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Income Tax - Case Laws
Showing 61 to 80 of 814 Records
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2015 (9) TMI 1654
Deduction u/s 80P(2) (a) (i) - assessee is said to be a Co-operative Society registered under the Karnataka State Co-operative Societies Act, 1956 - scope of amendment - Whether the benefit of deduction, under Section 80 P (2) (a) (i) of the IT Act, 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:- Issue decided in favour of assessee in M/S. BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERATIVE SOCIETY LIMITED [2015 (11) TMI 802 - KARNATAKA HIGH COURT] A Co-operative bank as defined under the Banking Regulation Act includes the primary agricultural credit society or a primary co-operative agricultural rural development bank. The Legislature did not want to deny the said benefit to a primary agricultural credit society or a primary co- operative agricultural and rural development bank. They did not want to extend the said benefit to a co-operative bank which is exclusively carrying on banking business i.e., the purport of the amendment. If the assessee is not a Co-operative bank carrying on exclusively banking business and if it does not possess a license from the Reserve Bank of India to carry on business, then it is not a Co-operative bank. It is a Co-operative society which also carries on the business of lending money to its members which is covered under Section 80P(2)(a)(i) i.e., carrying on the business of banking for providing credit facilitates to its members. The object of the aforesaid amendment is not to exclude the benefit extended under Section 80P(i) to the society
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, 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 1653
Penalty u/s 271(1)(b) - Assessee's failure to comply with the relevant notices issued by the AO u/s 142(1) - HELD THAT:- The order dated 29.11.2012 passed by the CIT(A) speaks that the assessee replied to the notice vide letter dated 7.9.2011 and subsequently, in compliance with the show cause notice u/s 271(1)(b), the assessee also sought the adjournment on the ground of fact that the assessee’s representative would be busy in the month of September on account of tax audit.
The tax audit and other documental work would be completed. In the said circumstances, the assessee complied with each notice issued by the AO. Subsequently, the assessment was completed vide order dated 26.12.2011 which speaks that the assessee attended the hearing from time to time and the case was also discussed with them.
The situation speaks that the assessee filed the details before the AO and thereafter the assessment order dated 26.11.2011 has been finalized. This can be considered as sufficient compliance and the default committed, if any, earlier has been ignored by the AO. Therefore, in the said circumstances, the penalty levied u/s 271(1)(b) is not liable to be leviable - also reasonable cause on account of busy in the month of September on account of tax audit is apparent on record. Penalty deleted - Decided in favour of assessee.
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2015 (9) TMI 1652
Revision u/s 263 - Nature of land sold and the cash deposited in the bank account - capital asset or agricultural land - HELD THAT:- From record it is clear that the AO made the investigation with regard to sale of the land and the cash deposited in the bank account of the assessee and family members. After making necessary inquiries, the AO accepted the returned income. He has also recorded that the land sold was not a capital asset within the meaning of section 2(14).
The assessee submitted an agreement before the Assessing Officer which he has duly taken into cognizance and accepted the contents of the same as genuine. As per this agreement, the assessee has sold 5.35 hectares of land which he agreed to sell at ₹ 4,51,000/- per bigha. He has received cash of ₹ 1,50,000/- as advance on 6.10.2007 and cash of ₹ 55,50,000/- on 15.10.2007. The balance amount was to be received by 15.1.2008 and then assessee was bound to do registration in purchaser's name or in any person's name whom the purchaser wanted to get it registered. The assessee submitted this agreement before the AO which he has duly apprised and accepted the contents as true to explain the transaction in the assessee's bank account as he has not made any addition to that effect. In such a situation, any contrary view taken by the CIT with regard to the contents of the agreement for sale of the land shall amount to change in the view on the same issue.
CIT himself was not sure about these transactions and he directed the Assessing Officer to examine the issue and make necessary inquiry and investigation and after ascertaining all the facts take decision as per law. This itself shows that the CIT himself was not sure regarding the erroneous of the order of the AO. AO has adopted a plausible view and the CIT was not justified in invoking the provisions of section 263. - Decided in favour of assessee.
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2015 (9) TMI 1651
Penalty u/s. 271D - receiving loans in cash - bonafide reasons for not furnishing complete details before the tax authorities - assessee received loans from Mr. Kashinath Tapuriah, which is in contravention of the provisions of section 269-SS - alternative addition u/s 68 - HELD THAT:- Assessee has bonafide reasons for not furnishing complete details before the tax authorities. Therefore in the interest of substantial justice, the matter deserves to be set aside to the file of the AO, who is directed to reconsider the matter afresh, in accordance with law.
In so far as penalty proceedings u/s. 271D are concerned, if an addition is made u/s. 68 of the Act, by treating it as non-genuine cash credit, it needs to be reconsidered as to whether the Assessing Officer can invoke provisions of section 269SS so as to levy penalty. Since the quantum proceedings are set aside the Assessing Officer is at liberty to initiate penalty proceedings afresh, after making a fresh assessment. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1650
Application u/s 12AA rejected - Tribunal held that on the grounds indicated as the application could not be rejected, directed for grant of registration under section 12A - HELD THAT:- If the assessment made and the reasons given by the learned competent authority in the order passed rejecting the application under section 12AA(1) of the Income Tax Act, is perused, we find that the application has been rejected on merits after considering various transactions and activities of the Trust in question and not based on the activities of the Trust.
That being so, the Tribunal has not committed any error in applying the law laid down in the case of DPR Charitable Trust (2011 (8) TMI 1136 - MADHYA PRADESH HIGH COURT . No substantial question of law arises for consideration in this appeal.
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2015 (9) TMI 1649
Scope of scrutiny in cases selected under CASS - conversion the limited scrutiny in to unlimited - revised ground - CBDT letter dated 23.05.2007 - approval of the Pr.CIT/DIT for taken up for comprehensive scrutiny - HELD THAT:- Admittedly, the necessary approval had not been taken by the AO while widening the scope of inquiry. Though the Ld. D.R. has submitted that the notice in this case was issued on 20.08.09 whereas the instruction of CBDT regarding the wider scrutiny was issued on 08.09.2010 and that the said circular was applicable prospectively and not retrospectively, however, it is noted that the said instruction of 2010 has been passed in reconsideration of instruction dated 23.05.2007. Under such circumstances, the instruction of 2007 was operative on the date of issue of notice. The Ld. D.R. has not submitted any evidence on the file that the AO had taken the necessary approval of ACIT/JCIT for widening the scope of inquiry.
The action of the AO in widening the scope of the inquiry without obtaining the necessary permissions as per the Board’s instruction was without jurisdiction and the same is accordingly set aside and consequently the additions made beyond the scope of AIR information are ordered to be deleted. The assessee’s appeal succeeds on technical/legal ground taken by the assessee vide revised ground of appeal.
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2015 (9) TMI 1645
Depreciation on fixed asset of assessee trust - HELD THAT:- Judgment of Apex Court in the case of Escorts Ltd (1992 (10) TMI 1 - SUPREME COURT) relied on by the AO while making the disallowance is not applicable to a charitable organization, like the assessee in the present case which is registered u/s 12A of the Act, since it pertains to the claim of depreciation under the provisions of section 35 of the Act. As per the proposition laid down in the case of DIT (E) vs. Framjee Cawasjee Institute [1992 (7) TMI 331 - BOMBAY HIGH COURT] expenditure on acquisition of depreciable asset was treated as application of income of the trust in the year of acquisition, depreciation is allowable in subsequent years.
Disallowance of carry forward of deficit - amount was claimed as set-off against the accumulated carried forward deficit of earlier years - HELD THAT:- It is a settled issue that any surplus amount of the current year can be set-off against the brought forward deficit of the earlier years and the same view was even supported by judgment of CIT vs. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT]. Considering the same, CIT (A) has rightly adjudicated the issue by granting relief to the assessee
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2015 (9) TMI 1644
Validity of Assessment U/s 143(3) read with section 154 passed by successor AO - AO has reviewed his own order without properly assuming jurisdiction and hence, the assessment order passed u/s.143(3) r.w.s.254 on the second occasion i.e. on 18.02.2014 is illegal and void ab- initio - HELD THAT:- It is well-settled that there cannot be two assessments in respect of total income of an assessee in one and the same A.Y. The assessee cannot be assessed twice over for the same A.Y. by framing two assessments, because there cannot be double taxation of the same income. During the existence of first order dated 16.09.2013, the second order dated 18.02.2014 could not have been passed and if passed, the same is non est. The two orders cannot exist at the same time. In this connection, I find merit in the appellant's plea [based on judgment of Hon'ble jurisdiction High Court in the case of Classic Share & Stock Braking Services Ltd. (2013 (3) TMI 516 - BOMBAY HIGH COURT) that after having passed order dated' 16.09.2013 giving effect to the order of Hon'ble ITAT, the impugned assessment order dated 18.02.2014 passed by the AO is totally illegal, void and without jurisdiction. Under these circumstances, there is no hesitation in holding that the impugned order passed by the AO is bad in law and void ab initio and the same is, therefore, annulled - Decided against revenue
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2015 (9) TMI 1643
Addition treating the amount of share application money received as income of the assessee - Held that:- The statement of Bank of Baroda of Satco reflecting the payment of four cheques to STSPL for sale of its own investment/shares of stock exchange was also filed before the lower authorities. Our attention was also invited to the contract note of Satco dated 3-9-2007, 4-9-2007, 5-9-2007 & 7-9-2007 reflecting the sale of shares/investments by STSPL on the stock exchange with trade date and also the order number, order time, trade number, trade time, name of shares, quantity, rate, service tax, STT charges, total amount of settlement, settlement period etc. Demat account of STSPL with Satco-CDSL showing debit of investment/shares sold was also placed on the record. The STSPL audited annual accounts, computation of income, assessment order under section 143(3) for assessment year 2008-09 & 2009-2010 duly reflected and the aforesaid amounts received from Satco and paid by STSPL towards 50% share application money was also placed on record.
No justification in the addition made by the AO in respect of share capital received by the assessee for which not only identity but the source and genuineness was duly established. - Decided in favour of assessee.
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2015 (9) TMI 1642
Reopening of assessment - disallowance of loss on sale of assets - change of opinion - Held that:- Re-assessment proceedings are liable to be quashed for the reason that the proceedings u/s 147 has been initiated merely on change of opinion.
As already seen that, while completing the original assessment, the AO has made enquiries with regard to the details of loss on sale of assets and further the details of the customs duty on the plant & machinery debited by the assessee in P & L account as the asset was not existing during the year. Thus we notice that the assessing officer has applied his mind on the impugned issue and has taken a view. On perusal of the reasons recorded by AO for initiating the re-assessment proceedings, we notice that the above said details were available while completing the assessment u/s 143(3). AO, on a mere change of opinion, has issued the notice for re-assessment. It is not permissible for the AO to resort to proceedings u/s 147 merely on change of opinion.
We notice that the AO has reopened the assessment after expiry of four years from the end of the relevant assessment year. Hence it is imperative on the part of the assessing officer to show that the conditions specified in the first proviso to sec. 147 are complied with. However, the AO has failed to show that there was failure on the part of the assessee to disclose fully and truly all material facts.
We are of the view that the reassessment proceeding under section 147 has not been validly initiated because the same has been initiated merely on a change of opinion without any fresh material coming into the possession of the AO. We, therefore, hold that the reassessment proceedings are invalid and consequently the order of reassessment is quashed. - Decided in favour of assessee
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2015 (9) TMI 1640
Reopening of assessment - receipt as sales tax benefit under the power policy of the State Government for installing windmills in the Maharashtra State - Sales Tax benefit is not an income derived from the business of the industrial undertaking, allowing the same resulted in excess deduction u/s. 80IA which in turn resulted in short levy of tax - Held that:- Reasons for the reopening of the completed assessment have been duly considered by the AO while making the original assessment order. Therefore, it is clear that no new facts have come to the notice of the AO for reopening a completed assessment.
In so far as the claim of the Revenue that sales tax subsidy has no direct nexus with the business of the assessee has already been decided by the Tribunal in assessee’s own case [2015 (9) TMI 1639 - ITAT MUMBAI] wherein the Tribunal has held that the amount of sales tax subsidy is directly arising from the business of the assessee, therefore, the decision in the case of CIT Vs Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] and the decision CIT Vs ICICI Bank Ltd. [2012 (7) TMI 521 - BOMBAY HIGH COURT] have been correctly relied upon by the Ld. CIT(A). We, therefore, do not find any reason to interfere with the findings of the Ld. CIT(A). - Decided against revenue
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2015 (9) TMI 1639
Reopening of assessment - denying the deduction u/s. 80IA in respect of the receipts from transfer of sales tax benefits - Held that:- In assessee’s own case for A.Y 2003-04 to 2006-07 we find that the Tribunal has treated the sale consideration received on the transfer of Sales tax benefits/incentive as a benefit directly arising from the business and therefore the same was treated as a revenue receipt.
Coming to the reasons recorded for the reopening of the assessment as mentioned elsewhere in this order, the allegation of the Revenue is that, the sales tax benefit is not an income derived from the business of the industrial undertaking. This view of the AO is not matching with the decision of the Tribunal in assessee’s own case in earlier assessment years as mentioned hereinabove.
Once the issue has been thoroughtly examined/scrutinized and has met the higher judicial forum, reopening of the assessment based on the same set of facts is nothing but a change of opinion which is not permissible as per the ratio laid down by the Hon’ble Supreme Court in the case of Kelvinator of India [2010 (1) TMI 11 - SUPREME COURT OF INDIA]. - Decided against revenue
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2015 (9) TMI 1637
Accumulation of the income derived from property held under the Trust under section 11(1)(a) - @15% of the income derives from property held under the Trust under section 11(1)(a) or its accumulation can only be restricted to 15% of the balance amount remained with the assessee after applying for charitable purpose - CIT(A) held that exemption available under section 11(1)(a) i.e. 15% of the income is unfettered and not subject to any conditions - Held that:- With the assistance of the ld.representative, we have gone through the record carefully. The ld.counsel for the assessee has placed on record a copy of the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Programme for Community Organisation [2000 (11) TMI 4 - SUPREME COURT] as held it is clear that a charitable or religious trust is entitled to accumulated twenty-five percent of income derived from property held under trust. For the present purposes the donations the assessee received, in the sum of ₹ 2,57,376, would constitute its property and it is entitled to accumulate twenty five per cent thereout. - Decided against revenue
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2015 (9) TMI 1636
Levy of penalty u/s 272A(2)(k) - assessee had failed to file the quarterly TDS return in Form No. 26Q for the second quarter by the due date and there was a delay of 191 days in filing the same - reasonable cause for delay - Held that:- The reason for the delay as being on account of systems error and delay in filing return by Chartered Accountant on account of data mismatch. All that the Ld. Joint Commissioner found was that the reason was insufficient / unreasonable. The explanation of the assessee was not controverted. Such un-controverted explanation of the assessee constitutes reasonable cause within the meaning of Section 273B, which provides that no penalty shall be levied if reasonable cause for the failure is established by the assessee. Therefore the penalty could not be levied u/s 272A(2)(K) of the Act.
Also an admitted fact that the Tax deducted at source, to which the F.No. 26 Q pertained, was paid within the prescribed time. No loss as such has therefore been caused to the Revenue. Delay in filing return is at best a technical or venial breach of law and no contumacious conduct can be attributed to the assessee. - Decided in favour of assessee.
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2015 (9) TMI 1635
TPA - comparability analysis - functinal similarity - Held that:- M/s Accentia Echnologies Ltd., during the relevant year, and the said company therefore, cannot be considered as comparable due to this extraordinary event which occurred in the relevant year as rightly held by the Tribunal inter-alia in the case of Excellence Data Research Pvt. Ltd (2014 (9) TMI 126 - ITAT HYDERABAD).
Direct the TPO to consider M/s MIcroland Ltd., as a good comparable for the purpose of analyzing the pricing of the international transaction undertaken by the assessee.
Credit of tds - Held that:- We direct the AO/TPO to verify the claim of the assessee with regard to the tax deducted at source and allow credit if found correct.
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2015 (9) TMI 1634
Penalty u/s 271(1)(c) - unexplained cash u/s 69A - cash was seized by the Department and ex parte assessment u/s 144 was made - Held that:- As relying on case of T.Kodeswaran v. ITO [2008 (10) TMI 273 - ITAT MADRAS-B] wherein the similar issue had come up and similar facts were there. In that case, the AO has passed the assessment order ex-parte u/s 144 and the AO has levied penalty u/s 271(1)(c) of the Act, which was deleted and Tribunal has deleted the penalty - Decided against revenue.
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2015 (9) TMI 1632
Rectification of mistake u/s 154 - additional depreciation u/s. 32(1)(iia) - whether mistake of incorrect claim is clearly apparent on plain reading of section 32(1)(iia) - Held that:- Additional depreciation is allowable to the assessee to the extent of 20% on the cost of plant & machinery and where the assessee has purchased an asset in the preceding year and has been allowed only 10% of the cost of asset as additional depreciation, the correct position of law is that balance 10% of additional depreciation is to be allowed to the assessee.
Where the AO failed to apply the correct provisions of law, the assessment order passed by the Assessing Officer is amenable to rectification under section 154. We uphold the invoking of provisions of section 154 against the assessee. Further, in view of the concession made by the AR for the assessee, where the assessee was only entitled to 10% of the cost of machinery to be allowed as additional depreciation in the instant assessment year, since the balance 10% of cost of machinery has been allowed as additional depreciation in the preceding year, we reverse the order of CIT(A) and direct the Assessing Officer to allow depreciation @ 10% of the cost of machinery as additional depreciation on plant & machinery purchased by the assessee in the preceding year. - Decided in favour of assessee.
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2015 (9) TMI 1631
Repayment of loan by trust - to be treated as application of income as disallowed “because the loan was never taken as income at the time of receipt” - Held that:- The question that the Revenue seeks to urge in this appeal, and on which notice was issued by this Court on 10th July, 2015 did not arise for consideration before the AO. Since such contention was not raised by the Revenue before the AO, the Respondent Assessee had no occasion to be heard on such issue at the appropriate stage. The Court, therefore, cannot permit the Revenue to urge the said issue at this stage.
Moreover, the Respondent Assessee is stated to have a deficit of ₹ 33,67,78,348 for the AY in question and, therefore, there is no tax effect for the said AY. What is sought to be projected by the Revenue is only a notional tax effect. Appeal dismissed.
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2015 (9) TMI 1630
Adjustment in the arm’s length price(ALP) of international transaction entered into by the Assessee with it’s Associated Enterprise (AE) u/s 92 - Assessee provided Software Development Services to its AE - Comparable selection - Held that:- Assessee providing IT Software development Services thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Excluding Comparable from the list of comparable chosen by the TPO, the arithmetic mean of profit margin of the remaining comparable is directed to be reworked by the TPO/AO after allowing +/- 5% adjustment, if permissible, u/s.92C(2) of the Act. None of the other grounds are adjudicated except comparability of companies chosen by the Assessee, as the exclusion of comparable companies chosen by TPO and confirmed by the DRP would itself result in the price charged in the international transaction to be one at Arm’s Length.
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2015 (9) TMI 1628
Addition u/s 68 - bogus credit - Denial of natural justice by providing no opportunity of being heard to the assessee - Held that:- Both the A.O. as well as CIT(A) being judicial authorities, were under obligation to adhere to the rule of natural justice by providing opportunity of being heard to the assessee to produce nine sundry creditors whose confirmations have been duly placed on record during assessment / remand proceedings.
When the assessee has discharged its onus u/s 68 of the Act by providing confirmation letter from the sundry creditors, the onus stands shifted to the A.O. to controvert the same by bringing cogent evidence on record, that the said parties are not existing and their creditworthiness and genuineness is highly doubtful.A.O. has rather summarily dismissed the confirmation letters on the sole ground that the same are stereotyped and has never given findings that the confirmation filed by the assessee in respect of the nine sundry creditors are fake one and of non existing entities;
No doubt Inspector, income tax deputed by the A.O. reported that M/s. R. K. Enterprises, Natraj Sanitary and Verma Engineering works are non-existing, but the assessee has never been provided opportunity to produce them, or to fill their latest addresses but outrightly, ignored the confirmations and business transactions submitted by the assessee;
Notices sent to nine parties shown to have been received back unserved but thereafter, no opportunity has been provided to the assessee to provide their latest address or to produce the parties before the A.O. nor any effort has been made to serve them through substitute service;
Confirmation filed by assessee pertaining to nine parties/sundry creditors ought not to have been rejected merely on the ground that the letters sent to them by the A.O. have been received back unserved except with thorough probe;
Thus A.O. has failed to verify confirmations filed by the assessee rather rejected the same on the basis of conjectures and surmises. - Decided in favour of assessee.
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