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Income Tax - Case Laws
Showing 81 to 100 of 758 Records
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2015 (8) TMI 1431
Disallowance u/s 14A - Held that:- Maximum disallowance in this case cannot exceed the amount of exempt income received by the assessee i.e. ₹ 34,445/-. Hence, restrict the disallowance to ₹ 34,445/- and allow the balance in favour of the assessee. See CIT Versus Holcim India P. Ltd [2014 (9) TMI 434 - DELHI HIGH COURT]
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2015 (8) TMI 1428
Revision u/s 263 - Claim of exemption u/s 10A - Held that:- Admittedly the facts remain that the AO has passed the original assessment order u/s 143(3) on 30.11.2012 allowing the claim of exemption u/s 10A of the Act. The circular of CBDT is of 16.7.2013. The decision of the jurisdiction High Court of Karnataka in the case of Yokogawa India Ltd. [2011 (8) TMI 845 - Karnataka High Court].
Following the decision of the jurisdiction High Court cannot be held to make the order of assessment erroneous or prejudicial to the interest of the Revenue. Further, on identical grounds the co-ordinate bench of this Tribunal in the case of M/s. Safran Aerospace India Pvt. Ltd. [2015 (1) TMI 773 - ITAT BANGALORE] has also held the issue in favour of the Assessee upholding the principles applied by the AO in the course of the original assessment in his order u/s 143(3) dt. 30.11.2012. Therefore, the order passed by the AO is by following one of the two possible views and same cannot be held to be erroneous which calls for invocation of the powers of the Principal Commissioner of Income Tax u/s 263 of the Act. In the circumstances, the order passed u/s 263 by the Principal Commissioner of Income Tax stands set aside.
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2015 (8) TMI 1426
Unexplained expenditure u/s.69C - AO made addition in the hands of the assessee by observing that assessee has purchased the land as per MOU dated 18-8-2007 during the year under consideration where Part-B payment is unaccounted payments - Held that:- As carefully gone through the order of the Tribunal and found that exactly similar addition was made in case of other group companies, which has been deleted by the Tribunal. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal, we do not find any infirmity in the order of the CIT(A) for deleting the addition made u/s.69C of the IT Act. Accordingly, we dismiss the appeal of the revenue for A.Y.2008-09. - Decided in favour of assessee.
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2015 (8) TMI 1424
Bogus transactions - loan was converted into OCPS - Held that:- The court finds that the Income-tax Appellate Tribunal has given cogent reasons why in the facts and circumstances the transaction in question cannot be held to be bogus as Tribunal pointed out that with no significant event having taken place, except redemption of the 2 per cent. RCPS, there was no basis for the Assessing Officer to have concluded that the entire transaction to be bogus. The Income-tax Appellate Tribunal further noted that the Assessing Officer called for information from JPL under section 133(6) of the Act but was unable to find any material to conclude that the transaction between the respondent-assessee and the JPL was bogus. - Decided against revenue.
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2015 (8) TMI 1414
Disallowance of payment made made to M/s. Alishan Estates (P) Ltd - as per AO transaction is a sham transaction - AO treated the said amount as an expenditure by holding that the assessee should have deducted the tax at source - Held that:- As regards the sham transaction, at the outset, we do not support the order of the AO for the reasons that the transactions were made by a valid written contract/agreement on various terms and conditions with the two said parties, which are essential for such a joint venture project. This has not been denied by the AO. The AO has not pointed out any defect in the said agreement entered between the assessee and Alishan Estates Pvt. Ltd.
In lieu of the said agreement dtd. 10/07/2005 M/s. Alishan Estates Pvt. Ltd was to procure pre-specified land for purchase, to make all the necessary legal arrangements for such land and to find out suitable buyer for the said land and profit was to be shared between the assessee and M/s. Alishan Estates P.Ltd in ratio 25 : 75. The profit includes loss as well. Had there been a loss whether the AO would have treated the said transaction as a sham transaction, obviously the answer is No.
Since joint venture has earned a profit and same was shared between the said two parties. Therefore, we are of the view that the transaction is completely in lieu of joint venture agreement. The AO is not justified in treating the said payment made by the assessee to the joint venture partner, M/s. Alishan as an expenditure and no TDS is required to be deducted on the profit so shared between the said two joint venture partners. In the circumstances and facts of the present case the addition so made by the AO is without any basis and is purely on surmises and conjectures. - Decided against revenue
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2015 (8) TMI 1409
Entitlement to depreciation to assessee trust - Computation of income u/s 11(1)(a) - entire cost of the asset was deducted while computing the amount applied towards the object of the trust - Held that:- Charitable or religious trust registered under section12A can claim benefit under section 11 in the form of application of funds as well as depreciation under section 32 in respect of the property held under the trust. See A. P. Olympic Association v. Asst. DIT [2014 (2) TMI 988 - ITAT HYDERABAD] - Decided in favour of assessee
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2015 (8) TMI 1399
Depreciation - World Trade Centre and the World Trade Tower buildings - Held that:- Claim being allowed to the Assessee in respect of the World Trade Centre and the World Trade Tower buildings under Section 32 - the question stands answered against the Revenue by an order passed in CIT v. Bharat Hotels Ltd. (2015 (7) TMI 875 - DELHI HIGH COURT ).
Addition u/s 14A - Held that:- The ITAT has rightly followed the decision of this Court in CIT v. Holcim India Pvt. Ltd. (2014 (9) TMI 434 - DELHI HIGH COURT) and held that since no exempt dividend income was earned the question of invoking Section 14 A of the Act read with Rule 8D did not arise.
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2015 (8) TMI 1398
TDS u/s 195 - TDS liability - nature of expenditure - Held that:- The obligation to deduct tax under Section 195 can only arise if the sum paid is chargeable to tax under the Act. Reimbursement of expenses can never be subjected to tax as income.
This is clear from the plain reading of the Section 195 of the Act. Besides it is also settled by the decision of this Court in CIT v. Siemens Aktiongesellschaft [2008 (11) TMI 74 - BOMBAY HIGH COURT]. So far as Mr.Pinto's submission on behalf of the Revenue is concerned that the reimbursement of expenses is of estimated expenses. We find that the impugned order of the Tribunal on facts has held that the payment is only reimbursement of expenses. This finding of fact has not been shown to be perverse and / or arbitrary.
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2015 (8) TMI 1394
The following question is framed for determination:
“Whether the ITAT has erred in deleting the disallowances of ₹ 1143,32,82,361 made by Assessing Officer under section 40(a)(i) for non deduction of TDS on business profits?”
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2015 (8) TMI 1393
Validity of proceedings initiated u/s 158BD - Search and seizure operations carried out u/s 132 - period of limitation - delay of about 20 months in issuing notice - Held that:- The assessment under section 158BC of the Act of the searched persons was completed on 24.12.2003 and thereafter, satisfaction note was received by the Assessing Officer in-charge of the assessee on 06.04.2004. In view of the proposition laid down by the Hon’ble Supreme Court in CIT vs. Calcutta Knitwears (2014 (4) TMI 33 - SUPREME COURT) we hold that the Assessing Officer in-charge of the searched persons can record satisfaction note after the completion of assessment in the hands of the searched persons and forward the same to the Assessing Officer, who is in-charge of the other person, as provided under section 158BD of the Act.
A notice which was issued and served upon the assessee after a considerable delay of about 20 months i.e. from the date of receipt of satisfaction note to the date of issue of notice under section 158BD of the Act, cannot be brushed aside. In view of the said notice under section 158BD of the Act being not issued within reasonable time, though there is no time limit provided under the Act to issue the said notice under section 158BD of the Act, the said notice issued under section 158BD of the Act is invalid notice. Following the ratio laid down by the Hon’ble Delhi High Court in CIT Vs. Bharat Bhushan Jain (2015 (1) TMI 705 - DELHI HIGH COURT ) in line with the proposition laid down by the Hon’ble Supreme Court in CIT vs. Calcutta Knitwears (supra), we hold that the notice issued under section 158BD of the Act in the present case was unduly delayed and the same is held invalid and void. - Decided in favour of assessee.
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2015 (8) TMI 1391
Transfer of cases from one Standing Counsel of the Revenue to the other - Held that:- The court had in its order already expressed its concern about the manner in which the Revenue’s cases has been handled. The Court had, in fact, called the concerned Additional CIT, Mr. Vivek Kumar and conveyed to him its concern. Mr. Vivek Kumar had assured the Court that there would be a proper coordination and it would be ensured that the Revenue is effectively represented in its cases before the Court. It is disappointing to note that the Revenue has been unable to make good the above.
The Court is constrained, therefore, to require the Secretary Revenue, Ministry of Finance, Government of India to be present in person in the Court on 20th August, 2015. We request him to submit to the Court in writing the steps that he proposes to take to put in place a mechanism for the seamless and immediate transfer of cases from one Standing Counsel of the Revenue to the other in any contingency, so that no unnecessary adjournments are sought by the Standing Counsel for the Revenue, particularly on the grounds of lack of formal order of entrustment of the case, want of instructions or papers and so on and so forth. We expect that the matter will be attended to with the seriousness and urgency that it deserves.
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2015 (8) TMI 1390
Delay in filing and re-filing of the appeals - Held that:- There should be a system devised for the Deputy CIT, under supervision of the Additional CIT to monitor on a constant (if not daily) basis the adherence to time lines in various matters entrusted to standing counsel. If there is delay beyond the acceptable limit, for any reason whatsoever, it should be possible for the case to be re-assigned to another standing counsel with specific instructions to complete the further steps within the stipulated time frame. The defects pointed out by the Court are accessible on the net, and the Deputy and Additional CIT will keep themselves apprised of these on a regular basis case-wise to facilitate effective monitoring.
The Court would like the ITD to ensure that in none of the matters there is a situation where (a) there is no one appearing for the ITD (b) even if they are, they have neither instructions nor papers. The Deputy CIT incharge of the Judicial Cell of the ITD in the High Court should coordinate with the Court Masters of the Court and provide a list of the names of standing counsel who will be appearing in the appeals should in the final hearing list. It will the responsibility of the Deputy CIT to ensure that the standing counsel who have been assigned the cases have the complete records. The Deputy CIT can obtain from the Court Masters of the Court, well in advance of the likely dates of hearing of the cases, soft copies of the complete case records available in the Court server, upon payment of the usual charges. It should not be an excuse for standing counsel of the ITD to take adjournments on the ground that they have no instructions or that they do not have the case papers.
The Court would like to be shown the supplementary SOP on the next date of hearing.
The Registry is directed to ensure that all the defects in the appeals/applications/replies/etc. filed are pointed out in the first instance. The defects pointed out after re-filing should pertain to or relate to the defects already pointed out in the first instance. They should not be fresh defects.
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2015 (8) TMI 1388
Penalty proceedings u/s 271AAA - assessee has not specified the manner and also could not substantiate the manner in which the undisclosed income was derived - Held that:- It is an undisputed fact that the assessee has disclosed the amount of ₹ 3,85,00,000/- under the head “business income”, i.e. income derived from business of real estate and other business activities, which has been assessed as such by the Assessing Officer. If that is so, then it can be taken as implied substantiation of the manner of deriving of the income, which stands accepted by the Assessing Officer in the assessment proceedings.
Assessing Officer cannot turn around and say that the manner of deriving of income has not been substantiated. Regarding payment of taxed on such income there is no dispute. if that is so, then it can be taken as implied specification of the manner of earning of income and also the substantiation of the same. This offer of business income has been accepted by the Assessing Officer also. At the stage of recording of statement u/s 132(4) and assessment stage, nowhere the revenue officials have held that it is not from business income or not derived from business. Hence, it cannot be held that the assessee is liable for penalty u/s 271AAA on the facts of the present case - Decided in favour of assessee.
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2015 (8) TMI 1386
Transfer pricing adjustment on account of advertisement, marketing and promotion expenses - Held that:- If the expenses which are included by the TPO as part of AMP are excluded from the AMP expenses being the expenses directly linked with the sales and marketing as well as trade discounts allowed by the assessee as incentive to the distributors than, the AMP to sales ratio of the assessee comes to 0.74%. There is no ambiguity, a it is manifest from the items of expenditure included by the TPO in the category of AMP expenses that the same are directly related with the sales, marketing and other sales promotion expenses in the shape of trade discounts allowed to the distributors. Therefore, these expenses cannot be included as part of the AMP expenses for the purpose of determining the arm’s length price. The TPO has not disputed the operating margin of the assessee at 6.25% in comparison to the margin of the comparables at =0.13%. Therefore, there is enough scope of accommodating the AMP to sales ratio at 0.74% if the said transaction is clubbed with the other international transaction of the assessee. Even after giving effect to the AMP expenditure of the assessee the margins of the assessee would still the higher than the margin of the comparable which is =0.13%. Thus, in the facts and circumstances of the case, the inclusion of the sales related expenditure in the category of AMP is not justified as held in the light of the judgment of the Hon’ble Delhi High Court in the case of M/s Sony Ericsson Mobile Communication Ltd (2015 (3) TMI 580 - DELHI HIGH COURT ). Accordingly, we delete the addition made by the TPO on account of AMP adjustment.
Adjustment on account of ‘Royalty” payment - Held that:- TPO has not undertaken any exercise as per the provisions of transfer price rules and regulation to determine the arm’s length price of royalty payment by the assessee to the AE. The assessee has also not furnished a separate comparable analysis to establish that the payment of royalty is at arm’s length. We find that the issue was not raised by the assessee before the DRP because the TPO did not make any adjustment on account of royalty payment on the ground that the same has got subsumed in the AMP adjustment. Thus, it is clear that neither the TPO has undertaken proper process of determining the arm’s length price nor this issue was raised before the DRP. Therefore, this issue requires a proper examination and verification as the assessee has not submitted any separate transfer pricing analysis on this issue except TNM method analysis in respect of the purchase and sale transaction with AE. Accordingly, in facts and circumstances of the case, we set aside the issue to the record of the TPO/AO for adjudication of the issue afresh in the light of the jurisdictional High Court in the case of CA Computers Associates Pvt. Ltd (2012 (7) TMI 560 - BOMBAY HIGH COURT ).
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2015 (8) TMI 1385
Penalty u/s 271AAA - seized or requisitioned assets against existing liability - AO was of the view that since the assessee has not paid tax on the income declared by the assessee himself, the benefit of exclusion under section 271AAA(2)(i) is not available - Held that: - Explanation 2 to section 132B, as Finance Act, 2013 clearly states is effective from 1st June, 2013. When the law so specifically states, there is no scope of holding that it is retrospective in effect - This provision restricts the scope of adjustment of seized cash, and, therefore, is to be treated as advance to the assessee - appeal dismissed - decided against Revenue.
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2015 (8) TMI 1384
Cancellation of penalty under section 271(1)(c) - capital gain addition - Held that:- The facts of the case of assessee are admittedly identical as have been decided in the case of Shri C.S. Atwal Vs CIT, Ludhiana [2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT] issue of exigibility to capital gain in favour of the assessee and against the revenue. In the case of the present assessee also, the assessee has, of his own filed another return of income disclosing all the material facts relating to transfer of plot and has disclosed capital gains on the amount which was actually received during the year under consideration. The dispute was left regarding transfer of plot and the amount which was not yet received through the agreement to sell. The ld. CIT(Appeals), therefore, on proper appreciation of the facts and material on record, correctly held that it is not a case of concealment of income or furnishing inaccurate particulars of income. - Decided in favour of assessee.
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2015 (8) TMI 1379
Unexplained jewelry - excess jewellery found in a search - Held that:- Central Board of Direct Taxes Circular No. 1916, dated May 11, 1994, lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by the family members of an assessee belonging to an ordinary Hindu household.
Assessee can always claim exclusion from undisclosed jewellery the quantum of jewellery mentioned in the said circular. However, the circular allows only 100 gms per male member, 250 gms for unmarried lady and 500 gms for married lady in the family. The list mentioned by the assessee claims 200 gms each for himself and his son and 250 gms for the HUF. As per the circular what could be given credit for a male member is only 100 gms. No credit could be given for HUF, for the simple reason that an HUF cannot wear any jewellery by itself. In our opinion, the maximum relief that could be given to the assessee in addition to what was given by the AO was 950 gms, viz., 100 gms for assessee, 100 gms for assessee’s son, 250 gms for assessee’s daughter and 500 gms for assessee’s daughter-in-law. Contention of the Ld. AR that status of the assessee had to be considered and higher relief should be given cannot be accepted for the simple reason that nothing was produced to show any special social status enjoyed by the assessee, except for stating that assessee belonged to a marwari business family.
Vis-a-vis silver, circular does not mention anything about holding of silver or diamonds. Therefore, we are of the opinion that the maximum relief that could be given to the assessee is only on the value of gold jewelelry to the extent of holding mentioned at para 8 above. Addition made for unexplained silver found at the time of search was in our opinion was justified. AO is directed to give relief to the assessee for 950 gms of gold jewellery and rework the addition accordingly. Appeal of the assessee is treated as partly allowed.
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2015 (8) TMI 1376
Valuation of closing stock of low grade iron ore - Held that:- Commissioner of Income Tax (Appeals) has deleted the addition made by the Assessing Officer by following the order of this Bench of the Tribunal in assessee’s own case in assessment year 2004-05. Since the assessee has consistently following the method of accounting and no such addition has been made in earlier years, even though the assessee is in the business for so many years, we are not persuaded by the contention that the assessee would get benefit of opening stock in the following year. In fact the correct procedure which could have been followed by the A.O. is to consider the amount of opening stock of low grade iron ore also while bringing to tax the entire stock available, which might have been produced over a period of many years, in the closing stock of this year which certainly distort the profits of this year. Since we are not in agreement with the addition of closing stock of unrealisable low grade iron ore, we have no hesitation in deleting the addition so made by the A.O. Accordingly the grounds raised in the cross objection are considered allowed A,O. is directed to delete the addition. - Decided in favour of assessee.
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2015 (8) TMI 1375
Jurisdiction of CIT(A) Noida to pass the order and deletion of demand created by the Addl.CIT(TDS) Ghaziabad u/s 201(1) and 201(1A)- failure of the assessee to deduct tax at source from the interest paid by it to New Okhla Industrial Development Authority (NOIDA).
Held that:- In Addl. CIT(TDS) Ghaziabad vs. Canara Bank, Noida [2015 (8) TMI 415 - ITAT DELHI ] held that between the period 5.6.2014 to 15.11.2014, the jurisdiction of the first appellate authority to pass the orders against the orders of the Addl.CIT (TDS), Ghaziabad rested with the CIT(A), Ghaziabad and for the periods prior to 5.6.2014 and after 15.11.2014, it vested in CIT(A), Noida. It has, therefore, been held that only the CIT(A), Noida had rightful jurisdiction over the appeal emanating from the order passed by the Addl. CIT(TDS), Ghaziabad.
On merits, it has been held that the payment of interest by the banks to NOIDA does not require any tax withholding as the same is covered u/s 194A(3)(iii)(f). Resultantly, the order passed by the Addl CIT(TDS) u/s 201(1) and 201(1A) read with section 194A has been set aside. - Decided in favour of assessee
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2015 (8) TMI 1374
Addition on unexplained investment in Jewellery and Silver - Search & seizure action - Held that:- We are of the opinion that the maximum relief that could be given to the assessee is only on the value of gold jewelelry to the extent as per the circular No. 1916, dated May 11, 1994, lays down guidelines for seizure of jewellery and ornaments in the course of search what could be given credit for a male member is only 100 gms. No credit could be given for HUF, for the simple reason that an HUF cannot wear any jewellery by itself. In our opinion, the maximum relief that could be given to the assessee in addition to what was given by the AO was 950 gms, viz., 100 gms for assessee, 100 gms for assessee’s son, 250 gms for assessee’s daughter and 500 gms for assessee’s daughter-in-law. Addition made for unexplained silver found at the time of search was in our opinion was justified. AO is directed to give relief to the assessee for 950 gms of gold jewellery and rework the addition accordingly. Appeal of the assessee is treated as partly allowed.
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