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Income Tax - Case Laws
Showing 21 to 40 of 641 Records
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2015 (3) TMI 1377
Registration u/s.12A denied - activities carried on by the trust were meant for members of the Jain community and thus it is established for the benefit of specific religious community attracting the provisions of section 13(1)(b) - whether the trust whose objects were religious as well as charitable would be entitled for registration under section 12A? - HELD THAT:- One of the objects of the assessee trust was to build a temple, prayer hall and maintain the same and further object was to set up a religious library, maintain it and propagate Indian culture and inculcate and study all the cultures of all the religion. Further, to take up research on religious, social and educational in order to uplift the public at large. The objects Nos.3 to 5 of the Trust Deed were admittedly for the propagation of philosophy of Shri Jain Shwetamber Murtipujak. However, object No.7 was to create, encourage and propagate inter-se cooperation, co-living and feeling of co-living in the community of entire public at large. The objects of the assessee trust thus, reflect the activities to be carried on for the purpose of Jain religion and also for the purpose of public at large. In view thereof, it could not be held that the same are meant for the benefit of only Jain religious community. We reverse the findings of the Commissioner in this regard.
Hon’ble Supreme Court in CIT Vs. Dawoodi Bohra Jamat [2014 (3) TMI 652 - SUPREME COURT] while holding the trust eligible to claim exemption under section 11 of the Act. In the totality of the above said facts and circumstances, we hold that the assessee is a charitable religious trust and the provisions of section 13(1)(b) of the Act would not be applicable. In view thereof, we direct the Commissioner to grant registration to the assessee under section 12A of the Act as charitable religious trust. The grounds of appeal raised by the assessee are thus, allowed.
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2015 (3) TMI 1376
Revision u/s 263 - Deduction u/s 80IB(10) - HELD THAT:- It is not in dispute that the AO had taken into consideration the revised certificate issued by the Pune Municipal Corporation while granting the benefit of deduction under section 80IB(10) of the Act.
It cannot be disputed that the view taken by the AO is one of the possible views on the matter. As rightly observed in the case Gabrial India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] as well as case of Sunbeam Auto Ltd. [2008 (11) TMI 348 - RAJASTHAN HIGH COURT] merely because the Commissioner of Income Tax holds a different opinion on the matter an order passed by the AO cannot be considered as erroneous and prejudicial to the interests of Revenue particularly when it cannot be attributed to lack of enquiry by the AO. We are of the firm view that the learned Commissioner has no jurisdiction to invoke provisions of section 263. - Decided in favour of assessee.
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2015 (3) TMI 1373
Denial of deduction u/s 10A - HELD THAT:- As following the same parity of reasoning in assessee's own case [2015 (3) TMI 494 - ITAT PUNE] we hold that in the absence of any arrangement having been arrived between the parties which resulted in higher profits, there is no merit in the order of the AO in re-working the profits by invoking the provisions of section 10A(7) r.w.s. 80-IA(10) - Accordingly, we reverse the order of the CIT(A) in restricting the deduction u/s 10A of the Act and direct the AO to delete the addition - Decided in favour of assessee.
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2015 (3) TMI 1369
Levying penalty u/s. 271C - assessee had not deducted TDS from the payments made to the State Bank of India as MICR charges during the relevant year u/s.194J - HELD THAT:- Since tax has already been paid by the payee, no penalty could be levied on assessee-payer for failure to deduct tax at source as held by the ITAT Bangalore Bench rendered in the case of Wipro GE Medical Systems Ltd. vs. ITO [2005 (1) TMI 609 - ITAT BANGALORE]. In view of the above, penalties levied by the authorities below u/s.271C are directed to be deleted in all the four years as these pertain to same issue.- Decided in favour of assessee.
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2015 (3) TMI 1368
Deduction u/s 80IB(10) - as per revenue the original commencement certificate was issued to the assessee on 06.09.1991 i.e prior to 01st October 1998 - CIT-A allowed the claim - HELD THAT:- The condition for commencement is a primary condition and if the project is found commenced prior to 1.10.1998, it would not be entitled for deduction u/s 80IB(10), at the threshold without going into the other condition prescribed under the other clauses of section 80IB(10)
There was some dispute at the time of original approval granted by the CIDCO on 6.9.1991 on the point of development charges as well as theatre and shops in the development plan. Accordingly, the original owner of the land in question challenged the action of CIDCO rejecting the modified development proposal vide order dated 18.06.1998 by filing the appeal u/s 47 of the Maharashtra Regional and City Planning Act 1966. The appeal was decided by the appellate authority on 8.9.1999. In pursuant to the order of appellate authority, the amended approval certificate dated 3.10.2005 was issued by the CIDCO. From perusal of the order dated 8.9.1999, we find that there was some construction in the project prior to the amendment proposal in the development plan put forward by the owner of the land which was rejected by the CIDCO vide order dated 18.06.1998.
Therefore, the commencement of the project has to be taken into account as per the actual construction work started in respect of the project and not by taking into consideration the original sanction and amended sanction of the plan. Since the actual work of construction and development of the project has not been examined by the authorities below, therefore, in the facts and circumstances of the case, we set aside this issue to the record of AO for proper verification and examination of the fact and then decide the issue as per law. The issue of completion of project within the prescribed time limit is kept open - Decided in favour of revenue for statistical purposes.
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2015 (3) TMI 1366
Application u/s 12AA rejected - proof of charitable activity u/s 2(15) - HELD THAT:- It is admitted fact that the receipts of the assessee society are from government departments, sale of tender forms and facilitation charges. The assessee is, therefore, working for the Government of Punjab and as such may not be doing the commercial activity in order to violate the provisions of Section 2(15) of the Act. CIT, at the end of the impugned order noted that since the assessee could not furnish the explanation, therefore, application of the assessee was rejected. The assessee, however, submitted that complete details were filed, therefore there was no justification to reject the application for registration.
We are of the view the matter requires re-consideration at the level of the ld. CIT(Appeals). We, accordingly, set aside the impugned order and restore the matter and issue to the file of Ld. Commissioner of Income TaxII Chandigarh with direction to re-decide registration application in accordance with law - Decided in favour of assessee for statistical purposes.
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2015 (3) TMI 1364
Addition by estimating the raw material consumption @ 53% as against 55.22% as per books of account and records - HELD THAT:- As for the AO’s observation that some of the expenditure is supported by self-made vouchers, the mere fact that some expenditure is supported with self-made vouchers can never be reason enough which is sustainable in the eyes of law to reject the books of account as a whole. In case the A.O. was not satisfied about the authenticity of the support for this expenditure, nothing prevented him from exploring the possibilities of disallowance with respect to that expenditure. The course of action he adopted i.e. in rejecting the books of account though only to the extent of consumption of material cannot be given any judicial approval. It is also to be noted that consumption of raw material in year to year even under ideal circumstances can never be the same because there are many variables governing the consumption of raw material. The A.O. was thus clearly in error in resorting to the impugned disallowance.
CIT(A) has also not dealt with any of these aspects but has proceeded with his seemingly erudite discussion on the legal position though without properly establishing the fundamental facts. In view of these discussions and bearing in mind the entirety of the case, we are of the considered view that the authorities below was in error so far as their stand on disallowance of ₹ 33,01,961/- on raw material consumption is concerned. We, therefore, direct the Assessing Officer to delete the impugned disallowance.
Addition of bad debs in respect of NTPC, Rihandnagar - HELD THAT:- The impugned disallowance is devoid of any legally sustainable merit. There is no dispute that this debt was so written off and yet the disallowed is made only because a certificate from the debtor is not produced. The conditions laid down for allowance and bad debt are clearly satisfied in the case and the disallowance, therefore, deserves to be deleted. We direct the A.O. to do so. Ground no.2 is thus allowed.
Disallowance on adhoc basis of various administrative expenses - HELD THAT:- We find that the disallowance is made purely on the basis of surmises and conjectures and without pointing out any specific defects in the vouchers in support of these expenses. We are unable to see any legally sustainable merits in this kind of approach based on sweeping generalisation for making disallowance. We direct the A.O. to delete the same. Ground no.3 is thus allowed.
Disallowance being 5% of the total wages paid as against disallowance being 10% of the total wages paid - HELD THAT:- Disallowance is made purely on the basis of surmises and conjectures and without pointing out any specific defects in the vouchers in support of these expenses. We are unable to see any legally sustainable merits in this kind of approach based on sweeping generalisation for making disallowance. We direct the A.O. to delete the same. Ground no.4 is thus allowed.
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2015 (3) TMI 1363
Refund of amount seized u/s 226(3) - Administrator of respondent No.4-PUDA was also appointed as the competent authority to recover the regularization dues in respect of the unauthorized colonies on behalf of the State of Punjab - Respondent No.1 contends that it never sought to receive amounts due to the petitioner-State of Punjab towards satisfaction of the fourth respondent’s tax dues - HELD THAT:- The petition is disposed of by setting-aside the order passed by respondent No.1 in so far as the same relates to the dues of the petitioner kept in the escrow or other accounts opened by the Administrator of respondent No.4 but for and on behalf of the petitioner- State of Punjab. The impugned order passed by respondent No.1 will not operate in respect of any other accounts maintained in any name which are for the benefit of the petitioner-State of Punjab. Further, the order passed by respondent No.1 shall also not operate in respect of any accounts, fixed deposits or other investments made out of the accounts which belonged to the petitioner-State of Punjab. The order shall also not operate in respect of any accretion to the amounts.
The amounts shall be refunded by respondent No.1 within 12 weeks from the receipt of a communication by the petitioner specifying the details of the accounts kept by respondent No.4 on behalf of the petitioner and in the name of the petitioner itself.
We would not express any opinion regarding the question of interest including as to whether or not the interest is payable or not to the petitioner and if payable as to which of the respondents is liable to pay the same. The petitioner is given liberty to adopt appropriate proceedings for interest. Mere furnishing of PAN Number of respondent No.4 would not be determinative as to whether the amounts belonged to the petitioner or respondent No.4.
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2015 (3) TMI 1360
Calculation of deduction u/s 36(1)(viia) - as per AR set off of bad debt could be done only against provisions and not vice-versa - HELD THAT:- Similar issue was considered in ING VYSYA BANK LTD. [2014 (9) TMI 44 - ITAT BANGALORE] - All the arguments now raised by the learned DR including the effect of explanation2 to section 36(1)(vii) by Finance Act 2013, were considered in the above order. Accordingly, in the case of assessee also we set aside the orders of the authorities below and direct the AO to examine the claim of the assessee in the light of the discussion of the Tribunal in the case of M/s ING Vysa Bank Ltd (Supra). Ground of the assessee is therefore allowed for statistical purposes.
Disallowance u/s 14A - sufficiency of own funds - HELD THAT:- It is not disputed that assessee had interest free funds of ₹ 21,280.59 Crores with it. Against this, investments that could give rise to tax free income was ₹ 1444.02 Crores. This has not been disputed. Assessee had itself made a disallowance of ₹ 52,88,281.90 being 5% of the exempt income for covering the over head expenditure in relation to earning of the exempt income. In assessee’s own case for assessment year 2010-11 a similar issue had come up before this Tribunal wherein as held there can be no dispute that the interest-free funds far exceeded the investment in tax free securities. Therefore, one has to come to a conclusion that investments in tax-free securities was made out of own funds and therefore, no disallowance in terms of Rule 8D(2)(i) or (ii) of the Rules can be made on account of interest expenditure. AO has completely ignored the submissions made by the assessee in this regard and has blindly applied Rule 8D(2)(iii) of the rules and made disallowance u/s.14A
Deduction u/s 36(1)(viii) being income earned by it on long term finance - HELD THAT:- Whether assessee had indeed made a further creation of special reserve in the succeeding year and also whether such reserves were created before finalization of the grant of deduction u/s 36(1)(viii) had not been verified by any of the authorities below. We therefore, set aside the orders of the authorities below and remand the issue to the file of the AO for fresh consideration in accordance with law.
TDS u/s 194H - payments which were made to National Financial Switch and Cash tree (NFS in short) consortium - Non deduction of tds - Disallowance u/s 40a(ia) - HELD THAT:- We are of the opinion, that the payments made by the assessee to M/s NFS could not be considered as commission or brokerage, in any sense all these terms. Assessee was therefore,not bound to deduct tax on such payments u/s 194H of the Act. Disallowance u/s 40a(ia) of the Act is not warranted. Such disallowance stands deleted.
Depreciation on investment portfolio by treating the investment as stock in trade - HELD THAT:- As decided in assessee's own case for assessment year 2010-11 Preparation of the balancesheet in accordance with the statutory provision would not disentitle the assessee in submitting the Income-tax return on the real taxable income in accordance with the method of accounting adopted by the assessee consistently and regularly. That cannot be discarded by the departmental authorities on the ground that the assessee was maintaining the balance-sheet in the statutory form on the basis of the cost of the investments. No question of following two different methods for valuing its stock-in-trade (investments) because the bank was required to prepare the balance-sheet in the prescribed form and it had no option to change it. For the purpose of income tax as stated earlier, what is to be taxed is the real income which is to be deduced on the basis of the accounting system regularly maintained by the assessee and that was done by the assessee in the present case - method adopted by the banks valuing stock-in-trade (investments) at cost in balance sheet in accordance with the Banking Regulation Act and valuing the same at cost or market value, whichever was lower for income-tax purposes. - Decided in favour of assessee.
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2015 (3) TMI 1359
Shortfall in premium for issuance of equity shares by the assessee to its holding company - deemed loan - computation of fair market value of shares issued by the Indian subsidiary to its holding company and shortfall in premium - HELD THAT:- In the case of M/s Shell India Markets Pvt. Ltd. [2014 (11) TMI 897 - BOMBAY HIGH COURT] has again decided the identical issue by following the Judgment in case of Vodafone India Services Pvt. Ltd. [2014 (11) TMI 897 - BOMBAY HIGH COURT] . Accordingly, following the Judgment of Hon’ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd. (supra), we delete the addition made by the authorities below on account of shortfall in premium for issuance of equity shares by the assessee to its holding company has been treated as deemed loan.
Credit of TDS - assessee has already filed a petition u/s 154 for grant of credit for tax deducted at source - HELD THAT:- Since the assessee has already filed a petition u/s 154 for grant of credit for tax deducted at source accordingly, we direct AO to verify the claim of assessed and then pass the appropriate order.
Revision u/s 263 - HELD THAT:- The assessee objected to the proposed enhancement u/s 263 by the Commissioner. Commissioner passed the impugned order holding that the AO failed to make the adjustment towards the benefit of loan advanced by the assessee to its holding company as income in the hands of the assessee and the order passed by the AO is erroneous and prejudicial to the interest of revenue. Commissioner set aside the assessment order and directed the AO to frame the assessment as per the the directions given in the impugned revision order.
AR as well as Ld. DR and considered the relevant material on record. The issue is directly covered by the Judgment of Hon’ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd [2014 (10) TMI 278 - BOMBAY HIGH COURT] the relevant finding of the Hon’ble High Court has been produced in the foregoing paras of this order. Accordingly, following the Judgment of Hon’ble Jurisdictional High Court in the case of Vodafone India Services Pvt. Ltd. (Supra), we set aside/quash the impugned revision order passed u/s 263 of the Act.
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2015 (3) TMI 1357
Deduction u/s 80IB(10) - HELD THAT:- All appeals are admitted on the following questions:-
“Whether the ITAT is correct in facts and circumstances of the case and in law in allowing the deduction u/s 80IB(10) of the Act, to the assessee, without appreciating the fact that the assessee has entered into separate agreements with individual buyers for construction work and thus carried out construction of residential houses as a contractor, rendering it ineligible for deduction u/s 80IB(10) of the Act?”
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2015 (3) TMI 1355
Determination of Annual value - income from house property - Undisclosed rental income in view of the provisions of section 23(1) - HELD THAT:- CIT (Appeals) correctly decided the issue. He has clearly met with the contention that different view has not been taken in the case of Shri Manoj Singla. CIT (Appeals) has reproduced the contents of the appellate order in the case of Manoj Singla in para 7 and reading of the same clearly shows that in the case of Manoj Singla the learned CIT (Appeals) observed that B-7 Preet Vihar property is commercial property and is not covered by the provisions of section 23(4) of the Act. As far as Bombay flat is concerned, since the assessee has shown rental income in the earlier years, therefore, the income has to be charged. As observed by the learned CIT (Appeals), therefore, it becomes clear that even in the case of Manoj Singla it was never held that if the property was never let out, then no income can be charged.
Once the expression "might" is used in section 23(1)(a), it becomes clear that what is required to be charged is the notional income because the basis of the charge of income is annual value. See BIMAN BEHARI SHAW SHEBAIT. [1967 (7) TMI 29 - CALCUTTA HIGH COURT]
It is not necessary that the property has been let out for computing the annual value because what is required under section 23(1)(a) of the Act is a sum for which property might be let out. In case of let out properties section 23(1)(b) of the Act is applicable which talks of annual rent received or receivable.
Where the property remains vacant for the whole year, in that case, nil value is to be computed or notional value of rent is to be computed? - As pointed out by the learned CIT (Appeals), section 23(1(c) of the Act clearly stipulate the situation where the property has been let out that being if some property is rented out and the tenants leaves, then section 23(1)(c) of the Act would get activated. But ff the property has never been let out, then the provisions cannot be invoked because section 23(1)(c) of the Act is clearly applicable where the property was let out. Therefore, in our opinion, the learned CIT (Appeals) has rightly interpreted the provisions of section 23(1)(c) of the Act. Clearly, the property for which notional income has been computed by the Assessing Officer was never let out by the assessee, therefore, section 23(1)(c) of would not be applicable.
Dispute seems to be the value on which the notional value is to be computed whether this should be municipal ratable value or the standard rent as per the Local Rent Control Act, whichever, is higher. Therefore, the facts were quite distinguishable and in our opinion this decision is not applicable.
We find nothing wrong with the order of the learned CIT (Appeals) and confirm the same
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2015 (3) TMI 1352
Addition u/s 68 - genuineness, credit worthiness and identity of creditor - HELD THAT:- The assessee's version of truth was placed before A.O. also, but A.O. did not find any evidence contrary to above facts. CIT(A) further observed that the assessee’s husband was working in Meghalaya House and he used to come across the friend Mr. W. Sutong in the Meghalaya House.
When the assessee and her husband purchased a house, they had discussed the matter with the Mr. W. Sutong and Mr. W. Sutong agreed to pay them ₹ 16,18,000/- by cash in their bank account but later on they realized that they being in the government service, it is not proper to get loan from stranger. There will be problems for them and they returned the money immediately to the appellant's bank account by RTGS. The above submission of refund of money is available on record.
Therefore, ₹ 15,80,000/- was returned by assessee's husband from their joint account to Mr. W. Sutong. Hence, in our considered opinion, the CIT(A) has rightly gave a relief to the assessee of ₹ 15.80 Lakh. In the background of the aforesaid detailed discussions, we find that Ld. CIT(A) has rightly deleted the addition of ₹ 15,80,000/- and sustained the balance addition of ₹ 38,000/-. - Decided against revenue
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2015 (3) TMI 1351
Deduction u/s 80P - returns of income were not filed by the assessee either u/s 139(1) or u/s 139(4) or within the time limit provided u/s 142(1) - HELD THAT:- This Tribunal examined the issue elaborately in the case of Kadachira Service Co-operative Bank [2013 (2) TMI 208 - ITAT COCHIN] , M/s Kunnamangalam Co-operative Bank [2014 (10) TMI 350 - ITAT COCHIN] and M/s Pinarayi Service Cooperative Bank Ltd [2014 (7) TMI 1176 - ITAT COCHIN] and found that if the assessee failed to file the return of income within the prescribed time and claim deduction u/s 80P, then the assessee is not entitled for deduction u/s 80P.
Disallowance u/s 40(a)(ia) - interest was paid to non members without deducting tax - HELD THAT:- Assessee is carrying on banking activity. Therefore, deduction of tax at source either at the time of credit or payment of interest is a mandatory requirement. Hence, this Tribunal do not find any infirmity in the order of the lower authority. Accordingly, the orders of the CIT(A) on this issue are also confirmed. Assessee's appeal dismissed.
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2015 (3) TMI 1350
TP adjustment - arm‘s length pricing of international transactions - Whether the additions suggested by the TPO on account of Advertising/Marketing and Promotion Expenses was beyond jurisdiction and bad in law as no specific reference was made by the Assessing Officer, having regard to retrospective amendment to Section 92CA of the Income Tax Act, 1961 by Finance Act, 2012? - Transfer pricing adjustment made on account of payment of royalty to an associated enterprise - HELD THAT:- For detailed order see Sony Ericsson Mobile Communications India Pvt. Ltd. (Now known as Sony India Limited) Vs. Commissioner of Income Tax-II [2015 (3) TMI 580 - DELHI HIGH COURT] [
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2015 (3) TMI 1347
Addition based on seized papers - taxation from undisclosed income of seized document being fastened on assessee - HELD THAT:- Seized document found from the possession of Sh Kinda, belong to them and if it is claimed that said document belong to assessee, then in that event the onus of proof vest with the AO.
CIT(A) has rightly found that this onus has not been discharged by the AO, in so far as there is no corroborative evidence brought on record to substantiate that document or transactions mentioned therein belong to assessee except conjectures and presumptions and what to talk of any liability for taxation from undisclosed income of seized document being fastened on assessee.
CIT(A) as per the trite law that "there must be something more than suspicion to support an assessment, the assessment based on pure suspicion is bound to be quashed". CIT(A) has rightly concluded that the attempt of the AO to connect seized paper with assessee has failed and finding given in the assessment order is erroneous on facts and is perverse and whimsical and stands vitiated and any addition based thereon deserves to be deleted.
CIT(A) has rightly deleted the addition. No reason to interfere with the well reasoned order of the CIT(A), accordingly, we uphold the same and decide the issue against the Revenue by rejecting the ground of appeal filed by the Revenue. - Appeals filed by the Revenue stands dismissed.
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2015 (3) TMI 1346
Disallowance of deduction available to Co-operative society u/s 80P - assessee collecting deposits from members by way of corpus funds and other deposits - HELD THAT:- As in the case of Jafari Momin Vikash Co-op. Credit Society Ltd [2014 (2) TMI 28 - GUJARAT HIGH COURT] sub-section(4) of section 80P will not apply to an assessee which is not a co-operative bank. In the case clarified by CBDT, Delhi Coop Urban Thrift & Credit Society Ltd. was under consideration. Circular clarified that the said entity not being a co-operative bank, section 80P(4) of the Act would not apply to it. Revenue's contention cannot be entertained that section 80P(4) would exclude not only the co-operative banks other than those fulfilling the description contained therein but also credit societies, which are not co-operative banks. In the present case, respondent assessee is admittedly not a credit co-operative bank but a credit co-operative society. Exclusion clause of sub-section (4) of section 80P, therefore, would not apply. In the result, Tax Appeals are dismissed.
Referring to SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA BAGALKOT [2015 (1) TMI 821 - KARNATAKA HIGH COURT] section 80P (4) was not applicable to cooperative societies and was restricted only to cooperative Banks which had got licence to do banking business from the RBI. As the assessee dealing only with its members, so it is to be considered a cooperative society only and not a bank. Considering the facts and circumstances of the case, we are reversing the order of the FAA. Effective ground of appeal, filed by the assessee, is decided in its favour.
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2015 (3) TMI 1345
Income from other sources - interest earned on Fixed Deposit prior to communication of project - classification of income - interest earned by the assessee from the nationalised banks as concerned with setting up or commencing of the business - HELD THAT:- The assessee deposited money in the bank is itself not sufficient to show that the deposit was made with a view to carrying out the business in the sense of earning profit by investment.
There was neither setting up nor commencement of business during the year under consideration,that non commencement of the project is continuing since 1993,that the money raised in form of OFCE was not raised for any construction of project or purchase of plant and machinery or for obtaining any license or letter of credit etc. but was only done with a specific and limited purpose to reduce resultant tariff of the project,that had nothing to do with the setting up or commencing of the business, that it was a pure and simple case of accruing of interest income from deposit-we are of the opinion that that the assessee earned the interest from the bank deposits and earning of interest was plainly not in the ordinary course of its business and that the interest earned by the assessee was rightly assessed under the head income from other sources.
We find that the FAA has clearly and logically distinguished the cases relied upon by the assessee. On the other hand,cases quoted by him, while upholding the order of the AO, fortify our view. He has also analysed the audited accounts and various agreements entered into by the assessee.In our opinion, his order does not suffer from any legal or factual infirmity. Considering the peculiar facts and circumstances of the case for the year under appeal, we decide effective ground of appeal against the assessee.
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2015 (3) TMI 1343
Revision u/s 263 - AO has not disallowed provision for gratuity and provision for leave encashment - rectification u/s. 154 - computation of book profit u/s 115JB - HELD THAT:- CIT has reached to a prima facie conclusion that assessment order is erroneous and so also prejudicial to the interest of Revenue for the reason that the AO has not disallowed provision for gratuity amounting to ₹ 25.75 lakhs and provision for leave encashment amounting to ₹ 11,79,202 while framing assessment u/s. 143(3) and thereafter computing book profit u/s 115JB of the Act.
Even now before us, on merits the assessee has nothing to say rather the assessee on merits has conceded this issue that the same is subject-matter of rectification u/s. 154 of the Act. As the issue is covered in the case of South India Steel Rolling Mills (1997 (2) TMI 10 - SUPREME COURT), we confirm the order of CIT revising the assessment. But the assessment cannot be directed to be reframed de-novo and AO will go into the issues raised by CIT in his order i.e. the issue of provision of leave encasement and provision of gratuity. - Decided against assessee.
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2015 (3) TMI 1342
Disallowance of interest expense - HELD THAT:- CIT(A) has held that the issue of interest expenditure is pending before the Hon’ble Special Court. It is the say of the proceedings in which the said issue of interest was issued by the custodian have been already concluded which fact has already been recorded by the Ld. CIT(A) in the impugned order. We, therefore, direct the CIT(A) to consider this fact while deciding the issue afresh. CIT(A) may also direct for the taxing of income in the hands of the recipient (family members) in accordance with the method of accounting followed by them and as per the provisions of the law. Ground No. 4 is treated as allowed for statistical purpose.
Interest u/s. 234A, 234B and 234C - HELD THAT:- The Tribunal has considered this issue at para-6 of its order and restored the matter to the file of the AO to recompute the interest liability as per the provisions of the law. We direct accordingly. Ground No. 6 is treated as allowed for statistical purpose.
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