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Showing 121 to 140 of 925 Records
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2012 (6) TMI 813
Disallowance expenses u/s 40 (a)(ia) - amount paid in the year - Held that:- It is not clear from the orders of the lower authorities whether this amount of ₹ 1,38,30,000/- has been paid during the financial year relevant to the assessment year under appeal to the transporters or not, therefore, this fact requires verification at the end of the A.O. and for this purpose the matter is hereby set aside to the file of the A.O. In case this amount is found to have been paid during the year, no addition u/s 40(a)(ia) of the Act is called for in view of the decision of M/s Merilyn Shipping & Transports vs. ACIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM ]
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2012 (6) TMI 812
Issues involved: Interpretation of exemption under section 10(10C) of the Income-tax Act, 1961 for ex gratia payment received on voluntary retirement under the Exit Option Scheme (EOS) floated by the State Bank of India.
Summary:
The appeal was against the order of the Commissioner of Income-tax (Appeals)-III, Pune, arising from the Assessing Officer's order u/s 143(3) read with section 147 of the Income-tax Act, 1961, for the assessment year 2006-07. The sole issue raised was the denial of exemption of &8377; 3,03,330/- u/s 10(10C) of the Act for ex gratia payment received by the assessee on voluntary retirement under the EOS of State Bank of India. The authorities held that the scheme did not comply with Rule 2BA of Income-tax Rules, 1962, and referred to a CBDT Instruction dated 6.10.2009 to support their decision.
It was noted that the issue in this appeal was similar to a previous case, and following the precedent, the order of the Commissioner of Income-tax (Appeals) was set aside. The matter was remanded back to the Assessing Officer with directions as given in the previous case of Jagdish Raghunath Ektare. The appeal of the assessee was allowed for statistical purposes.
The decision was pronounced in the open Court on 26th June 2012.
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2012 (6) TMI 811
Issues involved: Appeal against order of Commissioner of Income-tax (Appeals)-III, Pune u/s 143(3) read with section 147 of the Income-tax Act, 1961 for assessment year 2007-08.
Issue 1 - Exemption under section 10(10C) of the Act:
The appellant contested denial of exemption of &8377; 5,00,000/- u/s 10(10C) for ex gratia payment on voluntary retirement under the Exit Option Scheme (EOS) of State Bank of India. Authorities cited non-conformance to Rule 2BA of Income-tax Rules, 1962 and a CBDT Instruction dated 6.10.2009. The Tribunal found the issue identical to a previous case and remanded it back to the Assessing Officer for detailed reasoning, following precedent and setting aside the order of the Commissioner of Income-tax (Appeals). The appeal was allowed for statistical purposes.
Decision:
The Tribunal allowed the appeal and remanded the matter back to the Assessing Officer based on the precedent, directing to enclose a copy of the relevant order for reference.
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2012 (6) TMI 810
Validity of assessment - best judgment assessment - violating section 158B(a) - denial of natural justice - Held that:- In view of the second proviso to section 144(1), in a case where notice under section 142(1) has been issued, it is not necessary for the assessing officer to give an opportunity of hearing to tire assessee as provided in section 144(1), prior to making a best judgment assessment. As already seen in the preceding paras, this is a case where notice under section 142(1) was issued to the petitioner and it has also been found that such notices were properly served. Therefore, this case is covered by the second proviso to section 144(1) of the Act and hence there is no substance in the complaint that best judgment assessment was completed without affording an opportunity of hearing to the petitioner.
The petitioner has miserably failed to prove that any documents were sought for by him or that on account of refusal to furnish the same, any prejudice was caused to him to sustain a plea of violation of the principles of natural justice.
Unable to accept the case of the petitioner that in finalising the assessment under section 144 of the Act, natural justice was violated.
In this case, since proceedings for assessment were initiated following a search under section 132, the special procedure as provided in Chapter XTV-B has to be followed. In such a case, the assessment to be completed has to be for the block period as defined in section 158B(a) and the block period includes the period upto the date of commencement of search, in addition to the six assessment years preceding the previous year in which the search was conducted. Insofar as this case is concerned, apart from contending that the assessment under section 144 is beyond the six years, petitioner does not have a case that the assessment for 2009-2010 has been completed violating section 158B(a) of the Act. Therefore, Writ Petn. where Ext. P17 is challenged has to be dismissed.
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2012 (6) TMI 809
Issues Involved: Disallowance and applicability of section 14A of the Income Tax Act.
Issue of Disallowance under Section 14A:
The case involved the disallowance of expenses attributable towards earning exempt income, specifically focusing on dividend income declared by the assessee. The Assessing Officer (A.O.) computed the disallowance u/s 14A, read with Rule 8D, at Rs. 45,71,250. However, the CIT(A) reduced this disallowance to 5% of the dividend income, amounting to Rs. 4,90,396. The department appealed against the CIT(A)'s decision, while the assessee filed cross objections arguing that section 14A should not be applicable to the presumptive tax regime of section 115VG, which mandates ignoring the profit and loss account.
Applicability of Section 14A on Tonnage Tax Scheme:
The Tribunal considered the nature of the assessee's business, which involved shipping activities under the "Tonnage Tax Scheme" governed by Chapter XII-G of the Income Tax Act. Under this scheme, tonnage income from qualifying ships is computed as per specific provisions, disregarding the actual profit and loss account. The Tribunal referred to a previous decision in the assessee's case for the assessment year 2008-09, where it was established that expenses incurred for the purpose of the business are deemed to have been allowed under Chapter XII-G. Therefore, the Tribunal held that the provisions of section 14A cannot be applied to the Tonnage Tax Scheme, as Chapter XII-G operates as a distinct code on its own.
Decision:
After considering the arguments from both sides and the precedent set in the assessee's previous case, the Tribunal ruled in favor of the assessee. It was held that no disallowance should be made under section 14A in the present case due to the unique provisions of the Tonnage Tax Scheme. Consequently, the appeal filed by the department was dismissed, and the cross objection filed by the assessee was allowed.
This judgment clarifies the non-applicability of section 14A on the Tonnage Tax Scheme, emphasizing the distinct nature of Chapter XII-G in computing income for businesses engaged in shipping activities.
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2012 (6) TMI 808
Reopening of assessment - Held that:- When on the same set of fact and materials Assessing Officer takes bonafide decision, it is not open for the subsequent officer to reopen the same just because he does not agree to the decision of the previous officer. In this case the Tribunal has recorded that a mere change of opinion between two officers in reopening of the assessment and it is not legally permissible. We, therefore, do not find any infirmity and illegality in the impugned judgment and order dated 12th January, 2012 passed by the learned Tribunal.
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2012 (6) TMI 807
LTCG - Income from other sources - Held that:- As the assessee has proved the genuineness of the share transactions and there is no justification to disallow the claim of the assessee in respect of the long-term capital gain. Accordingly, direct the A.O. to allow the same.
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2012 (6) TMI 806
Whether the CIT(A) has erred in law and on facts in deleting the addition u/s 10(10C)? - Held NO - There is no prohibition to the twin benefits in respect of the amount received under the voluntary retirement scheme. The word ' salary ' as defined in s. 17 includes any profit in lieu of salary, which has been defined in s. 17(3) to include any amount of compensation due or received by the assessee from his employer or former employer in connection with the termination of his employment. Hence, payment under the voluntary retirement scheme is covered by the word ' salary ‘, which has been given a very wide definition in s. 17. Since the assessee is covered by s. 89, he will get both the benefits, which he has claimed for.
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2012 (6) TMI 805
Issues involved: Appeal against order of ld. CIT-II, Kolkata u/s 263 of I.T.Act for Assessment Year 2007-08.
Grounds raised by the assessee:
1. Violation of natural justice in show cause notice for u/s 263 action.
2. Failure to pass a speaking order against appellant's submissions.
3. Allegation of order u/s 263 being a mere change in opinion.
4. Incorrect interpretation of 'taxable securities transactions' u/s 88E.
5. Direction to reduce rebate u/s 88E by a specific amount.
6. Request for flexibility to modify grounds of appeal.
Assessee's submission:
The show cause notice u/s 263 did not specify the erroneous order or error in assessment order, leading to lack of clarity on the issue. The notice was incomplete and non-specific, only revealing the issue during the assessee's appearance before ld. CIT. The AO's adherence to judicial discipline in not making additions related to rebate u/s 88E was deemed erroneous by ld. CIT, despite the issue being subjudiced. Lack of specificity in the notice rendered it unsustainable under law, resulting in the order u/s 263 being considered excessive and beyond jurisdiction.
Revenue's response:
The ld. DR supported the order u/s 263, emphasizing that the assessee was given a fair opportunity to address the concerns raised. The ld. CIT's decision regarding the erroneous nature of the AO's order was communicated to the assessee, justifying the need for revision.
Bench's observation:
The show cause notice lacked specificity on the issue deemed erroneous, making it vague and unsustainable under law. No further clarification was provided to the assessee, leading to the conclusion that the order u/s 263 exceeded the jurisdiction granted by the notice. Consequently, the appeal of the assessee was allowed.
Conclusion:
The appeal of the assessee was allowed, with the order pronounced on 29.06.2012.
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2012 (6) TMI 804
Issues Involved: Appeal against deletion of addition made u/s 41(1) of the Income Tax Act for cessation of liabilities due to lack of confirmation from creditors.
Summary:
The revenue appealed against the CIT(A)'s order for the AY 2007-08, specifically challenging the deletion of an addition made u/s 41(1) of the IT Act amounting to `. 7,55,806/- due to cessation of liabilities. The main contention was the failure of the assessee to prove the existence and subsistence of alleged liabilities.
The Assessing Officer treated the creditors as ceased liabilities due to lack of confirmation filed by the assessee. However, the assessee argued that the creditors were genuine and existing, with payments withheld due to disputes. The liabilities were still shown in the books as payable. The Tribunal noted that sec. 41(1) cannot be invoked unless it is proven that the liability actually ceased to exist.
The Assessing Officer did not provide evidence that the liabilities no longer existed, basing the addition solely on non-confirmation of creditors and no change in their account balances. The assessee's explanation of ongoing litigation with creditors for non-payment was considered valid. Consequently, the Tribunal upheld the CIT(A)'s decision, dismissing the revenue's appeal.
In conclusion, the appeal by the revenue was dismissed, affirming the deletion of the addition u/s 41(1) for cessation of liabilities.
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2012 (6) TMI 803
Deduction u/s 10B - Held that:- CIT(A) has erred in granting deduction u/s. 10B without due approval from the competent authority. Accordingly, we remit back the issue to the file of the Assessing Officer in similar lines to examine the issue in the light of the above.
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2012 (6) TMI 802
Issues involved: Appeal by Revenue against Commissioner of Income-tax(Appeals) orders for assessment year 2007-08 u/s 143(3) of the Income-tax Act, 1961 regarding allowing carried forward depreciation and/or loss of earlier years pertaining to windmills.
Summary:
Issue 1: Carried forward depreciation and/or loss of earlier years
The Revenue contended that the Commissioner of Income tax(Appeals) erred in directing the assessing authority to allow the carried forward depreciation and/or loss of earlier years pertaining to windmills, if not notional. They cited the decision of the Hon'ble Madras High Court in Velayudhaswamy Spinning Mills case and the orders of the Income-tax Appellate Tribunal in group cases as not final. However, the Income-tax Appellate Tribunal, D-Bench, Chennai, in the assessees' own group cases, held that once set off of depreciation/loss occurred in earlier years against other income, the Revenue cannot rework the set off amount notionally. The Tribunal found support in the judgment of the Hon'ble Madras High Court in Velayudhaswamy Spinning Mills case (231 CTR 368) and upheld the Commissioner of Income-tax(Appeals) orders as legally sound. Consequently, the appeals were dismissed, affirming the lower authority's decision.
End of Summary
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2012 (6) TMI 801
The Gujarat High Court ordered to list the matters on 4.7.2012 for argument by counsel coming from Mumbai. Interim relief extended till then, with a clear instruction not to adjourn the matters on that date.
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2012 (6) TMI 800
Issues involved:
The only issue in this appeal is against the order of ld. CIT(Appeals) deleting the addition made by the Assessing Officer u/s. 68 of the I.T. Act.
Details of the Judgment:
Issue 1: Addition made u/s. 68 of the I.T. Act
The Assessing Officer observed that the assessee, a Company engaged in scrap trading, credited sales of Rs. 78,77,282/- and declared purchases at Rs. 1,57,57,619/-. The purchases were made from Official Liquidator, Jharkhand, with bills enclosed. The assessee failed to produce documentary evidence for cash sales, leading to the addition of Rs. 78,77,281 u/s. 68. Ld. CIT(Appeals) allowed the claim, stating that cash was collected from parties interested in purchasing materials, with deliveries made later. The AO's observations were deemed untenable as the purchases were confirmed, and the sales proceeds were recorded in the profit and loss account. The addition u/s. 68 was deleted by ld. CIT(Appeals).
Issue 2: Admission of additional evidence
The Revenue objected to ld. CIT(Appeals) admitting evidence without providing an opportunity to the AO. The purchases were made under the order of Hon'ble Jharkhand High Court, with payments confirmed. The AO made the addition without fault found in the books of accounts. In the absence of book rejection, treating sales as cash credits was deemed improper. Ld. CIT(Appeals) rightly deleted the addition, which was confirmed. The appeal filed by the Revenue was dismissed on this issue.
In conclusion, the appeal filed by the Revenue was dismissed, and the addition made u/s. 68 of the I.T. Act was deleted by ld. CIT(Appeals) and upheld by the Tribunal.
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2012 (6) TMI 799
Issues Involved:
1. Validity of Reassessment Proceedings u/s 147.
2. Addition of Unexplained Cash Credits u/s 68.
3. Disallowance of Interest on Unexplained Cash Credits.
4. Jurisdiction of Assessing Officer in the Absence of Order u/s 127.
Summary:
1. Validity of Reassessment Proceedings u/s 147:
The Tribunal, in the first round of appeals, dismissed the ground disputing the validity of reassessment proceedings as the assessee's counsel opted not to press it. The Tribunal held that the issue could not be re-agitated in the second round of appeal as it had already been decided against the assessee and was binding.
2. Addition of Unexplained Cash Credits u/s 68:
The assessee failed to provide sufficient documentary evidence to prove the identity, creditworthiness, and genuineness of the unsecured loans. Despite filing 98 confirmation letters out of 145 parties, the assessee could not produce any bank statements or other supporting documents. The Assessing Officer (AO) issued notices u/s 133(6), and only 8 parties responded with satisfactory evidence. Hence, the AO treated the balance loans as unexplained cash credits u/s 68 and made corresponding additions. The CIT(A) and the Tribunal upheld these additions, citing the assessee's failure to discharge the onus of proving the genuineness of the transactions.
3. Disallowance of Interest on Unexplained Cash Credits:
The AO disallowed the interest claimed on the unexplained loans. The CIT(A) allowed interest only on the amount of loans that were considered genuine. For A.Y. 1994-95, the disallowance of interest was partially allowed, considering the interest paid to the bank. For A.Y. 1995-96 and 1996-97, the entire interest claimed was disallowed as it was related to the unsecured loans, which were treated as income from undisclosed sources.
4. Jurisdiction of Assessing Officer in the Absence of Order u/s 127:
The assessee contended that the AO did not have jurisdiction in the absence of an order u/s 127. However, the Tribunal noted that the case was assigned to the AO as per a notification, and there was no evidence to show that reasons were not recorded for the transfer of jurisdiction. The Tribunal found no merit in this ground and rejected it.
Conclusion:
The Tribunal dismissed the appeals for A.Y. 1995-96 and 1996-97, upholding the additions and disallowances made by the AO and CIT(A). For A.Y. 1994-95, the Tribunal allowed the appeal in part, granting partial relief on the disallowance of interest.
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2012 (6) TMI 798
Issues involved: Delay in filing appeal before Tribunal, Non-deduction of tax on payments made.
Delay in filing appeal before Tribunal: The appeal by the assessee was delayed by 211 days due to the negligence of the earlier legal counsel. The new legal advisor prepared and filed the appeal before ITAT, citing the mistake on the part of the previous counsel. The delay was condoned based on the absence of malafide intent in not filing the appeal, and a decision of the Hon'ble Calcutta High Court was relied upon where a delay of 1652 days was condoned due to advocate negligence. The Tribunal admitted the appeal after condoning the delay.
Non-deduction of tax on payments made: The assessee made various payments without deducting tax, leading to proceedings u/s. 201(1) of the Income-tax Act. The AO raised a liability u/s. 201(1) at &8377; 53,956/- and interest u/s. 201(1A) at &8377; 14,991/-. The assessee contended that once the payees had paid the tax, no TDS was required to be deducted, referring to a decision of the Hon'ble Supreme Court. The assessee agreed that all payees had declared the receipts in their incomes, claimed as expenditure by the assessee. The matter was set aside to the AO to verify if the payees had included the receipts in their incomes, and if so, the assessee should not be treated as defaulting u/s. 201(1) of the Act, leading to a reduction in the demand. The appeal of the assessee was allowed for statistical purposes.
Separate Judgement: None mentioned.
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2012 (6) TMI 797
Issues:
Appeals filed by Revenue against Commissioner of Income Tax(Appeals) orders allowing deduction under Section 80(P)(a)(ii) of the Income Tax Act, 1961 for the impugned Assessment Years.
Analysis:
The Revenue filed appeals against the orders of the Commissioner of Income Tax(Appeals) allowing the assessee's claim for deduction under Section 80(P)(a)(ii) of the Income Tax Act, 1961. The Revenue contended that the assessee was not engaged in a cottage industry or a small-scale business. However, during the hearing, it was brought to light that a similar issue had been decided in favor of the assessee by the Tribunal in a previous case. The Tribunal had previously held that the term "cottage industry" was not specifically defined in the Income Tax Act but was classified under the Industrial Development and Regulation Act. The assessee enjoyed the status of a cottage industry under this Act and received various benefits and concessions from both Central and State Governments to promote the handloom industry. The Tribunal found that the objections raised by the Assessing Officer regarding the size and extent of the operations of the assessee were not legally valid to disqualify it as a cottage industry for the purpose of the Income Tax Act. The Tribunal emphasized that the recognition of the assessee as a cottage industry under statutory provisions and the support received from government bodies were conclusive proof of its status. The Tribunal further noted that the growth of the assessee into a large institution was in line with the policies of the State and Central Governments to promote and expand cottage industries, providing employment to traditional workers. Therefore, the Tribunal upheld the Commissioner of Income Tax (Appeals) decision that the assessee was entitled to the benefit of exemption under Section 80P(2)(a)(ii) of the Income Tax Act.
In conclusion, the Tribunal, based on the previous decision of a Co-ordinate Bench, dismissed the appeals filed by the Revenue. The Tribunal found no merit in the Revenue's appeals and upheld the decision of the Commissioner of Income Tax (Appeals) regarding the assessee's eligibility for the deduction under Section 80P(2)(a)(ii) of the Income Tax Act. The appeals of the Revenue were consequently dismissed, and the order was pronounced in open court after the conclusion of the hearing.
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2012 (6) TMI 796
Whether the Commissioner (Appeals) has power to remand the matter back to the adjudicating authority for fresh adjudication after the amendment of Sec. 035A of the Central Excise Act, 1944 by virtue of Sec. 128A(2) of the Finance Act, 2001 - HELD THAT - Section 035A( 3) of the Act as amended confers powers on the Commissioner (A) to annual the order-in-original and also to pass just and proper order. There may be circumstances where only just and proper order could be to remand the order for fresh adjudication. Thus, we are of the view that the Commissioner (A) have power to remand the matter back to the original adjudicating authority even after the amendment of Section 035A( 3).
Both the sections defined the powers of Commissioner (Appeals) in similar language.
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2012 (6) TMI 795
Imposition of penalty u/s 67 of the KVAT Act - the Department alleged that the sale of timber being at rates lesser than that prescribed in the aforesaid circular; leads to undervaluation and consequent evasion of tax - petitioner's case is that the authority, under the said provision, suffers from an inherent lack of jurisdiction to make an attempt to estimate the turnover; which power and jurisdiction is conferred only on the officer conducting assessment proceedings.
Does the provision enumerating the offences and conferring the power for imposition of penalty in cases where tax is actually evaded or sought to be evaded, more specifically Section 67 of the KVAT Act, clothe the authority with the power to make an estimation of the turnover for the purposes of determining the penalty? - Held that: - Any suppression detected or rather any file generated on a crime so detected and penalised necessarily gives the assessing authority the power to make estimations to compensate the State against probable omissions and suppressions. Such exercise, as is mandated by the statute, has to be regulated by the best judgment of the individual officer which definitely is subject to the principles of reasonableness, proportionality and of course natural justice. Such estimation on best judgment would definitely have to be done with due notice and after affording a personal hearing. Such estimation should be reasonable and should have a nexus with the gravity and frequency of the commission of offences as also the quantum of loss suffered by the State. This exercise, in our opinion, cannot be undertaken by the officer empowered with the power to impose penalty u/s 67 of the Act. Section 67 contemplates imposition of penalty on proof of commission of offences as a measure of deterrence; best judgment assessments are made to compensate the loss caused to the State - question answered against the Revenue and in favor of the assessee.
Scope of Circular No.28/2008, dated 19.06.2008 - Would the prescription of rates for the purpose of collecting advance tax in the case of evasion prone commodities; bind and restrict the dealers from claiming sale of such commodities at a lesser rate resulting in tax liability only for such lesser amounts? - Held that: - The first appellate authority as well as the Tribunal was considerably swayed by the possibility of the dealer claiming refunds of input tax credit. It ought to have been noticed that the circular was issued as a measure to plug evasion of tax and the same was not intended to augment revenue, but to ensure collection of tax due to the State. On the sale price being lesser than that prescribed in the circular, refund of input tax is a natural consequence and that alone cannot be a reason to claim tax for amounts higher than that for which the goods were sold - the Intelligence Officer cannot apply his judgment at the reasonable best for inferring suppression and thereby estimating turnover, for the simple reason that such power has not been conferred by Section 67 of the KVAT Act.
Revision allowed - decided against the Revenue and in favor of the assessee.
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2012 (6) TMI 794
The Appellate Tribunal CESTAT CHENNAI allowed the application for extension of stay granted earlier until the final disposal of the appeal or for six months, whichever is earlier.
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9911796707
