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Income Tax - Case Laws
Showing 161 to 180 of 771 Records
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2013 (11) TMI 1511 - ITAT COCHIN
Validity of reassessment u/s 147 - Without recording the reasons for reopening - Held that:- The AO has not showed that escapement of income is on account of failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment - The assessment year involved is A.Y. 2004-05 and impugned notice u/s. 148 was issue on 23.3.2011 i.e. after expiry of about 4 years from the end of the said assessment year - Following Sound Casting Pvt. Ltd. Vs. DCIT [2012 (4) TMI 248 - BOMBAY HIGH COURT] - The AO has failed to establish that there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment - Decided against Revenue.
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2013 (11) TMI 1510 - ITAT DELHI
Penalty u/s 271(1)(c) - addition on account of Deemed dividend u/s 2(22)(e) - whether amounts to concealment of income - Held that:- The assessee has taken the amount for meeting normal business transaction and travelling and other expenses - The assessee's explanation that the addition was on account of deeming provision of which he was not aware is sufficiently cogent - The assessee's contention that no material was suppressed - There was no malafide intention on the part of the assessee to evade the tax - It was an inadvertent error which was genuine and bonafide - Following Dilip Sheroff case [2007 (5) TMI 198 - SUPREME Court] - Mensrea was a essential requirement of penalty u/s 271(1)(c) - Following Hindustan Steel vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court] - Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute - Decided against Revenue.
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2013 (11) TMI 1496 - DELHI HIGH COURT
Share application money - Addition u/s 68 - Held that:- Following CIT VS NR PORTFOLIO PVT. LTD [2013 (11) TMI 1381 - DELHI HIGH COURT] - Mere production of PAN Number or assessment particulars does not establish the identity of a person. The identification of a person includes the place of work, the staff and the fact that it was actually carrying on business and further recognition of the said company/individual in the eyes of public.
Burden to prove - The onus to prove is on the Assessee - Mere production of incorporation details, PAN Numbers or income tax returns may not be sufficient when surrounding and attending facts predicate a cover up - The production of incorporation details, PAN numbers or income tax details may indicate towards completion of paper work or documentation but genuineness, creditworthiness and identity of investment and the investors are deeper and obtrusive than mere completion of paper work or documentation - The assessee has not been able to establish the identity, creditworthiness of the share applicants and the genuineness of the transaction - The surrounding circumstances and inquiries made by the Assessing Officer were significant but the said finding have been ignored by the Tribunal - It has failed to take holistic view - Decided in favour of Revenue.
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2013 (11) TMI 1495 - ALLAHABAD HIGH COURT
Income of minor - Held that:- The interest income has been disclosed by the assessee (father of minor) through out these years - The donors have also accepted the fact of gift of Rs. 1 lakh on 19 different occasions, who happened to be close relatives - For 1993-94, 1994-95 assessment years the interest income earned by the minor was clubbed in the hands of the father - Just because an assessment under Section 153 (3) has not been made or no scrutiny has been made, the income of the minor could not be disbelieved, when the interest was clubbed in the hands of father - Decided against Revenue.
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2013 (11) TMI 1494 - BOMBAY HIGH COURT
Validity of reassessment - Held that:- The assessee has claimed deduction u/s 80IB for its Sivasa Unit - As the assessment sought to be reopened is beyond the expiry of four years from the end of the relevant assessment year i.e. 200607, two conditions precedent have to be satisfied - The material which forms the basis of reason to believe is the allocation of expenditure between the two units leading to higher deduction under Section 80IB of the Act in respect of the petitioners Silvasa Unit - The Assessing Officer at that point of time appears to have been satisfied that the allocation of expenditure made by the petitioner between the two units and did not reduce the claim by increasing the expenditure attributable - While examining the quantum of deduction to be allowed under Section 80IB of the Act the issue of allocation of expenditure for that purposes would necessarily have been examined - There is no tangible material to lead to a reason to believe that income has escaped assessment but only change of opinion on the part of the Assessing Officer on the material available, thus cannot be a subject matter of reassessment.
The petitioner had in its profit and loss accounts allocated various common expenses between the non 80IB unit and 80IB unit. This was also subject to examination in determining the deduction available under Section 80IB of the Act to the Silvasa Unit - There has been disclosure of material facts truly and fully for the purposes of assessment on the part of the petitioner - The notice issued u/s 148 is quashed - Decided in favour of assessee.
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2013 (11) TMI 1493 - DELHI HIGH COURT
Block assessment u/s 158BC - Genuineness of purchase transactions - claim of deduction u/s 80HHC - Held that:- The Revenue does not doubt or dispute receipt of payment through banking channels - In most money laundering cases this would not be in issue as receipt through banking channels becomes the starting point of investigation - Adjudicating authorities and courts cannot take a myopic view but a holistic approach is required - The surrounding circumstances and milieu have to be gone into and examined and indeed would reflect and help in ascertainment of truth - In the present case, the order of the tribunal is lacking on the said aspects. Even if there may be justification and reason to ignore or not entirely base the case on statements of Chander Prakash Sachdeva - Several facts required explanation and elucidation from the respondent - Absence or failure to explain may in fact be reflective and help in adjudicating the contention whether any threats were extended to Chander Prakash Sachdeva or whether the facts corroborate the statement and together establish the stand of the Revenue The CIT(A) has not found that the purchases from Sachdeva Trading Co. and Rave Scans were genuine - Purchases were made in cash from third parties which were rejected and returned by the Hong Kong party - The assessment order does not refer to re-import and rejection of material by the Hong Kong party after export Tribunal has not decided the ground of appeal that the respondent had not filed certificate as postulated under Section 80HHC(4) - - while deciding the question law in favor of revenue, matter remanded back to ITAT for fresh decision.
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2013 (11) TMI 1492 - ALLAHABAD HIGH COURT
Reserve fund for educational purposes - Violation of Section 11(3)(d) Held that:- The funds were created during the assessment year 1996-97; 1997-98; and 1998-99 i.e. prior to 01.04.2003 though it was utilized during the assessment year under consideration As per the amended provisions - The Assessing Officer shall not allow application of accumulation of income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of Section 11 - This takes away the discretion of the Assessing Officer provided in sub-section (3A) to allow the trusts to apply the accumulated income for payment or credit to other charitable or religious trusts and institutions - The Finance Act, 2003, has amended the proviso to sub-section (3A) of Section 11 so as to empower the Assessing Officer to allow donation to another trust or institution as application of accumulated income for charitable purposes in the year in which the trust or institution claiming exemption is dissolved Following assessee's own case for the assessment years 1994-95 - The assessee is registered under Section 12AA as well as 80G(5) and also under Section 10(23C)(iv) - The entire income of the assessee remains non-taxable The issue is restored for fresh adjudication.
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2013 (11) TMI 1491 - ANDHRA PRADESH HIGH COURT
Rectification application - Held that:- The learned Tribunal taking note of the judgment in case of Indwell Constructions Versus Commissioner Of Income-Tax [1998 (3) TMI 121 - ANDHRA PRADESH High Court] passed the order on 25.08.2010 deciding the matter in favour of the assessee - According to the Department, the issue decided by this court in the aforesaid case was not applied at all - The learned Tribunal has committed grave error in not taking the note of the judgment of this court and in not considering whether the ratio of the decision therein is applicable in this case or not - The issue was restored for fresh adjudication.
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2013 (11) TMI 1490 - DELHI HIGH COURT
Expenses on exempt income - Held that:- The assessee has himself disallowed an amount of Rs.1,73,98,255/- under Section 14A of the Act - The said figure was calculated by appropriating expenditure incurred in proportion of the exempt income to the total income - 95% of the total expenditure was suo motu treated and attributed as expenditure relatable to earning of exempt income - If Rule 8D is applied to calculate the disallowance then the amount will be lower than the disallowance computed by the assessee - Decided against Revenue.
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2013 (11) TMI 1489 - PUNJAB & HARYANA HIGH COURT
Yield of paddy - estimation of income - Held that:- The AO pointed out two comparable cases who had shown yield of rice at more than 66% in the same area as that of assessee - In case of nine mills from Sunam cited by the assessee, the yield is 65% or more - In the case of assessee the yield of rice has been shown only at 64.75%. Having regard to the aforesaid cases as relied upon by the Ld. Counsel as also the cases relied upon by the AO, which are also from the area of the assessee i.e. Sunam - It is clear that the yield shown by the assessee is definitely on the lower side and that the Ld. Counsel has not placed any material before us which would justify the yield shown by the assessee - Decided against assessee.
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2013 (11) TMI 1488 - KARNATAKA HIGH COURT
Subvention payment - Revenue receipt or capital receipt - Held that:- Huge amounts were paid by the parent company not only to make good the loss, but also to see that the assessee would run more profitably - The monies paid were not utilized either for repayment of the loan undertaken by the assessee for setting up their unit or for expansion of existing unit/business - The main eligibility condition with which we are concerned is that the amount ought to have been utilized by the assessee to meet recurring expenses and/or to run their business more profitably and so also to get out of the loss that they were suffering at the relevant time - It is the object which is relevant for the financial assistance which determines the nature of such assistance
The character of the receipts in the hands of the assessee has to be determined with respect to the purpose for which payment was made. If the financial assistance is extended for repayment of the loan undertaken by the assessee for setting up new unit or for expansion of existing business then the receipt of such aid could be termed as capital in nature - If the financial assistance is extended to run business more profitably or to meet recurring expenses, such payment will have to be treated as revenue receipt - In the present case, the financial assistance was extended neither for setting up any unit or expansion of existing business or for acquiring any assets - Decided in favour of Revenue.
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2013 (11) TMI 1487 - ITAT DELHI
Depreciation on goodwill Held that:- The assessee as per slump sale agreement, acquired a going concern, business of on-line and other electronic media through internet and other networks including databases, online newspapers and magazines An amount which is reflected in the balance sheet as goodwill was for acquisition of bundle of business or commercial rights which was defined in the slump sale agreement, termed as goodwill in the books of accounts Following R.G. Keshwani vs. ACIT [2008 (2) TMI 443 - ITAT BOMBAY-H] - The principle of ejusdem generis is applicable in such case - Where there are general words following particular and specific words, the meaning of the latter words shall be confined to things of the same kind as specified In the given case for interpreting the expression 'business or commercial rights of similar nature' specified in section 32(1)(ii) - Such rights need not answer the description of 'know-how, patents, trademarks, licenses or franchises' but must be of similar nature as the specified assets - On a perusal of the meaning of the categories of specific intangible assets referred in section 32(1)(ii) preceding the term 'business or commercial rights of similar nature, it is seen that the aforesaid intangible assets are not of the same kind and are clearly distinct from one another.
In the absence of the aforesaid intangible assets (business or commercial rights), the assessee would have had to commence business from scratch and go through the gestation period whereas by acquiring these business rights along with the tangible assets, the assessee got an up and running business Following Honble Supreme Court in the case of C.I.T., Kolkata vs. Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] - Goodwill is an asset under Explanation 3(b) to Section 32(1) qualifies for depreciation u/s. 32 - Explanation 3 states that the expression asset shall mean an intangible asset, being know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature Decided in favour of assessee.
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2013 (11) TMI 1486 - ITAT MUMBAI
Undisclosed income Held that:- The assessee has failed to prove by any documentary evidence that the income of assessee was below taxable limit - The assessee during the course of assessment proceedings was non-cooperative and non-complied with the notices issued by AO - The AO is justified to estimate, considering the quantum of income declared by assessee in the preceding as well as in the succeeding assessment years in taking average of the same Decided against assessee.
Foreign travelling expenses Held that:- The assessee has not furnished any evidence to support her explanation that during her visits to Dubai she stayed with her husband and her husband born the expenses of boarding, lodging, local traveling etc on her behalf The onus is on the department to prove that the said expenses were not incurred by husband of the assessee but were born by the assessee from undisclosed income No incriminating evidence was found during the course of search regarding undisclosed income attributable to foreign travelling of the assessee - The ld. CIT(A) is justified in deleting the addition of Rs.2,75,000/- which has been estimated on account of boarding, lodging, local travelling and entertainment etc The ld. CIT(A) was not justified to estimate a sum of Rs.25,000/- per trip aggregating to Rs.75,000/- as undisclosed income of the assessee on account of foreign traveling particularly when no evidence is placed on record and the said estimation is made arbitrarily and not on any cogent material on record Partly allowed in favour of assessee.
Calculation mistake Held that:- The bills were prepared for less quantity and the actual delivery was higher and the total difference was only 300 ltrs The AO applied rate of Rs. 12.10/- per litre sales for the said excess comes to Rs.3,630/- but the addition as such made by AO is Rs.36,000 - Assessee has asked for relief by taking the correct figures and without disputing the rate and the quantity as considered by the authorities Decided in favour of assessee.
Gold and diamond jewellery found in search Mismatch with wealth tax return Held that:- Total weight and value of the jewellery found during the course of search and disclosed in the Wealth Tax returns and under the VDIS declarations are same - It could be possible that items of VDIS and exact specifications were not reported due to inadvertence particularly when the assessee had disclosed jewellery in her VDIS declaration - The difference in specifications were due to making and remaking of those jewellery items - The value of specifications were small it should be accepted that there was no non disclosure of income on this account Decided against Revenue.
Fall in GP rate Held that:- The firm Sunil Chemical Industries dealt with petrochemical products having higher margin and whereas the new firm in which the assessee was a partner only for four months were dealing in Petroproducts - AO compared unlike products and compared GP of the assessee firms of 0.81% as against GP of the earlier firm which was 2.9% - The assessing officer has not pointed out any discrepancy in the accounts of the proprietary concern - The expenses claimed were genuine or were bogus or inflated or were incurred for any purpose other than business purpose - The book result declared by the proprietary concern cannot be disbelieved.
Interest on overdraft expense - The overdraft fully or partly was not utilized by the appellant for any purpose other than her business purposes - The basis adopted by the assessing officer to work out the admissible interest expense was not correct - Outstanding liability on the last day of the accounting period is no parameter to work out the admissible interest expense - The actual working on the basis of the utilized overdraft facility on day to day basis and over the time should be considered - The assessing officer should have seen the total gross profit generated by the appellant. Discount received by the appellant is linked with the transactions of purchase and sale Decided against revenue.
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2013 (11) TMI 1485 - ITAT MUMBAI
Stay against Demand - coercive recovery proceedings where stay application is pending - Held that:- The assessee has filed the appeal before the Tribunal - The A.O has recovered the entire outstanding tax from bank account of the assessee by taking a coercive action u/s 226(3) of the Income Tax Act without waiting for the outcome of the Stay Application filed by the assessee before this Tribunal - Following UTI Mutual Fund Vs ITO [2012 (3) TMI 333 - BOMBAY HIGH COURT] - The A.O has taken a coercive action by ignoring the basic rule of law and the directions and guidelines issued by the Hon'ble Bombay High Court - The Income Tax Officer being a quasi judicial authority should observed the parameters which are laid down in this context - The action of recovery from the bank account of the assessee is a gross violation of the directions as well as the basic rule of law and principle of natural justice - The Revenue should refund the entire amount to the assessee within 10 days from the dated of receipt of this order - The assessee has already filed a writ petition in the High Court and the matter of stay of demand is subjudice before the Hon'ble High Court therefore the judicial propriety and discipline demand that this Tribunal should not venture into the subject matter which is subjudice before the Hon'ble High Court - Partly allowed in favour of assessee.
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2013 (11) TMI 1484 - ITAT DELHI
Under reporting of gross receipts Held that:- Assessee is doing advertisement business in his individual capacity as well as in HUF capacity - Assessee has given the PAN, obtained in an individual capacity to work done in HUF capacity - This has been said to be the reason for the difference in receipt as shown by the assessee and that as reflected in the Form No. 26AS The ld. CIT(A) has noted that in the appeal proceedings, assessee has duly established that the difference was properly explained - Ld. CIT(A) has also accepted that return of HUF purportedly filed by the assessee in HUF capacity when the appellant submitted that as it was not filed by him as it does not have his signatures - Ld. CIT(A) has also referred to the reconciliation made which he has found to be satisfactory The issue was restored for fresh adjudication.
Disallowance under section 40(a)(ia) Held that:- If the TDS has been deposited before the date of filing of the return, the disallowance is not sustainable - As per the provisions of section 40(ia) for the relevant period TDS was not deductible if the turnover of the previous year was less than Rs. 40 lacs The issue was restored for fresh adjudication.
Capital from undisclosed sources Held that:- The amount was outstanding balance of the HDFC bank in the name of the assessee and the said account was transferred to the capital account of the assessee by debiting the same to the HDFC bank - The issue was restored for fresh adjudication.
Low household drawings Held that:- The household expenses have been incurred out of the assessees own capital account from which he has also contributed to investment u/s 80C The expenses incurred by the HUF were granted as relief Decided against Revenue.
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2013 (11) TMI 1483 - ITAT DELHI
Unexplained cash payment Held that:- No evidence of any payment having been made by the assessee - The assessee could not reconcile the difference in account of sundry creditors appearing in balance sheet and as per sundry creditors the entire amount outstanding was paid in cash - No evidence was produced by the assessee to substantiate the fact that no payment has been made by it to the sundry creditors Decided against assessee.
Bogus purchases Held that:- The assessee failed to furnish any reasonable and sustainable evidence regarding genuineness of the purchasesdespite several oppurtunities given by the CIT(A) Also the assessee could not improve its case before the Tribunal for establishing genuineness of the claimed purchases except producing one bill The CIT(A) was justified in adding this - The AO has not addressed the submission of the assessee regarding allowing adjustment of the loss on account of rejection from debtor - The same cannot be done at the appellate stage as the assessee never claimed this amount in its return of income The issue was restored for fresh adjudication.
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2013 (11) TMI 1482 - ITAT DELHI
Long term capital gain Sale of plot of land - The Income Tax Department while conducting search at the premises or Piyush Group received a document from "anonymous sources" through fax purporting to be an Agreement to Sale of the said Property - the assessee and the buyers vehemently denied having ever entered into any such Agreement to sale of the said property at this consideration. They however stated that there was an earlier agreement to sell the property at a sum of Rs. eight crores which due to some problems in title in the land got reduced to Rs.5.5 crores and the final sale deed was executed at this sum of Rs.5.5 crores.
Held that:- In the case of purchaser on the very same transaction, the Tribunal considered each set of evidences relied upon by the Ld.A.O. and deleted the addition of Rs.12.5 crores made in the hands of the purchaser. Before us is the case of the sellers of this property. - A different view cannot be taken on the same set of facts and evidences. - Decided in favor of assessee.
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2013 (11) TMI 1481 - ITAT DELHI
Notional Rental income - Taxable under the head income from house property - Vacant property - Held that:- The assessee was not carrying out any business, but he was in occupation of the property. The AO has also alleged that the property had been kept vacant by the assessee for long time deliberately though it was a valuable property which was usable - As per section 22 since the assessee despite occupying the property for the purpose of business did not carry on any business, the profits of which are chargeable to income tax will not qualify the benefit of exception provided u/s 22 - Income from house property of the said property falling within the provision of section 22 of the Act will be determined as per the provisions of section 23(1)(a) of the Act, the sum for which the property might reasonably be expected to let from year to year - Decided against assessee.
Rental rate adopted - Held that:- The prevailing rental rate in the locality was around Rs. 60/- per sq. ft. and the rates during the financial year 2007-08 were approximately Rs. 40/- per sq. ft. The AO has not considered the contention of the assessee that the property could not be let out without prior permission of NOIDA authority that too for the agreed purpose of manufacturing color television receiver set of boxes Videocon and that water and electricity connections were not available in the property - The issue was set aside for fresh consideration of lettable value.
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2013 (11) TMI 1480 - ITAT COCHIN
Reassessment - Duplicate claim of same payment - valuation of stock - Held that:- The excise duty amount debited in the profit and loss account is included in the value of closing stock - The assessee has disclosed this fact in the significant accounting policies - The assessee has made provision for excise duty under the head "outstanding liabilities" - The assessee is of the view that incidence of excise duty arises as soon as the product is manufacture - AO has not disturbed the value of closing stock value declared by the assessee, i.e., he has accepted the value disclosed by the assessee, which included the amount of Excise duty payable on the closing stock. Hence, the AO may not be correct in holding that the liability to pay excise duty would arise only in the succeeding year upon sale of the closing stock. - Therefore both the views as that of assessee as well as AO ultimately will result in the same figure - Decided in favour of assessee.
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2013 (11) TMI 1451 - ITAT DELHI
Validity of assessment u/s 263 Held that:- The Assessing Officer did not make proper enquiry which was expected from him considering the facts of the case - He has simply examined the cash deposit in the books of account without examining any aspect of manufacturing and trading account - The order of the learned CIT is upheld to the extent that the assessment order passed by AO is erroneous and prejudicial to the interest of the Revenue.
Suppression of sales Held that:- The CIT did not properly consider the assessee's written submission - No defects have been pointed out by the CIT in the regular books of account maintained by the assessee - Unless the defect is pointed out and books of account are rejected, there is no question of estimation of any production and sales The issue is restored for fresh decision.
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