|
Advanced Search Options
Income Tax - Case Laws
Showing 21 to 40 of 947 Records
-
2016 (7) TMI 1657
Disallowance on account of interest on unsecured loans paid in excess of 18% to the persons specified u/s 40A(2)(b) - Whether AO is empowered to make disallowance by invoking the provisions of section 40A(2)( b)? - HELD THAT:- There is no dispute with regard to the fact that the amount was borrowed for the purpose of business and the assessee has claimed payment of interest @ 24% p.a. - AO considering the same as unreasonable and excessive, restricted @ 18%. The revenue has not placed any material under the identical facts and circumstances that the fair market rate of interest is lower than what the assessee has claimed. As per section 40A(2)(b) AO has to give a finding having regard to the fair market rate.
In the present case, no such finding is given. The assessee has placed reliance on the two decisions of the Coordinate Bench of the Tribunal rendered in the case of Ram Avtar Garg [2010 (5) TMI 715 - ITAT JAIPUR] pertaining to A.Y. 2005-06 and in assessee’s own case in pertaining to A.Y. 2010-11 wherein the Coordinate Benches have allowed the interest @ 24% being fair market rate. The facts of the present case are identical. The revenue has not brought any contrary material on record suggesting that the rate so claimed by the assessee is excessive of the fair market rate as prevalent during the year under appeal. Therefore, we hereby direct the AO to delete the disallowance made on account of interest on fair market rate paid in excess of 18% to the persons specified under section 40A(2)( b) - Appeal of assessee allowed.
-
2016 (7) TMI 1655
Addition treating the entire tax credit as undisclosed income - HELD THAT:- There is no dispute that the assessee has not proved to have actually conducted any retail business in the relevant previous year. His stand throughout except to the extent of revised statement not accepted has been that his source of income is only salary. Learned counsel strongly argues that the assessee has been carrying out retail saree business so as to be eligible for peak credit addition amount only.
We put a specific query as to whether any evidence is available in support of this retail business plea. Learned counsel fails to place reliance any documentary evidence forming part of the case file in this regard. We agree with the CIT(A) in this peculiar backdrop of facts that the assessee’s revised statement is liable to be rejected. It is made clear that there is no argument on assessee’s part qua his latter substantive ground. Nor is there any evidence or legal plea raised to controvert the CIT(A)’s findings on enhancement issue. We find no reason to interfere with the order of the CIT(A). Assessee appeal dismissed.
-
2016 (7) TMI 1653
Action of the CIT(A) in dismissing its appeal by holding that the same was barred by limitation - Penalty u/s 271(1)(c) - As mentioned appeal was barred by 361 days and that the assessee had not filed any condonation petition/affidavit in this respect but till date no remedial action has been taken by the assessee - HELD THAT:- From the pleadings of the assessee it clearly reveals that in fact the assessee was not aggrieved by the quantum additions rather the assessee was aggrieved on account of levy of penalty that is way the assessee had chosen not to file the appeal against the quantum additions. If on a subsequent occasion some senior counsel advised the assessee to file the appeal, that cannot be a sufficient cause for condonation of delay. We are surprised rather shocked to see that the concerned Chartered Accountant has deposed in the affidavit that he was getting feelers from the AO that the AO would not levy penalty if the assessee would not contest the quantum additions and that it was he who advised the assessee not to file the appeal, even, after receipt of notice regarding the initiation of penalty the proceedings under section 271(1)(c) of the Act. He also deposed before the Ld. CIT(A) in his affidavit that the appeal was not filed because of his advice and that the delay may be condoned. We feel it difficult to digest that such an advice may be given to an assessee by a Chartered Accountant and then that Chartered Accountant could affirm that he in fact has given such a wrong advice to the assessee by way of deposition in an affidavit.
Whatsoever might have been advice of the Chartered Accountant of the assessee, firstly the assessee in fact was not aggrieved by the order under section 143(3) but of the penalty order under section 271(1)(c); secondly the assessee has not shown sufficient cause for condonation of delay in filing the appeal before the Ld. CIT(A), hence, there is no infirmity in the order of the Ld. CIT(A) in rejecting the application for condonation of delay.
Even no application for condonation of delay has been filed before this Tribunal. No reasons/circumstances for filing the appeal with a delay of 361 days has been explained before us. It seems that the assessee again failed to take advice from his senior counsel even after dismissal of his appeal for the same reason by the Ld. CIT(A). Hence, appeal before this Tribunal is barred by limitation.
In view of this, neither we find any reason to interfere with the order of the Ld. CIT(A) in dismissing the appeal before him being barred by limitation nor we find any reason or sufficient cause to condone the delay in filing the appeal before this Tribunal. Hence, the appeal of the assessee is dismissed in both courts.
-
2016 (7) TMI 1650
Nature of expenditure - disallowance being payment made to NHAI towards land acquisition - assessee had claimed the entire expense as revenue expenditure which was related to construction of an elevated corridor from Beach road to Maduravoil in Chennai which has been approved by the Central Government - AO rejected the claim of the assessee for treating it as revenue expenditure and held the expenditure to be in the nature of capital expenditure - HELD THAT:- Assessee had incurred the expenditure only with the primary motive of facilitating its business and earning more revenue. Just because the benefit of the expenditure incurred by the assessee also flows to some unrelated parties, the expenditure cannot be disallowed under section 37(1) of the Act. This is a conscious decision taken by the assessee in concurrence with the Central Government and State Government. See AIRPORT AUTHORITY OF INDIA VERSUS COMMISSIONER OF INCOME TAX [2011 (12) TMI 114 - DELHI HIGH COURT]
The only purpose of the expenditure is to generate more profit and the benefit of which will overflow to subsequent years and the period is unknown. Hence, the expenditure incurred by the assessee is nothing but deferred revenue expenditure and accordingly the same has to be allowed as deduction under section 37(1) in the year in which it is incurred. Therefore, we hereby direct the learned Assessing Officer to treat the expenditure as revenue expenditure and allow deduction accordingly. - Decided in favour of assessee.
Disallowance being expenditure incurred towards strengthening and realigning of the tracks in the harbor - As per AO assessee has claimed deduction being the expenditure incurred towards strengthening and realigning of shed line-II and connecting lines at inner harbor - AO held the expenditure incurred by the assessee as capital expenditure and therefore, disallowed the same as allowable deduction either under section 31 or under section 37(1) - CIT-A agreed with the view of AO and directed the Assessing Officer to allow depreciation on the same - HELD THAT:- We find that it is necessary for the assessee to incur these expenditures in order to carry out its business activities. Further, by incurring such expenditure a new asset is not created but only the existing assets are reconditioned by carrying out extensive repairs. In such circumstances, the expenses incurred by the assessee will purely amount to revenue in nature and therefore allowable as deduction under section 37(1)
On a similar situation that of the present assessee also in the case of COATS VIYELLA INDIA LTD. [2000 (11) TMI 24 - MADRAS HIGH COURT] it was categorically held that contribution made to Govt. for building a new bridge in place of old one with a view to provide access to factory for workmen and goods though not owned by the assessee and when there is no addition to value of any of its assets would be treated as a revenue expenditure. Similarly, the Hon’ble High Court of Delhi in the case of Airport Authority of India Vs. CIT (2011 (12) TMI 114 - DELHI HIGH COURT] also held the issue in favour of the assessee. - Decided in favour of assessee.
Disallowance u/s 14A read with Rule 8D - As per AO Assessee has invested in equity shares of certain corporation limited companies, the dividend earned from which is exempt from tax - HELD THAT:- As relying on relevant portion of the decision of this Tribunal in the case of Kamarajar Port [2016 (5) TMI 315 - ITAT CHENNAI] we hereby hold this issue in favour of the assessee, subject to verification that all such investments are made in sister concerns / associate concerns / companies owned by the Government. Thus, this issue is also decided in favour of the assessee.
-
2016 (7) TMI 1647
Penalty u/s 271(1)(c) - AO passed assessment order under Section 143 (3) determining the total income after rejecting the books of accounts and estimating the profit @ 6% and making addition under Section 40(a)(i) of the Act - Tribunal cancelling the penalty - HELD THAT:- This Court is of the opinion that the Tribunal in its order has held that the substantial additions on merits have been deleted in this order while considering the cross appeals on merits and therefore nothing survives in favour of the revenue for levy of the penalty.
AO could have initiated the fresh penalty proceedings after receipt of the order of the Tribunal, but Assessing Officer did not do so. No review of the order is permitted under the I.T. Act by the Assessing Officer. The additions now made by the Assessing Officer in the order dated 6.01.2006 are not part of the show cause notice and no fresh notice is issued for initiating the penalty proceedings against the assessee. The result would be that the Assessing Officer dropped the proceedings for penalty on 30.03.2005 and thereafter, did not initiate the penalty proceedings.
Commissioner of Income Tax (Appeals) was justified in deciding the issue in favour of the assessee and against the revenue department. We may also note that substantial additions on merits have been deleted in this order while considering the cross appeals on merits. Therefore, nothing survives in favour of the revenue for levy of the penalty. Considering the facts and circumstances, in the light of the findings of the Commissioner of Income Tax (Appeals), we are of the view , Learned Commissioner of Income Tax (Appeals) was justified in canceling the penalty under section 271(1)(c) - Decided in favour of assessee.
-
2016 (7) TMI 1646
Deduction u/s 80- IA(4) for generating power for captive consumption - HELD THAT:- This will be governed by the answer in question (C) in Commissioner of Income-tax v. Alembic Limited [2016 (7) TMI 1239 - GUJARAT HIGH COURT] where we decided the issue in favour of the assessee and against the revenue. In that view of the matter, we answer the question in favour of the assessee and against the revenue.
Withdrawal from the revaluation reserve from the book profit under section 115JB - HELD THAT:- Since this question is covered by the decision of this court in [2008 (8) TMI 1009 - GUJARAT HIGH COURT] in the case of Commissioner of Income-tax-I v. Alembic Glass Industries Limited decided on 11.8.2008 where following the decision in [2008 (8) TMI 1010 - GUJARAT HIGH COURT], the question is answered in favour of the assessee, we answer this question in favour of the assessee and against the revenue.
Deduction of claim of interest payable to ONGC - Whether during the year assessee has not paid any amount towards this liability?” - HELD THAT:- This court in [2011 (5) TMI 816 - GUJARAT HIGH COURT] the case of Commissioner of Income-tax v. Alembic Glass Industries Limited as held a settled law is if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain.where this court held in favour of the assessee and against the revenue
-
2016 (7) TMI 1642
Disallowance u/s 14A - AO added the disallowance made u/s 14A of the Act to the book profit computed under the provisions of the Companies Act - HELD THAT:- In the absence of any income directly attributable to the interest paid by the assessee, the disallowance has to be computed under Rule 8D(2)(ii). From the assessment order it appears that the assessee has incurred expenditure which is directly attributable to any particular income by way of interest on the borrowed loan and also made investment during the year under consideration. Therefore, the observation made by the CIT(A) that the entire investment was made in the earlier previous year is not correct. Apparently, there is an investment during the previous year which is relevant to the assessment year under consideration. Even though the CIT(A) found that the investments were made in the subsidiary companies, no such particulars are available how the companies in which investments were made are subsidiary of the assessee-company.
CIT(A) by reproducing the order of this Tribunal has simply found that the investment in subsidiary companies cannot be considered for disallowance u/s 14A. In the absence of any material available on record, this Tribunal is of the considered opinion that the Assessing Officer has to examine the companies in which the investments were made by the assessee and how such companies are subsidiary or holding company of the assessee. Since such an exercise was not done by both the authorities below, this Tribunal is of the considered opinion that the mater needs to be reconsidered.
Apparently few investments were made during the year under consideration. The order of this Tribunal for the earlier assessment years viz. 2010-11 and 2011-12 is not applicable to the facts of this case. Therefore, the Assessing Officer has to reexamine the matter afresh by taking into consideration all the investments made by the assessee and thereafter decide the same in accordance with law. Accordingly, the orders of the lower authorities are set aside and the disallowance made by the Assessing Officer u/s 14A is remitted back to the file of the Assessing Officer.
Disallowance of expenditure made by the assessee for acquisition of intangible asset viz. logo - assessee claimed the same as revenue expenditure while computing the taxable income - AO disallowed the claim of the assessee on the ground that what was paid by the assessee is a royalty, therefore, it is in the capital filed and allowed depreciation u/s 32 - HELD THAT:- The assessee being a company engaged in the business, a Trust cannot be a group concern of the business concern. The Trust can be an independent entity for charitable activity or other activity as per the object of the Trust. This Tribunal is of the considered opinion that a Trust cannot be construed as a group concern of a business concern. The Trust has to be always treated independently and it is an independent statutory body. The assessee now claims that the logo belongs to Shriram Ownership Trust was used by the assessee in its business activity and payment was made on turnover basis. The question arises for consideration is whether such payment is an allowable business expenditure u/s 37(1) of the Act. This Tribunal is of the considered opinion that when Shriram Ownership Trust is an independent statutory body, being a Trust, the assessee has to necessarily make payment for using the logo to Shriram Ownership Trust and such payment has to be at the market rate. Therefore, this payment being an expenditure for using logo is an allowable expenditure u/s 37(1) of the Act
Appeal of the Revenue is partly allowed for statistical purposes.
-
2016 (7) TMI 1641
Revision u/s 263 - Bogus share transactions - returns were filed by such companies with meagre income; intimations were issued u/s 143(1); thereafter notices u/s 148 were issued either at the instance of such companies divulging a paltry escapement of income or otherwise ; assessment orders were passed u/s 143(3) read with section 147 after making nominal additions - HELD THAT:- It is relevant to mention that we have disposed of more than 500 cases involving same issue through certain orders with the main order having been passed in a group of cases led by Subhlakshmi Vanijya Pvt. Ltd. [2015 (8) TMI 174 - ITAT KOLKATA] as held Contention of the assessee that since the AO of the assessee-company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable. Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order.
The notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases.
CIT having jurisdiction over the AO who passed order u/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT - Addition in the hands of a company can be made u/s 68 in its first year of incorporation.
After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid.Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day.
Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given by the CIT.
Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 - Decided against assessee.
-
2016 (7) TMI 1639
Disallowance of royalty - nature of expenditure - AO treated the expenditure as capital in nature and allowed depreciation @ 12.5% - HELD THAT:- Material available on record. Shriram Ownership Trust is a Trust by itself, therefore, its logo cannot be used by any other concern. The object of the Trust is not to do business. The assessee-company was established for the purpose of business.
When the assessee-company used the logo belongs to Shritam Ownership Trust, this Tribunal is of the considered opinion that for the purpose of using the logo, the assessee has to necessarily make the payment. In the case before us, the payment was made on turnover basis, therefore, the same has to be allowed as revenue expenditure u/s 37(1) of the Act. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. - Decided against revenue.
-
2016 (7) TMI 1637
Revision u/s 254 - HELD THAT:- Ground No.3 raised by the AO i.e. disallowance u/s. 40(a)(i) remained unadjudicated , that the alternative plea taken by the assessee was accepted. Therefore, we are of the opinion that matter should be placed before regular Bench to decide the issue(GOA-3) afresh.
-
2016 (7) TMI 1636
Penalty u/s 271(1)(c) - none was present for the assessee in spite of issuance of registered AD notice - HELD THAT:- From the casual approach of the assessee an inference can be drawn that the appeal of the assessee was fixed for hearing before CIT(Appeal) on 08/05/2014. The assessee did not respond, thereafter also the assessee was provided final opportunity for appearance or to file written submissions. The assessee neither appeared nor filed any submissions. It is clear from the attitude of the assessee that assessee has nothing to say. The reasons for levy of penalty has been elaborated in para 10 of the penalty order. Such type of casual approach of the assessee forces us not to take a lenient view.
It is evidently clear that the assessee concealed its income/furnished inaccurate particulars of income, therefore, in the light of the decision in CIT vs A. Srenivas Pai [1999 (11) TMI 52 - KERALA HIGH COURT] -This appeal of the assessee deserves to be dismissed
-
2016 (7) TMI 1635
Revision u/s 263 - HELD THAT:- Once in the assessee’s own case [2016 (1) TMI 1469 - ITAT HYDERABAD] the ITAT has held that 263 proceedings are not sustainable, the original assessment u/s 143(3) is automatically revived. In the circumstances, the appeal against that 143(3) order before the CIT (A) gets revived. Therefore, we set aside the orders of the learned CIT (A) in all the cases and restore appeals to the file of the learned CIT (A) to adjudicate on the grounds and pass necessary orders. This order shall apply for all the appeals preferred before us herein. Therefore, in effect, all these appeals are set aside to the file of the CIT (A) for further adjudication.
-
2016 (7) TMI 1633
Validity of proceedings u/s. 92CA(3) after expiry of limitation period - period of limitation - Time limit for completion of assessments - Whether the procedure order is passed beyond the limitation of time? - irregularity in the procedure - HELD THAT:- Honda Trading Corporation [2015 (9) TMI 846 - ITAT DELHI] wherein, it has been held that the time limit specified u/s 92CA(3A) is mandatory and not directory and therefore the TPO is bound by the time limit for passing of the order u/s 92CA (3) of the act. Accordingly, in that case time limit as per section 153(1) of the Act was up to 7.06.2014 and TPO passed his order on 31.05.2014 instead of on or before 08.04.2014, hence order passed by the TPO in that case was held to be time barred. The coordinate bench has further held that in such circumstances the final assessment order would be same but the addition on account of transfer pricing adjustment arising from the determination of the ALP of the international transaction by the TPO emanating from his time barred order is unsustainable and therefore the coordinate bench directed for deletion of addition on account of transfer pricing adjustment made in the final assessment order.
Thus the order of the ld. TPO passed on 31.12.2014 is barred by limitation and liable to be quashed. Therefore, consequently, the addition on account of transfer pricing adjustment does not survive. In view of this ground No. 2 of the appeal of the assessee is allowed.
-
2016 (7) TMI 1632
Validity of reassessment u/s 147 - assessee has not offered the capital gains in the year of entering of the JDA - transfer of land as per the provisions of section 2(47)(v) as the possession of the said property has been taken by the developer in part performance of contract referred in section 53A of the Transfer of Property Act - HELD THAT:- There is no dispute that the assessee had entered into a JDA dt.12.5.2004 and had not offered any income being capital gain arising from the said JDA, Hon’ble jurisdictional High Court in the case of CIT AND JCIT VERSUS TK. DAYALU [2012 (6) TMI 405 - KARNATAKA HIGH COURT] held that when the possession was handed over to the developer at the time of entering into JDA, it constitutes transfer under Section 2(47)(v) of the Act and consequently the capital gains is to be taxed in the year in which the JDA was entered into.
When the assessee did not offer the income arising from transfer of land in question under JDA and there was no original assessment then the reopening based on the decision of Hon’ble jurisdictional High Court as well as facts came to the knowledge of the Assessing Officer that the assessee had entered into JDA is valid and justified.
Addition on account of capital gains - HELD THAT:- We find that as per the JDA dt.12.5.2004 the assessee has handed over possession to the developer for construction of the residential project though the said JDA and handing over of the possession does not constitute an outright and absolute sale however it would certainly constitute the transfer of the immovable property as per the provisions of section 2(47)(v) of the Act as held by the Hon’ble jurisdictional High Court in the case of Dr. T.K. Dayalu [2012 (6) TMI 405 - KARNATAKA HIGH COURT].
We do not find any error or illegality so far as the JDA along with handing over of possession constitute transfer of land in question in terms of section 2(47)(v) .
The issue of computation of capital gains is set aside to the record of the Assessing Officer with a direction to compute the capital gains by taking consideration for transfer of the land as on the date of JDA as market value of the asset to be received by the assessee.
-
2016 (7) TMI 1631
Addition of notional interest on interest free advances to DCM Employees Trust - assessee had claimed deduction for the liabilities on account of flyover cost and interest payable to MCD on accrual basis in AY 2004-05 - claim of the assessee company was disallowed by the AO by observing that the deduction would be allowable on payment basis - HELD THAT:- As decided in own case for AY 2004-05 in the later years, the assessee has accepted the stand of the Revenue and has also been following the same practice. For the relevant assessment year, it is noticed that the AO has changed his stand just because the assessee has transferred the complete rights in the project as a whole of M/s Purearth Infrastructure Ltd. When a particular method of computation of income of the assessee has been followed and has been accepted and is also followed by the Revenue and the assessee, just because the total rights in the project has been transferred, such method cannot be changed as by the change of the method, the expenses otherwise allowable to the assessee, is now being denied which is not a permissible act. In these circumstances, we are of the view that the action of the ld. CIT(A) in directing the AO to allow the deduction of the said expenses is on right footing and do not call for any interference.
Expenditure in respect of approvals and permissions, it is seen that the ITAT in assessee’s own case for AY 2006-07 - CIT(A) has rightly looked into the matter and has after considering the expenses which have been incurred subsequent to the claim, has granted the proportionate relief to the assessee. In these circumstances, we are of the view that the proportionate expenses as allowed to the assessee, is on a scientific and an acceptable principle after considering the expenses claimed and the possible future liability and consequently no interference is called for.
Notional disallowance made by the AO in respect of loan given to DCM Employees Welfare Trust - Similar disallowance had been made by the AO in earlier years and was subsequently deleted by CIT (A) and ITAT. Accordingly, this ground is covered in favour of the assessee.
Disallowance u/s 14A - assessee company had received dividend income during the year which was claimed as exempt u/s 10(34) of the Act and it had suo moto made a disallowance - HELD THAT:- AO has not examined the calculation as submitted by the assessee company in this regard and has also not recorded any satisfaction to the effect that the disallowance offered was not correct.
We find force in the contention of the Ld. AR that the AO has neither recorded his satisfaction nor giving any reason as to how the claim of expenditure in relation to tax free income has not been correctly made by the assessee as envisaged u/s 14A and the AO has proceeded to mechanically invoke Rule 8D. We also find that the AO has not established any nexus between the investment made and the expenditure incurred under interest expenditure and administrative expenses before disregarding the suo moto disallowance made by the assessee vis-à-vis the dividend income .
Hon’ble Delhi High Court in the case of Joint Investment P. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] has held that disallowance u/s 14A cannot exceed the amount of exempt income. The Hon’ble Delhi High Court in the case of Holcim India P. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] held that in absence of any exempt income, there can be no disallowance u/s 14A. We also find that the ITAT in assessee’s own case for AY 2009-10, on identical set of facts, had restricted the disallowance to the extent of dividend income received during the year. Respectfully following the same, we set aside the order of the Ld. CIT(A) on this issue and direct the AO to restrict the disallowance u/s 14A to ₹ 70,088/- .Decided partly in favour of assessee.
-
2016 (7) TMI 1624
Deduction u/s.80HHC - Non taxability of the gross interest on the FDR - HELD THAT:- As decided in own case where there is a direct nexus between the borrowings of an assessee utilized for business purpose, and the funds kept as FDRs by way of security, margin money etc., then interest, if any received on such FDRs will have to be netted off while considering and calculating deduction u/s.80HHC. In the instant appellant’s case, it is seen that all the FDRs are acquired from the funds taken from the O.D. account with IOB and thus, on facts also there is a direct nexus. This point, therefore, goes in favour of the appellant. The appellant has furnished a certificate from the bank, certifying that the FDRs were all acquired by debiting the O.D. account. It is also seen that the O.D. balances, both at the beginning and at the end of the year, far exceed to aggregate of the FDRs - Decided against revenue.
Treating the sale tax refund as allowable u/s.80HHC - HELD THAT:- CIT(A) has decided the said issue on the basis of decision in case of Alfa Level Ltd. [2003 (9) TMI 43 - BOMBAY HIGH COURT] as held that the sales tax refund is to be assessed as part of business profit under the head profit and gains of business and the same could not be excluded while calculating deduction u/s.80HHC of the Act. The appellant is a 100% exporter therefore the sales tax refund was considered as a part of profit on business for computing deduction u/s.80HHC of the Act. No distinguishable facts came into notice before us to which it can be assume that the CIT(A) has arrived at wrong conclusion.
Whether the appellant is entitled to deduction u/s.80HHC of the Act in view of the finding of the Assessing Officer that the assessee has no positive income from the export of 90% of incentives and other income, are reduced from profit of the business? - HELD THAT:- Since the profits derived from the export activity is a positive figure, the appellant is eligible for deduction u/s.80HHC. The A.O. is directed to re-compute and grant deduction u/s.80HHC in accordance with law. Not distinguishable facts were placed on record by the revenue to which it can be assumed that the finding given by the CIT(A) is wrong against law and facts.CIT(A) has passed the order on the basis of order passed by the ITAT, Mumbai ‘H’ Special Bench in the case of M/s. Surendra Engineering Corpn. [2002 (12) TMI 199 - ITAT BOMBAY-H] Finding no contrary view taken by any other court of law, we are of the view that the CIT(A) has passed the order judiciously and correctly which does not require to be interfere with at this appellate stage. Accordingly, these issues are decided in favour of the assessee.
Addition holding that the purchases are fully explained in the books of account whereas the supplier were not traceable - as per CIT-A net result would be that 80% of the addition would have to be allowed as a deduction u/s.80HHC leaving only the balance 20% - HELD THAT:- These issues have been remanded by the CIT(A) to the Assessing Officer for the verification of the allowable deduction u/s.80HHC of the Act while giving effect to the order of CIT(A). The representative of the department has raised the question of verification while in this regard the CIT(A) has already directed the Assessing Officer to verify the claim of the assessee in view of the directions as desired by the CIT(A) while deciding this issue. No justifiable facts have been placed on record to take the contrary view of the said finding. Moreover these issues are based upon the facts of the case which can be verified by the Assessing Officer in accordance with law. On appraisal of the above said order we find no reasons to interfere with in the order passed by the CIT(A) in question. These issues are decided in favour of the assessee against the revenue.
-
2016 (7) TMI 1623
Penalty u/s 271(1)(c) - tax was calculated on the deemed income under section 115JB - As the assessee has tax liability under section 115JB, however, it has offered tax under normal provisions of the Act and, therefore, had furnished inaccurate particulars to evade tax - CIT- A deleted the penalty levy - HELD THAT:- As considering the decision in CIT vs. Nalwa Sons Investments Ltd. at the SLP against the decision was rejected by Hon'ble Apex Court [2012 (5) TMI 150 - SC ORDER] and the facts available on record there is no dispute to the fact that the assessment as per normal procedure was not acted upon and only the deemed income assessed under section 115JB became the basis of assessment as it was higher of the two. In the case of Nalwa Sons Investment Ltd. it was held that when the tax was calculated on the deemed income under section 115JB. the Revenue is not to impose penalty.
Since the tax has been paid by the assessee under section 115JB, therefore, not penalty could be levied in respect of additions/disallowances made by the Assessing Officer. Respectfully following the decision M/S. NALWA SONS INVESTMENTS LTD. [2010 (8) TMI 40 - DELHI HIGH COURT] we find no infirmity in the conclusion of the learned CIT(A). Resultantly the appeal filed by the Revenue is dismissed.
-
2016 (7) TMI 1622
Addition on account of the commission paid on the bank guarantee issued by the VTB bank - bank guarantee commission to be treated as a payment of interest in terms u/s 2(28A) or addition 40(a)(i) - HELD THAT:- As pointed out by the CIT (A), there was no warrant for treating the bank guarantee commission as a payment of interest in terms of Section 2(28A) of the Act. The bank guarantee commission paid to the foreign bank could not have been disallowed under Section 40(a)(i) of the Act on the above basis. The Court is unable to find any legal infirmity in the above determination by the CIT(A) which has been affirmed by the ITAT.
Method of accounting - Substantial question of law OR fact - HELD THAT:- Revenue does not dispute that the method of accounting has been consistently followed by the Assessee and has been accepted by the Revenue for the AYs previous to and subsequent to the AYs in question. Consequently, this Court does not see any reason to frame any question on this issue as well.
-
2016 (7) TMI 1621
Reopening of assessment u/s 147 - non independent application of mind - receiving information from the Investigation Wing, New Delhi that assessee is one of the beneficiaries of the bogus accommodation entries initiated reopening of assessment - whether AO can initiate proceedings u/s 147/148 of the Act on the basis of certain communication received from his superior revenue authorities, namely, Addl. Director of Income-tax (Inv.), Unit-1, New Delhi? - HELD THAT:- As decided in CHHUGAMAL RAJPAL[1971 (1) TMI 9 - SUPREME COURT] it was not satisfied that the ITO had any material before him which could satisfy the requirements under Section 147 and therefore could not have issued notice under Section 148.
Similar issue has cropped up before the ITAT, Delhi Bench ‘H’ in M/s. USG Buildwell Pvt. Ltd. [2021 (3) TMI 518 - ITAT DELHI] wherein addition was made by the AO on the basis of similar intimation sent by ACIT, Central Circle 19, New Delhi on the basis of survey operation conducted in S.K. Gupta Group cases on 20.11.2007 and the coordinate Bench came to the conclusion that the AO has not applied his mind on the information received form ACIT as required u/s 147 of the Act and as such, assessment framed u/s 147 read with section 143(3) is not sustainable - Decided in favour of assessee.
-
2016 (7) TMI 1620
Survey u/s 133A - Addition based on loose papers found - non disclosure of donation receipt - HELD THAT:- Statement of the individual case has to be seen and it has to be used independently. In the statement recorded some of the students admitted that they have paid donation but this statement of the third party cannot be used against the assessee who has denied to have made any payment.
There are 1000s of reasons for appearing her name in the code but it cannot be used against the assessee unless proper opportunity of making cross examination is given to the assessee after giving a copy of statement to the assessee and thereafter this statement can be used, but I am of the view that the statement recorded of the some persons is in their individual capacity but cannot be used against the assessee. Therefore, this will not serve the purpose for making the addition in the hands of the assessee. Moreover, the assessee’s books of accounts are subject to audit. The assessee also denied to have made any payment then unless some incriminating material is found from the medical college, no addition can be made - Decided in favour of assessee.
........
|
