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Income Tax - Case Laws
Showing 61 to 80 of 758 Records
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2015 (8) TMI 1462
Disallowance of carry forward of excess capital expenditure which needs to be set off against the future income - assessee is a society, running several educational institutions - Held that:- This issue is no longer res integra. The Tribunal in assessee’s own case for the AY 2005-06 [2011 (8) TMI 1194 - ITAT DELHI] by following the judgment of the Hon’ble Bombay High Court in the case of CIT Vs. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT] has decided the issue in favour of the assessee.
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2015 (8) TMI 1460
Entitled for deduction u/S 80G - Held that:- No deduction was allowed in respect of any donation unless such donation is a sum of money and since the assessee made donation in the form of equipments and not as a sum of money, such deduction was not permissible in law and which came to be challenged by the assessee in appeal before the Tribunal and after perusal of the records the Tribunal arrived to a conclusion that the money was paid to the manufacturer of those machines which were installed at the SMS Hospital with the prior consent and such machines were installed to provide medical assistance to the poor people and also observed that if the money would have been paid directly to the SMS Hospital donation u/S 80G was permissible but there was a confirmation in regard to machines being installed and paid by cheque to the manufacturer and machines once installed in SMS Hospital has been counter checked by the revenue, taking note thereof and the facts which came before the Tribunal into consideration allowed the appeal of the assessee & held that he is entitled for deduction u/S 80G of the Act. - decided in favour of assessee.
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2015 (8) TMI 1458
TDS u/ 194C - tds liability on reimbursement expenses - addition u/s. 40(a)(ia) being the reimbursement of expenses paid to clearing and & forwarding Agents, reimbursed towards stamp charges, documents charges for custom, loading & Unloading charges and other miscellaneous expenses - Held that:- The assessee’s stand throughout has been that such shipping payments do not require TDS deduction as per the Boards Circular No. 723 dated 01-09-1995 excluding operation of the relevant TDS provisions. Both the lower authorities fail to rebut this contention on facts and law.
We accordingly hold that the CIT(A) erred in directing the Assessing Officer to consider assessee’s shipping line bills for the purpose of TDS deduction. The case file reveals that a coordinate bench of the tribunal in assessee’s own case for preceding assessment year [2014 (5) TMI 268 - ITAT AHMEDABAD] holds similar reimbursements made to be very payee as not covered by TDS provisions. The Revenue fails to point out any distinction on facts. We observe in these circumstances that the Commissioner of Income Tax(A)’s action in part is not liable to be upheld on both counts i.e. merits as well as judicial consistency. - Decided in favour of assessee.
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2015 (8) TMI 1457
Addition u/s 68 - Unsecured loans - accommodation entries received - genuineness of the transactions was not proved - Held that:- Considering this Remand Report dated 22.06.2012 filed in pursuance to the directions given to re-consider the issue on merits, the CIT(A) granted relief. In the said factual background, the ld. CIT DR was unable to point out any infirmity either in procedure followed or on conclusion arrived at on these facts in the order.
Admission of additional evidence considering the objections of the assessee to the first Remand Report - Held that:- Admittedly, as per the non-rebutted evidence on record, the effective hearing in the assessment proceedings started on 07.12.2011 leading to the passing of the assessment order on 29.12.2011. Thus in the absence of any evidence to the contrary the finding of the CIT(A) under challenge that “adequate and real opportunities was lacking during the assessment proceedings” is upheld. The Ground No.-2 of the Revenue accordingly is dismissed.
In the present case, admittedly the Assessing Officer, consciously and carefully after due and proper enquiry carried out by issuance of notices u/s 133(6) to the concerned persons/parties and considering the material comes to the conclusion that he is satisfied by the claim of the assessee on verification, then in such a situation the filing of the present appeals cannot be justified and can only be termed as a farce. - decided against revenue
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2015 (8) TMI 1456
TDS u/s 195 - non-deduction of tax on commission paid to non-resident outside India - addition u/s 40(a)(i) - income accrued in India - PE in India - Held that:- AO has accepted that the payment made by the assessee is on account of commission and compensation to the foreign agent and therefore it is not the case of the AO that the payment in question is either fee for technical service or royalty which could be taxed in India as per provisions of sec.9(1) of the Act. We further note that the AO has supported his finding by citing the reason that commission income arises in India because right to receive commission arises when the order is executed by the assessee in India.
In our view, this logic and contention of the AO is absolutely erroneous and based on mis-interpretation of the term ‘accrue or arise in India’ as per the provisions of sec.9(1). The commission is paid to foreign agent for services rendered by the agent outside India and the agent has no business link or source of income in India. Therefore, in absence of any business connection or source of income and consequently any permanent establishment in India, the said income in the hands of the foreign agent is not taxable in India. - decided in favour of assessee.
Disallowance of compensation paid of prior period export sales - selection of assessment year - Held that:- There is no dispute that the assessee is following mercantile system of accounting. Even otherwise, as per the accounting standard as well as per provisions of Companies Act, the assessee is bound to follow the mercantile system of accounting. The assessee has claimed sale rebate/damage on account of defective goods exported in the earlier year. It is pertinent to note that it is not the claim of the assessee that the liability of damage has been crystallized in this year and till the year under consideration assessee was disputing the claim of the purchaser. It is only payment in respect of same amount was adjusted against the purchases received in the year under consideration. Therefore, this amount of damage is undisputedly related to the export of goods made in the earlier assessment year.
Accordingly, when the assessee has never disputed the claim of damages, then the claim which pertains to earlier year cannot be allowed in the year under consideration. - decided against assessee.
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2015 (8) TMI 1454
Disallowance u/s 14A - no exemption was claimed by the assessee under section 10(2A) - Held that:- In the instant year no exemption has been claimed by the assessee under section 10(2A) of the Act as there was no tax free income and, therefore, the provisions of section 14A of the Act are not applicable. See CIT VERSUS M/S. DELITE ENTERPRISES [2009 (2) TMI 498 - BOMBAY HIGH COURT]
Direction of CIT(A) to verify and allow the assessee’s claim for carry forward of the business loss pertaining to A.Y 2008-09 - Held that:- On this aspect, we find no merit in the grievance of the Revenue in as much as the CIT(A) has directed the Assessing Officer to verify the fact-situation and allow the claim as per law. Quite clearly, the Assessing Officer had denied the claim for carry forward of the business loss without giving any cogent reasons. The order of the CIT(A) on this aspect is also affirmed.
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2015 (8) TMI 1451
Additions u/s 43B - Employee’s Contribution to Provident Fund - deposit of the contribution beyond the due date of filing of return - Held that:- the issues stand covered by the judgment of the jurisdictional Court in C.I.T. vs. Vijay Shree [2011 (4) TMI 63 - ITAT KOLKATA] and [2011 (9) TMI 30 - CALCUTTA HIGH COURT] - Decided in favor of assessee.
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2015 (8) TMI 1450
Deduction u/s 80P(2)(a)(i) - rejection of claim on the ground that the assessee was a cooperative bank, and hence, not entitled to claim deduction by virtue of sec. 80P(4) - Held that:- AO could not point out any specific error in the above quoted orders of the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) has allowed the claim of deduction under sec. 80P(2)(a)(i) of the Act by following the decisions in the case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha (2015 (1) TMI 821 - KARNATAKA HIGH COURT) and in the case of General Insurance Employees Cooperative Credit Society Ltd. (2014 (6) TMI 912 - KARNATAKA HIGH COURT). No contrary decision could be cited by the Departmental Representative. We, therefore, do not find any good and justifiable reason to interfere with the orders of the Commissioner of Income Tax (Appeals), which are hereby confirmed and the ground of appeal of the Revenue is dismissed.
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2015 (8) TMI 1448
TPA - selection of comparable - Held that:- The assessee is a resident private limited company as engaged in the business of providing software development services to its AEs thus companies functionally thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Foreign exchange gain on realization of consideration for rendering software development services is to be regarded as part of operating revenues. Assessing Officer/TPO are directed to verify this aspect as to whether the foreign exchange gain is on account of realisation of consideration and if that is so, to then consider the same as operating in nature.
Working Capital Adjustment - Held that:- We deem it fit to remand the matter back to the file of the TPO to examine and verify the assessee's claim that the amount of receivables and payables have been taken incorrectly in computing the working capital adjustment and to recompute the working capital adjustment accordingly, if so required, after affording the assessee adequate opportunity of being heard and to file details/submissions required in this regard.
Risk Adjustment - Held that:- the assessee has raised the issue of grant of market risk adjustment. However, during the proceedings before us, it was admitted that the assessee apart from putting forth this claim has not quantified the adjustment to be granted in this regard. In view of this, this plea of the assessee is hypothetical in nature and not maintainable and is accordingly dismissed.
Grant of benefit of deduction of 5% in computing the ALP of the Transactions - Held that:- The new section 92C(2A) of the Act mandates that if the AM price falls beyond +/- 5% from the price charged in the international transactions, then the assessee does not have any option as referred to in Section 92C(2) of the Act. Thus, as per the above amendment, it is clear that +/- 5% variation is allowed to justify the price charged in the international transactions and not for adjustment purposes. The aforesaid amendment has settled the issue and accordingly the 5% benefit is not available to the assessee. Consequently, Ground No.2 raised by the assessee is dismissed.
Charging of Interest u/s.234B - Held that:- The charging of interest The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld in the case of CIT v. Anjum H. Ghaswala [2001 (10) TMI 4 - SUPREME COURT] and we, therefore, uphold the action of the Assessing Officer in charging the said interest. The Assessing Officer is, however, directed to recompute the interest chargeable u/s. 234B and 234C of the Act, if any, while giving effect to this order.
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2015 (8) TMI 1447
Computing deduction u/s. 10A - Exclusion of internet charges and travelling expenses incurred in foreign currency from export turnover without reducing the same from the total turnover - Held that:- CIT(Appeals) correctly following the decision of the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd.[2011 (8) TMI 782 - KARNATAKA HIGH COURT ] held that whatever is excluded from the export turnover, has also to be excluded from the total turnover.
TPA - ALP determination - comparable selection - Held that:- Exclusion of companies unmatched with assessee's transaction of rendering software development services.
Advertisement expenses apportioned - provision of marketing support services by the Bangalore Non-STP unit to NVIDIA Singapore - Held that:- Non-STP unit of the assessee rendered services exclusively to NVIDIA Singapore and none of the other STP-units had the benefit of those services. This aspect has not been considered by the CIT(A) at all. On the other hand, the CIT(A) as well as the AO proceeded on the assumption that non-STP unit as well as STP units in India would benefit from the advertisement done for NVIDIA Singapore. It is seen that NVIDIA Singapore has acknowledged that software products and advertisement is attributable to those products. Non-STP units of assessee are engaged in software development activities and do not engage in sales or marketing activities or software product. In these circumstances, we find merit in the contention of assessee that advertisement expenses apportioned by the AO and confirmed by the CIT(A) was without any basis. The said addition is accordingly directed to be deleted.
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2015 (8) TMI 1446
Deduction u/s 80IA denied - the assessee had acted only as a contractor - Held that:- According to us the Revenue Department is expected to examine few things to ascertain whether the assessee is a developer or a contractor such as the utilization of funds, development of project, the nature of venture, the substance of the transaction etc.
The provisions of section 80IA also require a finding to the effect that whether the assessee as an enterprise carried out the business of developing a project or the assessee has developed, maintain and also operating the project. The provisions are applicable in respect of the project which is related to development of infrastructure facility. One of the primary requirement is that an assessee is entitled for the claim of deduction if he has developed the project.
The assessee is expected to shoulder out the investment and also subjected to technical risk in respect of the work executed. Such a developer is liable for liquidated damages if failed to fulfill the obligation laid down in the agreement. To keep brevity in mind it is not advisable to discuss all the parameters in this regard but to leave it to the Revenue authorities to examine the issue in its entirety so as to arrive at the correct judicial decision. It is also worth to mention that the guidelines enumerated in the case of ABG Heavy Industries Ltd. (2010 (2) TMI 108 - BOMBAY HIGH COURT) are required to be followed while deciding this issue.
Revision u/s 263 - this is not the case of the assessee that on one hand the Assessing Officer has rightly granted the deduction under section 80IA(4) of I.T. Act and on the other hand there was a change of opinion of learned Commissioner while passing the order under section 263 of I.T. Act. Therefore, after recording these reasons, we are of the conscientious view that the issue should be re-examined by the Assessing Officer - Decided in favour of assessee for statistical purposes
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2015 (8) TMI 1445
Addition on account of interest payment on borrowed funds - Allowable busniss expenditure - deduction of the interest paid on borrowings u/s 57(iii) - Held that:- CIT(A) had passed the order in line with the settled principle of law that the Assessing Officer cannot step into shoes of the assessee and decide as to how which of the expenditure can be incurred. Once the expenditure has been incurred wholly or exclusively for the business purposes, no disallowance can be made. The ld. Departmental Representative had not filed any material contradicting the findings reached by the CIT(A). Further, we notice that no such additions were made either in the immediate preceding year or succeeding year by the Assessing Officer. In these circumstances, we uphold the order of CIT(A) and dismiss the appeal filed by the Revenue.
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2015 (8) TMI 1444
Channel payment fees paid to cable TV operators/DTH providers - addition u/s.40(a)(ia) - whether TDS to be deducted u/s 194C or u/s 194J - Held that:- The issue of channel payment fees paid to cable TV operators/DTH providers has been decided by the Tribunal in the case of NGC Networks(I)(P) Ltd.[2014 (11) TMI 484 - ITAT MUMBAI] amount not taxable in India in the hands of SSA either u/s.9(1)(vi) or 9(1)(vii) as per the legal position prevalent at the relevant time and the assessee therefore was not liable to deduct tax at source from the said amount paid to M/s. SSA and there was no question of disallowing the said amount by invoking the provisions of sec.40(a)(i) - law can not compel a person to do something which is impossible to perform.
It is not the case of the Revenue that the issue of applicability of section 194J was already considered in the case of the Assessee. Therefore, when the Assessee has deducted the tax as per provisions of Section 194C which is a bonafide decision of assessee keeping in view the nature of payments and facts of the case, then, the Assessee was not supposed to foresee the subsequent retrospective amendment in the statute to be held liable to tax deduction at source under the provisions of section 194J - Decided in favor of assessee.
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2015 (8) TMI 1443
Exemption from Union Taxation - Entitlement for registration u/s 12A - status of ‘ADDA’ being constituted under section 11 of the West Bengal Town and Country (Planning & Development) Act, 1979, could “either be a Local Authority or a Government Department or Agency” or it was not a ‘corporate body’ - Held that:- We find that the Assessing Officer has relied on the decision of the Hon’ble Supreme Court in the case of Adityapur Industrial Area Development Authority –vs.- Union of India [2006 (5) TMI 61 - SUPREME COURT] wherein held that the assessee could not claim exemption from Union Taxation under Article 289(1) of the Constitution of India nor it was possible to hold that the income derived by the assessee was the income of the State Government
Thus observing that the circumstances were similar in the present cases, but he has not considered the above noted relevant statutory requirement s applicable in the case of assessee. We, therefore, set aside the order of ld. CIT(Appeals) for all the three years and restore the matter back to the file of Assessing Officer for de novo consideration of the entire issues - Decided in favour of assessee for statistical purposes.
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2015 (8) TMI 1442
Revision u/s 263 - scope of revision - fresh proceedings under section 143(3) - Held that:- When the order passed by the AO under section 143(3) is set aside by the Ld. CIT by exercising the power under section 263 with a direction to the AO to re-do the assessment afresh, the scope of such set aside proceedings is limited to the issues directed to be considered by the Ld. CIT in his order under section 263.
AO thus is required to consider in the fresh proceedings under section 143(3) read with section 263 only such issues over and above the issues already considered in the original assessment which continues to subsist to the extent of income as determined by the AO in the original assessment.
Since the appeal filed by the assessee before the Ld. CIT(A) against the order originally passed by the AO under section 143(3) was in respect of its grievance as arising from the income determined in the said assessment, the same, in our opinion, had not become infructuous as a result of order passed by the CIT u/d 263 and the Ld. CIT(A) ought to have disposed of the same on merit. - set aside the impugned order of the Ld. CIT(A) and remit the matter back to him with a direction to dispose of the appeal of the assessee filed against the order of the AO dated 31.12.2010 passed under section 143(3) on merit after giving the assessee a proper and sufficient opportunity of being heard - Appeal of the assessee is treated as allowed.
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2015 (8) TMI 1441
Revision u/s 263 - unexplained deposits of the assessee u/s 69 - Held that:- Assessee has not filed any evidence to the fact that the assessee was carrying on retail business in steel. When asked by the Bench, he expressed his inability to do so. In absence of the same, source of deposits in the bank account could not be established by the assessee to be out of carrying on retail business in steel by bringing any material on record, the Principal Commissioner of Income Tax was fully justified in treating the entire deposits made in cash as unexplained deposits of the assessee under sec. 69
It is not the case of the Authorized Representative of the assessee that while making the deposits in the bank, the assessee had utilized the withdrawals made on earlier occasions. Therefore, we find no good reason to interfere with the order of the Principal Commissioner of Income Tax - Decided against assessee.
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2015 (8) TMI 1440
Levy of Penalty u/s 271(1)(c) - non specification of charge - Held that:- The assessee has made an agreement for no penalty, and at the same time given an explanation for the same which is duly substantiated by the Report of the Inspector of the Department itself. Therefore even by the admission / standards of the CIT(A) also, it is not a fit case for levy of penalty.
In the instant case there is no material on record to show that the assessee had concealed the income or had furnished inaccurate particulars of his income. Decision in the case of Careers Education & Infotech (P) Ltd.'s case (2011 (3) TMI 602 - PUNJAB AND HARYANA HIGH COURT)is squarely applicable to the facts of present case. Considering the entire facts and circumstances of the present case, hold that it is not a fit case for levy of penalty u/s 271(1)(c) - Decided in favour of assessee
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2015 (8) TMI 1438
Validity of re-opening of assessment u/s 147 - eligible reasons to believe - Held that:- As pointed out rightly by the ITAT in the impugned order, there was no application of mind by the AO when he issued notice under Section 148 - AO was also not aware that the Assessee had filed a return for the AY in question. No satisfaction was also been recorded by the ACIT. In the circumstances, the conclusion of the ITAT suffers from no legal infirmity. No substantial question of law arises.
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2015 (8) TMI 1437
TPA - exclusion of comparables - functional similarity - Held that:- Assessee a company engaged in the business of providing software design and maintenance service and marketing support had operating revenues, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Exclusion of telecommunication and other expenses incurred in foreign currency from total turnover also while computing deduction u/s. 10A - Held that:- The issue regarding parity between total turnover and export turnover stands already resolved by the Hon'ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT ]
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2015 (8) TMI 1436
Reopening of assessment - assessee had filed the return of income in the ACIT, Kurnool and notice reveals that it has been issued by the DDIT (Exemptions), Hyderabad - Held that:- As decided in assessee's own case once the jurisdiction is vested with the Kurnool Range, there cannot be framing of assessment or issue of notice u/s. 148 or framing assessment by any other authority than the Kurnool Range. The argument made before us by the Department is devoid of merit. There cannot be one authority for levying of penalty on assessment at Kurnool and another authority for framing assessment. Being so, issue of notice u/s. 148 by the Hyderabad Range of the Department is not correct. As the issue of notice itself is bad in law by the Hyderabad Range of the Department, consequent framing of assessment is bad in law. Being so, we quash the reopening of assessment for all the above four assessment years. - Decided in favour of assessee.
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