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Income Tax - Case Laws
Showing 201 to 220 of 662 Records
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2012 (12) TMI 839
Gold deposit scheme, 1999 Redemption of Gold Bond - Capital Gain Long term capital gain or short term of capital gain Period of holding Cost of acquition Board's circular No. 415 - Assessee compute capital gain from cost and date of acquisition of the gold i.e. the date on which the gold has been received to assessee on the redemption of the gold bond AO computes capital gain from day and cost on which sum it was deposited with gold bond scheme Sale of gold acquired on the redemption of gold bond - Assessee deposited gold on 22.11.1999 - Redemption certificate of gold was issued on 22.11.2006 - Sold gold on 07.11.2007
Period of holding - Held that:- In the Board's circular No. 415, it was decided that for the purpose of computation of capital gains, the cost of acquisition of the gold would be the market value of the bonds on the date of redemption. On the date of maturity, i.e., 22.11.2006, the certificates of gold were redeemed, therefore, 22.11.2006 should be considered as the date of acquisition of the gold for the purpose of computation of capital gains.
Cost of acquition Held that:- The cost of acquisition of the gold is to be taken, i.e., value of gold on the date of redemption of certificates when a new capital asset has come into existence in possession of the assessee. Earlier, the gold in possession of the assessee had lost its identity when the same was converted into bonds. The Bonds cannot be treated as gold nor the gold can be treated as bonds.
Therefore, the cost and the date of acquisition of the gold for the purpose of computing the capital gains be taken as the date on which the gold has been received by assessee on redemption of the gold bonds, i.e., 22.11.2006. In favour of assessee
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2012 (12) TMI 838
Non-deduction of TDS on payment of Export Commission - disallowance u/s 40(a)(ia) - CIT(A) deleted the addition - Held that:- Incontrovertible evidence on record that the payment of commission has been made to agents outside India for services rendered outside India. The relationship between the assessee and the agents are principal to principal. The agents to not have any PE in India. Any tax that would accrue or arise is only outside the country and not in India. Very importantly this payment does not also fall within the ambit of Section 9(1)(vii) as the services under consideration is not for any technical service rendered nor could be taken as a job which was managerial in nature. It is only for facilitation of the sales of the assessee outside India. There was no agreement between the assessee and the agents and no such agreement was even required, since the transaction was of payment of commission for services rendered- as decided in CIT, A. P. Versus Toshoku Limited (and Another Appeal) [1980 (8) TMI 2 - SUPREME COURT] sales commission which were earned by the non resident for services rendered outside India could not be deemed to be income which had either accrued or arisen in India - Thus the assessee was held not to be liable for TDS under Chapter XVII-B of the Act - against revenue.
Addition on account of retention money - Held that:- The facts are that the customer retains money in respect of a completed contract for satisfactory performance of the contract for which the due diligence is undertaken. On demonstration of satisfactory performance of the contract, the money as released finally to the assessee, otherwise it has to repair the fault or pay liquidated damages. Thus such money withheld by the customer does not accrue as income to the assessee on completion of the turn-key project, the reason being that right to receive the money does not accrue to the assessee. This money accrues as income when the stipulated condition is satisfied which may be in the nature of showing satisfactory performance of the project. Therefore, the amount is taxable on accrual basis in the year in which stipulated condition is satisfied. Thus following the Tribunal's order in the assessee's own case for AY 2007-08 the amount in question does not accrue as income to the assessee on raising the bill after completion of the project. Rather, the income arises on performance of the conditionalities of the agreement - against revenue.
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2012 (12) TMI 822
Interest u/s 2(28A) - Discounting charges earned by Singapore Company from Indian parties by discounting bills of exchange and promissory note - Taxability and TDS u/s 195 - Held that:- Confirming the previous ruling of the Tribunal [2009 (10) TMI 70 - ITAT DELHI-B] reported in CIT v. Cargill Global Trading Ltd. [2011 (2) TMI 209 - DELHI HIGH COURT] the definition of 'interest' under section 2(28A) and analyzing the contents of two circulars issued by the CBDT No. 65 dated 02.09.1971 and subsequent one dated 22.03.1993 (Circular No. 647)(sic) that discounting charges did not amount to interest and was not subject to tax - deletion of disallowance u/s 40(a)(i) of the Income-tax Act - no substantial question of law arises.
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2012 (12) TMI 821
Deduction of interest expense - Against income from non-tonnage activities Tonnage tax Assessee is engaged in shipping business Assessee claim interest expenditure incurred wholly and exclusively for the purpose of its non-tonnage tax activities AO argued that loans availed for shipping activities had been diverted to non-tonnage tax activities Held that:- Loans which were availed for ship related activities have been diverted to non-tonnage tax activities. The expenditure incurred for earning such income has to be allowed against such income. Therefore, interest expenditure was incurred wholly and exclusively for the purpose of non-tonnage tax activities and allowed as deduction. In favour of assessee
Disallowance u/s 14A Rule 8D Computation of income Applicability of Rule 8D - prospectively or retrospectively - Expenditure incurred in relation to earning of exempt dividend income Held that:- Following the decision in case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) that provisions of Rule 8D are applicable from A.Y 2008-09 and cannot be applied retrospectively. Rule 8D applied by the AO to work out the disallowance u/s 14A was not applicable to the year under consideration. In favour of assessee
Tonnage taxation Chapter-XII-G - Computation of income from business of operating qualifying ships u/s 115VA - Exclusion from tonnage income - Bad debts recovered - Crude oil refund - General average claims received - Held that:- Following the decision in case of Shipping Corporation of India Ltd. (2011 (7) TMI 588 - ITAT, MUMBAI) that when all the ships of the assessee are qualifying ships and when there is no other activity other than core activities and incidental activities, in our opinion, a third category of other business income cannot be created. In favour of assessee
Tonnage taxation - Chapter-XII-G - Exclusion from tonnage income liabilities u/s 41(1) of prior periods written back Expenditure claimed in pre-tonnage tax scheme - Held that:- Following the decision in case of Shipping Corporation of India Ltd. (2011 (7) TMI 588 - ITAT, MUMBAI) that section 115VA, it is clearly provided that sections 28 to 43C would not over-ride the computation of profits and gains u/s 115VA. As section 41(1) falls within sections 28 to 43C, no separate addition under that section can be made. In favour of assessee
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2012 (12) TMI 820
Internet/web site expenses - Capital v/s Revenue - disallowance - Held that:- As decided in assessee's own case for A.Y. 2001-02 relying on decision in the case of CIT vs. Indian Visit.Com (P) Ltd. [2008 (9) TMI 8 - DELHI HIGH COURT] wherein held that expenditure on development of website is not a capital expenditure and that purpose behind the same is not to create an asset but only to provide a means for disseminating information about the assessee among its clients - also of a view in the present case that such websites developed by the assessee has a very short life and immediately after release of the picture or music album and after laps of a few month these websites are hardly visited by anybody. Thus, it cannot be said that the assessee derives an enduring benefit - thus internet/website expenses incurred by the assessee are revenue in nature - in favour of assessee.
Provision for stock obsolescence written back - Disallowance - Held that:- The facts are not in dispute that the claim of the assessee was denied by the A.O. without considering the same and without passing any speaking order on the issue. And that before the CIT(A) the assessee has filed detail submission along with supporting statements, however, the CIT(A) while observing that no relevant information is available on record in support of the claim, rejected the claim of the assessee. In the absence of any material to show that the assessee has filed any such supporting material before the A.O. or such material was examined by the A.O. during the course of assessment proceeding or the CIT(A) has called for the remand report from the A.O. on the impugned issue, in the interest of justice the matter should go back to the file of the A.O. to decide the same afresh providing a reasonable opportunity of being heard to the assessee.
Computer software expenses - Capital v/s Revenue - Held that:- As decided in CIT vs. Asahi India Safety Glass Ltd. [2011 (11) TMI 2 - DELHI HIGH COURT] the software expenditure incurred by the assessee are revenue in nature and hence the same are allowable as business expenditure and the CIT(A) was not justified in sustaining the disallowance made by the A.O.
Foreign exchange loss - Capital v/s Revenue - alternative plea to allow depreciation - Held that:- In the absence of any details, the Tribunal in assesees own case for the A.Y. 2002-03 has set aside the issue to the file of the A.O. As further find that the issue has not been examined in the light of the amended provisions of section 43-A, in the interest of justice, and keeping in view the consistency the matter should go back to the file of the A.O to decide the same afresh in the light of the observations hereinabove and in accordance with law.
Disallowance of advance written off - Held that:- No dispute that the assessee has not produced any documentary evidence in support of the claim. The Revenue authorities without examining the books of account has rejected the claim of the assessee thus it is fair and reasonable that the matter should go back to the file of the A.O. to decide the same afresh in the light of the observation hereinabove.
Disallowance of royalty expenses - Held that:- In assessees own case the Tribunal after following the order of the Tribunal in assessees own case for A.Y. 2001-02 has allowed the claim of the assessee for A.Y. 2002-03 holding that it is a revenue expenditure and not a capital expenditure. Respectfully following the consistent view of the Tribunal and keeping in view that the decision cited by the D.R. T v. M. Subramaniam [2003 (12) TMI 9 - MADRAS HIGH COURT] is in favour of the assessee - CIT(A) was not justified in sustaining the disallowance.
Disallowance of PF and ESIC - Held that:- It is not in dispute that the assessee has deposited the entire amount of PF and ESIC much before the due date of filing of return. The issue relating to retrospective operation of omission of second proviso to section 43B was considered in CIT vs. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] wherein held that it is curative in nature and would apply retrospectively, with effect from 1-4-1988. The Honble Delhi High Court in CIT vs. AIMIL Ltd. (2009 (12) TMI 38 - DELHI HIGH COURT) held that if the employees share of contribution is paid before the due date of filing of the return u/s 139(1), then no disallowance can be made - thus disallowance sustained by CIT(A)is not sustainable.
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2012 (12) TMI 819
Re opening of assessment - treating the assessee as an Association Of Persons instead of partnership firm - interest levied under section 234B & 234C - Held that:- It can be seen that the petitioner was assessed with the status as a Firm and that subsequently, following the judgment of this Court in Narayanan & Company v. Commissioner of Income Tax (1996 (3) TMI 81 - KERALA HIGH COURT), assessment was re-opened and the tax was re-assessed treating the petitioner as an Association Of Persons. Therefore, situation as contemplated in paragraph 2 clause (d) of notification dated 23.5.1995 was not available to the petitioner to claim the benefit thereof.
As held in Hazi Anwar & Others v. Competent Authority (2001 (1) TMI 915 - APPELLATE TRIBUNAL ) interest u/s 234A, B & C is mandatory. It is also settled that unless the claim for waiver or reduction come within the four corners of the conditions specified by the Central Government, interest levied under the aforesaid provisions cannot be waived (see Universal Trades Corporation v. Chief Commissioner of Income Tax & Ors. (2000 (11) TMI 65 - KERALA HIGH COURT)] - the assessee could not have claimed waiver of interest.
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2012 (12) TMI 818
Registration cancelled u/s 12-AA(3) - approval u/s 10(23C)(vi) had been denied to the assessee - ITAT restored registration - Held that:- Exemption under Section 10(23C)(vi) can be claimed by an assessee without applying for registration under Section 12A as it is not required to fulfill the conditions mentioned under Section 11 while claiming exemption under Section 10(23C) (vi).
Further in the order passed by the CIT, there is no whisper that the assessee has not fulfilled any of the conditions of the Section 11 for claiming it to be a charitable institution. He had solely relied on the order of the Chief Commissioner of Income Tax passed under Section 10(23C) (vi) while denying the exemption under the aforesaid sub-section. Therefore, the Tribunal had rightly restored the registration on the ground that in the Assessment Years 2004-05 and 2006-07 benefit of exemption/deduction under Section 11 was allowed to the respondent-assessee.
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2012 (12) TMI 816
Prior period expenses paid to Delhi Stock Exchange - disallowance - Held that:- For Listing fee for period upto 31.12.2004 of Rs.10,000/- and listing fee of Rs.5000/- each for 2005 and 2006 the assessee had made an application on 17.01.2002 for delisting of its securities from the Delhi Stock Exchange. The application was made on 17.01.2002. The assessee was under the bonafide belief that he has not to make any payment towards the listing fees. Revenue has also not brought on record anything which could show that the listing fee for these years was demanded in earlier years. In view of these facts, the listing fees paid for period upto 31.12.2004, 2005 & 2006 arose and crystallized during the year under consideration.
In view of these facts, the total expenditure of Rs.50,000/- (i.e Fees for revocation of suspension of trading of shares of the assessee company w.e.f. 16/12/2004 on 7/6/2007 Rs. 10,000, listing fees upto 31/12/2004 Rs.10,000/-, for 2005 Rs.5,000/-, for 2006 Rs.5,000/- and processing fees of Rs.10,000/- on 30/8/2007 & condonation fees Rs.5,000/- and reinstatement fees Rs.5,000/- on 3/12/2007, as earlier short paid were allowable during the year under consideration as these expenses were first time arose and crystallized during this year. Similarly, the was allowable during the year under consideration itself as these expenses cannot be termed as prior period expenses - in favour of assessee.
Non deduction of TDS - parking charges for reserved car parking - Disallowance u/s 40(a)(ia) - 194C v/s 194I - Held that:- Car parking comes u/s 194I of the Income-tax Act, 1961 for the applicability of the TDS provisions. However, from the facts, it is found that there is nothing on record which shows that the parking space was earmarked for the assessee - copy of the letter from Bharat Hotels Limited dated 26.04.2007 also did not mention anything about earmarking of the parking slot, it only states that inside the main gate entrance of World Trade Centre. Such arrangements cannot be said as a letting out of land.. It can be only a contract between the two independent parties for allowing vehicle to be parked inside the premises. Therefore, the provisions of section 194I are not applicable. Such payments for contractual obligations can be covered by the provisions of section 194C. Since no tax has been deducted on the payment the provisions of section 40(1)(ai) are applicable - against assessee.
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2012 (12) TMI 815
Deduction u/s 54 - CIT(A) allowed the claim - assessee contested against delay in filing appeal by revenue - Held that:- Where the time for referring an appeal has expired, a valuable right is secured to the respondent or the opposite party and such right ought not to be lightly disturbed as held in the case of Ramlal v. Rewa Coalfields Ltd.[1961 (5) TMI 54 - SUPREME COURT]. The appeal preferred or made after the expiry of the prescribed period can be admitted only if the assessee satisfied the Tribunal that there was sufficient cause for not preferring the appeal within such period.
As in this case the Department did not file the appeals within due time in this case and cause shown by it does not conclusively show that same is reasonable or sufficient. It was a case of no action on the part of the AO inasmuch as even after obtaining authorization from concerned CIT on 30.08.2010, the appeal was filed on 29.03.2012 and no material or evidence to justify such inordinate delay of 557 days has been adduced except taking general type of plea of oversight and pressure of overwork, Department has sought condonation of delay, which, cannot be held to be a sufficient or reasonable cause for not filing the appeal within stipulated time - in favour of assessee.
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2012 (12) TMI 814
Warrant of authorization for conducting search - block assessment Held that:- As decided in CIT (Central) Versus Smt. Vandana Verma [2009 (10) TMI 52 - ALLAHABAD HIGH COURT] joint warrant could not be issued and it shall, be incumbent upon die authority to issue warrant in individual name
Undisputedly in the present case the warrant of search was issued in the joint names of the assessee and his brother thus assessment not justified - the warrant of authorization must be issued individually by the Director/Commissioner at the time of issuing the same. If the same is not issued individually, then assessment cannot be made in an individual capacity as done by the Assessing Officer in the instant case - Order of CIT(A) is set aside and remand the matter to CIT(A) with a direction to await the decision of larger Bench and also direct the Revenue not to press demand raised out of assessment orders till disposal of the appeals by CIT(A) - appeals of the assessee allowed for statistical purposes.
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2012 (12) TMI 813
Disallowance of additional depreciation u/s 32(1)(iia) Non submission of Form 3AA - AO argued that assessee having not fulfilled the mandatory requirements of Sec. 32(1)(iia) by filing a report of the accountant in Form No.3AA before completion of the assessment proceedings - Assessee contended that the report in Form 3AA was filed before the AO on 27-11-2006 before completion of the assessment proceedings Held that:- In view of the dispute regarding filing of form No.3AA, we think it proper to restore the matter back to the file of the CIT who shall conduct an enquiry and find out as to whether in reality the assessee has filed Form 3AA on 27-11-2006 before the AO and if it is available on record. Issue remand back to AO
Unexplained income As per TDS certificates the total amount received was Rs.59,16,285 TDS deducted amount Rs.12,12,839 - Assessee credited only an amount of Rs.55,32,097/- to its P &L account - CIT held that the difference of Rs.3,84,188/- escaped assessment Held that:- As concluded from the facts it is seen from the final accounts which has been submitted before us that in Schedule XII, shown royalty and service charges at Rs.55.32 lakhs and the assessee has paid an amount of Rs.3,83,158 towards service tax. Therefore claim of the assessee needed to be examined again. Remand back to AO
Validity of order u/s 263 passed by CIT - Issue already subject matter before CIT(A) - Deduction u/s 80HHC Computation of export turnover - Whether Ocean freight included/excluded for arriving at Export turnover - AO held that the said freight is not deductible from the total turnover as the said turnover does not relate to the exports Held that:- CIT has therefore no powers to exercise his jurisdiction with regard to the issue which is already subject matter of appeal before the CIT (A) in view of the provisions contained in section 263 (1)(c). Therefore we hold that the CIT s direction to the AO to recompute the deduction allowable u/s 80HHC is legally unsustainable. In favour of assessee
Addition of excise duty payable on finished goods - Assessee has to prepare P&L A/c as per section 145A of the Act by taking the value of excise duty component in finished goods of closing stock - finished goods have not been removed from the manufacturing point which could have attracted levy of excise duty Held that:- when the stock of finished goods are still lying at the manufacturing point and has not been removed to the godown, there is no question of adding excise duty following the decision in case of D & H Secheron Electrodes (P.) Ltd. (2007 (11) TMI 546 - MADHYA PRADESH HIGH COURT). A similar view was taken by this Tribunal in the assessee's own case for the assessment year 2004-05. In favour of assessee
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2012 (12) TMI 812
Written off of Losses on amalgamation Held that:- The assessee conceded that paper books giving details of the assets written off were not supplied to the AO and for the first time these details were given to the CIT(A), and no plausible reason was given for not submitting these documents to the AO. The judgments relied on by the assessee do not come to the rescue of assessee. In favour of revenue
Calculation of book profit u/s 115JB AO reduce the book profits by inventories written off, advances written off, discarded assets and bad debts written off Held that:- As per the provisions of Sec. 115JB and has rightly observed in his order that he book profit cannot be adjusted except for the items specified in the section. Therefore, the deduction claimed by the assessee in the book profit has rightly been disallowed by the AO. In favour of revenue
Inventories written off as obsolete stock - Assessee had acquired the business of the demerged company as a going concern Held that:- assessee has not placed on record any document to show that the assessee had taken over the amalgamating companies as a going concern. Moreover, it is not the case of the assessee that the inventories are being written off for being obsolete alone. The assessee has stated before the AO that it could not receive the amounts from various parties and when it has become bad, the same was written off. The assessee was unable to show how and why the inventories have become obsolete. The assessee failed to tender any evidence before the AO. In favour of revenue
Write off the losses Capital or revenue nature - Incurred in acquiring the assets and liabilities of the amalgamating companies Held that:- In the present case, there was amalgamation of four companies into the assessee company. The assessee intends to write off the losses incurred by the assessee in acquiring the assets and liabilities of the amalgamating companies, which is capital in nature. In favour of revenue
Bad debts Assessee had not written off the debts in the books of account - Held that:- Assessee is claiming write off of bad debts in violation of the provisions of section 36(2)(i). The assessee has not placed on record the scheme of amalgamation either before the lower authorities or before the Tribunal. Therefore, claim of bad debts, inventories etc. of the assessee has rightly been disallowed by the AO. In favour of revenue
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2012 (12) TMI 811
Transfer Pricing Arm length price determined by TPO u/s 92CA (3) Assessee argued that Comparable company is in the business of Exploration of oil and natural gas whereas the assessee is in the business of manufacture of lubricants - Held that:- As concluding from the facts of the case, the order is set aside and the matter of transfer pricing for determining the ALP in respect of exports by the assessee to their AEs, to the file of the TPO for giving a reasoned order as to how the domestic prices are comparable in all respects to the exports made by the assessee to their AEs in terms of Rule 10B. Issue remand back to AO
Disallowance of Capital Loss - AO disallowed advanced to one of the subsidiaries which was stated to have become sick and incurring loss Held that:- From the order of AO & CIT(A) it is not clear as to the purpose of loan and the line of the business subsidiary. Therefore restore the issue of write off to the file of the Assessing Officer for considering de-novo in accordance with law. Issue remand back to AO
Disallowance u/s 14A - Interest expense in relation to earning income u/s 10 Held that:- Once the profit and loss account of the floriculture division has been accepted and the net profit(loss) excluded from the total income there is no question of further estimating disallowance of interest. Prior to insertion of sub-section 2 & 3 to Sec 14A, the AO has no power to artificially allocate certain expenditure as having been incurred in relation to earning the income which does not form part of the total income. In absence of any finding that some expenditure were definitely incurred in relation to earning dividend income no artificial allocation can be made so as to disallow the same. Delete the estimated addition of notional interest on borrowed funds deemed to have been utilized for floriculture division. In favour of assessee
Deduction in respect of certain inter-corporate dividends AO restrict the deduction u/s 80M - Assessee contended that the balance non-corporate dividend should also be considered as deemed dividend for the purpose of deduction u/s 80M Held that:- Since this aspect has not been adjudicated by either by the AO or by CIT(A), we restore this issue to the file of the AO for considering the issue de-novo in accordance with law after providing reasonable opportunity of being heard to the assessee. Issue remand back to AO
Computation of book profits u/s 115JB Treatment of provision for doubtful debts Held that:- In view of the amendments to Sec. 115JB introduced by the Finance (No.2) Act of 2009 inserting clause (i) to Explanation (1) to sub-section (2) to Sec. 115JB with respective effect from 01/04/2001, any amount set aside towards diminution in the value of assets should be added back to the book profits computed in accordance with part II & III of schedule VI to the Companies Act. It has been held that the provision for bad and doubtful debts is a provision for diminution in the value of assets as decided in case of HCL Comnet Systems & Services Ltd. (2008 (9) TMI 18 - SUPREME COURT). In favour of revenue
Levy of interest u/s 234D Applicability of Sec. 234D Held that:- Following the decision in case of Ekta Promoters (2008 (7) TMI 452 - ITAT DELHI-E) wherein it has been held that section 234 has been inserted by the Taxation Laws (Amendment) Act, 2003 with effect from 01.06.2003 applicable from AY 2004-05. Since the assessees case falls in AY 2003-04, we direct the AO to delete the levy of interest. In favour of assessee
Credit of TDS - Interest income received from UTI was taxed in the A.Y 2003-04 - TDS certificates for the taxes deducted by UTI were filed along with the return for A.Y 2004-05 because the TDS certificates were belatedly sent by UTI Held that:- The TDS certificates have been filed in original and full particulars have been furnished, credit for TDS has not been given. Hence, AO is directed to give credit of TDS for AY 2003-04. In favour of assessee
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2012 (12) TMI 810
Rectification of mistake - section 254 - order of tribunal - held that:- Tribunal has no jurisdiction to re-appreciate the contentions as well as evidence in the proceedings under section 254(2). It is a settled proposition of law that the scope of sec. 254(2) is very limited and circumscribed. A mistake apparent from record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning which can be rectified u/s. 254(2). For exercising the jurisdiction u/s. 254(2), it is mandatory that a mistake should be wide apparent, manifest and patent and not a point which would involve serious circumstances of dispute of question of fact or law which requires investigation and verification of facts.
Regarding rectification of mistake on account of disallowance of depreciation while calculating MAT (u/s 115JB) - held that:- in view of the settled proposition of law the Tribunal has no jurisdiction to re-appreciate the contentions as well as evidence in the proceedings under section 254(2). Once the finding has been given on merit than under the proceedings of 254 (2), the same cannot be reversed. - In favour of revenue
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2012 (12) TMI 809
Validity of Block Assessment - plea for rectification of mistake - Held that:- As decided in ITAT Versus V. K. Agarwal And Another [1998 (11) TMI 126 - SUPREME COURT] in accordance with section 254(1) is only when order bears the signature of both the Members and communicated to the parties. The rule 34 of ITAT Rules 1963 also provides that the order of Bench shall be in writing and shall be signed and dated by the Members constituting the Bench.
Thus in the light of above law laid the so-called claim by the assessee that order has been pronounced in the open Court is not the order of I.T.A.T. under section 254(1) of the Act. When there is no order of I.T.A.T. in accordance with law under section 254(1), there is no question of amending the order under section 254(2). That according to rule 34(4) the orders are to be pronounced in the Court but on perusal of records, it is noticed that there is no such pronouncement, rather the case/appeal was kept for order as per the order sheet dated 6.10.2008. Also that for such pronouncement in the open Court, the rules (4) & (5) of rule 34 of has been inserted by the Income Tax (Appellate Tribunal) (Amendment) Rules 2009 w.e.f. 01.05.2009. In the light of the facts, the contention of the assessee is rejected as such are not mistakes which are rectifiable under section 254(2).
The contention raised in the Miscellaneous Application itself shows that the assessee wants a second order after recalling the original order. The I.T.A.T. has no power to review its earlier order. The power under section 254(2) is only to amend the order with a view to rectify any mistake apparent from record. The so-called mistakes pointed out in the Miscellaneous Application discussed above are not mistake apparent on record. Therefore, the same is not covered under section 254(2) - against assessee.
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2012 (12) TMI 808
Rejection of method of accounting Project completion method Assessee consistently following the project completion method - AO notice that the project was not completed before 31st March 2008 - Sale of flats as well as construction work were less than 30% - Held that:- As concluding from the facts of the case AO accepted this fact that on completion of project, the assessee has offered the income to tax after claiming the deduction u/s 80 IB(10). Therefore when the assessee offered the income to tax from the entire project for the A.Y 2008-09 which has been adopted by the AO for estimation of the income for the year under consideration, then this fact goes to prove that there is no difference in the rate of profit declared by the assessee for the A.Y 2008-09 and the rate adopted by the assessing officer for the year under consideration. Thus there is no revenue effect and the income offered by the assessee on completion of the project is revenue neutral. In favour of assessee
Deduction u/s 80IB(10) - More than one approval obtained from the local authorities - First approval dated 12.9.2003 was obtained by the earlier owner for the project -
Due to substantial change in the housing project assessee obtained another from local authorities on 28.9.2005 Held that:- When the project in question was sanction after 1.4.2004, then as per clause (a) (ii) of sec 80IB(10), it is required to be completed within four years from the end of the F.Y in which it is approved by the local authorities. Since the project in question was sanctioned on 28.9.2005; therefore, the same was required to be completed on or before 31.3.2010. Accordingly, we hold that the assessee has complied with the conditions of completion within four years from the end of the financial year 2005-06. In favour of assessee
Deduction u/s 80IB(10) Correct measurement of size of plot on which project developed - Discrepancy in the records of the Government agencies with regard to the actual size of the plot of land Held that:- If it is ultimately found that the area of plot is more than one acre, then deduction u/s 80IB cannot be denied on the basis of the area of plot shown in the 7/12 extract as less than one acre. This factual aspect is required to be verified physically either by the competent revenue authorities or by the AO through some agencies. The assessee is also directed to get the demarcation and correct measurement by the competent authority. Issue remand back to AO.
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2012 (12) TMI 807
Jurisdiction power u/s 263 by CIT(A) - claim of depreciation on car against salary and interest from the firm Held that:- The AO made an addition of Rs.17,533/-, treating the same as monetary perquisite, being interest free loan as the tax on the same as not exempt u/s 10(10CC) of the Act. The addition was made by the AO, on perusal of form No. 16A and on the basis of explanation, filed by the assessee.
It is evident that the AO, has taken a legally permissible view, in the matter, in terms of the provisions of Section 10(10CC). The CIT has computed the income of Rs.18,339/- in respect of interest paid by the employer, as is evident from findings of the CIT. The issue, in question has been dealt with and considered by the AO, after application of mind and making requisite enquiries. Therefore, CIT is not competent u/s 263 to substitute his opinion, in place of the view taken by the AO. The impugned order of the CIT, falls beyond the statutory pale of Section 263 view further supported by the decision of the Apex Court n the case of Malabar Industrial Co. Ltd.V CIT [2000 (2) TMI 10 - SUPREME COURT] - in favour of assessee.
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2012 (12) TMI 806
Disallowance of Premium paid for Keyman Insurance Policy Held that:- The object and purpose of a keyman insurance policy is to protect the business against a financial set back which may occur, as a result of a premature death, to the business or professional organization. There is no rational basis to confine the allowability of the expenditure incurred on the premium paid towards such a policy only to a situation where the policy is in respect of the life of an employee. It safeguard the firm against a disruption of the business that may result due to the premature death of a partner. Therefore, the expenditure which is laid out for the payment of premium on such a policy is incurred wholly and exclusively for the purposes of business - Disallowance made by the AO is directed to be deleted - in favour of assessee.
Foreign Traveling Expenditure - Held that:- Entire Expenditure on foreign traveling was on account of business exigencies and the countries traveled i.e. USA and Canada represent 80% of the turnover of the assessee firm and same countries have been visited on a continuous basis year after year to maintain the business relation and to expand the same. It was further submitted that the fringe benefit tax (FBT) @ 5% on entire expenditure on foreign traveling had been paid separately to take care of any possible personal use of the funds of the firm while on foreign tour and the partners have traveled individually and not alongwith their families so as to suggest personal use of funds of the firms. Any disallowance in addition to fringe benefit tax has to be based on concrete evidence available with the AO and in case of estimation specific reasons need to be brought on record like an unusual increase in foreign traveling expenses especially the unvouched expenses vis-avis last year/years - appeal of the Revenue is dismissed.
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2012 (12) TMI 805
Reopening of Assessment report of the DVO in respect of construction of the building by the assessee - Held that:- As decided in ACIT Vs. Dhariya Constructions Co. [2010 (2) TMI 612 - SUPREME COURT OF INDIA] mere opinion of the DVO in relation to the cost of construction of the building owned by the assessee, in the absence of any other information collected against the assessee is not an information and reopening of assessment by way of proceedings under section 147/148 are invalid and are hereby cancelled. Consequently, the assessment order passed under section 143(3) r.w.s. 147 in the present case is hereby cancelled - all the four appeals relating to assessment years 2001-02 to 2005-06 filed by the assessee are allowed - against revenue.
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2012 (12) TMI 804
Visa Charges and Others Whether liable to FBT Held that:-The incurring of visa charges may result in tour and travel of employees but the objective and purpose of incurring these and other related expenditure is for the carrying on of business outside India. Further, visa charges are a statutory payment. It is a legitimate business expenditure incurred by the assessee and is neither paid to the employees as a consideration for employment, nor are they incurred for the benefit of the employees of the assessee company.
As decided in M/s. Toyota Kirloskar Motor P. Ltd. Vs. Addl. CIT (LTU), Bangalore [2012 (6) TMI 484 - ITAT, BANGALORE] legitimate business expenditure which does not result in any benefit to employees is not liable to FBT - Thus the findings of CIT(A) in concluding that the expenses under the head Visa Charges and Others are not liable for FBT are correct - in favour of assessee.
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