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Income Tax - Case Laws
Showing 81 to 100 of 190 Records
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2012 (1) TMI 282
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... ... ..... ssment in the light of provisions u/s. 153A of the Act. The requirement of penalty u/s. 271(1)(c) as per the law laid down in the case of apex court in the case of Reliance Petroproducts (P) Ltd. (supra) is to be considered in the light of return filed by the assessee in response to notice u/s. 153A of the Act. The assessment was made by the AO on the basis of admission of assessee and not on basis of any material found during the course of search. Therefore, the case under consideration, is not the case that the assessee has furnished inaccurate particulars or concealed any particulars of income in the return of income filed u/s. 153A of the Act. When there is no such finding in respect of return filed by the assessee in response to notice u/s. 153A we find that penalty u/s. 271(1)(c) cannot be levied. We therefore, cancel the penalty of ₹ 78,750/- levied u/s./ 271(1)(c). 5. In the result appeal of the assessee is allowed. Order pronounced in Open Court on 13.01.2012.
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2012 (1) TMI 279
Disallowing development expenses - Held that:- It is useful to note that the assessee has used the percentage completion method. When an assessee follows the percentage completion method then at the completion of the project, the assessee has to make up the accounts. At that relevant time, the assessee can offer surpluses from the provisions or may claim the deficit in case the actual expenditure is more than the provisions. Hence, the revenue is not without any remedy in case the provision is excessive.
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2012 (1) TMI 278
Addition of proportionate interest being interest free loan to its subsidiary concern - commercial expediency for assessee to advance such loan - Held that:- Since the ld. CIT(A) while deleting the disallowance has followed the order of his predecessor for A.Y. 2004-05 and since the Tribunal has restored the issue to the file of the A.O. for fresh adjudication, therefore, we deem it proper to restore this issue to the file of the A.O. with a direction to adjudicate the same in the light of the direction of the Tribunal in assessee’s own case for A.Y. 2004-05 and in accordance with law after giving due opportunity of being heard to the assessee. The ground raised by the Revenue is accordingly allowed for statistical purposes.
Addition of expenditure on corporate club membership fees - Held that:- Respectfully following the order of the Tribunal in assessee’s own case and in absence of any contrary material brought to our noticeby the ld. D.R. we set aside the order of the ld. CIT(A) on this issue and direct the A.O. to delete the disallowance.
Addition u/s 14A - Held that:- We restore the issue back to the file of the A.O. with a direction to adjudicate the same afresh in the light of the decision of the Hon’ble jurisdictional High Court in the case of Godrej Boye Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly.
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2012 (1) TMI 277
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... ... ..... t Order in invoking the Section 40A(3) of the I.T. Act, 1961 and treating the cash deposit into the payee’s bank account as direct cash payment to the payee and failed to consider the object and purpose of Section 40A(3) of the Income Tax Act, 1961 ?” o p /o p Mr. Chatterjee waives service of notice of appeal. o p /o p The appellant shall file requisite number of paper book within four weeks from date. o p /o p Liberty to mention. o p /o p We are told that the attached amount has been taken away by the department from the bank concerned. We, therefore, direct the department to keep this amount separately and it would be abide by the result of this appeal. The stay application is, therefore, disposed of. o p /o p Since no affidavit-in-opposition to the application has been filed by the respondent, allegations contained therein are not admitted by them. o p /o p All parties concerned are to act on a signed photocopy of this order on the usual undertakings. o p /o p
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2012 (1) TMI 276
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... ... ..... appeal. 4. In reply, the ld. DR supported the order passed by the ld. CIT. 5. We have heard both the parties and carefully considered their submissions. As rightly observed by the ld. CIT, the assessee follows mercantile system of accounting. However the fact remains that the insurance premium fell due in the year under appeal and was therefore paid by the assessee. In the mercantile system of accounting, the expenses are liable to be allowed on accrual basis. The expenditure is said to arise as soon as it is incurred, i.e., liability to pay arises and is recognized in the books of account. In the present case, the liability to pay insurance premium arose in the year under appeal. It was also paid in the year under appeal. The expenses were also recognized in the books of account. In this view of the matter, the order of the ld. CIT in disallowing the insurance premium is vacated. Appeal filed by he assessee to the aforesaid extent is allowed. Order pronounced on 11.01.2012
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2012 (1) TMI 275
Exemption u/s 54 - utilization of capital gains proceeds in the residential house only within the time provided u/s 139 - Held that:- The exemption should be forfeited for a technical breach does not appear to be the correct proposition particularly since the appellant pleads that he was not aware of the requirement ot invest in the capital gains account scheme and also states that his objective was to invest in a residential house which is apparent from the fact that he has purchased a land and also constructed a house thereon. It is also seen that section 54E (since deleted) and sections 54EC and 54ED which require investment of the proceeds in specified assets, specifically provides that the exemption would be forfeited if the specified asset is given as a security for taking loan. In section 54, we do not find any such provision and therefore in our considered view the purpose of section 54(2) is not to deprive the assessee of an exemption but only to avoid rectification. The ultimate object of the section having been satisfied namely to encourage construction of houses, we are convinced that the utilization of the funds in constructing a residential house should be treated as sufficient compliance of section 54 and therefore hold that the appellant is entitled to the exemption u/s 54 even in respect of the amount invested by way of construction of the residential house - Decided in favour of assessee.
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2012 (1) TMI 274
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... ... ..... e has been issued by order dated 29.11.2010 we have not examined the question whether or not the said amount should be disallowed under Section 40A (2) of the Act. 4. On the question of deduction of tax at source, the contention of the Revenue is that tax at source should have been deducted under Section 194H at the rate of 5 (it appears that w.e.f. 1.6.2007 the rate of tax has been increased to 10 ). The respondent company had deducted TDS on the commission under the head salaries under Section 192 of the Act. The TDS deducted under Section 192 is at the normal rate which is much higher than either 5 or 10 . In these circumstances, we feel that the contention of the Revenue is hypertechnical. TDS has been deducted at a higher rate under Section 192 on the footing that the commission is part of salaries . Thus the contention of the Revenue that Section 40(a)(ia) should have been applied does not have any merit and has to be rejected. 5. The appeals are accordingly dismissed.
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2012 (1) TMI 268
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... ... ..... de by the AO, the disallowance is restricted to ₹ 90,000/-.” 20. After considering the submissions and perusing the material on record, again we find no infirmity in the finding of ld. CIT (A) as ld. CIT (A) has ascertained the factual aspects that the payments were on account of reimbursement of expenses, therefore, provisions of section 194C were not applicable and accordingly there was no liability to deduct tax under section 40(a)(ia) of the Act, to which the additions were made by AO were reduced. The ld. CIT (A) has reduced the addition to ₹ 90,000/- on which the TDS was liable to be deducted. Accordingly, to this extent we hold that ld. CIT (A) was justified and about remaining disallowance deleted by ld. CIT (A), we confirm his order as finding of ld. CIT (A) remained uncontroverted. 21. In the result, appeal of the assessee is allowed in part and the appeal of the department is dismissed. 22. The order is pronounced in the open court on 09.01.2012.
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2012 (1) TMI 267
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... ... ..... nternet charges of the communication expenses is attributable to the export of software outside India. 8.2 That the assessing officer erred on facts and in law in making the adjustment of communication expenses, viz., link charges of ₹ 24,06,287 and Insurance expense of ₹ 3,32,329 attributable to delivery of computer software outside India from “the export turnover” in terms of clause (iv) of Explanation 2 of section 10A of the Act without making the similar adjustment from “the total turnover” resulting into absurd and unintended results.” 2. In this view of the situation, after hearing both the parties, we find that the aforementioned grounds have not been adjudicated. Therefore, we allow the Misc. Application filed by the assessee for the limited purpose of adjudication of aforementioned grounds. 3. The Misc. Application filed by the assessee is allowed in the manner aforesaid. 4. Pronounced in the Open Court on 6th January, 2012.
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2012 (1) TMI 266
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... ... ..... by the order of the learned CIT(A), the assessee is in appeal before us. At the time of hearing, the learned counsel of the assessee submitted that the AO has passed the order without giving proper opportunity of being heard to the assessee, as he took the assessment proceedings at the fag end of the year when the case was getting time-barred. He accordingly prayed that in the interest of justice and fair play, the mat ter may be restored to the file of the AO for re-adjudication. 4 The learned DR did not object to this submission made by the learned counsel of the assessee. 5 Having heard both the parties, we restore the matter back to the file of the AO for fresh adjudication. Since the issues involved in the assessee’s appeal are restored back to the file of the AO, the Revenue’s appeal for the year under consideration also stands restored. 6 In the result, both the appeals are allowed for statistical purpose. Order pronounced in the court today on 31-01-2012
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2012 (1) TMI 265
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... ... ..... ra 9 of its appellate order allowed the claim of assessee as under “9. I have considered the submissions of the A/R and gone through the assessment order. From the facts stated hereinabove it is manifest that the appellant continued to carry on the business and did not stop it. In the immediately succeeding year itself it has made export to the tune of ₹ 20.35 crores. The year under appeal was only a period of full & dormancy. I am therefore of the considered view that the expenditure for maintaining the establishment and other misc. expenses were incurred for the purpose of business and are allowable deduction u/s. 37(1). The court decisions cited by the Ld. A/R also support such view. The disallowance of expenses made by the A.O. is deleted. Ground No.3 is allowed.” We find no infirmity in the order of CIT(A) and this issue of revenue’s appeal is also dismissed. 8. In the result, appeal of revenue is dismissed. 9. Order pronounced in open court.
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2012 (1) TMI 264
Income from sale of shares - Long Term Capital Gain - Held that:- In the case on hand, we find that the assessee has earned substantial income by way of dividend and also that the assessee has not borrowed any funds for making purchases in shares. The entire investment was from own funds. The transactions are delivery based transactions. Just because the assessee maintains multiple portfolios, it cannot be concluded that the assessee is a trader. The mere fact that the transactions are voluminous, does not lead to a conclusion that the assessee has traded in shares. As a prudent investor, the assessee may have sold certain shares within a short period, as in her opinion, the sale had been made at the opportune time. The assessee, in this case, has not valued her investments at cost or net realisable value whichever is less and claimed losses as in the case of stockin- trade. On this factual matrix, we uphold the findings of the first appellate authority that income from sale of shares which are held by the assessee for more than one year, is to be assessed as income earned from long term capital gain.
Treating short term capital gain earned by the assessee as business income - Held that:- As the assessee is an “Investor”, we restore ground no.1, which is on the issue of treating short term capital gain earned by the assessee as business income, to the file of Assessing Officer for denovo adjudication in accordance with law. Thus, this ground is allowed for statistical purposes.
Treatment of losses on derivative transactions as non-speculative loss by the first appellate authority - Held that:- We find that the issue is covered against the assessee and in favour of the Revenue by the decision of a Special Bench of the Tribunal in Shree Capital Services v/s ACIT [2009 (7) TMI 172 - ITAT CALCUTTA] wherein it is held that clause (d) of section 43(5) of the Act cannot be held to be clarificatory and it applies only to assessment year 2006-07 and onwards. The Hon'ble Jurisdictional High Court in CIT v/s Bharat R. Ruia [2011 (4) TMI 37 - BOMBAY HIGH COURT] impliedly upheld the Special Bench decision. At Para-37, the argument that amendment by way of insertion of clause (d) to the proviso to section 43(5), is clarificatory and, hence, retrospective was rejected by the Hon’ble Court. In view of the above, we allow grounds no.2 to 5 of the Revenue.
Disallowance under section 14A - Held that:- disallowance in question is excessive. This issue is also restored to the file of Assessing Officer for fresh adjudication keeping in view the judgment of Hon'ble Jurisdictional High Court in Godrej and Boyce Mfg. Co. Ltd. v/s DCIT, [2010 (8) TMI 77 - BOMBAY HIGH COURT].
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2012 (1) TMI 263
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... ... ..... al to that of the cases decided by the Tribunal (supra), respectfully following the same, we set aside the order of the CIT(A) and delete the additions made by the AO u/s 68 of the Act in both the years under consideration. 12. Ground No. 2 raised by the assessee in AY 2006-07 pertaining to treating business loss as speculation loss by invoking the provisions of Explanation to section 73 of the Act, has not been pressed by the learned counsel for the assessee at the time of hearing, therefore, this ground is dismissed as not pressed. 13. Ground No. 2 in AY 2005-06 and Ground No. 3 in AY 2006-07 are pertaining to charging of interest u/s 234B of the Act. Since levy of interest u/s 234B is consequential in nature, the AO is directed to give consequential relief. 14. In the result, appeal being ITA No. 1715/Mum/09 for AY 2005- 06 is allowed and the appeal being ITA No. 3858/Mum/09 for AY 2006-07 is partly al lowed. Pronounced in the open court on this 25th day of January, 2012.
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2012 (1) TMI 262
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... ... ..... f the Act is to be looked into by the Assessing Officer during the course of assessment proceedings. The Tribunal further held that secondly at the level of granting registration by the Commissioner of Income Tax, the absence or presence of the surplus is not relevant. We find that the issue raised in the present appeal is identical to the issue considered by the Tribunal in Surya Educational & Charitable Trust (supra) vide order dated 30.11.2009. Following the said ratio laid down by the Tribunal we direct the Commissioner of Income Tax to grant registration under section 12AA of the Income Tax Act to the assessee society for carrying on the objects of running the educational institution. The grounds of appeal raised by the assessee are allowed. The registry is directed to annex the copy of the order in ITA No. 223/Chd/2009 for ready reference. 8. In the result, the appeal filed by the assessee is allowed. Order Pronounced in the Open Court on 20th day of January, 2012.
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2012 (1) TMI 261
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... ... ..... the lower authorities. 8. After hearing the rival submissions and on careful perusal of the material available on record, it is observed that there is no new material or information, which has come with the knowledge of the Assessing Officer to re-initiate the proceedings. Since the Assessing Officer has derived the facts/material placed by the assessee himself during the course of original assessment, this will not constitute the new information. Since in this case regular assessment was made u/s. 143 of the Act, presumption can be raised that such an order has been passed on application of mind. Therefore, in our considered opinion this will tantamount to change of opinion on the same set of facts, which were available on record. Therefore, we are of the considered view that re-assessment framed by the Assessing Officer is not sustainable in the eyes of law. Therefore, we quash the orders of the revenue authorities. 9. In the result, the appeal of the assessee is allowed.
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2012 (1) TMI 260
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... ... ..... Thus, the assessee is not required to deduct tax at source as held by Hon'ble Supreme Court in the case of GE India Technology Centre Pvt. Ltd. (supra). In view of the above legal position, we allow ground No. 1 of the assessee. 8. Coming to ground No. 2, the undisputed fact is that the consultancy fees was paid, to M/s. Ernst & Young, to submit feasibility report on setting up of a new channel. In our opinion, the expenditure is in the revenue field, as it did not bring any new assets into existence nor did it provide any enduring benefit to the assessee in the capital field. It did not touch the structure of fixed capital. We rely on the decision of Hon'ble Supreme Court in the case of Empire Jute reported in 124 ITR 1. Case laws relied upon by the first appellate authority are distinguishable. In the result, this ground of the assessee is also allowed. 9. In the result, appeal of the assessee is allowed. Order has been pronounced on 13th Day of January, 2012.
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2012 (1) TMI 259
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... ... ..... awyers no steps were taken to get back the papers. We do not know for what reason, that may be various, but it is within the knowledge of the department, however, we cannot probe into the mind of the officials of the department. We are told that involvement of revenue is to the extent of ₹ 63 lac. In view of this situation we reluctantly condone the delay and this application is allowed upon payment of cost assessed at ₹ 10,000/- to be paid by the appellant department within a period of three weeks from date to the respondent. Such cost shall be realized without fail from the officials and staffs of the department who were negligent in not taking back the papers from the erstwhile learned Lawyers, which was kept for about long four years. This matter will come up for admission hearing four weeks hence. However, in default of payment of cost as aforesaid obviously appeal will stand dismissed automatically. In the event cost is paid the matter will be reconsidered.
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2012 (1) TMI 258
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... ... ..... Hon’ble jurisdictional High Court in the case of M/s. Exide Industries Ltd. (supra). It was pointed out by the ld. DR that the Hon’ble Apex Court in SLP (Civil) 22889 of 2008 has stayed the operation of the decision of the Hon’ble jurisdictional High Court. In view of the above, we set aside the orders of the authorities below on this point and restore the matter back to the file of the AO with the direction that he will readjudicate this issue as per decision of the Hon’ble Apex Court in the case of M/s. Exide Industries Ltd. (supra)”. Respectfully following the same we set aside the orders of authorities below on this point and restore the matter back to the file of Assessing Officer for adjudication as per the decision of the Hon’ble Apex Court in the case of M/s. Exide Industries Ltd. (supra). 6. In the result, all the appeals filed by the assessee are allowed for statistical purposes. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2012.
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2012 (1) TMI 257
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... ... ..... or the advertisement of “Rasna” products and the same brand is being used by other concerns of the assessee group. Hence the AO has rightly disallowed 30 of advertisement expenses. The action of AO should have been upheld.” 3 At the time of hearing, both the parties agreed that the facts in these two assessment years are identical to the facts in AY 2004-05. Since, vide ITA no.1032/Ahd/2009 for AY 2004-05, we have dismissed the ground raised by the Revenue, following the same, we dismiss this ground of the Revenue for these two years also. 4 In the result, the Revenue’s appeals are dismissed. Order pronounced in the court today on 31-01-2012
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2012 (1) TMI 256
Addition of advertisement expenses - Held that:- AO is not justified in disallowing 30% of the advertisement expenses
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