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Income Tax - Case Laws
Showing 41 to 60 of 814 Records
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2015 (9) TMI 1681
TP Adjustment - interest calculated @ 18% on the delayed credit period on the import made by AEs beyond 180 days - HELD THAT:- Assessee has undertaken 33 transaction of exports for the value aggregating ₹ 18.45 crores, out of which in 25 transactions, the payments was received well before the expiry of credit period of 180 days. For the balance 8 transactions, in 6 transactions the delay was less than 30 days as given in the table incorporated above. If overall credit period of all the 33 transactions is to be analyzed, then it is evident that the average credit period for all the transactions is only 139 days, the working for which has been given at page 5 of the paper book.
For making any adjustment in the arms length price, a comparability analysis is to be carried out with the uncontrolled transactions to benchmark the price or profit in a third party situation.
Here in this case, neither the TPO nor the assessee has given any comparable instance as to whether in such a situation or condition an unrelated party would have charged interest. If in the majority transaction there no delay then for few transactions interest cannot be imputed, unless it is benchmarked with the transactions with some unrelated parties. However, no such comparable instance has been filed or sown before us. 8 transactions where there is a delay beyond the period of 180 days, the interest if at all, should be levied. Then same should be on the basis of LIBOR + 150 points (i.e. 1.5%) - we direct the TPO/AO to apply the interest rate of LIBOR + 1.5% and worked out the adjustment on account of interest for the transactions, which are beyond the period of 180 days. Accordingly, grounds raised by the assessee are partly allowed.
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2015 (9) TMI 1680
Rejection of books of accounts - addition on the basis of net profit of 3% of the gross receipts - survey proceeding u/s. 133A - HELD THAT:- The term net profit as commonly understood means the profit which has been arrived at by netting off income over the expenditure meaning thereby that whatever expenses which were due and were deductible have been deducted from the income of the Assessee before deriving the final figure of profit.
We are of the view that in a situation when once addition has been made on the basis of estimation of net profit, further addition is not called for and for this conclusion we derive support by the decision of CIT vs. Aggarwal Engg. Co. [2006 (7) TMI 188 - PUNJAB AND HARYANA HIGH COURT] wherein the Hon’ble High Court after considering the decision of Allahabad High Court in the case of CIT vs. Banswarilal Banshidhar [1997 (5) TMI 37 - ALLAHABAD HIGH COURT] held that no further addition was called for in respect of purchases and introduction of cash. Before us, Revenue has not placed on contrary binding decision in its support nor has controverted the submissions made by ld. A.R. In view of the aforesaid facts, we are of the view that apart from addition made by A.O by making estimation of net profits, no further addition on account of income declared during the course of survey was called for. Thus this ground of Assessee is allowed.
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2015 (9) TMI 1679
TDS u/ 194C or 194J - payment of carriage fees/payment charges by the assessee - HELD THAT:- We find that the Tribunal in that case relying upon the decision of the Co-Ordinate Bench in the case of ACIT Vs NGC Network (I) (P) Ltd [2014 (11) TMI 484 - ITAT MUMBAI] held that provisions of Sec. 194J are not at all applicable on the impugned payments.
A similar view was taken by the Tribunal in the case of UTV Entertainment Television Ltd [2014 (12) TMI 716 - ITAT MUMBAI] wherein also the Tribunal followed the decision in the case of NGC Network [2014 (11) TMI 484 - ITAT MUMBAI] . In the case of UTV Entertainment Television (supra), the Tribunal at para-7 has held that the impugned payments is covered by the explanation (iv)(b) under the provisions of Sec. 194C of the Act. The objections raised by the Ld. DR in respect of impugned payments being payment for royalty vis-à-vis payment for technical service is also taken care of by the Tribunal in the case of UTV Entertainment (supra) at para-2 of its order.
We are convinced with the findings of the Ld. CIT(A), therefore, no interference is called for.
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2015 (9) TMI 1678
Long term capital gain - Additions made by the AO in the absence of complete satisfactory documentary evidence - HELD THAT:- As decided in KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. [2009 (7) TMI 1251 - ITAT NAGPUR] Assessee has placed on record all the evidences to support the sale transactions including the quotation of the said shares on the date of sale which tallies with the sale price of the assessee. No opportunity to cross-examine the broker was given to the assessee. These authorities have held that no adverse cognizance of the fact that the broker could not be produced or the companies were not found at their addresses can be taken. Thus the above mentioned authorities are squarely applicable to the assessee.
In view of the evidences and authorities placed on record by the assessee, in the absence of any evidence or document brought on record by the assessing officer to negate the contentions raised by the assessee, the transaction of sale of the said shares was genuine and resulted into a long term capital gain of ₹ 13,52,6501- to the assessee. Thus the addition is hereby deleted assessing officer is directed to assess the long term capital gain as declared by the assessee and charge the same to tax @ 10%. Thus this ground of appeal is allowed.
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2015 (9) TMI 1677
Addition of claim u/s. 54EC of REC bond, hutment charges paid and brokerage paid - Whether CIT(A) has erred in law and on facts in admitting the fresh evidences and submission without giving any opportunity to the A.O. being heard on the principles of law and natural justice and thereby violated the provision of Rule 46A of the I.T. Rules - HELD THAT:- Deductions claimed by the assessee are reasonably supported by documentary evidences and just because the AO has some apprehensions, without any supporting material, the disallowances cannot be made. It was not for the AO to consider what ought to have happened in ideal circumstances.
All that he was to see whether there were any inconsistencies in the claim made by the assessee, or whether the claim so made was devoid of supporting evidences. Clearly, that was not the case. There was thus no good reasons to reject the claim of deduction for brokerage and removal of hutments. Learned CIT(A) was thus quite justified in giving the impugned relief. We approve the relief so granted by the ld. CIT(A) and decline to interfere in the matter.
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2015 (9) TMI 1676
Rectification u/s 154 - whether the excess depreciation was correctly disallowed - HELD THAT:- In the present case the alleged “mistake” sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February 2007 and thus for less than 180 days. Thus AO wanted to reappreciate facts on record which have already been considered.
The fact that the assets were put in use in February 2007 is a matter of debate. In the proceedings u/s 147, the assessee had stated that his assets were put to use on 28/08/2006. The assessee had also produced evidence of the same in the form of copy of WIP Plant & Machinery and WIP Electric Installation for the F.Y 2005-06 and 2006-07 showing the date of purchase of these assets, Fixed assets Register for the F.Y 2005-06 and 2006-07 showing the date of purchase,installation and date of put to use of these assets, Certificate of M/s Power Tracks approved Chartered Engineers to prove the date of installation of the new plant and machinery, Certificate of Central Excise Department regarding installation of new plant and machinery all of which showed that the assets were installed by August 2006. It supports case of assessee on merits.
On the other hand the AO has relied upon detail of WIP provided by the assessee during reassessment proceedings which showed that the Capital WIP was capitalized in the month of February 2007 to believe that the assets were put to use for less than 180 days. Clearly this appears to be a matter which requires long drawn process of reasoning. The mere fact that capital WIP was capitalized in the month of February does not settle the issue of claim of depreciation. The assets may have been installed and ready for use earlier as claimed by the assessee.
The point therefore is clearly debatable and requires further investigation which is not permissible u/s 154 of the Income Tax Act.
In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 1971 (8) TMI 3 - SUPREME COURT held “ A decision on a debatable point of law is not a mistake apparent from record.” Hon’ble Punjab & Haryana High Court in case of CIT Vs. Investment Trust of India Ltd. [2009 (8) TMI 9 - PUNJAB AND HARYANA HIGH COURT] held “ the issue relating to disallowance of depreciation on the ground that the asset did not exist in the assessee’s business of hiring out assets, is a debatable one and hence cannot be the subject matter in rectification proceeding.” Therefore the provision of section 154 of the Income Tax Act, 1961 is not attracted to the instant case. - Decided in favour of assessee.
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2015 (9) TMI 1674
TDS u/s 194A - considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A - Whether the State Welfare Board constituted through the notification issued under / in consonance with Section 18(1) of the Building and Other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996 could be considering as a corporation established by a Central / State or Provincial Act, falling within the meaning of notification GO No.SO 3469, dt.22.10.1970 ? - HELD THAT:- The common genus that runs through all the three clauses is that ownership is vested with the Government either by way of holding the shares or by way of financing. If a company whose shares are held by the government is considered as one falling within sub-clause (f) of clause (iii) of section 194A of the Act, there is no reason why a welfare board constituted in accordance with the Central enactment should be excluded from its ambit. Especially so since funds of the Board was nothing but only cess collected by contractors under a statutory edict.
Apart from the above, what we find is that the Board has been established through a notification issued, under section 18 of Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. This Section has been reproduced by us above at para ten above. Clause (2) thereof states that the Board shall be a body corporate. To understand what is a body corporate, when a ready definition is not available in the relevant statutes, the best place to look is the Companies Act, 1956.
A body corporate is considered equivalent to a corporation. The board can thus very well be construed as a corporation. It has been constituted to exercise the powers conferred on a State under the Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. Thus in our opinion the methodology in which and the purpose for which the board has been created, when seen along with the wording of SO No.3469, dt.22.10.1970, would show that it could claim itself to be falling within subclause (f) of clause (iii) to sub-section (3) of Section 194A of the Act. Assessee had a bonafide reason to believe that interest payment on deposits placed by the Board did not warrant deduction of tax at source.
Assessee was justified in considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A of the Act. It had every reason to hold a bonafide belief that it was not liable to deduct tax at source on the interest payments effected by it to the Board. Especially so since Board gave all details to the assessee as to how it was constituted and also explained why the interest paid to it was exempt. In the facts and circumstances of the case, we are therefore of the opinion that assessee could not be deemed to be one in default for not deducting tax at source on interest paid to the board. Accordingly we set aside the orders of the Ld. CIT (A) and that of ITO (TDS) treating the assessee as one in default u/s.201(1) and levying interest u/s.201(1A) of the Act. - Decided in favour of assessee.
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2015 (9) TMI 1671
Income under the head "Management Development Programme and consultancy charges - whether exemption was not admissible because the requirement which is set out in sub-section (4A) of section 11 has not been satisfied? - Admissibility of depreciation - asset purchased by trust - ITAT allowed claim - HELD THAT:- Delay condoned.
Leave granted. The matter to be heard along with Civil Appeal LISSIE MEDICAL INSTITUTIONS VERSUS COMMISSIONER OF INCOME TAX [2013 (7) TMI 1143 - SC ORDER]
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2015 (9) TMI 1670
Disallowance of provision for leave encashment u/s. 43B(f) - HELD THAT:- We do not see any reason to interfere with the order of the Ld. CIT(A). Even though it is a fact that Hon'ble Calcutta High Court in the case of Exide Industries Ltd., Vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] has struck down provisions of Section 43B(f), the Hon'ble Supreme Court stayed that order. Consequently, the provisions of Section 43B(f) are applicable, CIT(A)’s order is in accordance with the principles on the subject. We however, direct the Assessing Officer (AO) to give relief to assessee in case Hon’ble Supreme Court also concurs with the opinion expressed by the Hon'ble Calcutta High Court. The ground for the time being is considered allowed for statistical purposes.
Disallowance of payment of ocean freight - disallowance u/s 40(a)(ia) - Admission of additional evidence - HELD THAT:- Since the additional evidence is required to be examined as both AO and CIT(A) gave contradictory findings, in the interest of justice, we admit the additional evidence and remit the issue to the file of AO to examine the said payments and if the payments are to the agents of foreign shipping liners, we make it clear that amounts cannot be disallowed U/s. 40(a)(ia), as there is no need to make TDS on such payments. This issue was already crystalised in favour of assessee - in case the payments are made to local shipping agents of non-resident ship liners, then AO is directed to exclude the amount as provisions of Section 40(a)(ia) does not apply to the payments. With these directions, ground is considered allowed for statistical purposes.
Disallowance of payment made towards transport charges - disallowance u/s. 40(a)(ia) - whether amounts are covered by the provisions of TDS or not? - HELD THAT:- AO has to establish that the payments made are covered by the provisions of TDS. It was submitted that these are Hamali charges/local auto charges and these payments were below ₹ 20,000/-. In case assessee reimburses said amounts, there is no need for deduction of TDS. Just because single debit entry was made, it cannot be automatically considered that amount is covered by provisions of Section 40(a)(ia). AO is bound to examine the payments made and whether each amount is liable for deduction of tax or not, therefore even in the above three cases, AO has to establish that the amounts paid are required to be covered under the provisions of TDS. Therefore, we restore the examination of the amounts to the file of AO to examine whether the said reimbursement made by the assessee are covered by the provisions of TDS so as to attract disallowance u/s. 40(a)(ia). Appeal allowed for statistical purposes.
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2015 (9) TMI 1669
TP Adjustment - international transaction with the Associated Enterprise (AE) on software development services - inclusion of certain comparable companies by the TPO to benchmark the profit margin of the assessee on such transactions - HELD THAT:- The assessee company is a subsidiary of Somero Enterprises Inc Mauritius, which in turn is a subsidiary of Dassault Systems France which is premier global software developer and product like Cycle Management Solutions. It is the holding company of Delmia Corporation, USA. The assessee was established as 100% export oriented Unit registered under STPI. It is mainly engaged in the provision of software developer and other related services primary to its group companies, thus companies functionally dissimilar with that of assessee need to be deselected.
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2015 (9) TMI 1668
Addition of interest expenses and storage charges - HELD THAT:- AO has bifurcated these expenditure to AY 2005-06 and AY 2006-07. So the issue is when can it be said that the liabilities have crystallised. It is not in dispute that the final lifting of the paddy was completed during the relevant AY and the account also got settled then after several correspondences between the assessee and PSWC whereby some waivers were granted to the assessee.
A certificate of receipt towards interest and towards storage charges during FY 2005-06 issued by PWSC has been placed at PB 4.1. The authenticity of this certificate has not been challenged. No doubt as evident from the working of the interest and storage charges, the incurring of the liabilities have been determined with reasonable certainty, but it cannot be said that the actuals have been quantified correctly as extension of interest as well as storage waivers have been given by the PSWC. In other words, it can be safely said that the liability got crystallised during AY 2006-07 when the dues have been squared up. Thus, as find the contention of the assessee as put forth deserves to be accepted.
Addition of interest expenses - HELD THAT:- We do not find any merit in this ground of appeal of the revenue. The assessee was to recover the amount from sister concern on account of sales made to this party which has no connection whatsoever with the interest and storage paid to PSWC for lifting of the paddy. Since for lifting of the paddy, assessee used storage facility of PSWC, therefore, amount was spent for the purpose of business only. Further, assessee has not claimed any interest expenditure in assessment year under appeal. Therefore, addition made by the Assessing Officer was wholly unjustified. CIT(Appeals), on proper appreciation of the facts and material on record correctly deleted the addition and this ground of appeal of the revenue is accordingly, dismissed.
Addition on account of valuation of closing stock - HELD THAT:- It is clear that assessee has been able to prove reduction in the valuation of the closing stock because these commodities get deteriorated and explanation of the assessee is supported by material on record, therefore, authorities below were not justified in making and confirming the addition on account of undervaluation of closing stock. We, therefore, set aside the orders of the authorities below and delete the addition
Addition u/s 68 as unexplained credit - HELD THAT:- Assessee has been able to prove creditworthiness of the creditor and all these evidences on record also prove that assessee entered into genuine loan transaction with the creditor. Therefore, the initial burden lay upon the assessee to prove identity/existence of the creditor, its creditworthiness and genuineness of the transaction have been discharged by the assessee. AO has, however, not brought any evidence on record to prove that loan was not genuine in the matter. Therefore, there was no justification for the authorities below to make addition against the assessee under section 68
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2015 (9) TMI 1667
Non perusal of appeal - various adjournment seeked - HELD THAT:- Record shows that on each of the dates mentioned above adjournment has been moved coupled by the fact that the defect pointed out by the Registry requiring the assessee to carry out necessary action to ensure that the Tribunal fee is deposited under the correct head as indicated by the notice dated 22.08.2013 till date has not been acted upon and remain unaddressed leads to the conclusion that the assessee is not serious in pursuing the appeal filed. The appeal is dismissed in limine.
We add that in case the assessee is serious in pursuing the appeal filed then it would be at liberty to pray for a recall of this order by moving an appropriate petition and also by taking appropriate action to correct the defects pointed out. The Co-ordinate Bench considering the petition if so moved, if so satisfied with the explanation and the actions of curing the defects may recall this order. The said order was pronounced in the open Court in the presence of the parties.
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2015 (9) TMI 1664
Disallowance u/s 14A - mandation of “satisfaction” having regard to the accounts of the assessee about the claim of the assessee - HELD THAT:- For making disallowance u/s 14A, the condition precedent is that the conditions laid down in sub-section (2) and sub-section (3) of section 14A has to be mandatorily fulfilled. If such conditions are not satisfied, then no disallowance u/s 14A can be triggered. Here in this case, not only from the accounts of the assessee but also looking to the nature of expenditure incurred and nature of investments standing in the Balance sheet, it cannot be held that any disallowance u/s 14A is called for.
Nowhere the AO has given his “satisfaction” having regard to the accounts of the assessee about the claim of the assessee, that no expenditure has been incurred, which can be said to be attributable for making investment capable of earring exempt income or has yielded the exempt income is false or incorrect. Accordingly, on these facts we hold that no disallowance u/s 14A is called for
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2015 (9) TMI 1663
TDS liability on contribution made by the appellant to the concessionaires towards the project u/s 194C - demand created u/s 201 /201(1A) - Payee has already paid tax on the income on which there was a short deduction of tax at source - HELD THAT:- In the instant case the Concessionaire / Payee included the amount of grant made by the assessee in his return of income and had already paid taxes on the returned income as per the regularly followed accounting policy and, therefore, present case is squarely covered by the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd Vs. CIT [2007 (8) TMI 12 - SUPREME COURT] wherein held that where the Payee has already paid tax on the income on which there was a short deduction of tax at source, recovery of tax cannot be made once again from the tax deductor - where the assessee has already paid tax on the income on which there was a short deduction of at source, recovery of tax cannot be made once again from the tax deductor.
What is common to both the provisos to Section 40(a)(ia) and Section 201 (1) of the Act is that as long as the Payee / resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default. See CIT Vs. Ansal Land Mark Township (P) Ltd [2015 (3) TMI 403 - DELHI HIGH COURT]
No doubt there is a mandatory requirement u/s 201 to deduct tax at source under certain contingencies, but the intention of the legislature is not to treat the Assessee as a person in default subject to the fulfillment of the conditions as stipulated in the first proviso to Section 201(1). The first proviso to section 201(1) of the Act was inserted w.e.f. 1.7.2012. The Hon'ble Delhi High Court has categorically held that insertion of the second proviso to Section 40(a) (ia) also requires to be viewed in the same manner. According to Hon’ble High Court this again is a proviso intended to benefit the Assessee. The Hon'ble High Court ruled that the second proviso to Section 40 (a) (ia) of the Act is declaratory and curative in nature and should be given retrospective effect from Ist April 2005. - Decided against revenue
Interest u/s 201(1) (1A) - As claimed before us that the recipient / payee had filed the return for the year under consideration declaring loss, therefore, no interest u/s 201(1A) is required to be charged from the assessee (Payer) for not deducing tax at sources. Even if the assessee herein deducts / remit the TDS amount on the income paid to recipient / payee, the same is liable to be refunded to the said recipient / payee and there is no tax liability in their hands. In our view, there is no loss to the Revenue. While taking such a view we are supported by the decision of ITAT, Lucknow Bench in the case of DCIT v Sahara India Commercial Corporation [2014 (12) TMI 721 - ITAT LUCKNOW]
Tax at source u/s 206C - main contention of the assessee is that the project namely Kiratpursahib-Una Road project was awarded on Built – Operate - Transfer (BOT) basis - HELD THAT:- As the aforesaid project was awarded on BOT basis and the amount was received as commission fee and not as toll fee, therefore, the provisions of section 206C(7) cannot be applied to the amount received. Section 206C (7) provisions are not attracted in the facts and circumstances of the present case as the assessee had received the payment as commission fee and not as toll fee. In our opinion, the CIT(A) has taken a correct view, therefore, we uphold his view and dismiss the appeal of the Revenue.
Default u/s 206C(7) - appellant was required to collect TCS on toll fee - as per the Appellant the concessionaire is responsible for overall operation and maintenance of the project facility and not merely granted the usance of the toll plaza - HELD THAT:- Provisions of section 206C are mandatory to collect tax under certain contingencies, but the intention of the legislature is not to treat the assessee as a person in default subject to fulfillment of the conditions stipulated in the proviso to section 206C(6A) - the insertion of second proviso to section 40(a) (ia) of the Act also requires to be viewed in the same manner. This again is a proviso intended to benefit the assessee. The effect of the legal fiction created thereby is to treat the assessee as a person not in default to deduct or collect tax at source under certain contingencies. The first proviso to section 201(1) and proviso section 206C(6A) were brought on statute on 1.7.2012 for rationalization of tax deduction at source (TDS) and Tax Collection at Source (TCS) provisions. These provisions are declaratory and curative in nature and have retrospective effect from 1st April, 2005 being the date from which sub section (ia) to section 40(a) was inserted by Finance (No.2). Act, 2004 - the impugned demand created under section 206C(1C) / 206C(7) of the Act are, hereby deleted. The appeal of the assessee stands allowed.
Levying the penalty u/s 271CA - HELD THAT:- Under section 271CA, the penalty is imposed for failure to collect tax at source. Since, we have held that there was no failure on the part of the assessee to collect tax at source, therefore, no penalty can be validly levied u/s 271CA of the Act. It is well settled law that the very basis on which penalty was levied, are deleted, there remains no basis at all for levying the penalty. Since, there was no failure on the part of the assessee to collect tax at source; therefore, there remains no basis at all for levying the penalty u/s 271CA of the Act. Accordingly, we allow the appeals and cancel the impugned penalty levied by the Assessing officer and confirmed by CIT(A) for all the assessment years - Decided in favour of assessee
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2015 (9) TMI 1661
Addition u/s. 41(1) - remission or cessation of liability - HELD THAT:- Section 41 (1) would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relevant to the assessment year under consideration.
In the present case, both elements are missing. There was nothing on record to suggest there was remission or cessation of liability that too during the previous year 2006-07 relevant to the assessment year 2007-08 which was the year under consideration. It is undoubtedly a curious case.
Even the liability itself seems under serious doubt. AO undertook the exercise to verify the records of the so called creditors. Many of them were not found at all in the given address except in the case of Narayan Chandra Gorai and M/s. Stesalit Limited. These inquiries were made ex parte and in that view of the matter, the assessee would be allowed to contest such findings. Nevertheless, even if such facts were established through bi-parte inquiries, the liability as it stands perhaps holds that there was no cessation or remission of liability and that, therefore, the amount in question cannot be added back as a deemed income under section 41(1) - no alternative except to delete the addition as made by AO and confirmed by CIT(A). Appeal of assessee is allowed.
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2015 (9) TMI 1660
Levy of penalty u/s. 271(1)(c) - addition on account of excess shortage - exparte appeal - HELD THAT:- We have heard the Ld. Departmental Representative at length and carefully perused the orders of the authorities below. In so far as the addition on account of excess shortage is concerned, the Tribunal has deleted the said addition, therefore, to this extent, no penalty is leviable.
On the addition on account of valuation of closing stock is concerned, we find that even in the quantum appeal, the Tribunal has categorically denied to accept the additional evidence which were not relevant in the case of the assessee. The relevant portion of the Tribunal’s order is exhibited at page-3 & 4 of CIT(A)’s order, based on which the Ld. CIT(A) has confirmed the penalty. We, therefore, do not find any error or infirmity in the findings of the Ld. CIT(A). Order of the Ld. CIT(A) is confirmed.
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2015 (9) TMI 1659
Disallowance of deduction claimed u/s.80IB(4) - profits derived from its unit located at Silvassa in the Union Territory of Dadra & Nagar Haveli, an industrially backward area specified in 8th Schedule to the Act - HELD THAT:- We find that the issue relating to disallowance of deduction u/s.80IB(4) has been recurring every year from Assessment Year 2005-06 onwards. The Assessing Officer has been disallowing deduction u/s.80IB(4) in all the aforesaid assessment years on the same ground. In Assessment Years 2005-06 and 2008-09 the CIT(A) upheld the findings of AO on the issue, whereas in Assessment Years 2006-07 and 2007-08 the CIT(A) allowed the claim of deduction u/s.80IB(4). Against the findings of the CIT(A) the assessee filed appeal before the Tribunal in Assessment Years 2005-06 and 2008-09 and the Revenue filed appeal before the Tribunal in Assessment Years 2006-07 and 2007-08.
Since the issue raised in the impugned assessment year is identical and no change in the facts and circumstances have been pointed out by either sides, we deem it appropriate to remit this issue back to the file of Assessing Officer for fresh adjudication in accordance with the order of the Tribunal [2015 (2) TMI 1317 - ITAT PUNE] . Thus, ground Nos. 1 to 7 in the appeal of assessee are allowed for statistical purposes.
Disallowance of the commission expenses claimed by the assessee - HELD THAT:- Assessee has stated at the bar that the documents as sought by the Assessing Officer are now available with the assessee and the same can be furnished, if an opportunity is granted. We deem it appropriate to remit this issue back to the file of the Assessing Officer with a direction to assessee to file the necessary documents in support of the claim. The Assessing Officer after considering the documents furnished by the assessee shall decide the issue afresh, in accordance with law. This ground of appeal of assessee is also allowed for statistical purposes.
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2015 (9) TMI 1658
Deduction u/s 80 P(2) (a) (i) denied - AO opined that the assessee was not entitled to the deduction that the activity of the appellant was covered by Section 2 (24) (vii)(a) which requires the inclusion of profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society - Whether the benefit of deduction, under Section 80 P(2) (a) (i) could be denied to the assessee on the footing that, though the appellant was said to be a Co-operative Society, it was in fact a co-operative bank, within the meaning as assigned to such bank under Part V of the BR Act? - HELD THAT:- There is a seriously disputed question of fact which the Authorities under the IT Act have taken upon themselves to interpret in the face of the BR Act prescribing that in the event of a dispute as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and(ccvi) of Section 56 of the BR Act, a determination thereof by the Reserve Bank shall be final, would require the dispute to be resolved by the Reserve Bank of India, before the authorities could term the assessee as a co-operative bank, for purposes of Section 80 P of the IT Act.
Any opinion expressed therefore is tentative and is not final. The view expressed by this court BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERATIVE SOCIETY LIMITED [2014 (6) TMI 913 - KARNATAKA HIGH COURT] however, as to the assessee being a co-operative society and not a co-operative bank in terms of Section 80P (4) of the IT Act, shall hold the field and shall bind the authorities unless held otherwise by the Reserve Bank of India. - Decided in favour of assessee.
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2015 (9) TMI 1657
Undisclosed income admitted in the statement recorded u/s 132(4) - surrender of income - case was scrutinized U/s 153A read with Section 143(3) - HELD THAT:- It is undisputed fact that besides statement U/s 132(4), no incriminating documents were found during the course of search including undisclosed cash/assets as revealed from the assessment order of the assessee. The search was conducted on 27-28/08/2008 and statement was recorded u/s 132(4) on 28/08/2008.
Copy of statement was provided by the AO on 13/3/2009 even various requests had been made by the assessee before the DDIT(In) to provide the copy of statement. After considering the assessee’s own statement and copy of seized material, he decided to retract the statement given u/s 132(4) on 31/3/2009, which was supported by the affidavit filed by the assessee dated 31/3/2009.
The Coordinate Bench has considered the statement recorded u/s 132(4) in case of Shri Radhey Shyam Mittal [2013 (8) TMI 936 - ITAT JAIPUR] in group cases and held that disclosure taken U/s 132(4) during course of search under pressure or duress where no incriminating documents/unrecorded valuables were found is to be held invalid and cannot be sustained. The assessee filed affidavit on 31/3/2009 before the AO but he remained silent on the face of it and had not carried out any inquiry to verify the correctness of the affidavit. AO also had not cross examined on the points of retraction and not asked to produce any evidence.
It is held by the various Hon'ble High Courts as well as Hon'ble Supreme Court that the statement recorded U/s 132(4) has evidentiary value but rebuttable. In CBDT circular No. F.NO. 286/2/2003- IT(Inv) does not support any disclosure made U/s 132(4), in absence of any incriminating document/undisclosed assets. Therefore, we upheld the order of the ld CIT(A). - Revenue’s appeal is dismissed.
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2015 (9) TMI 1656
Undisclosed income admitted in the statement recorded u/s 132(4) - case was scrutinized u/s 153A read with Section 143(3) - HELD THAT:- It is undisputed fact that besides statement u/s 132(4), no incriminating documents were found during the course of search including undisclosed cash/assets as revealed from the assessment order of the assessee. The search was conducted on 27-28/08/2008 and statement was recorded u/s 132(4) on 27/08/2008.
Copy of statement was provided by the AO on 13/3/2009 even various requests had been made by the assessee before the DDIT(In) to provide the copy of statement. After considering the assessee’s own statement and copy of seized material, he decided to retract the statement given u/s 132(4) on 31/3/2009, which was supported by the affidavit filed by the assessee dated 31/3/2009.
The Coordinate Bench has considered the statement recorded u/s 132(4) in case of Shri Radhey Shyam Mittal [2013 (8) TMI 936 - ITAT JAIPUR] in group cases and held that disclosure taken U/s 132(4) of the Act during course of search under pressure or duress where no incriminating documents/unrecorded valuables were found is to be held invalid and cannot be sustained.
The assessee filed affidavit on 31/3/2009 before the AO but he remained silent on the face of it and had not carried out any inquiry to verify the correctness of the affidavit. AO also had not cross examined on the points of retraction and not asked to produce any evidence. It is held by the various Hon'ble High Courts as well as Hon'ble Supreme Court that the statement recorded U/s 132(4) has evidentiary value but rebuttable. In CBDT circular No. F.NO. 286/2/2003- IT(Inv) does not support any disclosure made U/s 132(4), in absence of any incriminating document/undisclosed assets. Therefore, we upheld the order of the ld CIT(A). - Decided against revenue.
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