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Income Tax - Case Laws
Showing 101 to 120 of 678 Records
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2016 (2) TMI 1204 - GUJARAT HIGH COURT
Bogus purchases - purchases from grey market - Held that:- AO without rejecting the books of account of the assessee for the year under consideration has observed that the genuineness of the purchases is not established and has made the addition whereas the Tribunal has proceeded on the footing that the AO has recognised the purchases made by the assessee and the question is not of quantitative details. Tribunal has also observed that the AO has accepted the sales made by the assessee and if that be so, it would indicate that the assessee must have made purchases, otherwise it would not be possible for the assessee to make the sales. Thus, even as regards the basic facts, the Tribunal has proceeded on an erroneous footing.
As regards the cheque issued in favour of A.K. Textile which is withdrawn by the proprietor of A.K. Textile named "Aaisha" a perusal of the table at paragraph 4 of the assessment order shows that an amount of ₹ 50140/- has been withdrawn in cash in respect of cheque No.446893 and an amount of ₹ 52451/- has been withdrawn in cash in respect of cheque No.446894 and the assessee in his reply has clearly admitted that payment was made in cash and has stated that 20% thereof be disallowed. However, the same has been totally disregarded by the AO as well as the Tribunal.
The court is of the view that the Tribunal while passing the impugned order has lost sight of the directions contained in its previous order and has recorded findings which are not in consonance with the record of the case and are, therefore, perverse. The impugned order of the Tribunal which suffers from various infirmities as noted hereinabove, therefore, cannot be sustained. - Decided against the revenue.
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2016 (2) TMI 1203 - ITAT CHENNAI
Allowance of MAT credit u/s.115JAA - Surcharge and Education cess included in the MAT credit - Held that:- As decided in WYETH LIMITED VERSUS ASSISTANT COMMISSIONER OF INCOME TAX, LARGE TAXPAYERS UNIT, MUMBAI [2015 (1) TMI 1299 - ITAT MUMBAI] the MAT as well as normal tax before allowing the MAT credit has to be taken on parity either exclusion of surcharge and education cess or inclusive of surcharge and education cess or inclusive of surcharge and education cess. Accordingly we set aside the orders of authorities below and direct the Assessing Officer to allow the MAT credit against the tax liability payable before surcharge and education cess or alternatively the amount of MAT credit should also be inclusive of surcharge and education cess and then allow the credit against the tax payable inclusive of surcharge and education cess - decided against revenue.
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2016 (2) TMI 1202 - ITAT MUMBAI
TDS u/s 195 - payments to non-residents under the heads training fee,service fee and royalty payment - PE in India - scope of amendment of act - Held that:- The payments in question are covered by the provisions of section 9, that the non residents had no PE in India, that the assessee was not liable to deduct tax at source for these payments. We are of the opinion that his order does not suffer from any legal infirmity. Here, we would also like to mention that the issue of taxability of these three payments had arisen because of the retrospective amendment to section.
The assessee had managed its affairs as per the provisions of existing law and at the time of filing of return, it had not to deduct the tax. The settled principle of jurisprudence stipulates that impossible acts cannot be expected to be performed by an assessee. In the case of IDBI Capital Market Services Ltd.(2015 (5) TMI 1169 - ITAT MUMBAI)the Tribunal has, in almost similar circumstances, held that if at the time of filing of its return the assessee is not required to deducted tax as per the existing provisions and later on because of the retrospective amendment or judgment of a court liability to deduct Tax at Source arises, the assessee cannot be held responsible for not deducting of tax at the time of filing of return. - Decided against revenue
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2016 (2) TMI 1200 - ITAT CHANDIGARH
Addition u/s 14A - Held that:- The undisputed facts of the case are that the assessee has not received any tax-free income during the year. Neither the learned CIT (Appeals) nor the learned D.R. during the course of hearing before us has controverted this fact. In this factual situation, the I.T.A.T., Chandigarh Bench in M/s BCL Industries & Infrastructures Ltd. [2016 (1) TMI 1250 - ITAT CHANDIGARH] No disallowance under section 14A of the Act can be made if there is no taxable income earned during the year.
Assessee has not been able to demonstrate before us with the help of documents that no tax free income has actually been earned during year. In view of this, we think it proper to send the case back to the file of the Assessing Officer. If there is no tax free income during the year, the Assessing Officer is directed not to make disallowance under section 14A of the Act. Otherwise, he has to decide the case as per law. - Decided in favour of assessee.
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2016 (2) TMI 1198 - ITAT NEW DELHI
Transfer u/s 127 - jurisdiction of AO - Held that:- Merely on the basis of PAN data base, the jurisdiction of AO cannot be decided. In the present case admittedly the assessee had filed the return giving Gurgaon address and, therefore, on the basis of territorial area, the jurisdiction lay with ACIT Circle 1(1), Gurgaon. This jurisdiction could not be transferred to DCIT Circle 47(1), New Delhi without the order being passed u/s 127, as per which the Commissioner has to provide a reasonable opportunity of being heard to the assessee and record his reasons before the case is transferred to the jurisdiction of another Commissioner, We, therefore, are in agreement with the findings of ld. CIT(A) that the assessment order passed by AO of Circle 47(1), New Delhi was without jurisdiction, hence the order is bad in law. Ground no. 1 is dismissed.
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2016 (2) TMI 1197 - ITAT MUMBAI
TPA - comparable selection criteria - Addition of 3% markup additionally made over and above the comparative margin arrived - Held that:- The assessee is a Private Limited Company incorporated in India and is 100% subsidiary of Tamasek Holdings Private Limited, Singapore (THPL). Assessee vide agreement dated 1st April 2004 with THPL agreed to provide Investment Advisory Services. While rendering these services, the assessee provides investment recommendation in India to THPL, whereas the later retains the right of the use of investment advice or information. Hence the advisory services provided by the assessee were in the nature of non binding advisory services for which assessee was compensated with cost plus markup.
The profitability derived from uncontrolled party engaged in similar line of business activity under similar circumstances, is the measure of arm's length results. If cost or sale is used as the base, then profitability depends largely upon the functions performed, therefore, in such a situation closer functionality is required preferably to an appropriate business segment or transaction.
Addition of 3% markup additionally made over and above the comparative margin arrived - additional mark-up applied by the TPO is without any FAR analysis or without any benchmarking exercise with any comparables and more importantly without any analysis of assessee's own facts. The assessee is providing non-binding investment advisory services to its AE and such services as highlighted by Ld. Counsel include; identifying and analyzing potential investment opportunities, evaluating and making recommendations to THPL with respect to specified investments. The monitoring functions performed by the assessee are part and parcel of the portfolio advisory services rendered by it because, the activities carried out by the assessee while undertaking portfolio monitoring activities include analysis of the latest development in the industry, ongoing performance of the industries and providing necessary information to its AE from time to time. This aspect has been noted by the ITAT, Mumbai Bench in the case of Carlyle India Advisors (P.) Ltd. (2013 (4) TMI 486 - BOMBAY HIGH COURT) and in other decisions cited above by the Ld. Counsel. Thus, we hold that no such addition or adjustment on account of extra markup can be made. Accordingly, we direct to delete the addition.
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2016 (2) TMI 1196 - GUJARAT HIGH COURT
ADMIT the following substantial question of law arises for consideration:
“Whether the Income Tax Appellate Tribunal has correctly appreciated the facts on record so as to hold that an amount of ₹ 37,22,156/- represented goodwill and thereby allowing depreciation thereon?”
For proposed question No.2, as can be seen from the impugned order, the Tribunal has merely set aside the issue and restored the matter to the file of the Assessing Officer to verify the claim of the assessee that it did not claim any income to be exempt from payment of income tax. No infirmity can be found in the approach adopted by the Tribunal warranting interference. No question of law can be stated to arise qua the said issue. The said ground of appeal is, therefore, rejected.
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2016 (2) TMI 1195 - ITAT AHMEDABAD
Manner in which the income earned by the assessee is to be treated in the subsequent assessment years - Held that:- We find ourselves in agreement with the learned counsel that the CIT(A) has indeed made certain observations which pre-empt the case of the assessee for the subsequent assessment years as well. We, therefore, make it clear that the observations made by the CIT(A), so far as period outside the assessment year 2009-10 is concerned, are devoid of any basis and stand vacated. A fresh call on merits will have to be taken for the assessment years, uninfluenced by the stand taken by the CIT(A) in the assessment year 2009-10, and the observations in this order, to that extent, stand expunged. Learned counsel, in this background, does not press the ground of appeal on merits and he is content with the unwarranted observations of the CIT(A) being held to be devoid of legal force.
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2016 (2) TMI 1193 - ITAT INDORE
Deduction claimed u/s 54F - assessee has not filed the return of income in time and not deposited the amount in the Capital Gains Deposit Scheme, 1998, within the stipulated time of furnishing the return of income - Held that:- As decided in COMMISSIONER OF INCOME-TAX VERSUS RAJESH KUMAR JALAN. [2006 (8) TMI 126 - GAUHATI HIGH COURT] Section 139 cannot mean only Section 139(1) but it means all sub-sections of Section 139.
Under sub-Section (4) of Section 139, any person who has not furnished a return within the time allowed to him under sub-Section (1) of Section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Such being the situation, it was the case of the assessee that he could fulfill the requirement u/s 54 for exemption of the capital gain from being charged to income-tax on the sale of property used for residence up to 30-3-1998, inasmuch as the return of income tax for the assessment year 1996-97, could be furnished before the expiry of one year form the end of the relevant assessment year or before the completion of the assessment, whichever is earlier, under sub-Section (4) of Section 139. Also see COMMISSIONER OF INCOME-TAX-II, CHANDIGARH VERSUS MS. JAGRITI AGGARWAL [2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT] - Decided in favour of the assessee.
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2016 (2) TMI 1192 - ITAT MUMBAI
Reopening of assessment - formation of belief by AO that certain income chargeable to tax had escaped assessment - information received from the Investigation Wing that assessee made bogus purchases - Held that:- Merely noticing such information, the Assessing Officer proceeds to record a belief that income chargeable to the aforesaid extent had escaped assessment.
Reasons recorded by the Assessing Officer do not reflect independent application of mind as to whether the information before him suggested any escapement of income. To that extent, in my view, the reasons recorded do not satisfy the requirement of section 147 of the Act in as much as they do not refer to any documents or statement, etc., which would prima-facie establish a link between the bogus nature of the impugned purchases and consequential escapement of income. - Decided in favour of assessee.
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2016 (2) TMI 1189 - ITAT AHMEDABAD
Addition u/s 68 - receipt of accommodation entries from Mukesh Chokshi - Held that:- It is evident that Mahasagars Securities Pvt. Ltd. and Alliance Intermediaries Network Pvt. Ltd. were involved in providing accommodation entries, and the assessee has shown long term capital gain as assessee’s own money from undisclosed sources. The assessee has not brought anything on record to controvert the finding of the AO or the ld.CIT(A). No infirmity on the order of the AO, and the CIT(A) has rightly confirmed the same. Thus, all the grounds of the assessee are dismissed.
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2016 (2) TMI 1188 - ITAT AHMEDABAD
Addition on account of the claim of assessee for deduction u/s 80IA(iv) - Held that:- As referring to earlier AYs Nothing contrary was brought to our knowledge on behalf of the Revenue. Facts being similar, so following the same reasoning, we are not inclined to interfere in the findings of the CIT(A) who has rightly deleted the addition of ₹ 85,14,513 in the Assessment Year 2008-09 and ₹ 1,05,98,781/- in the Assessment Year 2009-10 made in respect of deduction u/s 80IA(4)(iv). Thus, the order of the CIT(A) is upheld in this regard.
Addition on account of the claim of the assessee for legal and professional fees - Held that:- AO ought to have appreciated that the payment to Deloitte was for consulting and seeking advice on bidding for acquisition of European cage manufacturing company since assessee is engaged in the business of manufacturing bearing cages. Such consultancy was potential risk and reward attached with assessee’s business; therefore the expenditure on the same is wholly and exclusively for the business of the assessee. Payment to Mars Export Services was for export promotion capital goods authorization; therefore, the same is also wholly and exclusively for the business of the assessee. The professional fees paid to Shri Mukesh Patel and Shri Saurabh Soparkar was also for consultancy/legal services against the service rendered by them, hence the same is also wholly and exclusively for the business of the assessee. Therefore, the impugned disallowance made by the Assessing Officer on lump-sum basis is not tenable in the eyes of law. CIT(A) was justified in deleting the addition of ₹ 9,00,000/- against the total disallowance of ₹ 12,00,000/- made by the Assessing Officer on account of legal and professional fees of ₹ 82,58,275/-. Therefore, we uphold the order of CIT(A) in this regard.
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2016 (2) TMI 1187 - ITAT JAIPUR
Disallowance u/s 14A applying rule 8D - Held that:- It is admitted by ld. AO himself that the investments in JV equity and mutual funds was made by the assessee out of own capital and reserves. The disallowance is made not on consideration of assessee’s reply and merits of its contention but merely by mechanically applying rule 8D. These unambiguous observations on the part of AO clearly clinch the issue in favor of the assessee.
Without prejudice to above in AY 2011-12, assessee earned dividend of only to the extent of ₹ 1,19,645/- whereas ₹ 59,01,52,708 has been disallowed u/s 14A by mechanical application of rule. In view of above judgments even in worst circumstances and if assessee’s all explanation fail, disallowance u/s 14A can never exceed the exempt income. In AY 2011-12 also ld. AO has admitted the acquisition of JV shares and mutual funds from the same interest free own sources i.e. capital and reserves of company.
Contribution to Employees PF - payments made by the assessee within the due date prescribed for filing the return - Held that:- The issue in question is squarely covered by Hon’ble Rajasthan High Court judgment in the case of CIT V. SBBJ [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] which has been relied by ld. CIT(A). Respectfully following Hon’ble Rajasthan High court judgment this ground is dismissed.
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2016 (2) TMI 1186 - ITAT DELHI
Penalty u/s 271AAA on account of undisclosed income - Assessee covered u/s 132 i.e. search conducted on the Assessee OR survey u/s 133A - Held that:- As the assessee offered the disclosed income and paid taxes. That issue on quantum reached the finality. When comes to the penalty proceedings, we find that the AO initiated the penalty proceedings u/s 271AAA of the Act when the present assessee is not covered u/s 132 i.e. search conducted on the Assessee. The assessee is covered only by survey u/s 133A of the Act as such initiation of penalty proceeding u/s 271AAA is not legally tenable so AO erred initiating action under section 271AAA of the Act. Further, on perusal of the order of the CIT (A), we find that the finding of the CIT (A) in this regard is legally right and so upheld. Therefore, the impugned order does not call for any interference and so upheld. Accordingly, grounds raised by the Revenue are dismissed.
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2016 (2) TMI 1185 - ORISSA HIGH COURT
Addition u/s 43B - deduction for deposit of electricity duty as per the directions of the Hon'ble Odisha High Court - Claim of deduction in respect of foreign traveling expenditure of the Directors - allowable busniss expenditure - Held that:- As an interim measure, it is directed that the operation of the order dated 13.06.2014 under Annexure-1 shall remain in abeyance till the next date. Free copy of this order be handed over to the learned counsel for the Income Tax Department for necessary communication.
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2016 (2) TMI 1183 - ITAT VISAKHAPATNAM
Revision u/s 263 - Held that:- As decided in V.D. REDDY & CO VERSUS DCIT-1, CIRCLE-1 (1) VISAKHAPATNAM [2013 (5) TMI 971 - ITAT VISAKHAPATNAM] AO has taken one of the possible views while completing the assessment of the years under consideration and has considered all aspects while completing the assessment. Accordingly, we set aside the revision orders passed by Learned CIT for both the years under consideration.
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2016 (2) TMI 1182 - ITAT DELHI
Addition u/s 68 - transaction recorded on the basis of which peak credits were worked out were accepted to be belonging to Chetan Gupta - Held that:- Before making any addition u/s 68, it is necessary to prove on the part of the revenue that there is a sum found credited in the books of the assessee. The Pen Drive found from Chetan Gupta cannot be regarded to be the books maintained by the assessee. In view of sum not being found credited in the books of the assessee, it is of the view that provisions of section 68 cannot be applied in this case. Book will always mean systematic recording of the financial data from which financial accounts i.e. profit & loss account and balance sheet can be made at the close of the period for which these books are maintained. Set aside the order of the CIT (A) and delete the addition made. - decided in favour of assessee.
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2016 (2) TMI 1181 - ITAT DELHI
Reopening of assessment - addition on the basis of certain entries from the Pen Drive seized from the possession of the partner of the assessee - Held that:- Coming to the addition in assessment year 2002-03, I noted that the Tribunal has given a finding under para 6.26 in respect of the working of the peak credit by Chetan Gupta at ₹ 36,89,310/- to be correct and treated the same as undisclosed income for the assessment year 2002-03. The peak credit has been worked out as observed in this decision on the basis of the transaction recorded in the alleged Pen Drive. I, therefore, agree with the submission of ld. Senior Counsel that there cannot be any double addition. Accordingly, delete the addition thus ground no.1 in assessment year 2002-03 is allowed.
Deduction of expenditure disallowed - Held that:- AO disallowed this expenses merely on ad hoc basis by observing that as the books of accounts could not be produced the expenses cannot be verified even though he did not dispute details of various expenses as demanded by him. It is not the case that the expenses have not been incurred wholly and exclusively for the purpose of business. This disallowance has been made just on ad hoc basis @ 15% of the expenses incurred. The Income-tax does not permit the AO to disallow the expenditure on ad hoc basis. Accordingly, I delete this disallowance.
Disallowance of depreciation - Held that:- The provisions of section 147 empowers the AO to make the addition in respect of any other income which escaped the assessment provided addition has been made in respect of the income for which the reasons to believe were recorded. The Pen Drive has been found from Chetan Gupta during the course of search and seizure operation conducted by the Punjab Vigilance Bureau at Ludhiana pertaining to the Ludhiana City Centre scam. It is proved that the assessee was having office in Punjab. In the subsequent assessment year i.e. assessment year 2005-06, I noted that no such disallowance in respect of the depreciation was made by the AO while completing the assessment. Therefore, set aside the order of the CIT (A) on this issue and delete the disallowance of depreciation
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2016 (2) TMI 1180 - ITAT MUMBAI
Computation of income u/s 44B - whether service tax collected by the assessee should form part of the gross receipt while computing income under section 44B / 44BB - Held that:- In the light of decision of the Hon’ble Delhi High Court in the case of “DIT vs. Mitchell Drilling International Pvt. Ltd.” [2015 (10) TMI 259 - DELHI HIGH COURT] n the context of provisions contained under section 44BB, which is pari materia to section 44B and the decision of the Tribunal in assessee’s own case for assessment year 2007–08, we hold that service tax collected by the assessee and paid to the Government account having no profit element cannot be included in the gross receipts for computation of income under section 44B of the Act. Accordingly, while confirming the order of the learned Commissioner (Appeals) for assessment year 2009–10, we set aside the order passed by the learned Commissioner (Appeals) for assessment year 2010–11 by allowing assessee’s claim - Decided in favour of the assessee.
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2016 (2) TMI 1179 - ITAT AHMEDABAD
Non-prosecution of appeal by the appellant assessee - none appeared on behalf of the assessee at the time of hearing nor filed any application for adjournment of the case or intimated any reason for non-attendance. This shows that the assessee is not serious in pursuing with this appeal - the appeal of the assessee is dismissed.
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