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Showing 121 to 140 of 731 Records
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2009 (11) TMI 910
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... ... ..... he construction thereon are one and the same. In fact, it was the case of the assessee that the land was purchased in the 1990 and the constructed property came into possession of the assessee only in the year 2000 when the development agreement of the land was entered into by the assessee with the developer. Further, the value of 32.5 per cent constructed area was the consideration for the transfer of 67.5 per cent of the land to the developer. Therefore, the ratio of the aforesaid decision is distinguishable to the facts of the present case. The other decision in the case of Sekhar Gupta (supra) was in line with the above decision of Hon'ble Madras High Court. 7. In view of our above discussions, we do not interfere with the order of the CIT(A) in treating the receipt of ₹ 15,25,000 as long-term capital gain and allowing exemption under s. 54EC of the Act. The ground of the Revenue is, therefore, rejected. 8. In the result, the appeal of the Revenue is dismissed.
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2009 (11) TMI 909
Deduction u/s 80-IA(5) - 'initial year' - as observed by the AO that the deduction u/s 80-IA would be computed with reference to profits of the eligible unit unaffected by losses suffered in other units - CIT(A) dismissing assessee's claim u/s 80-IA by relying on the decision of Goldmine Shares & Finance ( P) Ltd. [2008 (4) TMI 405 - ITAT AHMEDABAD] and ignoring the decision of Mohan Breweries & Distilleries Ltd. [2007 (10) TMI 354 - ITAT MADRAS-B] - whether assessee can opt for the year of deduction for any 10 consecutive years out of 15 years taken from the first year in which the enterprise develops and begins to operate in any infrastructure activity and it does not mandate that first of 10 consecutive assessment years should be always the first year of set up of enterprise?
HELD THAT:- As in computing the total income of the assessee, derived from profits and gains from an eligible business, which are detailed in sub-s. (4), 100 per cent deduction is allowed for ten consecutive assessment years. Sub-s. (2) of s. 80-IA gives option to the assessee to choose the 10 consecutive assessment years out of 15 years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing' telecommunication service or develops an industrial parks.
Sub-s. (5.) of s. 80-IA qualifies deduction of sub-s. (1) of s. 80A with a non obstante clause and overrides every other provision in this Act providing mechanism by way of assumption that for determining the quantum of deduction for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, it would be deemed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every assessment year upto and including the assessment year for which the determination is to be made.
The above provisions are very clear, plain and direct in meaning. But only difficulty is cast by the term 'initial year' which has nowhere been defined in the Act, yet by sub-s. (2) it is obvious that it is referring to the option vested in the assessee to choose any 10 years out of 15 or 20 years, period provided, as the case may be. The year from which option has been exercised is to be treated as the initial assessment year, but after that the 10 years have in continuity.
The Chennai Bench has directly dealt with the question which is really involved in this appeal. Hence, sub-s. (5) of s. 80-IA would come into operation only from the year in which the appellant started claiming deduction under s. 80-IA i.e., from the initial year, as we have described earlier, and the depreciation relating to the years prior to the initial assessment year cannot be brought back notionally to be adjusted against the income of the initial or subsequent assessment years. But for the 10 year lag opted by the assessee the ratio of Special Bench would apply verbatim in its letters and spirit. Therefore, we allow this issue in favour of the assessee by following the Special Bench and the Chennai Bench decision.
Windmill is a separate undertaking - Each co-generation, plant installed in different years has to be considered as a separate undertaking and the profit/loss cannot be clubbed in order to compute the deduction under s. 80-IA.Appeal of the assessee stands allowed.
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2009 (11) TMI 908
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... ... ..... hich was a misreporting by the assessee. However, AO reiterated his stand that the claim of custom duty was not correct hence the amount paid was clearing and forwarding charges requiring deduction of tax at source. Further, we find that the CIT(A) has also rightly observed that in view of the confirmations along with copies of debit notes and details of expenses which were reimbursed by the assessee to the four C & F agents viz. Niranjan Sheeping Agency, S K Punjabi, Saiom Clearing Agency and Rudraksh Shipping Services, it is clear that ₹ 50,95,316 is reimbursement of expenses against debit notes and separate bills issued by them. These are not clearing and forwarding charges on which section 194C is applicable. We, therefore, do not find any illegality or infirmity in the order of the CIT(A). We accordingly uphold the order of the CIT(A) in this regard. 5 In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court today on 11-11-2009
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2009 (11) TMI 907
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... ... ..... theory of payments have been accounted for under the head work-in-progress was not finding a place in the impugned assessment orders. However, the crux of the issue before us is that the assessee had contravened the provisions of s.40A(3) of the Act while making the payments in cash. As such, the AO was within his domain in invoking the provisions of s.40A(3) of the Act. However, while doing so, the AO, perhaps, by oversight, had resorted to disallow the cash payments of ₹ 5 lakhs made in the case of C.Narayanaswamy and Ajithkumar twice. Hence, the cash payments are restricted to ₹ 3837250 43,37,250 - 5,00,000 and the disallowance is brought down to ₹ 7,67,450 Rs.8,67,450 - 1,00,000 instead of ₹ 8,67,450/- resorted to by the AO. Thus, the assessee gets a relief of ₹ 1 lakh. It is ordered accordingly. 11. In the result, the assessee’s appeals for the AYs 2005-06 and 2006-07 are partly allowed. Pronounced in the open court on 13th Nov, 2009.
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2009 (11) TMI 906
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... ... ..... the assessee. 13. Ground 1 & 2 in appeal of the Department is against directing the Assessing Officer to include the exchange rate gain difference of ₹ 1,12,778/-. 14. The Assessing Officer reduced the amount pertaining to rate gain difference related to earlier year while calculating deduction u/s 80HHC. The CIT (A) allowed the issue in favour of the assessee. 15. Now, this issue has been decided by the Special Bench in case of Prakash L Shah (115 ITD 167) whereby it has been held that the rate difference in exchange gain or loss will be taken into consideration in the year of export. Therefore, in the year under consideration this issue is decided in favour of the Department. However, the Assessing Officer is directed to take into consideration the exchange rate gain difference in the year of export. We order accordingly. 16. In the result, the appeal of the assessee as well as of the Department are allowed in part. Order pronounced on 30th day of November 2009.
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2009 (11) TMI 905
Long term capital gains on transfer of tenancy right - Addition u/s 50C OR 48 - difference of 9.43% between document price and market value - HELD THAT:- From the perusal of Notes on clauses and Memorandum explaining the provisions in the Finance Bill, 2002, it becomes explicitly clear that if the consideration declared to be received on sale of land or building or both is less than the value adopted or assessed by any authority of the State Government for the purposes of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of consideration and capital gain shall be computed accordingly u/s 48.
As noticed from plain reading of the section 50C that unless the property transferred has been covered by that section 50C, that is a capital asset, being land or building or both registered by sale deed and for that purpose the value has been assessed and stamp duty has been paid by the parties, only then section 50C cannot come into operation. In the case under consideration there is transfer of tenancy right though that is capital asset but not a capital asset, being land or building or both.
Therefore, section 50C is not applicable to the facts of the case under consideration. Accordingly, the AO is not correct in taking the value adopted or assessed by the authority of a State Government/ the ‘stamp valuation for the purpose calculation of capital gains on transfer of tenancy right. The orders of AO and CIT (A) are set aside and the claim of the assessee is allowed.
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2009 (11) TMI 904
Exemption u/s 54F - intimation u/s 143(1)(a) - denial of deduction as assessee had not invested the sale consideration in full or part in any of the specified accounts prior to the date of filing return in terms of section 54F(4) - ITAT allowed deduction - HELD THAT:- In order to qualify for exemption under section 54F(3), the assessee should have first deposited the sale proceeds of the property in any bank account and the construction of the house to qualify for exemption under section 54F should have been completed by utilising the sale proceeds also available with the assessee.
In this case, though the assessee constructed new building within the period of three years from the date of sale, it was with funds borrowed from HDFC. Assessee is not entitled to exemption u/s 54F because the assessee neither deposited the sale proceeds for construction of the building in the bank in terms of sub-section (4) before the date of filing returns nor was the sale proceeds utilised for construction in terms of section 54F(3) - So much so, the assessee was not entitled to claim exemption on capital gains under section 54F of the Act which the Assessing Officer rightly declined.
Validity of intimation u/s 143(1)(a) denying exemption - Whether claim of exemption u/s 54F could be disallowed in the course of proceedings u/s 143(1)(a)? - It is settled position that the section authorises the AO to make disallowance of items which are prima facie inadmissible. It was the duty of the assessee to establish the eligibility for exemption from payment of tax on capital gains by production of documents in terms of the statutory provisions.
According to the relevant provisions stated above in the first place, it was the duty of the assessee to deposit the net sale proceeds in the bank before due date for filing return and furnish proof of the same along with the return filed which was admittedly not done.
Secondly, by allowing credit of value of transferred property in the capital account of the assessee in the firm, the assessee concedes that the sale proceeds was neither received nor going to be utilised for construction or purchase of house. So much so, in our view, exemption claimed u/s 54F was prima facie inadmissible and, therefore, the officer was justified in making disallowance in the proceedings u/s 143(1)(a). Consequently, the appeal is allowed vacating the order of the Tribunal and by restoring the assessment confirmed by the first appellate authority.
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2009 (11) TMI 903
Loss incurred on cancellation of foreign exchange forward contract - ''Speculation loss or business loss'' - AO treated it as speculation loss and added to the total income of the assessee. CIT held the transaction as business loss.
HELD THAT:- The issue is against the Revenue and in favour of the assessee by the decision in the case of CIT vs. Woodword Governor (I) Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] held that the "loss" suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure u/s 37(1). In view of the submission of the ld DR, this ground raised by the Revenue is dismissed.
Disallowance of Interest - Claimed as business expenditure - AO observed that the funds on which the interest has been paid were utilised for the purpose of making investment from which the income has to be computed u/s. 45 and not u/s. 28. Since the assessee has not utilised the borrowed funds for the purpose of its business, therefore, the assessee has not fulfilled the conditions of section 36(1)(iii) for allowing the said expenses from the business income. He accordingly disallowed.
HELD THAT:- We find the CIT(A) has given a finding that no investment has been made during the year and the borrowed funds are utilised for making payments to the sundry creditors. The factual findings given by the CIT(A) could not be controverted by the learned DR. Therefore, we find merit in the submission of the learned counsel for the assessee that the AO disallowed the interest expenditure only on mere presumption without bringing any material or evidence on record. In absence of any material brought before us to controvert the factual findings given by the learned CIT(A) that no fresh investment has been made during the year, therefore, this ground by the Revenue being devoid of merit is dismissed.
Book profit u/s. 115JB computation - addition being the surplus from the sale of rights in the premises made - profit which was taken directly to the Balance Sheet as “capital reserve” without routing the same through the Profit and Loss A/c - On being questioned by AO as submitted that since the rights in booked premises were held as capital asset, the profit arising from the sale thereof was not credited to the Profit and Loss A/c - CIT(A) held that the AO does not have the jurisdiction to go beyond the net profit shown in the Profit and Loss A/c. except to the extent provided in Explanation to section 115JB.
HELD THAT:- As it is clear that the Profit and Loss A/c. of a company shall disclose every material feature including credits or receipts and debits or expenses in respect of non-recurring transactions or transactions of exceptional nature also. Further the company is also required to set out the various items relating to the income and expenditure of the company arranged under most convenient heads and disclosing profit or loss in respect of transactions of a kind not usually undertaken by the company or undertaken in circumstances of exceptional or non-recurring nature if material in amount.
We find although the assessee has earned a profit from the sale of rights in an immovable property the same has not been routed through the Profit and Loss A/c. and has directly been credited to the Balance Sheet. In our opinion, the AO cannot go beyond the book profits as per the audited accounts provided they are prepared as per the manner provided in Part II and Part III of Schedule VI to the Companies act, 1956 and are adopted in the AGM.
However, admittedly the accounts are not prepared in the manner provided in Part II and Part III of Schedule VI to the Companies Act, 1956 since the profit on sale of investments which is a material amount, has not been routed through the Profit and Loss A/c. Therefore, the AO, has the power to re-work the book profit by recasting the accounts in the manner provided as per Part II and Part III of Schedule VI to the Companies Act, 1956. In this view of the matter, the order of the CIT(A) on this issue is set aside and that of the AO is restored.
In the result, the appeal filed by the Revenue is partly allowed.
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2009 (11) TMI 902
Sudden increase in the price of phosphatic nutrient - concession provided by Government - rates of concession
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2009 (11) TMI 901
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... ... ..... the turnover and volume of the business and any disallowance could be made with reference to the specific omission and not on ad-hoc estimate deleted the disallowance. 17. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. We find that the Learned Departmental Representative could not point out any specific expenditure incurred under the head sales promotion by the assessee was not for the business of the assessee. Thus, the Learned Departmental Representative could not point out any error in the order of the Learned Commissioner of Income Tax(Appeals). Therefore, we confirm the order of the Learned Commissioner of Income Tax(Appeals) and dismiss this ground of the appeal of the Revenue. 18. In the result, appeal of the assessee is allowed for statistical purposes and that of the Revenue is dismissed. Order pronounced at the conclusion of the hearing in the presence of parties in the Court on 17/11/2009.
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2009 (11) TMI 900
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... ... ..... er of Wealth Tax(Appeals) as incidental to business activity. Whatever income earned from guest house is also assessed by the Learned Commissioner of Wealth Tax(Appeals) in the assessment year 2001-02 under the head ‘business’. The guest house maintained at nearby site from where exploration and exploitation of oil resources were carried out by the assessee, is maintained for the purpose of business. Therefore, its value is not includible in net wealth of the assessee for both the assessment years under clause (3) as well as clause (5) of section 2(ea)(i) of the Wealth Tax Act, 1957. The view taken by the Learned Commissioner of Wealth Tax (Appeals) in respect of guest house is also upheld for both the assessment years. 12. In view of the foregoing reasons, the view taken by the Learned Commissioner of Wealth Tax(Appeals) in respect of both the properties for both the assessment years is upheld. 13. In the result, both the appeals of the Department are dismissed.
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2009 (11) TMI 899
Validity of assessment order - case of petitioner is that there was no application of mind to the effect that whole or any part of the turnover of the assessee in respect of the concerned assessment year had escaped assessment to tax or had been under assessed - Held that: - it is not the case of the Petitioner that the Petitioner had not disclosed full particulars. In these circumstances, the limitation has prescribed under Section 24(1)(b) i.e. four years from the date of final order of assessment would apply - As the assessment itself has become time barred and it would not be permissible for the Assessing Officer to now proceed on the basis of the notice dated 5th July, 2007 and pass reassessment orders, it is not necessary to go into the other issues raised. Reassessment proceedings are set aside on this ground alone - petition allowed - decided in favor of petitioner.
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2009 (11) TMI 898
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... ... ..... o the AO and the AO had disallowed part of the remuneration without making any inquires. 9. However, we find substance in the submission of the department that in the initial years, in view of the setting up of the outlets the payment of the remuneration was same and that being so over the years under consideration, a drastic decline in the payment of remuneration was warranted. This has no where been controverted on behalf of the assessee. As such, as agreed to by the parties, the matter needs to be remitted to the file of the AO, to be examined and decided afresh in accordance with law, after affording adequate opportunity of being heard to the assessee. The AO shall deal and decide the issue independent of the comparison with the remuneration paid in the earlier years with that of the year under consideration. We order accordingly. 10. In the result, for statistical purposes, the appeal of the department is treated as allowed. Order pronounced in open court on 30-11-2009.
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2009 (11) TMI 897
Service Tax on SIM Cards - the decision in the case of Commissioner of Central Excise & Customs, Cochin Versus Idea Mobile Communication Ltd. [2008 (9) TMI 292 - KERALA HIGH COURT] referred where it was held that the value of SIM card supplied by the respondent forms part of taxable service on which service tax is payable by the respondent - Held that: - stay not granted.
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2009 (11) TMI 896
Whether the nature of the investigation amounts to a further or a re- investigation?
Whether the eye witnesses' account stands substantiated by the medical evidence?
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2009 (11) TMI 895
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... ... ..... ces in the quantity and the demand notices were issued for shortages. 2. The appellant has filed the written submissions that in the appellant s own case, on the identical issue this Tribunal has decided in their favour vide Order No.A/741 to 746/2007/C-II/EB dated 12.10.2007. The issue is squarely covered and prayed the appeal be allowed. 3. The learned SDR also confirmed the same. 4. I find that the issue in this case has already been decided by this Tribunal vide Order dated 12.10.2007 nothing remains to be decided. Following the same, the impugned order is set aside and the appeal is allowed. (Pronounced in court)
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2009 (11) TMI 894
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... ... ..... he 2005 Act. The petitioner contends that as the petitioner’s appeal before the 3rd respondent instituted on 30-09-2009 and the stay petition filed therewith are pending, it would be inequitable for the 1st respondent to issue the garnishee notice directing the 4th respondent to remit the tax liability determined. In the facts and circumstances of the case, after hearing the learned counsel for the petitioner-Sri G.Narendra Chetty and Sri P.Balaji Varma, the learned Special Standing Counsel for Commercial Taxes, we consider it appropriate to quash the garnishee notice issued by the 1 respondent, dated 09-10-2009. The 1st respondent is however at liberty to initiate appropriate processes including for recovery of the outstanding tax liability, consequent on the outcome of the decision of the 3rd respondent in the stay application preferred by the petitioner in the appeal filed. The writ petition is accordingly disposed of at the stage of admission. No order as to costs.
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2009 (11) TMI 893
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... ... ..... 9 of the Act and had been sentenced to undergo rigorous imprisonment for 11 years besides fine. 85. The word „may‟ used in Section 20 gives a discretion to the court which has been ascribed by the Legislature as regard the awarding of sentence. This discretion which has been vested with the Court, has to be exercised legally, properly and reasonably and not arbitrarily or disproportionately. 86. In the instant case the sentence of rigorous imprisonment for 16 years to A-1 appears to be excessive and on the higher side. This Court is of the view that ends of justice would be well met if the sentence of RI for 16 years is reduced to RI for 13 years. No modification is made in the fine imposed. Similarly, while maintaining the conviction of A-2 his sentence of RI for 11 years is reduced to the minimum i.e. RI for 10 years. No modification is made in the fine imposed. 87. With these directions, appeals are disposed of. (INDERMEET KAUR) JUDGE 5th November, 2009 nandan
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2009 (11) TMI 892
Whether the order of rejection of the application for restoration as well as the application for dismissal of the writ application for non prosecution are liable to be set aside?
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2009 (11) TMI 891
Penalty u/s 271(1)(c) - unaccounted rice bran and under-valuation of closing stock of rice bran - As per ITAT additions are based on the estimation when the same is on the basis of the concrete evidence in the form of documents found during the course of survey operation - HELD THAT:- ITAT has recorded a finding of fact with regard to the addition of income being made on the basis of estimate, which in our opinion does not require any interference.
A perusal of the order passed by the ITAT in the assessment proceedings which has been quoted in extenso in the impugned order, makes it clear that addition of the income was made only on the basis of estimate. Therefore, we do not find that the learned ITAT has recorded a wrong finding in this regard.
As far as the finding with regard to concealment of income is concerned, it is clear that in the original assessment order, there was no finding that the assessee has concealed its income and furnished inaccurate particulars of income, but subsequently after the cancellation of the assessment, AO has proceeded on the basis that the assessee, while inflating the electricity charges and under-valuing the closing stock of rice bran, has suppressed the income.
Therefore, the additions on account of processing of unaccounted rice bran and under-valuation of closing stock of rice bran were made and income was assessed on the estimate base. Therefore, in our opinion, the ITAT is right while coming to the conclusion that when the assessment is made on estimate basis, the penalty should not be imposed. In this regard, reference can be made to a decision in Harigopal Singh [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT]. No substantial question of law
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