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Income Tax - Case Laws
Showing 121 to 140 of 190 Records
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2012 (1) TMI 232 - ITAT MUMBAI
Denial of deduction u/s 80-IB - manufacturing - Held that:- When the coordinate bench of the Tribunal in the case of Sheetal Diamonds Ltd. (2011 (3) TMI 1044 - ITAT, MUMBAI ) has held that cutting and polishing of diamonds amounts to manufacture and deduction should be allowed, there is no reason to deny deduction under similar circumstances. As such we overturn the impugned order on this issue and order for the granting of deduction u/s 80-IB in all the years in question.
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2012 (1) TMI 231 - ITAT AHMEDABAD
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... ... ..... cord in the assessment proceedings. In the light of above discussion, we do not agree with the contention of the Ld. D.R. After considering the totality of the case we admit the additional ground filed by the assessee. However, we notice that the Revenue did not get occasion to examine the issue in detail which has been raised by the assessee in the Additional Ground. Considering the principles of natural justice, we think proper to send back this matter to the file of CIT (A) with a direction to record relevant facts of the Additional Ground and decide the same in accordance with law after providing the reasonable opportunity of hearing to both the sides. 8. These cross appeals have been decided on legal ground raised by the assessee in the form of Additional Ground. Therefore, we do not express any opinion on the original grounds raised in both the appeals. 9. In the result both the appeals are allowed for statistical purposes. Order pronounced in Open Court on 13-01-2012.
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2012 (1) TMI 229 - ITAT PUNE
Challenge the valuation determined by the DVO as per the provisions of s. 50C(2) - business of construction activities/promoters - sale consideration of basement Nos. 2 and 3 as - valuation of the stamp by Departmental Valuation Officer (DVO) - fair market value (FMV) of the property - calculating the capital gain - HELD THAT:- In the instant case we find that as against the value of ₹ 28,73,000 adopted by the stamp valuation authorities, the DVO has determined the FMV on the date of transfer at ₹ 20,55,000. This itself shows that there is wide variation between the two values. Further, the value adopted by the DVO is also based on some estimate. We find that the difference between the sale consideration shown by the assessee at ₹ 19,00,000 and the FMV determined by the DVO at ₹ 20,55,000 is only ₹ 1,55,000 which is less than 10 per cent. The Courts and Tribunals are consistently taking a liberal approach in favour of the assessee where the difference between the value adopted by the assessee and the value adopted by the DVO is less than 10 per cent.
Since the difference is less than 10 per cent and considering the fact that valuation is always a matter of estimation where some degree of difference is bound to occur, we are of the considered opinion that the AO in the instant case is not justified in substituting the sale consideration at ₹ 20,55,000 as against the actual sale consideration of ₹ 19,00,000 disclosed by the assessee. We, therefore, set aside the order of the CIT(A) and direct the AO to take ₹ 19,00,000 only as the sale consideration of the property. The grounds raised by the assessee are accordingly allowed.
In the result, the appeal filed by the assessee is allowed.
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2012 (1) TMI 228 - ITAT PUNE
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... ... ..... ssee in the return of income also does not correspond to the aforesaid principles. Under these circumstances, we, therefore, deem it fit and proper to set-aside the order of the Commissioner of Income-tax (Appeals) and to remit the matter back to the file of the Assessing Officer, who shall revisit the working of book profit for the purposes of section 115JB in so far as it relates to clause (iii) of Explanation 1 to section 115JB(2) of the Act. The Assessing Officer shall carry out the aforesaid limited exercise in accordance with our aforesaid discussion and after allowing the assessee areasonable opportunity of being heard as per law.” Following the parity of reasoning, we set aside the order of the Commissioner of Income-tax (Appeals) and restore the issue to the file of the Assessing Officer with similar directions as extracted above. 4. In the result, appeal of the assessee is partly allowed. Decision pronounced in the open court on this day of 31st January, 2012
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2012 (1) TMI 227 - ITAT MUMBAI
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... ... ..... eme Court judgment in Ajanta Pharma, 327 ITR 305 (SC). Thus, this appeal comes before us for the limited purpose of adjudicating ground no.4. Accordingly, we now proceed to decide ground no.4, of this appeal. 3. Both parties agree before us that the issue stands covered in favour of the assessee and against the Revenue by the judgment of Larger Bench of the Hon'ble Supreme Court in CIT v/s Bhari Information Technology Systems Pvt. Ltd., (2012) 17 Taxman.com (SC). The view of the Tribunal that deduction claimed under section 80HHC had to be worked out on the basis of adjusted book profit under section 115JA and not on the basis of profits computed under regular provisions of law applicable to computation of profits and gains of the business, has been upheld by the Supreme Court. Respectfully following this judgment, the ground raised by the Revenue is dismissed. 4. In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 25th January 2012.
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2012 (1) TMI 226 - ITAT JODHPUR
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... ... ..... herefore, we are not inclined to discuss those decisions in detail as on the facts of the present case discussed above, it is amply proved that the AO has made detailed inquiry before allowing deduction under s. 10B of the Act. It is worth mentioning here that the order of the learned CIT(A) for the asst. yr. 2005-06 has been approved by the Tribunal. Copy of the Tribunal's order decided in ITA No. 614/Jd/2008, for the asst. yr. 2005-06 vide order dt. 20th Nov., 2009, is placed in the paper book at pp. 47 to 63, wherein the issue has been discussed in detail and then only the order of the CIT(A) was confirmed. Therefore, for this reason also, it cannot be said that the view adopted by the AO was incorrect. 6.2 In view of the above facts and circumstances of the case, we set aside the order of the learned CIT and restore the order of the AO passed originally. Accordingly, the appeal of the assessee is allowed. 7. In the result, the appeal filed by the assessee is allowed.
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2012 (1) TMI 225 - ITAT JODHPUR
Revision u/s 263 - Held that:- CIT noticed that during the course of proceedings u/s 263 of the Act the amount shown is more as compared to the amount shown by the assessee in its books of accounts. The difference is on account of discount which according to the assessee is not included in the receipts mentioned in the TDS certificate. According to the ld. CIT, the AO has not examined this issue and the AO has not even discussed the issue in the assessment order. We have noticed from the assessment order that the AO issued a detailed query letter on 2-11-2006 and in response to that query letter, the assessee filed the written submission before the AO. The paper book filed before us by the assessee does not contain either query letter or reply submitted before the AO. The details have been filed before the AO during the course of set aside assessment proceedings. As a result of order u/s 263 of the Act, it is clear from the record that the ld. AR has not been able to satisfy us that AO made enquiry during the course of assessment proceedings. If the AO fails to make any enquiry then the order is definitely erroneous and prejudicial to the interest of the revenue.
Since the AO has not applied his mind, therefore, we do not feel to record the findings that reconciliation filed by the assessee is correct. Hence, we hold that the ld. CIT was justified in passing the order u/s 263 of the Act
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2012 (1) TMI 224 - ITAT MUMBAI
Disallowance of interest under section 36(1)(i) - Held that:- Under the provisions of section 36(1)(iii), any interest on borrowings made for acquisition of assets for extension of existing business is required to be capitalized till the asset is first put to use.
In this case, assessee had made total advance payments of ₹ 1,53,25,5000/- for acquisition of two new premises out of payment made during the year was ₹ 10,06,000/- and balance payment had been made in the earlier years. Authorities below have proceeded with the presumption that the assets had been acquired from borrowed funds. However, no basis for such finding has been given. The assessee has pointed out that most of the payments had been made in earlier years in which year there was no disallowance of interest. Therefore, in the earlier years, the payments were made from own funds. During the year, payment was only ₹ 10.06 lacs. Assessee had own funds of ₹ 3.95 crores and interest free borrowing of ₹ 7.92 crores. In addition, current year profit was itself ₹ 96.00 lacs. Considering these facts in our view source of current payment is easily explained from own funds. Therefore, when the payment for acquisition of assets have been made from own funds, there cannot be any case of disallowance of interest. We, therefore, set aside the order of CIT(A) and delete the addition made.
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2012 (1) TMI 223 - ITAT COCHIN
Deduction u/s 80P(2)(a)(i) - interest received by the assessee from the deposit made in Kerala Government Treasury Small Savings Fixed Deposit Scheme - Held that:- Since Government of India has withdrawn India Vikas Patra, as a small savings instrument, funds invested at the discretion of the bank is one of the activities of the banking as per the Banking Regulation Act. Since the assessee co-operative society is in the business of banking the investment in the state promoted treasury small savings fixed deposit certificate scheme is a banking activity, therefore, the interest accrued on such investment has to be treated as business income in the course of its banking activity. Once it is a business income, the assessee is entitled for deduction u/s 80P(2)((a)(i). therefore, this Tribunal is of the opinion that the judgment of the Larger Bench of the apex Court in Karnataka State Cooperative Apex Bank (2001 (8) TMI 9 - SUPREME Court) is applicable to the facts of this case. Appeal of the revenue stands dismissed.
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2012 (1) TMI 222 - ITAT JAIPUR
Trading addition deleted as relying on previous year of assessee
Deemed dividend addition - Held that:- As already held that transactions are of business in nature, therefore, provisions of section 2(22)(e) cannot be applied. In view of these facts and circumstances and in view of the decision of Tribunal in case of sister concern for the same year in which we have held that transactions are business in nature, we uphold the order of ld. CIT (A) indeletingthe addition
Addition u/s 40A(3) - Held that:- There is no infirmity in the finding of ld. CIT (A) as the payment to the transporter on each occasion does not exceed ₹ 20,000/-. Therefore, in our considered view, addition under section 40A(3) could not have been made. Accordingly, we confirm the findings of ld. CIT (A)
Disallowance of telephone expenses - Held that:- We noted that expenditure incurred under this head is exclusively for the purpose of business. The AO has not pointed out any particular expenses which are not for purposes of business. Looking to the turnover of the assessee and other details kept by assessee, we hold that ld. CIT (A) was justified in deleting the addition.
Depreciation @80% on windmill allowed
Addition on account of interest expenses - Held that:- The ground taken by the department is wrong as ld. CIT (A) has remitted the matter back to the file of AO to work out disallowance in view of provisions of section 14A of the Act. The assessee has also challenged the finding of ld. CIT (A) by ground No. 11 and 12 in which it has been held that provisions of section14A are not applicable on the facts of the present case.
Vehicle running & maintenance expense allowed
Disallowance of packaging material expenses
Disallowance of legal and professional expenses - Held that:- On perusal of ledger account of legal and professional expenses, it is noticed that the expenditure is incurred on payment of monthly retainership charges to various consultants/professional charges paid for obtaining consultancy/court charges for appearing and arguing the matters at various levels. All the confirmations have been filed. There is no dispute about rendering of services. Therefore, we hold that there is no question of disallowing of ₹ 50,000/- on adhoc basis. Accordingly, we delete the addition. The ground of the assessee is allowed.
Addition on account of unverified sundry creditors - Held that:- Assessee deserves to succeed in this ground. There is no dispute about liability of the assessee which is coming from last year. This liability has not been ceased to exist
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2012 (1) TMI 221 - ITAT CHENNAI
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... ... ..... mentioned Hon'ble Madras High Court’s decision. In the assessment order, the date of processing of return u/s 143(1) of the Act has not been mentioned and the assessment was passed u/s 143(3) on 31.3.2005 which was subjected to re-assessment proceedings and further assessment order was passed u/s 143(3) r.w.s 147 on 23.12.2009. In these circumstances, we are unable to decide the issue and for that matter, the ground raised by the Revenue in this regard as Ground No.3 (3.1 to 3.4) has to be dealt with after recalling the order to that extent. Accordingly, in the given facts and circumstances of the case, where Hon'ble jurisdictional High Court’s decision remained to be considered, we recall the order in question for the limited purpose of deciding this issue; and direct the Registry to fix the appeal for hearing in due course. 5. In the result, the miscellaneous petition filed by the assessee stands allowed. Order pronounced in the open court on 31.1.2012.
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2012 (1) TMI 220 - ITAT JODHPUR
Unexplained cash credit u/s 68 - sum credited in books of accounts - Held that:- As per section 68 of the Act where any sum is found credited in the books of an assessee and the assessee offers no explanation, the sum so credited may be charged to income tax as the income of the assessee. In this case, no sum has been credited in the books, as the payment of purchase of shares was made and the sale proceed of shares has been received through bank. Thus, it is proved that the sale proceed is against the purchase of shares. Therefore, the amount cannot be treated as cash credit u/s. 68. See ACIT Versus Shri Raj Kumar Soni [2011 (12) TMI 597 - ITAT JODHPUR]
Undisclosed commission payment - Held that:- It is seen that is it very common thing, that a broker has provided the services for purchase and sale of shares and has deducted his brokerage from the sale proceed itself and paid to the appellant the balance amount. Due to this reason, the appellant has not shown payment of brokerage payment. Therefore, the brokerage addition of ₹ 2,250/- made by the AO is deleted.
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2012 (1) TMI 219 - ITAT JAIPUR
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... ... ..... he past, assessee has shown GP rate at 22.91 and 23.9 for assessment years 2005-06 and 04-05 respectively. Reason for decline in GP rate, it is stated that in earlier year there was manufacturing activity done by the assessee. However, in the year under consideration, there is trading activity only. Therefore, the GP rate has declined. Keeping in view all these facts and circumstances and taking into consideration the unverifiable purchases, we are of the view that if a trading addition of ₹ 10,000/- is sustained that will meet the ends of justice. We order accordingly. 4. In the result, appeal of the assessee is allowed in part. 5. The order is pronounced in the open court on 09.01.2012.
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2012 (1) TMI 218 - ITAT JAIPUR
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... ... ..... e in the case of 05 parties. The AO in his order has given the gross profit rate disclosed by the assessee for the assessment year under consideration and for the last two preceding years. In the last two preceding years, the gross profit rate was 2.09 and 1.26 as compared to 1.37 in the year under reference. It is not the case of the AO that the assessee has not disclosed correct gross profit rate on purchases than unverifiable purchases. The assessee has made sales of around ₹ 11.09 crores. One has to consider the past history of the case for considering the trading addition. It is also true that the commission is to be paid in respect of bogus bills. Hence, the trading results cannot be accepted. However, looking to the quantum of the bogus purchases, we feel that it will be fair and reasonable to restrict the trading addition to ₹ 40,000/-. 3. In the result, the appeal of the assessee is partly allowed. The order is pronounced in the open Court on 25-01-2012.
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2012 (1) TMI 217 - ITAT JAIPUR
Deduction u/s 10BA allowed
Addition on account of delay in deposit of employee’s contribution to PF - allowable deduction within the meaning of Section 36(1) read with Section 2(24)(x) - Held that:- No disallowance can be made in respect of Employers P.F. Contribution and Employees P.F. Contribution in case such contributions are paid before due date of filing. It is not in dispute before us that the contributions have not been paid before due date of filing of the return. We therefore, hold that the ld. CIT(A) was justified in deleting the Employers P.F. Contribution and Employees P.F. Contribution
Addition on account of disallowance of bad debt u/s 36(1)(vii) - Held that:- The issue before us stands covered by the decision of Honb'le Apex Court in the of TRF Ltd. vs CIT [2010 (2) TMI 211 - SUPREME COURT]. The Section itself mentions that the assessee can claim deduction on account of writing off any bad debt or part thereof. Hence, it was not necessary for the assessee to have written off the entire debt. The business decision is to be taken by the assessee and the onus was on the Revenue to have established that writing off of part of the debt was not true. The onus was on the Revenue to have collected the material to suggest that writing off of bad debt was for the purpose of evading the tax. We therefore, feel that the ld CIT(A) was justified in deleting the addition.
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2012 (1) TMI 216 - ITAT JAIPUR
Capital account balance received by the appellant on account of his retirement from the firm M/s. Krishna Villa Apartments - taxability - Held that:- The Finance Minister in the budget speech for the year 2003 stated that no confession shall be obtained during search and seizure operation. The instructions were followed by CBDT by issue of a circular on the lines desired by the Finance Minister. There can be an estoppel on the issue of the facts but there cannot be estoppel on the principle of law. It is not the case of the revenue that the assessee was not disclosing the amount received as a result of retirement from the firm. The assessee obtained the legal advice and was of the opinion that such revaluation is capital receipt which is not liable to tax. Hence, we feel that income cannot be added simply on the basis of surrender. The statement recorded u/s 132(4) can be rebutted by the assessee and the case of the assessee is that the amount is not liable to tax.
After considering various case laws relied upon by both the parties, we feel that the issue is to be decided in favour of the assessee because if two constructions are to possible then one has to adopt the construction which is favourable to the assessee. We had also noticed the distinguishing features in this case and it is not a simple case in which other partners joined the firm. This is a case where another firm has been taken over by the firm in which the assessee was a partner. Both the firms were having intangible rights arising from development agreement and right of constructing a housing / commercial complex and none of the firm valued such rights in the form of monetary consideration. Such rights remained with the firm even after retirement of the assessee. We therefore, hold that the ld. CIT(A) was not justified in confirming the addition of ₹ 5,24,47,943/-.
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2012 (1) TMI 215 - ITAT CHENNAI
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... ... ..... e of S. Harinivas Chowdry v. ACIT 246 ITR 256 (Mad) has held that the inference of the escapement should be clearly indicated in the ground for reopening a completed assessment. The reasons for reopening must be objective and not vague, farfetched or fanciful. Further, the Hon’ble Delhi High Court in the case of Sarthak Securities Co. P. Ltd. v. ITO 2010 329 ITR 110 (Del) has held that the reasons recorded should be clear and unambiguous and not suffer from any vagueness. 7. In view of the above, in our considered opinion reopening of the assessment on the above recorded reasons cannot be sustained. We, therefore cancel the impugned assessment and allow the ground of the appeal of the assessee. 8. In view of our above decision, the other grounds of appeal taken in this appeal by the assessee have become merely academic in nature and hence infructuous. 9. In the result, the appeal of the assessee is allowed. Order signed, dated and pronounced in the Court on 27.01.2012.
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2012 (1) TMI 214 - ITAT DELHI
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... ... ..... to be decided on merit. The learned counsel for the assessee was unable to controvert the submissions made by the Learned DR. 2. We have duly considered the contentions of the learned DR and gone through the record carefully. When the appeal of the revenue was dismissed for want of approval of COD, the mechanism to get such approval was available, however, the Hon'ble Supreme Court in its order dated 17.2.2011 has dissolved the mechanism of COD, therefore, revenue cannot get such approval. In these situations, its appeal deserves to be decided on merit. We recall our order dated 27th September, 2010 and direct the Registry to restore the appeal bearing ITA No. 3557/Del/2010 and Cross-Objection No.291/Del/2010 for assessment year 2007-08 to their original number. The registry shall fix the appeal and the cross objections for hearing on 04.04.2012. 3. In the result, the miscellaneous application of the revenue is allowed. Decision pronounced in the open court on 20.01.2012
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2012 (1) TMI 212 - ITAT MUMBAI
Levying penalty u/s 271(1)(c) - treating income from sale and purchase of shares as capital gain - Held that:- The penalty has been levied by the reason of treatment of capital gain declared by the assessee as business income, which clearly shows that as far as the quantum on account of capital gain or expenditure, no mistake was found by the Assessing Officer, but there was a difference of view and opinion as the assessee declared said income as short term capital gain, which was treated by the Assessing Officer as business income. Accordingly, the claim of the assessee treating the income from sale and purchase of shares as capital gain cannot be treated as impossible view or absolutely illegal and incorrect treatment of income.
Even for the subsequent year i.e. AY 2006-07, the income admitted by the assessee as capital gain was accepted by the Assessing Officer. Therefore, the issue of treatment of the income is a debatable issue and the view taken by the assessee in treating the same as capital gain, though was not acceptable but could not ipso facto lead to the conclusion that the assessee concealed the particulars of income or furnished inaccurate particulars of income. Accordingly, the penalty is not justified in the facts of the present case. Appeal filed by the assessee is allowed.
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2012 (1) TMI 211 - ITAT PUNE
Eligibility of deduction of expenses - claim made only during the course of assessment proceedings and it was neither claimed in the return of income and nor by way of filing a revised return of income - Held that:- The claim of the assessee has been wrongly refused to be entertained at the threshold itself, by the lower authorities. Since none of the authorities below has examined the claim of the assessee on merits, we find it appropriate to restore it back to the file of the Assessing Officer who shall examine the claim of the assessee on merits, after allowing the assessee a reasonable opportunity of being heard in support of its claim. Needless to mention, it is a settled position of law that only such expenditure can be permitted deduction which is incurred or the liability thereof has been crystalised in the relevant assessment year. The Assessing Officer shall, therefore, carry out the aforesaid exercise and pass a fresh order on this aspect in accordance with law.
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