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Income Tax - Case Laws
Showing 41 to 60 of 236 Records
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2010 (5) TMI 870
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... ... ..... ns. We are not concerned with a procedural provision. We have already seen that the assessee had acquired a vested right to have the speculation loss computed for the assessment year 2001-02 carried forward to the subsequent eight years as per section 73(4) as it stood before the amendment made by the Finance Act, 2005. That such a right is a vested right cannot be doubted after the judgement of the Supreme Court in the case of CIT Vs. Shah Sadiq & Sons (supra). Since we are concerned with the substantive or vested right, the judgement of the Hon’ble Bombay High Court dealing with procedural provision can have no application. 8. In the result, the assessee’s contentions are upheld and the Assessing Officer is directed to allow set off of the speculation loss brought forward from the assessment year 2001-02 against the speculation profits for the year under appeal. The appeal is allowed with no order as to costs. Order pronounced on this 31st day of May, 2010.
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2010 (5) TMI 869
Bogus Share application money - genuineness of transaction not proved - onus to prove on assessee or revenue - HELD THAT:- Since the assessee has discharged its onus by proving the identity of subscribers and even otherwise had any suspicion still remained in his mind, nothing prevented him to initiate action as per the provisions of the Act. The existence of subscribers to share application is not in doubt as the assessee duly furnished their names.
Age, address, date of filing the application, number of shares for which respective applications were made, amount given and the source of income of the applicant.
There is no justification for making the impugned addition because once the existence of the investor/share subscribers is proved, onus shifts on the revenue to establish that either the share applicants are bogus or the impugned money belongs to the assessee company itself.
Once the confirmation letters are filed, no addition can be made on account of share application money in the hands of the company. Our view finds support from the decision in Shri Barkha Synthetics Limited v. ACIT.[2005 (8) TMI 67 - RAJASTHAN HIGH COURT] The case like CIT v. GP International Limited [2009 (12) TMI 33 - PUNJAB AND HARYANA HIGH COURT],CIT v. Steller Investment Limited [1991 (4) TMI 100 - DELHI HIGH COURT] supports the case of the assessee.
charging of interest u/s 234B - HELD THAT:- We have found that no specific section has been mentioned for charging of interest and merely it has been mentioned that charge interest if any, as per law.
Since the issue of share application has been decided in favour of the assessee and the addition made u/s 68 has been deleted, therefore, charging of interest is consequential in nature, meaning thereby that it is not leviable/chargeable.
In view of these facts and judicial pronouncements both these appeals of the assessee are allowed.
Finally, the appeals of the assessee are allowed.
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2010 (5) TMI 868
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... ... ..... In the totality of facts and circumstances of the case we hold that the assessee is not a local authority entitled to the benefit of exemption us/ 10(20) of the Act. Hence, the common ground of appeal raised by the assessee in all the appeals is rejected.” 7. The facts of the present case being identical to the facts in Assessment Years 2003-04 to 2005-06 and respectfully following the ratio laid down by the Tribunal in assessee’s own case relating to Assessment Years 2003-04 to 2005-06, we hold that the assessee is not a local Authority under the amended provisions of section 10(20) of the Act. Accordingly, we confirm the order of CIT(A) and dismiss the ground No. 1 raised by the assessee. 8. The ground No.2 raised by the assessee relates to charging of interest u/s 234A and 234B of the Act, which is dismissed being consequential in nature. 9. In the result, appeals of the assessee are dismissed. Order Pronounced in the Open Court on this 14th day of May, 2010.
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2010 (5) TMI 863
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... ... ..... of the assessee with the AO during the assessment proceedings, we find force in the contention of the Ld. Counsel for the assessee that the assessee objected to the computation of long term capital gain as per section 50C of the Act as he wanted that the matter should be referred to Valuation Cell as per the provisions of section 50C(2). Therefore, the AO was unjustified in not referring the matter to the Valuation Cell. We further find that valuation of the property taken as on 1.4.1981 is also without any basis. Therefore, in the interest of natural justice and fair play, we restore the matter to the file of the AO for recomputing the long term capital gain after referring the matter to the Valuation Cell for valuing the property as on the date of sale and also as on 1.4.1981. The appeal of the assessee is, therefore, allowed for statistical purposes. 8. In the result, the appeal is allowed for statistical purposes. 9. The order is pronounced in the open court on 7.5.2010
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2010 (5) TMI 859
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Unexplained credits u/s 68 - share capital and share premium unexplained - transaction entered into by the assessee was a scheme for laundering black money into white money or accounted money
HELD THAT:- In the present case, the appellant has furnished all the details relevant to share capital contribution before the A.O and also before me. AO except noticing certain unusual features in fund flow chain could not establish the link between the unaccounted incomes of the appellant company and share capital contributors. Having regard to the facts and circumstances of the case and respectfully following Hon’ble Supreme Court decision in the case of M/s. Lovely Exports Pvt. Ltd [2008 (1) TMI 575 - SC ORDER] share capital/premium received from investors is not liable to be treated u/s. 68 as unexplained credits and to be taxed in the hands of the appellant company.
In view of the above, and finding no contrary decisions brought on record by the revenue authorities, we find no infirmity in the order of the Ld. CIT(A) and the same is hereby upheld. The appeal of the revenue is, therefore, dismissed.
In the result, the appeal of the revenue is dismissed.
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2010 (5) TMI 858
Addition on Work in progress - defective method of accounting - business of Dyeing and printing of cloth - job work basis - During assessment proceedings, AO noticed that assessee has not shown work-in-progress in the closing stock as on 31-03-2003. AO held that assessee had claimed all the expenses made during the year under consideration on un-dispatched gray cloth laying at different stages of processing, which should have been shown as work-in-progress as on 31-03- 2003. AO accordingly calculated work-in-progress. The Ld. CIT(A) deleted the addition on the ground that assessee is engaged in processing of material for outside parties and does not have stock of its own. Further, assessee is following the same method of accounting year-after-year. There is no justification in disturbing this method.
HELD THAT:- we are of the view that issue is now covered in favour of the assessee by the decision of Tribunal in the case of Pratik Processors Pvt. Ltd. wherein Tribunal has held that there cannot be any work in- progress in a case where business of Dyeing and printing of cloth is done on job work basis. He referred to para from that order as under:-
''At the time of hearing both the Representatives agreed the similar issue arose in an appeal by the revenue in the case of Vipul Industries Pvt. Ltd. V/s ACIT[1996 (1) TMI 144 - ITAT AHMEDABAD-C] held that the assessee which is engaged in the business of dyeing and printing of cloth on job work basis and where the assessee had not shown any work-in-progress at the year end, the same was estimated to be 50% of the job receipt of the likely stock remaining in process. However was deleted by the learned CIT(A).deletion was confirmed by the Tribunal.''
Disallowance of 25% on purchase price - purchases from Min Chemicals - HELD THAT:- In our considered view there is no case for interference in the order of Ld. CIT(Appeals). In the case of first two purchases Ld. CIT(A) has given finding that goods have actually come but from other parties but bills are procured from first two parties. This finding is not controverted.
We also hold that assessee has obtained goods from other parties but to what extent is not known. The quantity and quality of the goods purchased from other parties and, what price was paid is also not known. Therefore, there is no co-relation of quality and quantity of goods brought by the assessee, for which payment was made. In view of this we confirm the order of Ld. CIT(A) in disallowing 25% of purchase price. In respect of purchases from Min Chemicals it was not even established that any goods had actually come in respect of which the assessee had procured bills from this party. In view of this disallowance of purchase from this party is also confirmed.
As a result, we confirm the order of Ld. CIT(A) and dismiss appeal filed by Revenue and that of CO filed by assessee.
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2010 (5) TMI 857
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... ... ..... eturned income ignoring the provisions of the IT Act. Even if the returned income was accepted under the provisions of section 143(1) without there being any scrutiny, there are various other provisions of sections 154, 155 etc, wherein consequent to the orders in earlier years, the total income can be varied as per the provisions of the Act. Therefore, we are of the opinion that the finding given by the Assessing Officer in determining the total income on the basis of the returned income, rather than assessed income is not correct and, therefore, is liable to be set aside. The Assessing Officer is directed to determine the total income according to the provisions of the Act, after giving effect to various orders of higher authorities of earlier years and also to this order. The Assessing Officer is directed accordingly. o p /o p The ground is considered allowed. o p /o p 15. In the result, appeal is partly allowed. o p /o p Order pronounced on 17th day of May 2010. o p /o p
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2010 (5) TMI 855
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... ... ..... ped assessment. The expression cannot be read to mean that the AO should have finally ascertained the fact by legal evidence or conclusion. What is required is "reason to believe" but not the established fact of escapement of income. At the stage of issue of notice, the only question whether there was relevant material on which a reasoned person should have formed the requisite belief. Whether material would conclusively prove escapement of income is not the concern at that stage. This is so because the formation of the belief is within the realm of the subjective satisfaction of the AO. 30. In view of the above, the reason to believe by the AO was having rationale connection with the facts of the case and reopening was done by the AO as per provisions of the Act, no interference is required in this part of CIT(A)'s order upholding the reopening of assessment. 31. In the result, the appeal of the Revenue as well as cross-objection of the assessee are dismissed.
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2010 (5) TMI 853
Addition u/s 68 - amount introduced under the head “unsecured loan” from various parties - HELD THAT:- The Learned CIT(A) on appreciation of entire facts noticed that the amount was received by account payee cheques. These were repaid by account payee cheques. The loans were taken in the previous year relevant to the assessment year under appeal and the same were paid in the said financial year. The mere fact that prior to issue of cheque, there is some cash deposit, in our opinion, this alone is no ground to make the addition u/s 68. We found considerable force in submissions made by the ld. counsel of the assessee that the addition of ₹ 10,00,000/- was made on doubt and suspicion and the Learned CIT(A) has given cogent reason for deleting the same. We, therefore, incline to uphold the order of Learned CIT(A).
In the result, the appeal filed by the Revenue is dismissed.
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2010 (5) TMI 852
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... ... ..... ng asset to be transferred to the assessee. As per the provisions of section 48, the indexation of cost of acquisition is given by comparing the cost of inflation indexation for the first year in which the assets was held by the assessee or for the year beginning on 1-4-1981 whichever is later and the cost of inflation indexation in the year in which the assets is transferred. Thus, it is clear that the benefit of cost of inflation indexation is to be given in proportionate to the cost inflation index for the year in which the asset is transferred bears to the cost of inflation index in the first year in which the assets was held by the assessee/acquired by the assessee. Since the assets was acquired only by an agreement dated 22-11-2001, therefore, prior to that indexation cost is not available to the assessee. Accordingly, we set aside the order of the CIT(A) on this issue. 14. In the result, the appeal of the assessee is dismissed and the appeal of the revenue is allowed.
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2010 (5) TMI 851
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... ... ..... arned Departmental Representative could not bring any material to controvert the above finding of the Learned Commissioner of Income Tax(Appeals). From the order of assessment, it is observed that the assessee in engaged in the business of manufacturing and trading of machinery parts. On the above facts, the explanation of the assessee that the technical drawing was an integral part of the above business of the assessee cannot be held as incorrect. Thus, the drawing charges in question being integral part of the main business of the assessee of manufacturing and selling of machinery and parts, we do not find any error in the order of the Learned Commissioner of Income Tax(Appeals), which is confirmed and this part of the ground of the appeal of the revenue is dismissed. Thus, this ground of appeal of revenue is partly allowed. 16. In the result, the appeal of the revenue is partly allowed as above. Order signed, dated and pronounced in the Court on this 21st day of May, 2010
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2010 (5) TMI 850
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... ... ..... erence between the receipt and the expenditure in the P&L a/c does not mean that either the receipts were not its income or that the payments were not its expenses which had been claimed as such. The net commission income is, in fact the difference of the receipt and expenditure in the P&L a/c without showing the figures separately. I, therefore, reject the appellant's submissions that no disallowance could be made under s. 40(a)(ia) solely for the reason that no expenditure was claimed in the P&L a/c. The expenditure was very much claimed by the appellant, though no shown as such. Ground No. 6 is, therefore, rejected." 10.4 In view of the above discussions, we do not find any infirmity in the findings of the learned CIT(A). Consequently, the findings of the CIT(A), on this issue are upheld and this ground of the cross-objection is dismissed. 11. In the result, the appeal filed by the Revenue and the cross-objection filed by the assessee stand dismissed.
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2010 (5) TMI 849
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... ... ..... r 2004-05 the payment to employees was made based upon the performance of the employees in the earlier year. The liability crystallized during the assessment year in question, because the working of the incentives based on performance was cleared for payment in the month of July, 2003 which falls during the assessment year under appeal i.e. assessment year 2004-05. Since the liability to pay the expenditure crystallized during the assessment year under appeal, therefore, the learned CIT(A) was justified in deleting the addition. The learned DR has not produced any material contrary to the findings of the learned CIT(A). Thus, the Revenue has failed to rebut the findings of the learned CIT(A). We, therefore, do not find any infirmity in the order of the learned CIT(A) in deleting the disallowance of the expenditure. We confirm his findings and dismiss both the appeals of the Revenue. 7. As a result, both the appeals of the Revenue are dismissed. Order pronounced on 07-05-2010
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2010 (5) TMI 848
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... ... ..... are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.” 7. Respectfully following the above judgment of Hon’ble Supreme Court, we hold that there is no case for levy of penalty on the facts of the case. Even otherwise the assessee can not be expected to visualise invoking a different method by the TPO in valueing an international transaction and arrive at a disallowance. The basic data has been furnished on the basis of which only TOP invoked the CUP method. It can not be stated that assessee furnished inaccurate particulars. Accordingly, the order of the CIT (A) is upheld. 8. In the result, revenue appeal is dismissed. Order pronounced on 17th day of May 2010.
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2010 (5) TMI 845
TP Adjustment - Selection of CPM or TNMM as MAM - HELD THAT:- the assessee is manufacturing Optical Brightening Agents (OBAs) which are being used in textile and paper industries and which are exported by the assessee to the AEs as well as Non-AEs. the cost data for the manufacture of products are available as per cost audit report, the reliability there of is assured and therefore Cost Plus Method is the most appropriate method. In this view of the matter and in view of the detailed discussion by the learned CIT(A), we hold that the Cost Plus Method (CPM) is the most suitable method for the international transactions with AEs in the instant case.
Since the exports to AEs at ₹ 34,32,62,520 is almost six times of the exports to Non-AEs which is at ₹ 5,58,47,305, therefore, an adjustment on account of volume discount should be allowed to the assessee in order to carry out a prudent transfer pricing analysis. We find from the orders of the TPO that similar volume discounts were allowed by him for the A.Ys. 2003-04 and 2004-05. Since the methodology for computation of volume discount for the A.Y. 2002-03 is the same as that was adopted for the A.Y. 2003-04 and which has already been verified by the TPO and accepted by the CIT(A), therefore, in our opinion, volume discount should be allowed to the assessee for the A.Y. 2002-03 on the basis of methodology accepted by the TPO and the CIT(A) in the subsequent year. With these observations, we restore this issue to the file of the AO for calculating the necessary volume discount and give appropriate relief to the assessee on the basis of the methodology adopted by him in the sub sequent years. The grounds raised by the assessee are partly allowed.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
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2010 (5) TMI 844
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... ... ..... eipts, other than corpus donations, would be income in the hands of the assessee. There was, therefore, full disclosure of income by the assessee and also application of the donations for charitable purposes. It is not in dispute that the objects and activities of the assessee were charitable in nature, since it was duly registered under the provisions of section 12A of the Act. For these reasons, we do not find any merit in the appeal. No substantial question of law arises. Dismissed.” 3. The learned counsel did not press the cross objection in which validity of assessment proceedings u/s 147 was challenged. 4. The result of aforesaid discussion is that the assessee is entitled to deduction u/s 11(1) of all expenses except the application of income shown at ₹ 6,245/-. 5. In result, the appeal is partly allowed and the cross objection is dismissed as infructuous. This order was order pronounced in open court on 12.05.2010 soon after the conclusion of the hearing.
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2010 (5) TMI 843
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... ... ..... p; Ors is excluded, the penalty is sustainable on the basis of the independent reasoning. 8. Here it is important to mention that we are dealing with the miscellaneous application. The proceedings u/s.254(2) cannot be taken as a tool for seeking review of an earlier order passed by the Bench. Only to the extent there is some mistake apparent on record, the parties can approach for rectification of such mistake. It cannot be permitted to impress upon the bench to carry out the review in the garb of rectification of the order. Our view is fortified by the recent judgment of the Hon’ble jurisdictional High Court in the case of CIT Vs. Earnest Exports Ltd. 2010-TIOL-164-HC-MUM (Bom.) . 9. In view of the foregoing discussion, we are of the considered opinion that the impugned order does not call for any rectification within the meaning of section 254(2) of the Act. 10. In the result, the Miscellaneous Application is dismissed. Order pronounced on this 21st day of May, 2010.
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2010 (5) TMI 842
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... ... ..... of business. In fact, vide Para 73 of the CIT (A)’s order have been with reference to the amount due from Sujanil Chemo Industries as well, there is clear finding that the transaction entered into with the said company have not been satisfying the conditions prescribed u/s 36(1)(vii) r w s 36(2). It is also on record that bad debts claimed were written off as an ‘integration expenses’ in the books of account. Since the assessee failed to furnish the nature of advances and how these are satisfying the conditions for allowing expenditure, the Bench has considered the evidences on record and agreed with the findings of the CIT (A). Since a view was taken on its merits after examining the record, we are of the opinion that there is need to reconsider the issue, as sought out by the assessee. This forum does not have any power to review its own order. Accordingly, the contentions are rejected. 6. In the result, MA is dismissed. Order pronounced on 14th May 2010.
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2010 (5) TMI 841
Addition u/s 40(a)(ia) - Disallowance on payments made to parent company - reimbursement of expenses - TDS was not deducted as per provisions of section 40(a) - HELD THAT:- We find that the facts are not in dispute inasmuch as the payment was made to parent company M/s. J.B. Boda & Co. Pvt. Ltd. as payment of reimbursement expenses on the basis of cost sharing arrangement. This arrangement was entered into for more effective cost management. The common expenses are incurred for and on behalf of everyone in the group. All the group companies reimbursed the expenses to M/s. J.B. Boda & Co. Pvt. Ltd. on an equitable basis determined in earlier years by the management consultant. There is no material on record to show that the assessee has made payments to the contractor or sub-contractor or actual service provider. Therefore, the payments made to M/s. J.B. Boda & Co. Pvt. Ltd. do not fall within the purview of section 40(a)(ia).
In the absence of any distinguishing feature brought on record by the revenue, we hold that the assessee is not liable to deduct TDS on the reimbursement of expenses and accordingly we are inclined to uphold the finding of the ld. CIT(A) in deleting the disallowance made by the AO.
''The ld. CIT(A) while observing that the expenses reimbursed by the group company to the flagship company does not constitute income in the hands of the later and does not partake the nature of commission, held that there is no liability to deduct tax on part of the appellant company and accordingly deleted the disallowance made by the AO.''
The grounds taken by the revenue are therefore, rejected.
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2010 (5) TMI 840
Fringe benefit tax - vehicle hire expenses for arriving at value of FBT - DR submitted that the facility of conveyance given to the employees is covered by clause (F) of sub-section 2 of section 115WB and there is no discretion left to the AO in making any exception to the rule - HELD THAT:- What is intended to be taxed is a benefit attributable to employees collectively but the transport services for workers and staff are to be outside the tax net.
Any form of conveyance provided by the employer to the employees would be fringe benefits, taxable in the hands of the employer. During the previous year relevant to asst. year 2006-07, the clause (F) included the words "conveyance, tour and travel (including foreign travel)", while the words "tour and travel (including foreign travel)" were omitted by Finance Act of 2006 w.e.f. 1/4/2007 and has been inserted into clause (Q) w.e.f. 1/4/2007; therefore, in the relevant asst. year, the words "conveyance, tour and travel (including foreign travel)" have to be read together.
In the case before us, items 1, 2 and 3 considered by the CIT(A) are for the purposes of carrying on the business activities of the assessee company by the agencies of the assessee company and it is only item 4, which is spent on the employees for attending the meetings, inspections and other official functions. From the reading of the provisions of section 115WB(2), it is clear that the benefits given to an employee directly or indirectly only would be taxable under Chapter XII-H. As rightly pointed out by the CIT(A), the other expenditure is incurred for agencies other than the employees, who are outside the scope of the provisions of section 115WB(2). Therefore, we do not see any reason to interfere with the order of the CIT(A).
In the result, the appeal filed by the revenue is dismissed.
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