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Database updates
Judgments
Commissioner of Income Tax-I, Ludhiana vs Parveen Fabrics Private Limited
[PUNJAB AND HARYANA HIGH COURT, 25 Aug 2010]
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Ajmera Housing Corporation and another Etc. vs Commissioner of Income Tax
[SUPREME COURT OF INDIA, 20 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 245C(1) and 245D - Income Tax Settlement Commission (Procedure) Rules, 1987, r. 6 - Undisclosed income in settlement application - Assessee filed an application u/s. 245C(1) of the Act before the Settlement Commission, disclosing an additional income of Rs.1,94,33,580/- for the a/ys 1989-90 to 1993-94, in addition to the income declared in the returns of income submitted by them earlier - Thereafter, assessee filed a revised settlement application declaring therein an additional income of Rs.11.41 crores - After Settlement Commission passed an order u/s. 245D(1) of the Act deciding to proceed with the application, a further disclosure of Rs. 2.76 crores was made by assessee - Despite the department's objection that the assessee had not made a 'full and true disclosure', Settlement Commission passed the final order u/s. 245D(4), determining the total income of the assessee at Rs.42.58 crores - Settlement Commission also imposed token penalty of Rs. 50 lakhs on assessee as against the minimum leviable penalty of Rs.562.87 lakhs, as per its own assessment - Department filed writ petition against said order - HC remitted the proceedings back to the Settlement Commission - Assessee challenged said order before SC - SC remanded the matter to the HC on the ground that a report given by the Commissioner estimating the undisclosed income at Rs. 42.58 crores which approximately coincided with the figure arrived at by the Settlement Commission had not been considered by the HC - HC again remanded the matter to the Settlement Commission for re-determination of the undisclosed income - Assessee challenged said order submitting that in terms of s.245D(1) of the Act, the order made by the Settlement Commission under sub-section (4) of the said Section is conclusive as to the matters stated therein and no matter covered by such order can be reopened in any proceedings under the Act or under any other law for the time being in force - Whether assessee's submission could be accepted and order made by settlement commission u/s. 245D(1) of Act was conclusive? - Full disclosure of income by assessee must for case settlement - Held, disclosure of 'full and true' particulars of undisclosed income and 'the manner' in which such income had been derived are the pre-requisites for a valid application u/s. 245C(1) of the Act and unless the Settlement Commission records its satisfaction on this aspect, it will not have jurisdiction to pass any order on the settlement application - An assessee cannot be permitted to resile from his stand at any stage during the proceedings - Therefore, by revising the application, the applicant would be achieving something indirectly what he cannot otherwise achieve directly and in the process rendering the provision of sub-section (3) of s. 245C of the Act otiose and meaningless - In present case, the manner in which assessee's disclosures of additional income at different stages of proceedings were entertained by the Settlement Commission, disregarding the objection of the Commissioner that the assessee had not made a full and true disclosure of their income in the application u/s. 245C(1) of the Act, is unacceptable - Assessee had not made true and full disclosure of their income in the previous application, the foundational requirement of a valid application under Section 245C(1) of the Act, hence, assessee's submission not accepted - Appeals dismissed.
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Commissioner of Income Tax vs Noble Resources and Trading Private Limited
[DELHI HIGH COURT, 18 Aug 2010]
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Commissioner of Income Tax, Bikaner vs Krishi Upaj Mandi Samiti, Suratgarh
[RAJASTHAN HIGH COURT, 13 Aug 2010]
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Commissioner of Income Tax vs Suraj Devi
[DELHI HIGH COURT, 13 Aug 2010]
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Commissioner of Income Tax vs Shiv Shakti Exports
[PUNJAB AND HARYANA HIGH COURT, 13 Aug 2010]
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Commissioner of Income Tax, Delhi vs Bharti Cellular Limited
[SUPREME COURT OF INDIA, 12 Aug 2010]
Telecom - Income Tax & Direct Taxes - Income Tax Act, 1961, s. 194J - 1st respondent/Cellular Service Provider (CSP) entered into an interconnect agreement with another CSP wherein both CSPs access the network of each other and pay the interconnect charges to each other for such use - Income-tax department sought the deduction of Tax Deducted at Source (TDS) from the payment of interconnect charges - 1st respondent filed appeal before the Commissioner of Income-tax (CIT) - CIT dismissed the appeal, however, Tribunal set aside CIT's order and allowed 1st respondent's second appeal - Appellant/Revenue contended that the human intervention would take place during the process of interconnection of networks of CSPs, therefore, interconnect charges belonging to the category of 'fees for technical services' as contemplated u/s. 194J of the Act - Whether TDS was deductible by 1st respondent when it paid interconnect charges/access/port charges to another CSP - Held, no expert evidence available from the side of the appellant/department to show how human intervention takes place, particularly, during the process when calls take place via interconnection network - However, in view of the larger interest and the ramification of the issues, which is likely to recur, particularly, in matters of contracts between Indian Companies and Multinational Corporations, present case is required to be remitted to the Assessing Officer (TDS) - Direction issued to the Assessing Officer (TDS) to examine a technical expert from the side of the Department and to decide the matter within the stipulated time - Appeals disposed of.
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Commissioner of Income Tax vs Shell Bitumen India (P) Limited
[DELHI HIGH COURT, 11 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961 - Capital expenditure - Whether consultancy charges paid to various authorities for obtaining study reports in bitumen amount to capital or revenue expenditure? - Held, consultancy expenditure in the present case amounted to revenue expenditure, as by virtue of the consultancy the respondent-assessee had neither acquired an income earning asset nor did it obtain any enduring advantage - Moreover, the aforesaid expenses are clearly relatable to the business of the respondent-assessee - Revenue's appeal dismissed.
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Commissioner of Income Tax vs Jackson House
[DELHI HIGH COURT, 11 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 133A and 260A - Respondent-assessee is a partnership firm engaged in business of manufacture and export of readymade garments - Survey operation u/s. 133A of IT Act was conducted at business premises of respondent-assessee and excess stock worth Rs. 68,69,090 was found on physical verification which was accepted by respondent-assessee - Case of respondent-assessee was selected for scrutiny and Assessing Officer determined respondent-assessee's taxable income at Rs. 1,26,75,040 by making various additions/disallowances - Upon matter being carried forward in appeals, controversy ultimately reached ITAT which, by way of impugned order, partly allowed respondent-assessee's appeal, hence these appeals - Whether ITAT rightly allowed in part appeal of respondent/assessee by deleting addition in value of stocks, added accounts of stock and added low gross profit as imposed by Assessing Officer? - Held, no substantial question of law arises in present proceedings inasmuch as ITAT has given cogent reasons for arriving at its factual conclusions - ITAT has rightly held that while conducting survey, survey team is expected to take all reasonable steps to find out unexplained stock, cash etc. found and in including same but it will be unfair to hold that survey team did not acted in interest of revenue and left out value of work-in-progress lying at fabricator's place in valuing stock during survey - Some of bills from fabricators or consumables were not received like dyeing' and acid wash expenses, finishing expenses, embroidery expenses fabrication expenses etc and in respect of some of goods even sales had already taken place and therefore, expenses cannot be attributed to stock remaining in inventory and these facts were explained by identifying each bill and in relation to each item manufactured, for which such expenses were incurred - Even sales invoice number for items sold have been mentioned and u/s 145(3) Assessing Officer may make a best judgment assessment by rejecting book results only where method of accounting or accounting standard has not been regularly followed or where Assessing Officer is not satisfied about correctness or completeness of account - In original assessment Assessing Officer has not made any allegation that books of account are either incorrect or incomplete and on contrary same are duly audited as required u/s. 44AB of Act and no addition could 'have been made by estimating gross profit - Appeal dismissed.
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Commissioner of Income Tax-II vs Desh Bhagat Memorial Education Trust
[PUNJAB AND HARYANA HIGH COURT, 10 Aug 2010]
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Commissioner of Income Tax vs Sakthi Sugars Limited
[MADRAS HIGH COURT, 10 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 36 and 37 - A.Y. 1992-93 - Expenditure relating to expansion of business unit - Admissibility - Respondent/Assessee filed revised return after filing the original return and claimed further revenue expenses relating to the expansion of its sugar units - Assessing Authority held that the assessee's business and installed capacity had gone up and the business expansion was carried out in a different State and that the assessee cannot claim the expenses incurred on the installation of new factories as revenue expenditure and hence the same was treated as capital expenditure - Respondent filed appeal before Commissioner of Income Tax (CIT) - CIT allowed appeal and held that expenditures in question were revenue expenditures - Revenue filed appeal before the Tribunal - Tribunal confirmed the CIT findings - Hence the present appeal by the Revenue - Whether expenditures in question were allowable as provided u/ss. 36 and 37 of the Act - Held, respondent's statement of expenditure disclosed that all expenditures therein were incurred in the relevant years for the purpose of manufacture of sugar in the respective factories with a view to earn profits and therefore they were nothing but revenue expenditure only - Expenditure incurred by way of salaries, wages, bonus, provident fund contribution, workmen welfare expenses, power, fuel and water, manufacturing expenses, rent for office building etc., were all expenses which were incurred for the purpose of running of the business and it cannot be held to be by way of investment - Therefore, said expenditures were allowable deduction as provided u/ss. 36(1)(i) & (iii) and 37(1) of the Act and hence CIT as well as the Tribunal were fully justified in accepting the case of the assessee in respect of said expenses as revenue expenditure and no interference called for - Question of law is therefore answered in favour of the assessee and against the Revenue - Appeal dismissed.
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Commissioner of Income Tax vs Shyam Tex International Limited
[DELHI HIGH COURT, 06 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 260A and 271 - Petitioner/revenue submits that Tribunal has failed to appreciate that respondent/assessee had furnished inaccurate particulars of income with deliberate intent to reduce statutory liability - Whether Income Tax Appellate Tribunal rightly allowed appeal of respondent/assessee? - Held, Supreme Court in Dharamendra Textile Processors and Ors. 2008 INDLAW SC 1837, has held that mens rea is not essential for imposing penalty for breach of civil obligations, however, it has not been stipulated by Apex Court that by merely making a claim, which is not sustainable in law by itself, will amount to furnishing of inaccurate particulars within meaning of 271(1)(C) of Act, 1961 - HC is not required to see mens rea in present case but only required to see whether inaccurate particulars were given by assessee were given or not - In this case, there is no finding that any details supplied by assessee in its return were found to be incorrect or erroneous or false. Such not being case, there would be no question of inviting penalty u/s. 271(1)(c) of Act - A mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of assessee - Such claim made in return cannot amount to inaccurate particulars - Assessee had furnished all details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as concealment of income on its part - It was up to authorities to accept its claim in return or not and merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to revenue, that by itself would not, in our opinion, attract penalty u/s. 271 (1)(c) of Act - Appeal dismissed.
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Commissioner of Income Tax vs Shahi Export House
[DELHI HIGH COURT, 06 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 80 HHC - Assessee had earned interest on Rs.14,24,027/- on certain fixed deposit receipts - Whether ITAT was correct in law in allowing benefit of netting of interest to assessee while computing deduction u/s 80HHC of Act? - Held, only in those cases where interest earned on fixed deposits have an immediate nexus with export business would be treated as income from business and interest earned on fixed deposits which does not have an immediate nexus with export business, it would be treated as income from other sources - When interest was earned on fixed deposits for purposes of availing of credit facilities from bank, it did not have such a nexus with export business and therefore had to be necessarily treated as income from other sources and not business income - If interest received is found to have a nexus with business, still it remains to be excluded from profits of business by virtue of Explanation (baa)(1), but claim is that quantum of such interest income to be excluded must be determined in accordance with computation provisions relating to business by allowing expenditure by way of interest which bears a nexus with interest receipt. computation provisions included s.37(1) under which any expenditure incurred or laid wholly and exclusively for purpose of business is to be allowed as a deduction - Any expenditure incurred which has a connection or nexus with interest receipt has to be allowed as a deduction and only balance can be excluded from business profits - Appeal dismissed.
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Commissioner of Income Tax, Faridabad vs Ajay Sharma
[PUNJAB AND HARYANA HIGH COURT, 05 Aug 2010]
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Commissioner of Income Tax, Faridabad vs Roshni Dev
[PUNJAB AND HARYANA HIGH COURT, 05 Aug 2010]
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Sridevi Venkataswamy vs (1) Chief Commissioner of Income Tax; (2) Deputy Commissioner of Income Tax; (3) Assistant Commissioner of Income Tax
[MADRAS HIGH COURT, 04 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 234A, 234B, 234C - Delay in filing returns - Charging of interest - Entitlement - Petitioner paid advance tax for her income, however, delayed in filing the returns - Assessing Officer (AO) regularised the returns, however, charged interest u/ss. 234A, 234B and 234C of the Act - Petitioner sought waiver of interest - 1st respondent/Chief Commissioner rejected petitioner's request - Whether petitioner is entitled to the waiver of interest - Held, DB of HC in V. Akilandeswari v. Chief Commissioner of Income-tax, 2009 INDLAW MAD 1481, held that if the petitioner had paid the tax voluntarily and had also pleaded a good and sufficient reason for the non-payment of tax on time, levying interest u/ss. 234A, 234B and 234C of the Act was unreasonable - Judgment of V. Akilandeswari's case was applicable to petitioner's case with equal force, however, if any amount is paid by the petitioner pursuant to the impugned order, she is not entitled to seek refund of the same - Petitions allowed.
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Commissioner of Income Tax vs Paramount Products (P) Limited
[DELHI HIGH COURT, 04 Aug 2010]
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Commissioner of Income Tax , Panchkula vs Davender Parshad Jain
[PUNJAB AND HARYANA HIGH COURT, 02 Aug 2010]
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Commissioner of Income Tax vs Market Committee, Bapoli
[PUNJAB AND HARYANA HIGH COURT, 02 Aug 2010]
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Commissioner of Income Tax-IV vs (1) Dwarkadhish Investment (P) Limited; (2) Dwarkadhish Capital (P) Limited
[DELHI HIGH COURT, 02 Aug 2010]
Income Tax & Direct Taxes - Income Tax Act, 1961, s. 68 - Cash Credits - Respondent-assessee was engaged in business of financing and trading of shares - Assessee filed a return declaring NIL income - On scrutiny of accounts, Assessing Officer (AO) found an addition of Rs. 71,75,000 in share capital of assessee - AO sought an explanation from assessee about this addition in share capital - Assessee failed to explain addition of share application money from five of its subscribers - AO made an addition of Rs. 35,50,000 on account of unexplained cash credits appearing in books of assessee - On appeal, Commissioner deleted addition on the ground that assessee had proved existence of shareholders and genuineness of transaction - Appellate Tribunal upheld order of Commissioner - Hence, present appeal - Whether Commissioner and Appellate Tribunal rightly deleted addition on ground that assessee proved existence of shareholders and genuineness of transactions? - Held, though in s. 68 proceedings, the initial burden of proof lies on the assessee yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or income tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue - Just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke s. 68 of IT Act - One must not lose sight of the fact that it is the Revenue which has all the power and wherewithal to trace any person - Moreover, it is settled law that the assessee need not to prove the 'source of source' - Hence, Commissioner and Appellate Tribunal rightly deleted addition on ground that assessee proved existence of shareholders and genuineness of transactions - Revenue's appeal dismissed.
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Nexo Industries Private Limited vs Commissioner of Income Tax
[PUNJAB AND HARYANA HIGH COURT, 30 Jul 2010]
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Commissioner of Income-Tax vs Market Committee, Assandh
[PUNJAB AND HARYANA HIGH COURT, 29 Jul 2010]
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Director of Income Tax (Exemption) vs ACME Educational Society
[DELHI HIGH COURT, 28 Jul 2010]
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Commissioner of Income Tax vs Raj Overseas
[PUNJAB AND HARYANA HIGH COURT, 28 Jul 2010]
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Commissioner of Income Tax vs Tiny Tots Education Society
[PUNJAB AND HARYANA HIGH COURT, 28 Jul 2010]
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