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 →

M/s. Balaji Agro Industries Versus ACIT, Circle-20 (1) , New Delhi

Penalty u/s 271(1)(c) - assessee claimed remuneration to partners - assessee has contended that the case of the assessee was audited under section 44AB of the Act, however, the learned Auditor did not disallow the excess claim of the remuneration - Held that:- We find that the assessee has offered explanation in respect of the facts material to the computation of income and which has not been found to be false by the Assessing Officer. The assessee has substantiated the explanation and proved 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

penalty proceedings the assessee explained his bonafide in claiming the remuneration. Before us also, learned Authorised Representative of the assessee has explained that the learned Auditor did not point out in audit reports under section 44AB of the Act allowability of the remuneration to partners to the extent of ₹ 50,000/- only and, because of which, the assessee has paid tax on the remuneration paid to the partners and the disallowance has also been sustained resulting into double ta .....

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 Revenue, cannot lead to the levy penalty under section 271(1)(c) of the Act.See Reliance Petroproducts Private Limited [2010 (3) TMI 80 - SUPREME COURT ] - Decided in favour of assessee. - ITA No. 3422/Del/2013 - Dated:- 19-8-2016 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : Sh. Kunal Bhatia, Adv. For The Respondent : Smt. Anima Barnwal, Sr.DR ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order of the learned Commissio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and on facts in upholding the penalty proceedings initiated u/s 271(l)(c) without appreciating that the remuneration paid to partners of ₹ 2,40,000/- is as per the Partnership Deed and since in this year there was loss from business the remuneration to partners was allowable at ₹ 50,000/- therefore, balance 1,90,000/- was disallowed which is a matter of difference of opinion and there is no concealment of income. Therefore, the penalty imposed u/s 271(l)(c) is wrong, arbitrary mid ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

no concealment of income. Therefore, the penalty imposed is altogether invalid, illegal, unsustainable and unsustainable and unjustified. 3. That the penalty proceeding u/s 271(1)(c) can be initiated only in case of concealment of income or inaccurate particulars furnished for income whereas in this case there is no concealment of income and disallowances made cannot be taken as concealment of income. Therefore, the contention of Learned Assistant Commissioner is not sustainable and hence, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

essee has furnished true and accurate particulars of income. Hence there is no concealment of income end therefore the penalty imposed is wholly untenable and unsustainable. 6. That the quantum of penalty imposed at the rate, if 150% of the tax sought to be evaded is highly excessive, harsh and arbitrary. PRAYER:- The assessee most respectfully prays your honour on the aforesaid grounds which are described in brief among other detailed grounds which the assessee may take up during the course 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

ing to the loss from the business activity, the assessee was allowable remuneration to partners to the extent of ₹ 50,000 only. Therefore, he disallowed the balance amount of ₹ 1,90,000/- and initiated penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961 (for short the Act ). The said disallowance was confirmed by the learned Commissioner of Income-tax (Appeals). The Assessing Officer levied penalty under section 271(1)(c) of the Act on 18/03/2010 amounting to 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

ssee has furnished true and accurate particulars of income and the remuneration debited to profit and loss account was as per the clauses of the partnership deed and the assessee firm was regularly claiming the remuneration to partners in profit and loss account from last many years . The assessee also relied on the judgment of the Hon ble Delhi High Court in the case of Commissioner of Income Tax Vs. Regency Express Builders (P) Ltd, (2008) 166 taxmann 269, where it is held that on question whe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ficer with following observations: 8.2 The Assessee has claimed that the Hon ble Apex Court in the case of CIT vs. Reliance Petroproducts (P) Ltd. (2010) 189 Taxman 322 (SC) held that Whether merely because Assessee had claimed expenditure, which claim was not accepted or was not acceptable to Revenue, that by itself would not attract penalty under section 271(l)(c) . It is seen that the Income Tax Act vide section 40(b)(v)(a), very clearly provided for the year under consideration that only an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Commissioner of Income Tax vs. Regency Express Builders P. Ltd. (2008) 166 Taxman 269, where it was held by Hon ble Delhi High Court that the Commissioner (Appeals) held that two views were possible. However, in the case under consideration there was no way in which any other view was possible and thus the facts of the case are entirely different and thus the finding of the Hon ble Delhi High Court again cannot give any relief to the Appellant. 3. Aggrieved, the assessee is in appeal before the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

paid tax @ of 30%, therefore, intention to evade tax was absent and there had been double taxation of the said remuneration in the hands of the assessee as well as in the hands of partners, hence, levying a penalty was not justified. (ii) As per the remuneration clause of the partnership deed, assessee was regularly claiming the remuneration to partners of ₹ 2,40,000/- for last many years and has been assessed and allowed and same has been claimed in the year under consideration also. (ii .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to furnishing of inaccurate particulars. Merely, because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that, by itself, would not attract the penalty under section 271(1)(c) of the Act as held by the Hon ble Apex Court in the case of CIT Vs. Reliance Petroproducts, (2010) 189 taxmann 322 (SC) 4.2 On the other hand, the learned Senior Departmental Representative relied on the orders of the lower authorities. 4.3 We have heard the riv .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f income filed, the assessee reduced the rental income of ₹ 26,16,000/- out of the net profit and offered the same under the head income from house property , which resulted into a loss of ₹ 10,20,466/- under the head profit and gains of business and profession. In view of loss under the head profit and gains of business/profession , the remuneration to partner was allowable only to the extent of ₹ 50,000/- in terms of Section 40(b)(v) of the Act during the assessment year unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Senior Departmental Representative. We find that the assessee has offered explanation in respect of the facts material to the computation of income and which has not been found to be false by the Assessing Officer. The assessee has substantiated the explanation and proved that the explanation filed is bonafide and all the facts and material related to computation of total income has been disclosed by the assessee. In view of above, in our considered opinion, in the case of the assessee, the Expl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s under section 44AB of the Act allowability of the remuneration to partners to the extent of ₹ 50,000/- only and, because of which, the assessee has paid tax on the remuneration paid to the partners and the disallowance has also been sustained resulting into double taxation on the remuneration paid to the partners. This explains the bonafide of the assessee in claiming the remuneration to the partners, which is found to be excess by the Assessing Officer. We find that in the case of Commi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inaccurate" has been defined as:- "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript". We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e in the Return cannot amount to the inaccurate particulars. 10. It was tried to be suggested that Section 14A of the Act specifically excluded the deductions in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. It was further pointed out that the dividends from the shares did not form the part of the total income. It was, therefore, reiterated before us that the Assessing Officer had correctly reached the conclu .....

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