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Income Tax - Case Laws
Showing 81 to 100 of 515 Records
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2013 (8) TMI 1035
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... ... ..... t of Hon'ble Calcutta High Court rendered in the case of CIT vs. S.K. Tekriwal (2013) 90 DTR 26 (Cal) wherein Hon'ble Calcutta High Court has held that “we are of the view that the conditions laid down u/s 40(a)(ia) of the Act for making addition is that tax is deductible at source and such tax has not been deducted. If both the conditions are satisfied then such payment can be disallowed u/s 40(a)(ia) of the Act but where tax is deducted by the assessee, even under bona fide wrong impression, under wrong provisions of TDS, the provisions of Section 40(a)(ia) of the Act cannot be invoked.” Hence, respectfully following the ratio laid down by the Hon'ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal (supra), we find no infirmity in the order of the ld. CIT(A) which is upheld. Thus the solitary ground raised by the Revenue is rejected. 3.0 In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 23-08-2013.
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2013 (8) TMI 1029
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... ... ..... or assessment year 2009-10 under Section 143(3). In view of the above facts and circumstances of the case, I allow this issue in favour of the assessee and direct the AO to allow the various expenses incurred by the assessee in its profit and loss account by treating the business of the assessee company has set up. 8. Regarding miscellaneous income of ₹ 24,720/- claimed as business income, I find that in subsequent year ie. Assessment year 2009-10, similar income shown by the assessee has been computed as income from other sources and as per learned counsel of the assessee the assessment order for assessment year 2009-10 has been accepted by the assessee. Accordingly, I hold that the AO and learned CIT(A) were justified in treating the nature of income as income from other sources. Accordingly, I confirm the order of learned CIT(A) on this issue. 9. In the result, appeal of the assessee is allowed in part. Order pronounced in the open court on this 19th day of Aug.2013
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2013 (8) TMI 1028
Deduction u/s. 8OIC - Held that:- We are of the opinion that Ld. CIT(A) did not commit any error in holding that the activities of the assessee were in the nature of manufacturing, therefore, the assessee is entitled to get deduction under section 80 IC of the Act. We decline to interfere in the relief granted by Ld. CIT(A) and the appeals filed by the revenue are dismissed.
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2013 (8) TMI 1027
Depreciation on pipelines - Held that:- Admittedly, this issue is covered against the assessee by the decision of this Tribunal in assessee’s own case for the assessment year 2004-05
Disallowance of depreciation on telecom system - Held that:- It is pertinent to note that in the Assessment Year 2004-05 the depreciation was not allowed on the ground that in the Tax Audit Report it was stated that telecom system in question was put to use on 30.09.2004. There is no dispute that the system in question was put to use by the assessee which is evident from the certificate of IOCL dated 07.05.2003. We are, therefore, of the view that the assessee is entitled to full depreciation for the Assessment Years 2005-06 and subsequent years in accordance with the law. We are accordingly direct the Assessing Officer to allow the same. We also direct the assessee to furnish the working of depreciation to the Assessing Officer who will verify and allow the same in accordance with law.
Disallowance of prior period expenses - Held that:- CIT(A) confirmed the disallowance on the ground that the assessee has not furnished any evidence in support of the claim that those expenses were crystallized during the year. Before us also the ld Counsel of the assessee could not produce any evidence in support of the claim that those expenses were crystallized during the year. Therefore, we decline to interfere
Lump sum disallowance of vehicle and office expenses - Held that:- It is pertinent to note that the assessee has not produced voucher of these expenses before the Assessing Officer. Keeping in view of this conspicuous facts, the Assessing Officer made the disallowance of ₹ 50,000/-. The disallowance made by the Assessing Officer is neither excessive or unreasonable.
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2013 (8) TMI 1026
Additional depreciation on plant and machinery utilized in its mining operations, windmill operations and computers used in those operations u s 32(l)(iia) - Whether engaged in the production or manufacturing of an article or thing - Held that:- Activity carried by the company in its mining division viz., iron-ore processing amounts to production of an article - processing activity carried out by the Company to convert raw iron ore to saleable processed iron ore amounts to 'production' - the activity carried in windmill division viz., generation of electricity, the same also amounts to production of an article or thing - once the company is in the manufacture or production of article or thing, any new machinery or plant purchased would qualify for additional depreciation, irrespective of the fact that the same is directly or indirectly used in the manufacturing or production activity - entitle to additional depreciation on machinery as per the decision of Hon’ble Supreme Court in the case of CIT Vs Sesa Goa Ltd [271 ITR 331] - entitled for additional depreciation on windmill operation as per the decision of Madras High Court in the case of CIT Vs V T M Limited [319 ITR 336] - Decided in favor of assessee
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2013 (8) TMI 1024
Admission fees for taking membership of MCX and NCDEX - allowable deduction - Held that:- We find that the assessee had made payments towards membership fees of two exchanges Fees paid by it was onetime payment and as a result assessee was allowed to carry out business on both the exchanges. Such a right has to considered a capital asset. In the cases of Techno Shares and Stocks Ltd. (2010 (9) TMI 6 - SUPREME COURT OF INDIA ) and Smifs Securities Ltd. (2012 (8) TMI 713 - SUPREME COURT ) Hon'ble Apex court has held that Stock exchange membership cards were assets eligible for depreciation under section 32 of the Act. In our opinion membership fees paid by the assessee under the head exchanges cards fees is squarely covered by the above judgments. FAA has already directed the AO to allows depreciation. Therefore, we are of the opinion his order does not suffer from any infirmity - Decided against the assessee
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2013 (8) TMI 1023
Rejection of books of accounts - Held that:- AO has accepted the wages upto the month of February, 2009 and it is only with respect to the wages for the month of March, 2009 he had a doubt but at the same time as per findings of the ld. CIT(A) and the AO these wages have been paid up to July, 2009 i.e. in the following year. In the absence of any wages paid or payable during the year to be bogus, the AO was not justified in rejecting the books of account.
Non maintenance of stock register with regard to the sand, soil, bajri, cement, crusher etc. - Held that:- In the absence of proper record maintained or in the absence of calculation of consumption presented before the authorities below or before us of such material, books of account cannot be treated as complete and accurate and therefore, we find no infirmity in the order of the ld. CIT(A), who has rightly invoked the provisions of section 145(3) of the Act.
Estimation of income - Held that:- The assessee has declared Net Profit rate of 4.42% on the gross receipts of ₹ 23,09,62,133/- and to cover up possible leakage, we estimate Net Profit rate at 5% of the gross receipts as mentioned hereinabove and direct the A.O. to allow depreciation as per law subject to the income does not go down below the returned income. We order accordingly.
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2013 (8) TMI 1021
Addition made on the basis of the statement recorded u/s 132(4) - Held that:- The ingredient for retraction of statement made during the search, therefore, stand duly satisfied as the assessee is found to have made retraction within a reasonable time immediately after the copies of statement were provided to him. Since the documents found as a result of search were pertaining to the income of the other two persons namely S/Shri Praful Mittal and Murari Lal Mittal and there being no material or evidence on record to show that the appellant has carried any business outside the books for sale and purchase of medicines that could give rise to the income to the extent of ₹ 25 lacs, the addition merely on the basis of such statement which stood validly retracted could not have been made. We, therefore, find no factual or legal justification in sustenance of addition by Ld. CIT (A) in this regard.
Addition on account of alleged excess stock of medicines found at the time of search - Held that:- . The inventory so found reveals that some of the medicines which were sample and had no value and also medicines with expiry which were to be discarded by the assessee have also been included in the list. The value thereof, could not be included for determining unexplained investment in stock. In this view of the matter, we set aside this issue to the assessing authority so that the assessee can demonstrate his claim for exclusion of value of such items of stocks for sustaining only the resultant addition, if any, as his undisclosed income.
Disallowance of remuneration to the partners - addition on the ground that the interest income cannot be a subject matter of deduction under section 40(b) - Held that:- The perusal of material reveals that the amount of ₹ 31,711/- is a journal entry by which the assessee reversed the excess amount of bank interest charged. This has gone to reduce the expenses charged under the head Bank Interest and charges. The resultant income has also been assessed as income from business. This amount of ₹ 31,711/- is not shown to have been assessed as assessee’s income from other sources. We, therefore, do not find any justification in excluding such amount for making disallowance of ₹ 12,685/- under section 40(b) of the Act. Accordingly the ground raised in appeal stands allowed.
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2013 (8) TMI 1020
Disallowance u/s 14A r.w. Rule-8D - Expenditure incurred towards exempt income - Assessee is a company engaged in the business of investment and trading. AO observed that the assessee has received loans from the shareholders and in turn, extended said loan to three of the companies, of which two of them are group concerns, thus assessee is not engaged in the business of money lending. Therefore, the AO treated the ‘interest income’ as ‘income from other sources'. HELD THAT : - Interest earned on money lending operation arose from a systematic and organized activity carried on with a motive of profit and hence ought to be taxed under the head “profits and gains of business or profession’'.
Decision in the case of - NARAIN SWADESHI WEAVING MILLS VERSUS COMMISSIONER OF EXCESS PROFITS TAX [1954 (10) TMI 11 - SUPREME COURT], relied upon.
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2013 (8) TMI 1019
Addition of interest on notional basis - Held that:- The assessee has not provided any material/evidence to establish that there has been a claim for the repayment of the loan/interest and a consequent refusal thereon to pay the same. It is also noted that the assessee has not written off the loan as bad debt. As regards the contention of the assessee that the said interest has not been paid to the assessee due to the litigation with the debtors, in our view is not acceptable as the AO and the Ld.CIT(A) has correctly held that there is no dispute between the assessee and the parties to whom the loans have been made on this issue. Mere fact that the said parties have not paid the impugned interest to the assessee as per their return cannot be the basis for giving relief to the assessee as the same has been assessed only on accrual basis and not on the basis of actual receipt - Decided against assessee
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2013 (8) TMI 1018
Computation of short-term capital gain - Held that:- Computation of capital gain prescribed under section 48 of the Act cannot be confused with the rate of tax liable to be charged on the income under section 48 of the Act could not be confused with the rate of tax liable to be charged on the income under the head “Capital gains” so computed. The computation of capital gain is governed by section 48 whereas the rates of tax are governed by sections 111A and 115AD of the Act. The authorities below had erred in negating the assessee’s computation of short-term capital gain
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2013 (8) TMI 1017
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... ... ..... t, appeal of the assessee in ITA No. 329/PN/2012 is partly allowed. 78. ITA Nos.330 to 332/PN/2012 is appeal by the assessee are directed against an order of the Commissioner of Income Tax (Appeals)-II, Nashik dated 08.12.2012 which, in turn, have arisen from an order dated 24.12.2008 passed by the Assessing Officer, under Section 153A read with Section 143(3) of the Act, pertaining to the assessment years 2002-03 to 2004-05. 79. The only Ground in these appeals are with regard to assessee’s claim for availability of depreciation as a cash in-flow. This aspect has been dealt with by us in Ground of Appeal No. 2 in ITA No. 872/PN/2013 and the Assessing Officer is directed to apply the same and thereafter re-work the total income accordingly. 80. In the result, appeals of the assessee in ITA Nos. 330 to 332/PN/2012 are partly allowed. 81. Resultantly, appeals of the respective assessees are partly allowed as above. Order pronounced in the open Court on 29th August, 2013.
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2013 (8) TMI 1016
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... ... ..... xpenditure in those years have been allowed. Thus, we accept the contention of the assessee that there was a temporarily lull in the business of the assessee. This resulted in assessee not earning any worthwhile business income. In these circumstances, in our considered opinion, assessee's contention has considerable cogency. In this regard, we refer to the decision of ITAT, Delhi Bench in 38 TTJ 564 in the case of Daljit Exports (Ind.) P. Ltd. vs. ITO. In this case it was held that assessee was a corporate entity and did not carry any business during assessment year under consideration. It was held that expenses incurred by the assessee to keep its corporate entity are allowable. In the background of the aforesaid discussion and precedent, we do not find any infirmity in the order of the Ld. Commissioner of Income Tax (A). Accordingly, we uphold the same. 7. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the Open Court on 02/8/2013.
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2013 (8) TMI 1015
Nature of loss - speculation loss u/s 43(5) v/s non-speculation loss - Held that:- The ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of A.O. We order accordingly and direct him to decide this issue afresh as per law in the light of the afore-noted Tribunal order. We want to make it clear that the issue is left open to be decided by the Assessing Officer. The applicability of the Tribunal order in the case of Arnav Akshay Mehta [2012 (9) TMI 447 - ITAT MUMBAI] should be considered by the Assessing Officer as per law and facts of the instant case. He will also dealt with the assessee’s contention on the applicability of proviso (a) to section 43(5) if the case is found to be falling in proviso (d) to section 43(5). Without prejudice ground taken by the assessee about the direction to the Assessing Officer to allow set off of the alleged speculation loss against profit arising to the assessee in similar transaction in subsequent year, is clearly not acceptable because firstly we have not upheld the view of the Revenue in treating the loss of ₹ 1.99 crore as speculation and secondly subsequent assessment year is not before us.
Disallowance on account of exchange rate fluctuation - Held that:- The Hon’ble Supreme Court in the case of CIT v. Woodward Governor [2009 (4) TMI 4 - SUPREME COURT ] has held that loss suffered by the assessee in respect of fluctuation in the rate of foreign exchange as on the date of the balance sheet is an item of expenditure u/s 37(1) in the year of approval. It is relevant to note that apart from claiming deduction for ₹ 62.62 lakh, the assessee offered income of ₹ 34.37 lakh in respect of gain on foreign exchange fluctuation with refernce to the rate of purchase and sale transaction entered during the year, which has been duly accepted as taxable by the authorities below. In such a situation and respectfully following the precedent rendered by the Hon’ble Supreme Court, we are of the considered opinion that the assessee deserves deduction of ₹ 62.62 lakh.
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2013 (8) TMI 1014
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... ... ..... /2010/-AY2005-06, 7872/Mum/2011-AY.2006-07, 7873/Mum/2011-AY-2007-08 3.Now we will like to take the appeals filed by the assessee. Before us, AR of the assessee did not press grounds 1to3 for all the three AYs., hence same stand dismissed as not pressed. 3.1. Ground no.4 is about disallowance of interest of ₹ 5.62 Crores, ₹ 6.37Crores and ₹ 13 Crores. It was brought to our notice that identical issue was decided by the Tribunal in the case of the husband of the assessee, Sh.Hitesh S Mehta for AY.1994-95 and 2005-06.vide order dated.12.06.2013(ITA/5587-89/Mum/ 2011) and order dated 26.04.2013(ITA/7726/Mum/2010). While going through the said orders of the Tribunal we find that the issue had been set aside to the files of the FAA for fresh adjudication. Following the same we remit back the matter to the file of the AO. Appeals filed by the assessee for all the three AYs. are allowed in part. As a result, appeals of the AO and the assessee stand partly allowed.
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2013 (8) TMI 1013
TDS u/s 194I or 194J - royalty payment - Held that:- We have perused the definition of royalty as given in Explanation 2 to clause (vi) of section 9(1) and find that the scope of royalty is limited to consideration paid for transfer of certain rights in respect of, e.g., patent, invention, model, design, secret formula or process or trade mark or similar property, etc. The impugned sum paid by the assessee does not fall under any of the clauses of Explanation 2 to clause (vi) of sub-section (1) of section 9. As stated earlier, the ld. Authorised Representative for the assessee also could not establish as to how the impugned payments made by the assessee fell under Explanation 2 to clause (vi) of sub-section (1) of section 194J. In this view of the matter, it is held that there was no basis with the assessee for deducting tax at source u/s 194J. The ld. CIT(A) has rightly held that the assessee was required to deduct tax at source u/s 194I.
Non/short-deduction of tax at source u/s 194I - Held that:- The assessee shall not be treated as assessee in default in case the AO is satisfied, after due verification, that the conditions stipulated by the first proviso to sub-section (1) of section 201 have been fulfilled by the assessee but in that situation also the assessee shall be liable to pay interest u/s 201(1A) at the prescribed rate from the date on which such tax was deductible u/s 194I to the date of furnishing of return of income by the payee. All grounds of appeal taken by the assessee in both appeals, except Ground No.1.1 taken by the assessee in both the appeals, and the issues raised in the appeals filed by the Revenue thus stand restored to the file of the AO for passing a fresh order as per directions earlier given by us.
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2013 (8) TMI 1010
Revision u/s 263 - allowance of penal charges on belated payment of employees’ provident fund - Held that:- The Administrative Commissioner in exercise of his revisional jurisdiction found that the assessing officer without examination allowed the claim of the assessee towards penal charges on belated payment of employees’ provident fund even though in the tax audit report this amount was shown as disputed penal charges on belated payment of dues . The Commissioner also found that every year the amount was debited in the profit and loss account. However, this was disputed by the ld.representative for the assessee. The fact remains that the assessing officer has not applied his mind to the claim made by the assessee. There is no discussion in the assessment order with regard to the penal damages paid by the assessee on the belated payment of employees’ provident fund. The assessing officer without any discussion allowed the claim of the assessee.
The assessing officer being a quasi judicial authority is expected to apply his mind to the claim made by the assessee and by a speaking order. An assessment order shall speak for itself. The application of mind shall be reflected in the assessment order. It is well settled principles of law that reasons for the conclusion arrived at in a quasi judicial order / judicial order shall be in the order itself. The reason for the conclusion cannot be substituted by way of an affidavit or additional material before the appellate / revisional proceedings. - Decided against assessee
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2013 (8) TMI 1009
Mistake apparent from record is Rectifiable or not? u/s. 254(2) - Assessee had deposited the amounts under ESI and EPF contributions prior to the filing of the return under s. 139(1) of the Act. Tribunal held that assessee firm is in default for depositing the aforesaid amounts beyond the stipulated time period. Proviso to s. 43B was retrospective and no disallowance could be made if the payment had been made before the due date prescribed u/s 139(1) of the Act- interpreted vide judgment delivered by Hon'ble High Court in 2006- COMMISSIONER OF INCOME-TAX VERSUS AVERY CYCLE INDUSTRIES P. LIMITED (NO. 1). [2006 (9) TMI 153 - PUNJAB AND HARYANA HIGH COURT] and in March 2007 delivered by the Hon'ble Supreme Court in CIT VERSUS VINAY CEMENT LTD. [2007 (3) TMI 346 - SC ORDER]. The said decisions were prior in point of time to the decisions of the Tribunal on 5th Nov. 2007 and 23rd Nov., 2007 - HELD THAT : - Non-consideration of the decision of the jurisdictional High Court or of the Supreme Court would constitute "mistake apparent from the record" and such mistake can be rectified u/s 254(2) by the tribunal. The Tribunal was in error in declining to rectify the mistake which was apparent on the face of the record.
Decision in the case of- ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT VERSUS SAURASHTRA KUTCH STOCK EXCHANGE LTD [2008 (9) TMI 11 - SUPREME COURT], relied upon.
Decision in favour of Assessee.
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2013 (8) TMI 1008
Penalty u/s 271(1)(c) - Held that:- For levying the penalty in cases of search after 1st June 2007, the deeming provisions of Explanation 5A can only be invoked, which clearly carves out the exception in the cases where due date of filing of the return of income had not expired at the time of search. Thus, for levy of penalty under Explanation 5A, it has to be seen whether any assets or income found on the date of search has been acquired out of the previous year and not afterwards for which penalty can be levied or initiated under other provisions of section 271(1)(c). Thus, in our opinion, once the due date had not expired for filing the return of income for the assessment year 2007–08, at the time of search, penalty cannot be levied under the deeming provisions of Explanation 5A. Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and hold that on this preliminary ground, penalty levied by the Assessing Officer and as confirmed by the Commissioner (Appeals) cannot be sustained and same is deleted. - Decided in favour of assessee
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2013 (8) TMI 1007
Computation of deduction under Section 10B - whether deduction allowed before adjusting brought forward losses and unabsorbed depreciation? - Held that:- the provision of Section 10B, amongst others, is not treated to be any head of income and it cannot be brought within the purview of computing income for the purpose of taxation. We, therefore, hold accordingly that the Department has to exclude this portion of the income first at the threshold and thereafter proceed to compute the income for the purpose of taxation and then usual deductions under the other provisions of law have to be given.
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