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2013 (4) TMI 761 - ITAT BANGALORE
Test of charitable institution - Corpus donation - whether contribution to development fee was not a voluntary contribution? - Held that:- The fact that the donations were given by students who joined the educational institution of the Assessee as in return for admission granted would not affect the character of the contribution as voluntary contribution. The reason why clause (d) to Sec.11(1) of the Act was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989 and Section 2(24) amended by the same amending Act to include voluntary contribution with direction that they would form of corpus of the trust as income, was to treat them as income in the hands of the recipient, but in the case of trusts or institutions, who comply with the requirements for exemption under section 11 of the Act and not tax such receipts. Prior to the insertion of the above provisions, they were treated as capital receipts not chargeable to tax. However, in case the trust or institution loses the exemption under section 11 of the Act, either by not complying with the conditions laid down in section 12A or by falling within the mischief of section 13, corpus donations will be included in its income and taxed. Therefore the question whether the donations were voluntary or not becomes irrelevant and what becomes relevant is the application of such contributions for the objections of the trust which are admittedly charitable. The application of such contributions for objects of the trust is not in dispute. - Decided in favour of assessee.
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2013 (4) TMI 760 - PUNJAB AND HARYANA HIGH COURT
... ... ... ... ..... erala Act contemplated filing of appeal and cross objections. Therefore, the court held that scheme of the Statue does not contemplate enhancement of Tax, without availing the remedy of appeal or cross objections. Though, in the Statue under consideration, there is no provision of filing of cross objections but that fact will not materially change the position of law. Therefore, we hold that without appeal or the provisions of crossobjections, the Tribunal or the Appellate Authorities under the Act could not enhance the tax lability. Consequently, the appeals are allowed and the order passed by the Tribunal and the first Appellate Authority are set aside. The matter is remitted back to the Joint Excise and Taxation Commissioner to pass fresh orders in accordance with the orders now passed by this court. However, the acceptance of these appeals will not preclude the Revenue to initiate such other proceedings as are permissible in law against the dealer in accordance with law.
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2013 (4) TMI 759 - ALLAHABAD HIGH COURT
Rejection of books of accounts - estimation of income and agreed for a net profit of 8% of the gross receipts - adoption of flat rate of 8% under Section 44AD
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2013 (4) TMI 758 - ITAT PUNE
Widening of existing road - New infrastructure facility u/s 80IA(4) - Assessee executed a project named “BOT" at Hanumangar. He submitted that it was not merely a repairing of road, but re-doing of the entire road work. He claimed deduction u/s.80IA(4) in respect of that project. - HELD THAT: - Assessee incurred a huge expenditure on widening and strengthening the existing road by constructing additional lane, thus it is a new infrastructure facility, therefore, assessee is entitled for deduction u/s.80IA(4).
Decision in the cases of - SHRISTI INFRASTRUCTURE DEVELOPMENT CORPN. VERSUS INCOME-TAX OFFICER, WARD 8(3), NEW DELHI [2009 (7) TMI 904 - ITAT DELHI] and COMMISSIONER OF INCOME-TAX, BOMBAY VERSUS TATA HYDRO ELECTRIC POWER SUPPLY COMPANY LIMITED [1978 (7) TMI 29 - BOMBAY HIGH COURT], relied upon.
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2013 (4) TMI 757 - ITAT MUMBAI
MAT - Computation of Book Profit u/s. 115JB - Held that:- No hesitation to hold that for the purpose of computing Book Profit u/s. 115JB of the Act, income has to be computed as per Parts of Schedule VI of Companies Act and not on basis of provisions of I.T. Act.
Interest on deposits - eligible for deduction u/s. 10A - Held that:- We find that the issue has been decided in favour of the assessee by the Tribunal in his own case allowing the claim of the assessee for treating the interest from fixed deposit as income falling under the head “Profits & gains of business or profession” eligible for deduction u/s. 10A of the Act. Facts being identical, respectfully following the decision of the Tribunal, we direct the AO to treat the interest from fixed deposits as income falling under the head “Profits & gains of business or profession” eligible for deduction u/s. 10A of the Act.
Computation of profits of the business of the undertaking and amount of deduction u/s. 10A - Held that:- We direct the AO to allow deduction u/s. 10A before setting of the brought forward unabsorbed depreciation and business loss.
Charging of interest u/s. 234B - income of the assessee is taxable under the provisions of Sec. 115JB - Held that:- The issue has been decided against the assessee by the Hon’ble Supreme Court in the case of JCIT Vs Rolta India Ltd. (2011 (1) TMI 5 - SUPREME COURT OF INDIA) wherein held that interest u/s. 234B is payable on failure to pay advance tax in respect of tax payable u/s. 115JA of the Act.
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2013 (4) TMI 756 - KARNATAKA HIGH COURT
... ... ... ... ..... , a licensee, during the currency of the licence, the Deputy Commissioner may on an application by the legal heirs of the deceased with the previous sanction of the Excise Commissioner, transfer the licence in their favour. 11. If that is so, then the legal representative of the deceased K.B. Motekar is entitled to be inducted as a partner in the petitioner - firms and the Deputy Commissioner is bound by Rule 17A to transfer the licences in respect of the three firms. In that view of the matter, Rule 17B has no application to the facts of the case. 12. In the result, these petitions are allowed. The demand notice Annexure-E1 followed by notices Annexures-A1, A2 and A3 are quashed. The third respondent - Deputy Commissioner is directed to pass orders on the representation. Annexure-E2 by exercising jurisdiction under Rule 17A of the Rules and to pass orders in accordance with law and in the light of the observation made supra, in any event on or before 9th May 2013.
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2013 (4) TMI 755 - ITAT AMRITSAR
... ... ... ... ..... e cannot be broken into pieces nor can the telecommunication service rendered b them be so mutilated. Not only this position flows from the terms of contract, this also flows from section 4 of the India Telegraph Act which provides for grant of license on such conditions and in consideration of such payments as it thinks fit, to any person “to establish.” maintainer work at telegraph”. The integrity of establishing, maintaining and working is not to be mutilated.” 26. In view of the above legal and factual discussions, the roaming charges paid by the assessee to other operators attract TDS provisions u/s 194C of the I.T. Act. Accordingly, we find no infirmity in the order of the Ld. CIT(A) for the assessment year 2007-08. Hence, the ground of the assessee taken in the assessment year 2007-08 is dismissed. 27. In the result, the appeal of the assessees in ITA Nos. 93 to 97(Asr)/2012 are dismissed. Order pronounced in the open court on 22nd April, 2013.
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2013 (4) TMI 754 - ITAT CHENNAI
... ... ... ... ..... ssee that the related vouchers remained impounded with the Assessing Officer. 40. We considered the issue. If the vouchers are impounded by the Assessing Officer, the assessee could have atleast obtained copies of some of them. No piece of evidence was produced before the Assessing Officer. The quantum of the expenditure may be reasonable, when compared to the total turnover of the assessee-company. But, that is not the issue in the present case. The issue is whether the incurring of such expenditure was proved by documentary evidence or not. It has not been proved. It is on that ground that the lower authorities have rejected the contentions of the assessee and confirmed the disallowance of ₹ 10,45,913/-. We do not find any reason to interfere in their orders. 41. The assessee fails in its appeal. 42. In result, the appeal filed by the Revenue is allowed and the appeal filed by the assessee is dismissed. Orders pronounced on Monday, the 15th of April, 2013 at Chennai.
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2013 (4) TMI 753 - SUPREME COURT
Whether the punishment imposed on the appellant is shockingly disproportionate to the misconduct?
Whether no injustice much less any grave injustice has been done to the appellant?
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2013 (4) TMI 752 - ITAT MUMBAI
Disallowing the claim for deduction under section 35D for expenditure on public issue of equity shares - Held that:- Matter is restored back to the file of the AO for fresh adjudication after affording a reasonable opportunity of hearing to the assessee. Ground no.1 is allowed in part in favour of the assessee.
Prior period expense - Held that:- Assessee had made submissions about pending rent payment and accrued interest on FDRs. As per the settled principles of taxation-jurisprudence, prior period expenses can be allowed in certain circumstances though they may not pertain to a particular AY for which return of income is filed.Crystalisation of expenses during a particular period is the deciding factor in such cases.We find that in the matter under consideration prior period expenses related to arrears of rent paid by the bank in respect of leased property and interest expenditure due to renewal of Fixed Deposits held by the FDR holders. The nature of expenditure is as such that some delay is bound to happen and crystalisation of such expenditure after 31st March of the AY.under consideration is natural
Applicability of section 115 JB - Held that:- appellant is not a company under Companies Act but is only deemed to be a company as per the provisions of Sec. 11 of the Banking Companies (Acquisition and Transfer of Undertaking)Act,1970.Therefore as held by the Jurisdictional ITAT in the case of Maharashtra State Electricity Board [2001 (8) TMI 310 - ITAT MUMBAI] the provisions of Sec. 11 5JB cannot be made applicable to the appellant.
Addition u/s 36(1) - Held that:- FAA had rightly directed the AO to calculate the bad debts and provisions in a particular manner,that section 36(1) of the Act allowed writing off of bad debts as well as provisions in certain circumstances.
Applicability of section 88E while computing the income of the assessee as per the provisions of section 115JB - Held that:- Analysis of section 88E of the Act proves that where the total income of any assessee includes any income chargeable under the head Profits and gains of business/profession arising from taxable securities transaction,the assessee is entitled to a deduction from the amount of income tax on such transaction of an amount paid as STT. We agree with the view of the FAA that provisions of section 115JB deem the book profits to be income of the assessee and income tax on such book profits is payable at the rate provided in section115JB. Therefore,we are of the opinion that the amount tax paid as STT is income tax only and the reference to income tax in Section 88E includes the tax payable u/s. 115JB.In our opinion appellant-bank is entitled to the rebate of STT paid even if tax has to be calculated under MAT provisions
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2013 (4) TMI 751 - ITAT CHENNAI
Depreciation on building including land disallowed as relying of assessee's own case for assessment year 1994-95
Disallowance of bad debts written off relating to rural branches - Held that:- Remand the issue back to the Assessing Officer to decide it afresh in accordance with the law laid down by the Hon’ble Supreme Court of India in the case of Catholic Syrian Bank Ltd [2012 (2) TMI 262 - SUPREME COURT OF INDIA]
Restriction of claim in respect of deduction under section 36(1)(viia) to the extent of provision made in the books - Held that:- Tthis issue has already been decided against the assessee bank in the case of Bharat overseas Bank Ltd. [2012 (11) TMI 505 - ITAT CHENNAI].
Disallowance under section 14A based on Rule 8D - Held that:- Assessee’s claim is baseless, as many of such investments were continuing from preceding years and the Tribunal has already confirmed the disallowance under section 14A as the assessee has incurred expenditure to earn the income. From the assessment year 2008-09 the provisions of Rule 8D have become applicable therefore, it is mandatory to compute disallowance under section 14A in accordance with computation provided under Rule 8D and there is no scope to make modifications as it is a deeming provision to make a fair estimate - Decided against assessee
Allowablility of provision for leave encashment - Held that:- he provision made by the appellant-company for meeting the liability incurred by it under the leave encashment scheme proportionate with the entitlement earned by employees of the company, inclusive of the officers and the staff, subject to the ceiling on accumulation as applicable on the relevant date, is entitled to deduction out of the gross receipts for the accounting year during which the provision is made for the liability. The liability is not a contingent liability - Decided in favour of assessee
Depreciation on UPS @ 60% allowed.
Deprecation on fixed assets taken over from Bank of Tamilnadu Ltd - Held that:- In the assessment year 1996-97 Tribunal remitted the issue back to the Assessing Officer as provisions of section 2(1B) were not taken into consideration by Assessing Officer while deciding the issue. In the instant case also the Assessing Officer has failed to consider the issue in the light of the provisions of section 2(1B). Thus we remit the issue back to the Assessing Officer for deciding it afresh on the similar directions as given by the Tribunal above.
Disallowance of contribution to staff welfare fund - Held that:- This ground of appeal of the Revenue has already been adjudicated against the assessee for the assessment year 2002-03 wherein held that the claim of the assessee based upon the provision of section 43B has no merit. Before the provisions of section 43B can be applicable, deduction must otherwise be allowable under the Act. In view of the above discussion, we are constrained to hold that the contribution towards staff welfare fund is not allowable expenditure.
Loss on revaluation of investments - Held that:- As in assessee's own case for AY 1996-97 assessee is entitled to change the method of valuation of Government securities to market value from cost and claim depreciation on the difference in the diminution value. The Tribunal also rightly pointed out the above ruling and held that the securities are trading assets of the bank and the loss arising on its sale is an allowable deduction. The loss on sale of securities is a revenue loss considering that the securities are trading assets and not investments. Hence, this question of law is answered in favour of the assessee and against the revenue.
Disallowance of loss on revaluation of derivative contracts - Held that: Direct the Assessing Officer to allow the provision as reflecting in substance the loss arising on account of valuation of the closing stock.
Recovery in respect of bad debts written off which has not been allowed as deduction in the earlier years - Held that:- Commissioner of Income Tax (Appeals) has only remitted the issue back to Assessing Officer to verify whether the bad debts written off has earlier been allowed as deduction or not. If earlier, it has not been allowed as deduction at the time of write off, the same be allowed now. There is no error in the findings of Commissioner of Income Tax (Appeals). Therefore, this ground of appeal of the Revenue is dismissed.
Disallowance of provision towards leave travel allowance - Held that:- We are in concurrence with the findings of the CIT(A) that the expenditure on leave travel allowance to the staff is not prior period expenditure. The expenditure has been claimed on actual valuation. This ground of appeal of the Revenue is dismissed.
Disallowance of the claim of debenture redemption reserve - Held that:- Assessee has taken over assets and liabilities of the Bharat Overseas Bank Ltd.. In the process of amalgamation, all the reserves and provisions created by the erstwhile Bharat Overseas Bank Ltd. were also taken over by the assessee bank. As pointed out by the AR, the reserve has been created after preparation of profits already charged to tax. The assessee bank steps into the shoes of the amalgamating company. It shall be deemed that reserve has been created out of profits charged to tax, taxing the same amount would result in double taxation which would be unfair. We agree with the findings of the Commissioner of Income Tax (Appeals) on the issue and dismiss this ground of appeal of the Revenue.
Grant of double taxation relief - DTAA - Held that:- CIT(Appeals) hyper technically held that the only job of the Assessing Officer was to see whether there is a DTAA between India and Thailand. We are unable to understand the above conclusion made by the learned CIT(Appeals) that the job of the Assessing Officer is just to see whether there is a DTAA between India and Thailand. If there is a DTAA, the Assessing Officer has to allow the relief claimed by the assessee. That being so, in our opinion, the Tribunal need not refer it to the Assessing Officer as well just to see and pass an order. The Tribunal clearly directed the Assessing Officer to enquire into the existence of a DTAA between India and Bangkok. "Enquiry" means to investigate and apply the same. In our opinion, the Assessing Officer has rightly investigated and applied the same and decided the issue. We therefore hold that the finding given by the learned CIT(Appeals) is not correct. Accordingly, we reverse the order passed by the learned CIT(Appeals) on this count and uphold the order of the Assessing Officer.
Applicability of provisions of section 115JB - Held that:- In the appeal of the assessee for the assessment year 2005-06 held in view of amendment to the provisions of section 115JB by the Finance Act, 2012, the provisions of section 115JB are applicable to the banks as well from assessment year 2013-14
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2013 (4) TMI 750 - ITAT KOLKATA
... ... ... ... ..... ITAT, Kolkta Bench decision dt.21.0 1.2011. in the case of Basil Exports Ltd. to support its claim that share application money cannot be treated as ‘deposit’ appearing in the provisions of section 269SS and accordingly penalty u/s 271D is not applicable. Keeping in view these facts and circumstances, penalty levied u/s 271D is deleted.” 4. We have heard the ld. DR and carefully perused the material available on record. On careful perusal of the orders of the authorities below we do find that the facts as brought on record by the AO did not require the visit of penalty provision u/s 271D of the Act as being dealt with by the ld. CIT(A) in an elaborate manner, in so far as, share application money cannot be treated as deposit for invoking the provision of section 269SS of the IT Act. In this view of the matter we dismiss the appeal filed by the revenue. 5. In the result the appeal of the revenue is dismissed. Order pronounced in the open court on 18.04.2013.
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2013 (4) TMI 749 - ITAT PUNE
Addition on account of loans advances as per Promissory Notes - Held that:- A copy of assessee's letter dated 29.12.2009 duly acknowledged by the Assessing Officer in his Tapal on the same date in which the assessee has claimed to have clarified the impugned issue by stating that he has not signed any promissory note to Mr. Sunil D. Khosla, neither he knew any such individual. Similarly, his mother Malani D. Irshid had not taken any promissory note from any Shri Mandar Kelkar. So the Assessing Officer was not justified in reaching to the conclusion. The Assessing Officer has applied the presumption u/s.143(4A) against the assessee. Normally, the said presumption is applicable to the person from whose possession the document is found in the course of search action. The presumption under section 132(4A) is available only against the person from whose possession the document is found and not against the third person. In absence of clinching evidence against the third person as stated above, no action has been taken against him. In such situation, the Assessing Officer was not justified in making the addition of ₹ 31,50,000/- in case of assessee and same has been rightly deleted. - Decided in favour of assessee.
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2013 (4) TMI 748 - ITAT MUMBAI
... ... ... ... ..... presentatives of both the parties and the facts that the authorities below have denied the claim for deduction u/s 80-IB(10) of the Act in respect of the Assessment Year under consideration i.e. Assessment Year 2007-08 by following their orders for the Assessment Years 2004-05, 2005-06 & 2006-07, which have since been reversed by the Tribunal vide its order dated 30.03.2011, (copy placed at pages 1 to 17 of the paper book) and vide common order dated 04.05.2012 for Assessment Years 2005-06 and 2006-07, (copy placed at pages 18 to 44 of the paper book), we hold that assessee is entitled for claim of deduction u/s 80-IB(10) of the Income Tax Act in respect of its projects comprising of Balaji Towers, Silicon Towers, Kaveri, Panchvati Vrindavan, Tulsi, Kamothe Phase I & II. Hence, the ground of appeal taken by the assessee is allowed. 7. In the result appeal of the assessee is allowed. Order pronounced on 04.04.2013 in the open court after the conclusion of the hearing.
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2013 (4) TMI 747 - ITAT DELHI
Addition on account of unaccounted profit and unaccounted investment - addition in course of search and seizure operation u/s 132(1) - CIT-A deleted addition - Held that:- Considering the totality of above facts, we entirely agree with the learned CIT(A) that the statement of Shri Sohan Raj Mehta cannot be used against the assessee and, similarly, the chits found from the third party, with which the assessee has no dealing, cannot be used against the assessee in the absence of any corroborative evidence. That merely because some excess stock was found in the survey for which separate addition has already been made, it cannot be further presumed that the assessee made sales outside the books, specially when the survey was followed by the search and neither during the course of survey nor during the course of search, any evidence of sale outside the books was found. In view of the totality of above facts, we do not find any justification to interfere with the order of learned CIT(A). The same is sustained. - Decided against revenue
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2013 (4) TMI 746 - DELHI HIGH COURT
... ... ... ... ..... the appellant? (the petitioner herein). Consequently, the Tribunal allowed the stay application and waived the condition of pre-deposit of duty demanded as well as the interest and penalty. We are of the view that, as the Tribunal, in the case of the very same petitioner, had come to the conclusion that a case of financial hardship had been made out by the petitioner, the Commissioner of Central Excise (Appeals), when he was considering the matter pertaining to a subsequent period, shortly after the said order passed by the Tribunal, ought to have given due credence to this fact. Consequently, we feel that, as the petitioner is undergoing financial difficulties, the entire duty, interest and penalty demanded ought to have been waived as a condition for hearing the appeal. It is ordered accordingly. To that extent the impugned order stands superseded. The appeal of the petitioner shall be heard without insisting on the pre-deposit. The writ petition stands disposed of. Dasti.
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2013 (4) TMI 745 - ITAT BANGALORE
... ... ... ... ..... s an agricultural land and therefore not a capital asset within the meaning of the Act. 3. We have heard the rival submissions and are of the view that it would be just and appropriate to grant an out of turn hearing of the appeal as there is no immediate threat of recovery. The assessee is, however, at liberty to move the Tribunal in the event of any coercive action being taken by the department. The appeal is directed to be fixed for hearing on 25.04.2013. The date of hearing was announced in the open court, hence no notices be served to the parties. 4. In the result, the stay petition is dismissed. Pronounced in the open court on this 1st day of April, 2013.
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2013 (4) TMI 744 - ITAT MUMBAI
... ... ... ... ..... ion of the income of the assessee by applying the higher GP rate. As regards the GP rate applied by the A.O., it is observed that the GP rate of 34.73 was declared by the assessee for the immediately preceding year and since there was some agency commission income received in that year affecting the GP rate as pointed out by the assessee, the A.O. excluded the agency commission and adopted a low GP rate of 30.40 to estimate the income of the assessee. Having regard to all the facts of the case as well as the material available on record, we are of the view that the GP rate adopted by the A.O. was quite fair and reasonable and the ld. CIT(A) is fully justified in confirming the trading addition made by the A.O. by applying the said GP rate. We therefore find no justifiable reason to interfere with the impugned order of the ld. CIT(A) on this issue and upholding the same, we dismiss this appeal filed by the assessee. 8. In the result, appeal filed by the assessee is dismissed.
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2013 (4) TMI 743 - ITAT BANGALORE
... ... ... ... ..... or manifest injustice. But words may be modified or varied where their import is doubtful or obscure. Legislature does not intend what is inconvenient and unreasonable. As we have already seen, it is doubtful that the legislature intended to give a meaning to the expression “held by the Assessee” used in Sec.2(42A) of the Act, as referring to only vesting of legal title. It is unlikely that the legislature would wish to deny exemption from levy of tax on capital gain in a case where, otherwise the Assessee satisfies all parameters for grant of exemption. 25. For the reasons given above, we are of the view that the capital gain in question in the present case has to be treated as LTCG as claimed by the Assessee and the Assessee should be entitled to consequential benefits of exemption from levy of tax on capital gain. We hold and direct accordingly. 26. In the result, appeal of the Assessee is allowed. Pronounced in the open court on this 30th day of April, 2013.
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2013 (4) TMI 742 - GUJARAT HIGH COURT
the Additional Chief Metropolitan Magistrate has no jurisdiction to take possession unless authorized by the High Court to have all or any of the powers of a Chief Metropolitan Magistrate under the Criminal Procedure Code or under any other law for the time being in force.
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