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Income Tax - Case Laws
Showing 401 to 420 of 743 Records
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2012 (9) TMI 576
Writ petition – Re-vesting of property in hand of transferor u/s 269UH - The order u/s 269UD came on April 28, 1993, pursuant to which the subject land stood vested in the Central Government - Writ petition filed by person who was already have an agreement with owner of land – No stay had been granted by the Bombay High Court till August, 1993 - Consideration was not tendered, upto the date of dismissal of Writ petition by HC on Sep 20, 2005 – Present Writ Petition was filed on Nov. 1, 2006 challenging on the basis of that CG had not tendered the amount of apparent consideration by the date fixed by section 269UG – HC did not provide any interim relief to respondent – Held that:- Sec. 269UG, the amount of consideration was required to be tendered within a period of one month from the end of the month in which order of such vesting took place i.e. by end of May, 1993. The writ petition file was dismissed on Sep 20, 2005, after which there was no reason for the CG not to tender the amount. The present petition came to be filed on or about November 1, 2006, and no interim relief has been granted therein. However, till date even in the year 2012, the consideration payable in accordance with the provisions of Sec 269UF has not been tendered to the petitioners. On account of failure on the part of the respondents to tender the amount of consideration payable u/s 269UF, the order dated April 28, 1993 stands abrogated in view of the mandatory provision of Sec 269UG(1) and the Central Government stands divested of the title which was vested in it as in accordance with Sec. 269UH. Decision in favour of assessee
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2012 (9) TMI 575
TDS u/s 194C on sub-contractor - Assessee get work contract for Construction of roads & bridges – Assessee deduct TDS on subcontract of supply of labour @ 1.2% - AO disallow the same because assessee fail to substantiate that work was sub contract – Held that:- As per Sec. 194C, sub-contractor would means a person who enters into a contract with the Contractor for carrying out or for supply of labour for carrying out whole or part of work undertaken by the contractor. Therefore it is clear from the above provision that person supplying the labour is a sub-contractor. And assessee applies TDS rates as per Law. Decision in favour of assessee
TDS u/s 194C – Assessee is engage with person for supplying of Bitumen to hot mix plant assessee's site – Assessee consider the same as sub-contractor for the purpose TDS and deduct the TDS @ 1.2% - Held that:- As they are not involved in execution of any part of the contract which was taken by the assessee and accordingly the assessee should have deducted full tax @ 2% from this party. However, at the same time it is also required to be verified whether the payments were made to this party or they are still payable because the Special Bench of the Tribunal, in case of Merilyn Shipping & Transport (2012 (4) TMI 290) has already taken a view of Sec. 40(a)(ia) would be applicable only if the amount remains payable. Therefore case remand back to AO.
Delay in deposit of Employees Provident Fund – AO disallows the amount on account of delay in deposit of EPF on due date as per Sec. 36(1)(va) - Held that:- Payment were made with in grace period of 5 days after due date. Therefore, the same would be allowable on the basis of decision given by Punjab & Haryana HC in case of V. Lakhani Rubber Works (2010 (3) TMI 471). Decision in favour of assessee
Disallowance u/s 40(a)(ia) – Held that:- Following the decision of Tribunal in case of Merilyn Shipping & Transport(2012 (4) TMI 290) held that disallowance u/s 40(a)(ia) can be made only in respect of payments which remain payable at the end of the year. However, it is not clear from the record which payments have been made and which are payable, therefore, Case remand back to AO.
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2012 (9) TMI 574
Deduction u/s 80IB – Whether assessee can claim deduction u/s 80IB where manufacturing process carried out by an assessee on job work basis - Held that:- As it makes no difference in the manufacturing process carried out by an assessee whether the raw material belongs to the assessee himself or owned by some other person. In both the circumstances, manufacturing activities are carried out in the same process by using the similar plant and machinery and similar manpower. No material could be brought on record by the Revenue to show that the risk incidental to manufacturing was not of the assessee and was liability of any other person. Therefore, dismiss the grounds of appeal. Decision in favour of assessee
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2012 (9) TMI 573
Validity of Notice issued u/s 143(2) – Assessee files ROI 29/06/2007 for the AY 2003-04 & 2005-06 in response to notice u/s 147 – Notice issued u/s 143(2) on 15/07/2008 for the both of years - AO dismissed the same on the ground that Sec. 143(2) amended w.e.f. 1.4.2008 prescribed that notice shall not be issued after the expiry of 6 months from the end of the F.Y. in which the return was filed – Held that:- As per the explanatory note issued by CBDT vide circular no. 1 of 2009, reveals that the amended provision of Sec. 143(2) shall apply to all such returns (irrespective of the assessment year, to which the returns pertain) where notice u/s 143(2) can still be issued on 1.4.2008, under the pre-amended provision. Therefore, circulars or general directions, issued by the CBDT would be binding u/s 119, on all officers and persons, employed in the execution of the Act. Appeal decides in favour of revenue
Disallowance due to change in accounting method – AO rejecting method of accounting employed by the assessee u/s 145(3) - Assessee accounting for the incomes on cash basis and the expenses were claimed on mercantile basis under the head PGBP - which is neither cash nor mercantile – Held that:- As the Tribunal direct the AO to consider the allowability of the expenses in question namely interest, salaries and rent in the year of their payment in accordance with law. Appeal decides in favour of revenue
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2012 (9) TMI 564
Computation of gross receipts for the purposes of taxation u/s 44BB - Whether service tax will be included ? - the assessee is an Australia Company - Held that:- Service tax which is a statutory liability, would not involve any element of profits and a service provider is collecting the same from its customers on behalf of the Government and, accordingly, same cannot be included in the total receipts for determining the presumptive income as decided in Islamic Republic of Iran Shipping Lines (2011 (4) TMI 637 - ITAT MUMBAI) - service tax paid by the assessee could not form part of amount for the purpose of deemed profits u/s 44BB unlike the other amounts received towards reimbursement - Decided against Revenue
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2012 (9) TMI 558
Penalties u/s. 271(1)(C) - disallowing the commission paid by the company - CIT(A) deleted the levy - Held that:- Addition in this case has been primarily made on the basis of statement given by Mr. Meattle and Jhunjhunwala, Directors of the company as during the course of penalty proceedings assessee company requested the AO to cross examine both the directors whose statement was relied upon by the AO in disallowing the commission paid by the company. As agreeing with the CIT(A)’s observation that penalty proceedings is separate proceedings and AO should have allowed cross examination of both the persons which has been denied due to time baring matter when the set aside order was passed on 25.3.1996. Thus, the whole assessment / reassessment is based upon the statement of two persons mentioned above and no opportunity was allowed in the penalty proceedings to cross examine them. Thus penalty levied without allowing opportunity to the company for cross examination of both the persons are liable to be cancelled
As assessee company has given documents in support of the commission payments and the payments have been made by account payee cheques also & in the penalty proceedings assessee was not sought opportunity to cross examine those two persons, the same was not provided by the Assessing Officer no levy of penalty u/s. 271(1)(c) can be warranted - in favour of assessee
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2012 (9) TMI 557
Penalty u/s 271D - violation of provisions of sec. 269SS for accepting the deposits in cash - CIT(A) deleted the levy - Held that:- As is apparent from the order of Addl. CIT, there is nothing on record to show that these transactions were attached with certain conditions or stipulation as to period of repayment, rate of interest, manner of repayment, etc. so as to treat the said transactions as deposits. The Revenue have not placed before us any material suggesting that the transaction was actually in the nature of loans or deposit. Since there is nothing on record to suggest that the transaction is in the nature of loan or deposit, apparently, the provisions of section 269SS are not attracted.
When the CIT(A) found as a fact that the amount of Rs.14,81,208/- was indeed received by the assessee from the aforesaid two directors as share application money, we are not inclined to interfere with the findings of the CIT(A)& as the AO did not even attempt to examine as to whether or not the share application money can be treated as “loan” or “deposit” within the meaning of provisions of sec. 269SS penalty cannot be imposed - Also there is nothing on record, suggesting any tax planning or infraction of relevant provisions with malafide intention. Moreover, transactions are between the directors and the company and that too towards share application money/capital - in favour of assessee.
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2012 (9) TMI 556
Transfer of leasing rights of Films - considered to be 'goods' OR 'sale'? - Held that:- As decided in CIT v. B. Suresh [2009 (3) TMI 4 - SUPREME COURT] Profits are embedded in the "income" earned. Earning of income depends on sale of goods and services - the word "sale" would also include "lease" as indicated in Rule 9A(7) which states that for the purposes of Rule 9A, the "sale" of the rights of exhibition of feature films would include the "lease" of such rights. Similarly, under Rule 9B(6), it has been, inter alia, provided that "sale" of rights of exhibition of a feature film would include the "lease" of such rights - in favour of assessee.
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2012 (9) TMI 555
Claim of depreciation on property which was exchanged for another property in respect of which the assessee had forgone the tenancy rights - surrender of tenancy rights - Held that:- The Revenue does not dispute the existence of such an agreement with the landlord, which showed the payment of consideration for the surrender of tenancy rights. It is also not disputed by the Revenue that the purchase of the premises by the assessee was from M/s.Harsaran Singh Constructions Pvt. Ltd., which had nothing to do with the landlord.
Given the fact that tenancy right is a capital asset, as decided in CIT Vs. D.P.Sandhu Bros Chembur P. Ltd.(2005 (1) TMI 13 - SUPREME COURT ) that the surrender of tenancy rights amounted to transfer and hence, being a capital receipt, on the facts thus placed before this Court that the amount paid on account of surrender of tenancy rights being given by the assessee to the builder, there is no exchange of one property for the other. Hence no hesitation in accepting the plea of the assessee to hold that the assessee is entitled to depreciation - in favour of assessee.
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2012 (9) TMI 554
Deduction u/s 80P (2)(d) - whether provision of section 14A are applicable to the deductions u/s 80P(2)(d) - Held that:- As decided in The Punjab State Cooperative Milk Producers Federation Ltd. v. Commissioner of Income-Tax and another [2011 (3) TMI 615 - PUNJAB AND HARYANA HIGH COURT] that under Section 14A, any expenditure incurred by the assessee for earning income which does not form part of total income under the Act shall not be an allowable expenditure. The assessee is entitled to deduction under Section 80P(2)(d) after deducting the expenditure attributable to the earning of such income - against the assessee
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2012 (9) TMI 553
Claim of compensation paid as allowable business expenditure - the assessee allowed possession of the land to the intending purchaser only after payment of full consideration and registration of sale deed. In some cases, since the intending purchaser did not want to buy the land as per mutual agreement and advance received was refunded along with some excess amount as return on investment. This excess amount was termed as compensation. - AO did not accept the submissions of the assessee on the ground that compensation was nothing but consideration to reacquire the rights in plots. - CIT(A) deleted the addition. - Held that:- order passed by the CIT(A) is cryptic and grossly violative reflecting non application of mind by the concerned authority to the issues/points raised before it - set aside the order of the ld. CIT(A) and restore the matter to his file for deciding the aforesaid issues - in favour of revenue.
Disallowance of repair and maintenance of building - no documentary evidence to be treated as revenue expenditure - CIT(A) deleted the addition - Held that:- The assessee did not produce all the bills and vouchers in relation to expenditure incurred on repairs to building and the CIT(A),without ascertaining the nature of construction or verifying the bills/vouchers or any other material concluded that expenditure was incurred on temporary structures. There is nothing to suggest that the assessee produced the relevant bills & vouchers before the ld. CIT(A) nor seems to have verified the genuineness of expenditure or even recorded any such findings - as CIT(A) without disclosing any basis or giving opportunity to the AO, concluded that expenditure was on temporary structure it is appropriate to vacate the findings of the CIT(A) and the matter is to be remanded to the AO to go into the matter afresh - in favour of revenue.
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2012 (9) TMI 552
Profits derived from export of granite - denial to claim deduction as per sub-section 1-B of Section 80HHC - AY 1988-1989 - Held that:- Answered against the assessee as decided in case of Gem Granites v. CIT [2004 (11) TMI 13 - SUPREME COURT] reading of the 1984 circular by holding that the circular expressly provided that polished and processed granite did not fall within the meaning of word "minerals" in 80HHC(2)(b) as it stood before 1991 - against assessee.
Denial of Investment allowance on mining granite from quarries activities and exporting - cutting, polishing, etc. which does not tantamount to manufacture for the purpose of Section 32A - Held that:- Answered in favour of assessee as decided in case of Gem Granites v. CIT [2004 (11) TMI 13 - SUPREME COURT]
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2012 (9) TMI 551
Disallowance of interest and finance charges - Non business investments in UTI Money Market Fund & shares of M/s MPIPL out of borrowed funds - CIT(A) deleted the addition - Held that:- Considering total investments made by the assessee both UTI Money Market Fund and MPIPL came to only ₹ 48 lakhs. When viewed against the substantial reserves and surplus available with assessee, it cannot be said for definite that any loan funds were utilized for the purpose of investments. No doubt, assessee was unable to show a one-to-one matching between the investments and surplus funds. However, the Assessing Officer has also not been able to bring out any link between borrowed funds and investments. Share purchased by the assessee in M/s MPIPL was for having controlling interest therein and AO himself has noted that assessee had purchased 1216 out 2200 shares from the promoters of the said company. It is also not disputed that the said company was engaged in the same line of business - since assessee was having substantial reserve funds with it and the AO had merely gone by a presumption that investments were made out of borrowed funds disallowance under Section 36(1)(iii) was not warranted - against revenue.
Disallowance u/s 14A - investments made by the assessee were not out of any surplus funds - CIT(A) deleted the addition - Held that:- There is no dispute that during these two years, Rule 8D of Income-tax Rules, 1962, was not applicable in view of the decision of Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd [2010 (8) TMI 77 - BOMBAY HIGH COURT] as Rule 8D applicable from Assessment Year 2008-09 and assessment years in question is 2006-07 and 2007- 08 thus the matter requires a re-visit by the A.O as disallowance for earlier period to be determined on reasonable basis - in favour of revenue for statistical purposes.
Disallowance u/s 14A - CIT(A) partially deleted the disallowance to third limb of Rule 8D, i.e. 5% on the average value of investments - Held that:- As D.R. fairly admitted that Rule 8D was applicable from impugned assessment year and therefore, the A.O. was obliged to compute the deduction in accordance with the said rule & had not applied Rule 8D for making disallowance under Section 14A the matter has to go back to the A.O. for consideration afresh, in accordance with law - in favour of revenue for statistical
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2012 (9) TMI 550
Disallowance of reversal of interest - Held that:- The assessee is a Government Company engaged in the business of providing long-term finance for Industrial projects. The assessee has followed a system of accounting in respect of penal interest on accrual basis and as and when it was charged from the customer the same was shown as income of the assessee. Subsequently, on settlement with the parties the penal interest is either waived or reduced - Since the Board had taken the decision during the current year, therefore the amount of previous year’s expense had been charged to P&L account in the current year. On that basis, the decision taken by the Board cannot be held as an unsubstantiated decision and the interest income which was taxed in the past by offering in the books of accounts forming part of the total income declared, however the same was a doubtful of recovery, therefore the assessee-company had justification to reverse that entry by charging the same in the P&L account - in favour of assessee.
Addition on account of interest waived - CIT(A) deleted the addition - Held that:- Facts have revealed that the amount in question pertained to penal interest which stood allowed therefore, following the directions of the Tribunal, the CIT(A) has directed that the waiver of penal interest is allowable. This findings of the CIT(A) being inconsistent with the order of the Tribunal is hereby allowed - against revenue.
Addition of interest amount reverse pertaining to the earlier year - CIT(A) deleted the addition - Held that:- CIT(A) has found that the assessee has wrongly computed the higher income than the actual receivable, therefore rectification was correctly made. In the absence of any contrary material, this finding of ld.CIT(A) is hereby confirmed - against revenue.
Addition being the interest waived pertaining to the earlier year - CIT(A) deleted the addition - Held that:- Facts have revealed a finding was given that there was an overlapping between the waiver of the penal interest and the amount pertaining to preceding year but the exact position of overlapping of the amount has not been placed on record, therefore we refer this item of waiver of penal interest back to AO to verify the same - in favour of Revenue by way of remand.
Addition being the amount of interest waived pertaining to the earlier year - CIT(A) deleted the addition - Held that:- As that the amount was waived in terms of the settlement with the customer no fallacy in the deletion made by ld.CIT(A) - against revenue.
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2012 (9) TMI 549
Reopening of assessment u/s.147 - the return was processed u/s.143(1) - Held that:- As decided in ACIT Versus Rajesh Jhaveri Stock Brokers P. Limited [2007 (5) TMI 197 - SUPREME COURT] an intimation u/s.143(1) could not be treated to be an order of assessment. It was held that there being no assessment u/s.143(3), the question of change of opinion did not arise. The AO had jurisdiction to issue notice u/s.148 for bring to tax income escaping assessment in an intimation u/s.143(1) and did not render the AO powerless to initiate re-assessment proceedings - against assessee.
Disallowance of deduction on “Gola” i.e. wastage income u/s.10B - Held that:- On questioning that what was the related expenditure which was having a direct nexus for production of this by-product, assessee has fairly expressed not to further argue this ground and let the issue to be decided after considering the facts as available on records. Thus the Revenue Authorities have rightly rejected the said claim of the assessee after considering the manufacturing process and the manner in which the said by-product was generated - against assessee.
Disallowance of deduction u/s 10B on DEPB income - Held that:- As decided in Maral Overseas Ltd. vs. Addl.CIT [2012 (4) TMI 345 - ITAT INDORE] once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act. As per the computation made by the Assessing Officer himself, there is no dispute that both these incomes have been treated by the Assessing Officer as business income. - the undertaking is eligible for deduction on export incentive received by it in terms of provisions of Section 10B(1) read with Section 10B(4) of the Act - Decided in favor of assessee.
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2012 (9) TMI 548
Addition made on account of higher Gross Profit rate – The G.P. rate is on higher side as compare to earlier years in the assessee’s own case - GP rate also more than the comparable case quoted by AO for the same assessment year - Held that:- In AY 2005-06, in assessee’s own case, the GP rate of 2.37% was accepted by the Revenue. AO himself considered u/s 143(3) the GP rate of 2.65% in AY 2006-07 to be reasonable. Therefore, ITAT did not find any justification for applicability of GP rate of 4.90% by AO. The gross profit rate disclosed by the assessee at 3.63% is better as compared to earlier two years of assessee’s case and also better than the comparable case of Sat Paul & Sons quoted by the Assessing Officer for AY 2007-08. Appeal allowed in favor of assessee.
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2012 (9) TMI 547
Penalty u/s 271(1)(c) - Assessee has fulfilled all the conditions for eligibility of deduction u/s 10A and claim the same – AO disallow the same on the basis of CBDT Circular dated 6th January, 2005 stated that the deduction under Section 10A would be permissible only in respect of receipt after the date of registration with STPI – AO levy penalty u/s 271(1)(c) on basis of claim of the assessee under Section 10A was patently wrong and false – Held that:- As claim made for deduction u/s 10A was bona fide and merely because the Assessing Officer did not accept the same, it would not amount to either concealment of income or furnishing of inaccurate particulars following the decision of SC in Reliance Petro Products Pvt. Ltd. (2010 (3) TMI 80) & Delhi High Court in Zoom Communication Pvt. Ltd. (2010 (5) TMI 34). Decision in favour of assessee.
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2012 (9) TMI 546
Disallowance of Expenditure on ad-hoc basis - Held that:- As AO had given sufficient opportunities to assessee but assessee did not attend the proceedings and during remand proceedings also, verification of books of accounts along with various expenses could not be done. Assessee submits require documents with AO which AO has denied. Matter remanded back to revenue
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2012 (9) TMI 545
Dis-allowance u/s 80IC - interest on late payment of sale bills and miscellaneous income contended by Revenue as income from other sources - Held that:- Assessee is entitled to the relief with respect of deduction u/s 80IC in relation to interest on late payment of bills, but in the absence of details of miscellaneous income, such relief could not be granted to the assessee in this regard.
Dis-allowance u/s 43B - belated payment of contribution towards employees provident fund - Held that:- Since same is paid before the due date for filing of the return hence allowed.
Addition on account of repair and maintenance and labour charges - dis-allowance u/s 40(a)(ia) - assessee now placing reliance on decision in case of Merilyn Shipping & Transport - Held that:- Since issue raised in this ground does not arise from the order of CIT(A), hence, impugned order is not interfered with - Decided partly in favor of assessee
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2012 (9) TMI 544
Withdrawal of the interest allowed u/s 244-A - the total payment made by the assessee-company being less than the total interest payment - Held that:- Where valuable rights of refund and interest is involved, the Income Tax Authorities are not required to draw assumption on the quantum of the amounts. In this case there is no other material placed by the respondents to justify the inference other than the quantum of the amount being less than the interest payable, to support the assumption that the deposit was of interest and not of tax. To test the assumption, if we deduct the interest of Rs.1, 83, 53, 133/- out of the total amount of Rs. 3, 61, 46, 374/- liable to be paid by the petitioner, the amount of tax comes to Rs. 1, 77, 93, 241/-, which is more than the amount deposited by the petitioner.
Thus as the amount in question was deposited as tax and not as interest, and also that even if a presumption could be drawn that the amount was deposited as interest, the interest under Section 244A (1) of the Act, was payable on interest - petitioner-company will also be entitled to interest on this amount from the date of deposits - in favour of assessee.
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