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2011 (7) TMI 1343
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... ... ..... ilized for repayment of loans to NABARD. Such loans were taken by the assessee for a specific purpose of construction of tube wells, laying down of pipe lines and providing lift irrigation system for providing water for the people of the State. 7. We are of the opinion, therefore that the Tribunal correctly held that the subsidy was not for the purpose of enabling the assessee to do the business better or more profitably but it was for the purpose of repaying loans utilized for acquiring capital assets. The assessee's main object appears to be to carrying out such water schemes. In furtherance of such object, the assessee had constructed tube wells, laying down pipelines and providing lift irrigation system. It was for this purpose the assessee had taken loan from NABARD, which through the subsidy received from the State Government was being repaid. 8. In view of the above, we do not find any error in the judgment of the Tribunal. The Tax Appeal is, therefore, dismissed.
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2011 (7) TMI 1342
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... ... ..... n 44BB(3) of the Act. The scheme of computation of income under this section does not provide any leeway to apply both the sub-sections (1) and (3) of section 44BB to the income arising from the business activities falling under the ambit of section 44BB(1) of the Act. Even if part of the income falls under 'Royalties' or 'Fees for technical Services', there is no scope to assess such receipts under these heads, once it is held that the income is from its oil exploration and production activities as envisaged under section 44BB. We are of the view that if the applicant desires to know the answers to the two issues, then it has to first exercise the option to get its income computed under section 44BB(3). In view thereof, we answer the Question No. 2 by saying that the entire mobilization/demobilization revenues received by the applicant with respect to seismic data acquisition and/or processing would be taxable in India at an effective rate of 4.223 per cent.
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2011 (7) TMI 1341
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... ... ..... squo;D’ Bench of the Tribunal in assessee’s own case in ITA No. 220/Mds/08 for the assessment year 2005-06 dated 19.03.2008 and by filing copy of the said order, the assessee’s counsel further submitted that the appeal of the assessee can be dismissed and to this move of the ld. Counsel for the assessee, the ld. DR did not object. 3. After having heard both the sides and considering the material on record, we find that the issue is covered by earlier decision of ‘D’ Bench of the Tribunal in assessee’s own case in ITA No. 220/Mds/08 for the assessment year 2005- 06 dated 19.03.2008, wherein, both the issues raised in this appeal, which were raised in that appeal, have been decided against the assessee. Therefore, following the said decision, we confirm the order of the ld. CIT(A) and dismiss the appeal of the assessee. 4. In the result, appeal of the assessee is dismissed. Order pronounced soon after the conclusion of hearing on 18.07.2011.
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2011 (7) TMI 1340
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... ... ..... ir constituents. Therefore, the joint venture or the consortium was only a paper entity and has not executed in contract itself. They have also not offered any income out of the work executed by its constituents, nor did they claim any deductions u/s 80IA(4). Therefore, in all practical purposes, the contract was awarded to the constituents of the joint venturers through joint venture and the work was executed by them. As per provisions of section 80IA(4), the benefit of deduction under this section is to be given only to the enterprise who carried on the classified business. Therefore, in the light of this legal proposition, we are of the view that the assessee is entitled for the deductions u/s 80IA(4) on the profit earned from the execution of the work awarded to JV and consortium. We accordingly set aside the order of the CIT(A) and direct the A.O. to allow the deductions. 12. In the result, the appeal of the assessee is allowed. Pronounced in the open Court on 14.7.2011
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2011 (7) TMI 1339
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... ... ..... on the lessee. We may further note, if the lessee commits default in paying the land revenue, it may amount to a breach leading to re-entry under Clause (4) of the lease deed. Be that as it may. However, having regard to the pendency of these proceedings, if the payment of the land revenue dues is made within four months from today it shall not be treated as a default or breach of the terms of the lease deed for the purpose of re-entry. 18. In view of the above, we find no error in the order of the High Court. Consequently this appeal is dismissed reserving liberty however to the Appellant to file representations/objections before the concerned Revenue Authority, if it has any objection or grievance in regard to the quantum of non-agricultural assessment claimed in regard to the property leased to it. As the Appellant had the benefit of interim stay against recovery, the Appellant shall be liable to pay interest on the arrears/dues at the rate of 9% per annum from 26.2.2002.
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2011 (7) TMI 1338
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... ... ..... nion that there is failure on the part of the assessee to disclose correct incomes at the time of filing not only original returns but also at the time of filing returns in response to notice under section 153A. As noted earlier the A.O. did indeed initiate proceedings under section 271(1)(c) for an amount of ₹ 5,00,000/- disclosed in the return in response to notice under section 153A in A.Y. 2005-06 but levied penalty only on the additional income offered of ₹ 11,50,000/-. Similarly the amount offered in AY 2003-04 of ₹ 18,05,000/- was also not offered earlier. Since these amounts are offered to tax for which the particulars were concealed by the assessee and were found consequent to search, we are of the opinion that on the facts of the case penalty is warranted in respective years. Therefore the orders of the A.O. and the CIT(A) are confirmed. 10. In the result, appeals of the assessee are dismissed. Order pronounced in the open court on 15th July 2011.
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2011 (7) TMI 1337
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... ... ..... the material placed before us. Admittedly, the CIT(A) has admitted certain additional evidences during the appellate proceedings and did not allow the opportunity to the AO to examine such evidences and to produce any evidence or documents in rebuttal of the additional evidence produced by the assessee. The action of the CIT(A) is clearly in violation of Rule 46A(3). In view of the above, we set aside the order of the authorities below with regard to Ground Nos.4, 5 and 6 and restore the matter back to the file of the AO. We direct the assessee to produce all the evidences, including the evidences produced before the CIT(A), before the AO and thereafter, the AO is directed to re-adjudicate the issue in accordance with law. Needless to mention, the AO will allow adequate opportunity to the assessee to produce all the evidences before him. 8. In the result, Revenue’s appeal is deemed to be allowed for statistical purpose. Order pronounced in Open Court on 28th July, 2011
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2011 (7) TMI 1336
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... ... ..... e basis of seized papers (Pages 8 & 10), the following picture emerges (A) In assessee M. N. Patel’s hands. Loose Page 8-Confirmed para No 22(10)(i) ₹ 6,25,000 Loose Page 10 (Detailed asunder) ₹ 20,72,500 Deleted Para No22(11)(iV) ₹ 5,57,500 Deleted Para No 22(11)(ii) ₹ 2,25,000 Deleted Para No 22(11)(i) ₹ 9,16,000 Confirmed Para No 22(11)(iii) ₹ 3,20,000 Confirmed para No 22(11)(V) ₹ 54,000 ₹ 20,72,500. Total ₹ 26,97,500 Loose Page 8-Confirmed Para No 22(10)(ii) ₹ 67,820 Loose Page 10- Confirmed Para No.22(10)(ii) and 22(12). Rs. 13,53,500 Total ₹ 14,21,320 (B) In company’sHands Rs. Deleted Para No 22(13) & 22(10(ii) Rs. 10,85,125 Deleted Para No 22(13), 22(10(ii) and 22(12) ₹ 2,16,56,000 Total ₹ 2,27,41,125 23 In the result appeal of MN Patel is partly allowed and the appeal of the Company, Ambica Realities Pvt. Ltd is allowed. Order pronounced in the open Court on 29-07-2011.
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2011 (7) TMI 1335
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... ... ..... such enactment. In view of the matter, we are of the considered opinion that s.194C(2) being not applicable in this case, the disallowance of ₹ 74,33,210/- made by the AO by invoking s. 40(a)(ia) of the I. T. Act, 1961 and sustained by the Ld. CIT (A) is hereby deleted. This ground of the assessee is allowed. Respectfully, following the same, we set aside the orders of the revenue authorities and keeping in view of the fact that section 194C(2) being not applicable in this case, the disallowance of ₹ 72,61,850/- made by the Assessing Officer by invoking section 40(a)(ia) of the Income Tax Act, 1961 and sustained by the Ld. CIT (A) is hereby deleted. This ground of the assessee is allowed.” As the facts are exactly identical and revenue could not distinguish the same, respectfully following Tribunal’s decision cited supra, we dismiss this appeal of the revenue. 5. In the result, the appeal of the revenue is dismissed. 6. Order pronounced in open court.
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2011 (7) TMI 1334
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... ... ..... ay condoned. The Special Leave Petitions are dismissed.
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2011 (7) TMI 1333
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... ... ..... ay condoned. The Special Leave Petition is dismissed.
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2011 (7) TMI 1332
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... ... ..... issed in the light of the decision of this Court in SLP (Civil) ……/2011 (CC 7114/2011).
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2011 (7) TMI 1331
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... ... ..... we find that Ld. CIT(Appeals) has deleted the disallowance u/s.80IB(10) of the Act on account of sale of unutilized FSI of ₹ 1,39,112/- by following the decision of this Tribunal in the case of Radhy developers & Others (supra) by holding that the facts of the assessee are squarely covered by that decision of the Tribunal. Therefore we feel no need to interfere with the order passed by Ld. CIT(Appeals) on this issue and the same is hereby upheld. As regards to disallowance of proportionate expenses for working out the eligibility of deduction u/s 80IB(10) of the Act is concerned, the Assessing Officer is directed to re-compute this expenditure in the light of our decision in assessee’s appeal, wherein we have upheld the unit completion method of accounting adopted by the assessee. 30. In the result, assessee’s appeal is allowed and that of Revenue’s appeal is partly allowed for statistical purposes. Order pronounced on this day of 28th July, 2011.
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2011 (7) TMI 1330
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... ... ..... incoming members of the Housing Society is exempt under the principles of mutuality. 2. Since the decision of the Income Tax Appellate Tribunal is based on the decision of this Court, we see no reason to entertain these appeals. Both the appeals are accordingly dismissed with no order as to costs.
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2011 (7) TMI 1329
"Reason to Believe" - Assessment/ Re-Assessment of Income u/s 147 - AO initiated proceedings u/s 147, as he believed that assessee did not co-operate with the department and not submitted any return in reply to notice u/s. 148 - CIT(A) held the reasons recorded for initiating proceedings u/s 147 are not valid
HELD THAT:- We noted that the apex court in the case of INCOME-TAX OFFICER VERSUS PURUSHOTTAM DAS BANGUR AND ANOTHER [1997 (1) TMI 477 - SUPREME COURT] has settled the law on the issue in question, that at the time of initiation of the proceedings u/s. 147, the AO should have the material relevant to the assessee. The information received from the Investigation Wing is also material if it contains the information regarding the assessee. The Assessing Officer at the time of recording of the reasons/formation of belief is not supposed to counter the evidence or material collected by him with the assessee. Even the source of the material cannot be asked by the assessee.
If the material or the information belongs to the assessee, in our opinion, the Assessing Officer has a bona fide belief to record the reasons. The court cannot look into the sufficiency of the material held by the Assessing Officer for the formation of the belief. Once the proceedings are initiated, the onus is on the Assessing Officer to prove that the assessee has escaped the income and for that he has to give the hearing to the assessee and give all the material and evidence collected by him so that the assessee may contradict the same. If the Assessing Officer does not have the material, the reasons cannot be regarded to be bona fide and the initiation of the proceedings can be quashed. If the initiation is valid and subsequently, the assessee proves that there is no escapement of income, the assessment so framed could be quashed/cancelled.
We noted that in the decisions relied on by the learned AR, the decision of the Hon’ble Supreme Court, which has settled the position of law has not been discussed. The law pronounced by the Supreme Court is the law of land and is binding on all the courts what to talk of this Bench of the Tribunal. We, therefore, set aside the order of the CIT(A) on this issue as, in our opinion, the Assessing Officer has bona fide reason to believe that the income has escaped in the case of the assessee - Decision against Assessee.
Unexplained Cash Credits u/s 68 - Assessee expressed his inability to produce the brokers - AO treated the amount received by the assessee from brokers credited in Saving Account as unexplained. - HELD THAT:- We noted that the issue on merits is covered in the case of BAIJNATH AGARWAL VERSUS ACIT [2010 (2) TMI 892 - ITAT, AGRA], where it was held that "The transaction was treated as non genuine as the assessee could not produce the broker. This in my opinion cannot be the ground to hold the transaction to be a non-genuine transaction. The assessee has given the address of the broker and proved the identity of the broker, even the bank account of the broker is also on record of the department".
Respectfully following the decision, we confirm the order of the CIT(A) i.e such amount does not come u/s Sec. 68 - Decision in favour of Assessee.
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2011 (7) TMI 1328
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... ... ..... and therefore, applying 9597 sq.ft. (6000 3597) in the denominator the appellant’s proportionate use even as per AO’s formula would be ₹ 12,00,375/- and that for the Bank would be ₹ 7,19,624/- instead of ₹ 8,73,124/- & ₹ 10,46,875/- determined in the assessment order. 25. Thus, even as illogical, the AO’s computation would not show any excess by adopting correct figures. Therefore, the excess computed at ₹ 2,18,563/- was ill-conceived. I delete such illogical disallowance.” 13. In our view the above conclusions of the CIT(A) are proper and the disallowance made by the AO ignoring all the above vital factors cannot be sustained. The CIT(A) was therefore, justified in deleting the addition made by the AO. We, therefore, confirm the order of the CIT(A) and dismiss ground No.2 raised by the revenue. 14. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on the 29th day of July, 2011.
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2011 (7) TMI 1327
Unconfimed Creditors u/s 69 - Assessee firm was having two old creditors - Notice send by AO to them were returned unserved - AO treated them as unconfirmed creditors, therefore made addition - CIT (A) deleted such additon on the ground that the creditors were old and did not pertain to the year under scrutiny - HELD THAT:- The fact that the creditors were old creditors brought forward from earlier years has not been disputed by the department. These creditors have not been introduced during the year under consideration. There is no evidence or material on record to establish that the asessee’s liability to pay the amount to the creditors have been ceased during the year under consideration.
We, therefore, hold that the ld. CIT(A) is justified in deleting the addition. The amount payable to these creditors can be added to the assessee’s total income in the year in which the assessee’s liability to pay the amount ceases or extinguished and not in the year under consideration where assessee has admittedly shown the liability in the balance sheet. Thus, the ground raised by the revenue is rejected - Revenue Appeal Dismissed.
Disallowance of salary and interest paid to partners - AO disallowed the assessee's claim by stating that in partnership deed there was no clause of quantum of salary paid and rate of interest payable to partners - CIT(A) upheld such disallowance - HELD THAT:- It is the assessee’s case that there was a stipulation in the supplementary deed of partnership regarding payment of salary and interest to the partners as so provided u/s 40(b)(v) applicable from the A.Y. 1993-94. which was not examined by CIT(A).
We, therefore, restore this matter back to the file of AO for his fresh consideration after ascertaining as to whether a supplementary deed of partnership was submitted by the assessee in A.Y. 1994-95 and whether the situation had remained the same till this assessment year. The AO shall also ascertain whether identical claim of payment and salary and interest has been allowed in earlier assessment years - Matter restored back.
Admission of Additional Grounds as CIT(A) didn't comment on such ground - AO’s action in disallowing 5% of the total expenses in the absence of books of account or bills or vouchers - HELD THAT:- Assessee should be allowed to raise this ground. We accordingly admit this ground and restore the same to the file of AO for his fresh adjudication after examining the books of account and after providing reasonable opportunity of being heard to the assessee - Decision in favour of Assessee.
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2011 (7) TMI 1326
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... ... ..... fter considering the arguments of the learned D.R., we do not see any reason to differ from the finding of the CIT(A). Assessee is in the business of share broking and as part of business activity has entered into open positions in derivative market. By virtue of the amendment brought to section 43(5) the transactions in respect of trading in derivatives cannot be considered as a speculative transaction. Therefore these transactions are business transactions. If the assessee has taken the stock position the law permits valuation of stock either at cost price or market price, whichever is lower in computation of profit for the year. Therefore, the notional loss arrived at in the above positions is correctly allowed by the CIT(A) as a loss in the computation of income. We do not see any reason to interfere with the order of the CIT(A). Accordingly the ground is rejected. 8. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 27th July 2011.
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2011 (7) TMI 1325
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... ... ..... 3/-, is taxable in the year in which the amount was promptly included by the assessee in its total income. As far as the dividend income of previous year relevant to AY 2002-03 amounting to ₹ 4,60 crores, was exempt u/s 10(34) of the Act. The above fact makes a difference in determining the total income of the assessee. Both the authorities below decided the issue in the year under consideration following the earlier year’s order as the same was entirely different from the present year. In this view of the matter, we set aside the order of the CIT(A) and remit the matter back to the file of the AO with a direction to examine the entire facts of the case and decide the issue afresh keeping in view of our above observations and after providing reasonable opportunity of hearing to the assessee in the matter. 6. In the result, the appeal of the assessee is treated as partly allowed for statistical purposes. Pronounced in the open court on this 15th day of July, 2011.
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2011 (7) TMI 1324
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... ... ..... assessee submitted that the Tribunal’s decision suffers from mistake apparent from record so as to invoke the provisions of section 254(2) of the Act. So, the same should be rectified. On the other hand, the learned DR supported the order of the Tribunal and submitted that if the payer of the assessee is accepted, it would amount to review of the order of the Tribunal which is not permissible under the law. 4. After going through the rival submissions and material on record, we do not find it a fit case for invoking the provisions of section 254(2) of the Act. In fact, the assessee wants to review the order of the Tribunal in the garb of provisions of section 254(2) of the Act which is not permissible under the law. In the facts and circumstances of the case therefore, the miscellaneous application filed by the assessee is rejected. 5. In the result, the miscellaneous application filed by the assessee is dismissed. Order pronounced in the open court on 27th July 2011.
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