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Showing 221 to 240 of 1180 Records
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2013 (8) TMI 963 - ITAT BANGALORE
Nature of expenditure - Held that:- Expenditure incurred after allowing depreciation at 10% by the AO cannot be categorized as capital in nature.
Addition on ‘speculative loss’ - Held that:- For the purpose of hedging the loss due to fluctuation in foreign exchange while implementing the export contracts, the assessee had entered into forward contract with banks. In some cases, the export could not be executed and the assessee had to pay certain charges to the bank and thereby incurred certain expenses. These expenses, the assessee claimed by way of expenditure towards business. We do not find that the transaction can be stated to be in speculation as to cover under sub-section (5) of section 43 of the Act
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2013 (8) TMI 962 - ITAT HYDERABAD
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... ... ..... valent to 20 of the claim, be disallowed on roundsum basis. These two grounds are, accordingly, partly allowed." 14. We have heard both the parties and perused the material on record. In the present case the assessee incurred cash expenditure of ₹ 2,48,42,505 and the assessee recorded most of the payments as less than ₹ 20,000 in its books of account which are supported by self-made vouchers and not verifiable. So there is every chance of inflating the expenditure. Considering these facts, as held by the jurisdictional High Court in the case of CIT vs. Transport Corporation of India (256 ITR 7012), we are inclined to disallow 15 of the amount ₹ 2,48,42,505 worked out at ₹ 37,26,375 towards disallowance. This ground in Revenue appeal is dismissed and the ground by the assessee in its CO is partly allowed. 15. In the result, Revenue appeal is dismissed and assessee's CO is partly allowed. Order pronounced in the open court on 19th August, 2013.
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2013 (8) TMI 961 - ITAT PANAJI
Addition under section 14A r/w Rule 8D - Held that:- We do not find any whisper whatsoever which proves that the AO was not satisfied with the correctness of the claim of the Assessee in respect of expenditure which the Assessee claims to have incurred in relation to income which does not form part of total income having regard to the accounts of the Assessee. The AO straightaway went on applying Rule 8D while, in the first instance, the AO should have determined whether the claim of the Assessee that it has not incurred any expenditure with regard to the Dividend income is correct or not and such determination must have been made having regard to the accounts of the Assessee on objective basis. It is only when the AO is not satisfied with the claim of the Assessee, the Legislature has empowered the AO to follow the method for calculating the disallowance as may be prescribed i.e. Rule 8D. The AO instead of discharging his obligation, straightaway applied Rule 8D and made disallowance. He has put the cart before the horse which is not permissible under law. The case of the Assessee, in our opinion, is covered by our aforesaid decision in the case of Sesa Goa Ltd. vs. JCIT (2013 (9) TMI 233 - ITAT PANAJI). Addition deleted - Decided in favour of assessee
Disallowance of expenditure incurred on renovation of the temple - Held that:- It is not denied that transportation of the iron ore was not possible without the co-operation of the villagers as the movement of the trucks had to be through the village where the temple was located for which the Assessee has contributed the amount for renovation. The expenditure incurred for renovation of the temple is also not denied. For carrying on the business smoothly, it was necessary for Assessee to maintain cordial relation to ensure smooth movement of the trucks otherwise the Assessee would not have been able to transport the ore from the mines to the jetty for the purpose of the export. It would have affected the export earnings and income of the Assessee. The expenditure has been incurred, in our opinion, during the course of the business. Business expediency demands such expenditure to be incurred. The expenditure is neither a capital expenditure nor personal expenditure of the Assessee. Therefore, we do not find any illegality or infirmity in the order of CIT(A) while allowing this deduction.- Decided in favour of assessee
Disallowance of expenditure incurred on construction of new bridge - Held that:-It is a social obligation demanded by the local community which cannot be overlooked by the Assessee. No material or evidence was brought to our knowledge which may prove that the bridge belonged to the Assessee and it represents capital expenditure incurred by the Assessee. - Decided in favour of assessee
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2013 (8) TMI 960 - CESTAT AHMEDABAD
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... ... ..... ication gives the benefit of concessional rate of duty only to those products which are used as fertilizer and fall under Chapter 31. Since the appellant is disputing the classification of the product under Chapter 28 in grounds of appeal, we find that the appellant needs to be put to some condition for hearing and disposing the appeals. 7. Accordingly, keeping in mind that the issue involved is reclassification of the product, we direct the appellant to pre-deposit an amount of ₹ 10 lakhs (Rupees ten lakhs only) within a period of eight weeks from today and report compliance before Deputy Registrar on 24-10-2013. Deputy Registrar, on ascertaining such compliance, will place the file before the Bench on 31-10-2013 for passing an appropriate order. Subject to such compliance being reported, the applications for waiver of pre-deposit of balance amounts involved are allowed and recovery thereof stayed till the disposal of appeals. (Dictated & pronounced in Court)
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2013 (8) TMI 959 - ITAT MUMBAI
TDS u/s 194C - non deduction of tds on freight charges and Clearing & Forwarding charges - Held that:- CIT(A) has given a categorical finding that amount paid by the assessee to clearing and forwarding agent is merely reimbursement expenditure for which the agent has raised a separate bill for these expenditure. Wherever TDS was to be deducted has been deducted by agent and paid to Government account on behalf of the assessee. Therefore, assessee cannot be asked to deduct tax out of the same amount. For this purpose Ld. CIT(A) has also considered copy of Form No.16A, which reflected the deduction of tax by the agent. Ld. CIT(A) has also found that from the sample of Air waybill that Airlines had shown, the name of the assessee which had been reimbursed to the assessee by the agent and handling charges have been separately billed by the agent. Ld. CIT(A) has also found that circular in the present case was not applicable as there are two separate invoices, one issued in respect of reimbursement of charges and other for service charges of the agent. No contrary material has been brought on record to dislocate aforementioned findings recorded by Ld. CIT(A). - Decided against revenue
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2013 (8) TMI 958 - KARNATAKA HIGH COURT
Reopening of assessment - Held that:- 'Reason to believe' does not mean that the assessing officer should have finally ascertained the fact by legal evidence. It only means, the examination that is required to be made on the basis of information that the assessing officer has received and if he discovers or finds as satisfied that the taxable income has escaped assessment, suffice it to state that he had reason to believe that such income had escaped assessment.
Job work done by FFIPL for the petitioner, by itself and nothing more, cannot deprive the petitioner from claiming deduction under Sec.10B of the Act, is a pure question of fact that has to be decided based upon an enquiry. It is well settled law that it is for the authorities to lift the veil and ascertain the true nature of transaction that has taken place as between FFIPL and the petitioner., who claim to be sister-organizations, carrying on identical business. It is useful to notice that FFIPL could not make any further claims for deduction under Sec.10B of the Income Tax Act after the period, specified therein, whence the petitioner-company was incorporated and two years thereafter purchased the machinery of FFIPL disclosing the value of the old machinery was less than 20%. It is elsewhere said that tax planning may be legitimate provided it is within the framework of law. However colorable devices cannot be part of tax planning.
The reasons assigned by the Deputy Commissioner to reject the objections of the petitioner in the exercise of jurisdiction under Sec. 147/148 of the Income Tax Act for the assessment year 2006-07 cannot be said to be either arbitrary or irrational calling for interference in exercise of extraordinary writ jurisdiction under Art.226 of the Constitution of India
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2013 (8) TMI 957 - ITAT DELHI
Provision for contractual obligations - Provision for doubtful debts in the P&L Accounts - Held that:- Matter be restored back to the file of the Assessing Officer to examine the issue de novo
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2013 (8) TMI 956 - CESTAT BANGALORE
100% EOU - CENVAT Credit on the 3rd education cess paid - Service recipient - Held that:- If education cess on CVD portion is admissible, 3rd time cess which is payable according to the Department on the ground that what is required to be paid by the 100% EOU is excise duty and the total excise duty arises only after calculation of equal amount to customs duty and therefore the 3rd time cess should be paid supports the assessee’s case. If the 3rd education cess is considered as a levy on total excise duty, the obvious conclusion would be that the credit also admissible - credit allowed.
Whether the appellant is eligible for Cenvat credit on education cess paid to the extent of full amount or not? - Held that:- The decision of the Tribunal in Emcure Pharmaceuticals Ltd. [2008 (1) TMI 147 - CESTAT, MUMBAI] case is squarely applicable in respect of the Cenvat credit of education cess in respect of the appellant - credit allowed.
Whether the appellant can take Cenvat credit of excise duty paid equal to the amount of cess paid on the additional customs duty or the amount calculated in accordance with formula as per Rule 3(7)(a) of CCR? - Held that:- When the statutory provisions clearly provide that appellant can take credit as per the formula, the question of availing the credit equal to the additional duty indicated in the invoice does not arise as far as credit of duty is concerned - the credit of ₹ 82,965/- availed by the appellant is clearly not admissible and therefore is required to be paid back - credit cannot be allowed.
Appeal allowed in part.
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2013 (8) TMI 955 - CESTAT BANGALORE
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... ... ..... means part of the report is acceptable and part of the report is not acceptable. This does not seem to be correct approach. Since PHO is responsible to test only whether the product is edible or not, the test by Chemical Examiner becomes an absolute necessity and when there is a contradiction between the two, it is for the assessee/importer to challenge the report or question the correctness by legal means to ensure that his interests are safeguarded. Appellants have not lifted a finger for two years. 9. Under these circumstances and in view of the precedent decisions of the Tribunal that Chemical Examiner’s report can be relied upon and in view of the facts and circumstances of this case, we find that the appeal filed by the Revenue has merit and since the acid value is more than 10 in the imported consignments, the appellant is not eligible for the benefit of concessional rate. In the result, the appeal filed by the Revenue is allowed. (Pronounced on 29-8-2013)
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2013 (8) TMI 954 - ITAT PUNE
Depreciation on the securities claimed by the assessee bank - Held that:- The securities held under HTM category are part of stockin- trade of the bank and there is no justification to decline the claim of depreciation/loss on the valuation of the said securities.
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2013 (8) TMI 953 - CESTAT BANGALORE
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... ... ..... it amounts (less ₹ 1 lakh already deposited) as confirmed in the adjudication order. Applicant has not complied with the condition of the stay order, therefore the appeal is dismissed for non-compliance of Section 129 of Customs Act, 1962. (Order Pronounced and Dictated in Open Court)
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2013 (8) TMI 952 - ITAT- PUNE
Re-assessment u/s 147 r.w.s 148 - Period of limitation - Royalty - Article 12(3) DTAA with USA - The assessee is a foreign company incorporated in USA and is also a tax resident of US. Assessee contended that re assessment was made merely on the change of opinion of AO. - HELD THAT:- Nothing is there on record even to suggest that the A.O made any inquiry whether the said receipt was taxable in the hands of the assessee under the normal provision of the Act and particularly u/s 9(1)(iv) of the Act as well as under Article 12 of the DTAA between India and USA - He initiated re-assessment proceeding within limitation period as mentioned in Section 147.
Royalty - HELD THAT:- The agreement is for the “Licence or Sub-Licence for use of certain software rights” as described in Exhibit ‘A’ of the agreement. There is a clause for payment of fees and the fees are provided in schedule B.
Relying on the judgement of Hon’ble Karnataka High Court in the case of Samsung Electronics co. Ltd. oths [2011 (10) TMI 195 - KARNATAKA HIGH COURT] payment made by the respondents to the non-resident supplier amounts to royalty and is rightly brought to tax in India. The assessee is not entitled to get the immunity of the DTAA between India and USA.
When the decision of the Hon’ble High Court of Karnataka is available then it is not necessary for the Tribunal to show more wisdom unless some contrary decision on the issue of another High Court or the Supreme Court has been brought to our notice. In our opinion, all the decisions relied upon by the assessee are not helpful to decide the nature of payment received by the assessee in present case which is described as licence fee but in fact it is the royalty only.
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2013 (8) TMI 951 - CALCUTTA HIGH COURT
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... ... ..... ri jurisdiction, accordingly this writ petition is maintainable. However, in view of my aforementioned findings the order passed by the Joint Excise Commissioner is not sustainable. The impugned order is set aside. In the facts and circumstances of this case the petitioner is directed to deposit an amount of ₹ 10 lakhs before the appropriate authority by three weeks for reconsidering the case on merit upon giving the petitioners an opportunity of hearing. The Joint Commissioner, Central Excise is directed to decide the matter afresh in accordance with law, affording an opportunity of hearing to the writ petitioner or their authorized representative within six weeks from the date of deposit. The deposit made shall abide by the result of the order to be passed by the Joint Commissioner. In case the writ petitioners did not deposit the aforementioned amount the order under challenged would revive and the respondents would be entitled to recover the demand as made by them.
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2013 (8) TMI 950 - ITAT DELHI
Profit charged on accommodation entries transactions - Held that:- As the facts emerge, the assessee has filed his returns of income u/s 153A on the basis of audited statements which are found to be bogus and unreliable. Therefore, the income offered by the assessee in such returns becomes assessee’s own offer. Apropos assessee’s business, it has not been disputed that the assessee was actually engaged in providing accommodation entries and not in real business transactions. The findings of assessing officer and CIT(A) that assessee could not substantiate his claim about accommodation entries and assessment of profit @ 0.5%. Assessee has not been able to substantiate the rate of income from accommodation entries except making a general assertion that the profit charged on accommodation entries transactions is generally 0.5%.
The providing of accommodation entries amounts to running a parallel economy and is a sort of money laundering, which is against public policy. Therefore, assessee in any case cannot get any deduction for any estimated expenses in this behalf. Since assessee could not substantiate the rate of providing accommodation entries, the assessing officer is well within his rights to estimate the income of the assessee. This estimate in ordinary circumstances cannot be interfered with unless the assessee makes out a case of arbitrariness and unreasonable estimate, which has not been established.
The estimate as arrived at by assessing officer @ 2% and confirmed by CIT(A) is reasonable and cannot be called arbitrary.
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2013 (8) TMI 949 - ITAT PUNE
Deduction u/s. 80P(2)(a)(i) eligibility - Held that:- Sub-sec. (4) of Sec. 80P has withdrawn the deduction to the cooperative bank other than primary agricultural credit society or a primary co-operative agricultural and rural development bank w.e.f. the A.Y. 2007-08. The said provision is applicable to the Aurangabad District Central Co-operative Bank (ADCCB) in which the assessee society has kept deposit. The withdrawal of deduction by insertion of Sub-section (4) of Sec. 80P does not change “status” of Aurangabad District Central Co-operative Bank “as a co-operative society which is contemplated in Sec. 80P(1) of the Act. We, therefore, hold that the interest received on the deposit with the Aurangabad District Central Cooperative Bank by the assessee on the deposits are squarely covered u/s. 80P(1)(d) and the interest received on deposit kept with the Aurangabad District Central Co-operative Bank is an allowable deduction. - Decided against revenue
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2013 (8) TMI 948 - ITAT PUNE
Disallowance of interest - Held that:- Once interest is paid in respect of funds used for purposes of business there is no question of its disallowance under Section 36(1)(iii) of the Act and there would not be a necessity to see as to whether the funds advanced to sister concern are out of interest-bearing borrowings or not.
Disallowance of expenditure paid towards stamp duty on and in respect of the merger - Held that:- The income-tax authorities have disallowed the expenditure on the ground that it was in the nature of capital expenditure. On this aspect, we find that there is no material to hold that the expenditure is not in the nature of capital expenditure. Admittedly the expenditure was incurred by way of stamp duty paid on land owned Trinity Thermal Pvt. Ltd. which had since merged with the assessee in terms of an amalgamation scheme. The orders of the authorities below in this regard are affirmed as assessee has not made out any credible argument against the orders of the authorities below holding the impugned expenditure to be capital in nature. Thus, assessee fails on this Ground.
Depreciation on buildings - Held that:- ere was no evidence to show that the building was complete and put to use during the year under consideration. The CIT(A) has also denied the claim primarily basing on the contents of the Director’s report of the assessee company which indicated that the building was still under construction as on 31.03.2008. The CIT(A) further noticed from the Director’s report an averment that the company would start installation of equipments in the building from October, 2008. There is no material brought on record to negate the findings of the Assessing Officer as well as the CIT(A) and for that reason we are unable to interfere with the conclusion drawn.
Disallowance of Telephone Expenses on the ground that the same was for personal use
Disallowance on the basis of ITS data - Held that:- We restore the matter back to the file of the Assessing Officer who shall allow a reasonable opportunity to the assessee to reconcile the ITS data and thereafter he shall examine the impugned addition afresh as per law.
Ad-hoc disallowance of Welfare Expenses - Held that:- Notably, both the authorities below have launched into a statistical exercise to arrive at a disallowance out of staff welfare expenses, when there is no iota of material or evidence to say or pint-point any expenditure of non-business nature. Nevertheless, we also find that the explanation rendered by the assessee with regard to the increase in the expenditure on account of regrouping of expenses, incurrence of expenditure for entire period as compared to for a lesser period in the preceding year, increase in turnover etc. have not been faulted at all. Considering the explanation furnished as also the absence of any material to doubt the genuineness of the expenditure claimed, we find no reasons to uphold the impugned disallowance.
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2013 (8) TMI 947 - ITAT DELHI
Depreciation on goodwill - Held that:- Claim of depreciation on goodwill, intangible asset, allowed by the decision of ITAT in assessee’s own case for AY 2004-05 & 2005- 06 wherein held that ‘Goodwill’ is an asset under Explanation 3(b) to Section 32(1) of the Act
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2013 (8) TMI 946 - ITAT MUMBAI
Estimation of income at the rate of 5% net profit on gross receipt - Held that:- No infirmity in the findings of the AO in rejecting the books of account. Therefore, the rejection of books of accounts is upheld. We further noted that the assessee did not maintain proper vouchers etc. and, therefore, no recourse was left with the AO except applying the profit on the basis of best judgment. In immediately preceding year, the turn over of the assessee on which the profit was shown at 3.37%, whereas in the year under consideration the AO applied 5%. In our view, the net profit rate applied by the AO is not exorbitant. Therefore, we confirm the application of NP rate of 5% on the facts of the present case.
Addition under Section 41(1) - Held that:- We found that the assessee deserves to succeed in this ground. Firstly, once the AO has applied the net profit rate then no further addition can be made as held by the Hon’ble Allahabad High Court in the case of CIT Vs. Banwari Lal Banshidhar (1997 (5) TMI 37 - ALLAHABAD High Court ). Even on merit, we noted that how the liability on account of sundry creditor is ceased to exist is not borne out from the facts of the case. Therefore, for this reason also, the application of provision of Section 41(1) were not justified.
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2013 (8) TMI 945 - ITAT MUMBAI
Addition on account of cessation of liability u/s 41(1) - Held that:- First party is Jagruti Corporation with an opening balance of ₹ 8.52 lakh. Page 35 of the paper book shows the payment of ₹ 1.45 lakh made by the assessee to this party thereby bringing closing balance down to ₹ 7.07 lakh. We fail to appreciate as to how this closing balance can be considered as remission or cessation by the party, even after three years of outstanding balance, so as to qualify as income u/s 41(1) when the assessee is paying the liability and there is nothing to indicate, even remotely, that the creditor has given up his claim. The assessee was supposed to pay ₹ 8.52 lakh to the party, out of which a sum of ₹ 1.45 lakh has paid either by cheque or by cash. When the position is so and the assessee is regularly making payment to such party, there can be no question of treating the closing balance as income u/s 41(1) of the Act.
The second party is M/s Samidha Engineering. It had opening balance of ₹ 1.77 lakh. A sum of ₹ 10,000 was paid by cheque during the year under question bringing down the balance payable at ₹ 1.67 lakh at the end of the year. It is further relevant to note that the assessee made payments to this party in the immediately succeeding year for the full amount. Copy of this account for the financial year 2009-2010 is available showing nil balance as at the end of the subsequent year. By no stretch of imagination, this amount can be considered as income u/s 41(1) of the Act for the year relevant to the assessment year under consideration.
Similar is the position regarding Universal Enterprises. It had opening balance of ₹ 8.52 lakh. Though no amount was paid during the year but in subsequent year the entire amount has been paid. Copy of account of this party for the financial year 2009-2010 is available on pages 40 and 41 of the paper book showing nil balance. We cannot consider the outstanding amount at the end of the year as income chargeable to tax u/s 41(1).
The last is M/s Argass Chemicals. It had opening balance of ₹ 25.67 lakh. Page 32 of the paper book is the copy of account of this party which shows various debits and credits in this account leaving closing balance at ₹ 26.54 lakh. Page 33 of the paper book is copy of account of this party for the subsequent year again having several debits and credits with closing balance of ₹ 14.02 lakh. The assessee is having regular transactions with this party and the amount is payable because of regular purchase transactions.
Amount in respect of these four parties cannot be considered as income u/s 41(1) of the Act
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2013 (8) TMI 944 - ITAT BANGLORE
Benefit of exemption to the assessee u/s. 54 - Held that:- Under section 54F of the Act, the same conditions as are envisaged u/s. 54(1) of the Act are required to be met for claiming exemption from tax on capital gain on transfer of a certain capital asset. The assessee on sale of shares, derived capital gain and paid part of the consideration to the developer for construction of residential house. The construction could not be completed within a period of three years. The Hon’ble Court took the view that the assessee had made entire payment, but did not get a registered sale deed and the fact that the construction was not fully completed in all respects cannot be a ground to deny the benefit of exemption u/s. 54F of the Act.
In the light of the facts and circumstances of the present case and the precedents on the issue, we are of the view that the assessee was entitled to benefit of exemption us. 54(1) of the Act as claimed by the assessee. - Decided in favour of assessee
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