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Income Tax - Case Laws
Showing 301 to 320 of 662 Records
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2012 (12) TMI 668
Non deduction of TDS - perquisite value of stock options allotted to its employees covered under the employees Stock Option scheme - Held that:- Decision of a Division Bench of this Court, dated 23.12.2011, in a batch of cases confirming the orders passed by a single judge of this Court directing the refund of the amounts paid by the assessees, as tax, with the interest payable thereon, as per the provisions of the Income Tax Act, 1961.
Set aside the impugned order of the first respondent, dated 19.1.2007. Consequently, the second and the third respondents are directed to refund the tax amount to the petitioner, within a period of eight weeks from the date of receipt of a copy of this order - in favour of assessee.
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2012 (12) TMI 667
Clause (2) to Explanation 5 to Section 271(1)(c) not applied - course of proceedings u/s 153A - Held that:- The said provision is available, not merely when the assessee, in his statement offers or surrenders, to tax the amount in question which is later assessed, but also complies with the other conditions, of having filed the return. The allusion to Section 139 (1) is significant in this regard, because a notice and consequent search assessment pursuant to Section 153A stands excluded, altogether, by virtue of the non-obstante clause to the latter (Section 153A) provision. Even if the other view, more favourable to the assessee were to be taken, and a return under Section 153A be assumed to be covered as one under Section 139 (1), the fact remains, that in this case, the assessee did not include it, pursuant to the notice issued, and instead chose to merely reiterate its return originally filed on 31-10-2005
The search, and the statement recorded under Section 132 (4), the assessee, on being issued with notice u/s 153A did not file any return. The notice under Section 153A was issued on 20-7-2006. It was only when assessment proceedings were taken up for consideration, did the assessee, by letter dated 14-8-2007, request, that its return, filed on 31-10-2005, be treated as its return filed in response to the notice under Section 153A. Much later, it sought to revise its computation, on 14-12-2007. Therefore, this Court is of the opinion that the “escape route”, provided by Clause (2) to Explanation 5 in this case, was not available to the assessee - the Tribunal did not commit any error of law appeal, being devoid of merits, is consequently dismissed.
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2012 (12) TMI 666
Deduction u/s.80JJA - manufacturing fuel briquettes from bagasse - Held that:- Bagasse is a waste of the sugar factory. This waste is a bio-degradeable waste and the same is collected on consideration by the assessee from the factory. There could be no universal definition of the word “waste” & has to be understood contextually i.e. place where it arises and the manner in which it arises during the processing of some article. The fact that sugar industry also regards Bagasse as waste is evident from Circular dated 4/2/2006 issued by the Sugar Commissioner, Maharashtra State, Pune. Besides the ITC classification of the Exim policy & CETA 1985 classifies bagasse as a waste of sugar industry under Chapter 23 Heading 23.20 thereof & Chapter 23 heading 23.01 respectively.
Whether collection would mean collecting free of charge and not by purchasing the same. - held that:- The word “collecting” means to gather; to fetch. It is a neutral word and does not mean collection for consideration or collection without consideration.
Thus it is an undisputed position that the assessee has collected bagasse from sugar factories after having made payment for the same. Therefore, the aforesaid requirement of collecting as provided under Section 80JJA is satisfied. It is a undisputed finding of fact that the collected bagasse has been used by the respondent-assessee to make briquettes for fuel as that indeed is the business of the respondent-assessee - in favour of assessee.
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2012 (12) TMI 665
Indo-USA DTAA - payment received from ERAPL(USA) for providing assistance in client coordination titrated as Royalty under Article 12 - Held that:- As seen that the ERAPL serves certain multinational clients in India who have principal offices located outside India and the appellant has agreed to serve EARPL to help to act as coordinating agency as required by such multinational clients. For this purpose, the ERAPL has to pay to the appellant certain amount of annual billings. For the communication channel between ERAPL and its clients the client coordination fees paid to the appellant cannot be termed as Royalty because it is not a consideration for the use of right or to use any of the specified terms mentioned in the definition of Royalty under Article 12 of Indo US DTAA.
Since the appellant admittedly does not have a permanent establishment India, the question of taxability of the impugned amount in India would not arise in the absence PE, as provided for in Article 7 of DTAA. In view of these facts, this ground of appeal is decided in favour of the appellant.
Lower rate of tax - fees for included services(FIS) - CIT(A)directing to tax @10% instead of @15% - Held that:- As per the Article 12(2)(b) the rate of 10% is applicable in the case of royalty referred to in sub-paragraph of 3(b) and fees for included services as defined under this article that are ancillary and subsidiary to the enjoyment of the property for which payment is received under Para 3(b) of Article. Since the amounts are not royalty being considered either 3(a) or 3(b), the rate of 10% on FIS is not correct. There is nothing on record that indicates that rate specified under Sub-Article (2)(b) is applicable and not (2)(a)(ii). Therefore, upholding the Revenue ground direct the AO to tax the above amounts confirmed by CIT(A) as FIS at 15% of the rate - in favour of revenue.
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2012 (12) TMI 664
Prior period of expenses - the expenditure incurred by the employees of the assessee on account of travel which are of very petty sums. Once the employees have submitted their bills to the assessee company, the same has to be reimbursed. Insofar as the assessee is concerned, as and when the bills were submitted, payments have been made and has been claimed as business expenditure. - held that:- Looking to the fact that the assessee has a substantial turnover, such reimbursement of expenditure cannot be disallowed simply on the ground that travelling by the employees have been undertaken in the earlier years and bills by them are submitted in this year. - Since they are directly related to business of the assessee, the same has to be allowed. - Decided in favor of assessee.
Foreign travel expenditure - business purposes - AO disallowed the claim of expenditure holding that the expenditure incurred is not for business purpose as the assessee has no business transactions i.e., sale or purchase with these countries. - held that:- The assessee, being a global company, which has business interest all over the world, such kind of business trip by senior officials cannot be disallowed simply on the reason that the assessee does not have direct transactions of sale or purchase from such countries. Such a myopic perception cannot be upheld in this era, as there can be several reasons in relation to the business. The term “wholly and exclusively for the business purpose” has a very wide meaning and the assessee’s perception as to what is the business purpose has to be given importance. The only requirement is that the assessee has to prove that such expenditures are genuine and for its business purposes. - Decided in favor of assessee.
Advertisement expenses - The Assessing Officer disallowed the claim of the assessee on the ground that the services have been rendered in earlier years and, therefore, the same cannot be allowed in this year even if the bills have been raised by these parties in this year. - held that:- Since both the authorities have not examined this issue properly, matter remanded back.
Ad-hoc disallowance of expenses - held that:- It is now a settled proposition of law that the Appellate Tribunal under section 254(1) of the Act, had no power to take back the benefit conferred by the Assessing Officer or enhance the assessment. Once the matter has been restored by the Tribunal, the income cannot be enhanced from what was determined at the time of original assessment proceedings, which was the subject matter of dispute before the Tribunal. - the enhancement of assessment by making 100% disallowance in respect of free food allowance cannot be sustained and the same is restricted to 50%, as was made by the Assessing Officer in the original round of proceedings. - Decided in favor of assessee.
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2012 (12) TMI 663
Disallowance of Interest – Held that:- As AO has not given any finding that the interest free loans were given out of the borrowed funds on which interest was paid & has not examined the availability of surplus funds with the assessee which can justify interest free loans to the managing director no disallowance can be warranted - accepting the submission of the assessee that borrowed funds on which interest was paid had been utilized for the purpose of business of the assessee thus, the disallowance directed to be deleted - in favour of assessee.
Business Promotion and Tour and Travelling expenditure - disallowance for want of sufficient proof – Held that:- As foreign travel is a necessary incident of the business of the Assessee but at the same time the inability of the Assessee to produce bills and purpose of foreign travel, calls for some disallowance - it would be just and fair to disallow 50% of the expenses claimed by the Assessee. Accordingly the disallowance is directed to be restricted to 50% of Rs.14,74,280/- - partly in favour of assessee.
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2012 (12) TMI 662
Prior period expenditure - Power Lines Service charges excluded in the valuation of the current assets - hand over of power lines to KEB free of cost - whether assessee can claim the expenditure incurred by it for the earlier assessment years as a deduction of expenditure of the relevant assessment year - Held that:- The assessee has earned income from the said power lines and the same has also been offered in the years of receipt. By treating the expenditure as work-in progress, the assessee in the year in which the power lines are to be handed over in K.E.B, free of cost, has to set off the work-in progress, from the profits of the relevant year as the assessee is no longer going to earn income out of the said power lines. By debiting the expenditure to profit and loss account and credibility the closing stock, it is clear that the assessee has not claimed this expenditure as deduction in the earlier years.
As held by the Hon’ble Courts in CIT Vs. Standard Radiators Pvt. Ltd [2005 (12) TMI 70 - GUJARAT HIGH COURT] wherever there is a change of method of accounting, for genuine reasons, there is every chances of claim of double deduction arising during the year on change of accounting. The necessity and the crystallization of the liability during the relevant period is to be consider for allowing the expenditure. Thus as the assessee has not claimed the expenditure in the earlier years and there is no claim of double deduction in the relevant assessment year & the assessee who has changed the method of accounting due to genuine reason of having to hand over the power lines to KEB can claim the expenditure relating to earlier years in this year, even if it results in double deduction - in favour of assessee.
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2012 (12) TMI 661
Invoking of provisions of sec 154 and disallowance u/s 40(a)(ia)- Held that:- Provisions of Chapter XVII are relevant only for ascertaining the deductibility of the tax a source and not for the actual deduction and payment for attracting the provision of section 40(a)(ia). Since in the instant case, it is not in dispute that that the assessee deducted TDS which was not paid to the account of Central Govt. within the prescribed time, however, it was paid before the due date of filing the return specified in section 139(1), addition u/s. 40(a)(ia) cannot be made if the payment of tax deducted at source has been made before the due date of filing the return of income for the year under consideration. See CIT v. Virgin Creations [2011 (11) TMI 348 - CALCUTTA HIGH COURT ]
Therefore, when the assessee‘s case was covered under the main provisions of existing law then there was no need to go to the issue of prospective or retrospective effect of the amendment in the provisions by the Finance Act, 2010 - in favour of assessee.
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2012 (12) TMI 660
Deduction u/s 80HHC & 80IB - income derived from DEPB, duty draw back and premium on sale of DEPB - Following the decision of Supreme Court in case of M/s Liberty India Versus Commissioner of Income Tax 2009 (8) TMI 63 - SUPREME COURT on the income derived from DEPB and duty draw back, deduction under section 80HHC and 80IB cannot be allowed - Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act.
Penalty u/s 271(1)(c) - furnishing of inaccurate particulars – Held that:- Following the decision of Supreme court in case of COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS FVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of the assessee - No infirmity in the order of the CIT(A) - Merely because the assessee has a different perception of the situation than the Assessing Officer, even though, in the ultimate analysis, the stand of the Assessing Officer is to be upheld, it cannot be said that the assessee has concealed any particulars - in the result both the appeals of the Revenue are dismissed
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2012 (12) TMI 659
Ex-parte order - assessee contested against non allowing proper opportunity of being heard - Held that:- CIT(A) has given eight opportunities to the assessee commencing from 30/06/2005 to 14/01/2011 & the order was passed by the CIT(A) on 10/02/2011. However, the concept of natural justice cannot be extended to an absurd limit of affording endless opportunity, to an assessee, who is not willing to avail of such opportunities, thus the ground of appeal, raised by the assessee is without any merit.
Unexplained Cash Credits - Held that:- Following the decision of Kale Khan Mohammad Hanif Versus Commissioner Of Income-Tax, M. P. And Bhopal (1963 (2) TMI 33 - SUPREME COURT) onus of proving the source of any sum found credited in the books of the assessee is upon the assessee - the sanctity of the affidavit, filed by the assessee, patently uncorroborated by any evidence, cannot be accepted as having any legal consequence as mere filing of confirmatory letter does not discharge the onus that lays on the assessee. The payment through cheque merely indicates movement of fund and not the creditworthiness and genuineness of the transaction - The assessee has failed to discharge the onus cast on him within the meaning of section 68 as also under the general law - the assessee himself admitted non-traceability of such cash creditors - against assessee.
Disallowance of Staff Welfare Expenses – Held that:- This disallowance has been made in the computation of income without giving any finding, whatsoever by AO thus disallowance is founded on surmises and conjectures, as not been supported by any evidence - disallowance need to be deleted - in favour of assessee.
Disallowance of car running expenses & depreciation – Held that:- AO has disallowed 1/4th of care running expenses & depreciation in respect of personal use of the car without bringing any material on record - in the interest of fairness and justice, the disallowance is reduced to 1/10th in each head - partly in favour of assessee.
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2012 (12) TMI 658
Undervaluation of closing stock - Rate of rice bran Held that:- In the remand report, AO did not brought any fresh material on the record to establish that the rate adopted by the assessee was not correct.
The only basis of adopting enhanced rate of valuation was the report of Krishi Utpadan Mandi Samiti which cannot be considered as reasonable because these rates are determined in a particular manner which cannot be applied in all the circumstances and all the times for every quality of a particular product. The rates are dependent upon number of factors such as quality of produce, the prevailing rates in the market, content of moisture in the produce and demand in the market etc. Therefore, the observation of the A.O., that the rates fixed by Krishi Utpadan Mandi Samiti are reasonable and justified, do not have any rational or scientific basis. Thus the rate adopted by the AO is not justified - in favour of assessee.
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2012 (12) TMI 657
Jurisdiction power u/s 263 by CIT(A) – treatment to advance rent received – Held that:- As special audit report categorically admits that the assessee has maintained his accounts on mercantile system, thus once it is accepted that the assessee is following the mercantile system of accounting, then the advance of rent received by the assessee cannot be treated as rent receipt during the year. This is also because the assessee has offered the advance rent as his income during the relevant assessment year to which it relates and the same has also been accepted. In the circumstances, finding of CIT u/s. 263 is erroneous and unsustainable in law and his liable to be quashed as without jurisdiction provided by the show-cause notice - appeal of the assessee allowed.
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2012 (12) TMI 656
Unexplained Investment u/s 69 – Held that:- Profit arising from the sale of plots along with building is to be taxed under the head Capital Gain. Tribunal has taken into consideration the investment made in past year and held that the investment has been made from its books of account as all the entries are incorporated in books of account. No amount has been spent over and above recorded in the books of account. Therefore, there was no reason in not accepting the claim of the assessee. CIT (A) has also deleted the addition for the year under consideration following the order of Tribunal as all the facts have already been discussed by the Tribunal. Accordingly, Order of CIT (A) in this aspect as the issue has already been considered by the Tribunal while disposing the appeal for the assessment year 2005-06 is confirmed.
Addition on account of interest on capital from partnership firm – Held that:- Where there is no tax effect of revenue, the authority would not fritter away its energy in fighting matters of this kind. The supplementary partnership deed has not provided any interest on capital to the partners. Accordingly the firm had not allowed interest on capital. If capital allowed by the firm is expenses of the firm and to that extent the income of the firm would reduce. The tax effect is hardly there. Therefore, the addition made by the AO is deleted - In the result, appeals of the department as well as cross objections of the assessee are dismissed.
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2012 (12) TMI 655
Validity of assessment u/s 147 – Notice u/s 148 was issued on the basis of sufficient material on record, including the order u/s 263 – Order u/s 263 had been cancelled by the ITAT - Assessee had claimed deduction u/s 80IA which was observed to be non - genuine and non- admissible by the AO – Assessee contended that the assessments have been framed without issue of notice u/s 143(2) – Held that:- As the said notices u/s 148 were issued within six years i.e. within stipulated period. Following the principles of natural justice we deem it fit to restore the present issues back to the file of the CIT (Appeals) to decide the same de - novo in accordance with law after affording reasonable opportunity of hearing to the assessee. Remand back to CIT(A)
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2012 (12) TMI 654
Unaccounted sales and purchases – Held that:- AO has estimated the additional purchases at Rs. 9,40,000/ - without bringing any material on record. At the same time, there is no satisfactory explanation on behalf of the assessee regarding the discrepancies pointed out by the AO in the books of account of the assessee. Thus considering the entire facts the addition of Rs. 85,000/ - will meet the ends of justice - addition sustained by the CIT(A) is on higher side - assessee gets a further relief of Rs. 3,85,000/ - on this count - appeals of assessee allowed partly.
Addition on account of additional gross profit – Held that:- GP rate shown at Rs. 3,25,400/ - on the total sales of Rs. 50,05,936/ - is slightly on higher side when compared to GP rate of the preceding year . However, the fact remains that the assessee did not produce the books of account thus, the sales affected/shown are not subject to verification - thus considering the entire facts the addition reduced to Rs. 15,000/ - particularly when the sales affected/shown are not subject to verification - assessee gets a further relief of Rs. 15,000/ - on this account -appeals of assessee allowed partly.
Addition u/s 68 - unsecured loan as non-genuine – Held that:- As in earlier year, the department has not doubted the credit worthiness of Shri Harbans Singh father of the assessee, who is regularly assessed to tax & considering the contention of the assessee that these funds were used by Shri Harbans Singh for purchasing demand drafts directly from the bank in favour of the supplier of the assessee to meet financial emergency of the assessee there is no merit in the contention of the DR that amount of Rs. 50,000/ - and Rs. 65,000/ - withdrawn by Shri Harbans Singh do not figure in the bank account of the assessee. In view of the above, the addition of Rs. 1,15,000/ - made by the Assessing Officer and confirmed the CIT(A) deserves to be deleted - in favour of assessee.
Disallowance of expenses in part incurred for business – Held that:- The expenses in question relate to petrol , salaries, telephone etc. which are necessary for smooth running of a business. However, as per law, the assessee was required to produce supporting evidence to claim these expenses which are absent thus disallowance of certain amount is required to be made - ad hoc disallowance of Rs. 75,000/ - made by the AO is definitely on higher side, thus to meet the ends of justice the disallowance reduced to Rs. 50,000/ - - partly in favour of assessee.
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2012 (12) TMI 653
Computation of Deduction u/s 10B – Whether interest received/ receivable from its customers on the delayed payments is treated as part of eligible profit – Held that:- As the factum of the nature of interest income received needs verification by the AO. In case said interest is received/ receivable by the assessee from its customers on the delayed payments, relatable to the export sales, then such interest is to be included as part of the eligible profits, for computing the exemption u/s 10B. However, where such interest due from the parties is not so relatable to the export sales made by the undertaking, then the assessee is not entitled to the benefit of exemption u/s 10B on such other incomes. Remand back to AO
Eligible profit u/s 10B – Whether interest received from employees on housing loans are includible in eligible profit – Held that:- Following the decision in case of Joyco India P.Ltd. (2008 (9) TMI 416 - ITAT DELHI-D) that the interest receivable from employees on housing loans advanced to them by the assessee undertaking, being linked to the business of the undertaking and such interest , being included as business is eligible for the aforesaid deduction. In favour of assessee
Deduction u/s 10B – Whether provisions written back are eligible for deduction u/s 10B – Held that:- There is no dispute that the above categories of expenses have been incurred by the assessee during the course of carrying of the eligible business of its industrial undertaking. Such reduction of expenses may not constitute income derived from the industrial under taking but all the same since such expenses in the past have reduced the eligible profits of the industrial under taking as a consequence the reduction in such expenses, which is portrayed by the “Provision no longer required written back” deserves to be considered to compute profits of the industrial undertaking eligible for deduction. In favour of assessee
Deduction u/s 80HHC - Computation of indirect cost of trading goods which are to be worked out for computing deduction u/s 80HHC – Assessee is preparing a consolidated statements of P&L account for export of its manufactured items and of traded items - Held that:- As per the assessee, the AO had excluded only proportionate expenses related to export while assessee had excluded all the expenses related to manufacturing i.e. domestic as well as exports and at located only expenses which were common for trading as well as manufacturing. Therefore issue remand back to AO
Adjustment of deduction u/s 80HHC while calculate book profit u/s 115JB – AO, while computing the book profits u/s 115JB, had made certain adjustments by re-computing turnover of the business i.e. on account of the income to which Sec. 10B applies and hence, also excluded the profits eligible for deduction u/s 80HHC – Assessee while calculating the book profits u/s 115JB had appropriated the income and expenditure of Sec. 10B in the same ratio which was used to calculate the deduction u/s 10B and reducing there from 100% of the profits, eligible for deduction u/s 80HHC - Held that:- As concluded from the facts of the case we find no merit in the allocation made by the AO of different components of income with different total turnover. Therefore, direct AO to recompute the book profits u/s 115JB. Issue remand back to AO
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2012 (12) TMI 652
Doctrine of merger – Revision order passed by CIT u/s 263 – AO passed the order which is erroneous and prejudicial to the interest of the revenue –Assessee contended that re-assessment order got merged with the order of Tribunal because the Tribunal has allowed the full deduction which were denied during assessment proceedings and therefore, such order is not available for revision - Held that:- As the doctrine of merger would not be applicable because reassessment was confined only to the issue of deduction u/s 80HHC with and the assessment was not reopened for the purpose of examining the application of Sec. 80IB(13) r.w.s. 80IA(9)
Validity of order u/s 263 - CIT argued that assessee had claimed deduction u/s 80IB as well as u/s 80HHC – Deduction u/s 80IB and 80HHC was allowed by the original assessment order dated 20.12.2005 – Held that:- Since the original assessment order has been passed on 20.12.2005 and therefore, the limitation would run from 1.4.2006 and expire on 31.3.2008 whereas the revision order has been passed on 23.3.2010 which is clearly barred by limitation. Appeal in favour of assessee
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2012 (12) TMI 641
TDS u/s 194A - payment of interest by the partner to the partnership firm - held that:- The Act does not provide exemption to the interest paid/credited by a partner to his firm. - the Act treats a partner and a firm as different 'Person', - the position of legal relationship between a partner and his firm loses its importance/significance under the Income tax Act. - the position of legal relationship as prevailing under the Partnership Act should not be applied in abstract, only to the provisions of sec. 194A of the Act. - Decided against the assessee.
Assessee in default - interest and penalty u/s 201(1) and 201(1A) - held that:- Let us consider about exigibility of interest u/s 201(1A) of the Act under the peculiar conditions prevailing in the instant cases, wherein the recipient of interest viz., the partnership firms have declared losses even after accounting for the interest paid by the assessees herein. Even if the assessees herein deduct and remit the TDS amount on the interest paid to the partnership firms, the same is liable to be refunded to the said partnership firms, as there is no tax liability in their respective hands. Under this situation, can it be said that the Government is deprived of the funds due to it or any loss is caused to the Government.
It may be noted that the prevailing rate of interest chargeable/payable u/s 201(1A)/244A are different, i.e., the rate of interest payable u/s 244A is lesser than the interest chargeable u/s 201(1A) of the Act. Due to this disparity, a question may arise as to the correctness of the view taken by us in the preceding paragraphs. In our view, the rate of interest is prescribed by the Government on the basis of various factors. The main principle considered by us is that pronounced by the Hon'ble Courts, viz., that, interest is compensatory in nature for depriving funds belonging to the revenue/assessee. Hence the disparity in the rate of interest shall not have any effect on the said principle.
On the issue of levy of interest u/s 201(1A) matter restored to DCIT(TDS) to verify whether or not the recipients of the interest income, viz., the partnership firms were liable to pay tax on that income and then take appropriate decision about the chargeability of interest u/s 201(1A) of the Act in the hands of the assessees herein in accordance with the principles discussed by us in the preceding paragraphs.
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2012 (12) TMI 640
Interest income on NOSTRO and overseas placements maintained with branches outside India - deduction towards interest expenditure on such accounts. - interest income u/s 9(1)(v) - held that:- Tribunal in the case of ABN Amro Bank NV v. Asstt. DIT [2005 (8) TMI 294 - ITAT CALCUTTA-E] (SB) has held that the branch of the assessee bank cannot be treated as a separate entity. The transactions between the Head office and branch resulting into interest income or interest expenditure are to be viewed as transaction with self. On the basis of mutuality, it has been held that there can be neither any income in respect of interest earned from its overseas branches, nor there can be deduction for interest expenditure paid by the Indian branch to Head office or the other overseas branches. - the interest income of Rs. 4.88 crore which has resulted only from the assessee's dealings with its Head office or overseas branches cannot be charged to tax on the principle of mutuality will apply. Accordingly no tax can be levied on the interest earned by the assessee from its Head office or overseas branches.
There is a clear distinction between the NOSTRO interest earned/paid by the assessee from/to its own Head office/overseas branches and NOSTRO interest paid/earned to/from other than assessee's own Head office or branches. Whereas in the first situation, the principle of mutuality will apply and in the later case it will not.
No deduction on account of interest expenditure can be allowed which has been incurred by the assessee in relation to its own Head office and overseas branches.
Both the grounds of assessee and revenue allowed.
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2012 (12) TMI 639
Inadequate drawings - CIT(A) deleted the addition - Held that:- No reason to interfere with the findings of the CIT(A) as no evidence was brought on record by the Revenue in support of the addition made in the assessment order towards inadequate drawings. No material was found during the course of search to indicate any suppression of drawings and the drawings admitted by the assessee are reasonable - against revenue.
Unexplained investment/expenditure u/s 69B/ 69C - CIT(A)directed to treat as income from other sources - Held that:- No material was placed on record suggesting that the assessee has made payment over and above the documentary value for purchase of the property as alleged in the assessment order the order of the CIT (A) in holding that the amounts offered by the assessee voluntarily in his return of income should be assessed as income from other sources - There being no good reason to interfere with the findings of the CIT(A) that the amounts offered by the assessee are to be assessed as income from other sources and not to be treated as an addition made under section 69B/69C as assessee is not the owner of the asset and he has not paid any amount more than the registered sale price - against revenue.
Unexplained Cash - Held that:- Department had seized Rs..8.00 lakhs in assessee’s premises in the course of search. It is also not in dispute that an amount of Rs..6.00 lakhs was seized from assessee’s mother Smt. K. Rajeshwari. The Department having seized the cash of Rs. 14.00 lakhs, it has to give credit for such seized cash either in the hands of the assessee individual or in the hands of Shri V. Sankar (HUF) or mother of the assessee Smt. K. Rajeshwari. In the circumstances, no infirmity in the direction given by the CIT (A) in directing the AO to grant credit for a sum of Rs..14.00 lakhs in the hands of the assessee and in case, if credit is given for such cash seized in the hands of Shri V. Sankar (HUF) and Smt. K. Rajeshwari, the credit given in the hands of the assessee has to be withdrawn - against revenue.
De novo assessment made under section 153(A) - Held that:- As per provisions of section 153A to 153C it provides for fresh assessments for six years preceding the year of search and assessments need not be confined to issues based on the materials found during the course of search
Levy of Interest - Since levy of interest under section 234B is only consequential, no force in the ground taken by the assessee.
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