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Income Tax - Case Laws
Showing 81 to 100 of 320 Records
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2010 (7) TMI 1070
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... ... ..... This was extra polated for entire year and total unaccounted service charges received by the assessee was estimated at ₹ 7,31,600/-. The ld. CIT(A) confirmed the addition on the ground that above receipts represented unaccounted service charges and maintenance contract income which is not accounted for in the books of account. 14. We have heard the parties and perused the material on record. In our considered view there is no case to interfere in the order of ld. CIT(A). The reasons are that these are admittedly service/maintenance charges received by the assessee, which are not accounted for. The survey officers had found evidence for part of the month. They have estimated such income for whole of the year. In our considered view the estimate made by the officers are reasonable and, therefore, confirmed. Thus this ground of the assessee is dismissed. 15. In the result, the appeal filed by the assessee is partly allowed. Order was pronounced in open Court on 02/07/2010
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2010 (7) TMI 1069
Valuation of closing stock of gold jewellery - LIFO or FIFO method - accounting standard - Present appeal is with regard to the valuation of closing stock. the AO had changed the value of closing stock but not that of opening stock. In view of the declaration of additional income by the assessee during survey. it was held that further addition in the year would result in double addition. Accordingly, the AO was directed to delete the addition of ₹ 52,23,753/-. Revenue is in appeal against the said order.
HELD THAT:- we find support from the ratio laid down in Chainrup Sampat Ram Vs. CIT [1953 (10) TMI 2 - SUPREME COURT] wherein it has been held that the value of stock cannot be appreciated higher than the cost because the closing stock is not the source of profit for the assessee. In the facts and circumstances of the present case, we are in conformity with the order of CIT(A) and uphold the same. There is no merit in adopting the weighted average cost method for valuation of inventory of stock in the circumstances of the case. We confirm the deletion of addition made by the AO totaling ₹ 52,23,753/-. The ground of appeal raised by the Revenue is thus dismissed
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2010 (7) TMI 1068
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... ... ..... . Bhakti Pasrija,Adv., Mr. B.V. Balaram Das,Adv. For the Respondent Dr. Rakesh Gupta,Adv., Mr. Ambhoj Kumar Sinha,Adv. O R D E R Delay condoned. The special leave petition is dismissed.
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2010 (7) TMI 1067
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... ... ..... ct based on material available on record of the AO and it was held by the Tribunal as under "We are further of the opinion that if the facts of the issue before us are analyzed as a whole, then as against the documentary evidences produced by the assessee, his conduct and the circumstances speak volume against." 7. It is undisputed that the alleged sales of garlic were effected immediately after the survey was carried out and sales thereof took place in the latter half of the March, 2003 only when the trend of prices was against the assessee. Undisputedly, the assessee was not in the garlic business and the proximity of purchases with the date of survey makes whole thing very suspicious as has been rightly observed by the Tribunal and in our considered opinion, no question of law much less substantial question of law is involved in this appeal. We find no merit and substance in the appeal. 8. In view of the foregoing, appeal fails and is hereby dismissed summarily.
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2010 (7) TMI 1065
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... ... ..... he share applications, Memorandum and Articles of Association and their Income Tax Returns. If the Assessing Officer had any doubt about identity of the share applicants, he could have summoned the Directors of the applicant companies. No such attempt was, however, made by him. Therefore, the Commissioner of Income Tax/Appeals) and the Income Tax Appellate Tribunal, in our view were justified in holding that the identity of share applications and the genuineness of the transactions had been established by the assessee.” 8. Taking into consideration the authoritative pronouncement of the Delhi High Court and the other material placed on record we are of the opinion that assessee has discharged the onus put by section 68 of the Income Tax in explaining the share applications money received by it. Therefore we allow the appeal of assessee and delete the addition of ₹ 6,55,000/-. The appeal of the revenue is dismissed. Order pronounced in the open court on 16.7.2010.
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2010 (7) TMI 1063
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... ... ..... nal. Therefore in, the present case also following the decision of the Tribunal confirm the order of the CIT(A), the addition on account of estimated value of work-in-progress is required to be deleted.” 4. Ld Sr. DR on the other hand submitted that if assesses has spent money which has been debited in the profit & loss account and to the extent the assessee does not get receipt from the principle, work-inprogress should be estimated. 5. After considering the rival submissions of the parties, 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. (supra) pronounced on 15.01.2010. Respectfully following the above order we dismiss the ground No.1 & 2 of the Revenue’s appeal.” Respectfully following the above decision, we allow the appeal filed by the assessee. 7. In the result, appeal filed by the assessee is allowed. Order was pronounced in open Court on 16/7/2010.
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2010 (7) TMI 1062
TDS u/s 194C - disallowed subcontracts - disallowance u/s 40(a)(ia) - HELD THAT:- the disallowance sustained by the CIT (A) is not correct. Accordingly, we direct the AO to delete the same. In our considered view, the department should not take the advantage of the ignorance of the assessee while claiming some relief which the assessee is legally entitled. In Instant case, the assessee is legally entitled to claim the said deduction as per the proviso (A) to section 40 a (ia). Therefore, the ground raised by the assessee on this issue is allowed.
With regard to the disallowance of expenditure amounting to ₹ 4 lakhs made by the AO - HELD THAT:- We find that the lower authorities have made only a token disallowance out of the expenditure claimed by the assessee looking into the reasonableness of the expenditure. Even before us, the learned counsel for the assessee could not state any good reason why the assessee could not produce bills, vouchers etc., before the authorities below in support of his claim. Hence, we find no reason to interfere with the order of the lower authorities. In view of the above, we confirm the findings of the CIT (A) and reject the grounds raised by the assessee on this issue.
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2010 (7) TMI 1060
Claimed exemption u/s 10(23C)( iiiad) - notices u/s 148 issued for 3yrs - Assessee filed returns for the respective assessment years on 17-8-2004 declaring nil income - assessee is running two Schools in the name of Gagan Public School, one at Agra Road and other at Exhibition Road. Proceedings u/s 147 were initiated in all these three years as in the assessment year 2003-04 vide order dated 31-12-2004 the AO held that the Society is running the School for profit and not for charitable purposes.
Income-tax Rules 2BC prescribes the limit of ₹ 1 crore. It means that if the turnover is ₹ 1 crore or less, then the educational institution has not to be approved by prescribed authority. Otherwise, educational institution has to get approved by the prescribed authority. In the case of the assessee, in each of the assessment year the annual receipts as detailed above is less than ₹ 1 crore.
Therefore, in our opinion, the assessee is not required to get approved by any prescribed authority. It is not the case of the Revenue that the assessee has defaulted the proviso to section 10(23C). Merely this surplus has arisen to the assessee during the course of carrying on the education activity does not mean that the assessee is not existing for education purpose. Even no such evidence or material was brought on record which may prove that the assessee was engaged in any of the activities other than the education activities so that the assessee may be disentitled for the exemption under section 10(23C)(iiiad), rather the AO has accepted by allowing exemption to the assessee u/s 11 during the assessment year 2007-08 that the assessee is a genuine educational institution and the activities of the assessee are genuine and has been carried on as per the objects of the assessee.
We accordingly set aside the order of the AO and allow the exemption to the assessee u/s 10(23C)(iiiad). The aforesaid view is supported by the decision of the Allahabad High Court in the case of City Montessory School v. Union of India [2009 (5) TMI 41 - ALLAHABAD HIGH COURT] and that of Ewing Christian College Society v. Chief CIT [2009 (5) TMI 103 - ALLAHABAD HIGH COURT] and American Hotel & Lodging Association, Educational Institute v. CBDT[2008 (5) TMI 17 - SUPREME COURT].
In the result, all the three appeals are allowed.
Exemption u/s 11 & 12 - Granted registration u/s 12AA - HELD THAT:- By allowing the exemption to the assessee u/s 11 during the assessment year 2007-08, the AO has himself accepted that the assessee is a genuine education institution and the activities of the assessee are genuine and has been carried out as per the objects of the assessee. If the main object of the assessee is imparting of the education and during the course of imparting of the education, if some surplus has arisen to the assessee, it cannot be said that the assessees institution is not engaged for charitable purpose as defined under section 2(15). The Hon'ble Supreme Court in the case of Asstt. CIT v. Surat City Gymkhana [2008 (4) TMI 16 - SUPREME COURT] has held that once the trust is registered u/s 12A, it is a fait accompli and the AO cannot thereafter make a further probe into the objects of the trust. We accordingly set aside the order of the CIT(A) on this issue and hold that the assessee institution is engaged for charitable purpose. Once the assessee is engaged and is duly registered u/s 12AA, unless and until the assessee violates the terms and conditions as stipulated u/s 12 to 13 in our opinion, the assessee cannot be denied exemption u/s 11.
Issue relates to the donation - The assessee has donated a sum of ₹ 15,73,600 out of the current year income to Gagan Academic Society. The Society is also engaged in imparting education and is registered u/s 12A as pointed out by the ld. A.R. The donation so paid was not treated as an application of the income by the AO and confirmed by the CIT(A).
HELD THAT:- We have gone through the provisions of explanation to section 11(2). This explanation has been inserted by the Finance Act, 2002 by amending section 11(2). This explanation provides that the amount accumulated cannot be credited or paid to any other trust or institution registered under section 12AA or to any fund or institution or trust or any University or any other educational institution or any hospital or other medical institution referred to in section 10(23C), as any such credit or payment shall not be treated as application of income for charitable or religious purpose, either during the period of accumulation or thereafter. Any such credit or payment by the donor trust to another trust or institution shall be deemed to be the income of the donor trust in such year of credit or payment.
Since the 15 per cent accumulation u/s 11(1) is unconditional and need not be spent at all by the trust, the question of treating the same as income in case it is credited or paid to another trust (in the subsequent year) does not arise in any case, section 11(3) which beings with the words "income referred to in sub-section (2)", makes it explicitly clear that the restriction imposed by section 11(3)(d) applies only to income accumulated u/s11(2) and not to the current year's income or to the accumulation u/s 11(1).
Therefore, we set aside the order of CIT(A) on this issue and direct the AO to allow deduction to the assessee in respect of donation paid to Gagan Academic Society provided that the society is duly registered u/s 12AA as a charitable institution.
Interest income earned - loan advanced - We, therefore, set aside the order of CIT(A) and restore this issue to the AO with the direction that the AO shall verify from record of the concerned assessment year whether the assessee has received interest at the rate of 15 per cent from Smt. Urvashi Sharma or not. He is also further directed to verify whether the loan advanced by the assessee to Smt. Urvashi Sharma during the year do not exceed 5 per cent of the capital of Smt. Urvashi Sharma. In case amount invested by the assessee by way of loan to Smt. Urvashi Sharma do not exceed 5 per cent of the capital of Smt. Urvashi Sharma, the AO is directed to allow exemption to the assessee u/s 11.
Capital expenditure as an application of the income u/s 11 - We, therefore, restore this issue to the file of the AO with the direction that the AO should verify the quantum of the capital expenditure from the audited balance sheet and allow the application to the assessee u/s 11 to the extent the assessee has incurred the capital expenditure. The assessee is free in case he so chooses to submit consolidated balance sheet of both the educational institutions run by the assessee for the purpose of verification of the figures of the capital expenditure incurred by the assessee before the AO.
No other issue was argued or raised by either of the side before us rather the ld. A.R. contended that even if the disallowance of the expenses of ₹ 5,63,189 is confirmed, but the assessee is allowed statutory accumulation u/s 11 and the application u/s 11 in respect of the capital expenditure, the income of the assessee will be nil and accordingly the claim of the assessee in respect of ₹ 14,08,804 will merely be academic and the assessee therefore did not press the claim before us and accordingly we dismiss this claim of the assessee.
In the result, appeal of the assessee is partly allowed for statistical purposes.
Whether the assessee is running an institution for charitable purposes, whether the assessee is entitled for statutory accumulation u/s 11(1)(a), whether the assessee is entitled for claim of application u/s 11 in respect of the capital expenditure or not - HELD THAT:- We have already held during the assessment year 2003-04 that the assessee is a charitable institution. We have already allowed deduction to the assessee at the rate of 15 per cent u/s 11(1)(a). We have also allowed capital expenditure as an application of the income u/s 11 but restored the issue relating to the capital expenditure for the purpose of verifying the figures as claimed by the assessee to the AO.
We have confirmed the disallowance of the expenses in the assessment year 2003-04 and restored the issue so far the advance to Smt. Urvashi Sharma is concerned to the file of the AO. Accordingly, we restore this issue for the assessment years 2004-05, 2005-06 and 2006-07 relating to the verification of the capital expenditure incurred by the assessee to the file of the AO with the direction that the AO shall allow exemption to the assessee u/s 11 in respect of the capital expenditure to the extent it is found that the assessee has incurred the capital expenditure.
In the result, the appeals filed by the assessee for assessment years 2000-01, 2001-02, 2002-03, are allowed while the appeals for the assessment years 2003-04 to 2006-07 are partly allowed for statistical purposes.
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2010 (7) TMI 1059
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... ... ..... the file of CIT to decide the issue in line with the ratio laid down by the jurisdictional High Court. Reasonable opportunity of hearing shall be allowed to the assessee. 12. We find no merits in the order of CIT in rejecting the registration u/s 12A of the Act in view of allegation of non-carrying on of charitable activities by the trust. At the time of granting registration u/s 12A of the Act the CIT is to verify whether the objects of the trust are charitable and the quantum of activities or lack of activities is in the domain of the Assessing Officer while computing the income and its exemption u/s 11 & 12 of the Act. Accordingly this objection of the CIT is rejected. The matter is remitted back to the file of CIT with our directions. The ground of appeal raised by the assessee is thus allowed for statistical purposes. 13. In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on this 30th day of July, 2010.
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2010 (7) TMI 1058
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... ... ..... each assessment year is separate in itself. The Tribunal held that there ought to be uniformity in treatment and consistency when the facts and circumstances are identical, particularly in the case of the assessee. This approach of the Tribunal cannot be faulted. The revenue did not furnish any justification for adopting a divergent approach for the assessment year in question. Question (b), therefore, does not also raise any substantial question.” 11. In the instant case before us the a past history of the assessee shows that the assessee’s claim of STCG has been accepted by the AO. Therefore respectfully following the decision of the Mumbai High Court in the case of Gopal Purohit (supra), we confirm the order of the Ld. CIT(A) and dismiss ground No. 1 of the Revenue. 12. Ground No. 2 is consequential to ground No. 1, therefore we dismissed the same. 13. In the result, the appeal filed by the Revenue is dismissed. Order pronounced on this 30th day of July, 2010
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2010 (7) TMI 1057
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... ... ..... cordingly, levy of penalty was upheld. But such are not the facts in the instant case nor the ld. DR appearing before us demonstrated as to how these decisions help the Revenue. Therefore, we are of the opinion that reliance by the Revenue on these two decisions in the facts and circumstances of the instant case, is totally misplaced. 5.5. In view of the foregoing, especially when no material has been brought to our notice by the Revenue, controverting the aforesaid findings of the ld. CIT(A) nor any contrary decision has been brought to our notice ,we have no alternative but to uphold the findings of the ld. CIT(A),cancelling the penalty levied under section 271 (1)(c) of the Act . Therefore, ground no.1 in these three appeals is dismissed. 6. Ground nos.2 & 3 in these three appeals ,being mere prayer, do not require any separate adjudication and are, therefore, dismissed 7. In the result, these three appeals are dismissed. Order pronounced in Open Court on 30-7 - 2010.
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2010 (7) TMI 1056
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... ... ..... 62/Mum/2007 vide order dt. 9th July 2010 reported at (2010) 133 TTJ (Mumbai)(SB) 377 (2010) 45 DTR (Mumbai)(SB)(Trib) 121'Ed. , wherein it has been held that internal hardware parts of a computer are often referred to as 'components' while external hardware devices are usually called 'peripherals'. Together, they all fall under the category of computer hardware. It was held that it was not only the equipment which performs such functions which can be called as computer. All the input and output devices which support in the receipt of input and outflow of the output are also part of computer. The Bench agreed with the view taken by the Kolkata Bench in the case of Samiran Majumdar, cited supra, and held that depreciation 60 per cent was allowable on routers and switches. Respectfully following the decisions above, we uphold the order of the learned CIT(A) and decide the issue in favour of the assessee. 18. In the result, appeal of the Revenue is dismissed.
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2010 (7) TMI 1055
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... ... ..... d in respect of all assessee’s Therefore, I am of the view that method adopted by the AO as per provisos of the Act cannot be faulted. I therefore, inclined to agree with the computation method adopted by the AO. Accordingly, the ground under appeal is dismissed” 8. From the above it is clear that the CIT(A) has not gone into the question of correctness of method adopted by the AO but decided the issue on the ground that the method adopted by the AO is being consistently followed in respect of all assessees. Therefore, the impugned order of the CIT(A) qua this issue is not sustainable in law and liable to be set aside. We accordingly decide this issue in favour of the assessee and direct the AO to calculate the interest on the refund due to the assessee without reducing the interest under section 244A which is part of the refund earlier granted from the refund due. 9. In the result, the appeal of the assessee is allowed. Pronounced in the Open Court on 02.07.2010
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2010 (7) TMI 1054
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... ... ..... eport of the DVO dt. 28th Oct., 1997. However, the AO has not pointed out any material defect/discrepancy in the books of account regularly maintained by the assessee. 12. The investment worked out by the DVO for the asst. yr. 1997-98 was ₹ 2,64,37,966 against which the assessee had shown the investment at ₹ 2,05,74,840 as per the books of account regularly maintained by it. The difference came to ₹ 58,63,126. The AO made the addition of ₹ 58,63,126 without looking into the books of account, viz., cash book and ledger produced on 20th March, 2002. 13. The facts of these years are similar to that of asst. yr. 1995-96 and even the rival submissions are also similar. In that view of the matter, the findings given in ITA No. 563/All/2000 (supra) shall apply to the grounds raised in ITA Nos. 151 and 152/Luck/2003 with equal force. Accordingly, we dismiss both the appeals filed by the Revenue. 14. In the result, all the appeals of the Revenue are dismissed.
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2010 (7) TMI 1051
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... ... ..... rused the material placed before us. We find that during the year under consideration, the assessee claimed travelling expenses amounting to ₹ 4,29,011/-. The AO disallowed 50 of the claim because the expenses included the expenses of assessee’s wife also. The CIT(A) reduced the disallowance to ₹ 50,000/-. The Revenue is not in appeal against the relief allowed by the CIT(A). At the time of hearing before us, leaned counsel for the assessee has not denied that the expenses incurred by assessee’s wife was claimed as business expenses. The CIT(A) has already reduced the disallowance substantially. Considering the facts of the case, in our opinion, the disallowance of ₹ 50,000/- sustained by the CIT(A) cannot be said to be unreasonable or excessive. We therefore uphold the same and reject the Ground No.2 of the assessee’s appeal. 8. In the result, the assessee’s appeal is partly allowed. Order pronounced in Open Court on 9th July, 2010.
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2010 (7) TMI 1050
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... ... ..... the method of remuneration payable to the BWIPL from 15 of the Indian revenues to cost 10 . The remuneration so calculated exceeds the remuneration payable on the earlier basis. Thus, there is no justification for attributing any profit to the PE. 9.2 Having considered submissions from both the sides, we are of the view that the issue needs further examination in which both the reports will have to be considered. The argument regarding prospective withdrawal of the circular also needs examination. Therefore, we restore the matter to the file of the AO to consider the matter afresh after giving a reasonable opportunity of being heard to the assessee. The attribution of profit, if found necessary, shall be subject to limitation mentioned in the case of B.R.Bamsi (supra). 10. In the result - (i) Appeal in ITA No. 2458(Del)/2008 is partly allowed; and (ii) Appeal in ITA No. 2459(Del)/2008 is treated as partly allowed. This order was pronounced in the open court on 23 July, 2010.
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2010 (7) TMI 1049
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... ... ..... ointed out any specific details and vouchers on this issue to show that the assessee expended all traveling expenses for business purpose. The status of the assessee is that of an individual, therefore, personal traveling expenses debited under this head also cannot be ruled out. However, it is also a fact that the AO has not pointed out and has also not quantified as to how many traveling expenses has not been supported by documentary evidence. Considering the business of the assessee and in the absence of specific finding by the AO, we restrict the addition on this head to ₹ 10,000/- in all as against ₹ 43,081/- to meet the ends of justice. The AO is accordingly directed to make addition of ₹ 10,000/- only. As a result, this ground of appeal of the assessee is allowed partly. 23. No other point is raised in both the appeals. 24. In the result, appeal of the assessee is partly allowed and the departmental appeal is dismissed. Order pronounced on 23-07-2010
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2010 (7) TMI 1048
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... ... ..... has been wrongly applied in the case of the assessee. The assessee has given full clarifications on all the discrepancies noted by the A O. 58.4 Considering the above discussions it is clear that the A O observed that the sale and lease back transactions are not genuine on finding some contradictions in the statements of various persons which in our opinion were not vital and signif icant to the matter in issue. No other evidence or materials have been brought on record against the assessee for rejecting the transactions. Therefore, learned CIT (A) on proper appreciation of materials and evidences on record rightly allowed claim of depreciation in favour of the assessee. In the result, we uphold the finding of the learned CIT (A) and this ground of appeal of the Revenue is dismissed. 59. In the result, departmental appeal is dismissed. 60. In view of the above, appeal of the assessee is partly allowed and the departmental appeal is dismissed. Order pronounced on 30-07-2010.
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2010 (7) TMI 1047
Deleting the addition u/s 92CA(3) - arm’s length price - International Transaction - royalty paid - In Present case, Department filled an appeal on the grounds that The ld. CIT(A) erred, in law and on the facts and circumstances of the case, in deleting the addition of ₹ 43,68,838/- being the difference in the arm’s length price and the value of the International Transaction on account of Royalty. The AO made this addition on the basis of TPO’s order passed u/s 92CA(3) of the I.T. Act.
HELD THAT:- In fact, The expenditure in question was no doubt incurred for business purposes and it was this which was the determining the factor, as rightly noted by the ld. CIT(A). The payments made by the assessee to the Joint MD and the Technical Adviser were correctly found by the ld. CIT(A) to be genuine business expenditure. It remains undisputed that as per the OECD guidelines, the assessee was not a contract manufacturer. Rather, it was an independent company. The royalty was paid by the assessee under the Technology Agreement, computed on the basis of the entire production/sales. Considering, all the facts We do not find any reason to record any variance with the well reasoned elaborate findings of fact recorded by the ld. CIT(A). The same are hereby upheld.
In the result, the appeal filed by the Department is dismissed.
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2010 (7) TMI 1046
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... ... ..... and submitted that the materials available before the lower authorities are all for the months of July to October, 2004. Therefore, the material is relatable to the financial year 2004-05 which falls in the asst. yr. 2005-06. Therefore, at the best the Revenue may be justified in utilizing these materials for the asst. yr. 2005-06. No material is available for making addition of ₹ 25,66,909 for the asst. yr. 2004-05. In the absence of any material, in our opinion, the addition made by the lower authorities to the extent of ₹ 25,66,609 is not justified. Material available on record is relatable to the asst. yr. 2005-06. In the absence of any materials, there cannot be any addition at all. Therefore, we are unable to uphold the orders of the lower authorities for the asst. yr. 2004-05 in the case of Vijay Anand Fabrics (P) Ltd. Accordingly, we set aside the same. 22. In the result, ITA Nos. 585 to 597/Hyd/2008 are partly allowed and ITA No. 618/Hyd/2008 is allowed.
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