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Income Tax - Case Laws
Showing 381 to 400 of 421 Records
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2012 (4) TMI 127 - BOMBAY HIGH COURT
Debenture Redemption Reserve - whether qualify as reserve for the purpose of Section 115JA - AY 1997-98 Held that:- Supreme Court in National Rayon Corporation Ltd. Vs. CIT (1997 (7) TMI 113 - SUPREME Court) have held that basic principle is that an amount set apart to meet a known liability cannot be regarded as reserve. Where a company issues debentures, the liability to repay arises the moment the money is borrowed. The mere fact that a Debenture Redemption Reserve is labeled as a reserve will not render it as a reserve. Consequently, Tribunal was correct in holding that the Debenture Redemption Reserve is not a reserve within the meaning of Explanation (b) to Section 115JA Decided in favor of assessee. Dis-allowance of pre-operative expenses by A.O. treating it to be capital expenditure Held that:- Tribunal deleted the dis-allowance in view of its earlier decision in relation to AY 85-86 confirmed by this court treating Pre-operative expenses viz salary and wages, staff welfare expenses, power, travelling, legal and professional fees and miscellaneous expenses to be revenue expenditure No infirmity found in the order Decided in favor of assessee.
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2012 (4) TMI 126 - ITAT HYDERABAD
Compensation for foregoing right to acquire the shares - the company received Rs.10 Crores towards compensation for waiving the right to receive the equity shares which was admitted under the head "Other Income" in the profit and loss account whereas in the computation of income the assessee company claimed this receipt to be capital in nature -It was the contention of AR that, there was no cost of acquisition incurred by the assessee for obtaining the rights under the agreement cited earlier in this order and so there could be no capital gains assessable in that connection - Held that :- the entire amount of Rs.10 crores received by the assessee company towards compensation for waiver of rights to receive the shares of KPCL is to be brought to tax as capital gain to be computed as long term or short term depending upon the investments/advances as made by assessee Recalculation of deduction under section 80IC - The AO has pointed out in the assessment order that the assessee has clearly deflated salary expenses, raw material expenses, etc. with respect to Dehradun to artificially inflate the profit - the formulations in Mekaguda unit cannot be sold in the market, it is obviously not practical for him to calculate the prices of inputs on the basis of market prices - Held that :- it is most appropriate to consider the actual cost as per cost records maintained by the assesee and thereafter assessing office consider the profits on these transaction as compared to other industries in similar line or if there is no comparable, fix reasonable percentage of profit depending upon market condition prevailing in the similar line of industry. Thus to set aside this issue to the file of assessing office to bring the comparable cases on record and redo the assessment on this issue. addition made by the assessing office towards interest - The assessee company had advanced certain loans to M/s Natco Organics Limited in the earlier years and the assessee has not admitted any interest - Held that :- Assessing Officer does not have any basis on the addition made for the interest - The issue is covered in favor of the assessee as that interest has to be charged from the date on which there is a resolution of the Board of the company stating that interest has to be charged.
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2012 (4) TMI 125 - DELHI HIGH COURT
Disallowance u/s 14A - Assessing Officer, while making disallowance under Section 14A, had observed as under: In the computation of income assessee has shown a dividend income of Rs.1,12,89,548/- and claimed the same as exempt u/s 10(33) of I.T. Act - The reply of the assessee has been considered and as per provisions of sec. 14A as mentioned above, the expense relatable to earning of exempt income are not allowable - CIT(Appeals), as observed above, held that the investment with reference to the applicability of section 14A should be taken as Rs.13,57,50,000/- and not as Rs.18,57,50,000/- after inter alia holding that the investment of Rs.5,00,00,000/- in bonds of ICICI Bank had not resulted in tax-free income - It is clear from the observations made by the Assessing Officer, in the assessment order, that his intention was to segregate and compute the disallowance to be made of expenses under Section 14A - Held that: the disallowance, if any, to be made by the Assessing Officer will not exceed the disallowance which was made in the original assessment order as reduced by the CIT(Appeals) - Decided in favor of the assessee by way of remand to AO
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2012 (4) TMI 124 - ALLAHABAD HIGH COURT
Assessee in default - TDS u/s 194I - Central Board of Direct Taxes in Circular No.715 dated 8th August, 1995 - A plot of land was purchased by Late Sri Pyare Lal long back on which a building was constructed, which was numbered as 141/1, Hanuman Road, Ward -3, Shamli, district Muzaffarnagar - Fourteen persons, including M/s. Atma Ram and Brothers, executed a registered lease deed on 2nd January, 1986 giving lease of 6290 sq.ft covered area on the ground floor of the aforesaid property to the Manager, State Bank of India, Hanuman Road, Shamli, Muzaffarnagar - The covered area of 3287 sq.ft of the aforesaid property on the ground floor was given to the Senior Manager, Oriental Bank of Commerce vide registered lease deed dated 17.10.1997, which was valid for 20 years at the monthly rent of Rs.8904.50 per month inclusive of house tax and all other taxes with a clause that after every five years there would be an increase of 15% in the rent - On a reading of the Section 194-I and the scope and effect elaborated by the Board it is clear that Section 194-I was inserted to bring more persons in the tax net and it also helps in the reporting of correct income by way of rent - It has come on record that after the letter written by one of the coowners that the premises is owned by 15 co-owners and their shares are definite, the Bank has been paying rent to each co-owner by a separate cheque, the total of which did not exceed Rs.1,20,000/- a year - Decided in favor of the assessee
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2012 (4) TMI 123 - PUNJAB AND HARYANA HIGH COURT
Income from 'lottery' - revenue filed an appeal against the order of Tribunal as assessee was liable to pay tax on the prize of 1Kg. Gold won by him Section 2 (24)(ix) of the Income-tax Act, 1961 - assessee subscribed to PPF which formed part of Small Savings Scheme of the Government - lucky coupons were issued to encourage investments and the assessee was also issued a lucky coupon which won the prize of 1Kg. Gold - assesse contented that gold received by him did not amount to winning from lottery because for the purpose of lottery the assessee has to purchase a ticket and he loses the amount spent on purchase of lottery ticket but in case of contribution to small savings scheme a person obtains a return on his investment and there is no risk of loss on the amount contributed - Held that :- It may be observed that all the categories which are brought to tax in s. 2(24)(ix) concerns those schemes where there was an element of risk meaning that a person could lose part of his money except in the case of cross-word puzzles which has been specifically mentioned therein - assessee has invested in PPF and his contribution and return at the fixed rate remain the same and will be given to the person on maturity of the scheme irrespective of the fact whether the person has won the prize or not. Therefore, there is no element of risk involve - amount realised would not fall within the provisions of Section 2(24)(ix) and cannot be brought to tax - question raised by the revenue is decided in favour of the assessee and against the revenue.
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2012 (4) TMI 122 - ITAT MUMBAI
Assessee in default - Time limitation - assessee had a successful GDR issue with nine times over subscription and allotted 6,613,750 GDRs inclusive of firm and optional GDRs being the maximum issue possible at a rate of US$ 7.56 per GDR - The work involved in the issuance of GDRs to international investors was carried out outside India and as indicated above, the distribution and marketing as also approaching target international investors all necessarily had to be done outside India - AO passed an order u/s. 195 of the Income Tax Act, 1961 (the Act) on 30/3/1995 holding that the payments made by the assessee to the non-resident Lead Manager's was in the nature of fees for Technical Services rendered and therefore, the assessee ought to have deducted tax at source on the payments so made - AO worked out the quantum of tax in respect of which the Assessee was to be treated as Assessee in default and the quantum of interest payable on tax not deducted at source as follows - It has also been submitted that the question of limitation in whatever manner it arises is a question of law and goes to the root of the appeal and jurisdiction of the Tribunal - The liability of the person liable to deduct tax is a vicarious liability and, therefore, he cannot be put in a situation which would prejudice him to such an extent that the liability would remain hanging on his head for all time to come in the event the Income-tax Department decides not to take any action to recover the tax either by passing an order under section 201 of the Income-tax Act, 1961, or through making an assessment of the income of the person liable to pay tax - no period of limitation can be read into the provisions if there is no period of limitation specified in the Act for taking action u/s. 201(1) or 201(1A) then no time limit can be read into those provisions - Decided in favor of the assessee
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2012 (4) TMI 121 - KERALA HIGH COURT
Search and seizure of 4136.83 grams of gold from the business premises - Following the search and seizure, by Exts.P2 to P2(f) orders issued on 31/12/2010, assessment for the years 2003-04 to 2009-10 was completed under Section 153C of the Income Tax Act - Penalty u/s 271(1)C - the correctness of the stand taken by the respondents in refusing to release the gold to the petitioner has to be decided with reference to the pendency of the penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961 - the respondents do not contend that the petitioner had any existing liability and therefore, the first part of section 132B(1)(i) of the Act does not have any relevance - the contention of the petitioner is that the section entitles the respondents to apply the assets seized only towards existing liability, liability determined, penalty levied and interest payable - These orders itself stated that penalty proceedings under section 271(1)C of the Act are being initiated and accordingly such proceedings have been initiated and are pending - When statute recognizes the entitlement of the respondents to apply the asset seized towards the tax liability determined,which includes penalty, it is puerile to contend that the statute obliges the respondents to return the same on determination of the tax liability and before levying the penalty - Held that: the section entitles the respondents to retain the gold in question with them until penalty is levied and apply the same towards the liability so determined, provided the petitioner is in default or deemed to be in default
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2012 (4) TMI 120 - ITAT MUMBAI
Addition u/s 92CA(4) of Rs.1,93,48,372 - A reference u/s. 92CA(1) of the I.T. Act for the Assessment Year 2004-05 was made to the TPO for computation of Arm's Length Price (ALP) in relation to the international transactions carried out by the assessee - TPO noted that the assessee has used TNMM method and its OP/TC comes to 1.8%. By taking comparable margins as per Annexure-I, the TPO noted that the OP/TC ratio comes to 20.42% for the sample set - TPO vide notice dated 24.11.2006 asked the assessee to show cause as to why the mark-up earned by the assessee at 10% upon cost be not considered as under pricing of the services to the parent company as the industry is earning a mark-up of over 30% - It is only after this incomplete list showing lesser profit than the profit declared by the assessee was brought to the notice of the TPO that he excluded the 47 loss making companies to determine the mean average profit at 20.42% - the submission of the Ld. Counsel for the assessee that there is no basis for only excluding the loss making companies and not excluding the high profit making companies or companies which are not at all comparable considering their size, volume of turnover and other factors. In our opinion, the whole exercise of selecting the comparables by the TPO is not proper and is in a haphazard manner - Decided in favor of the assessee Regarding addition of Rs.1,13,84,034/- made by the AO on account of income received from the holding company treated as advance by the assessee deleted by CIT(A) - Held that: during the course of assessment proceedings the assessee has given a statement that it has received advance towards market research analysis services rendered during the year - Appeal is partly allowed by way of remand to AO
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2012 (4) TMI 119 - KERALA HIGH COURT
Saty petition - Taking note of the pendency of appeals and stay petitions mentioned above, this writ petition will stand disposed of directing that the first respondent will consider and pass orders on Exts.P3 and P7 stay petitions - Petition is stayed
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2012 (4) TMI 118 - KERALA HIGH COURT
Recovery of duty - Petition to defer recovery proceedings - appeal against the order/ rectification order and stay petition are pending consideration - Held that:- 2nd respondent is directed to consider stay petition filed within stipulated time. Meanwhile further proceedings for recovering the amount due under said orders will be kept in abeyance.
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2012 (4) TMI 117 - GUJARAT HIGH COURT
Deduction u/s 80IA - Rule 18C[4] of the Income Tax Rules, 1962 - petitioner, by a letter dated December 9, 2005 informed the Assistant Commissioner of Income Tax that the time mentioned as "September, 2002" was a typographical mistake in the petitioner's earlier letter dated August 25, 2003 and the correct time to be read was "September, 2001 - according to the petitioner, the Board ought to have notified the industrial park on getting a copy of approval letter dated June 21, 2001 of the Commerce Ministry, which is annexed to the writ-application as Annexure: A - it is the duty of the Commerce Ministry to decide whether an industrial undertaking is complying with the conditions envisaged in the scheme and if the undertaking fails to comply with those conditions, it is the Commerce Ministry alone, which has the right to withdraw the benefit granted under sub-rule [2] of Rule 18C of the Rules - Held that: it is a fit case where the petitioner is entitled to the relief claimed in the application. We, accordingly, direct the Central Board of Direct Taxes to notify the petitioner's industrial park for the benefits under Section 80-IA in terms of Rule 18C[[4] of the Rules within one month from today without any further inquiry - Decided in favor of the assessee
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2012 (4) TMI 116 - KARNATAKA HIGH COURT
Royalty paid to foreign software Supplier Held that:- Consideration paid by the Indian customers or end-users to the assessee - a foreign supplier, for transfer of the right to use the software/computer programme in respect of the copyrights fells within the mischief of 'royalty' as defined under sub-clause (v) to Explanation 2 to Clause (vi) of section 9(1). See CIT v. Samsung Electronics (P.) Ltd (2011 - TMI - 208153 - Karnataka High Court) Decided in favor of Revenue
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2012 (4) TMI 115 - KERALA HIGH COURT
Disallowance of Depreciation - appellant is a charitable institution under Section 12A acquired medical equipments with the surplus funds available AO held that the assessee claims expenditure for acquisition of assets claiming depreciation in the computation of income though the appellant enjoys a 100% write off of the cost of assets resulting in double deduction of capital expenditure leading to violation of the provisions of Section 11(1) assessee contented that the system of allowing depreciation was followed by the assessee for several years - Held that :- if the assessee treats expenditure on acquisition of assets as application of income for charitable purposes under Section 11(1)(a) and claims depreciation then in order to reflect its true income, the assessee should write back in the accounts the depreciation amount to form part of the income -assessee cannot be taken by surprise by disallowing depreciation which was being allowed for several years and to demand tax for one year after making dis-allowance - assessee should be allowed to write back the depreciation for this year and even for previous and then allow the same to be carried forward for application for subsequent years - appeal in favour of Revenue but by granting the relief to the assessee .
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2012 (4) TMI 114 - ITAT MUMBAI
Assessee filed a return declaring a loss - scrutiny with the service of notice u/s 143(2) of the Act - A.O noticed that the assessee had entered into international transactions with its A.E TPO suggested initiation of penalty proceedings u/s 271AA, 271G and 271BA - Ld. CIT(A) deleted the penalty levied by the AO as the appellant had submitted chronology of events before the TPO Held that:- In the penalty orders passed by the AO,there is nothing to suggest as to which particular information or document was not submitted by the assessee nor the exact nature of default has been brought out - the Revenue have not placed any material, controverting the findings of the ld. CIT(A) to enable take a different view in the matter appeal of revenue dismissed.
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2012 (4) TMI 113 - ITAT DELHI
Clerical mistake in filing return - return declaring nil income filed by the assesse - providing education and training for professionals in insurance and finance sector - service of a notice u/s 143(2)for scrutiny - A.O. noticed in the Tax Audit Report in Form 3CD that the prior period expenses totaling to Rs. 36,14,178/- were debited by the assessee under the different heads in the profit and loss account for the period ended 31.03.2006 - Show cause was issued as why the assessee did not add back aforesaid prior period expenses in the computation of income - the assessee submitted that the return filed originally contained some clerical mistakes and revised the computation of income, adding back the aforesaid amount of Rs. 36.14 lacs besides disallowing an amount of Rs. 2,17,344/- u/s 40(a) of the Act and claiming higher depreciation -The AO while accepting the revised computation of income added another amount of Rs. 7,000/- towards charity and donation and assessed loss - the AO initiated the penalty proceedings u/s 271(1)(c) of the Act in response to a show cause notice - After considering the reply to SCN, the AO levied penalty @100% of the tax evaded on the income as a result of aforesaid disallowances of Rs. 36,14,178/- and Rs. 2,17,344/- on the ground that the assessee furnished inaccurate particulars of income - Held that :- mere erroneous claim in the absence of any concealment or furnishing of inaccurate particulars, is no ground for levying penalty, especially when there is nothing on record to show that any material particulars were concealed or furnished inaccurate - appeal of revenue dismissed
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2012 (4) TMI 101 - ITAT MUMBAI
Allow ability of discount charges in respect of debentures issued by the assessee while computing income from house property - the outstanding loans which were utilized for the construction of property were converted into deep discount debentures in assessment year 2001-02 - AO observed that it was a colourable device. - AO further observed that no interest liability had accrued to the assessee as the liability on account of interest would arise only on maturity of deep discount debentures. He therefore held that the claim of deduction under section 24(b) was not allowable and accordingly he disallowed the claim in both the years which was disputed by the assessee. - CBDT in Circular No.28[F 8/8/69-IT(A-I)] dated 20.8.1969 a copy of which has been placed by the assessee at page 46 of the paper book that fresh loan raised to repay the original loan used for construction of house property will be eligible for deduction under section 24(vi) which corresponds with present section 24(b) - Held that: the claim has already been allowed by the Tribunal in the initial year i.e., assessment year 2001-02 and appeal filed by the department has been dismissed by the Hon'ble High Court - the principle of re-judicata is not applicable in case of income tax proceedings, the rule of consistency has to be followed when there is no change in legal and factual position.
In view of the judgment of Hon'ble Supreme Court in the case of Madras Industrial Finance Corpn. Ltd. (1997 -TMI - 5591 - SUPREME Court), the difference between the issue price and maturity value has to be spread over the debenture holding period and only proportionate amount can be allowed as deduction in a particular year.
Tax liability in the hands of director - held that:- it is for the department to ensure that the director pays tax on interest income from year to year as it has power to enforce compliance and assessee can not be penalized for the failure of the department to take action in case of the director.
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2012 (4) TMI 100 - BOMBAY HIGH COURT
Interest u/s. 234A, 234B, & 234C - assessee is a notified person under the Special Court (Trial of Offences relating to Transactions in Securities) Act 1992 - The levy of interest under the provisions of Sections 234A, 234B and 234C is mandatory in nature - The submission which has been urged on behalf of the Respondent, however, is that the provisions of the Special Court Act, would override those of the Income Tax Act, 1961 and that consequently the provisions of Sections 234A, 234B and 234C would not be attracted - the remedy of a notified person who is assessed to penalty or interest after the notified period would be to move the appropriate authority under the taxing statute in that connection - it has been directed that no reduction or waiver of interest shall be ordered unless the assessee files a return of income for the relevant Assessment Year and pays the entire income tax due on the income as assessed - Held that: the assessee in the present case, is not without remedy since it is open to the assessee to take recourse to the remedy available under the direction dated 26 June 2006. We accordingly answer the questions of law as framed in the negative - it would be open to the notified person to seek a waiver or reduction by making an application to the Chief Commissioner of Income Tax in terms of the order dated 26 June 2006 of the Central Board of Direct Taxes. - The appeal is accordingly disposed of
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2012 (4) TMI 99 - BOMBAY HIGH COURT
Exemption u/s 10A(2) - Depreciation - Deduction u/s 80HHE - Capital or revenue expenditure - Assessing Officer held that the undertaking was carrying on the same business before Assessment Year 1995-96; it was formed by splitting up or reconstruction of a business already in existence since the same business was being carried on by the software division of IOCL before the assessee came into existence and all the assets and liabilities including plant and machinery previously used were transferred to the Section 10A undertaking - In relation to a software technology park, the condition required that the undertaking must begin to manufacture or produce articles or things during the previous year relevant to the Assessment Year commencing on or after 1 April 1994 - the test in law is as to whether the undertaking is formed by splitting up or reconstruction of a business already in existence - Tribunal in the present case has come to the conclusion that where a running business is transferred lock, stock and barrel by one assessee to another assessee the principle of reconstruction, splitting up and transfer of plant and machinery cannot be applied - Reconstruction is of a business already in existence and there must be a continuation of the activities and business of the same industrial undertaking - In the present case, the entire business of the software undertaking was transferred to the Assessee - Decided in favor of the assessee
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2012 (4) TMI 91 - GAUHATI HIGH COURT
Validity of revisionary powers exercised by CIT u/s 263 exemption u/s 54F for LTCG on sale of shares granted by A.O. shares purchased on 21.04.2000 for Rs 19,536 sold on 02.05.2001 for Rs 6,36,640 increased price of more than 30 times in one year CIT suo-moto assumed jurisdiction on ground that AO failed to make any enquiry while accepting genuineness of the share transaction Tribunal set aside order of CIT Held that:- Jurisdiction u/s 263 in the present case has not been exercised merely on the ground that the A.O. should have gone deeper into the matter but by pointing out that the A.O. had failed to apply his mind in allowing the benefit u/s 54F by accepting the genuineness of the capital gain - Decided in favor of Revenue.
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2012 (4) TMI 90 - KARNATAKA HIGH COURT
Capital gain - the assessee had filed its return of income and had, amongst others, offered an income of Rs.11,15,44,005 as capital gains - in the instant case, that the return was filed by the assessee and the assessee disclosed a capital gain amount of Rs. 11,15,44,005 - A footnote if at all can be for the pur- pose of amplification or for further reference or any such thing, but not to indicate a stand contrary to the main thing - a footnote cannot guide or control a return which is filed by an assessee. A footnote if at all can be for the pur- pose of amplification or for further reference or any such thing, but not to indicate a stand contrary to the main thing - Held that: the instant case was not one of a principle of estoppel being put against the assessee to deny any examination but it was a more a case of non-production of relevant material by the assessee which would have compelled the Tribunal or the Appellate Commissioner to examine and opine on that and merely raising a ground is not a substitute for material to make good the ground - Appeal is dismissed
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