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Income Tax - Case Laws
Showing 101 to 120 of 667 Records
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2013 (10) TMI 1389
Deemed dividend u/s 2(22)(e) - Held that:- Assessing Officer neither in course of the assessment proceeding nor in his remand report has brought any materials to establish the fact that the amount received was not in regular course of trade but in the nature of loan and advance as envisaged u/s 2(22)(e) of the Act.
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2013 (10) TMI 1388
Capital gain or business income - nature of income - Held that:- Sale of shares held for more than one month would be charged capital gain and surplus of shares held for less than one month will be treated as profit from business. CIT(A) was not justified to make above classification. This classification is not reasonable. Taking all facts and circumstances as discussed above, we hold that all the share transactions undertaken by assessee will be charged to capital gain irrespective of their holding period. Assessing Officer is directed to compute capital gain accordingly.
This take care of issue raised in cross objection by assessee as well.
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2013 (10) TMI 1386
Eligibility to claim of deduction u/s 80IB - Held that:- Amendment to Section 80IB(10) was brought by the Statute w.e.f. assessment year 2005-06, accordingly, assessee’s claim for deduction, on the plea of for non-filing of completion certificate cannot be declined in the assessment year 2003-04, under consideration. No inirmity in the order of CIT(A) for allowing assessee’s claim of deduction u/s 80IB(10).
Reopening of assessment - withdrawal of claim - Held that:- As per C.B.D.T. instructions, assessee is eligible to claim deduction u/s 80IB on the basis of progress of the project and without waiting for its completion and Assessing Officer is also required to consider assessee’s claim while framing assessment u/s 143(3)/143(1). If the Assessing Officer finds that all the conditions of Section 80IB has been complied with except the completion certificate, which can be furnished only after completion of project within stipulated period, the Assessing Officer is required to allow the proportionate claim attributable to the completion of project by the end of relevant financial year. If subsequently, the Assessing Officer finds that after completion of statutory period the assessee has failed to furnish the completion certificate, the deduction so allowed knowingly is liable to be withdrawn. Accordingly, we do not find any infirmity in the order of CIT(A) for upholding the reopening of assessment for the purpose of withdrawal of deduction claimed and allowed u/s 80IB(10).
No infirmity in the orders of lower authorities for withdrawal of claim of deduction allowed u/s 80IB(10)while framing assessment u/s 143(3), due to non-furnishing of completion certificate, after completion of stipulated period of four years which expired on 31.03.2008.
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2013 (10) TMI 1384
Registration under section 12A(a) cancelled - Held that:- The Registration has been cancelled by CIT, Rajkot-2, Rajkot on the basis of amended provisions of Section 2(15) of the Income-tax Act, 1961; therefore we are of the considered opinion that the action taken by the ld CIT, Rajkot-2, Rajkot does not fall within the permissible limits of Section 12AA(3) of the Income-tax Act, 1961 and therefore, the impugned order is bad in law.
Recently, ITAT Chennai "B" Bench, in the case of Madras Motor Sports Club v. DIT (Exemptions) [2013 (2) TMI 70 - ITAT CHENNAI ] in almost identical facts restored the registration, which was cancelled by ld DIT (Exemptions), observing that the nature of objects of the assessee cannot fluctuate in tandem with the quantum of receipts mentioned in the first proviso to section 2(15) of the Income-tax Act, 1961.
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2013 (10) TMI 1383
Deemed income from house property on estimate basis only - Held that:- We have noted the decision of Hon’ble Calcutta High Court pronounced in the case of Prodip Kumar Bothra[2011 (7) TMI 31 - CALCUTTA HIGH COURT ] came to the conclusion that the assessee cannot pray for exclusion of the income of the property occupied by a partnership firm. The Hon’ble Court has expressed the view in favour of the Revenue and held that by operation of Section 22 of IT Act income from house property is chargeable in the hands of the assessee. Resultantly, the view expressed by the Revenue Authorities is hereby affirmed and this ground of the assessee is dismissed.
Dis allowance of expenses incurred wholly and exclusively for earning taxable income - Held that:- 70% of the expenditure was disallowed by the AO which appeared to be towards higher side in a situation when one estimate is to be pitted against another estimate; than it is reasonable to adopt a fair estimate. Considering the nature of the business of a tax payer, we therefore direct that 50% of the expenditure is to be allowed and, therefore, the balance 50% shall be disallowed. In this manner, the assessee shall get part relief in respect of disallowance made by the AO.
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2013 (10) TMI 1379
Appeal of the taxpayer is dismissed for non prosecution as no one appeared for the assessee even though the case was posted at the request of the assessee on 22-10-2013
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2013 (10) TMI 1376
Depreciation at the rate of 60% on those items as is applicable to ‘computer’ allowed. Depreciation claimed at 60% on printers, scanners, modems, switches, hubs, cables/cards and software etc., should not be disallowed as these devices are used along with the computer and their functions are integrated with the computer.
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2013 (10) TMI 1374
Exemption u/s 11 - Held that:- Since the activities of the assessee are charitable in nature, and, hence, the assessee is entitled for exemption under section 11 of the Act and accordingly, we decline to interfere with the order passed by the CIT(A) in directing the AO to allow exemption under section 11 of the Act.
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2013 (10) TMI 1373
Levy of Fringe Benefit Tax - Held that:- We find that the Assessing Officer has estimated Fringe Benefit amount at 20% of the expenditure He has not brought any material on record to show that the above expenditure gave any benefit to the employees of the assessee company. In absence of any such nexus being proved by the Assessing Officer, in our considered opinion, levy of Fringe Benefit Tax on the expenditure is not warranted.
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2013 (10) TMI 1370
Penalty u/s 271(l)(c) - Held that:- This is a fit case wherein the explanation offered by the assessee establishes and proves his bona fides. The same should be accepted especially when he had filed a detailed note and had also paid tax and had asked for refund of tax. The question of law is accordingly, answered in favour of the appellant and against the revenue. Penalty under Section 271(1)(c) is directed to deleted.
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2013 (10) TMI 1368
Expenditure towards programme, production expenses, amortization of film and serial broadcasting rights, cost of programme content (rights) and expenditure towards consumables and media - revenue or capital expenditure - Held that:- After first telecast, the assessee does not discard the films but carefully store the same in digital library for airing the same again. Therefore, the assessee gets enduring benefit from the rights acquired in films and serials and they do not expire on the date of first telecast as contemplated by the assessee. The rights are intangible assets within the meaning of Explanation (iii) to Section 32 and do not fall within the purview of Section 37(1). The assessee is entitled to claim depreciation on same.
Write-off of advances given for production of films - Held that:- In the course of purchasing movie/serial rights, advances are given to the producers/production houses of the serials and the movies. In some of the cases, the amounts given as advance become bad-debt and hence become ir-recoverable. The assessee has no other option but to write-off the same. The Assessing Officer disallowed the claim of the assessee on the ground that the assessee is not in the business of purchase and sale of movies. On appeal, the CIT(Appeals) reversed the findings of Assessing Officer by following the judgment in the case of Turner Morrison & Co., Ltd., Vs. CIT, (2000 (3) TMI 34 - CALCUTTA High Court) and CIT Vs. Bhagwarprasad (1999 (9) TMI 5 - GUJARAT High Court ). We do not find any infirmity in the findings of the CIT(Appeals) on this issue.
Deferred income - assessment year - Held that:- It is not disputed that the income generated by selling the time-slot is offered as income in the year of broadcasting/airing the programme. The monies received are shown as deferred revenue in the year of receipt and are offered as income in the year when programme is aired. We do not find any illegality or irregularity in methodology adopted by assessee in registering the revenue in the year of telecast of programme. There is no merit in this ground of appeal of the Revenue
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2013 (10) TMI 1367
Allowability of expenditure - revenue expenses - Held that:- As in the case of Commissioner of Income TaxI vs. Gujarat State Fertilizer & Chemicals Limited rendered [2013 (6) TMI 776 - GUJARAT HIGH COURT] wherein the Division Bench of this Court has held that once the expenditure is held to be in revenue in nature incurred wholly and exclusively for the purpose of business, it can be allowed in its entirety in the year in which it is incurred. In view of the above direct decision of this Court, question no.1 in respective appeals is required to be held in favour of assessee and against the revenue by holding that the respective Corporate Debt Restructuring expenses was revenue expenditure and the same was required to be allowed in the respective assessment years.
Lease rent was deductible as revenue expenditure.
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2013 (10) TMI 1366
Assessment envisaged u/s 153A - Held that:- An assessment u/s 153A(1)(b) for the assessment years 2003-04 and 2006-07 would be based on incriminating material, books of accounts, other documents found in the course of search but not produced in the course of original assessment or any undisclosed income or property discovered in the course of search. At the time of hearing, the Ld. Counsel for assessee fairly conceded the position that impugned claim relating to exclusion of income on account of retention money does not fall in the aforesaid category and thus, it is beyond the scope and ambit of an assessment envisaged u/s 153A(1)(b) of the Act for assessment years 2003-04 and 2006-07. Therefore, on this point itself, we uphold the stand of the Revenue for assessment years 2003-04 and 2006-07 in denying assessee’s claim for excluding income on account of retention money.
We find no justification for the Revenue to reject assessee’s impugned claim for assessment years 2007-08 and 2008-09 on the ground that the claim was made by way of a letter during the course of assessments and not in the return of income.
At the time of hearing, the appellant has preferred Additional Grounds of Appeal re-quantifying the claim for assessment years 2007-08 and 2008-09 in the event of similar claims not being found exigible for assessment years 2003-04 and 2006-07. In order to enable the Assessing Officer to verify the workings of the claim for assessment years 2007-08 and 2008-09, we restore the matter back to the file of the Assessing Officer. The Assess1in3g Officer shall examine the working of the claim made by the assessee, including the revised workings consequent to non-admission of similar claim for assessment years 2003-04 and 2006-07, and thereafter allow the appropriate claim as per law. Needless to say, the Assessing Officer shall allow the assessee a reasonable opportunity of furnishing appropriate details in support of the claim and only thereafter the Assessing Officer shall adjudicate it as per law and re-compute the total income accordingly for the assessment years 2007-08 and 2008-09.
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2013 (10) TMI 1365
TDS u/s 194C - non deduction of tds - addition u/s 40(a)(ia) - Held that:- Provisions of section 194C(3) are not applicable in the case of assessee and as such, the assessee is not liable to deduct TDS. Therefore, the addition is wholly unjustified.
Disallowance of truck freight expenses - Held that:- The authorities below have correctly made disallowance out of the aforesaid expenses. The Explanation to section 37 of the IT Act provides that any expense incurred by the assessee for the purpose which is an offence or prohibited in law shall not be deemed to have been incurred for the purpose of business or profession and no deduction shall be made in respect of such expenditure. The reimbursement of the amount paid for violation of traffic rules is not proper because the challans amount is paid for violation of law and offence committed relating to Motor Vehicle Act. Similarly, payments made to bribing police, Inams is not the expenditure permissible under the law of land. Therefore, disallowance is justified.
Disallowance of repairs and maintenance - Held that:- The addition is adhoc in nature without pointing out any specific vouchers not produced before the AO. The assessee maintained books of account, which are audited and were produced before the AO. The AO made disallowance without pointing out any specific inadmissible expenditure and in order to cover up possible leakages of income, which would suggest that the addition is adhoc in nature. Therefore, the addition is wholly unjustified.
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2013 (10) TMI 1364
Market to market loss arising on valuation of forward exchange contracts on the closing date of accounting year - Hedl that:- Hon'ble Supreme Court in case of ONGC vs. CIT (2010 (3) TMI 81 - SUPREME COURT ), following the earlier decision in the case of CIT vs. Woodward Governor India (P.) Ltd. (2009 (4) TMI 4 - SUPREME COURT ), have held that the Assessee having maintained account on mercantile system of accounting, loss claimed by the Assessee on account fluctuation in the rate of foreign exchange as on the date of balance sheet in respect of loans taken for Revenue purpose is allowable as expenditure u/s. 37(1) notwithstanding the fact that liability has not been actually discharged in the year in which the fluctuation rate of foreign exchange is accrued. Therefore, we find no infirmity in the order passed by the ld. CIT(A) holding that Market to market loss of ₹ 1,06,47,416/- arising on valuation of forward exchange contracts on the closing date of accounting year is not a notional loss and, therefore, allowable - Decided in favour of assessee
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2013 (10) TMI 1363
Set off of unabsorbed depreciation pertaining to assessment years 1997-98 to 1999-2000 against business income of the assessment years under consideration allowed
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2013 (10) TMI 1362
Miscellaneous income derived from penal interest and pre-closure charges can also be treated as eligible profit for the purpose of deduction under section 36(1)(vii) of the Act when receiving income from providing long term finance being the eligible business. - See Weizmann Homes Ltd. case [2013 (5) TMI 123 - KARNATAKA HIGH COURT ]
Appellate Authorities were correct in holding that when computing the Book Profit u/s.115JB of the Act the assessee need not add back lease equalization reserve (reserve for doubtful income) and provisions for contingencies (unascertained liability) - See Weizmann Homes Ltd. case [2013 (5) TMI 123 - KARNATAKA HIGH COURT ]
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2013 (10) TMI 1361
Exemption u/s 11 - Held that:- In the present case, there is no dispute on the fact that the assessee is carrying on the business of running an International Guest House (IGH) and Working Women's Hostel (WWH). Assessee is maintaining separate accounts for the above business activities. But, the crucial question is whether running of IGH and WWH is a business incidental to the attainment of the objectives of the trust or not. By any stretch of imagination, it is not possible to hold that the business of running IGH and WWH are incidental to the above stated objectives of the assessee-Trust. "Incidental" means offshoot of the main activities; inherent by-product of principal activities. Activities to compliment and support the main objectives are not in the nature of incidental to the business. They are supporting activities, at the maximum. The genesis of incidental activities must be from the principal activities themselves. There cannot be one source for the principal activities and another source for incidental activities.
In the present case, even if the activities of the assessee are stated to be relief of the poor, medical relief and education, it is not at all possible to hold that running of the business in the form of IGH and WWH are business incidental to the carrying on of main objective of the assessee-Trust. Therefore, the assessee is not protected by the provision stated in Section 11(4A), either.
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2013 (10) TMI 1360
Loan advanced - Held that:- A perusal of the order passed by the Income Tax Appellate Tribunal reveals that after considering that a cheque was issued in favour of the assessee, from the account of the proprietorship concern, the assessee deposited the cheque in the account of the newly formed company, which returned this amount to the assessee, held that the amount belonged to the assessee on account of his capital in the proprietorship concern. The Income Tax Appellate Tribunal also held that the Commissioner of Income Tax (Appeals) rightly restricted addition of ₹ 34,858/-, i.e., to the extent of accumulated profits. We have considered the arguments advanced by counsel for the revenue and are not inclined to take a view different from the opinion recorded by the Tribunal. The arguments raise disputed questions of fact, which have been answered in favour of the assessee. In the absence of any error, while considering the facts or in applying any provision of the Act, we find no reason to hold that findings of facts recorded by the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals) give rise to a question of law, much less, the questions of law framed by the revenue.
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2013 (10) TMI 1356
Eligibility of duty draw back for the computation of deduction u/s 10B allowed. Provisions of section 10B are different from the provisions of section 80IA wherein no 77 formula has been laid down for computing the eligible business profit.
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