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Income Tax - Case Laws
Showing 181 to 200 of 421 Records
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2012 (4) TMI 474 - DELHI HIGH COURT
Exercise of jurisdiction by the Assessing Officer under Section 147/148 - deduction under Section 33AC and deduction under Section 80IA of the Act - The tribunal has held that the aforesaid reasons to believe do not justify reopening and satisfy the requirements under Section 147/148 of the Act. - Held that :- Re-assessment proceedings were initiated by the Revenue, inter alia, stating that income had escaped assessment in respect of so many items. Additions were made on account of as many as six heads - The order passed by the tribunal is cryptic and does not deal with the contentions and the issues raised with reference to the reopening under Section 147 of the Act - the tribunal has not examined and dealt with the said aspect as mandated and required - accept the appeal by the Revenue and pass an order of remand directing the tribunal to decide the issue afresh
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2012 (4) TMI 473 - DELHI HIGH COURT
Deemed dividend - Assessing Officer held that Rs. 2,13,84,360/- received by the partnership firm from Bharti Enterprises Pvt. Ltd. should be treated as deemed dividend. It may be noted that the two partners hold more than 10% shares in Bharti Enterprises Pvt. Ltd - learned counsel for the respondent-assessee submits that the payment of Rs.2,13,84,360/- was not out of accumulated profits but this contention was not examined by the CIT (A) and Income Tax Appellate Tribunal as the respondent had succeeded on the other ground mentioned above - Decided in favor of the assessee by way of remand to Tribunal.
Regarding capital loss - It was simultaneously claimed that a note was enclosed with the return stating that long term capital gains on the sale of the property was exempt under Section 54, consequent upon her purchase of a residential house in Vasant Vihar for more than Rs.13 crores. The Assessing Officer expressed reservation/doubt about the exemption claim by Deepika Mittal under Section 54 after stating that only Rs.50 lacs was paid to her and balance amount was payable on registration of the sale deed. - held that:- The Revenue should have examined and verified the records before raising the said contention in this appeal.
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2012 (4) TMI 470 - ITAT MUMBAI
Confirmation of the penalty u/s. 271(1)(c) by CIT (A) as on the date of filing of return no judicial pronouncement was available in his favour of assessee – assessee contested that appellant had disclosed all the details with respect to claim u/s. 10B in the computation of income and notes thereon and the said claim was as per Form 56G issued by the Chartered accountant – Held that:- Availability/non-availability of a particular pronouncement on a particular date cannot be the basis for imposing penalty u/s. 271(1)(c) - deduction has to be allowed in respect of three eligible units and loss of the fourth 10A unit has to be set off against the normal business income - Provision of s. 271(1)(c) are valid when there exists concealment of the particulars of the income of the assessee or the assessee have furnished inaccurate particulars of his income - no information given in the return was found to be incorrect or inaccurate – in favour of assessee.
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2012 (4) TMI 469 - DELHI HIGH COURT
Treating the sale proceeds of depreciable assets as short term capital gains – ITAT held the Order to be contrary to Section 50 - Held that:- Given the fact that block of assets is identified by the percentage of depreciation granted, on going through the various heads under the Schedule, we find that the depreciation percentage fixed is more of machinery specific rather than industry specific. Thus, on going through the various clauses in the Schedule, we find, if the asset transferred and the asset purchased fall for consideration under the self-same percentage of depreciation, then the asset qualified for being termed as falling under a block of assets. Thus, if the assets transferred from the 100 per cent export- oriented unit and the assets purchased come for the same percentage of depreciation as prescribed in the table, the assessee would be justified in seeking adjustment in the matter of working out the capital gains.
Whether effect of section 32 should be examined while computing short term capital gains and interpreting Section 50 - held that:- ection 32 forms part of Chapter IV-D and relates to computation of income from profession and business. It is not the case of the Revenue that the gain on transfer of the block of assets is taxable as business income. The two sections operate in their own filed and there is no conflict. In these circumstances, we do not think we should refer and rely upon Section 32 and accordingly compute and decide whether short term capital gains is payable under Chapter IV-E - in favour of the assessee
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2012 (4) TMI 468 - DELHI HIGH COURT
ITAT deleted addition of Rs.5,60,750/-, Rs.4,50,600/- and Rs.8,12,350/- made by the Assessing Officer on the basis of the valuation report – Held that:- AO cannot make addition solely on the basis of the report of the DVO - no incriminating material was found during the course of search and the transactions were duly reflected in the returns filed by the assessee in the normal course – against revenue.
ITAT deleted addition made by the Assessing Officer on account of undisclosed investment – Held that:- Income in question had to be taxed in the hands of Association of Persons and the mere fact that the said income was taxed in the hands of individual members of Association does not bar the Income Tax Officer from taxing the Association of Persons - Order passed by the tribunal is perverse and an order of remit is passed to the tribunal to re-examine the question of taxability on account of the undisclosed investment in the purchase of property No.1028, Sector 15-II, Gurgaon in the hands of the respondent-assessee –in favour or revenue.
Undisclosed income in the block assessment proceedings has to be taxed at a flat rate - no matter whether the income has been assessed under the head “income from business”, “income from other sources” or “income from property”.
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2012 (4) TMI 467 - ITAT CUTTACK
Income from a market complex for commercial purpose - Income from house property or business income – Held that:- The Assessing Officer has rather misdirected himself to hold the case laws cited by him leaning in favour of the Department - that the bank took cognizance of the commercial viability of this project to grant loan which partners pooled their resources to repay the loan and let out the property to the commercial organizations for earning income against which incidental expenses incurred for carrying out such activities - as it is rendered its income, residual to receipts from the lessees on account of electricity, water charges etc., which are the business activities from the assessee to charge for their portion and incur the remaining for itself along with the maintenance and providing security was in the nature of carrying out commercial activities and not for the purpose of letting it out as house property- the impugned orders of the authorities below are set aside with a direction to the Assessing Officer to accept the return of the assessee holding the same as income from business and not income from house property – in favour of assessee.
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2012 (4) TMI 466 - ITAT, AHMEDABAD
Disallowance u/s.40(a)(ia) - reopening of the assessment – CIT(A) charging interest u/s.234B and initiating penalty proceedings u/s. 271(1)(c) – Held that:- Decided in Kanubhai Ramjibhai Makwana Versus ITO (2010 - TMI - 202951 - ITAT, AHMEDABAD) that provisions of section 40(a)(ia) as amended by Finance Act, 2010 w.e.f. 1.4.2010 are to be treated as having retrospective application with effect from 1st April, 2005 - Assessing Officer is directed to delete the disallowance of ₹ 3,69,568/- as made u/s. 40(a)(ia) of the Act – in favour of assessee.
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2012 (4) TMI 465 - PUNJAB AND HARYANA HIGH COURT
Deduction u/s 80 HHC on export incentives received by the assessee as a supporting manufacturer in the same manner as in the case of direct exporter, treating the supporting manufacturer at par with the direct exporter – revenue appeal - Held that:- Court being the jurisdictional Court has already decided the issue raised in Special Leave Petition against the revenue and the instant appeal will follow the suit – in favour of assessee.
Addition of Rs. 8,38,77,635/- made by the AO on account of difference in the value of stock as per stock statement submitted to the Bank and that as per the books of account – Held that:- The mere fact that value furnished to the bank is without any detail or verification by the bank may not constitute the basis to make additions - there are categorical finding that the assessee- respondent had maintained broad details of the stock, its consumption, production and closing balance and the accounts have been maintained on day to day basis which have been accepted by the Excise and VAT authorities – in favour of assessee.
Depreciation - depreciation @ 50% on the purchase of machinery under TUF Scheme as against depreciation @ 25% allowed by the A.O.- Held that:- The machinery has been purchased as per TUF Scheme, making the assessee- respondent eligible for deduction at higher rate - the nature of stock purchasing is a finding of fact and revenue- could not advance any argument warranting admission of the appeal – in favour of assessee.
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2012 (4) TMI 464 - GUJARAT HIGH COURT
Reopening - Deduction u/s 80IA - assessee having challenged the notice of reassessment in a proceeding under Article 226 of the Constitution - contractor or supplier of irrigation products versus developer of any new infrastructural facility. - held that:- It is now a settled law that if an explanation is added to a section of a statute for the removal of doubts, the implication is that the law was the same from the very beginning and the same is further explained by way of addition of the Explanation. Assessing Officer earlier did not arrive at such conclusion and thus, the amended Explanation subsequently added cannot be of any help to him in arriving at the second opinion based on the alleged new law. In the absence of existence of "any tangible material" to come to the conclusion that there was escapement of income from assessment, the Assessing Officer exceeded his authority to reopen the assessment merely on the basis of a "change of opinion" and accordingly, it is a fit case of quashing the notice. - Decided in favor of the assessee
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2012 (4) TMI 463 - GUJARAT HIGH COURT
Power to transfer case from Vapi to Surat - Principles of natural justice - Petitioners filed objections and for effective and coordinated investigation in the search cases of the same group, the order impugned in the applications was passed - held that:- the requirement of recording reasons under section 127(1) is a mandatory direction under the law and noncommunication thereof is not saved by showing that the reasons exist in the file although not communicated to the assessee as held by the Supreme Court in Ajantha Industries vs. Central Board of Direct Taxes (1975 (12) TMI 1 - SUPREME Court).
Division Bench of this court in the case of Arti Ship Breaking vs. Director of Income Tax (Investigation) and others (2000 (3) TMI 38 - GUJARAT High Court) considered the similar question as to whether non-discloser of reason in the order of transfer vitiates the order and in spite of referring the above decision of the Supreme Court decided to ignore such vital defect.
Since we propose to hold that the law laid down in the case of Ajantha Industries (supra), is still the law of the land and has not been overruled by any competent bench of the Supreme Court whereas a co-ordinate Division Bench has taken a contrary view, judicial decorum demands that we should refer the matter to a larger bench for deciding the question - matter referred to LB.
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2012 (4) TMI 462 - KARNATAKA HIGH COURT
Deduction u/s 80-IB (10) - the sanction plan was issued on 4.4.2005 making it clear it comes into effect from 4 4.2005 and will be in force till 3.4.2007. Assessee contended as the approval was granted on 28.3.2005. he is entitled to the benefit under Section 80-IB(10) of the Act from the assessment year 2005-06 onwards - Held that: it was communicated to the assessee on 4.4.2005 and in law he should have 2 years time to complete the construction, the said communication and the sanctioned letter made it clear the time for completing the construction starts from 4,4,2005 and it ends on 3.4.2007 - As per the judgment of the Bombay High Court, once approval is granted it dates back to the date of application. Even that exercise is not to be done in this case, as the date of approval is 28.3.2005 the assessee is entitled lo the benefit for the assessment year 2005-06 - Decided in favor of the assessee
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2012 (4) TMI 461 - ITAT CHENNAI
Whether lower rate of tax u/s 115E will be applicable to long term capital gains on sale of bonus shares where such bonus shares resulted out of original investments of shares made out of convertible foreign exchange - Held that: A conjoint reading of Section 115E and 115F clearly show that long term capital gains mentioned in clause (b) of Section 115E and investment made out of sale consideration received on transfer of foreign exchange asset mentioned in Section 115F, both relate to income arising out of transfer of foreign exchange asset - In the case of Sanjay Gala v. ITO [2011 - TMI - 205129 - ITAT, MUMBAI - Income Tax] - it is clear that foreign exchange asset for the purpose of section 115F is the one which assessee has acquired in convertible foreign exchange. In the present case, the assessee subscribed to shares in convertible foreign exchange and acquired the foreign exchange asset - assessees cannot be deprived of the concessional rate available under Section 115E of the Act just because the sale of shares were bonus shares - Appeals are allowed
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2012 (4) TMI 455 - DELHI HIGH COURT
Jurisdictional pre-conditions for reopening under Section 147 – ITAT held that conditions were not satisfied in the present case - Revenue submitted that if the by mistake or lapse he does not examine a particular entry or a note in the return and overlooks it, there is no application of mind and thus it is not a case of mere change of opinion – Held that:- The matter should be examined by a larger Bench for elucidation and examination as the proposition clearly envisages a formation of opinion by the Income-tax Officer on the basis of material already on record provided the formation of such opinion is consequent on "information" in the shape of some light thrown on aspects of facts or law which the Income-tax Officer had not earlier been conscious of - it is a case where the Income-tax Officer looked at the facts and accepted the assessee's contention that the surplus was not taxable - referred to a larger Bench.
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2012 (4) TMI 454 - DELHI HIGH COURT
Deduction u/s 80I - Invoking and exercise jurisdiction under Section 263 – interest income on short term bank deposits and tank hire charges - ITAT confirmed CIT order – Held that:- Immediate and first source of receipt of interest income is the deposit of money and not the industrial activity. Manufacturing activity, or profit earned therefrom, is not the proximate source of the interest earned. The said interest income, therefore, cannot be treated as income earned or derived from manufacturing activity undertaken by the industrial unit.
Tank hire charges were received by the appellant-assessee from the consumers to whom Ammonia was supplied. It represents payment for transportation. On query, it is accepted/stated by the appellant that these tank hire charges were separately billed and these tanks were the carriage wagons owned by the Railways. Transportation charges when separately billed and charged cannot be included in the profit and gain from manufacturing activity undertaken by an industrial unit. – against assessee.
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2012 (4) TMI 453 - DELHI HIGH COURT
Writ of certiorari - assessee contested that the AO completed the assessment ex-parte under Section 144 – delay in filing the revision petition before the CIT- Held that:- Assessment order dated 28.2.2003 was never served on the petitioner firm or any of its partners and that it was for the first time that the petitioner firm came to know of the passing of the assessment order when the application filed by the income tax department before the Debt Recovery Tribunal came up for hearing - there existed reasonable cause for the delay in filing the revision petition before the CIT under Section 264 - CIT is directed to take up the revision petition and decide the same on merits in accordant with law after giving due opportunity to the petitioner firm of being heard – in favour of assessee.
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2012 (4) TMI 452 - HIMACHAL PRADESH HIGH COURT
Whether the assessee is entitled to the exemption under Section 10(20)- Held that:- Since the AMC(s) is neither a Municipal Committee nor a District Board under the said Explanation to section 10(20)of the 1961 Act no question arises whether the AMC(s) is legally entitled to the control of the local fund i.e.Market Fund - AMC(s) is therefore not entitled to exemption under section 10(20) after the insertion of the said Explanation, vide the Finance Act, 2002, with effect from April 1, 2003 - against assessee.
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2012 (4) TMI 451 - GUJARAT HIGH COURT
Deemed income – addition made on account of sundry creditors under Section-41(1)(a) - Appellate Tribunal deleted addition – Held that:- Decision in CIT, Calcutta vs. Sugauli Sugar Works (P) Ltd (1999 (2) TMI 5 - SUPREME Court) taken that only if the assessee has made an entry of transfer in his accounts unilaterally will not enable the Department to say that S. 41 would apply and the amount should be included in the total income of the assessee - expiry of period of limitation did not extinguish the debt but only prevented the creditor from enforcing the debt – in favour of assessee.
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2012 (4) TMI 450 - BOMBAY HIGH COURT
Set off of brought forward unabsorbed depreciation and losses of the unit the Income which is not eligible for deduction under Section 10A of the Act – Held that:- Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter – against revenue.
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2012 (4) TMI 449 - ITAT, AHMEDABAD
Disallowance of ₹ 58,05,328/- u/s 40(a)(ia) – Held that:- Decided by the Hon’ble Calcutta High Court in the case of CIT vs. Virgin Creators (2011 - TMI - 210395 - CALCUTTA HIGH COURT) confirming retrospective effect of section 40(a)(ia) on tax deducted at source and paid before the due date of filing of the return of income – in favour of assessee.
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2012 (4) TMI 448 - DELHI HIGH COURT
Disallowance of expenses for the period prior to date of Set up of business by AO – Held that:- It cannot be said that the business had commenced only from 1st June, 2001, when the assessee acquired the rights under the agreement dated 21st May, 2001 - Tribunal has rightly kept in mind the difference between setting up of business and commencement of business - the assessee is in a complete state of readiness to undertake its activity, it can be said that it has set up its business, the actual commencement of business may be at a later date – in favour of assessee.
Capitalization of expenses and consultancy paid to the architects by AO – Tribunal treated expenditure incurred in respect of leasehold premises on account of electrical work, wooden partitions, laying down of cables, false flooring etc and consultancy to architect makes no addition of extension of the premises taken by the assessee on lease as nothing was added to the profit making apparatus hence no merit in the treating all such expenditure as capital in nature - Held that:- Break up and particulars regarding the expenditure is not available and referred to and no information about the said expenditure was towards purchase and installation of air conditioners/air conditioning plant, furniture etc- Since the factual details have not been considered by the tribunal - set aside the findings recorded by the tribunal and pass an order of remand for fresh decision after ascertaining the factual aspects.
Legal and professional charges treated as revenue in nature by ITAT - Held that:- This expenditure was in connection with the transfer of assets and liabilities therefore, should be treated as a part of cost of acquisition of the business/asset - an order of remit with a direction to first examine and decide the factual aspects.
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