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

Income Tax Officer, Ward 5 (2) , Ahmedabad Versus M/s. PASL Windtech Pvt. Ltd.

Income from house property - property given to sister concern without charging any Interest - inclusion of Interest of investments (deemed income) - Estimation of Annual Value - determination of rate of interest for addition - Held that:- tribunal has already dealt with all these arguments in arriving at interest rate of 8.5% to form reasonable basis - We therefore direct the Assessing Officer to pass consequential order accordingly adopting 8.5% as the rate of return. Rest all other substantive .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

013 in case no. CIT(A)-XI/295/ACIT.Cir-5/12-13, in proceedings u/s. 143(3) of the Income Tax Act, 1961; in short the Act . Heard both sides. Case file(s) perused. 2. A combined perusal of both the parties respective pleadings indicate that their identical grievance in nut shell revolves around computing income from house property in respect of assessee s properties A & B comprising of industrial shed at plot no.37-B and 5/1/B situated in phase-1, GIDC, Industrial Estate, Vatva, Ahmedabad. 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

mount after a detailed discussion after taking into account this tribunal s directions in assessment year 2005-06 involving interest rate addition @17.25%. 3. The assessee preferred appeal. We notice that the CIT(A) takes into account his findings in the abovestated first assessment year 2005-06 adopting 8.5% to be the rate of return qua the two properties in question stated to be at par with prevailing interest rates on long term fixed deposits. He however observes that the impugned assessment .....

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 as return of investment (supra) and in not taking into consideration cost of the property in question as on 31.03.2010; respectively. The Revenue on the other hand pleads that the CIT(A) ought not to have disturbed Assessing Officer s computation arriving at the abovestated figure of ₹ 49,42,080/- as well as in holding rate of interest on investment to be the relevant benchmark for determining the notional income in question. 5. We have heard rival submissions in tune with above narrated .....

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 industrial shed to the sister concern without charging any rent. The Assessing Officer, in his order u/s 143(3) dated 31.12.2007, estimated the Annual Letting Value (ALV for short) of the property and assessed the same as income from house property. On appeal, the CIT(A) confirmed the addition made by the Assessing Officer. The assessee preferred an appeal before the ITAT which by order dated 31.03.2011 in ITA No.1165/Ahd/2009 set aside the matter back to the file of the Assessing Officer, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce in determining its annual letting value. In this case, the AO estimated the ALV on the basis of some information said to have been collected by him behind back of the assessee. Admittedly, those details were not confronted to the assessee. Neither the same is produced before us. Therefore, the same cannot be relied on for estimating the ALV . In the above circumstances, we deem it proper to set aside the order of the authorities below on this point and restore the matter back to the file 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

ate of 17.25% of the investment in the property by the assessee. On appeal, the CIT(A) vide his order dated 11.09.2013 computed the income at 8.5% of the cost of the property and allowed part relief to the assessee. The relevant portion in the order of the CIT(A) reads as under:- 2.2 I have carefully considered the rival contentions. I am of the opinion that the stand of A.O. in adopting the interest as if the appellant is borrowing funds equivalent to the investment is not reasonable. The appel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ision of Hon'ble Bombay ITAT in the case of Smt. Indira S. Jain reported in 52 SOT 270 is relevant wherein the Hon'ble Bench has adopted and confirmed the rate of return at 8.5% on the cost of the property. I therefore deem it fit to adopt the rate of return on investment in the property at 8.5% which is at par with the prevailing interest rate on the long term fixed deposit during the relevant period. The ALV of the property is worked out as under:- Property detail (as per submission dt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ground of appeal is partly allowed. 6. Both the parties, aggrieved with the order of the ld. CIT(A), are in appeal before us. 7. We have heard both the sides and perused the material placed before us. At the time of hearing before us, the ld. Counsel for the assessee stated that the Assessing Officer has estimated the interest which the assessee would have been required to pay had he borrowed the money for the purpose of investment in the property. He submitted that in the case of the assessee, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.5% and therefore, income should be estimated at the rate of 6.5% on the cost of the property let out by assessee to sister concern. 8. The ld. Departmental Representative, on the other hand, relied upon the order of the Assessing Officer and he stated that the Assessing Officer was fully justified in estimating the interest at the rate of 17.25% on the basis of interest which would have been required to be paid by the assessee had borrowed money being utilized. He alternatively submitted that 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

ts of both the sides and perused the material placed before us. We find that this issue is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of Sakarlal Balabhai vs Income-Tax Officer, reported in 100 ITR 97. In the first round of appeal also, the ITAT has set aside the matter back to the file of the Assessing Officer for determining the ALV as per the above decision of Hon'ble Jurisdictional High Court. In the above mentioned case, their Lordships 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

operty, and more particularly, as observed in Ryde on Rating, when the property is occupied by the owner. In our opinion, therefore, the contention of the learned Advocate-General that capital value of property may not have a bearing or relevance on the question of annual letting value, should be rejected, and more particularly, when, as in the instant case, the annual letting value of a self-occupied property is to be ascertained.... From the above, it is evident that their Lordships of Hon' .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see had the assessee borrowed the money for investment in the property or it should be interest receivable by the assessee had the similar money is invested somewhere else. In our opinion, for determining the income from the property, it should be rate of return on the investment of similar amount in another asset. Therefore, in our opinion, the CIT(A) was fully justified in estimating the ALV on the basis of interest which assessee would have earned on the investment of the similar amount. 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

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

News: Notification Issued For GST Actionable Claim On Branded Food Products

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Forum: GST Invoice

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

Forum: 3B mistake

Forum: Input tax credit

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

Forum: Due date of Filing TRAN-1

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer



|| 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