Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

THE ITO, Ward-8 (4) Ahmedabad Versus M/s. Vasupujya Arcade Pvt. Ltd., Ahmedabad

Net profit determination - AO has applied 15% of the contract receipts - ld.CIT(A) has restricted the same to 8% - Held that:- The appellant has purchased land during the year and has shown work in progress of ₹ 9,42,319/-. The cost of the land has been shown to be ₹ 98,96,100/-. Since the appellant is constructing the building to its share holders cum members, the profit element on account of land will not be there. However, there would be a profit element in the construction work t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

imate the income of the appellant by applying the profit rate of 8% on the W.I.P. of ₹ 9,42,319/-. - Decided against revenue.

Penalty u/s.271(1)(c) - penalty has been imposed by the A.O. as the income was assessed by him at ₹ 17,14,395/- as against a loss of ₹ 1,680/- shown in the return of income - Held that:- The appellant had given all the particulars regarding the claim in the return of income and the accounts were also presented before the assessing officer. It .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me found to be incorrect or erroneous or false there was no question of invoking the penalty under section 271(1)(c). Mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Considering the above facts and circumstances, the penalty imposed by the assessing officer is deleted and the appeal is allowed. See Reliance Petro products Pvt.Ltd. reported in [2010 (3) TMI 80 - SUPREME COURT ] - Decided i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hort) both identically dated 02/08/2011 ITA Nos.2695 & 2696/Ahd/2011 (By Revenue) and CO Nos.286 & 287/Ahd/2011 (By Assessee ) respectively pertaining to Assessment Years (AY) 2005-06. Both the appeals and the cross-objections were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the Revenue s quantum appeal in ITA No.2695/Ahd/2011 for AY 2005-06. The Revenue has raised the following grounds of appeal:- 1) The Ld.Commis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther original Share holder of the company nor the promoters. 3) On the facts and in the circumstances of the case, the Ld.Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad ought to have upheld the order of the Assessing Officer. 4) It is therefore, prayed that the order of the Ld.Commissioner of Income-Tax (Appeals)-XIV, Ahmedabad may be set-aside and that of the order of the Assessing Officer be restored. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ering the submissions of the assessee, partly allowed the appeal, whereby the ld.CIT(A) restricted the profit rate to 8% as against 15% of the contract receipts. 3. The ld.Sr.DR was supported the order of the AO and submitted that the ld.CIT(A) was not justified in reducing the addition. He submitted that the ld.CIT(A) ought to have confirmed the finding of the AO. 3.1. None appeared on behalf of the assessee, however written submission dated 23/03/15 has been filed. 4. We have heard the ld.Sr.D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y held that the income from the construction activity should be taxable in the present year. The appellant is constructing the project for its ITA Nos.2695 & 2696/Ahd/2011 (By Revenue) and CO Nos.286 & 287/Ahd/2011 (By Assessee ) respectively share holder cum members. The appellant has purchased land during the year and has shown work in progress of ₹ 9,42,319/-. The cost of the land has been shown to be ₹ 98,96,100/-. Since the appellant is constructing the building to its s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

able instance. Normally, the rate of profit in this line of business is adopted @ 8% of the contract receipts. The A.O. is, therefore, directed to estimate the income of the appellant by applying the profit rate of 8% on the W.I.P. of ₹ 9,42,319/-. The ground is accordingly partly allowed. 4.1. The aforesaid finding of the ld.CIT(A) has not been controverted by the ld.Sr.DR by placing any contrary material on record. Therefore, we do not see any reason to interfere with the order of the ld .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

). The assessee has raised the following grounds in its cross-objection:- 1. That the tax effect is less that threshold limit of ₹ 3.00 Lacs, and as such the appeal filed by the Department be dismissed in limine in view of Board s Circular. WITHOUT PREJDUICE: 2. That the learned CIT(A)-XIV has grievously erred both in law and on the facts of the case in directing the A.O. to estimate the income by applying profit rate 8% on work in progress. 3. That the learned CIT(A) has further erred in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts written submission dated 23/03/2015 that the appeal is not maintainable due to low tax effect. However, we find that the AO has enclosed a copy of order dated 20/09/2011 giving effect to the CIT(Appeals) s order. As per this order, the revised income is at ₹ 4,24,131/-. However, the assessee in its submission dated 23/03/2015 at page No.23 of the paperITA Nos.2695 & 2696/Ahd/2011 (By Revenue) and CO Nos.286 & 287/Ahd/2011 (By Assessee ) respectively book has submitted that the t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rejected for want of proper prosecution. As a result, assessee s cross-objection No.286/Ahd/2011 for AY 2005-06 is dismissed. 8. Now, coming to the Revenue s penalty appeal, i.e. ITA No.2696/Ahd/2011 for AY 2005-06. The Revenue has raised the following grounds of appeal:- 1) The Ld.Commissioner of Income-tax(Appeals)-XIV, Ahmedabad has erred in law and on facts in deleting the penalty of ₹ 7,00,000/- levied u/s.271(1)(c) of the Act. 2) On the facts and in the circumstances of the case, th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. 8.2. None appeared on behalf of assessee, however written submission dated 23/03/2015 has been filed. 9. We have heard the Sr.DR, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this issue in para-2.3 of his order by observing as under:- 2.3. Decision: I have carefully perused the assessment order and the submission filed by the ld.AR of the appellant. Since all grounds of appeal relates to the imposition of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

account held that the appellant s income for the assessment year should be worked out after applying a rate of 15% on the total receipts of the appellant. In my opinion the appellant had given all the particulars regarding the claim in the return of income and the accounts were also presented before the assessing officer. It was his bonafide belief that the he has not earned any income from the activity. The assessing officer did not accept his claim. The addition made by the assessing officer o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he case of Reliance Petro products Pvt.Ltd. reported in 322 ITR 158 is clearly applicable. According to the decision, where there is no finding that any details were supplied by the assessee in its return of income found to be incorrect or erroneous or false there was no question of invoking the penalty under section 271(1)(c). Mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Considering t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Excise duty credit on finished stock at additional place of business.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Forum: GST rates on mobile recharge business

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Forum: 3B mistake

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 – comments and suggestions-reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version