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Income Tax - Case Laws
Showing 61 to 80 of 641 Records
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2015 (3) TMI 1305
Sales Tax Subsidy receipt pursuant to Haryana Government’s Scheme - to be treated as revenue receipt or one falling in the capital scheme - Held that:- A taking note of the salient features of the sales tax exemption scheme as well as the judgment of the Supreme Court in CIT v. Ponni Sugars and Chemicals Ltd.[2008 (9) TMI 14 - SUPREME COURT] correctly held to be as capital receipt. We are of the opinion that the impugned order of the ITAT does not disclose any infirmity. No substantial question of law arises.
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2015 (3) TMI 1304
Addition on account of interest on Post Dated Cheques paid out of books of accounts - Held that:- The PDCs’ have been encashed within a period of six months as is apparent from page 11 of assessment order where A.O. has noted the date of sale of properties and date of encashment of cheques. Therefore, we find that the facts in the present case are similar in one of the Sister concern i.e. case of M/s IAG Promoters and Development Pvt. Ltd [2015 (2) TMI 12 - ITAT DELHI] therefore, following the Tribunal order in the case of group company, we dismiss this appeal of Revenue.
Disallowance u/s 40A(3) in respect of which no deduction was claimed by the appellant - Held that:- The Tribunal in the group cases of the assessee on identical facts have held that the payment made for acquisition of land was not claimed as a deduction and hence the provisions of S.40A(3) of the Act is not applicable. See case of Glitz Builders and Promoters Pvt.Ltd [2015 (5) TMI 384 - ITAT DELHI] as held that when the cost of the land as well as additional payment is not claimed by the assessee as deduction, the question of any disallowance under Section 40A(3) or otherwise in the case of the assessee does not arise. - Decided in favour of assessee.
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2015 (3) TMI 1299
Applicability of section 50C - issue of rate of tax while computing the capital gains - Held that:- We direct the AO to compute the capital gain from sale of industrial units and apply the appropriate tax rate after necessary verification, as the assets have been claimed to have been owned for more than three years. Ground no.1 is decided against the assessee.
Interest under section 220(2) - Held that:- In view of the circular of CBDT vide Circle No.334 Dt.3.4.1982, the interest can be levied only from the date of default of the demand notice issued in pursuance of the fresh assessment order. The order of CIT(A) holding that interest under section 220(2) has to be levied from the date of default as per the original assessment order therefore cannot be sustained. The same is set aside and the claim of the assessee is allowed.
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2015 (3) TMI 1297
Eligibility to exemption u/s 11 - eligible to benefits of set off of carried forward losses - Held that:- As decided in assessee's own case for the assessment year 2008-09 we find that assessee deserves to succeed in this ground. We have seem various assessment orders for earlier years, copies of which are placed on record and found that the respective assessing officers had allowed the net deficit to be carried forward in the respective assessment order. Therefore, there is no reason in not allowing the benefit of carry forward losses/deficit. Accordingly, we direct the AO to allow the benefit of quantified carry forward losses to the assessee against the income of the assessee.
For the sake of clarification, for the year under consideration there was a positive income and, therefore, assessee has filed its return showing the income of the year, exemption under section 11 of the Act has also been claimed. If the carry forward losses are allowed to be set off then the income will become of negative figure and, therefore, exemption under section 11 cannot be allowed. - Decided in favour of assessee.
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2015 (3) TMI 1293
Rejection of registration u/s 12AA - proof of objects of the trust and genuineness of its activities - Held that:- CIT has to satisfy about the objects of the trust and genuineness of its activities. CIT(A) has not pointed out any of the object of non-charitable or any non-genuine activity. The assessee has filed ‘brief notes of the activities of the Society’ along with newspaper cuttings to substantiate that the activities of the Society have been widely reported in various news papers/media, along with various vouchers for the expenditure incurred.
During the year ending 31.03.2013 starting from 01.11.2012 for five months, the assessee has incurred expenditure of ₹ 34,726/- out of donations received. The income & expenditure has been incurred to help the needy persons, widows & needy families, students and society expenses etc., which in fact, are in consonance with the objects of the Society available at PB 3 to 5. On perusal of the same alongwith ‘brief notes of the activities of the Society’ and newspapers cuttings etc., placed on record, we find that none of the expenditure is found to be of non-charitable nature and therefore, even if the activities of the assessee Society and the donations are negligible according to the ld. CIT, the ld. CIT cannot refuse registration u/s 12AA(1) of the Act.
CIT(A) is not justified in refusing registration u/s 12AA(1) of the Act and accordingly the order of the ld. CIT(A) is cancelled - Decided in favour of assessee.
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2015 (3) TMI 1291
Proceedings initiated against the petitioner pursuant to a search - discrepancy in the stock of medicines - reassessment not having been done within the period stipulated by Section 153(2A) - limitation under Section 153(2A) - Held that:- The time limit within which the consequential order ought to have been passed is nine months from the date of receipt of a copy of the order. Ext.P5 order is dated 24.1.2007. The respondent has in Ext.P4 stated that Ext.P5 order was received by the said authority on 22.2.2007. Therefore, as per sub section (2A) of Section 153 of the Act the order had to be passed before 22.11.2007. As already noticed above, in the present case no such order was passed by the respondent.
Even in a case where only one issue has been directed to be considered afresh, the limitation under Section 153(2A) would apply. It is clear from the passage in [2008 (2) TMI 52 - DELHI HIGH COURT] extracted above that, sub section (3) of Section 153 applies to a different situation where only a consequential order has to be passed in implementation of a direction issued by the appellate forum. In the present case, as already found above the direction was to consider the issue afresh. Therefore, Section 153(2A) of the Act is attracted. In view of the above, this is a case in which the Assessing Officer ought to have passed a consequential order within the time limit stipulated. Since no such order was passed the petitioner is entitled to succeed.
In view of the above findings the writ petition is allowed. It is held that in so far as the issue that was remitted to the respondent Assessing Officer for fresh consideration, the time bar contained in Section 153(2A) of the Act operates. The petitioner shall therefore be entitled to the refund sought for, in accordance with law. It is made clear that on all other aspects the assessment order is final and binding on the assessee.
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2015 (3) TMI 1289
Denial of application of benefits u/s 11 and 12 - violation of sec. 13(1)(d) in respect of TISCO share - Held that:-As far as the assessee's appeal is concerned, this Bench of ITAT in assessee's own case for the assessment year 2008-09 has held that the assessee cannot be denied exemption u/s 11 and 12 of the Act because of its investment in continuing in TISCO shares. It has been further held that dividend income from TISCO shares is exempt u/s 10(34) of the I T Act. Therefore, the trust is eligible for benefits of sec 11 and 12 of the I T Act and there will be no addition in taxable income as dividend income is exempt. Thus respectfully following our own decision in the case of the assessee, the grounds raised by the assessee’s appeals are allowed.
Depreciation claim - Held that:- Charitable institutions can claim depreciation on assets acquired out of application of trust income, irrespective of the facts that cost of purchase is out of application of income exempt u/s 11 and 12 of the Act.
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2015 (3) TMI 1288
Penalty U/s 271(1)(c) - addition on rejection of books - estimated addition on probability only i.e. to “plug the leakage - Held that:- It is fact that the additions were confirmed by the lower authorities as well as ITAT on the basis of unverifiable/bogus purchases, for which department had collected number of evidences including statement during the course of search and seizure at M/s Laxmi Diagold Jewellers and also in case of other suppliers. The Ld. Assessing Officer had reproduced the statements of these parties in the assessment order and came to conclusion that these transactions were bogus. The Coordinate Bench has confirmed the quantum addition of ₹ 5 lacs in A.Y. 2004-05 and ₹ 2 lacs in A.Y. 2005-06 on the basis of findings given by the lower authorities
The case laws referred by the assessee are not squarely applicable on facts. The explanation submitted by the assessee was not bonafide. The assessee has not correlated any sale with reference to bogus purchases made in the books of account from the various parties. The Hon'ble Supreme Court in the case of Mak Data P. Ltd. Vs. CIT (2013 (11) TMI 14 - SUPREME COURT) has held that the assessee fails to offer an explanation which is bonafide and proved that all the material facts have been disclosed, penalty proceeding is justified. In the case of CIT Vs. Kalindi Rail Nirman Engineering Ltd.(2014 (4) TMI 679 - DELHI HIGH COURT) has held that even imposition of penalty on estimate is justified, are squarely applicable. Therefore, we confirm the order of the ld. CIT(A) in both the assessment years. - Decided against assessee.
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2015 (3) TMI 1283
Capital recovery of leased assets termed as lease equalisation charges - rolling stock of the Indian Railways which is owned by the assessee and which is on lease finance basis - Held that:- The issue in respect of the assessee itself is covered for the previous assessment year 2001-02, in its favour. The ITAT had followed its previous order for assessment year 2001-02 in its impugned order. The ITAT’s order for the previous year 2001-02 has been affirmed by a judgment of this Court in Commissioner of Income, Large Taxpayers Unit V. Indian Railways Finance Corporation Ltd. [2014 (6) TMI 224 - DELHI HIGH COURT]. This position is in fact conceded by the revenue. Consequently, the appeals do not involve any substantial question of law. They are dismissed.
Prior interest expenditure claim on account interest for a prior period - assessee had contended that on account of retrospective revision of rate of interest which occurred in the assessment year in question i.e. AY 2006-07 - Held that:- ITAT’s final order noticed its direction for assessment year 2002-03 held that there is no dispute about the allowability of expenses. Only dispute is regarding the year of allowability. If the Assessing officer is of the view that the expenses are pertaining to the prior period, the same are required to be considered for the prior and allowed in that year. If it is found that the expenses are allowable in this year on the basis of crystallization of liability, the same may be considered in the year under appeal. The assessee is therefore, directed to place necessary evidence in support of claim of expenses. The Assessing officer on appreciation of evidence may determine the year of allowability and allow the same in either of the year. No substantial question of law
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2015 (3) TMI 1281
Reference to the Valuation Officer - adoption of value of the SVA as FMV - whether for the purposes of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall for the purposes of section 48 be deemed to be the full value of consideration received or accruing as a result of such transfer? - Held that:- In the instant case, the assessee has requested the Assessing Officer for referring the matter to DVO wherein the assessee was given show-cause notice and thereafter DVO has made his report. We find that in the instant case, the valuation assessed by SVA is at ₹ 92.65 Lac. wherein the DVO’s value at ₹ 1.50 crore. So, Assessing Officer adopted the value declared by SVA. We find that the Assessing Officer is justified in his action.
As gone through the judgment of CIT Vs. Smt. Shweta Bhuchar (2010 (2) TMI 1049 - PUNJAB AND HARYANA HIGH COURT) as held that if the addition has to be made on account of unexplained investment in purchase of property, the Assessing Officer should make a reference to the Valuation Officer in terms of sub-section (2) of sec. 50C of the Act. We find that in the instant case, the Assessing Officer has obtained the report from DVO, therefore this judgment will not helpful to the assessee. Similarly, in the case of CIT Vs. Chandni Bhuchar reported in (2010 (1) TMI 502 - Punjab and Haryana High Court) decided the issue relating to addition made u/s. 48 on account of unexplained investment in the property. In the instant case, it is a case of deciding the FMV, therefore this judgment also will not helpful to the assessee. Therefore, we are of the view that the Assessing Officer and the Ld. CIT(A) are justified in their action. Appeal of the assessee is dismissed.
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2015 (3) TMI 1280
Seized cash adjustment against the liability of advance tax - Interest leviable under section 234B/C - Held that:- CIT(A) has correctly decided the issue because explanation to section 132B can not be held to be of retrospective nature because notes on the clauses very clearly provide that amendment shall take effect from 01/06/2013. Further we are bound to follow the decision in case of CIT v/s Ashok Kumar [2010 (9) TMI 771 - Punjab and Haryana High Court]. The Ld. CIT has also correctly noticed that application was received on 22/03/2010 i.e. one week after the due date for deposit of advance tax and that is why he has ultimately directed the AO to rework the interest leviable under section 234B/C. Therefore, we find nothing wrong with this order and follow the same. Appeal of the Revenue dismissed.
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2015 (3) TMI 1279
Levy penalty under section 271(1)(c) - eligible for additional depreciation denied - Held that:-
After careful consideration of the provisions of section 32(1)(iia)the assessee is eligible for additional depreciation for the plant and machinery installed in the year under consideration. The case of the assessee is that the assessee was not able to install the plant and machinery as per statute and when it is not able to claim the entire additional depreciation, the left over portion can be claimed in subsequent year being the provisions of section 32 is a beneficial provision. Considering the provisions of section 32(1)(iia) we are of the opinion that the assessee has made a bonafide claim by disclosing all material details before the Assessing Officer and therefore, the claim of the assessee is neither concealment of income or furnishing of inaccurate particulars. Therefore, it is not a fit case to levy penalty under section 271(1)(c) of the Act. - Decided against revenue.
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2015 (3) TMI 1278
Reopening of assessment - peak credit addition - validity of notice - Held that:- In the instant case, if we accept the contention of the assessee that the Assessing Officer has acted at the behest of the Investigation Wing, then in that case he would have made addition of ₹ 9,83,50,000/- which is as per the reasons for issue of notice u/s.148 for the A.Y. 2002-03. Further, from the letter dated 10-12-2009 by the JCIT, Range-1, Jalgaon to JDIT (Investigation) Jalgaon, we find the JCIT has mentioned that peak determined by the Investigation Wing is incorrect and the peak is coming to negative for which he has requested for further material at the disposal of the Investigation Wing. Therefore it is not a case where the Assessing Officer has acted at the behest of the JDIT. He has acted in a very judicious manner acting independently thus we dismiss the additional ground raised by the assessee.
Addition on advances and interest thereon - Held that:- After thoroughly analysing he considered certain transactions which according to him do not appear to be taxable receipts. Such transactions are without any reference to interest or profit on sale and are just financial transactions involving receipts by the assessee and cannot be considered as income for the impugned assessment year. He therefore added these loans for the purpose of working out the peak credit but did not consider the same as income. Similarly, certain transactions represented sale of jewellery which according to him cannot be said as income as such. According to him, only the profit element can be considered as taxable. He accordingly restricted such interest and other income to ₹ 62,51,754/- as against ₹ 82,81,598/- determined by the Assessing Officer. This reasoned finding given by the CIT(A) in our opinion does not suffer from any infirmity and accordingly the same is upheld. The grounds raised on this issue are accordingly dismissed
Addition on account of alleged interest received on the unexplained investment - Held that:- After considering the reply of the assessee to such enhancement notice, the Ld.CIT(A) enhanced the income and directed the AO to adopt interest of ₹ 73,31,192/-. Nothing contrary was brought to our notice by the Ld. Counsel for the assessee against the said calculation. Under these circumstances, the third issue raised by the assessee in the ground is dismissed. The appeal filed by the assessee for this year is accordingly dismissed.
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2015 (3) TMI 1277
Disallowance u/s.14A r.w.r.8D - Held that:- No merit in the disallowance so made by the AO, insofar as rule 8D can be applied only when assessee has claimed certain expenditure against earning of exempt income. In the instant case, the AO has made disallowance under Rule 8D on the plea that the assessee has made investment in partnership firm, income of which is exempt. We found that on the capital so invested in the partnership firm, the assessee has earned substantial interest income which is liable to tax. As per the audited profit and loss account placed in the record, we found that assessee has earned gross interest income of ₹ 2,51,65,257/- and paid interest of ₹ 80,17,792/- which resulted into net interest income of ₹ 1,71,47,465/-. Most of the investment was out of interest free funds available with it and even in respect of the part of the investment made out of borrowings, since the assessee has earned interest income thereon which was more than what was paid against the borrowing, no disallowance is warranted under rule 8D.
AO is empower to make disallowance u/s.14A r.w.r.8D only if the assessee has debited certain interest expenditure which are attributable to earning the exempt income. In case the assessee has not claimed any interest expenditure attributable to earning exempt income, no disallowance is warranted under rule 8D.
For the administrative expenses claimed in the profit and loss account, we found that assessee has earned taxable income of ₹ 1,71,52,765/- and after claiming such expenses offered not taxable income of ₹ 1,68,36,770/-. Thus, it is clear that entire administrative expenses are attributable to earning of the taxable income. It is pertinent to mention here that no exempt income was earned by assessee during the year under consideration, therefore, disallowance merely on the presumption that in future assessee may earn exempt income is not taxable when assessee has not claimed any expenditure in its profit and loss account for earning of exempt income. Accordingly, we reverse the order of both the lower authorities and direct the AO to delete the disallowance made u/s.14A r.w.r.8D. - Decided in favour of assessee.
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2015 (3) TMI 1276
TPA - ALP determination - TPO justification in adopting the ALP at Rs.Nil - Held that:- The Hon’ble Jurisdictional High Court in the case of Cushman and Wakefield (India) (P.) Ltd. (2014 (5) TMI 897 - DELHI HIGH COURT) held that TPO cannot determine arm’s length price of the payments made by the assessee to its ‘AE’ at ‘nil’ for the reason that assessee did not derive any benefit from services rendered by AE.
The Hon’ble High Court categorically held that the TPO is to conduct a Transfer Pricing analysis to determine the arm’s length price (ALP) and not to determine whether there is a service from which assessee has derived benefit or not. The Hon’ble Court held that the exercise to determine whether assessee had derived any benefit or not from payment of such management fee is to be examined by the AO and appropriate disallowance u/s 37 is called for. In the instant case, the TPO had determined the ALP of payment of management fees at ‘NIL’ by holding that the assessee did not derive any benefit from services rendered by the AE. Thus necessarily AO as to determine whether the assessee has derived any benefit from payment of professional fees and if any benefit had derived, whether such payment is commensurate to comparable transaction has to be examined by the TPO. For the above said purpose, the Transfer Pricing issue is restored to AO/TPO for de- novo consideration. - Appeal of the assessee is partly allowed for statistical purposes.
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2015 (3) TMI 1275
Deduction under Section 80I on gross total income before reducing deduction under Section 80HH - Held that:- The question of law has since been decided by Hon'ble Supreme Court in Joint Commissioner of Income-Tax Vs. Mandideep Eng. and Pkg.Ind. P. Ltd. [2006 (4) TMI 75 - SUPREME Court] - Decided in favour of the assessee and against the Department.
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2015 (3) TMI 1274
Penalty u/s 271(1)(c) - claim made on account of bad debt not allowed - Held that:- It is not in dispute that the amount of debt had duly been written off by the assessee; why was the same not allowed is however a mystery to us but be that as it may, the fact remains that the claim for bad debt after the debt had been written off could never be a ground for initiating penal proceedings. Before initiating the penal proceedings the Assessing Officer is required to be satisfied as to whether any income has been concealed or any inadequate particulars have been furnished.
As the appellant submitted that the order under challenge passed by the Assessing Officer does not show any such satisfaction nor the learned Tribunal had considered the matter in that perspective. The order of the CIT has been passed mechanically and without applying mind. The learned Advocate appearing for the respondent did not seriously try to support the order under challenge. We have no doubt in our mind that the order suffers from perversity of the highest order. The order under challenge is set aside. The question as framed is answered in the affirmative.
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2015 (3) TMI 1273
Condonation of delay - Grant of registration under section 12AA denied - Held that:- When the assessee has been advised that the impugned order could challenged when regular appeals for subsequent assessment years are decided, would clearly indicate that the assessee was well aware of the consequences of the impugned order. As per settled law when no registration is granted under section 12AA to the assessee for assessment year 2009-10 and subsequent assessment years, there was no question of making claim of exemption from income under section 11 for any subsequent assessment years either in the regular assessments or in the consequential appeals filed before the learned CIT (Appeals).
Thus the assessee failed to explain any sufficient cause for not presenting the appeal within the period of limitation before the Tribunal. Sufficient cause would mean a cause which is beyond the control of the assessee. Sufficient cause means which prevents the assessee acting under normal circumstances without negligence or inaction or want of bonafide. When the assessee was aware of the consequences of the impugned order that its income would not be exempt under section 11 of the Act from assessment year 2009-2010 onwards, the assessee should not have waited for filing of the appeal in the matter. It is a clear case of negligence or inaction or want of bona fide. The conduct of the assessee clearly speak against the assessee itself that the assessee deliberately did not file the appeal within the period of limitation. - Decided against assessee.
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2015 (3) TMI 1272
Stay application - recovery proceedings - Held that:- The assessee being aggrieved by the assessment order has filed an appeal before CIT (Appeals) III – third respondent as evidenced from the appeal memorandum appended to the present writ petition which is at Annexure-D. An application for stay of re-assessment order has also been filed seeking for stay of the demand as evidenced from the stay application which is at Annexure-E. Hence, without going into the merits namely as to whether Assessing Officer was justified in disallowing the claim made by the assessee under Section 10A of the Act requires to be examined by CIT (Appeals) III in the facts and circumstances of the case and also taking into consideration the fact that CIT (Appeals) III is now seized of the matter, this Court is of the considered view that ends of justice would be met if CIT (Appeals) III – third respondent is directed to dispose of the stay application that has been filed by the petitioner expeditiously within a time frame.
Since learned Sr. counsel appearing for petitioner has submitted that issue is no more res integra in view of the decision taken by the Division Bench in respect of allowability of deduction under Section 10A of the Act, this Court is of the considered view that impugned demand raised by the Assessing Officer pursuant to re-assessment order requires to be stayed till the application filed by petitioner before appellate authority – CIT (Appeals) III (Annexure-E ) is disposed of.
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2015 (3) TMI 1271
Depreciation om technical knowhow - Held that:- Claim of deprecation becomes eligible as it is an intangible asset on which assessee has claimed depreciation on WDV.
Deemed international transactions - ALP determination - nature of transaction - Held that:- Since the transactions between Matrix and Astrix both being resident companies in India do not fall within the definition of international transactions so as to necessitate the computation of arms length price under the T.P. provisions of the Act, DRP accepted the assessee’s objections. DRP also noted that the transactions between the Matrix and assessee does not in any way shift any profits out of India, since both the entities are taxable entities in India and the question of applying the T.P. provisions does not arise. Since the TPO does not have any jurisdiction to examine the domestic transactions in the impugned assessment year, the DRP has rightly held that stand of the TPO fails. Domestic transactions cannot be examined under T.P. provisions for the impugned assessment year - Decided against revenue
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