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Income Tax - Case Laws
Showing 101 to 120 of 190 Records
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2012 (1) TMI 254
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... ... ..... e provisions of section 115JB. The Mumbai Bench of the Tribunal in Krung Thai Bank PCL Vs. Jt.Director of Income Tax (I.T.) (2010) 113 TTJ (Mumbai) 435 has held that the provisions of section 115JB cannot be applied to the assessee foreign bank. Another decision of the Chennai Bench of the Tribunal in Indian Bank Vs. Addl.CIT in ITA No.469/Mds/2010 dated 3rd August, 2011 has also been placed on record holding to the same effect. In view of these decisions, it becomes apparent that the provisions of section 115JB cannot apply to a foreign bank. The instant assessee is also a foreign bank. As such the application of section 115JB to the facts of the instant case cannot be held to be valid. If that is the position, then there can be no question of imposing or confirming penalty u/s 271(1)(c) on that issue. We, therefore, overturn the impugned order and order for the deletion of penalty. 4. In the result, the appeal is allowed. Order pronounced on this 25th day of January, 2012.
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2012 (1) TMI 253
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... ... ..... f Income-tax (A)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. It is therefore, prayed that the order of the Id. Commissioner of Income-tax(A)-XIV, Ahmedabad may be set-aside and that of the Assessing Officer be restored.” 33. Ld. D.R. supported the assessment order whereas the Ld. A.R. submitted that this ground is related to ground No.7 of the assessee’s appeal. Since, we have deleted the disallowance confirmed by the Ld. CIT(A), no interference is called for in the order of Ld. CIT(A) on this part also as per which he has deleted the part disallowance. This ground of the revenue is also rejected. 34. Grounds No. 4 & 5 of the revenue’s appeal are general grounds and no separate adjudication is called for. 35. In the result, appeal of the revenue is partly allowed. 36. In the combined result, the appeal of the assessee and the revenue are partly allowed. 37. Order pronounced in the open court on the date mentioned hereinabove.
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2012 (1) TMI 252
Surplus arising on prepayment of deferred sales was a revenue receipt liable to tax u/s. 41(1) - deduction u/s. 80M - disallowance of expenses for earning dividend income as made by the revenue authorities cannot be sustained - computation of deduction u/s. 80HHC - expenditure in the form of premium on premature redemption of debentures - Disallowance in respect of Company's contribution to Provident Fund - disallowance u/s. 92C - commission to non AEs - recompute deduction under section 80 HHC
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2012 (1) TMI 251
Unexplained Cash Credits u/s 68 - One of the Director of the company had expressed his inability to provide any information regarding share capital investment made by some investors in the assessee company - AO made addition u/s 68 - Moot question was whether assessee company had received share application money or not.
HELD THAT:- Addition is based on alleged statement of that one director behind the back of the assessee. The assessee was not even afforded any opportunity of cross examination nor that director was examined in the course of assessment proceedings. Therefore, in our view, the inference drawn by AO was not correct. We found that there is no evidence that assessee had paid any commission and has refunded the amount received under the garb of share application money.
Even and otherwise, the issue is squarely covered by the decision of Hon’ble Supreme Court in case of CIT VERSUS DIVINE LEASING AND FINANCE LTD., GENERAL EXPORTS AND CREDITS LTD., LOVELY EXPORTS P. LTD. [2006 (11) TMI 121 - DELHI HIGH COURT], wherein it has been held that – If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company.
In the present case we noted that ld. CIT (A) has already taken a recourse for taking action against the respective shareholders as the Assessing Officer was directed to take necessary action against the purchaser company for such investment in purchase of shares.
Share Applications if remained unproved can be added u/s 68 or not? - Difference b/w Cash Creditor and Shareholder - Contention was is there any difference b/w cash creditor and shareholder. Further, it was contended that cash was deposited in account of the investor companies before issuing cheque to the assessee company for allotting the shares.
HELD THAT:- We would like to observe here that there is a difference between cash creditor and shareholder. In case of cash creditor, the cash creditor has right to demand the money back from the assessee. However, in case of shareholder, there is no liability of the company to refund the amount as the shares can be sold in the market. Therefore, in case of cash creditor, heavy onus lies on the assessee to prove whether cash creditor was genuine or not. However, in case of shareholder, it is held by various High Courts and Hon’ble Supreme Court that if shareholders are not genuine, then in that case no addition can be made in the hands of the company but the case can be reopened of the shareholders for enquiring about their source of buying the shares in the company.
Further, the contention regarding cash deposited in investor companies' account is without any evidence and if the cash deposited in the account of those companies then onus lies on those companies to prove that from which source the cash has been deposited in their account. The ld. CIT (A) has already directed, as stated above, to take action against the respective shareholders and, therefore, in our view, the ld. CIT (A) was justified in allowing the issue in favour of the assessee.
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2012 (1) TMI 250
Disallowance of commission paid to employees, representatives and/or agents of customers - Held that:- By taking into consideration the circumstances in which the commission was paid, the commission paid for earlier assessment years and the commission paid by similar companies in similar circumstances and reasonableness of the payment, in our opinion, we can definitely quantify the excessive payment of commission at 15% of the total commission paid by the assessee for these assessments years under consideration before us. This disallowance at 15% of total commission paid by the assessee would meet the ends of justice. Accordingly, we direct the assessing officer to disallow only 15% commission paid the assessee as excessive in these assessment years as inadmissible.
Disallowance of interest on borrowed funds on notional basis - Held that:- There is no dispute regarding fact that the assessee has advanced the money for the purpose of acquiring office premises from TCI Industries Ltd and entered into MOU on 15th March 1999 and total amount advanced was at ₹ 2,20,00,000/- and not ₹ 3,00,00,000/-. It was provided in the said MOU that the possession of the premises would be given to the assessee company on or before 31st October 2001; and if the delivery cannot be given by the aforesaid date M/S TCI Industries Ltd; the owner would be entitled to reasonable extension of time. The purpose of advance of the for the purpose of business and that is for the purpose of acquiring a business premise in course of business activity and being so, even the interest paid on borrowed funds is allowable and there cannot be any disallowance on notional basis. We confirm the order of CIT(A) on this issue. Grounds of the Revenue on this issue are rejected.
Treatment of loss arising on sale of shares, alleged to be speculative loss, under Explanation to S.73 of the Act - Held that:- Loss has to be treated as capital loss and accordingly we confirm the order of CIT(A) and same is confirmed. Grounds of the Revenue on this issue are rejected.
Disallowance of bad debt - Held that:- There is no dispute regarding writing off the debts in the books of accounts of the assessee. After the amendment of the section 36(1)(vii) of the Income Tax Act by Direct Laws (Amendment) Act, 1987 w.e.f. 1-4-1989, it is not necessary for the assessee to prove that the debt has actually become bad. The only requirement is to write off of the debt in the books of accounts of the assessee. In this case the assessee actually written off of the debt in its books of accounts and corresponding entry is also appearing the Profit & Loss account prepared for the year ending on 31-03-2001. Being so, the claim of assessee is in order and it is to allowed.
Computing the long term capital gains on sale of three immovable properties, sold by the assessee at ₹ 3,43,58,163 as against assessable loss of ₹ 18,21,092 computed by the assessee - Held that:- The assets of Transport Division was transferred to the assessee company at book value. Though shares were allotted to the shareholders of the parent company, we have to see what was the cost of acquisition of the property sold by the assessee. The book value as on 1-4-1996 could be considered as cost of acquisition for the purpose of computing capital gain. As per provisions of section 49 of the income Tax act, there is no special provision for computation of cost in respect of property vest with the company by way of scheme of arrangement approved by the competent court of law. The assessee got the property as successor by a scheme approved by High Court. Therefore, the value as appeared in the audited books of the transferor company would be the cost of acquisition for the assessee company. In view of this, we do not find any infirmity in the order of CIT(A) in taking the cost of value at the respective figure appearing in the audited books of account of the transferor in pursuance to the scheme sanctioned by the High Court. Grounds of the Revenue on this issue are rejected.
Reopening of assessment - disallowance of commission - Held that:- the order of assessing officer is merged with the order of CIT(A). Once the order of the assessing officer is merged with order of CIT(A), the assessing officer cannot exercise his power u/s 147 of the Income Tax Act to reopen the issue was decided by higher forum in the guise of income assessable to tax has escaped from assessment. There is no further question of any escapement of income from assessment when the CIT(A) considered the very same issue of payment of commission in the course of appellate proceedings before him under section 250 of the Act. The assessing officer could exercise the power of reopening of assessment on any issue if it is not subject matter of appeal before CIT (A) and it is before the CIT(A) for his consideration or if he has considered the same issue, in that circumstances, the AO is precluded from considering same for reopening of assessment in guise of bringing into tax the escaped income. The only remedy available to assessing officer is to prefer appeal before higher forum and not to reopen the same assessment. In view of this, without going into merit of the issue, we cancel the order of the lower authorities and the ground taken by the assessee on reopening is allowed.
Addition by way of long term capital gains by applying the provisions of S.50C - Held that:- In the present case, the assessee not discharged the burden cast on it. The assessee having not availed of the opportunity provided under sub-sections (2) and (3) of s 50C to object to the value adopted by the stamp valuation authorities, in our opinion, the AO justified in treating the value adopted by the said authorities as the deemed sale consideration received/ accruing as a result of transfer. This ground of the assessee is dismissed.
Denial of relief under S.80M - Held that:- This section was deleted by Finance Act, 2003 w.e.f. 01-04- 2004. In this case, since the dividend received by the assessee does not exceed the amount of dividend distributed on or before due date, the said dividend received shall be allowed as deduction u/s 80M of the Act. The assessee has received only ₹ 4,500 and it has distributed ₹ 1,89,00,000 by way of dividend. Hence, we do not find any justification for disallowing the claim of the assessee. As such, the orders of lower authorities are set aside and the claim of the assessee is allowed.
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2012 (1) TMI 249
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... ... ..... raised specific issues, recorded findings thereon, in the light of the provisions of sec 263 of the Act. 11 In the present case, as is evident, from the above discussions, the AO failed to make inquiry, on the issues raised by the CIT and, hence, the question of application of mind, does not arise. It is settled proposition that if no inquiry has been made or no proper inquiry has been made, the case falls u/s 263 of the Act. Similarly, non application of mind is also covered by the provisions of section 263 of the Act. In the present case, the AO has failed to make enquiry and apply his mind, to the said issues. Such non application of mind has resulted in loss of revenue. Thus, the imperative conditions as contemplated u/s 263 of the Act stand satisfied. In view of the above legal and factual discussions, the findings of the Ld. CIT are upheld, as indicated in this order. 12. In the result, appeal filed by the assessee is partly allowed. Order Pronounced on 18th Jan.,2012.
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2012 (1) TMI 248
Expenditure towards community development - Held that:- Exact nature of the expenditure is not clear either from assessment order or from the CIT(A)or the ld. CIT(A) for assessee has not filed any paper book describing the exact nature of the expenditure we set aside the orders of the CIT(A) and remit back the issue to the file of AO for fresh adjudication and decide the same as per law after giving a reasonable opportunity of being heard to assessee.
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2012 (1) TMI 246
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... ... ..... to see whether the assessee collected any fees over and above the prescribed fees for admission of students. But in our opinion, the CIT(A) has no power to set aside the issue to the file of the Assessing Officer which amounts to setting aside the matter to the file of the Assessing Officer and we cannot approve the same. Being so, we cancel the order of the CIT(A). However, considering the totality of the facts and circumstances of the case it is necessary to see whether the assessee has collected any amount over and above the prescribed fees for admission of students by whatever name it is called. Accordingly, we set aside the order of the CIT(A) and the entire issue is remitted back to the file of the Assessing Officer to consider the order of the Tribunal in the case of Vasavi Academy of Education in ITA No. 1749/Hyd/2009 dated 4.2.2010. 4. In the result, appeal of the Revenue is allowed for statistical purposes. Order pronounced in the open court on 11th January, 2012.
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2012 (1) TMI 245
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... ... ..... material on record. After having considered all the aspects of the matter which are relevant for the consideration of assessee’s application for stay of outstanding demand specially the fact that the earlier year appeal i.e. for assessment year 2006-07 on similar issue had been heard by Tribunal on 23.1.2012 and the order is awaited, we are of the view that the balance of convenience lies in favour of assessee. Hence, it is a fit case to grant stay of balance outstanding demand of ₹ 63,85,261/- for a period of 6 months or till the disposal of this appeal by Tribunal whichever is earlier. The assessee will inform the Registry to fix this appeal on priority as and when the assessee receive order of Tribunal in respect of assessment year 2006-07 for which hearing had been completed on 23.1.2012 ‘L’ Bench, ITAT, Mumbai. 5. In the result, Stay Application of assessee is allowed. Order pronounced in the Open Court at the time of hearing i.e. on 27.01.2012.
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2012 (1) TMI 244
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... ... ..... error in the decision of the AO in not disallowing u/s 40(a)(ia). Merely because the order of the ITAT has not been accepted and department has filed appeal against the same, it cannot be said that there is an error causing prejudice to the Revenue in the order dated 29.12.2008 passed by the Assessing officer under Section 143(3) of the I.T Act. 10. Further, the order of the assessment under Section 143(3) dated 29.12.2008 has been passed by the AO after fully enquiring into all aspects including L.C. interest and applicability of Section 195 of the Act. Hence, it cannot be said that the order passed under Section 143(3) is without making any enquiry. Hence in our opinion, the proceedings under Section 263 invoked by the CIT to impose his decision over the decision of the AO is erroneous as held by the Apex Court in the case of Malabar Industrial Co Ltd v CIT 243 ITR 83 SC. 11. In the result the appeal of the assessee is allowed. Order pronounced in the open Court 6.1.2012.
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2012 (1) TMI 243
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... ... ..... passed it was subject to certain conditions and on compliance of the concessions only the assessee was to be conferred with the ownership of the alternate premises agreed to be given in the Shriniketan building by co-owners/landlords of the property. We, therefore, hold that the transfer took place on 04.11.2004 and not on 22.02.2007 even if the Deed of confirmation was registered on that date. We, accordingly, confirm the order of the Ld. CIT (A) on above reasons that capital gain cannot be brought to tax in this year and accordingly we decide question nos.1 & 2 against the revenue. 10. So far as ground no.3 is concerned, it is on the applicability of section 50C of the Act. As we have held that there is no transfer in the assessment year 2007-08 as per our detailed reasoning, ground no.3 becomes infructuous. We accordingly dismiss the same. 11. In the result, revenue’s appeal stands dismissed. Order pronounced in the open court on this day of 18th January, 2012.
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2012 (1) TMI 242
Income from sale of shares - nature of income - capital gain or business income - Held that:- AO in the case of assessee while making the assessment for the assessment year 2004-05 has accepted the short term capital gain and the long term capital gain on sale of shares vide order dated 22.12.2006 passed u/s 143(3) of the Act, therefore, we are of the view that the assessee’s case is squarely covered in favour of the assessee by the decision of the Tribunal in the case of Shri Satpal Singh Sethi (2011 (9) TMI 1035 - ITAT MUMBAI).
This being so and in the absence of any distinguishing features or contrary material brought on record by the Revenue, we respectfully following the consistent view of the Tribunal and the ratio of the decision of the Hon’ble Jurisdictional High Court in the aforementioned cases, hold that the ld. CIT(A) was fully justified in directing the AO to accept the appellant’s claim of short term capital gain and long term capital gain on share transactions, where the delivery has been taken or given and Security Transaction Tax has been paid.
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2012 (1) TMI 241
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... ... ..... ead of telescoping the said unrecorded receipt against unrecorded expenditure. The contention of the appellant about telescoping of expenses disallowed against the expenses incurred out of books is rejected as the telescoping claim is not proved by the appellant. However, the second contention of the appellant about telescoping of undisclosed receipt of 42,000/- against the undisclosed expenditure added ₹ 2.14,663/- is accepted. The addition of ₹ 2,14,663/- u/s. 69C is therefore reduced to ₹ 1,72,663/-. The appellant gets relief of ₹ 42,000/- in A.Y. 2005-2006 on this count.” 35. We find that the first appellate order on the issue is comprehensive and reasoned one, to which, in our view, no interference is required. The same is upheld. The issue no. 4 raised in the appeal for A.Y. 2005-06 is thus decided against the assessee. 36. In result, all the appeals are dismissed. The order is pronounced in the open court on the day of 31st January, 2012.
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2012 (1) TMI 240
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... ... ..... ribunal such as in case of KRA Holding & Trading Co. Ltd. (ITA No.5007/Pune/2008), which were in favour of the assessee regarding allowability of PMS fees. The Tribunal also noted that penalty had been initiated for furnishing inaccurate particulars of income. The disallowance of various claims could not be considered as furnishing inaccurate particulars of income in view of judgment of Hon'ble Supreme Court in case of Reliance Petroproducts (P) Ltd. (322 ITR 158). The Tribunal further observed that penalty cannot be levied merely because assessee had not filed appeal against quantum additions. The Tribunal therefore deleted the penalty levied. Facts in case of the assessee are identical and therefore, respectfully following the decision of the Tribunal dated 19/10/2011 in case of Shri Mukesh Gupta, we set aside the order of CIT(A) and penalty levied is thus deleted. 5. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 11/01/2012
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2012 (1) TMI 239
Refusing to grant the registration u/s 12AA - assessee running a school is charging high fees and running the elite educational institution/school and poor students of the society are unable to take/derive the benefit of the assessee-school - Held that:- As per the Trust Deed of the said assessee, it was permissible to award Scholarship outside the ‘Arur Family’ and also provided that the applicants deserving in the ‘Saraswat Community’. As per the Scheme of the Trust Deed as a whole, it was seen that the dominant object was benefits of scholarship for any members of the ‘Arur family’, in the case of female members limited to three degrees of relationships from the donee. The power to use surplus income for scholarship for deserving Members of the ‘Saraswat Community’ and the power to make advances to enable a start in life to be made by a scholar are subsidiary objects. It was held that the trust, though educational in character was for benefit of only family members and was having limited scope. In our humble opinion, the issue before their Lordships in the case of D.V. Arur (supra) was different and has not relevance to the issue before us.
We, therefore, hold that the assessee is entitled for registration u/s.12AA of the Act as the assessee is imparting the ‘education’ which is a ‘charitable purpose’. - Decided in favour of assessee.
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2012 (1) TMI 238
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... ... ..... depreciation 100 . In the present case the foundation of platform, erection, installation of plant and machinery, preparation of crane platform for windmill and other and other civil work carried out for installation are integral part of he windmill which have no independent use. Thus the same are entitled to claim depreciation 80 . Therefore, we find no infirmity in the order of the ld. CIT(A) who has rightly deleted the addition made by the A.O. Thus Ground No. 2 of the Revenue is dismissed.” Following that order of the Tribunal, we hold that the ld.CIT(A) was justified in disallowing the addition made by the AO on account of excess claim of depreciation to the extent of ₹ 36,39,773/-. 3. Following our order in the case of assessee which was formerly Chirash Associates P. Ltd., we hold the ld CIT(A) was justified in directing the A.O. to allow depreciation. In the result the appeal of revenue is dismissed. 4. The order is pronounced in open court on 13.01.2012.
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2012 (1) TMI 237
Interest free advances - busniss expediency - Held that:- As the funds are mixed funds and the assessee could not establish any commercial expediency and hence, in our considered opinion, this issue is squarely covered against the assessee
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2012 (1) TMI 235
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... ... ..... nd proper to set aside the impugned order and restore for adjudication afresh. The Commissioner of Income-tax (Appeals) shall adjudicate the primary plea of the assessee as to whether or not having regard to the facts of the case, income if any, arising as a result of the impugned transaction is assessable in the hands of the assessee or not. It is only after adjudicating the aforesaid primary controversy the Commissioner of Income-tax (Appeals) shall proceed to deal with other issues in accordance with law. 10. In this manner, we conclude by setting aside the order of the Commissioner of Income-tax (Appeals) to be adjudicated de novo keeping in mind the aforesaid discussion. The Commissioner of Income-tax (Appeals) shall allow reasonable opportunity of hearing to the assessee and thereafter pass an order afresh in accordance with law. In the result, appeal of the Revenue is allowed for statistical purposes. Decision pronounced in the open Court on 30th day of January, 2012.
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2012 (1) TMI 234
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... ... ..... ent of excise duty. Moreover, the Apex Court in the case of CIT V/s. Zandu Pharmacceuticals Works Ltd. reported in (2006) 12 Supreme Court Cases, 453 has held that the addition of perfume in hair oil constitutes manufacturing process. Therefore, in the present case, the decision of the ITAT that the process of producing 'attar' results into a distinct marketable product and hence eligible for Section 10B deduction cannot be faulted. In this view of the matter, we see no merit in the appeal and the same is dismissed with no order as to costs.
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2012 (1) TMI 233
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... ... ..... facts and circumstances, as well as the materials relied upon are identical. In that case, the tribunal found PC (I) 22, being relied upon by the Revenue, to be a vital piece of evidence, though could be relied upon in the manner done in framing the assessment for AY 2003-04. The observations and findings by the tribunal would be fully applicable and valid for the impugned assessments as well. If aggrieved by the said decision by the tribunal, the Revenue could carry the matter before a higher appellate forum. We, therefore, consider it fit and proper under the circumstances to follow the order of this tribunal in the case of Matha Enterprises (supra); the facts and circumstances of the case being admittedly identical. We decide accordingly. 5. In the result, the appeals by the Revenue for AYs 2001-02 and AY 2002-03 are dismissed. The assessee’s appeal for AY 2007-08 is dismissed, while that for AY 2003- 04 is partly allowed. For the other years, the assessee succeeds.
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