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Showing 81 to 100 of 1262 Records
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2015 (6) TMI 1189 - ITAT DELHI
Penalty u/s 271(1)(c) - difference in the value of stock shown by the assessee and as estimated by the AO by applying the rate of last purchase bill dated 28.3.2009 - HELD THAT:- The only basis of addition is the estimate of valuation made by the AO in valuing the closing stock @ ₹ 200.50 per bag, being the cost price of cement bags vide last purchase bill dated 28.3.2009. Apart from this estimate made by the AO, there is nothing to show that the way in which the assessee valued its closing stock was incorrect. This divulges that the addition has been made only on the basis of estimate made by the AO. It is a settled legal position that when income is estimated, then, there can be no question of imposing penalty u/s 271(1)(c) .
The Hon’ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd., [2010 (1) TMI 32 - DELHI HIGH COURT] , has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis. Similar view has been taken by the Hon’ble P&H High Court in Harigopal Singh vs. CIT [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and the Hon’ble Gujarat High Court in CIT vs. Subhash Trading Company, [1995 (11) TMI 37 - GUJARAT HIGH COURT] . In view of the foregoing precedents it is apparent that when the bedrock of instant penalty is the estimate of valuation of closing stock, the same cannot be sustained. Thus Penalty deleted - decided in favour of assessee.
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2015 (6) TMI 1188 - ITAT LUCKNOW
Addition u/s 14A - disallowance of expenditure incurred in earning dividend income - HELD THAT:- Since the Tribunal has taken a view in the assessee’s own case that once the provisions of section 14A of the Act are to be invoked, disallowance is to be computed as per rule 8D of the rules, we find no justification to take a contrary view in this appeal.
The mode of computation as per rule 8D of the rules was also examined by the Tribunal in the case of Income Tax Officer vs. M/s Shruti Finsec Pt. Ltd. [2014 (11) TMI 172 - ITAT LUCKNOW] in which it has been held that while adopting the procedure for computation of disallowance as per rule 8D of the rules, all aspects of direct and indirect expenses are to be considered Accordingly following the view taken by the Tribunal in assessment year 2009-10, we decide this issue in favour of the Revenue. Accordingly, the order of the ld. CIT(A) is set aside and that of the Assessing Officer is restored.
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2015 (6) TMI 1187 - BOMBAY HIGH COURT
Agricultural income - income from sale of breeder and foundation seeds - HELD THAT:- It is not denied that for growing breeder and foundation seeds, seeds are sown in field and usual agricultural operations, basic and subsequent, are undertaken utilizing human skill. In addition to this, measures are taken for restricting role of nature. Such measures are only taken in enhancing the yield. Such measures, thus, have nothing to do with the biological growth that takes place in the soil or such other substratum where the seeds are sown.
An agriculturist while growing his crops, is known to have used conventional as well as scientific method for reducing hostile interplay of natural forces on his crop. When such activity is taken to highest standard, it would still not make the growing operation a synthetic one. Thus, growing seeds can never be non-agricultural. In view of this, we do not see any substantial question of law in these appeals.
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2015 (6) TMI 1186 - ITAT MUMBAI
Rejection of books of accounts - GP addition - CIT-A held that both the books of accounts could not be rejected and consequently the GP could not be estimated and GP addition made @ 2.5% is hereby deleted - ad-hoc disallowance restricted by CIT-A - HELD THAT:- CIT (A) has rightly adjudicated the issue relating to the GP addition as well as the restricting the ad-hoc disallowance. In our considering opinion, since there is no infirmity in the order of the CIT (A) and the decision taken by the CIT (A) is fair and reasonable, therefore, it does not call for any interference. Accordingly, on this Ground assessee succeeds.
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2015 (6) TMI 1185 - ITAT MUMBAI
Addition made on protective basis - amount deposited in the joint bank account with Ms. Chandbibi Zaidi - assessee is a student, studying outside India, with no independent source of income - Unexplained credits - Unexplained investment - Addition u/s 69B - search and seizure action u/s 132 (1) - HELD THAT:- We find that the facts and the issue is identical to the case of Ravish P. Zaidi [2015 (6) TMI 1184 - ITAT MUMBAI]] wherein, while coming to a particular conclusion, CIT (A) considered the remand report from the Assessing Officer who himself, on verification of accounts from the bank and other material found that no addition is warranted. In view of this factual position, CIT (A) deleted the addition and the Bench affirmed his stand. Thus, being on identical fact, find no merit in the appeal of the Revenue, consequently, dismissed
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2015 (6) TMI 1184 - ITAT MUMBAI
Unexplained credits - Unexplained investment - Addition u/s 69B - search and seizure action u/s 132 (1) - Addition made on protective basis - case of the assessee, who was the daughter of the sister of Chandbibi Zaidi was centralized. A bank account in the joint name of Ms. Ravish Zaidi and Chandbibi Zaidi was with Nova Scotia Bank, Nariman point Branch, Mumbai, was found - HELD THAT:- The assessee filed confirmation from Mumbai Majdoor Sabha for Ms Ravish Zaidi’s Accounts, along with balance-sheet as on 31/12/2001, confirmation of copy of account of Ms. Chandbibi, letter of gift from Ms. Chandbibi, copy of balance sheet and capital account of Ms. Chandbibi as on 31/03/2002, copy of acknowledgement of return, bank statement of Mumbai Majdoor Sabha for repayment of loan in May 2004 (₹ 10 lakhs) and the investment made, appearing in the balance sheet, as on 31/03/2002. All these documents were forwarded to the Assessing Officer for his comments and the ACIT vide letter dated 31/11/2013, through Ad CIT sent the remand report that too after verification of bank accounts. In the remand report, the Assessing Officer found no unexplained cash credits.
In the remand report submitted by the assessing officer ACIT Central Circle-43, Mumbai through Additional CIT Central Range 6, Mumbai, the credits in the bank accounts were verified and it was submitted that no unexplained credits were found. Hence the addition made of ₹ 20,00,000/- in AY 2005-06 and ₹ 5,80,000/- for AY 2006-07 are deleted. The ground of appeal no. 1 is to this extent allowed.
In view of the submission of the assessee and remand report by the AO, the impugned addition was deleted by the CIT (Appeals). No contrary evidence was produced by the Revenue in support of the ground raised, therefore, find no infirmity in the conclusion drawn by CIT (Appeals). It is upheld.
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2015 (6) TMI 1183 - ITAT MUMBAI
Legal and professional fee - nature of expenditure - revenue or capital expenditure - CIT(A) accepted assessee’s explanation without giving the Assessing Officer an opportunity in terms of Rule 46 of the Income Tax Rules, 1962 - HELD THAT:- CIT(A) has not violated the provisions of rule 46A of the Rules. According to the Ld. Representative, even in the past years such expenditure has been allowed as revenue expenditure and that in the current year assessment year, the AO has based his disallowance on a complete misreading of the submissions put-forth by the assessee. We find that Revenue has not specified any material or evidence relied upon by the CIT(A) which was not before the Assessing Officer and, therefore, in our opinion, the objection of the Revenue in Ground of appeal no. 2, based on Rule 46 of the Rules, is quite misconceived and the same is hereby dismissed.
TDS u/s 194H - assessee has paid commission to banks on credit card transactions - Addition invoking sec 40(a)(ia). HELD THAT:- In the case of JDS Apparels P. Ltd. [2014 (11) TMI 732 - DELHI HIGH COURT] . As per the Hon’ble Delhi High Court, payment of commission to banks with regard to the processing of credit card transactions was not liable to be considered as a ‘commission’ within the meaning of section 194H. Bank does not act as an agent of the assessee while processing the credit card payments and a charge collected by the bank for such service does not amount to ‘commission’ within the meaning of section 194H. In view of the aforesaid Judgment of Hon’ble Delhi High Court in the case of JDS Apparels P. Ltd. (supra), we hereby affirm the conclusion of the CIT(A) to the effect that the impugned disallowance made by the Assessing Officer by invoking section 40(a)(ia) is unsustainable. Thus, Revenue fails on this Ground also. - Appeal of the Revenue is dismissed.
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2015 (6) TMI 1182 - ITAT BANGALORE
Deduction u/s 10A - computation of deduction - HELD THAT:- The issue is covered in favour of the assessee by the decision of the jurisdictional High Court in the case of Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein it was held that where any expenditure is required to be reduced from export turnover, then the same has to be excluded from total turnover as well, which is binding on us and therefore, respectfully following the said judgment, we direct the Assessing Officer (AO) to exclude the said amount from both the export turnover as well as the total turnover for the purpose of computing deduction u/s 10A of the Act.
Not granting set off of unabsorbed depreciation brought forward from earlier years against the income arrived at after allowing deduction u/s 10A - HELD THAT:- As decided in YOKOGAWA INDIA LTD. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] income of the section 10A unit has to be excluded before arriving at the gross total income of the assessee. The income of the section 10A unit has to be deducted at source itself and not after computing the gross total income. The total income used in the provisions of section 10A in this context means the global income of the assessee and not the total income as defined in section 2(45). Hence, the income eligible for exemption under section 10A would not enter into computation as the same has to be deducted at source level.
TP adjustment - comparable companies adopted by the TPO for determining the ALP and making addition of the adjustment - HELD THAT:- Assessee is providing software design and development services to its parent company thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Companies not satisfied the 25% employee cost filter and thus has to be excluded from the list of comparables
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2015 (6) TMI 1181 - ITAT NEW DELHI
TP adjustment - Comparable selection - HELD THAT:- Referring to assessee's international transactions of provision of contract IT services and provision of marketing support services companies functinally dissimilar with that of assessee need to be deselected from final list.
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2015 (6) TMI 1180 - CALCUTTA HIGH COURT
Additions u/s 40A(9) - Tribunal had restored the issue to the file of A.O. in earlier years, therefore, by respectfully following the same we also restore the matter back to the file of A.O. to decide the same afresh - HELD THAT:- Since the Tribunal did not delete any addition, the question does not appear to have been formulated on the basis of the impugned judgment and therefore, need not be decided.
Disallowance under the head proportionate management expenses u/s 14A - AO decided initially by the assessing officer on the basis of a thumb rule - HELD THAT:- Thumb rule applied by the assessing officer was rectified by another thumb rule by the Tribunal. If there is no basis to support the thumb rule applied by the AO or if there is any basis to support the thumb rule applied by the AO then the same rule shall apply to the thumb rule applied by the Tribunal.
Mr. Chowdhury, learned advocate appearing on behalf of the appellant/revenue, was unable to show as to how the sum of ₹ 40 lack and odd disallowed by the assessing officer is in accordance with law.
When the sum of ₹ 40 lacs and odd was on the basis of a pure guesswork and the learned Tribunal has reduced to a sum of ₹ 20 lacs, it cannot be said that the discretion was exercised unreasonably or illogically. Therefore, the second question is answered in the negative.
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2015 (6) TMI 1179 - ITAT CHENNAI
Addition of bad debts u/s 36(1)(vii) - proof of debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income - HELD THAT:- We are not in agreement with the findings of the CIT( Appeals) in allowing the claim of the assessee as bad debt. CIT(Appeals) wrongly observed that the assessee is complied with the conditions as stipulated in sec.36(1)(vii) read with sec.36(2) - legal requirement is that the amount of bad debt must have gone into the computation of the assessee’s income.
Thus, in the case of a trader, if the sales have been made on credit and corresponding debt becomes irrecoverable, the said debt can be allowed as bad debt, as sales have gone into the computation of the assessee’s income. In the instant case, there is no material to suggest that the debt was incurred in ordinary course of business and corresponding amount has gone into the computation of the assessee’s income and the assessee has not established beyond any doubt that the debt was incurred in normal course of business carried on by the assessee and the method followed by the assessee in writing off debt is not correct. - Decided in favour of revenue
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2015 (6) TMI 1178 - MADRAS HIGH COURT
Validity of assessment order - TNVAT Act, 2006 - failure to file Form-WW - Held that:- The petitioner admits the fact that on receipt of the notice issued by the respondent, the petitioner failed to file reply within the stipulated time. Therefore, the respondent was left with no other option except to pass the final orders. Accordingly, he has proceeded to pass final orders. Consequently, as per Section 63A(2) of the Act, he has only proposed to levy a fine of ₹ 10,000/- - But the orders say that he has proposed to levy interest of ₹ 10,000/-.
As there is a typographical error, this Court, while rectifying the error, made it clear that the petitioner has to pay penalty of ₹ 10,000/- under Section 63(A)(2) of the Act.
There are no merits in the petition - petition dismissed.
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2015 (6) TMI 1177 - ITAT MUMBAI
Rejection of books of accounts - Net profit estimation at 5% of the total turnover - Held that:- FAA had mentioned that the assessee had produced certain details including bank statements before AO,during the assessment proceedings, that the AO had passed an ex-parte order. If the assessee’s books of account were audited and an audit report was filed along with the return of income,then it cannot be said the assessee was not maintaining the books of account. Considering the peculiar facts and circumstances of the case,we have admitted the additional evidence produced before us by the assessee. We are of the opinion that in the interest of justice the matter should be restored back to the file of the AO for fresh adjudication. The effective ground of appeal filed by the assessee is allowed in favour of the assessee in part.
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2015 (6) TMI 1176 - ITAT CHANDIGARH
Disallowance of rebate u/s 80IC as per Rule 8D read with section 14A - Held that:- It is relevant to observe that in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D is applicable from assessment year 2008-09. It has no application prior to assessment year 2008-09. In the instant case, the assessment year is 2007 08. It is pertinent to state here that following the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. (supra) different Benches have set aside the matters back to the Assessing Officer where the additions were made on the basis of Rule 8D. In view it Rule 8D is not applicable to the assessment year under consideration and, therefore, set aside the orders of the lower authorities on this issue and remand the matter to the file of the Assessing Officer to decide the issue afresh
Disallowance of rebate u/s 80IC on account of Exchange Rate Fluctuations - Held that:- The issue in hand is squarely covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Rachna Udyog [2010 (1) TMI 38 - BOMBAY HIGH COURT] has categorically held that the exchange rate fluctuation arises out of and is directly related to the sale transaction involving the export of goods of the industrial undertaking and, therefore, difference on account of exchange rate fluctuation is entitled to deduction under section 80IB of the Act. No contrary decision was brought to my notice. Respectfully following above thus hold that the difference on account of exchange rate fluctuation is entitled to deduction under section 80IC of the Act. This ground of appeal is allowed.
Disallowance on account of interest expense under section 36(1)(iii) - Held that:- As assessee submitted that the provisions of section 36(1)(iii) of the Act are applicable in this case. However, she stated that the disallowance of interest @ 12% is not correct and the same should be worked out on pro-rata basis. Fully agree with the above submissions of the learned A.R. for the assessee and direct the Assessing Officer to re-work the disallowance on pro-rata basis. This ground of appeal is disposed off accordingly.
Disallowing deductions u/s 80IC for the additions made due to certain disallowances - Held that:- Direct the AO to re-compute the deduction allowable under section 80IC of the Act keeping in view the above observations and in accordance with law after affording reasonable opportunity of being heard to the assessee.
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2015 (6) TMI 1175 - ITAT CHANDIGARH
Reopening of assessment - scope of the expression ‘reason’ in the phrase ‘reason to believe’ - addition on gift receipt - Held that:- AO received an information from ACIT, CC-V, Ludhiana that assessee has received gift of ₹ 5 lakhs from Shri Jagdish Duggal, 38G, Sarabha Nagar, Ludhiana from bank account No. 16503 of Shri Jagdish Duggal maintained with Canara Bank, Bharat Nagar Chowk, Ludhiana. AO has also this information that the nature of this entry was an accommodation entry. The above information / material received by the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee’s hands. Therefore, there is no merit in the submissions made on behalf of the assessee that reopening of the assessment was invalid.
Material before the Assessing Officer was relevant and afforded a live link or nexus to the formation of the prima facie belief that income chargeable to tax had escaped assessment in the assessee’s hands. Thus reopening of the assessment was valid - Decided against assessee
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2015 (6) TMI 1174 - BOMBAY HIGH COURT
Income accrued in India - Characterization of income - consideration paid by assessee to the non resident company for acquiring right to distribute TV channels - Royalty OR business income - income subject to withholding tax - Held that:- As decided in assessee's own case when the payment received by the recipient Company is not royalty, the same would also not be royalty in the hands of payee. Thus, no substantial questions of law arises for our consideration. See SET SATELLITE (SINGAPORE) PTE LTD. VERSUS DEPUTY DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION AND ANOTHER [2008 (8) TMI 96 - BOMBAY HIGH COURT]
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2015 (6) TMI 1173 - GUJARAT HIGH COURT
Offence under PMLA - personal savings bank account of the petitioner maintained with the ICICI Bank freezed/attached - Whether the respondent no.2 was justified in invoking Section 102 of the Code for the purpose of freezing the savings account of the petitioner maintained with the ICICI Bank? - Held that:- The instructions were issued to the bank to freeze the account of the petitioner way back in the month of August 2014. Indisputably, till this date, the authority has not been able to pass any order of provisional attachment under Section 5 of the Act.
This would suggest two things : (i) there is no sufficient material collected by the authority so that the authority can record its reasons to believe that if the account is not freezed, then the non freezing of the property would frustrate the proceeding under the PMLA, and (ii) the authority does not intend to file any complaint against such person whose account has been ordered to be freezed.
For the aforesaid reasons, although the judgment was reserved CAV, this matter was once again notified on 8th June 2015 only with a view to ascertain from the learned Assistant Solicitor General of India, whether in the mean time the authority had passed any order of provisional attachment under Section 5 of the Act or whether it intended to pass such order in the near future if adequate material has been collected during the course of the investigation carried out so far. Assistant Solicitor General of India, after taking instructions from the officer of the Department present in the Court, made a statement that the authority has been able to collect sufficient material on the basis of which the authority now intends to pass an appropriate order of provisional attachment under Section 5 of the PMLA.
On one hand if an order of provisional attachment is passed under Section 5 of the PMLA, the life of it is 150 days subject to the further orders that may be passed by the adjudicating authority, whereas if an order of attachment is passed under Section 102 of the Code read with Section 65 of the PMLA, then there is no time period prescribed so far as its operation is concerned. Such a situation should not crop up.
In light of the statement made by the learned Assistant Solicitor General of India, do not want to go further into the matter - if the provisional order of attachment under Section 5 of the PMLA is not passed within a period of one week from today, then the instructions given by the Department to the bank for freezing of the account shall automatically come to an end and the bank shall permit the petitioner thereafter to operate her account.
The order of attachment of a bank account in exercise of the powers under Section 102 of the Code read with Section 65 of the PMLA cannot continue for an indefinite period of time, more particularly, when the life of an order of the provisional attachment under Section 5 of the PMLA is maximum upto 150 days.
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2015 (6) TMI 1172 - ITAT MUMBAI
Penalty u/s 271(1)(c) - disallowance u/s. 43B - VRS payment claimed excessively came to their notice during the course of scrutiny - Held that:- As rightly pointed out by CIT(A), with regard to the VRS claim as soon as it had come to the notice of the assessee the same was accepted. In fact it was the assessee, who brought the same to the notice of the Assessing Officer. Similarly copy of printed annual report of 2003-04 shows consolidated prior period figures for all the units and having regard to the circumstances of the case learned CIT(A) observed that it was not in the nature of furnishing inaccurate particulars, even though the claim was not allowable.
CIT(A) also observed that disallowance u/s. 43B is merely a technical disallowance and it cannot be inferred that it amounts to furnishing of inaccurate particulars or concealment of income. In our opinion the order passed by CIT(A) is based on cogent material and hence deserves to be accepted. Since explanation given by the assessee is substantiated by furnishing relevant particulars. It is for the Revenue to prove that the explanation furnished by the assessee is false. Whereas in the instant case no such material was furnished by the Revenue - Decided against revenue.
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2015 (6) TMI 1171 - KERALA HIGH COURT
Remittance of an amount of ₹ 3,50,000/-, out of which, ₹ 50,000/- was directed to be credited in the housing loan for regularising that loan account - Held that:- Since a counter affidavit has already been filed by the appellants in the writ petition, which is pending before this Court, we are of the view that the matter need to be considered by the learned Single Judge. It is open for the bank to seek clarification/modification/vacation of the interim order, if so advised - appeal not entertained and is dismissed.
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2015 (6) TMI 1170 - CESTAT BANGALORE
Rebate claim - rejection on the ground that in the FIRCs, name of the company was mentioned as ‘Affiliated Computer Services of’ whereas the name of the exporter was Affiliated Computer Services of India Pvt. Ltd. - Held that:- Apparently the lower authorities felt that there could be another unit by name ‘Affiliated Computer Services’ and another company by name ‘Affiliated Computer Services of India Pvt. Ltd’. - During the hearing, my attention was also drawn to the certificate wherein the name of the company is shown as ‘Affiliated Computer Services of’. Obviously this has happened because the number of characters provided for the first line ended at this level.
In view of the fact that the appellants have produced the certificates from the bank and Chartered Accountant and further rebate claims, in any case, to be sanctioned by the original authority - the matter can be remanded to the original authority to verify the documents and sanction the rebate claims - appeal allowed by way of remand.
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