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Income Tax - Case Laws
Showing 181 to 200 of 503 Records
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2013 (1) TMI 791 - ITAT DELHI
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... ... ..... of reimbursement of actual expenses incurred by the assessee on rail freight and thus the assessee was not required to deduct tax at source there from. The decisions relied upon by the ld. DR having distinguishable facts as there was no involvement of payment of freight to a government organization and issue are not helpful to the revenue in the present case. 11. So far as payment of ₹ 11,325/- made by the assessee to the payee is concerned itself below the limit of ₹ 20,000/- prevalent when the payment was made on 8.3.2007, we agree with the contention of the ld. AR that the payment was not liable to TDS under the IT Act. The authorities below were thus not justified in making disallowance on this amount under the provisions of Section 40 (a) (ia) of the Act. The issue raised in the grounds is thus decided in favour of the assessee. The related grounds are thus allow. 12. In result appeal is allowed Order is pronounced in the open Court on the day of 28/01/2013.
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2013 (1) TMI 790 - BOMBAY HIGH COURT
Whether on the facts and in the circumstances of the case and in law the ITAT did not err in holding that no approval could be said to have been given when in fact the Joint CIT has duly applied his mind and corrected the draft assessment order and the changes were incorporated by the AO in the final assessment order? - Held that:- Admittedly the finding of fact was recorded by the Tribunal that no prior approval of the Joint Commissioner was taken before Income Tax officer passing the order. In view of the above, we see no reason to entertain the proposed question. Hence, the aforesaid appeals are dismissed with no order as to costs.
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2013 (1) TMI 789 - GUJARAT HIGH COURT
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... ... ..... n the parties. The assessee had full authority and also responsibility to develop the housing project by not only putting up the construction but by carrying out various other activities including enrolling members, accepting members, carrying out modifications engaging professional agencies and so on. Most significantly, the risk element was entirely that of the assessee. The land owner agreed to accept only a fixed price for the land in question. The assessee agreed to pay off the land owner first before appropriating any part of the sale consideration of the housing units for his benefit. In short, assessee took the full risk of executing the housing project and thereby making profit or loss as the case may be. The assessee invested its own funds in the cost of construction and engagement of several agencies. Land owner would receive a fix predetermined amount towards the price of land and was thus insulated against any risk.” In the result, Tax Appeal is dismissed.
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2013 (1) TMI 788 - ITAT CHENNAI
Eligibility for the claim of deduction u/s.80IA - Held that:- An undertaking to be regarded as small scale industrial undertaking there must not have investment in plant and machinery exceeding ₹ 1 crore u/s 11B at the end of the previous year - simply because in a earlier year an assessee had satisfied the condition of small scale undertaking, it cannot ipso facto be taken that the assessee would be regarded as small scale industrial undertaking in the subsequent years also - it is observed that the assessee’s investment in plant and machinery exceeded the limit specified u/s 11B of the Industries (Development and Regulation) Act - Hence the deduction is not allowed - decided against the assessee
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2013 (1) TMI 786 - ITAT CHENNAI
Disallowance of expenditure incurred in relation to income not includible in total income u/s 14A - Held that:- AO will have to verify the correctness of the claim that no expenditure has been incurred in relation to income which does not form part of total income - AO has to accept the claim of the assessee -after giving the reasonable opportunity with the correctness of the claim AO can reject the claim and state the reasons for doing do - further AO will have to determine the amount of expenditure incurred in relation to such income - As per the judjement of Hon’ble Jurisdictional High Court in [T.C.(A.) No. 2621] of 2006 titled as M/s. Simpson and Co. Ltd. vs. DCIT - it would be reasonable and appropriate if the disallowance is restricted @2% of the exempt income as returned by the assessee - decided partly in favor of assessee
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2013 (1) TMI 785 - ITAT MUMBAI
Deduction u/s. 36(1)(viii) - Assessee, govt company claimed deduction in respect of special reserves created in the balance-sheet, as it is a financial corporation which is engaged in providing long-term finance for development of infrastructure facilities - Claim was rejected on the ground that it is neither a financial corporation nor a public-company. - HELD THAT:- In Sec. 36(1)(viii) ‘financial corporation’ is defined to “include a public company and a Government company". Any entity incorporated under a statute carrying on the business of financing would come under the definition of financial corporation. The definition is not an exhaustive definition and the term financial corporation has been defined in an inclusive manner so as to include a Govt. company and a public company. Even otherwise the assessee is a Govt. company since the Central Govt. holds more than 51% of the share capital of the bank and as defined in Sec. 617 of the Companies Act.
Relying upon the own case, UNION BANK OF INDIA VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2012 (6) TMI 500 - ITAT MUMBAI], matter was remitted back to AO to verify and examine the deduction, which has been transferred to the special reserves subject to the prescribed percentage of profits derived from providing long-term finance for the approved purposes mentioned in section 36(1)(viii).
Matter restored back.
Deduction on Notional gain on Derivatives - Assessee submitted that trading derivatives held by the bank constitute its stock in trade and according to the accepted basis, valuation of closing stock it should be valued at cost or market price, whichever is lower. Therefore, while the loss arising on account of revaluation of trading derivatives must be allowable as deduction. CIT rejected the contention as assessee didn't follow RBI guidelines for recognizing profit and loss.
HELD THAT:- Assessee is entitled to claim loss on revaluation of trading derivatives. The notional unrealized gain cannot be charged to tax. It is settled principle of law as laid down by Hon'ble Apex Court in the case of CHAINRUP SAMPATRAM VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL [1953 (10) TMI 2 - SUPREME COURT], that while anticipated loss is taken into account in valuing closing stock, the anticipated profit in the shape of appreciated value of the closing stock is not brought into account. No prudent businessmen or trader will show increased profit on unrealised gain. Findings of the CIT(A) were reversed and it was held that the assessee is entitled to claim loss on revaluation of trading derivatives
Decision in favour of assessee.
Applicability of sec. 115JB on Banks - Assessee, a banking company's accounts are being prepared as per Schedule III of Banking Regulation Act and not as per Schedule VI of the Companies Act. It was contended that in the earlier years provisions of s.115JB of IT Act were applicable on it. - HELD THAT:- Relying on the judgement of KRUNG THAI BANK PCL VERSUS JOINT DIRECTOR OF INCOME TAX - INTERNATIONAL TAXATION, MUMBAI [2010 (9) TMI 18 - ITAT, MUMBAI], it was held that provisions of section 115JB are not applicable in the case of the assessee.
Decision against Assessee.
Prior Period Expenses - Assessee claimed some amount as prior year expenses, it was submitted that the liability to pay said expenses arose only during the year, and hence cannot be considered as prior period expenses. HELD THAT:- Incurring of expenses is a continuous process and there cannot be cut-off date at any point of time to be classified as prior period expenses.
Decision in the case of TOYO ENGG. INDIA LIMITED. VERSUS JOINT COMMISSIONER OF INCOME-TAX. [2005 (9) TMI 237 - ITAT BOMBAY-J], relied upon and the contention of the assessee was upheld that it has branches all over the country, where incurring of expenses is a continuous process and there cannot be cut-off date at any point of time to be classified as prior period expenses liable to be disallowed.
Decision in Favour of Assessee.
Bad and Doubtful Debts u/s. 36(1)(viia) - AO restricted the deduction in respect of provision for bad and doubtful debts. Assessee claimed entire eligible amount as per the sec. 36(1)(viia) should be allowed as deduction instead of restricting it to the amount of provisions made in the books of account. - HELD THAT:- Provisions of section 36(1)(viia) are very clear which provides that in respect of ‘any provision’ made for bad and doubtful debts an amount not exceeding 7.5% of the total income and an amount not exceeding 10% of the aggregate average advances of the rural branches of such bank shall be allowed as deduction. Once a provision for bad and doubtful debts are made by the scheduled bank having rural Branches, the assessee is entitled to a deduction, which is quantified not with reference to the amount provided for in the account but with respect to certain percentage of the total income and also certain percentage of aggregated advances.
Decision in favour of Assessee.
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2013 (1) TMI 784 - ITAT MUMBAI
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... ... ..... , as these expenses mostly pertain to carrying out of various operations and activities carried on by the assessee company, which are necessary for maintaining a corporate establishment and are intricably linked for earning of the income under various heads, as shown by the assessee. The following expenses are allowable, which also includes some of the expenses allowed by the learned Commissioner (Appeals) - Sl.no. Particulars Amount claimed (Rs. ) 1. Directors Remuneration 2,58,000 2. Salaries 63,000 3. Staff Welfare 707 4. Audit Fees 22,472 5. Insurance 6,381 6. Other Expenses 12,700 7. Postage, Telegram & Telephone Expenses 3,345 8. Printing and Stationary 350 9. Rates and Taxes 830 10. Repairs and Renovation 38,916 11. Travelling Expenses 1,00,609 12. Professional Fees 30,000 12. Thus, in our conclusion, we allow the expenses claimed under various heads, as have been elaborated in serials no.1 to 12 above. 13. In the result, assessee’s appeal is partly allowed.
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2013 (1) TMI 783 - ITAT MUMBAI
Mark to Market Loss - Rule of Prudence - AO had disallowed mark- to- market loss claimed on account of trading in derivative transactions. The reason assigned by the AO was that loss on the last date of financial year was in the nature of noncrystallized loss and such loss should be added back for the purpose of computing taxable income of an assessee. - HELD THAT:- Rule of prudence that means that while anticipated losses can be taken note of while valuing the closing stock, anticipated profits cannot be recognized, is applicable in this case. The addition made by disallowing the mark-to-market loss claimed on account of trading in derivative transactions should be deleted.
Decision in the case of EDELWEISS CAPITAL LTD., MUMBAI VERSUS INCOME TAX OFFICER 3 (1) (1) , MUMBAI [2012 (10) TMI 223 - ITAT, MUMBAI], relied upon.
Decision in favour of assessee.
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2013 (1) TMI 782 - ITAT DELHI
Disallowance of provision for post retirement medical as unascertained liability - Held that:- Contingent liabilities can be taken into account as trading expenses if they are sufficiently certain to be capable of valuation - Due to the change in the Accounting Standard in respect of the accounting of post retirement benefits, the assessee got done the actuarial valuation - . A liability which has already accrued though discharged on a future date would be entitled for deduction - Decided in favor of assessee
Can interest paid in respect of capital borrowed allowed for deduction u/s 36(1)(iii) - Held that:- any amount of the interest paid towards or in respect of capital borrowed for acquisition of an asset or for expansion of the existing business regardless of its capitalization in the books or otherwise would not qualify as deduction - there is no finding regarding the source of the margin money whether it was from the borrowed fund borrowed for the purpose of expansion or from the other borrowings for which the assessee has claimed the interest paid as the revenue expenditure - the issue to the file of the AO - Remanded back for statistical purposes
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2013 (1) TMI 781 - ITAT MUMBAI
Whether Fringe benefit tax is levied on certain expenditure -club membership fees - Held that:- “Fringe benefit” cannot arise when expenditure is incurred on persons who are not employees - club membership fee, the payments made to LIMRA and Actuarial Society of India, are to be excluded as they are not payments to clubs - the issue is restored back to the file of AO for adjudication afresh - allowed for statistical purposes
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2013 (1) TMI 780 - ITAT NAGPUR
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... ... ..... unt of disallowance of interest for both of the years. 13. Now, we will take appeal filed by the assessee M/s Raju Steel Industries i.e. ITA No.70/Nag/2011 for the assessment year 2006-07. 14. The assessee is objecting the confirming the disallowance of ₹ 6,29,463/- out of interest paid as non-business purpose. 15. Similar additions were made in the case of M/s Bharat Hardware & Iron Stores. We have already disposed of the appeals in the case of M/s Bharat Hardware & Iron Store, wherein we have deleted the additions made and confirmed by the lower authorities on account of disallowance of interest. Since, facts are similar, therefore, for the same reasons, the addition made and confirmed by the lower authorities is hereby deleted. 16. Resultantly, the appeals of the department i.e. ITA Nos.65&66/Nag/2011 are dismissed and appeals of the assessees i.e. ITA Nos. 68 to 70/Nag/2011 are allowed. Order pronounced in the E-Court on this 9th day of Jan.2013. -2013.
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2013 (1) TMI 779 - ITAT DELHI
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... ... ..... cision, it was held that a loan grants temporary use of money, or temporary accommodation, and that the essence of a deposit is that there must be a liability to return it to the party by whom or on whose behalf it has been made, on fulfillment of certain conditions. If these tests are applied to the facts of the case before us, it may be seen that the receipt of share application monies from the three private limited companies for allotment of shares in the assessee-company cannot be treated as receipt of loan or deposit. In any case, the Tribunal has rightly noticed the cleavage of judicial opinion on the point and held that in that situation there was reasonable cause u/S.273B, applying the judgment of the Supreme Court in Vegetable Products (supra).” Considering these, we sustain the order of the CIT (A) and dismiss the revenue’s appeal. 5. In the result, the appeal of the revenue is dismissed. Order pronounced in open court on this 24th day of January, 2013.
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2013 (1) TMI 778 - ITAT PUNE
Disallowance of depreciation on wind mills @80% - Rate of depreciation on expenses incurred in connection with installation, erection and commissioning of the wind mills - Cost of civil work consisting of foundation/ground work - Held that:- the cost incurred by the asessee on civil work cannot be treated as an integral part of the entire wind mill - depreciation is resticted to @ 10% - cost of foundation as well as cost incurred on erection and commissioning forms integral part of cost of the windmill and thus eligible for depreciation at 80% - Partly in favor of assessee
Whether the profits earned on one unit can be set off against another unit - Held that:- assessee had been setting off the loss of depreciation from different wind mill undertakings against the income of the other business - Assessee is maintaining separate books of accounts in respect of 3 wind mills and working out the profit or losses - three wind mills at the 3 locations are independently operated and the financial results are separately worked out - every unit constitute a separate undertaking engaged in the eligible business and losses from one unit cannot be set off against the profits of another unit engaged in the same business for the purpose of computing the deduction u/s 80IA
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2013 (1) TMI 777 - ITAT PUNE
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... ... ..... turn of income but the computation attached with the return of income clearly indicated about the agricultural activity undertaken during the year. She stated that due to two separate Balance Sheets, one for her medical practice and another for agricultural activity, there was a discrepancy in the capital account. The Assessing Officer has not considered the balance in the capital account of agricultural activity which was of ₹ 20,48,448/-. The Ld. CIT(A) was convinced with the explanation of the assessee as well as the reconciliation given and he deleted the addition. The only grievance of the Revenue is that the Ld. CIT(A) should not have admitted the additional evidence. We find that no additional evidence is filed but the reconciliation of the two capital accounts have been filed. We find no merit in Ground No.3. Accordingly same is dismissed. 11. In the result, Revenue’s appeal is dismissed. Pronounced in the open court on this the 23rd day of January, 2013.
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2013 (1) TMI 775 - ITAT HYDERABAD
Legality of registration u/s 12AA - grant of approval under S. 80G(5) - Held that:- the assessee is engaged in the advancement of educational activities and support in the field of project management and undertakes training facilities as part of its charitable activities - registration can be cancelled u/s 12AA(3), if at any stage, it is found that the activities of the applicant institution are not genuine or are not being carried out in accordance with the objects of the Trust - there is no mention about violation of these two conditions - There is no evidence on record to consider that the assessee's activities are commercial in nature
The activities to provide a platform to exchange knowledge, information and expertise and bringing together the industrial practices and to promote and professionalise the project management through conducting seminars, workshops, etc. could not be said to be inconsistent with the objects of the trust and therefore, registration granted to the assessee could not be withdrawn u/s12AA(3) - AO is free to examine whether the assessee is fulfilling the conditions of sec 11 and 12 of the Act in the assessment proceedings - Decided in favor of assessee
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2013 (1) TMI 774 - ITAT PUNE
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... ... ..... erm deposits with the Bank 12. Before parting, we may refer to the reliance placed by the learned Departmental representative on the decision of the Hon'ble Madras High Court in the case of Menon Impex (P) Ltd (supra). We have perused the said decision ands find that the same has been rendered in the context of section 10A as it existed in the assessment year 1985-86. The amendment to section 10B, noted by the Bangalore Bench in the case of ACIT v Motorola India Electronics (P Ltd) (supra) with effect from assessment year 2001-02, makes the judgment of the Hon'ble Madras High Court inapplicable to the controversy before us, which relates to assessment year 2003-04, i.e. after the amendment in section 10B. Here, the said judgment does not help the Revenue in relation to the provisions of section 10B as it stood for the assessment year before us. 13. Resultantly, appeal of the assessee is allowed as above. Pronounced in the open court on this 31st day of January, 2011.
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2013 (1) TMI 773 - ITAT BANGALORE
Transfer pricing adjustments - calculation of ALP and selection of comparables:- Held that:- Assessees engaged in software development services business - 8 comparables are to be rejected from the TPO's list on account of the turnover filter - that 5 companies are to be excluded on account of functional dissimilarity - Turnover filter - the size of the comparable is an important factor in comparability - when companies which are loss making are excluded from comparables, then the super profit making companies should also be excluded - TPO is directed to take segmental margins of 23.11% for comparability - ordered accordingly
Related Party transaction - an entity can be taken as uncontrolled if its related party transactions do not exceed 10 to 15% of total revenue - cannot be said to have significant influence the profitability of the comparables - TPO is directed to exclude, after due verification, those comparables from the list with the related party transactions or controlled transactions in excess of 15% of the total revenue - Ordered accordingly - Decided partly in favor of assessee
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2013 (1) TMI 772 - GUJARAT HIGH COURT
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... ... ..... the Central Excise Act, 1944 defines term High Court for the purpose of ChapterVIA which pertains to appeals. Relevant portion thereof reads as under “Section 36 (b) High Court means, (i) in relation to any State, the High Court for that State; (ii) in relation to a Union Territory to which the jurisdiction of the High Court of a State has been extended by law, that High Court; (iii) in relation to the Union Territories of Dadra and Nagar Haveli and Goa, Daman and Diu, the High Court at Bombay; (iv) ... .... .... 3. Under the circumstances, these appeals are not maintainable before this Court and are disposed of accordingly with a liberty to the appellant to pursue its remedies before the appropriate Court.
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2013 (1) TMI 770 - ITAT CHANDIGARH
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... ... ..... ed cheques which were cleared on 23.2.2008 would have got bounced. In the absence of the assessee and his son, Smt. Ritika Anand could not have signed the cheques and the only course left was to deposit the cash so as to get the cheques cleared as the assessee had a CC limit only of ₹ 30 lakhs. We are of the opinion that this cash was really for emergency needs and needs to construed as reasonable because for accepting the cash deposit. Therefore, the ld. CIT(A) has correctly decided the issue and we decline to interfere in his order. 9 In the result, appeal of the revenue is dismissed. Cross-objections No. 1/Chd/2013 10 Various grounds taken in the Cross-objections are only in support of the order of the ld. CIT(A) which we have confirmed while adjudicating the revenue’s appeal. Accordingly the Cross-objections stands allowed. 11. In the result, appeal of the revenue is dismissed and the Cross-objections of the assessee is allowed. Order pronounced on 31.01.2013
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2013 (1) TMI 768 - BOMBAY HIGH COURT
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... ... ..... of the integrated system of computers were not Y2K compliant and thus, the respondent-assessee were required to purchase mother boards for such computers so as to make the entire system Y2K compliant. Further the definition of the computer system as provided under Section 36(1)(xi) of the said Act states that the computer system means device or “collection of device”…. Therefore, more than one computer together in the respondent-assessee's case constitutes system and replacement of some article / computer which are not Y2K compliant is certainly an expenditure incurred on making the existing computer system Y2K compliant. Further, we note that the aforesaid finding is essentially a finding of fact arrived at by the two authorities under the Act. The revenue has not been able to show that the same is perverse. In view of the above, we see no reason to entertain the proposed question of law. Accordingly, the appeal is dismissed with no order as to costs.
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