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Income Tax - Case Laws
Showing 141 to 160 of 585 Records
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2013 (9) TMI 1046 - DELHI HIGH COURT
With the consent of the parties we have taken on record copy of the agreement dated 30th November, 1993. We have also taken on record copy of the impugned order as it is noticed that some pages in the typed copy filed along with the appeal are missing.
Arguments heard. Judgment reserved
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2013 (9) TMI 1045 - ITAT CHENNAI
Additions/dis-allowances for non deduction of TDS u/s. 194J - Held that:- The assessee was liable to deduct Tax at source u/s. 194J for the payments made for acquiring rights of the films - such payments fall within the definition of ‘royalty’ - In our considered opinion, the case of the assessee is squarely covered by the decision of the Tribunal in the case of M/s. Shri Balaji Communications [2013 (2) TMI 373 - ITAT CHENNAI] - Decided against the Assessee
Credit of TDS - Held that:- the credit for tax deducted at source shall be given in the year in which the receipts against which the tax is deducted at source are assessed to tax - Thus assessee is entitled to claim credit of the TDS in the year in which the assessee accounts for the income - Decided against the Assessee
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2013 (9) TMI 1013 - ITAT PUNE
Income earned from sale and purchase of shares - ‘capital gains’ OR ‘business income’- Held that:- In the assessee’s own case for assessment year 2007-08 has upheld the stand of the assessee to the effect that income earned from sale and purchase of shares was assessable as ‘capital gain’ instead of ‘business income’ as contended by the Assessing Officer. - Decided in favour of assessee.
Fees paid to ENAM Asset Management Company Pvt. Ltd. - whether under the head ‘business’ or under the head ‘capital gains’ - Held that:- Carefully considered the rival submissions and also the precedent in the assessee’s own case by way of the order of the Tribunal [2012 (8) TMI 195 - ITAT, Pune] he Tribunal considered the allowability of expenditure incurred by way of payment of fees of ENAM Asset Management Company Pvt. Ltd. in terms of the investment agreement dated 01.01.2005, which is precisely the issue before us also. The Tribunal referred to its earlier decision in the assessee’s own case for assessment year 2004-05 and noticed that the issue has been decided in favour of the assessee. - Decided in favour of assessee.
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2013 (9) TMI 989 - ITAT JODHPUR
Addition on account of Ram Nagar Scheme - Held that:- No evidence of any investment in land worth the name was found in search from the possession of third party. The A.O. has not even made any investigation regarding investment made in the purchases of land. It is common practice in such type of business where land of another owner is transacted so that after some development, land is divided into plots and prospective buyers are attracted. The plots are sold one by one and out of those sale proceeds, the owner of land as well as the intermediary persons get their shares, as settled between them when land is directly transferred and sold by the owner of the land to the prospective buyers of the land. There is nothing unnatural in this claim of the assessee. The assessee has already offered for taxation his profit, rather to say, more than what has been calculated, a copy of document found from Shri Mohan Lal Suthar wherein he has suffered tax thereon in A.Y. 2006-07. We do not see any reason to make any addition on account of investment in the land being 1/4th of the total price estimated by the A.O. as per this page. This addition is totally baseless and deserves to be deleted. Accordingly, addition is hereby deleted - Decided in favour of assessee.
Unexplained investment - Addition on account of expenses shown in the books of account/balance sheet on account of house/farm house - Held that:- This addition pertains to an investment already shown in house/farm in his final account and books of account pertaining to this A.Y. No incriminating evidence was found in this regard during search in the third party. Therefore, this amount cannot be treated as unexplained investment by any means and by simply observing that proper books were not maintained. The investment of ₹ 3,00,024/- represents purchase of land on which house was constructed. The assessee had submitted copy of registered sale deed in support of the investment. The said land was purchased in the joint name of the assessee and his brother Shri Gautam Sharma. The investment is verifiable from the sale deed also. Decided in favour of assessee.
Unexplained house hold expenses - Held that:- The facts of this issue are that various members of the family made withdrawals amounting to ₹ 2,89,444/- which has been treated by the A.O. as inadequate for meeting the house hold expenses. This estimation of the A.O. is based on no evidence. Therefore, such addition cannot be encouraged and has to be out rightly rejected - Decided in favour of assessee.
Unexplained cash found during search - Held that:- The statements taken during the course of search and seizure operation were also perused. Balance on the date of search was ₹ 1,65,400/-. All the entries are found to be on account of professional fees received by the assessee. In our considered opinion, credit of such entries has to be given. All the family members of the assessee are assessed to tax in their individual capacity. The family of the assessee consists of himself, his wife, mother and children and family of his brother. In such circumstances we are satisfied that the meager sum of ₹ 1,65,400/- found as cash is verily explained.- Decided in favour of assessee.
Undisclosed investment in the construction of house property - Held that:- Funds are available with the partners and the credit of the same is shown by them towards investment. Separate addition cannot be made on such expenditure. Funds which have been earned by partners is found to be not utilized elsewhere and therefore, claim of telescopy cannot be denied. Since entire source of investment, cash flow statement etc. is available, there cannot be double addition. This is simply an utilization of such income towards acquisition of new assets and undisclosed income would always be represented by some cash, as it cannot vanish in air. The entire addition therefore, deserves to be deleted. We order to delete the same. The assessee has already surrendered ₹ 2,31,22,799/- as undisclosed income against the above income which truly and correctly covers the maximum possible income which the assessee had earned in the various years under consideration related to search assessment. There is no reason for the income declared by the assessee in various years should not be accepted. The impugned addition has been made simply on the ground that there was separate surrender in relation to different items at the time of search proceedings. - Decided in favour of assessee.
Unaccounted silver jewellery - CIT(A) deleted the addition - Held that:- After considering the rival submissions, this small quantity of silver cannot be ruled out as expenditure, which were found from the family of such a big means. However, the reliance of the ld. CIT(A) on Instruction No. 1916 may not be correct in law. However, the spirit of this Instruction should be given regard to. Accordingly, we do not find any merit in this ground and dismiss the same - Decided against revenue.
Addition on the basis of difference of cost of construction - CIT(A) deleted the addition - Held that:- the assessee is engaged in construction business only and therefore, deduction for self supervision should be allowed to the assessee in view of various judicial pronouncements in this regard. Considering the fact that no evidence was found during the course of search proceedings regarding supervision of construction of these properties having been outsourced, we find no folly in the finding of the ld. CIT(A) - Decided against revenue.
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2013 (9) TMI 988 - DELHI HIGH COURT
Disallowance made on account of premium payable on redemption of debentures - Whether the Tribunal was justified in holding that deduction under Section 80I is allowable without taking note of the deduction under Section 80HH of the Act? - Held that:- Decided against the revenue by an earlier decision in the case of the respondent assessee [2011 (1) TMI 1308 - DELHI HIGH COURT ] following the judgment in Commissioner of Income-Tax v. S.K.G. Engineering P. Ltd. [2005 (5) TMI 37 - DELHI High Court ) and Joint Commissioner of Income Tax v. Mandideep Eng. And Pkg. Ind. Pvt. Ltd.; [2006 (4) TMI 75 - SUPREME Court] - Decided in favour of assessee.
Deduction under Section 80HH - ITAT allowed deduction without adjustment of brought forward business loss in respect of Unit No.3 at Bhawani - Held that:- The assessment order is very brief and factual details are not set out. In fact the assessment order refers to the earlier order for the assessment year 1987-88 and records that respondent assessees claim stands rejected. Commissioner of Income Tax (Appeals) did not go into the facts but confirmed the reasoning of the assessing officer in view of the earlier order for the assessment year 1987-88. He has recorded that the respondent assessee had submitted that brought forward losses have been adjusted in the earlier years and there was no brought forward losses which had to be adjusted in the assessment year in question. He had relied upon the decision of CIT v. Balmer Lawrie and Co. Ltd. (1994 (5) TMI 5 - CALCUTTA High Court ). Order of the Tribunal, reversed these orders, in view of their order for the assessment year 1987-88. However, factual matrix has not been discussed.We are not in a position to comment upon and answer question No.2 in view of lack and absence of facts & returned unanswered.
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2013 (9) TMI 987 - ITAT MUMBAI
Stamp Valuation u/s 50C - invocation of the powers under section 155(15) - Substitution of the stamp valuation authority's valuation by the Valuation Officer's - Held that:- It is evident that the provisions section 155(15) is invoked only in cases of situations covered by section 50C(2)(b) of the Act. The above clause (b) of section 50C(2) of the Act refers to the values adopted or assessed by the stamp valuation authorities, which have not been disputed in any appeal or revision or no reference has been made before any authority, court or the High Court. The said provision does not cover a situation of the present appeal where a reference was made under section 55A to the Departmental Valuation Officer. There is a difference between the dispute on the value of stamp valuation authorities and the value of the Departmental Valuation Officer. Thus, the Departmental Valuation Officer's value is outside the scope of section 155(15) of the Act. Therefore, the provisions of section 155(15) were wrongly invoked by the Assessing Officer for giving effect to the findings of the report by the Valuation Officer. - Decided against Revenue.
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2013 (9) TMI 977 - ALLAHABAD HIGH COURT
Validity of issue of Notice u/s 148 to assess the income escaped assessment – Held that:- No any material was discovered by A.O, prior to issuing notice under Section 148 nor any such material was discovered from any other source, which may have given him reason to believe that the income has escaped income. The A.O. based his findings on the same material, which were disclosed in the return after making some more enquiries and which was not permissible as the limitation of 4 years had expired - Not only primary evidence but all details and documents were before the A.O. and that it was obvious that no discrepancies or defects have been noted by the AO in respect of such details/ documents - Contention of the AO that the shares of the companies, which were private limited were not traceable in the stock exchange did not have conclusive evidentially value – Decided against the Revenue.
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2013 (9) TMI 976 - ALLAHABAD HIGH COURT
Applicability of section 194I or 194C of the Income Tax Act - nature of payment for use of vehicals - whether rent or not – Held that:- the word 'rent' has not been defined in Section 2 of the Act. The definition of the word 'plant' under sub section (3) of Section 43, falls in Chapter IV - Computation of Total Income, which is neither relatable nor applicable to the Chapter XVII, relating to collection and recovery of tax. Even otherwise, it is difficult to believe that the word 'plant' defined in Chapter IV - computation of total income, falling under Section 43 of the Act, includes buses hired by the educational institutions.
According to the facts of the present case, assessee itself has not utilized the buses being plants but they were used by the transport contractor for fulfilling the obligations set out in the contract agreement. Therefore, the provisions of Section 194-I could not be applied to the facts of the present case and it has to be held that assessee has rightly deducted tax at source under the provisions of Section 194-C of the Act.
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2013 (9) TMI 975 - ALLAHABAD HIGH COURT
Addition u/s 68 of the Income Tax Act - Assessee-firm has not explained these credits and, therefore, the amount was added as unexplained credit – Held that:- Sri Dule Chand Pandey has sold the land to the assessee-firm. The amount of Rs.2,40,000/- was taken as a loan from Smt. Shyam Kumari Dubey, who was regularly assessed to the income-tax. M/s. Dube Lands and Finance Ltd., was also regularly assessed to the income-tax. The said amount was duly reflected in their income-tax returns, as mentioned by the CIT(A). Necessary confirmation certificate was furnished before the appellate authority, who has asked the remand report from the AO. The AO has accepted the credits in the name of Sri Dule Chand Pandey, and Smt. Shyam Kumari Dubey. M/s. Dube Lands and Finance Ltd., has duly shown the amount in question in their books of accounts - No justification to make any addition – Decided against the Revenue.
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2013 (9) TMI 974 - ALLAHABAD HIGH COURT
Allowability of depreciation on shuttering material - Assessee, a State Corporation, is engaged in the business of Civil Construction work specially for the constructing the bridges in India as well as abroad – Held that:- Construction of the bridge is the main business activity of assessee for which the shuttering is an essential item. The assessee is the complete owner of the shuttering. Without shuttering, no building or bridge can be erected. Shuttering material was treated as a plant on which 100% depreciation is allowable as per the ratio laid down in the case of Harijan Awam Nirbal Varg Avas Nigam Vs. CIT [1995 (12) TMI 2 - ALLAHABAD High Court] – Decided in favor of Assessee.
Shuttering was not used, it was kept unused, therefore no depreciation allowance – Held that:- Reliance has been placed upon the judgment in the case of Dinesh Kumar Gulabchand Agarwal Vs. CIT [2003 (1) TMI 19 - BOMBAY High Court], wherein it has been held that The word "used" in section 32 of the Income-tax Act, 1961, denotes that the asset has been actually used and not that it is merely ready for use. The expression "used" means actually used for the purpose of the business - In the instant case, the assessee was the owner of the shuttering which was ready to use - Assessee is entitled for 100% depreciation – Decided against the Revenue.
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2013 (9) TMI 973 - MADHYA PRADESH HIGH COURT
Search conducted u/s 132 of the Income Tax Act - Ownership of jewelry in dispute – seizure of Stridhan - Held that:- The petitioner No.2 is permitted to take the jewelleries seized on 20.6.2012 from the premises of Petitioner No.1, on supurdgi on furnishing bank guarantee to the amount of the value of the jewelleries. Petitioner No.2 shall also file an undertaking before the respondents that till the decision of the assessment proceedings, petitioner No.2 shall not sell or transfer the jewelleries without seeking prior permission of the respondents
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2013 (9) TMI 972 - MADRAS HIGH COURT
Applicability of Gift tax on transfer of shares to 100% subsidiary company – Held that:- Under Section 47(iv) of the Income Tax Act, for the purpose of capital gains, the transfer of capital asset between the holding company to subsidiary company is not treated as a transfer. But the relevance of Section 47 of the Income Tax Act has to be seen only in the background of the provisions relating to the charge on capital gains under Section 45 that given the inclusive definition on transfer under Section 2(47), but for Section 47, these transactions would certainly attract Section 45. Thus, this Section would not apply to a case where no capital gain is involved.
When one reads the definition of 'transfer of property' appearing under Section 2(xxiv) of the Gift Tax Act, it would reveal that any transaction entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person is also included within the meaning of transfer of property. It is not denied by the assessee that by transfer of shares held by the holding company, there is a diminution in the asset held by the holding company. Even though learned counsel for the assessee immediately replied that ultimately the assessee company is the owner of 100% owned subsidiary company, still, being two different entities, no any justifiable ground to extend the provisions of Income Tax Act to the assessment under the Gift Tax Act for the purpose of understanding the definition of 'transfer of property' as available under the Gift Tax Act - When two companies are treated as two different entities and when the facts are clear, there arises no necessity for lifting the corporate veil to know the nature of transactions or the existence of two entities – Decided against the Assessee.
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2013 (9) TMI 971 - MADRAS HIGH COURT
Disallowance of deduction u/s 80IC of the Income Tax Act - scope of the term manufacture - Assessee is engaged in the business of manufacture and service of communication and networking products, mainly to State Government and Central Government undertakings. It supplied communication device to TNEB and BSNL to the extent of Rs.37.62 crores, out of the total sale of Rs.52.61 crores - Assessee is stated to have purchased imported PCBs, RAMs, high and low transmission wireless adaptors, wireless antennae components, flash ram software, Red Hat Linux software and other networking components – Held that:- Using purchased components, the assessee redesigned, developed and manufactured a single product to suit the requirement of the project. As the end product was a distinct article and a marketable product, the assessee claimed deduction under Section 80 IC of the Income Tax Act.
Under Section 2(29BA) of the Income Tax Act, under Finance (No.2) Act of 2009, with effect from 01.04.2009, the definition 'manufacture' was inserted to mean, a change in a non-living physical object or article or thing resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure. Even though the said amendment would not be of relevance to the assessment year under consideration, namely, 2006-2007, yet, the intention of the Revenue being very clear on the scope of the expression 'manufacture', on the findings of fact that the various materials that had gone into making of the radio frequency identification device having thus undergone a change and that they had lost their original identity, therefore, deduction u/s 80IC allowed.
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2013 (9) TMI 970 - DELHI HIGH COURT
Disallowance of petty miscellaneous expenses – Held that:- Assessee agreed to the said addition on the ground that it was difficult to collect details from their offices all over India for all expenses over Rs.5000/-. However, some details were furnished vide letter dated 29.10.1999 - Turnover of the assessee was substantial, nearly Rs.68 Crores. Rs.34.9 lacs was a trivial amount, only 0.5% of the total turnover – Assessee-respondent suffered substantially high losses of Rs.372 Crores in last ten years and therefore addition of Rs.34.9 lacs was not material as the respondent assessee was not to pay any tax - Accepted the explanation given by the respondent-assessee and were satisfied about the bonafides of the said explanation – Decided against the Revenue.
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2013 (9) TMI 969 - DELHI HIGH COURT
Addition solely on the basis of Departmental valuation report – Held that:- Relying upon the decisions in the case of Commissioner of Income Tax vs. Navin Gera [2010 (8) TMI 194 - Delhi High Court], CIT vs. Suraj Devi [2010 (8) TMI 217 - Delhi High Court], it has been held that addition cannot be justified solely relying upon the valuation report – Decided against the Revenue.
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2013 (9) TMI 968 - ALLAHABAD HIGH COURT
Addition u/s 68 of the Income Tax Act – Lack of evidence to prove the case - proof of agricultural activities – Held that:- If in the previous years the agricultural income from the same land on which agricultural crops were produced by the appellant was accepted by A.O., then, the income could be treated as agricultural income for want of proof of records of fertilizer and chemicals and expenditures incurred on tube-well boring, construction of store house, levelling of field etc - Even if each assessment year is treated to be a separate unit, the findings in respect of previous years based on the record of title and possession of agricultural land, and the evidence led for proving that agricultural operations were carried out and crops were produced could not be disbelieved in the subsequent year, for want of primary evidence. The assessee was not required to submit proof of agricultural operations every year, in the absence of any material, which may suggest that the agricultural operations were stopped or was not carried out in the relevant period. There was no evidence to establish that the assessee has sold the agricultural land or that the assessee had stooped the agricultural operations.
Further, assessee as a Private Company was maintaining regular books of accounts as required under the Companies Act, which were also audited and accepted in the AGM of the Company. The entries in the books were not proved to be bogus. There is nothing under the Income-tax Act debarring the assessee from selling agricultural produce in cash, and thus additions based only on suspicion could not be sustained – Decided against the Revenue.
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2013 (9) TMI 967 - ALLAHABAD HIGH COURT
Addition u/s 68 of the Income Tax Act – Lack of evidence to prove the case - proof of agricultural activities – Held that:- If in the previous years the agricultural income from the same land on which agricultural crops were produced by the appellant was accepted by A.O., then, the income could be treated as agricultural income for want of proof of records of fertilizer and chemicals and expenditures incurred on tube-well boring, construction of store house, levelling of field etc - Even if each assessment year is treated to be a separate unit, the findings in respect of previous years based on the record of title and possession of agricultural land, and the evidence led for proving that agricultural operations were carried out and crops were produced could not be disbelieved in the subsequent year, for want of primary evidence. The assessee was not required to submit proof of agricultural operations every year, in the absence of any material, which may suggest that the agricultural operations were stopped or was not carried out in the relevant period. There was no evidence to establish that the assessee has sold the agricultural land or that the assessee had stooped the agricultural operations.
Further, assessee as a Private Company was maintaining regular books of accounts as required under the Companies Act, which were also audited and accepted in the AGM of the Company. The entries in the books were not proved to be bogus. There is nothing under the Income-tax Act debarring the assessee from selling agricultural produce in cash, and thus additions based only on suspicion could not be sustained – Decided against the Revenue.
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2013 (9) TMI 966 - ALLAHABAD HIGH COURT
Addition u/s 68 of the Income Tax Act – Addition of amount of Rs. 20,05,000/- - proof of investment in shares – Held that:- no evidence about the distinctive share numbers or photocopy of share certificates was available, nor any evidence was led to establish that the shares were actually transferred in the name of the assessee. The burden was clearly on the assessee to explain the amount withdrawn by him, and to satisfy the AO - Merely on the basis of the bank account that also belonging to business concern one cannot conclude that the assessee has duly explained the source of the deposit specially when the assessee has not filed Wealth Tax return showing cash in hand amounting to Rs.20,20,000/- as on 31.3.1999 which was chargeable to Wealth Tax – Decided against the Assessee.
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2013 (9) TMI 965 - ALLAHABAD HIGH COURT
Additions u/s 68 of the Income Tax Act – Exemptions u/s 11 of the Income Tax Act – Held that:- Reliance has been placed upon the judgment in the case of Director of Income-Tax (Exemption) v. Keshav Social and Charitable Foundation [2005 (2) TMI 84 - DELHI High Court], wherein it was held that under Section 11 (1) every charitable or religious trust is entitled to deduction of certain income from its total income of the previous year. The income so exempt is the income which is applied by the charitable or religious trust to its charitable or religious purposes in India. This is, subject to accumulation up to a specified maximum which was 25 per cent.
In the present case that the assessee had applied more than 75% of the donations for charitable purposes as per its objects - The Delhi High Court in the abovementioned case, further held that Section 68 of the Act has no application in such case where the assessee had disclosed donations as its income - If there is full disclosure of the donation for whatever purpose and that the registration under Section 12-A is continuing and valid, exemptions cannot be denied – Decided against the Revenue.
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2013 (9) TMI 964 - DELHI HIGH COURT
Taxability of government grants – Accounting Standard (AS) - 22 - Held that:- There was no dispute that the grant given to the respondent was based upon operations from which net profit/income had to be arrived at after deducting the expenditure - The grant had to be utilised over five years – Hon’ble Tribunal, accordingly accepted that amount of Rs.7.29 crores declared by the respondent, out of grant of Rs.35 crores should be treated as income of the year in question - Counsel for the Revenue has not been able to point out and state, how and why the reasoning can be faulted as the assessee had followed AS-12 - Revenue has not disputed that the accounting standard, as prescribed by the institute, has been followed – Decided against the Revenue.
Addition on the basis of auditors report - Addition of Rs.534.79 lacs - In the notes of the Auditor, they had qualified the accounts stating that details of inventories of Rs.534.79 lacs could not be ascertained – Held that:- On the question of inventories of Rs.534.79 lacs, the CIT (Appeals) has recorded that this amount was duly reflected in the Annual Report. He has made reference to Schedule IV of the Annual Report where under the head ‘inventories’ full details had been given. It is pointed out that the inventories were maintained by Indian Airlines and the figures given by them have been taken in the books. The Auditor had hedged his report and had stated that they could not ascertain inventories of Rs.534.79 lacs in view of the said factual position, i.e., they had taken the figures given by Indian Airlines and had not examined the accounts/books of Indian Airlines.
A remand report from the Assessing Officer was called for. The Assessing Officer did not submit the remand report to contest the contention of the respondent-assessee – Decided against the Revenue.
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