2013 (1) TMI 998
Issues involved:
The judgment involves issues related to re-opening of assessment u/s 147, validity of invoking provisions of s. 154 of the Act, and allowing set-off of brought forward unabsorbed depreciation.
I. ITA Nos.58 & 59/B/12 - AYs 2005-06 & 06-07 - By the assessee:
For AY 2005-06, the assessee contested the re-opening of assessment under s.147. The CIT (A) held that re-opening was permissible under the law. In AY 2006-07, the assessee challenged the validity of invoking s. 154, claiming no mistake apparent from records. The CIT (A) upheld the validity of invoking s. 154.
II. ITA Nos.254 & 255/12 - AYs 2005-06 & 06-07 - By Revenue:
The Revenue contested the direction to allow set-off of unabsorbed depreciation of AYs 1994-95 and 1995-96 against the income of AYs 2005-06 and 2006-07. The issues raised by both parties were inter-linked and heard together.
Details of the Judgment:
The assessee, engaged in the manufacture of granite tiles and slabs, had its assessments re-opened for AYs 2005-06 and 2006-07. The AO concluded the assessments, bringing certain amounts to tax. The CIT (A) directed the AO to allow set-off of unabsorbed depreciation against the incomes of the respective years.
The Revenue challenged the CIT (A)'s direction, arguing that the High Court remitted a similar issue back to the AO for fresh consideration. The Revenue contended that the CIT (A) did not fully consider the Court's ruling. The assessee argued that the AO's actions were based on a change of opinion and no fresh material was presented.
The Tribunal observed that the issues needed reconsideration. The matters related to re-opening of assessments and invoking s. 154 were remanded back to the AO for proper consideration. The Revenue's appeals were treated as allowed for statistical purposes.
In conclusion, the Tribunal ordered a fresh look into the issues raised by both parties and directed the AO to address the grievances of the assessee in accordance with the provisions of the Act. The appeals were treated as allowed for statistical purposes.
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2013 (1) TMI 997
Issues involved:
The judgment involves determining whether the loss on extension of Forward Foreign Exchange contracts should be considered as a capital loss or a business loss for assessment under the Income Tax Act.
Summary:
Issue 1: Classification of loss on extension of Forward Foreign Exchange contracts
The Revenue contended that the loss should be considered as a business loss, while the Assessing Officer treated it as income from other sources. The CIT(A) held that the loss on extension of forward foreign exchange contracts is a capital loss. The Revenue challenged this decision.
The Tribunal considered the previous findings in a similar case and concluded that the income arising from forward exchange contracts should be treated as capital gain. The Tribunal relied on consistent decisions and held that gains from early settlement of forward foreign exchange contracts are assessable as capital gain. Consequently, the appeal filed by the Revenue was dismissed.
Conclusion:
The Tribunal upheld the decision of the CIT(A) that the loss on extension of Forward Foreign Exchange contracts should be treated as a capital loss, in line with previous rulings and consistent interpretation of the law.
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2013 (1) TMI 996
Issues Involved: Assessment u/s.143(3) for the Assessment Year 2007-08, disallowance of expenditure accounted under Suspense Account, disallowance of Labour Charges, disallowance of certain expenditure u/s.40(a)(ia) for non deduction of tax at source.
Assessment u/s.143(3) for the Assessment Year 2007-08:
The Assessing Officer disallowed a sum on the ground that entries for these expenditure were made in the Suspense Account. The CIT(A) held that as the amounts debited to suspense account have been subsequently transferred to respective accounts, the disallowance is not sustainable. However, on appeal, the Revenue raised a specific ground that the assessee had not provided adequate details for verification. The Tribunal set aside the issue to the Assessing Officer for further examination based on the assessee's submissions and evidences before CIT(A).
Disallowance of Labour Charges:
The Assessing Officer found that all vouchers for labour charges were self-made. The CIT(A) reduced the disallowance from 15% to 5% of the total expenditure. The Revenue appealed, arguing that the assessee's AR had accepted a 15% disallowance. The Tribunal referred to a High Court decision emphasizing the burden of proof on the taxpayer to justify deductions. Consequently, the Tribunal confirmed the 15% disallowance of the claimed expenditure.
Disallowance of Expenditure u/s.40(a)(ia) for non deduction of tax at source:
The Assessing Officer disallowed certain expenditure for non-deduction of tax at source, citing lack of details about the parties involved. The CIT(A) noted that necessary details were not furnished or examined by the Assessing Officer. The Tribunal directed the Assessing Officer to verify specific payments and certificates provided by the assessee to determine the applicability of tax deduction requirements under the Income Tax Act. The issue was remitted back to the Assessing Officer for further examination.
In conclusion, the Tribunal partially allowed the department's appeal for statistical purposes, directing further verification and examination by the Assessing Officer on the issues of disallowances related to Suspense Account entries, Labour Charges, and non-deduction of tax at source for specific expenditures.
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2013 (1) TMI 995
Issues involved:
1. Disallowance of expenditure accounted under Suspense Account u/s.143(3) for AY 2007-08.
2. Disallowance of Labour Charges.
3. Disallowance of expenditure u/s.40(a)(ia) for non-deduction of tax at source.
Disallowance of expenditure accounted under Suspense Account:
The Assessing Officer disallowed a sum of Rs. 26,01,482/- as the entries for these expenditures were recorded in the Suspense Account and not in the individual expenditure accounts. The CIT(A) held that since these amounts were eventually transferred to the respective accounts, the disallowance was not justified. However, on appeal, the Revenue contended that the Assessing Officer did not verify the assessee's submissions and evidences. The ITAT directed the issue to be sent back to the Assessing Officer for verification and possible deletion of the addition.
Disallowance of Labour Charges:
The Assessing Officer disallowed Rs. 1,19,61,186/- claimed as labour charges, citing self-made vouchers as insufficient proof. The CIT(A) reduced the disallowance from 15% to 5% considering the nature of the business and difficulties in obtaining separate vouchers. The Revenue appealed, arguing that the assessee's acceptance of 15% disallowance should be upheld. The ITAT, referring to a High Court decision, upheld the 15% disallowance, emphasizing the burden of proof on the taxpayer.
Disallowance of expenditure u/s.40(a)(ia) for non-deduction of tax at source:
The Assessing Officer disallowed Rs. 37,92,350/- for non-deduction of tax at source under section 40(a)(ia) due to lack of details about the payees. The CIT(A) submissions were not examined by the Assessing Officer. The ITAT directed verification of specific payments like Tipper and Tractor hire charges, mixture and proclaim hire charges, and site engineering charges to determine if tax deduction was required. The issue was remitted back to the Assessing Officer for further examination.
The ITAT Hyderabad, in the case involving the above issues, provided detailed analysis and directions for each aspect of the disallowances, emphasizing the need for proper verification and compliance with tax deduction requirements.
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2013 (1) TMI 994
Issues involved: Appeal against penalty imposed u/s 271B for delay in filing tax audit report.
Summary:
1. The appellant, an individual engaged in garment manufacturing and wholesale trading, filed an appeal against the penalty of Rs. 1,00,000 imposed by the AO u/s 271B for delay in filing the tax audit report beyond the prescribed time limit under section 44AB.
2. The AO, after a survey u/s 133A, noticed the delay in filing the tax audit report and imposed the penalty. The appellant cited the delay in receiving a stock statement during the survey as the reason for the delay in finalizing accounts and getting them audited.
3. The penalty was challenged before the CIT(Appeals) reiterating the appellant's contention that the delay in receiving the stock statement constituted a sufficient cause for non-compliance with section 44AB.
4. The CIT(Appeals) upheld the penalty citing that the appellant failed to prove that the stock statement was not provided before the due date for filing the audit report. The Tribunal was approached against this decision.
5. The Tribunal observed discrepancies in the AO and CIT(Appeals) reasoning. The appellant provided a sequence of events and an affidavit affirming the delay in receiving the stock statement, leading to the delay in audit report submission. Considering this, the Tribunal canceled the penalty u/s 271B, allowing the appeal.
6. Consequently, the appeal of the appellant was allowed, and the penalty imposed by the AO and confirmed by the CIT(Appeals) u/s 271B was canceled.
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2013 (1) TMI 993
Issues involved: Challenge to the order dated 21.11.2012 in Criminal Misc. No.5936/2012 under Section 397 r/w Section 401 of the Code of Criminal Procedure.
Issue I: Maintainability of Revision Petition
The petitioner challenges the order dated 21.11.2012 in Criminal Misc. No.5936/2012 under Section 397 r/w Section 401 of the Code of Criminal Procedure. The Registry raised an objection regarding the maintainability of the Revision Petition. The petitioner argues that since the trial Court's order was under Section 14 of the Securitisation Act, no act of the Chief Metropolitan Magistrate can be questioned. The petitioner relies on a previous unreported order of the Court to support the maintainability of the Revision Petition.
Issue II: Legal Remedy Available
The Court considers whether a Petition under Section 397 of Cr.PC against orders made under Section 14 of the Securitisation Act is maintainable. It clarifies that the Securitisation Act does not provide for appeal or revision against an order made under Section 14. The Court opines that the aggrieved party can approach the High Court under Section 482 of Cr.PC, which is akin to the powers under Article 226 of the Constitution of India.
Issue III: Final Order
The Court notes that the previous order was not related to the maintainability of the Revision Petition. It highlights Section 14 of the Securitisation Act, emphasizing that no act of the Chief Metropolitan Magistrate can be questioned. The Court rejects the Revision Petition as not maintainable but grants liberty to the petitioner to seek appropriate legal recourse. Additionally, any pending applications related to the Revision Petition are disposed of, and the necessary papers are to be returned to the petitioner's counsel.
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2013 (1) TMI 991
Issues Involved:
1. Condonation of delay in filing the appeal.
2. Reopening of assessment u/s 147/148 of the IT Act.
3. Addition of Rs. 1,50,000 on account of unexplained gift.
Summary:
1. Condonation of Delay:
The appeal was time-barred by 40 days. The assessee provided a medical certificate and affidavit explaining illness from 25th April 2011 to 7th June 2011. The learned Departmental Representative had no objection. The Tribunal condoned the delay, satisfied that the assessee was prevented by sufficient cause from filing the appeal within the limitation period.
2. Reopening of Assessment u/s 147/148:
The assessee challenged the reopening of the assessment under s. 147/148. The Tribunal noted that the assessee did not raise this issue before the AO or the CIT(A). The Tribunal cited the Hon'ble Allahabad High Court's decision in CIT v. Sahara India [2012] 347 ITR 331, emphasizing that legal issues can be raised at any stage but must be supported by reasons. The Tribunal found no bona fide omission or good reasons for not raising the grounds earlier and rejected the additional grounds of appeal.
3. Addition of Rs. 1,50,000 on Account of Unexplained Gift:
The assessee claimed to have received a gift of Rs. 1,50,000 from Shri Kiran Sharma. The AO reopened the assessment u/s 148, questioning the genuineness of the gift. The assessee failed to produce original documents, the donor, or evidence of the donor's capacity and relationship with the assessee. The Tribunal upheld the AO's addition, citing the assessee's failure to prove the identity, capacity, and genuineness of the gift. The Tribunal referenced several judgments, including CIT v. P. Mohanakala [2007] 291 ITR 278 and CIT v. Durga Prasad More [1971] 82 ITR 540 (SC), emphasizing that mere identification of the donor and banking transactions are insufficient without proving the donor's capacity and the genuineness of the gift. The Tribunal dismissed the appeal, concluding that the gift was not genuine and was an arranged affair to receive accommodation entry.
Conclusion:
The appeal of the assessee was dismissed on all grounds.
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2013 (1) TMI 990
Issues involved: Cross appeals by the assessee and the department for assessment years 2005-2006 and 2006-2007 regarding addition made on purchases from M/s.R.R.Patel Trading Corporation.
Assessment Year 2005-2006:
The assessee challenged the assessment of total income and addition on purchases from M/s.R.R.Patel Trading Corporation. The CIT(A) reduced the addition to 25% of the purchase amount, leading to appeals by both parties. The Tribunal referred to a similar case and restricted the addition to 20% of the total purchases from the same party, "RRP." The Tribunal found the assessee had proven sales to reputable parties and upheld the 20% addition, partly allowing the assessee's appeal and dismissing the Revenue's grounds.
Assessment Year 2006-2007:
Similar issues arose in this assessment year, with the CIT(A) reducing the addition on purchases from M/s.R.R.Patel Trading Corporation. The Tribunal, following the precedent set in the previous year, sustained the addition at 20% of the total purchases from "RRP." The Tribunal noted the quantitative tally provided by the assessee and the sales made to reputable parties, ultimately partly allowing the assessee's appeals and dismissing the Revenue's grounds.
The Tribunal's decision was based on the factual matrix and legal principles, distinguishing the case from the precedent cited by the Revenue. The Tribunal held that adding 20% of the purchase amount as income in the assessee's hands was appropriate, ensuring justice in both assessment years. Consequently, the appeals of the assessee for both years were partly allowed, while the Revenue's appeals were dismissed.
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2013 (1) TMI 989
Issues involved:
The issues involved in this case are:
1. Whether the Appellant Authority qualifies as a charitable object u/s 2(15) of the Income Tax Act, 1961.
2. Whether the Appellant Authority can be considered a business entity earning profits and gains.
3. Whether the computation of income by the Assessing Officer (AO) by rejecting the principle of diversion of funds to the Infrastructure Development Fund is valid.
Issue 1: Charitable Object Qualification
The appellant, a Uttar Pradesh Government Organization, argued that it was created for general public utility, which falls under a charitable object as per Section 2(15) of the Income Tax Act, 1961. The organization's activities included municipal administration, provision of basic amenities, and development purposes. The appellant contended that any surplus generated was used for development and not distributed to members or employees.
Issue 2: Business Entity Status
The AO observed that the appellant declared profits and gains in business, along with income from other sources. The AO raised concerns about the appellant's treatment of receipts and interest income, leading to a show cause notice questioning the treatment of certain expenditures as income. The AO contended that the appellant's receipts were revenue receipts used at its discretion for various works.
Issue 3: Computation of Income
The appellant argued that the income in question was diverted at source for specific development purposes as per the State Government's notification. The appellant created an Infrastructure Fund for this purpose, with the government separating the income of the authority from total fees. The AO, however, considered all receipts as revenue receipts and made additions to the income. The CIT(A) upheld the AO's additions, leading the appellant to appeal to the Tribunal.
Tribunal's Decision
The Tribunal found that the case was similar to a previous year's decision involving the same appellant. Citing the earlier Tribunal order, the Tribunal remitted the case to the AO for fresh adjudication. The appeal filed by the appellant was allowed for statistical purposes, following the precedent set in the previous year's case.
This judgment highlights the importance of proper treatment of income and receipts, especially in cases involving charitable objects and revenue generation by government organizations.
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2013 (1) TMI 988
Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the Income Tax Act.
Summary:
The Revenue appealed against the deletion of a penalty of Rs. 35,38,348/- imposed by the Assessing Officer u/s 271(1)(c) of the Act. The penalty was levied due to the concealment of particulars of income by the assessee, who was a Director of a company that received and repaid a loan from him during the assessment year 2005-06. The CIT(A) deleted the penalty after considering the explanations provided by the assessee and relevant legal precedents.
The assessee contended that there was no intention to conceal income, as he was misinformed by a consultant regarding the treatment of the loan as deemed dividend. The assessee promptly disclosed the loan amount as deemed dividend upon being informed by the Assessing Officer. Additionally, the assessee argued that he had paid all tax dues, including substantial interest, and that the tax laws are complex, making it difficult for even experts to fully comprehend.
The CIT(A) considered the submissions and legal precedents cited by the assessee. Citing the decision in the case of Sarabhai Chemicals India Pvt Ltd Vs CIT, the CIT(A) concluded that if the assessee believed in good faith that no income had accrued, then no penalty should be levied. The CIT(A) also referenced the Supreme Court decision in Dhilip N Shroff Vs JCIT, emphasizing that the imposition of a penalty is not automatic and must be fair and objective.
The CIT(A) further highlighted the complexity of tax laws and the need for a proper explanation in cases of ignorance of the law. Ultimately, the CIT(A) found that the assessee had not willfully concealed any income liable to tax, as the income was treated as such due to deeming provisions. Therefore, the penalty was deemed not exigible, and the penalty imposed by the Assessing Officer was deleted.
The Appellate Tribunal upheld the CIT(A)'s decision, noting that the deletion of the penalty was based on sound legal reasoning and precedents. The Tribunal found no specific error in the CIT(A)'s order and dismissed the appeal of the Revenue.
In conclusion, the penalty u/s 271(1)(c) of the Income Tax Act was deleted based on the assessee's good faith belief, proper disclosure, and the complexity of tax laws, as determined by the CIT(A) and upheld by the Appellate Tribunal.
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