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Income Tax - Case Laws
Showing 161 to 180 of 586 Records
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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 Honble 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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2013 (9) TMI 963 - MADHYA PRADESH HIGH COURT
Power of the High Court to direct ITAT to decide the case expeditiously Held that:- The Income Tax Appellate Tribunal, Jabalpur is directed to decide the aforesaid appeals expeditiously as far as possible within a period of three months from the date of communication of this order.
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2013 (9) TMI 962 - ALLAHABAD HIGH COURT
Long Term Capital Gains (LTCG) or Short Term Capital Gains (STCG) - Taxability on conversion was by way of improvement of title on capital assets Held that:- The difference between the 'short-term capital' asset and 'long-term capital asset' is the period over which the property has been held by the assessee and not the nature of tittle over the property. - The lessee of the property has rights as owner of the property subject to covenants of the lease, for all purposes. He may, subject to covenants of the lease deed, transfer the lease hold rights of the property with the consent of the lessor. The conversion of the rights of the lessee in the property from having lease hold right into free hold is only by way of improvement of her rights over the property - It would not have any effect on the taxability of gain from such property, which is related to the period over which the property is held. If the period is less than 36 months, the gain arising from such transfer would be of short-term capital gain.
In the present case, the property was held by the assessee as a lessee since 1984, and the same was transferred on 31.03.2004, after the lease hold rights were converted into free hold rights on the same property which was in her possession, in her favour on 29.03.2004. The conversion was by way of improvement of title, which would not have any effect on the taxability of profits as short term capital gain it is long term capital gains - Decided against the Revenue.
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2013 (9) TMI 961 - ALLAHABAD HIGH COURT
Depreciation on spare parts u/s 32 of the Income tax act Whether spares can be capitalized and depreciation claimed on it even when they are not used Held that:- Accounts were maintained as per the accounting standard II issued by the Institute of Chartered Accountants of India, and the said standard is mandatory for all the companies. Hence, the assessee has capitalized the value of spare parts along with the equipments. The spare parts were supplied along with the equipments to keep the same in workable conditions. It may be mentioned that the spare parts cannot be utilized independently and the same will have to be used along with the equipments. When the depreciation is allowed on the equipments, then it is also allowable on its spare parts Decided against the Revenue.
Addition towards short provision of interest on Government loan for Financial Year 2001-02 and towards short provision of DA arrears of employees Held that:- Section 43B is not applicable to the interest on government loans and for DA arrears of employees. If the liability had finalized in the year under consideration, then the same would be allowed. The short fall in the provision was pointed out by the AG Auditors, so the A.O. made an addition - But fact remains that assessee has filed the revised return - Interest if any earned on the loan, the same will go to the State and it is the duty of the assessee to return it to the State as per G.O. issued in 1976 as well as terms and conditions of the loan Decided against the Revenue.
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2013 (9) TMI 960 - GUJARAT HIGH COURT
Sub-agent to deduct TDS Deduction of TDS to be made u/s 194C of the Income Tax Act - Assessee was engaged in the business of advertising working as an agent in some newspapers Disallowance of the expenses i.e. Rs.29,78,272/- and added to the income of the assessee under Section 40(a)(ia) of the Act Held that:- Assessee acted as sub agent and whatever amount was received from the client the same was paid to the five agencies, who in fact deducted the TDS from the payment - Assessee acting as sub agent was not supposed to deduct TDS from the payment so made to various advertising agencies as per the provisions of Section 194C of the Act - Various advertisement agencies of whom the assessee worked as sub agent they deducted the TDS from the payment of such advertisement Decided against the Revenue.
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2013 (9) TMI 959 - BOMBAY HIGH COURT
Limitation period for applicability of section 263 for revision by Commissioner Held that:- Except the issue of non genuine purchases all other issues dealt by Commissioner of Income Tax in the order dated 30 March 2009 were not a subject matter of the assessment order passed on 28 June 2006 under Section 143(3)/147 of the Act. All the other issues on which the Commissioner of Income Tax is seeking to exercise jurisdiction under Section 263 of the Act were concluded by virtue of an intimation under Section 143(1) of the Act which admittedly was done beyond a period of two years prior to notice dated 17 March 2009 issued under Section 263 of the Act. Section 263(2) of the Act provides that no order would be made in exercise of jurisdiction under Section 263(1) of the Act after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.
Commissioner of Income Tax has not exercised revisional jurisdiction in respect of order/intimation passed Section 143(1) of the Act within two years of it being passed. Therefore, exercise of jurisdiction on those issues under Section 263 of the Act is time barred as held by this Court in CIT vs. Anderson Marine & Sons (P) Ltd. [2003 (12) TMI 47 - BOMBAY High Court] Decided against the Revenue.
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2013 (9) TMI 958 - ALLAHABAD HIGH COURT
Allowance of Bad-debts u/s 36(1)(vii) of the Income Tax Act Evidence to be presented before A.O. - The assessee has turnover of more than Rs.19 crores, and had filed return of income, declaring income of Rs. 1,64,80,293/-. The amount of Rs. 11,52,901/-, which has been written off as bad debt, and could not be recovered was mostly from departments, which are government/semi government entities Held that:- There is no requirement to establish that debts has become irrecoverable in the accounts of the assessee for the previous year. Sub section (vii) of Section 36 (1) of the Act provides for allowing deductions subject to provisions of sub-section (2), the amount of any bad debt or part thereof, which is written off as irrecoverable in the accounts of the assessee for the previous year. There is no requirement under sub section (2) of Section 36 of the Act that assessee should produce evidence before the AO that he has made sufficient effort to recover the amount.
As a prudent business man in carrying out business and maintaining accounts, the reasons for which the amount, which was actually written off as irrecoverable, is not subject to scrutiny by the AO, unless and until there was some material, which could suggest that writing off debt as irrecoverable was not for bonafide purpose or that the assesee was in fact suppressing the income to be taxed Decided against the Revenue.
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2013 (9) TMI 902 - SC ORDER
Search and seizure - compliance of directions issued by the High Court in [2011 (5) TMI 620 - ORISSA HIGH COURT] When Petitioner complied with the orders/directions of the court Held that:- Petitioner complied with the orders and directions issued by the High Court Petitioner re-deposited the amount seized from the bank account of the respondent-company - Petitioner has completed the proceedings under Section 132(5) of the Income tax Act Petition becomes infructous
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2013 (9) TMI 901 - DELHI HIGH COURT
Penalty for concealment of Income u/s 271(1)(c) of the Income Tax Act Held that:- levy of penalty u/s 271(1)(c) of the Act in respect of loss on account of investments, vehicle and disallowance under Section 43B confirmed - The claims were ex facie wrong being contrary to fundamental/basic principles of accounts and Act, would not have escaped notice or missed. - Decided in favor of revenue.
However, penalty was not justified and proper on the wrong claim for depreciation of plant and machinery as the legal position on the said claim was debatable. - decided in favor of assessee.
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2013 (9) TMI 900 - SUPREME COURT
Excessive expenses - disallowance u/s 40A(2) - Revenue contended that the State Advised Price [S.A.P.] is determined on the basis of the price recommended by the assessee(s) after the finalisation of accounts and, therefore, the differential amount between S.A.P. and S.M.P. would constitute appropriation of profits and not expenditure/expense under Section 37 of the Act. Held that:- None of these questions have been examined by the Authorities below. These questions are required to be examined because, in these case, we are not only concerned with the applicability of Section 40A(2) of the Act but we are primarily required to consider whether the said differential payment constitutes an expense or distribution of profits?
Ordinarily, we would not have remitted these matters, particularly when they are for Assessment Year 1992-1993, but, for the fact that this issue is going to arise repeatedly in future. It will also help the assessee(s) in a way that they will have to re-write their accounts in future depending upon the outcome of this litigation. Therefore, in the interest of justice, matter remanded back.
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2013 (9) TMI 899 - SUPREME COURT
Deduction u/s 80HHC of the Income Tax Act profits on transfer of DEPB - Held that:- It is a well-settled principle of statutory interpretation of a taxing statute that a subject will be liable to tax and will be entitled to exemption from tax according to the strict language of the taxing statute and if as per the words used in Explanation (baa) to Section 80HHC read with the words used in clauses (iiid) and (iiie) of Section 28, the assessee was entitled to a deduction under Section 80HHC on export profits, the benefit of such deduction cannot be denied to the assessee In view of the decision in Topman Exports Vs. Commissioner of Income-Tax [2012 (2) TMI 100 - SUPREME COURT OF INDIA] matter remanded back - Decided in favor of Assessee.
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2013 (9) TMI 898 - ALLAHABAD HIGH COURT
Rejection of books of accounts u/s 145(3) of the Income Tax Act Held that:- Reliance has been placed upon the judgment of Honble Supreme Court in the case of Keshav Mills Ltd v. CIT [1953 (1) TMI 5 - SUPREME Court] and CIT vs. A. Krishnaswamy Mudaliar [1964 (4) TMI 7 - SUPREME Court], wherein it has been held that measurement of periodic income is, to some extent, a matter of estimation, based on certain acceptable principle of accounting. The computation of business income may differ depending upon the method of accounting employed. It is not the legal position that on identical facts, the same amount of income should be assessable in the cases of all the assessees - Adoption of the gross profit of account would not depend only upon the net profit. In the present case, from the chart of the gross profit, it is found that the gross profit was increasing progressively from the years 2007-08 to 2009-2010 Decided against the Revenue.
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2013 (9) TMI 897 - PUNJAB & HARYANA HIGH COURT
Revision u/s 263 of the Income Tax Act - erroneous nor prejudicial order - non availability of records - Plea of the assessee is that when books of accounts had been impounded on 27.3.2008 (Annexure A-6) during survey proceedings under Section 133-A of the Act, the Assessee was handicapped to put up its case effectively and thus entire exercise by the revenue under Section 263 of the 1961 Act, was a farce. Held that:- This plea has no merit. Consistent case of the appellant is that computer backup of all the books/accounts whatever the Assessee had, was available with them. In this backdrop, mere impounding of books of accounts vide Annexure A-6 and their retention with the authorities vide Annexure A-12 had caused no prejudice to the appellant in conduct of proceedings under Section 263 of the 1961 Act.
Plea of the appellant that contents of show cause notice under Section 263 of the 1961 Act and the findings arrived at by the Commissioner on conclusion of these proceedings are divergent again is mis-founded.
Assessing Officer should have rejected the books of accounts under Section 145 of 1961 Act or could have made proper examination and scrutiny of the same, in whatsoever form those had been produced before him. It is evident by now that no books of accounts maintained in regular course of business and prepared in due discharge of their duties by their Accountant or their C.A, had in fact been produced much-less for examination, as recorded in order of the Assessing Officer Decided against the Assessee.
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2013 (9) TMI 896 - DELHI HIGH COURT
Correctness of order of Settlement commission passed u/s 245D of the Income Tax Act Held that:- With some hesitation, we record that the order under challenge is cryptic and is not focused on the issues and contentions, which were raised by the petitioners and by the Commissioner. - The Settlement Commission has rejected the applications for all assessment years, without referring to facts and issues relating to each year.
Revenue accepted that there were some factual errors in the impugned order like opening and closing stock were on record, and accepts that the Commissioner had not objected to inflation of stock issue. However, he has submitted that assessment proceedings under Section 153A read with Section 143(3) are pending and all issues and questions can be thrashed out and decided there. - The submission of the revenue cannot accepted as the petitioners have a right to invoke jurisdiction of the Settlement Commission, which is provided under the statute, i.e., Income Tax Act.
The petitioners must come clean and be honest and admit their faults and cannot but declare their true and full undisclosed income. However, their plea and explanation that their declarations are genuine and truthful, cannot be rejected without a legitimate and fair consideration - The matter is remanded to the Settlement commission again.
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2013 (9) TMI 895 - ALLAHABAD HIGH COURT
Difference in exchange rate due to conversion of foreign currency into Indian rupee had been kept in the exchange reserve account Taxability of credit figure in the exchange reserve account Held that:- It is of the capital nature and is not allowable as deduction as per the ratio laid down in the case of Atlas Cycle Industries vs. CIT [2004 (2) TMI 21 - PUNJAB AND HARYANA High Court] - Also, in a different case, fluctuation in rate of exchange amounts to capital expenditure as per the ratio laid down in the case of Seshasayee Board Ltd. Vs. CIT [1997 (11) TMI 48 - MADRAS High Court] the assessee could not provide any details as directed by the Tribunal and at the time of hearing - assets tried to submit the details before the high court - matter remanded back for reconsideration.
Allowance of Interest as expenditure in which year - Assessee has taken the overdraft in the earlier years and claimed the interest payment during the assessment year under consideration Held that:- Once the assessee has claimed the payment and debited the same then at least the same should have been allowed in any year - Once the payment is genuine and debited in the books of account, the same is allowable.
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2013 (9) TMI 894 - MADRAS HIGH COURT
Excessive Expenses - transaction with related parties - disallowance u/s 40A(2) - Price paid by the assessee to sister concern for electricity is excessive or not Held that:- Tribunal viewed that such an isolated instance could not be a basis for making a meaningful comparison. On facts, thus, the Income Tax Appellate Tribunal held that the supplier had reasons for charging different rates. The Income Tax Appellate Tribunal further pointed out that the rate at which, the assessee purchased electricity from M/s OPG Energy Pvt. Ltd., was lower than the tariff fixed by the Tamil Nadu Electricity Board. Decided against the Revenue.
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2013 (9) TMI 893 - DELHI HIGH COURT
Interpretation of provisions of Section 115-J Minimum alternate tax (MAT) - the stand of the respondent-assessee that they were entitled to carry forward of unabsorbed losses, including investment allowance in view of the fact that income taxable had been computed on book profits under Section 115-J and not under the normal provisions. - Held that:- Reliance has been placed upon the judgment in the case of Karnataka Small Scale Industries Development Corporation Limited versus Commissioner of Income Tax, 2002 [2002 (12) TMI 4 - SUPREME Court], wherein it has been held that Section 115-J (1) commences with the non-obstante clause and provides for two stage assessment. The first stage requires computation of income under the normal provisions and the second stage requires computation of book profits as per provisions of Section 115-J. In case the income computed under the normal provisions is less than 30% of the book profits, then the assessees deemed total income chargeable to tax for the relevant previous year would be equal to 30% of the book profits. At the first stage, profits are computed under the normal provisions and deductions allowable under the Act have to be taken into consideration. The deduction, which are allowed, do not get disturbed or obliterated even if the assessee pays tax on the book profits under Section 115-J.
Thus, when Section 115-J is invoked and is applied, it does not affect the computation made under the normal provisions. They stand on their own legs and do not get effected. Accordingly, the unabsorbed loses, including investment allowance, which were duly taken into consideration and accounted for while computing tax under the normal provisions, do not get displaced or erased and adjustments made have to be given full effect to In the instant case, investment allowance, etc. which has to be adjusted while computing the deduction under the normal provisions will not be allowed to be carried forward Decided in favor of Revenue.
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2013 (9) TMI 892 - PUNJAB & HARYANA HIGH COURT
Taxability of interest received as compensation - Assessee received an interest of Rs. 1,17,49,161/- in the financial year 2004-05 from Oriental Bank of Commerce, Sangrur on FDRs/MIDRs, which had been made out of the compensation amount from the disputed property - Assessee submitted that the interest had been released on submission of security bond and he was not the final owner of the amount as court proceedings were still going on Held that:- Relying upon the judgment in the case of CIT v. Karanbir Singh, [2007 (12) TMI 184 - PUNJAB AND HARYANA HIGH COURT] interest is chageable to tax matter remanded back for reconsideration - Decided in favor of Revenue.
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2013 (9) TMI 891 - ALLAHABAD HIGH COURT
Addition u/s 68 as unexplained cash credit Held that:- The Tribunal has not discussed and found whether repayments were made in cash or otherwise, or whether the entire amount were repaid. The test laid down by Supreme Court in CIT Vs. P. Mohanakala [2007 (5) TMI 192 - SUPREME Court] does not appear to be satisfied. The assessee has not discharged the burden placed on him and did not prove the genuineness of transactions found to be circular transactions by the assessee Matter remanded to Commissioner(A) to decide afresh in the light of above observation Decided in favor of Revenue.
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2013 (9) TMI 890 - MADRAS HIGH COURT
Cessation of loan liability - waiver of loan - addition under section 41(1) - one time settlement scheme Held that:- Rs.4.93 Crores stand waived off in furtherance to One Time Settlement resulting in cessation of liability could not be treated as revenue receipt under Section 41(1) of the Act Reliance has been placed upon the judgment in the case Iskraemeco Rent Limited Vs CIT reported in [2010 (11) TMI 43 - Madras High Court], wherein it has been held that assessee had taken loan for purchase of capital asset and later on the loan was waived off by the Bank, it does not amount to a benefit arising out of business and it is also not even remission of the liability, which could attract Section 41(1) of the Act Decided against the Revenue.
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