|
Advanced Search Options
Case Laws
Showing 61 to 80 of 1900 Records
-
2015 (11) TMI 1842 - ITAT BANGALORE
Revision u/s 263 - Deduction u/s 80P(2)(a)(i) - assessee is a cooperative credit society and derives its income from business of accepting deposit and lending loans to its members HELD THAT:- As decided in M/S BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERATIVE SOCIETY LTD. [2011 (4) TMI 1222 - ITAT BANGALORE] section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies. The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks. Since the assessee is a cooperative society and not a cooperative bank, the provisions of section 80P(4) will not have application in the assessee’s case and therefore, it is entitled to deduction u/s 80P(2)(a)(i) of the Act.
Following the decision of the coordinate Bench of the Tribunal in the case of Bangalore v. M/s. Bangalore Commercial Transport Credit Co-operative Society Ltd. (supra), we quash the order u/s. 263 passed by the ld. Pr. CIT. - Decided in favour of assessee.
-
2015 (11) TMI 1841 - ALLAHABAD HIGH COURT
Seeking recall of order - power of criminal court to review its own order - difference between review and recall - the fact about the pendency of one more criminal revision against the same impugned order was informed to this court within 5 minutes of passing of the order - Principles of natural justice - opportunity of hearing not provided to the applicants - HELD THAT:- There is no dispute that the opposite party nos. 2, 3 and 4 were not given opportunity of hearing when this Court passed the order dated 7.3.2013.
Whether a criminal court has power to recall its order? - HELD THAT:- Section 362 Cr.P.C. reveals that a Court is not authorised to alter or review its judgment except for the limited purpose of correcting some clerical or arithmetical error. However, there is a saving provision also because Section 362 Cr.P.C. starts with the words “Save as otherwise provided by this Code or by any other law for the time being in force” - saving provision is section 401 Cr.P.C. which clearly provides that no order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by pleader in his own defence.
So far as the power to recall its order by a court dealing with criminal matter is concerned, the judgment of Hon'ble Supreme Court discussed earlier makes a clear distinction between “review” and “recall” and authorises a criminal court to recall its order in case it suffers from some technical error or has been passed ex-parte without giving opportunity of hearing to opposite party.
This Court is of the firm view that Section 362 Cr.P.C. only bars a “review” of the order. It does not bar “recall” of any order specially if the order has been passed ex-parte against the principle of natural justice - the recall application is allowed.
-
2015 (11) TMI 1840 - SUPREME COURT
Validity of secondary evidence of the contents - whether the High Court is justified in reversing the order passed by the Trial Court allowing the Defendant- Appellant to lead secondary evidence of the contents of the documents? - Sections 34 and 38 of the Specific Relief Act, 1963 - HELD THAT:- The pre-conditions for leading secondary evidence are that such original documents could not be produced by the party relied upon such documents in spite of best efforts, unable to produce the same which is beyond their control. The party sought to produce secondary evidence must establish for the non-production of primary evidence. Unless, it is established that the original documents is lost or destroyed or is being deliberately withheld by the party in respect of that document sought to be used, secondary evidence in respect of that document cannot accepted.
The High Court, following the ratio decided by this Court in the case of J YASHODA VERSUS K. SHOBHA RANI [2007 (4) TMI 11 - SUPREME COURT], came to the conclusion that the Defendant failed to prove the existence and execution of the original documents and also failed to prove that he has ever handed over the original of the disclaimer letter dated 24.8.1982 to the authorities. Hence, the High Court is of the view that no case is made out for adducing the secondary evidence.
It is well settled that if a party wishes to lead secondary evidence, the Court is obliged to examine the probative value of the document produced in the Court or their contents and decide the question of admissibility of a document in secondary evidence. At the same time, the party has to lay down the factual foundation to establish the right to give secondary evidence where the original document cannot be produced. It is equally well settled that neither mere admission of a document in evidence amounts to its proof nor mere making of an exhibit of a document dispense with its proof, which is otherwise required to be done in accordance with law.
All efforts have been taken for the purpose of leading secondary evidence. The trial court has noticed that the photocopy of the Exhibit DW-2/B came from the custody of DEO Ambala and the witness, who brought the record, has been examined as witness. In that view of the matter, there is compliance of the provisions of Section 65 of the Evidence Act. Merely because the signatures in some of the documents were not legible and visible that cannot be a ground to reject the secondary evidence. The trial court correctly appreciated the efforts taken by the Appellant for the purpose of leading secondary evidence - the impugned order passed by the High Court cannot be sustained in law.
Appeal allowed - decided in favor of appellant.
-
2015 (11) TMI 1839 - MADRAS HIGH COURT
Requirement of Board of Control or not - HELD THAT:- The powers intended to be conferred on the Board of Control would unduly interfere with the eights of the Temple Committee. In the Conjeevaram scheme the Board of Control was held necessary because the institution was not subject to the control of the Temple Committee. I am clearly of opinion that, all provisions in the scheme relating to the Board of Control should be omitted - Undoubtedly the Thengalai rights are predominant in this temple; the Subordinate Judge was therefore right in providing for the appointment of an additional Theugalai trustee. No serious objection was taken by any of the contending parties for the inclusion in the Board of. Trustees of a Smartha and Madhwa. It is to be hoped that their presence would tend to compose the differences between the two rival sects of Vaishnavas. We do not think that the provision for the appointment of the Saivitc and Madhwa trustees by the Court is necessary. The Committee should have the same power with regard to them as they have with reference to the other three trustees. As regards Clause 12, in the view that we have taken about the office of the treasurer and having regard to the representations that have been made regarding the funds of the Devasthanam we are of opinion that instead of a treasurer, the trustees should be directed to appoint a cashier on a salary of ₹ 75-0-0 per mensem.
As was done with reference to the Conjeevaram scheme we think liberty should be given to any of the trustees or any member of the Committee or to the 1st plaintiff in this case to move the Court for such alterations in the scheme as seem desirable in the light of the experience that may have been gained of its working.
Appeal disposed off.
-
2015 (11) TMI 1838 - ITAT AHMEDABAD
Reopening of assessment u/s 148 - HELD THAT:- In the cases where assessments are being reopened after the end of four years from the end of relevant assessment year, and where original assessment is completed under section 143(3), it is sin qua non that the Assessing Officer demonstrates that there was failure on the part of the assessee to disclose all the related material facts. No such exercise has been carried out on the facts of the present case. In the reasons recorded by the Assessing Officer it is not even his case that any material facts were withheld by the assessee. In this view of the matter, we quash the reassessment proceedings. The assessee gets the relief accordingly.
-
2015 (11) TMI 1837 - ITAT CHENNAI
Revision u/s 263 - Capital gain assessed in the hands of the larger HUF or in the case of the assessee member of HUF - CIT directing the Assessing Officer to disallow deduction allowed under section 54F of the Act in the hands of the assessee - CIT was of the view that sale proceeds have to be assessed in the hands of legal heirs of late A.R.Pandurangan - HELD THAT:- The assessee is one of the legal heirs of late A.R.Pandurangan who disclosed capital gains on his share after claiming deduction under section 54F of the Act. The Assessing Officer while completing the assessment called for details in respect of claim for deduction under section 54F and capital gains reported by the assessee HUF and accepted the exemption claimed under section 54F of the Act on the sale proceeds reported by the assessee HUF.
The Hon’ble Andhra Pradesh High Court in the case of Addl. CIT Vs. P.Durgamma [1986 (9) TMI 58 - ANDHRA PRADESH HIGH COURT]considered the scope of section 171 of the Act deeming HUF to be undivided.
In the case on hand, no evidence has been brought on record to suggest that late A.R.Pandurangan HUF has been assessed. In such circumstances, the sale proceeds of the property cannot be assessed in the hands of late A.R.Pandurangan (HUF). We also see no reason to disbelieve the memorandum of oral recording partition furnished by the assessee. Thus the contentions of the Commissioner of Income Tax that sale proceeds have to be assessed in the hands of late A.R.Pandurangan (HUF) is not sustainable in law. Thus, we set aside the order of the Commissioner of Income Tax passed under section 263 and restore that of the Assessing Officer since the assessment order cannot be said to be erroneous and prejudicial to the interests of the Revenue. - Decided in favour of assessee.
-
2015 (11) TMI 1836 - SC ORDER
Maintainability of appeal - HELD THAT:- Since the subject matter of these appeals has become infructuous, the appeals stand dismissed as infructuous - the appeal of the assessee which is pending in the High Court of Bombay shall be decided on its own merits.
-
2015 (11) TMI 1835 - SC ORDER
Maintainability of appeal - monetary amount involved in the tax appeal - HELD THAT:- Tax effect involved in Civil Appeal Nos. 364-365 of 2008 is low.
Appeal dismissed.
-
2015 (11) TMI 1834 - SC ORDER
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- Since the tax effect is low, these appeals cannot be entertained.
Appeal dismissed.
-
2015 (11) TMI 1833 - SC ORDER
Permission for withdrawal of appeal - HELD THAT:- Appellant has handed over the Additional Affidavit dated 29-10-2015 in the Court today wherein it is mentioned that the parties have settled the matter and in view of the Deed of Settlement dated 30-9-2015 which is signed between the parties, the appellant wants to withdraw the present appeal.
The appeal is dismissed as withdrawn.
-
2015 (11) TMI 1832 - ITAT DELHI
Exemption u/s 11 denied - AO treated the society maintenance fees receipts as business income and not incidental to the attainment of the objects of the assessee society - No separate books of accounts have not been maintained which is violative of provisions of s.11 and 12 -society maintenance fee, being in the name of franchisee income earned by the assessee was taxable - CIT-A deleted the addition - HELD THAT:- The issue is covered in favour of the assessee and against the Revenue by a series of decisions of the Tribunal in the assessee’s own case. The Ld. CIT(A) has followed the binding decisions of the ITAT in the assessee’s own case for the A.Y. 1998-99, 1999-2000, 2001-02, 2003-04 and ITAT orders for the A.Y. 2004-05.
We find no infirmity in the order of the Ld. CIT(A) and we dismiss both the appeals of the Revenue.
-
2015 (11) TMI 1831 - DELHI HIGH COURT
Suit for partition and rendition of accounts - Whether the suit properties, as detailed in Schedule-A to the plaint, are liable to be partitioned and if so, what would be the share of the parties? - HELD THAT:- Plaintiffs thus have failed to prove that there existed an HUF before 1956 on account of Sh. Tek Chand having inherited properties before 1956 and that the plaintiffs have further failed to prove that HUF was created after 1956 on account of throwing of property/properties into common hotchpotch either by Sh. Tek Chand or by Sh. Gugan Singh/defendant no.1. Accordingly, it is held that there is no HUF and there are no properties of HUF in which late Sh. Harvinder Sejwal had a share. The entire discussion given above for existence/creation of HUF and plaintiffs failing to discharge the onus of proof upon them will similarly apply qua the alleged family settlement pleaded by the plaintiffs because once again no credible evidence has been led except self-serving statements and which cannot be taken as discharge of the onus. In his cross-examination on 01.04.2013, the defendant no.3 as DW1 has denied the suggestion that there was any family settlement. It is therefore held that plaintiffs have failed to prove the issues.
Both the issues are decided in favour of the defendants and against the plaintiffs, the plaintiffs are not entitled to the reliefs of partition or rendition of accounts - Suit dismissed.
-
2015 (11) TMI 1830 - ITAT MUMBAI
Disallowance on account of service tax and insurance claim by holding that the assessee could not offer any valid explanation for such writing off during the year - assessee had written off service tax which is not available for set off against the CENVAT payable by the assessee and short insurance claim i.e claim not admitted and paid by the insurance company - HELD THAT:- In the case of service tax, we note that ₹ 2,05,177/- were written off by the assessee because the set off of such service tax was not available against the central excise duty. In our opinion, the amount of service tax which is paid by the assessee on the expenditure incurred and for which no set of was available was rightly written off and the order of the ld. CIT (A) cannot be sustained on this point.
Assessee has rightly written off the un-receivable insurance claim during the year which were either rejected or short accepted by the insurance company. More so when these expenses are not related to the prior period as the circumstances and facts under which these amounts were written off came to be finalized during the year.
Assessee further pointed out that the similar expenditure were allowed by the Department in the earlier years. All these write offs are necessitated when their adjustments or recovery is not possible to be made in the in the normal course of business . In the case of CIT Vs Excel Fashion Pvt Ltd.[2007 (5) TMI 647 - DELHI HIGH COURT] has upheld the order of Tribunal in which the tribunal allowed the irrecoverable Export Incentives as bad debt. Under these facts and circumstances order passed by CIT(A) can not be sustained and disallowance of service tax and the insurance claim ordered to be deleted. - Decided in favour of assessee.
-
2015 (11) TMI 1829 - ITAT DELHI
Assessment of trust - Anonymous donations u/s. 115BBC - failure on the part of the donors to file confirmation; in response to the notice issued u/s.133(6) - HELD THAT:- In the present case it is an admitted fact that the assessee is registered u/s 12AA of the Act and its income is exempt u/s 11 - AO while framing the original assessment vide order dated 31.03.2011 categorically stated that the activities of the assessee are charitable within the meaning of Section 2(15) of the Act and there was no change in the aims and objects of the assessee as compared to the earlier years.
As the assessee is established for religious and charitable purposes and the anonymous donation was not received with specific direction that such donation is for any university or other educational institution or any hospital or other medical institution run by the assessee trust. Therefore, the AO was not justified in making the addition by invoking the provisions of Section 115BBC(1) of the Act and the ld. CIT(A) rightly deleted the said addition in view of the provisions of Section 115BBC(2)(b) - Decided against revenue.
-
2015 (11) TMI 1828 - MADHYA PRADESH HIGH COURT
Rejection of declaration under the Kar Vivad Samadhan Scheme, 1998 - seeking settlement of case - seeking declaration of tax arrears of Central Excise Duty of ₹ 2,69,944 and Penalty of ₹ 3,64,238 - whether the factual position stated by the petitioner in the declaration, which is required to be filed in the prescribed Form No. 1-B, is incorrect in any manner?
HELD THAT:- The Department is right in pointing out that the duty/cess was already paid by the petitioner and was not due on 4-12-1998 when the declaration was filed, we fail to understand as to how that would result in causing willful loss to the public exchequer, as such. It would be a different matter, if the petitioner was to incorrectly claim that the amount was not outstanding on the day of filing declaration. Only then it would be a case of wrong or incorrect disclosure made to cause loss to public exchequer. Further, we hold that the correctness of the declaration submitted in the prescribed form for settlement of the dispute under the Scheme, cannot be judged on the basis of the stand taken by the assessee in the correspondence exchanged with the Department, prior to submission of such declaration. That approach will be counterproductive to the purpose and intent for which the Scheme has been launched - for resolution of the disputes. In other words, the declaration cannot be jettisoned at the threshold as has been done in the present case, by referring to the stand taken by petitioner in its previous correspondence exchanged with the Department. Instead, the Department ought to have treated the disclosures made in the declaration by the petitioner as relevant facts; and the correctness thereof could be judged on its own merits.
We have no manner of doubt that in the facts of the present case, it was not open to the Department to non-suit the petitioner from participating in the said Scheme at the threshold on the ground that the factual position stated in the declaration dated 4-12-1998, submitted in the prescribed Form 1-B, Annexure P-11, was incorrect as it was not consistent with the previous communication sent by the petitioner dated 15-6-1998 - much less is of such a nature that it would cause loss to public exchequer either directly or indirectly. If the petitioner has already paid the amount towards Duty/cess, there can be no loss to the public exchequer as such. The petitioner, at best, would be entitled for adjustment as per the Scheme propounded, which is a matter to be considered by the Appropriate Authority. It is also open to the Appropriate Authority to consider as to whether the assessee, who has already paid the amount towards Duty/cess is eligible to participate in the Scheme.
The communication dated 3-3-1998, Annexure P-12, is founded on incorrect understanding of the requirement of declaration to be filed in the prescribed format and disclosures made by the assessee in respect of the respective items to be declared therein. In the fact situation of the present case, it is not possible to hold that the petitioner had misdeclared the relevant information, as noted in the impugned communication.
The impugned communication, Annexure P-12, is quashed and set aside. Instead, the Appropriate Authority is directed to process the proposal/declaration of the petitioner under the Scheme as per law - Petition allowed.
-
2015 (11) TMI 1827 - ITAT PUNE
Nature of expenses - research and development expenses - revenue or capital expenditure - Revenue pointed out that the expenditure claimed by the assessee on research and development was because of the own R&D expenses carried on by the assessee - HELD THAT:- Looking at the nature of expenditure incurred by the assessee, we are of the view that the same is revenue expenditure allowable as deduction in the hands of assessee either under the provisions of section 35(1)(i) or 37(1) - expenditure having been incurred by the assessee by way of research, which resulted in reduction in the weight of body parts and also generation of revenue in the hands of assessee to the extent of ₹ 4.20 crores cannot be said to be capital expenditure.
Even if the expenditure is of enduring benefit, but having not been incurred in the capital field, is to be allowed as deduction in view of the ratio laid down by Pune Bench of Tribunal in Opus Software Solutions (P.) Ltd. . [2012 (11) TMI 619 - ITAT PUNE]- As the nature of expenditure is not such that it can be said to be capital expenditure and in the absence of product developed by the assessee having been patented, we find no merit in the order of Assessing Officer in this regard - Decided against revenue
Disallowance of premium paid on cancellation of foreign currency cover - CIT-A allowed claim - CIT(A) was of the view that the aforesaid expenditure related to payment of commitment charges for canceling agreement entered into by the assessee for FOREX cover, purchased for Dollar fluctuation relating to repayment of ECB loan and interest, therefore, the same was not in the nature of interest - HELD THAT:- In order to avail the foreign exchange cover offered by Citi Bank, it had to close its agreement with DBS Bank and for pre-mature closure of the offer made by DBS Bank, the prepayment charges / commitment charges relating to the cancellation of the said foreign exchange cover was paid by the assessee. The said commitment charges are not relatable to the acquisition of any foreign assets, but are on account of business agreement entered into by the assessee, which because of its business exigencies, had to be foreclosed, in view of the offer made by the principal lender i.e. Citi Bank.
Such commitment charges paid by the assessee having been paid during the course of carrying on its business are allowable as revenue expenditure in the hands of the assessee. The same are not relatable to loan taken by the assessee from Citi Bank for acquisition of assets. However, the foreign exchange cover was taken by the assessee in order to prevent itself from future currency rate fluctuations. The expenses have been incurred for the purpose of business are incidental to carrying on of the business by the assessee, are allowable as expenditure under section 37(1) - See Hon’ble Supreme Court in DCIT Vs. Gujarat Alkalies & Chemicals Ltd. [2008 (2) TMI 11 - SUPREME COURT] and Addl.CIT Vs. Akkamba Textiles Ltd.[1996 (10) TMI 71 - SC ORDER] for the said proposition. We uphold the order of CIT(A) in this regard. - Decided against revenue.
-
2015 (11) TMI 1826 - ITAT CHENNAI
Disallowance u/s.80IA - assessee company engaged in the business of spinning cotton yarn and generation of electricity through wind mill - AO disallowed the claim of the assessee u/s.80IA on the reason that the Special Leave Petition filed by the Revenue is pending before the Apex Court against the judgment of the Jurisdictional High Court in the case of Velayuthasamy Spinning Mills [2010 (3) TMI 860 - MADRAS HIGH COURT] - HELD THAT:- It is not the case of the Revenue that the judgment of the Madras High Court in Velayudhaswamy Spinning Mills P. Ltd(supra) is stayed by the Apex Court. This Tribunal is of the considered opinion that mere pendency of SLP before the Apex Court cannot be a reason for not following the judgment of the jurisdictional High Court. In other words, the judgment of the jurisdictional High Court is binding on all authorities in the States of Tamilnadu and Pondicherry. The CIT(A) has rightly allowed the claim of the assessees by following the judgment of the Madras High Court in Velayudhaswamy Spinning Mills P. Ltd. (supra). Therefore, this Tribunal do not find any infirmity in the orders of the CIT(A) and according the same are confirmed.
Receipts from CDM - Revenue or capital receipt - Whether CDM receipts being the one which has been received on account of the power generated through windmills would also qualify for the benefit u/s.80IA.? - HELD THAT:- Receipt from sale of carbon credits has to be considered as capital receipt and accordingly, it is not taxable. Thus, there is no question of considering the same for deduction u/s.80IA.
-
2015 (11) TMI 1825 - ITAT MUMBAI
Disallowing the business advances written off and claimed as deduction u/s 37(1) - HELD THAT:- As not been disputed by the department that the amount which was advanced was not for the purchase of raw material i.e., not for business purpose or the advance given has been received back by the assessee, rather their case is that the assessee is not in the business of giving advance, therefore such a bad debt of advance is not allowable. If the assessee has claimed that these advances have become bad i.e. neither the raw material has been supplied nor advance has been given back, then the same amounts to loss incurred during the ordinary course of business and same has to be allowed u/s 37(1) as business expenditure. No merit in the reasoning of the CIT(A) that such an advance can only be given when the assessee is in the business of financing or advancing money. The advance can be given to a supplier in the ordinary course of business and if such an advance has been turned out to be bad or irrecoverable, then it has to be allowed as loss.
Disallowing foreign travel expenditure of the Directors - HELD THAT:- Specific purpose for which the foreign tours were undertaken by the Directors are not available on records. No doubt if the Directors or the employees have undertaken to foreign travelling for exploring of prospective business, acquisition of latest machinery and for other business purpose then same has to be allowed. There has to be some prima facie evidence to substantiate such an explanation. For the AY 2008-09, the Tribunal has noted down the specific details of the tour undertaken by various persons and based on that, finding was given in favour of the assessee. In the interest of justice and for proper examination of this matter, we restore this issue to the file of the AO who shall consider the necessary explanation and evidences and decide the same afresh. Accordingly, the issue of foreign travelling expenses is set aside to the file of the AO to be decided afresh after giving due opportunity to the assessee.
TDS u/s 195 - enhancement of disallowance by CIT(A) of market research expenditure u/s 40(a)(i) for making the payment to an AE - Non deduction of assessee - HELD THAT:- TDS was required to be deducted on such a payment, because the said entity has a business connectin in India by virtue of having offices located at various places as noted by him and also had a help-desk etc. such an observation of Ld. CIT(A) for making the disallowance cannot be upheld, because if the payment made to M/s Mintel International Group Ltd. is a business income, then it has to be established as a matter of fact that the said entity does has a business connection in India or has a PE in terms of Article 5 of DTAA. Nowhere it has been brought on record that M/s Mintel International Group Ltd. had any kind of PE in India or any kind of business connection in India. Rather there is a letter on record, wherein, M/s Mintel International Group Ltd. has categorically stated and certified that it has no PE or business connection in India. Once that is so, then assessee was not required to deduct TDS on such a payment and, therefore, there is no violation of section 195 and consequently no disallowance u/s 40(a)(i) can be made in the hands of the assessee.
Treatment of subsidy - Capital receipt or revenue receipt - HELD THAT:- In PONNI SUGARS & CHEMICALS LTD. [2008 (9) TMI 14 - SUPREME COURT] has laid down a very important proposition that the test of character of the receipts in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is given. Hence, the “purpose test” has to be applied. The point of time at which subsidy is paid is not relevant, neither the source nor the form of subsidy is material - as held that if the subsidy has been given for setting up of new units or substantial expansion of the existing unit, then same is to be treated as capital account. If the object of the subsidy scheme is to enable the assessee to run the business more profitably then the receipts is on revenue account.
Hence in this case if we see the “Preface” of the “Madhya Pradesh Udyog Nivesh Samvardhan Yogna” of Industrial Promotion Policy of 2004 of the Madhya Pradesh Government, it provides that the subsidy would be given for setting up of a new industrial units at various places for employment generation and to accelerate the pace of industrialization in Madhya Pradesh. From the reading of the entire scheme, it is absolutely clear that the subsidy provided is not for assisting the assessee for augmenting the profit or help in running of the business, albeit it is for setting up of new industrial unit, for promotion of employment, growth, infrastructure in the backward areas of Madhya Pradesh. Thus, such a subsidy though given in the form of refund of VAT or CST is on capital account. Accordingly, we hold that the subsidy received by the assessee cannot be taxed as revenue, as it is on capital account, hence capital receipt.
Product development expenses - Revenue or capital expenditure - HELD THAT:- As relying on assessee's own case A.Y. 2007-08 assessee has changed the design of the bottle the expenditure would generally be on the revenue account, even though the advantage may have an enduring benefit for a brief period and the colour of the cap as is a regular phenomenon to be carried out between one to two years which cannot be held to be for an enduring benefit or major change in the profit making apparatus. Such, expenditures are required for either augmenting the sale or to survive in the market the market under stiff competition. Therefore, such expenditure has to be treated as revenue expenditure and, accordingly, the disallowance as confirmed by the learned Commissioner (Appeals) under the head product development expenditure is allowed.
-
2015 (11) TMI 1824 - ITAT KOLKATA
Reopening of assessment - four years has expired from the end of the relevant assessment year as on the date of issuance of notice u/s. 148 - change of opinion - Unexplained divided received - HELD THAT:- In this case, the assessee has filed complete details as is evident from the above facts and the details in respect of divided received and also the details of expenditure, which have been filed by the assessee vide different letters addressed to the AO, we feel that the reopening is just merely a change of opinion and nothing else. The change of opinion is not permissible in law as held by the Hon’ble Apex Court in the case of Foramer France[2003 (1) TMI 101 - SC ORDER] and JINDAL PHOTO FILMS LTD. [1998 (5) TMI 20 - DELHI HIGH COURT]
Thus we are of the view that even in post-1989 amended provision of Section 147 of the Act, change of opinion is not permissible. Accordingly, we allow this legal issue of the assessee’s appeal and reverse the order of lower authorities on this issue.
-
2015 (11) TMI 1823 - ITAT PUNE
Disallowance u/s 14A r.w.r. 8D - Need for recording of satisfaction before making addition - HELD THAT:- It is incumbent upon the Assessing Officer first to be satisfied that the claim made by the assessee as to whether any expenditure has been incurred or not, in relation to the income which does not form part of the total income under the Act, is correct. The perusal of the assessment order in the case of assessee, very clearly reflects that the Assessing Officer vide para 3.1 had noted the fact that the assessee had declared the exempt income, but had not debited any expenses in the books of account against the said exempted income. In view thereof, the assessee was requested to explain the reasons for the same and as to why the provisions of section 14A of the Act read with Rule 8D of the Rules should not be invoked. In view of the same, we find no merit in the plea of the assessee in this regard. The satisfaction is deemed to have been recorded and we proceed to decide the issue on merits.
Whether any disallowance is warranted out of dividend income received on account of dividend on mutual funds? - In view of the binding preceding being available in assessee’s own case with regard to the investments, which admittedly were not made in the instant assessment year, but were brought forward from the earlier years, then disallowance if any worked out in the preceding year is to be applied for the year under consideration also since the funds have been deployed in the earlier years and not in the current year. Accordingly, we direct the Assessing Officer to compute the disallowance, if any, in the hands of the assessee in line with working of the disallowance under section 14A(2) of the Act read with Rule 8D(ii) of the Rules in the preceding year. Further, no bifurcation of investments and stock in trade was raised in earlier year, hence this plea is dismissed as investments are old.
Disallowance under section 14A of the Act i.e. the administrative expenses relatable to earning of exempt income - From the details, it is not clear that as to whether any disallowance was made under Rule 8D(iii) of the Rules in the hands of assessee in the preceding year. In view thereof, in case no such disallowance is made in the hands of assessee in the earlier years, then we hold that no disallowance was warranted in the year under consideration. However, in case the assessee has accepted the disallowance made under Rule 8D(iii) of the Rules in the preceding year, then the facts of the case being identical, we find no merit in the claim of the assessee in this regard. The Assessing Officer shall verify this aspect from the assessment records for assessment year 2008-09 and decide the issue accordingly. AO shall afford reasonable opportunity of hearing to the assessee while deciding the issue of disallowance under section 14A of the Act.
Disallowance of foreign travel expenses - Assessing Officer noted that the explanation given by the assessee was without any specific details, or supported by any evidence, even the details of various destinations travelled by her were not furnished and in the absence of any evidence that foreign travel expenses were incurred for the business, the expenditure claimed by the assessee was disallowed - HELD THAT:- The assessee is making this plea from assessment year 2006-07 onwards, but till the instant assessment year i.e. 2009-10, no such investment has been made by the assessee. The statement by the assessee is without support of any iota of evidence and hence, cannot be accepted. Even during the course of hearing, the assessee was asked to produce evidence of business meetings undertaking by the assessee or the proposed investors met by the director of the assessee company on her foreign visit. The learned Authorized Representative for the assessee admitted that no such details were available. In the above said facts and circumstances, we find no merit in the claim of the assessee whatsoever. However, following the earlier order of the Tribunal, we restrict the disallowance to 75% of expenditure and direct the Assessing Officer to allow 25% of expenditure. The ground of appeal raised by the assessee is thus, partly allowed.
Computation of profits of the windmill power generation unit - HELD THAT:- In the case of the assessee, the matter in assessment year 2008-09 travelled to the Tribunal and the Tribunal upheld the order of Assessing Officer in computing disallowance by allocating the indirect expenses on the basis of turnover of respective businesses. The Tribunal upheld the order of lower authorities. However, directions were given to the Assessing Officer to re-calculate the computation of disallowance on the basis of working that may be furnished by the assessee. The said directions were given by the CIT(A) and were upheld by the Tribunal. Following the same parity of reasoning, we uphold the order of CIT(A) in this regard. However, in line with earlier directions, we direct the Assessing Officer to recompute the disallowance in line with directions of the Tribunal in assessment year 2008-09. The ground of appeal raised by the assessee are decided as indicated above.
Deduction u/s 80IA(4) on account of profit earned from the business of windmill power business - HELD THAT:- The Tribunal had allowed the claim of the assessee by following the earlier decision of Pune Bench of Tribunal in Serum International Ltd.[2013 (1) TMI 688 - ITAT PUNE] wherein the issue had been decided following the ratio laid down by the Hon’ble Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. [2010 (3) TMI 860 - MADRAS HIGH COURT] - Before us also, no other contrary decision has been brought to our notice, therefore, in the above said background and in view of the identical issue having been decided in assessee’s own case for assessment years 2006-07 [2012 (2) TMI 604 - ITAT PUNE]and 2008-09 [2013 (12) TMI 1708 - ITAT PUNE] we find no merit in the grounds of appeal raised by the Revenue and the same are dismissed.
Disallowance u/s 14A - HELD THAT:- We remit this issue also back to the file of Assessing Officer to determine the source of funds in the hands of assessee in line with the ratio laid down by the Tribunal in Lap Finance & Consultancy Pvt. Ltd. [2013 (12) TMI 1708 - ITAT PUNE] in assessment year 2008-09. The matter is remitted back to the file of Assessing Officer with same directions as above.
........
|
