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2012 (2) TMI 528
Unexplained Cash Credits u/s 68 - Assessee has failed to prove the identity of the share applicants, the share application money as received by the assessee, is liable be added to the income u/s 68 - Before CIT, assessee filed detailed written submissions, including address, PAN and has referred to further documentary evidences filed and compliances made by such share applicants before AO is in response to notice u/s.133(6) issued.
HELD THAT:- We observed that summons were issued to the share applicants, requiring certain information u/s 131, the share applicants duly confirmed that they gave share application money to assessee through cheque, meaning thereby the identity of the share applicants was proved. Other documents were also furnished by them acknowledging the return. All these documents clearly prove their identity if the summons would not have been received or the addresses of the share applicants would have been fake, there was no question of service of summons and consequent reply by such share applicants. In view of these facts, the decision from Hon'ble Apex Court in the case of COMMR. OF INCOME TAX VERSUS M/S LOVELY EXPORTS (PVT) LTD [2008 (1) TMI 575 - SC ORDER], clearly comes to the rescue of the assessee, where it was held that even if such share applicants are bogus, but their identity is proved, then no addition is warranted in the case of the assessee.
In the present appeal, since the identity of such share subscribers, as we have discussed above, was established, therefore, no addition u/s 68 is warranted in the case of the assessee company- Decision in favour of Assessee.
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2012 (2) TMI 527
... ... ... ... ..... submits that with effect from assessment year 2007-08 the respondent-assessee has changed the method of accounting and is no longer making any provision for maintenance cost. Learned counsel for the respondent-assessee states that change was made to avoid further confusion or litigation and it was not making any difference in the taxable income. It is therefore clear that this issue does not have any recurring effect in view of the change made by the respondent-assessee. After examining the reasoning given by the Tribunal we are not inclined to admit the present appeal. The provision for maintenance was made on the basis of flying hours undertaken in the year in question. The aircrafts require periodical maintenance after prescribed flying hours. Income is earned on basis of flying hours undertaken. Moreover, interfering with the accounting practice followed throughout on piece meal basis, in some years, will create its own difficulties and problems. The appeal is dismissed.
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2012 (2) TMI 526
Deemed dividend addition - payments for business exigencies/purposes - loans and advances - Held that:- The assessee has filed the copy of agreements and memorandum of undertaking executed by the parties and other connected papers beside order of the party for the relevant assessment year also filed. The assessee has also explained the business exigencies under which such amount were paid. The assessee has in support relied upon the decisions in the case of Smt. Nigam Chawala (2009 (1) TMI 534 - HIGH COURT OF DELHI), Bombay Oil Industries Ltd. (2009 (1) TMI 519 - ITAT MUMBAI ).
The Assessing Officer did not dispute or contest the said contention of the respondent-assessee in the first appellate proceeding in the said remand report. In view of the aforesaid, we do not find any merit in the present appeal and the same are dismissed - Decided against revenue
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2012 (2) TMI 525
... ... ... ... ..... ssessment years whereby a different look into the matter was warranted. Therefore, in view of the decisions of this Tribunal referred supra, we are of the opinion that the appeals of the Revenue has no merit.” 7. It is thus clear that on identical facts after considering all the relevant factors such as the search conducted etc. the Tribunal in the Assessment Years 2004-05 and 2005-06 (supra) had allowed the claim of deduction u/s.80 IB considering all the units as separate and independent units. Facts in this year are identical. Therefore, respectfully following the decision of the Tribunal in assessee’s own case in the Assessment Years 2004-05 and 2005-06 (supra) we see no infirmity in the order of the Ld. CIT(A) in allowing the claim of the assessee in relation to Unit V. The order of the Ld. CIT(A) is accordingly upheld. 8. In the result, the appeal of the Revenue is dismissed. 9. The decision was pronounced in the open court on today i.e. 9th February, 2012.
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2012 (2) TMI 524
Denial of deduction u/s 80-IA(4) - income derived by the assessee from development of eligible infrastructural facilities - Held that:- On the requirements of clause (c) of sec. 80-IA(4)(i) requiring it to be harmoniously read with the main sec. 80-IA(4), we do not find substance in the objection raised by the Revenue. We thus respectfully following the decision of the Hon’ble Bombay High Court on the issue in the case of CIT vs. ABG Heavy Industries Ltd & Ors (2010 (2) TMI 108 - BOMBAY HIGH COURT ) decide the matter in favour of the assessee with this finding that assessee is eligible to claim the deduction in question u/s 80-IA (4). The issue is thus decided in favour of the assessee.
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2012 (2) TMI 523
Business income under Section 28(iv) - Held that:- The Tribunal has recorded a finding to the effect that the holding Company had initially advanced funds to the assessee in 1998 as share application money. This was later on transferred as an unsecured loan. The Tribunal has held that the loan availed of for acquiring a capital asset (shares) was waived and cannot be treated as assessable income for invoking the provisions of Section 28. The original receipt being of a capital nature, its waiver did not have the quality of changing its character into a revenue receipt. No substantial question of law would arise. The appeal is accordingly dismissed.
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2012 (2) TMI 522
Addition on account of ‘profits on sale of investments’ - Deduction for Investments written off - Deduction for amortization of Premium on Investment debited to Profit & Loss A/c - Benefit of Exemption under section 10(38) in respect of Profit on sale of investments, Rebate under section 88E and concessional rate of tax under section 111A - Availability of Section 10 Exemption - Non applicability of provisions of section 14A - Non-applicability of provisions of section 115JB i.e. MAT - Higher Interest charged under section 234C.
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2012 (2) TMI 521
Trading addition - applying GP rate of 25.5% or 25.01% - Held that:- Where provisions of section 145(3) is attracted, then addition should be made taking into consideration the past history of the case. Past history is that assessee declared 24.92% in the last year and in this year GP rate declared is 25.01%. Taking into consideration this aspect and taking into consideration that certain purchases remained unverifiable, we are of the view that if a trading addition of ₹ 4,00,000/- is sustained that will meet the ends of justice. We order accordingly. Ground of the assessee is allowed in part and ground of the department fails.
Disallowance of commission expenses - appeal of the assessee was allowed in part by the ld. CIT (A) as he restricted the disallowance of commission @ 20% to the parties whose summons under section 131 could not be served - Held that:- In the year under consideration, there are five parties which were involved for assessment year 2006-07 to whom the commission was paid. Total commission paid to these parties was ₹ 5,83,763/- as ld. CIT (A) restricted the disallowance @ 20% on this commission on the basis of his finding for A.Y. 2006-07. Order of ld. CIT (A) for A.Y. 2006-07 was confirmed by the Tribunal. Facts are similar for the year under consideration. Accordingly we confirm his finding on this issue. The ground of the assessee as well as ground of the department fails.
TDS u/s 194H - Disallowance under section 40(a)(ia) - non deduction of tax on service fees retained by the bank on credit card transaction - Held that:- There is no such relation between the bank and the shop keeper which establishes the relationship of a Principal and Commission Agent. Technically it may be written that bank will charge certain percentage of commission but this is not a commission because assessee sells its goods against credit cards, and on presentation of bills, the bank has to make the payment. It is not the case that bank has advised the assessee to sell their goods to its customers then he will pay the commission. It is reversed in a situation as bank issued credit cards to the credit card holders on certain fees or whatever the case may be and the card holder purchases material from the market through his credit card without making any payment and that shop keeper presents the bill to the bank against whose credit card the goods were sold and on presentation of bill as stated above the bank makes the payment. Therefore, in our considered view, provisions of section 194H are not attracted in this type of transaction. Therefore, we hold that addition made and confirmed by ld. CIT (A) was not justified. Appeal of the department is dismissed.
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2012 (2) TMI 520
Sale value in respect of transfer of tenancy rights for the purpose of computation of capital gain - stamp duty value adoption - sec 50C applicability - Held that:- Assessee had shown value of ₹ 55.00 lacs in respect of transfer of tenancy rights relating to about 1800 sq.ft. area of factory godown. Capital gain has to be computed on the basis of sale consideration received or accruing to the assessee. Even if the document was not registered, the capital gain has to be computed on the basis of the sale consideration shown and received by the assessee unless there was material to show that the sale consideration was understated. Market value cannot be substituted for sale consideration while computing capital gain. Only for the limited purpose of computation of capital gain in respect of sale of land and building, stamp duty value has to be substituted for sale consideration in view of specific provisions of section 50C. Therefore, provisions of section 50C can not be applied in case of transfer of tenancy rights in respect of land or building or both.
In this case, admittedly the document was not registered and no stamp duty had been paid. Therefore stamp duty value can not be adopted for the purpose of computation of capital gain and the value shown in the agreement has to be adopted as there is no material to show that the assessee had understated the sale consideration. We, therefore, see no infirmity in the order of CIT(A) and the same is, therefore, upheld.
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2012 (2) TMI 519
... ... ... ... ..... e based in Muradabad, Rampur, Hapur etc. Table 2 consists of 11 parties, who are based in Jammu. Jurisdiction of said parties in tables 1 and 2 has been transferred by the Board to a single Commissionerate at Delhi. 4. A perusal of the show cause notice reveals that there are allegations in respect of transactions conducted between the parties at Jammu and the parties mentioned in Table 1. Similar/identical show cause notices on similar facts have been issued. In these circumstances, Central Board of Excise and Customs in exercise of power under sub-rule 2 to Rule 3 has issued a notification that the cases of the said parties should be consolidated and the hearing should take place at one place, i.e., Commissioner (Adjudication), Central Excise, Delhi. The said authority is to act as the common adjudicating authority as per notification dated 24th October, 2011. 5. Keeping in view the facts of the case, we do not find any merit in the writ petition and the same is dismissed.
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2012 (2) TMI 518
... ... ... ... ..... gly, the impugned order passed by the Tribunal dated 14.11.2008 is set aside and quashed. The Tribunal will decide the question/appeal afresh without being influenced by the earlier order. We clarify that we have not expressed any opinion on the merits of the case. The statement made by the counsel for the respondent-assessee will not be construed as an admission made by them that they do not have a case on merits. The appeal is disposed of. No costs.
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2012 (2) TMI 517
... ... ... ... ..... e set-aside and that of the Assessing Officer be restored.” 3. At the outset it is observed that the ld. CIT(A) was of the view that since in the quantum appeal, the matter was set aside and sent back to the file of the ld. CIT(A) by the Hon’ble Tribunal vide its order dated 29.12.2010, the penalty order of the ld. AO dated 23.03.2010 will not survive. In fact, the Hon’ble Tribunal in the quantum appeal had restored the matter back to the file of the ld. CIT(A) for deciding the issue afresh. In such circumstances, we are of the considered view that the penalty order should be considered in the light of the quantum appeal decided by the ld. CIT(A). For this reason, we set aside the order of the ld. CIT(A) dated 13.09.2011 and restore the matter back to the file of the ld. CIT(A) to consider the penalty order of the ld. AO in the light of his findings in the quantum appeal. 4. In the result, the appeal filed by the Revenue is allowed for statistical purposes.
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2012 (2) TMI 516
Disallowance being 10% of the dividend income under the provisions of Section 14A - satisfaction by AO - Held that:- In case the Assessing Officer is satisfied with the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, the Assessing Officer is to ascertain the claim of the assessee in so far as the quantum of disallowance under Section 14A is concerned. In such eventuality, the Assessing Officer cannot embark upon a determination of the amount of expenditure for the purposes of Section 14A(1). In case, the Assessing Officer is not, on the basis of objective criteria and after giving the assessee a reasonable opportunity, satisfied with the correctness of the claim of the assessee, he shall have to reject the claim and state the reasons for doing so. Having done so, the Assessing Officer will have to determine the amount of expenditure incurred in relation to income which does not form part of the total income under the Act. He is required to do so on the basis of reasonable and acceptable method of apportionment. Therefore, we restore this issue to the file of Assessing Officer to redetermine the disallowance
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2012 (2) TMI 515
Addition in respect of the sale of flats to outsiders in the free sale component - unlawful consideration - Held that:- Fifteen tenants were duly certified by a statutory board which had control over the process of redevelopment. Each of the tenants had registered agreements. Here again there was no direct evidence available of the receipt of any unlawful consideration. While the Court must take cognisance of the fact that direct evidence may not necessarily be forthcoming in such cases, it is equally necessary that the order of the Assessing Officer should be founded on some material and cannot be based purely on conjectures or surmises. As regards the statement of the Accountant, the Tribunal has taken a possible view by holding that the statement pertained to the free sale component in respect of which no addition has been made on flats sold to outsiders. As noted by the Tribunal, no addition has been made in respect of the sale of flats to outsiders in the free sale component. Hence, no substantial question of law would arise. The Appeal is accordingly dismissed.
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2012 (2) TMI 514
Penalty under Section 271(1)(c) - disallowance u/s 14A - ITAT confirming the deletion of penalty - Held that:- Disallowance under the said Section have been subject matter of debate and different views have been expressed. A legal contention which was plausible and merited consideration was raised. Accordingly, the appellate authorities have applied the explanation to Section 271(1)(c) of the Act. Looking at the nature of explanation offered and the provision in question i.e. Section 14A, which was incorporated by the Finance Act, 2001 with retrospective effect from 1st April, 1962, we do not think in the present case any substantial question of law arises in view of the factual matrix involved. Accordingly, the appeal of revenue dismissed.
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2012 (2) TMI 513
... ... ... ... ..... High Court in the case of Amilaben Upendra Shah (supra) and the decision in the case of Praveen Gupta (supra). Since, the flat was held by the assessee for more than three years, benefit of indexation is to be allowed and the capital gain arising on sale of transfer is liable to be taxed as long term capital gains and not as short term capital gains. 11. In view of the above, the Assessing Officer is directed to compute the capital gains arising on sale of flat as long term capital gain after allowing the benefit of indexation as per law. As regards the contention of the assessee that an amount of ₹ 60,000/- was incurred on renovation, no evidence was filed by the assessee for incurring expenditure on repairs. In the absence of any evidence, the benefit of repairs cannot be allowed. We uphold the order of CIT(A) on this issue. 12. In the result, the appeal filed by the assessee is partly allowed. 13. Order pronounced in the open court on the 29th day of February,2012.
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2012 (2) TMI 512
... ... ... ... ..... nch on 07.02.2012. According to the Assistant Registrar’s report, there is no compliance. Today there is no evidence, on record, of the amount having been deposited either. There is no representation for the appellant despite notice. The appeal is dismissed for want of compliance with Section 129E of the Customs Act. (Pronounced and dictated in open Court)
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2012 (2) TMI 511
... ... ... ... ..... arize and show the actual and true income. The aforesaid book entries cannot be compared to deposit of money in banks/FDRs and earning of interests. Examining the said aspect Bombay High Court in Commissioner of Income Tax Vs. Gem Plus Jewellery India Ltd. (2010) 194 Taxman 192 (Bom.) has held that the aforesaid amount is entitled to exemption/ deduction under Section 10A of the Act and is a part of profits derived from exports. It is an amount received in course of export transaction. 5. Ld. counsel for the appellant Revenue submitted that export transaction was complete when the invoice was raised and the goods were dispatched to the exporter and the entry was made to the books of account. The submission has to be rejected. The transaction is complete when the sale proceeds in foreign exchange were received by the Indian assessee. In fact, the section requires actual receipt of money. 6. Accordingly, we do not find any merit in the present appeal and the same is dismissed.
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2012 (2) TMI 510
... ... ... ... ..... dgments in support of its contention that it has got a very good case on merits and insistence of the respondents for pre-deposit of duty, fine and penalty will cause undue hardship to the appellant. However, the Commissioner, without considering the contentions raised by the petitioner, has mechanically rejected its prayer. In the circumstances, we are of the considered view that this petition deserves to be allowed and the matter requires to be remanded back to the Commissioner for considering the petitioner's aforesaid application for waiver afresh. We, accordingly, allow this petition, set aside the impugned order and remit the matter back to the Commissioner for deciding the petitioner's application for waiver afresh, in accordance with the law and for passing a speaking order. Till such order is passed by the Commissioner, the interim protection granted by this Court to the petitioner vide order dated 24.11.2010 and continued thereafter, shall remain operative.
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2012 (2) TMI 509
... ... ... ... ..... ropriateable to the bare pipes manufactured in Unit No.1. Appeal is disposed off in above manner.” Having heard the learned counsel for the appellant and having perused the record, we find no error in the Tribunal's view. Admittedly, the first unit of the respondent manufacturing bare pipes was set up long before the cut-off date and in fact went into commercial production also before the said date. The orders on record would further suggest that both the units were, for the purpose of excise registration, treated differently. In that view of the matter, though the unit of the respondent manufacturing coated pipes having been set up after the cut-off dates envisaged in the notification for exemption may not be eligible for exemption, the Tribunal correctly held that the unit manufacturing bare pipes would still be so eligible. No question of law arises. Tax Appeal is dismissed. In view of the order passed in the main Tax Appeal, Civil Application is also dismissed.
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