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Income Tax - Case Laws
Showing 21 to 40 of 803 Records
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2016 (8) TMI 1568
Disallowance of Depreciation - documentary evidence in support of purchase of two trucks not given - Commissioner (Appeals), refused to take cognizance of the documentary evidences submitted before him, stating that the assessee has not filed any application under rule 46A of the I.T. Rule, 1963 - Whether CIT(A) erred in rejecting the claim when depreciation is specifically shown in final accounts of company whose accounts have been audited? - HELD THAT:- If the assessee had produced certain documentary evidence before the first appellate authority he should have considered the same instead of rejecting them purely on technical reasons. If the assessee had not complied strictly to the provisions of rule 46A, learned Commissioner (Appeals) could have pointed out the same to the assessee for enabling him to submit the additional evidences complying to the provision of rule 46A.
From the photocopy of the documentary evidence produced before us in the from of a paper book it appears, the purchase invoice of two trucks are in the name of assessee. Similarly, R.C. Book also bear the name of the assessee. Further, certificate issued by the financing company G.E. Capital indicates that the assessee has repaid the amount to the finance company and no dues against the assessee is outstanding. These documentary evidences prima–facie proves assessee’s ownership over the two trucks.
Admittedly, these are only photocopy submitted by the assessee. Therefore, to prove the authenticity of documentary evidences submitted before the Departmental Authorities, it is essential for the assessee to produce the original purchase invoice, R.C. book, insurance document, etc., for verification to conclusively establish its ownership over the two trucks. For enabling the assessee to do so, we restore the matter back to the file of the Assessing Officer for production of the original purchase invoice, R.C. book, insurance documents, etc., which could prove assessee’s ownership over the two trucks. If on verification assessee’s claim is found to be correct, the Assessing Officer must allow depreciation to the assessee for the two trucks. Assessee’s appeal is allowed for statistical purpose
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2016 (8) TMI 1567
Maintainability of appeal low tax effect - HELD THAT:- As none of the appeals have a tax effect of ₹ 20,00,000/- or more, Ms. Kanani, learned Counsel appearing for the Revenue does not press any of the Appeals.
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2016 (8) TMI 1565
Revision u/s 263 by CIT - Validity of assessment framed u/s 143(3) r.w.s. 147/148 - As per CIT AO failed to conduct proper enquiries/verifications/examinations in respect of trading results declared in exclusion to extraordinary income declared by way of write back of certain credits - HELD THAT:- A combined reading of Section 263 and Section 147 would clearly suggest that revisionary powers under S. 263 cannot be read in a manner to expand the scope of section 147 of the Act. S. 263 read in the context of reassessment proceedings cannot be exercised unless there is a cause available on objective facts to demonstrate that detailed probe or enquiries were warranted to encompass escapement of other possible income in a given set of facts. Consequently, the alleged inaction of the AO on the issue of correctness of trading results in reassessment proceedings is not fatal or erroneous for the purposes of section 263 of the Act. Hence, the reassessment order passed within the four corner of its authority cannot be dubbed as erroneous per se and is thus is not susceptible to review contemplated under S. 263 of the Act.
Lack of enquiry on unconnected issues in a reassessment proceeding - We notice that the Commissioner has merely entertained strong suspicion on the bona-fide of trading results owing to huge losses and observed that in the absence of income reported on account of credit towards write back of certain amounts under section 41(1), the assessee has declared trading losses on a substantial turnover which ought not to have been accepted without embarking upon a detailed enquiry. The show-cause action of the Commissioner under section 263 seeking to upset the reassessment order is thus clearly actuated in the realm of such suspicion.
As noted earlier, indulging in roving enquiry u/s 147 on unconnected issues is a case of overreaching of powers which is not permissible in law. AO in his quasi judicial capacity has accepted the trading results. A mere different perception of Commissioner founded upon suspicion on the issue is not sufficient to legitimize jurisdiction under section 263. It would be farfetched to presume that the purported substantial turnover per se would necessarily give rise to presumption of profits thereon. The allegation of reassessment order being erroneous by the Commissioner is purely founded upon suspicion and surmises on losses declared. The exercise of revisionary power based on such suspicion is in our view not permissible in law.
Certain figures of income as an amount written back does not tally with corresponding breakup submitted in the course of assessment proceedings - The income declared by the assessee for the impugned assessment year 2008-09 is higher than the income given in the assessment year 2007-08 as an amount written back under section 41(1) of the Act. Apparently, no prejudice has thus caused to the interest of Revenue by declaring higher income compared to what was provided in the course of assessment in the earlier year. The condition precedent for exercise of powers under S. 263 is thus sorely missing. Hence, we fail to visualize any rationale in this Ground set out by the Commissioner for invoking revisionary powers.
A higher remission by a unilateral act to the prejudice of the Assessee can not be ordinarily forced. Therefore, this ground for invoking section 263 is also not sustainable in law - Decided in favour of assessee.
AO has not verified the write off amount during the course of assessment proceedings - A.Y. 2009-10 - Hon’ble Supreme Court in the case of T.R.F. Ltd. [2010 (2) TMI 211 - SUPREME COURT] has held that the assessee need not prove the debts to be irrecoverable under section 36(1)(vii) of the Act. It is sufficient if the debts incidental to business are written off for the purpose of making claims. In the light of the aforesaid decision of the Hon’ble Supreme Court in the case of T.R.F. Ltd. vs. CIT (supra), it was not unreasonable for the Assessing Officer to accept the debts written off. Further, the Commissioner has not brought on record any good reason to hold to the contrary. In this view of the matter, we do not see any error committed by the Assessing Officer in admitting amounts write off towards bad debts and grant deduction of the same with similar amounts written back. In the light of aforesaid discussion, the action of the Commissioner under section 263 is outside the bounds of law and thus cannot be sustained. In consequence, the order passed u/s 263 for the assessment year 2009-10 dated 28.03.2014 requires to be set aside and quashed.
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2016 (8) TMI 1563
Addition as unexplained capital - assessee(s) contends that both these parties were alleged to be paper-company of M/s. M.D. Patel Group. This information was revealed by survey action on one Shri Pankaj Danawala and M/s. M.D. Patel Group A statement at bar is made by the assessee Shri Hemant Jadia, Advocate to the effect that M/s. M.D. Patel Group has owned up the transactions, investments and income from all the front companies, including these two assessee - HELD THAT:- As statement at bar is made by Shri Hemant Jadia, Advocate of Gujarat High Court and some of the orders of the Bombay High Court are on the record in respect of purported litigation between M/s. M.D. Patel Group and Union of India. The facts about Settlement Commission owning up of the income by the kingpin M/s. M.D. Patel Group etc. are not on the record. In view thereof these appeals are set aside and restored back to the file of the Assessing Officer to call the assessee to demonstrate that the subject matter raised in these appeals is covered by the alleged settlement petition of M/s. M.D. Patel Group and the result thereof. It is made clear that the AO will verify necessary records and the assessees will fully co-operate in this matter. In case of non-cooperation by the assessees, the ld. AO will be at liberty to take appropriate view in accordance with law. Accordingly, both the appeals are allowed for statistical purposes.
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2016 (8) TMI 1562
Goodwill arising on succession - capital balance accounted as goodwill - capital gain computation - transfer u/s 2(47) - interpretation of Section 47 (xiv) - AO found that the goodwill was never created in the books of the proprietary concern and therefore it never became an asset of the sole proprietary concern which was taken over on such succession also confirmed by CIT-A and ITAT - HC said we do not think that the Tribunal's view and in the backdrop of the peculiar facts can be termed as perverse or vitiated by any error of law apparent on the face of the record - HELD THAT:- Application for exemption from filing certified copy of the impugned order is allowed.
We do not find any legal and valid ground for interference. The Special Leave Petition is dismissed.
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2016 (8) TMI 1561
Amortization/depreciation on Goodwill - Goodwill consequent to a scheme of amalgamation - As per revenue goodwill is depreciable u/s 32 only if any consideration is paid for its acquisition and the assessee has not earmarked any specific amount towards such goodwill at the time of amalgamation - CIT-A Allowed claim - plea of the Revenue is that in the present case assessee has not paid any consideration for acquisition of goodwill at the time of amalgamation and, therefore, the claim of depreciation has been wrongly allowed - HELD THAT:- Quite clearly, in terms of scheme of amalgamation, the assets and liabilities of GIL stood transferred to the assessee. Further, the deficit in the value of assets over the value of liabilities of GIL taken over after adjusting the aggregate value of the equity shares issued to the members of GIL, was treated as goodwill in the books of the assessee-company. In view of the authoritative pronouncement of the Hon'ble Supreme Court in the case of Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT], it cannot be denied that ‘goodwill’ is an asset qualifying for depreciation u/s 32(1)(ii) .
The plea of the Revenue that no amount has been paid for its acquisition does not defeat the claim of depreciation allowed by CIT(A). Notably, ‘goodwill’ has arisen in the present case consequent to a scheme of amalgamation approved by the Hon'ble High Court and so was the situation in the case of Smifs Securities Ltd. (supra) also. Thus we affirm the ultimate direction of the CIT(A) to allow depreciation on goodwill as per the Income Tax Rules, 1962 by working out the figure of WDV of goodwill for the year under consideration. - Decided against revenue.
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2016 (8) TMI 1560
Capital gain - FMV determination - JDA - value of the sale consideration of the land as on the date of Joint Development Agreement (‘JDA’) - whether transfer of the land under JDA constitutes transfer as per the provisions of Section 2(47)(v) r.ws. 53A of the Transfer of Property Act? - CIT-A held that the deemed consideration of the land should be adopted as fair market value of the built up area to be received by the assessee as on the date of JDA and based on the Govt. records - HELD THAT:- Identical issue decided in SMT. SAROJINI M KUSHE [2016 (4) TMI 1326 - ITAT BANGALORE] as decided that because at the time of signing JDA the capital gain has to be computed only on the guidance value of the land. Even otherwise, if any capital gains to be accrued in future in favour of assessee after receiving the possession of the property. Certainly that would also be subject to capital gains. Therefore, in our final conclusion valuation of the capital gain should be appropriate to adopt the FMV/asset as deemed consideration, but not cost of the construction. - Decided against revenue.
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2016 (8) TMI 1558
Levy of penalty u/s 271E and 271D - violation of the provisions of section 269SS and 269T for accepting and repaying loan in cash from Shri Abhijit A Sheth, Director of the company - whether no satisfaction has been recorded by the AO? - HELD THAT:- Hon'ble Apex Court in the case of CIT vs. Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] dealing with the levy of penalty under section 271D of the Act, has held that if there is no satisfaction recorded in the order of assessment regarding initiation of penalty proceedings under section 271D of the Act, then no penalty thereunder could be levied.
Admittedly, by both AO in the penalty orders and learned CIT(A) in the impugned orders, no satisfaction for initiation of penalty proceedings under sections 271D and 271E of the Act has been recorded in the orders of assessment. In this factual matrix of the case and respectfully following the decision in the case of Jai Laxmi Rice Mills (supra), we hold that since admittedly no satisfaction has been recorded for initiating penalty proceedings under sections 271D and 271E of the Act in the case on hand in the order of assessment for A.Y. 2000-01, therefore no penalty thereunder could be levied. In this view of the matter we cancel the penalty levied under sections 271D and 271E of the Act for A.Y. 2000-01 - Decided in favour of assessee.
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2016 (8) TMI 1557
Exemption u/s 11 - refusal to grant registration u/s 12AA - HELD THAT:- We find that the trust was created vide trust deed dated 26 Sep. 2014 and the objects of the trust deed of the society are charitable in nature. At the time of granting registration to an assessee the learned CIT (Exemption) has to only examine the objects for which the society has been registered.
The provisions of section 12AA regarding registration are very clear which clearly states that at the time of registration the Commissioner has to satisfy himself about the objects of Trust, and genuineness of its activities.
We find that in the next year the learned CIT(Exemption) on the basis of same trust deed has allowed registration to the assessee, therefore, refusal to grant registration in the present year is not justified - we direct the CIT(Exemption) to grant registration to the assessee u/s 12AA of the Act.
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2016 (8) TMI 1556
Penalty u/s. 271(1)(c) - Defective notice u/s 274 - assessee argued that AO had merely ticked the portion of concealment of income or furnishing of inaccurate particulars of income without making specific charge on the assessee to respond - HELD THAT:- A the show cause notice u/s. 274 of the Act is defective as it does not spell out the grounds on which the penalty is sought to be imposed. Following the decision of MANJUNATHA COTTON AND GINNING FACTORY, MANJUNATH GINNING AND PRESSING, VEERABHADRAPPA SANGAPPA AND CO., V.S. LAD AND SONS, G.M. EXPORT [2013 (7) TMI 620 - KARNATAKA HIGH COURT] which has been followed in the aforesaid tribunal decisions, we hold that the order imposing penalty in the assessment year 2007-08 have to be held as invalid and consequently penalty imposed is cancelled.
For the reasons given above, we hold that levy of penalty in the present case cannot be sustained. We therefore cancel the orders imposing penalty on the Assessee and allow the appeal by the Assessee
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2016 (8) TMI 1555
Revision u/s 263 by CIT - Depreciation on hoardings - temporary v/s permanent structure - depreciation at the rate 100% by treating these hoardings to be temporary structures - HELD THAT:- AO made enquiries on this issue and after being satisfied with the claim of the assessee allowed the cal of depreciation on hoardings at 100%. Order of the AO was in tune with the order of the tribunal in the past which has been accepted by the revenue. In fact even for the subsequent A.Y. 2009-10 the issue was before the tribunal and it had decided in favour of the assessee. In such circumstances we are of the view that the decision in the case of Russel Properties Pvt. Ltd. [1976 (5) TMI 111 - CALCUTTA HIGH COURT] will be applicable and the CIT could not have invoked his jurisdiction u/s. 263.
With regard to the policy guidelines on display of advertisement pointed out by the ld. DR as rightly contended by the ld. Counsel for the assessee this was only a draft policy 2009. In any event the CIT in the impugned order has not, on the basis of any material available before him, come to a conclusion that the hoardings on which the assessee claimed depreciation at 100% were structurally sound so as to be regarded any building.
The decision in the case of Asian Advertising [2016 (5) TMI 158 - ITAT MUMBAI] is a case where the question was whether hoardings constitute building or plant. In our view this cannot be said to be a precedent in so far as the issue involved in the present case is concerned. We are also of the view that the CIT in exercise of his powers u/s. 263 of the Act has to come to a definite conclusion as to how the order of the AO was erroneous. He cannot set aside the order of AO and direct an enquiry on the question whether hoarding structure would be in the nature of purely temporary erection - CIT could invoke the jurisdiction u/s. 263 of the Act only on a finding that hoardings were not purely temporary erection and such finding has to be sustainable in law. It is only then the CIT can make out a case that order of AO was erroneous. In the present case the CIT has not given such a finding. Even on this basis, we are of the view that order u/s. 263 of the Act cannot be sustained. Appeal of assessee allowed.
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2016 (8) TMI 1552
Revision u/s 263 - unexplained cash - only contention of the Pri. CIT is that the AO should have made further enquiries, which has not been done, according to him - HELD THAT:- CIT observed that Sh. Om Parkash prop, of M/s. Khubsoorat Ornaments, i.e. the father of the assessee was neither produced by the assessee nor summoned by the AO; that the agreement regarding purchase of property was not produced; that there was no power of attorney given by Sh. Om Parkash to Sh. Jiwan Kumar for purchase of property on his behalf; that no agreement to sell was produced and no part payment was made; and the AO did not examine the availability of cash in hand with M/s. Khubsoorat Ornaments.
As seen that the books of account were produced before the AO ward 1(4) Mansa during the course of proceedings u/s.132B for release of cash and also before the AO during the course of assessment proceedings. The copies of relevant pages of cash book are part of the assessment record in which cash amounting to ₹ 1480000/- has been debited in cash in transit on 05.01.2012 and the cash was seized on 06.01.2012 - Further during the course of assessment proceeding Sh. Sham Lal S/o. Sh. Mohan Lal was produced and his statement was recorded on 25.11.2013 in which he has confirmed that he had entered in to a deal of sale of property with Sh. Om Parkash and Sh. Om Parkash alongwith his son Sh. Jiwan Kumar visited him with a sum for finalizing the deal of property but the same could not be finalized due to non clearance of loan. But the Pr. CIT after raising objections to the explanation of the assessee held that the assessment order is erroneous and prejudicial to the interest of the revenue. The objections reproduced in the order u/s. 263 were not confronted to the assessee and only because of this fact the reply could not be given.
It is apparent that the only contention of the Pr. CIT is that the AO should have made further enquiries which has not been done according to him. Thus this is not a case of lack of enquiry and the Pr. CIT erred in assuming jurisdiction u/s. 263 merely because he has a different opinion then the AO in the matter.
It is seen that the present case is not a case of lack of enquiry - enquiry was carried out by the AO. We find that in fact, the ld. Pri. CIT has substituted its opinion for the opinion of the AO by repraising evidence on record, as has rightly been contended on behalf of the assessee.
This is certainly a case of difference of opinion between AO and CIT. The only contention of the CIT seems to be that the AO should have made further enquiries/investigation, which he has not done - for assuming jurisdiction u/s. 263, one has to keep in mind the distinction between lack of inquiry and inadequate enquiry. If there was an enquiry, even inadequate, that would not by itself give occasion to the CIT to pass order u/s. 263, merely because he has a different opinion in the matter. It is only in case of 'lack of enquiry' that such a cause of action could be open. AO accepted and even in the office note meant for internal purposes, he mentions that the assessee has substantiated the jewellery seized. In view of these evidences, this is not a case of lack of inquiry either. - Decided in favour of assessee.
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2016 (8) TMI 1551
Rectification u/s 254 - ITAT held that the assessee being an AOP is not required to deduct tax at source for making payment to its constituent companies - HELD THAT:- Tribunal has given a finding that the assessee, being an AOP/JV, is not required to deduct tax at source from the payments to the constituents towards their share of work carried out by them. Tribunal thought it fit to direct the A.O. to verify whether Chinese concern has offered its income to tax in India and has also directed the A.O. to bring the same to tax in India if it is found that the non-resident has not offered this amount as part of their taxable income in India.
We find that the above observation or direction is only means that the A.O. may take suitable action for bringing the amount to tax in accordance with the provisions of the Act. Whether it is only an observation or a direction, in our opinion, to take a suitable action, A.O. has to follow the relevant provision of law. It is a settled position that before bringing to tax any income of a non-resident, the A.O. has to examine as to whether such income is taxable in India.
The conditions precedent for bringing to tax such amount have to be satisfied before the A.O. can take recourse to bringing the same to tax in India in the hands of the assessee. Therefore, in our opinion, there is no mistake committed by the Tribunal in giving such observation/direction but in our opinion, it would be in the fitness of the case and justice if the following the words are added at the end of para-12 :
“Only if the said income is chargeable to tax in India”.
M.As. of the assessee are partly allowed.
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2016 (8) TMI 1550
Reopening of assessment u/s 147 - validity of audit objections in re-opening of assessments - disallowance of Provision on investment, under section 14A and disallowance u/s. 35D - reliance on Audit scrutiny of computation of income - HELD THAT:- As the part of the note of an audit party, which mentions the law that escaped the notice of the AO constitutes "information" and the part which emboides the opinion of the audit party in regard to the application or interpretation of the law cannot be taken into account by the AO. A completed scrutiny assessment should not be disturbed in a light manner. If an audit objection points out some mistake in the original order provisions of section 154 have to be invoked and not of section 147. Both the sections find place in the Act for specific purposes. Similarly, if the order passed by an AO is found to be erroneous and prejudicial to the interest of Revenue, a notice u/s.148 should not be issued. Section 147 is not panacea for all the ills. We would like to discuss the limitations of an audit objection in subsequent parargraphs. But, at present it is sufficient to say that re-opening should be done only in certain circumstances, as envisaged by the section.
The entire approach of the AO and the FAA, in the background of the present case, is misconceived. The re-assessment order is based on allowability of provision of bad and doubtful debts. Perusal of the assessment order reveals that such details were called for by the AO. It is further found that the details of the provisions for bad and doubtful debts furnished by the assessee were scrutinized during the original assessment proceedings. In the notes accompanying the return of income the assessee had specifically mentioned the fact and basis of treating the amount in question in a particular manner - there does not appear to the tangible material/reason for the AO to reopen the assessment proceedings in the facts of the present case. He himself admits that ‘scrutiny of the records revealed’ that there was escapement of income. So, the reasons, recorded by him, have to be analysed considering the post scrutiny events.
AO was not convinced about the reasons given by the audit party for disallowing the claim. Not only he stated that claim was sustainable as per the provisions of the Act, but, also indirectly questioned the validity of the objection. But, it is a fact that he had issued a notice u/s.148 of the Act.A comparison of the audit objection raised by the audit party and the notice issued by the AO as per the provisions of section 148 clearly prove that it was solely based on the audit objecttions. Thus, the AO has taken two diagonally opposite stands in the original assessment/ in the reply sent to the audit party and while issuing the notice u/s.148 of the Act. There is not an iota of doubt that it is a clear case of change of opinion.
Audit authorities, an outside agency, definitely has an important role to point out irregularities of assessment orders. But, a Laxamn-Rekha has to be there for audit party. It is not the job of an audit party to interpret the law with regard to facts of a case. Act does not give mandate to the audit personnel to hold that the provisions should be interpreted in a particular manner or to assess the income of an assessee in a particular manner. It is the prerogative of an AO. In the case under consideration the it was not the case of the audit that the AO, while completing the scrutiny assessment, had ignored the judgment of the Hon’ble Apex Court or the Hon’ble jurisdictional High Court resulting in under assessment of the taxable income. No arithmetical mistake or calculation error was also pointed out by the audit party. It had interpreted the law with regard to provisions of section 35D and 36(viiia)of the Act in a particular manner and held taxable income had escaped assessment. In our opinion, such an observation is beyond the power of any audit party and same cannot be termed information for the purposes of section 147 of the Act. Such an observation is not a reliable material-leave apart the tangible material that can be legally relied upon for disturbing a scrutiny assessment. - Decided in favour of assessee.
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2016 (8) TMI 1548
TDS u.s 194 - TDS on payments made to an exempt entity like M/s. APIIC, in whose respect eligibility for exemption u/s. 11 - whether eligibility for exemption u/s. 11 is to be decided by the AD from year to year? - HELD THAT:- There is no provision in the IT Act to grant blanket permit for non-deduction of tax except by following procedure of applying to the appropriate authority. To get the exemption certificate, the concern seeking exemption from the deductee, it has to apply to the DIT (Exemption) with the request in proper form, only upon approval from DIT (Exemption) in writing, the exemption is allowed not otherwise. In our considered view, the grounds raised by the revenue are correct. In the present case, the CIT(A) has made the passing comment that APIIC is a exempt entity, but, the CIT(A) has allowed the ground of assessee treating the transaction as capital in nature. CIT(A) has not adjudicated this ground mainly on exemption of entity. Hence, the ground raised by the revenue is dismissed.
Whether M/s. APIIC is a corporation established by the State Government of Andhra Pradesh and not by the Central Government so as to enjoy the exemption available u/s. 196(iii)? - There is no dispute that APIIC established under State Act. In the present case, CIT(A) has allowed the exemption by treating the APIIC as a concern u/s 194A(iii)(b) of the Act. On careful observation, the concern which is exempt u/s 194A(iii)(b) should be a financial corporation established by or under central, state or provincial Act. On the record submitted before us does not clarify that APIIC is a financial corporation. Since we are not sure about the type of financial corporation, we remit this issue back to the file of the AO to determine the status. In case it is found that it is a financial corporation, the exemption may be granted.
Whether 'Provision for Expenses" is made on adhoc basis, no TDS is deductible on such provision, which is in contravention to the provisions of section 194(2) ? - CIT(A) has allowed as no TDS is deductible on such provision, which is in contravention to the provisions of section 194(2) of the Ac. We are surprised to observe that there is no such section 194(2) in the Act. The section referred by the revenue is relating TDS on dividend. Since, there is no relevance to the present case, we are not considering this ground for adjudication.
Appeal of the revenue is partly allowed for statistical purposes
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2016 (8) TMI 1547
Reopening of assessment u/s 147 - application v/s non application of mind by AO - Reopening on basis of information allegedly received by him from the Directorate of Income Tax (Investigation) - HELD THAT:- AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi
As issue involved in the present appeal and is squarely covered by the aforesaid decisions of the Hon’ble High Court of Delhi in the case of G&G Pharma [2015 (10) TMI 754 - DELHI HIGH COURT] & Signatures Hotels (P) Ltd. [2011 (7) TMI 361 - DELHI HIGH COURT] Hence, we decide the legal issue in dispute in favor of the Assessee and against the Revenue and accordingly quash the reassessment proceedings and allow the ground no. 1 & 2 raised by the Assessee.
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2016 (8) TMI 1545
Exemption claimed u/s 54F - assessee claims relief of exemption of tax in respect of a residential house - possession of two residential houses on the date of transfer of property thus denied the exemption - one house is in the name of the assessee's wife - owner as defined under Section 27(i) of the Act, for the purpose of deemed to be the owner of the property - HELD THAT:- In this case, as categorically held by the Commissioner of Income Tax (Appeal) and the Tribunal that Section 27(1) of the Act is a deeming provision applicable only for Sections 22 to 26, in computing the annual value of the property and as such deeming provision cannot be extended to deny the exemption under Section 54F of the Act.
We are of the considered view that Section 54F of the Act, for granting exemption applies for the purpose of capital gain of transfer of certain capital assets not to be charged in the case of investment in residential house. To this context, Section 54F would apply as an independent provision, to the instant case. Therefore, the Commissioner of Income Tax (Appeal) and the Income Tax Appellate Tribunal have rightly come to the conclusion that Section 27(i) of the Act is not applicable to the facts of the present case - we are not inclined to entertain the instant appeal and the substantial questions of law raised in this Tax Appeal, is answered against the Revenue.
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2016 (8) TMI 1543
TDS u/s 194C - payment made by the assessee during the year under consideration to a particular owner of vehicle contractor for transportation of iron ore - disallowance u/s 40(a)(ia) treating the transaction between the Appellant and truck owners as works contract - whether appellant dealt only with the facilitators for the transportation of iron ore minerals from the site to the specified destination and there is no contract between the truck owners and the Appellant? - HELD THAT:- In the case on hand the hiring of the transporter is not on isolated occasion but it was for continuous transportation of iron ore mineral to ports and further the agreement between the assessee and the transporter is based on per M.T. transportation. Therefore, the rate of transportation was agreed between the parties on the basis of the quantity and not on the basis of per trip - payment made to the particular transporter for transportation of iron ore from mines to ports during the year under consideration has to be aggregated for the purpose of section 194C(3) - In this case, the Assessing Officer has only aggregated the amount paid in respect of a particular truck and there may be a case that more than one truck has been hired by the assessee from a particular transporter. Accordingly, we do not find any merit or substance in the contention raised by the assessee.
Amendment to section 40(a)(ia) by Finance Act, 2014 to be considered with retrospective effect - In the ordinary circumstances when an amendment has been specifically brought into statute w.e.f. a specific date then the same cannot be considered as retrospective in nature until and unless the said amendment is for the purpose of supplying an obvious omission in a former legislation or to explain a former legislation. Therefore it is clear that only in the case where the amendment is brought into statute for supply of omission in the existing legislation or it is explanatory in nature it can be considered retrospective. In the case of Vatika Township (P.) Ltd. [2014 (9) TMI 576 - SUPREME COURT], the amendment brought into Section 80IB(10) of the Act was considered by the Hon'ble Supreme Court as retrospective in nature because of the reason that after the said amendment the benefits were available only to some persons and it was detrimental to the other person for the same assessment year.
This is not the case of the assessee before us that amendment in the provisions of Section 40(a)(ia) of the Act discriminates different assessees for the same assessment year. Therefore the said decision cannot be applied to the amendment to Section 40(a)(ia) of the Act as the amendment has been brought prospective w.e.f. 1.4.2015 therefore the same cannot be considered as retrospective.
Appeal of assessee dismissed.
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2016 (8) TMI 1540
Addition on account of cash deposited by the assessee in her saving bank account maintained with Induslnd Bank - CIT-A deleted the addition - Department contends that since the assessee had not disclosed the purpose of withdrawal of cash from bank and usage thereof, the ld. CIT(A) ought not to have granted her the benefit of such cash withdrawn from the bank, a long period back - HELD THAT:- As per the decision of the Delhi Bench of the Tribunal in the case of ‘Mrs. Deepali Sehgal’, [2014 (9) TMI 1073 - ITAT DELHI], as correctly taken note of and followed by the ld. CIT(A), it is not mandatory under any law that an individual has to keep his/her savings in the bank account only and not as cash in hand. In ‘Shiv Charan Dass vs. CIT’ [1980 (4) TMI 74 - PUNJAB AND HARYANA HIGH COURT], in this regard, it has been held by the Hon’ble jurisdictional High Court that the onus is on the Department to show that the explanation of the assessee should not be accepted.Further, it is trite that nobody can be asked to prove a negative, as was sought to be done by the AO.
The department is also wrong in contending that since the assessee is not filing her wealth tax returns regularly, the ld. CIT(A) has erred in accepting that the assessee maintains personal books of account and draws personal balance sheet. Here, it needs to be reiterated that it is the department itself, which has accepted the balance sheets drawn by the assessee in her personal capacity and that for the assessment yea₹ 2007-08 to 2011-12, in the wealth tax cases of the assessee, the wealth tax returns filed by the assessee were based on the personal balance sheets of the assessee and it was the same AO who accepted the cash in hand, which was as per the balance sheet of the assessee, for wealth tax purposes.
No material has been brought on record by the Department to contradict the well reasoned findings of fact recorded by the ld. CIT(A). Appeal of the Revenue is dismissed.
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2016 (8) TMI 1538
Disallowance u/s 14A on account of ‘business portfolio’ - HELD THAT:- The situation that has emerged before us is that in view of the decision of the Tribunal of earlier years as well as judgments of Hon’ble Bombay High Court in the case of India Advantage Securities Ltd. [2015 (6) TMI 140 - BOMBAY HIGH COURT] and HDFC Bank Ltd. v. DCIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] and judgment of CCI Limited [2012 (4) TMI 282 - KARNATAKA HIGH COURT], the disallowance u/s 14A should be deleted for both the portfolios i.e. ‘investment’ as well as ‘business’. The only hitch with regard to disallowance made under ‘business portfolio’ is that assessee had himself made a voluntary disallowance.
It is well settled position of law that taxable income of an assessee has to be computed strictly in accordance with the provisions of Income Tax Act, 1961 as explained by the courts from time to time. Thus, disallowance/additions if any can be made only in accordance with law. Neither any item of receipts can be brought to tax nor can any expenditure be allowed/disallowed, merely on the basis of consent or acquiescence or waiver of any party or otherwise. It could be done only in accordance with the provisions of law.
The circular has been taken note of by many courts in their judgments while deciding the identical issues wherein taxpayers have paid more tax than actually due as per law. In this regard, we shall also like to make a mention of Article 265 of Constitution of India which says that ‘no tax can be collected except by the authority of law’. Thus, in the given facts of the case before us and the aforesaid legal position and we find that the disallowance made by the AO u/s 14A on account of ‘business portfolio’ deserves to be deleted in total and therefore, we direct the AO to give relief accordingly. Grounds raised by the assessee are allowed.
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