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Database updates
Judgments
Commissioner of Income Tax Haldwani, Nainital vs Bazpur Co-Operative Sugar Factory Limited through its General Manager, Bazpur
[UTTARAKHAND HIGH COURT, 10 Jun 2013]
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A. Murali and Company (Private) Limited, Chennai vs Assistant Commissioner of Income Tax, Chennai
[MADRAS HIGH COURT, 04 Jun 2013]
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Commissioner of Income Tax, Dehradun and another vs Shri Sanjay Kumar Bansal
[UTTARAKHAND HIGH COURT, 31 May 2013]
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Commissioner of Income Tax, Dehradun and another; Commissioner of Income Tax, Haldwani, Nainital vs Laksar Cooperative Cane Development Union Limited Laksar; Sahkari Ganna Vikas Samiti Limited, Sitarganj, U. S. Nagar
[UTTARAKHAND HIGH COURT, 31 May 2013]
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Commissioner of Income-Tax Delhi-XV, New Delhi vs Neenu Dutta
[DELHI HIGH COURT, 31 May 2013]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 54F and 260A - Penalty levied for making a wrong claim - Sustainability - Appeal was filed on behalf of the revenue u/s. 260A of Act - Appellant had challenged the order passed by Tribunal for the A/y 2008-09 - Controversy in the case related to levy of penalty by Assessing Officer(AO) u/s. 271(1)(c) of Act - It was contended on behalf of the assessee that making a wrong claim would not be a ground for imposing penalty u/s. 271(1)(c) of the Act as the same did not amount to furnishing inaccurate particulars or concealment of income as the assessee had disclosed all material facts and had claimed exemption u/s. 54F of the Act based on legal advice that gains from exercise of options would not be taxed - CIT (Appeals) accepted the contentions of the assessee and set aside the order of penalty - Tribunal also agreed with CIT(Appeals) - Hence instant appeal - Whether imposing of penalty was sustainable - Held, agreement with the decision of the CIT (Appeals) and Tribunal that it was not a case which would attract penalty u/s. 271(1)(c) of Act - Question whether gains arising out of exercise of cashless options was long term capital gains or short term capital gains could have been a contentious issue at the material time - Further the facts of instant case did not indicate that the assessee had furnished inaccurate particulars or concealed income - Commissioner of Income Tax v. Jaswinder Singh Ahuja, 2013 Indlaw DEL 417, relied on - Appeal dismissed.
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Commissioner of Income Tax and another vs Iqbalpur Cooperative Cane Development Union Limited, Roorkee
[UTTARAKHAND HIGH COURT, 31 May 2013]
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Vijai Electricals Limited, Hyderabad vs Additional Commissioner of Income-Tax, Hyderabad
[INCOME TAX APPELLATE TRIBUNAL, 31 May 2013]
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(1) Commissioner of Income Tax; (2) Commissioner of Income Tax-IV vs Delhi Press Patra Prakashan Limited
[DELHI HIGH COURT, 31 May 2013]
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Commissioner of Income Tax (Central) vs (1) O. P. Srivastava; (2) Ishtiaq Ahmed; (3) J. B. Roy; (4) U. K. Bose; (5) Suboroto Roy
[ALLAHABAD HIGH COURT, 30 May 2013]
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Kanpur Plastipack Limited vs Commissioner of Income Tax
[ALLAHABAD HIGH COURT, 30 May 2013]
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Commissioner of Income Tax vs Deepak Agarwal
[ALLAHABAD HIGH COURT, 30 May 2013]
Income Tax & Direct Taxes - Income-tax Act, 1961, s. 143(3) - Assessment - Deletion - Legality - Respondent assesse was an individual by status carrying on business of financing and investments - During assessment year under consideration, respondent had shown gross interest receipts from his business of financing to extent of Rs.56,49,614/- against which he had paid interest on borrowed funds amounting to Rs.53,31,137/- - Assessing Officer found that respondent had invested an amount of Rs.2,01,33,605/- - Assessment was completed u/s. 143(3) of the Act on an income of Rs.24,12,6000/- - Aggrieved, respondent filed appeal before Commissioner of Income Tax (Appeals)(CIT), which had allowed a relief of Rs.2,29,000/- out of total addition of Rs.20,61,000/- in respect of interest disallowed on account of investment in shares - Respondent filed appeal before Tribunal - Tribunal allowed the assesse' s appeal and deleted addition of Rs.18,32,000/- - Aggrieved, CIT preferred instant appeal - Whether Tribunal was justified in law in deleting addition of Rs.18,32,000/- sustained by CIT - Held, Tribunal had wrongly assumed that respondent was in business of investment in shares - Tribunal had not referred to any material in that regard - There was no finding that in previous years, respondent had ever made investments in shares of any company, or had earned profit or loss therefrom - Tribunal had totally glossed over main controversy between parties, namely, that investment in shares was not business of respondent -Business of financing was not same as business of investing in shares and at least not in instant case where there was no such history - Tribunal failed to notice reasoning's and various factors taken into consideration by assessing officer and CIT in holding that in circumstances of instant case - Since tribunal had proceeded to decide controversy on wrong assumption of facts and had glossed over findings recorded by Assessing Officer and CIT and had brushed aside relevant factors and order of tribunal deleting addition of Rs.18,32,000/- could not be sustained - Tribunal was not justified in passing the impugned order - Appeal allowed.
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Naresh Chand Agarwal vs Commissioner of Income Tax-I Lucknow
[ALLAHABAD HIGH COURT, 30 May 2013]
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Commissioner of Income Tax Delhi-II vs Jain Exports Private Limited
[DELHI HIGH COURT, 24 May 2013]
Income Tax & Direct Taxes - Income Tax Act, 1961, s.260A - Limitation Act, 1963, s.18 - Tax assessment - Deduction - Sustainability - Appeal was filed, on behalf of the revenue u/s. 260A of Act challenging the order passed by Tribunal, setting aside the addition of sum of Rs. 1,53,48,850/made by the AO on account of purported cessation of liability - Tribunal accepted the contention of the assesse/respondent that sum of Rs. 1,57,10,690.53 was owed by X Ltd. to respondent and thus, the net effect of the same would be that no amount would be payable by respondent to X Ltd. and a sum of Rs. 3,61,840.78 would be receivable after setting off the amount of Rs. 1,53,48,849/which was standing to the credit of X Ltd - Tribunal was of the view that it was not correct to only accept the figure relating to the amount that was receivable by the respondent while rejecting the amount payable by respondent to X Ltd - Whether order of Tribunal was sustainable - Held, although, enforcement of a debt being barred by limitation did not ipso facto lead to the conclusion that there was cessation or remission of liability, in the facts of instant case, it was also not possible to conclude that the debt had become unenforceable - It was well settled that reflecting an amount as outstanding in the balance sheet by a company amounts to the company acknowledging the debt for the purposes of s. 18 of 1963 Act and, thus, the claim by X Ltd. could also not be considered as time barred as the period of limitation would stand extended - Even, otherwise, it could not be stated that X Ltd. would be unable to claim a set-off on account of the amount reflected as payable to it by respondent - Admittedly, winding up proceedings against X Ltd. were pending and there was no certainty that any claim that might be made by respondent with regard to the amounts receivable from X Ltd. would be paid without the liquidator claiming the credit for the amounts receivable from respondent - It was well settled that in order to attract the provisions of s. 41(1) of 1961 Act, there should have been an irrevocable cession of liability without any possibility of the same being revived - Respondent having acknowledged its liability successively over the years would not be in a position to defend any claim that might be made on behalf of the liquidator for credit of the said amount reflected by the respondent as payable to X Ltd - Further, no credit entry was made in the books of the respondent in the previous year relevant to A/y 2008-2009 - Outstanding balances reflected as payable to X Ltd. were the opening balances which were being carried forward for several years - Issue as to the genuineness of a credit entry, thus did not arise in the current year and that issue could only be examined in the year when the liability was recorded as having arisen, that was, in the year 1984-1985 - Dept. having accepted the balances outstanding over several years, it was not open for the CIT (Appeals) to confirm the addition of the amount of Rs. 1,53,48,850/on the ground that the assessee could not produce sufficient evidence to prove the genuineness of the transactions which were undertaken in the year 1984-85 - Appeal dismissed.
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Commissioner of Income Tax vs Kichha Sugar Company Limited
[UTTARAKHAND HIGH COURT, 20 May 2013]
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Director of Income Tax (International Taxation) vs Western Geco International Limited
[UTTARAKHAND HIGH COURT, 20 May 2013]
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(1) ITO, Mumbai; (2) LKP Securities Limited, Mumbai vs (1) LKP Securities Limited, Mumbai; (2) ITO, Mumbai
[INCOME TAX APPELLATE TRIBUNAL, 17 May 2013]
Income Tax & Direct Taxes - Finance (No.2) Act, 2004 - Finance (No.2) Act, 1998, s. 37(1) - Employees State Insurance Act, 1948 - Income-tax Act, 1961ss. 2(24)(x), 2(24), 10(38), 14A, 36(1)(va), 37(1), 40(a)(ia), 43B(b), 43B, 143(3), 194J - Provident Funds Act, 1925 - Finance Act, 1987 - Finance Act, 2003, s. 43B - Income-tax Rules, 1962 r. 8D - Assessment - Deletion of disallowance - Justifiability - Appellant/revenue filed petition before AO for deletion of disallowance u/s.37 of 1961 Act in sum of Rs. 2,87,505/- on account of fines and penalties - AO disallowed same in view of explanation to s. 37(1) of 1961 Act, assessee found favor with commissioner on basis that fines and penalties levied to assessee were by National Stock Exchange (NSE) for various procedural defaults - Appeal was filed before Commissioner - Commissioner ruled in favor of assessee - Aggrieved by said order appellant filed instant appeal - Whether order passed by Commissioner was justified - Held, there was no case for deduction of any tax at source - Further, in fact, on an enquiry by Bench, also dealing with tax deductibility on various payments to Stock Exchange, it was clarified by ld, AR that the 'BOLT' system being adopted by Bombay Stock Exchange (BSE) entailed payments by brokers on three counts, lease rent charges, VSAT and transaction charges - It appeared that Stock Exchange was billed for total charges on these counts i.e., including lease line and VSAT charges by Department of Telecommunication (DOT), which in turn allocates same to its different constituents, without including any charge of its own - Payment to Stock Exchange was, only in nature of reimbursement - Accordingly, no ground for disallowance survives, and assessee succeeds in respect of relevant grounds - At outset, it might be relevant to state that said Finance Act, vide Chapter VII thereof, levies tax called Security Transaction Tax (STT) on long term capital assets, being equity shares in company or units in an equity oriented fund - That was, equity share transactions which were subject to STT would not be subject to tax under Act - As such, Tribunal was unable to see as to what infirmity in law attends Revenue's case in denying claim of loss on transactions in equity shares subject to STT, against taxable capital gains for current year (non STT), it relying and drawing support from decision by SC in case of CIT vs. Harprasad & Co. P. Ltd. [1975] 99 ITR 118 (SC 1975 Indlaw SC 315) - The income falling under Chapter III of the Act and, thus, exempt from levy of tax, would not form part of computation of income under Chapter IV of the Act - That in fact was a fundamental premise, the basis of sec. 14A of the Act - Revenue's case in this regard was unexceptional, and Tribunal confirmed the same - With regard to other limb of matter, assessee had again failed to bring anything on record to rebut clear findings by ld, CIT(A) that its assessment for Assessment year 2003-04 had attained finality, with there being not mention of any loss which required to be carry forward, so that findings by Revenue remain uncontroverted - It might be clarified that carry forward of losses was subject to certain conditions, viz. filing of return in time, its assessment, etc., which in instant case was u/s. 143(3) bearing a definite finding in matter - This gives vested right to assesse - Accordingly, Tribunal found no basis in assessee's case - Appeals partly allowed.
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Commissioner of Income Tax II vs (1) MBL and Company Limited; (2) Multiplex Capital Limited
[DELHI HIGH COURT, 17 May 2013]
Income Tax & Direct Taxes - Income Tax Act, 1961, ss. 88E, 115JB and 260A - Adjustment of rebate from tax - Sustainability - Appeals filed by the revenue under Section 260A of Act challenging the decisions of Tribunal - Tribunal held that rebate available to an assessee u/s. 88E of the Act was liable to be adjusted from the tax as payable irrespective of whether the tax was computed under the provisions of s.115JB of the Act or under the normal provisions of the Act - Whether Tribunal was correct in holding that for the purpose of s. 115JB of the Act rebate u/s. 88E of the Act cannot be taken into consideration or is not relevant/material - S.115JB of the Act provided for computation method for determining the total income of an assessee as an alternative to the total income as computed under Chap. IV, V, VI, VIA of the Act and under other provisions of the Act - S.115JB of Act also specified the rate at which tax was payable on the income as determined under the said section - S.88E of Act provided for remission of tax to the extent of Securities Transaction Tax as paid by the assesse provided the condition specified therein was satisfied, namely, the income of the assessee included income chargeable under the head 'Profits and gains of business or profession', arising from taxable securities transactions, and the assessee furnishes alongwith the return of income, evidence of payment of securities transaction tax in the prescribed form - HC found that there was no reason why the remission in tax which was available u/s. 88E of the Act to an assessee would be not available on the tax as computed under the Minimum Alternative Tax scheme as both s.115JB of the Act as well as the other provisions of the Act have been enacted to provide the machinery for computing total income of an assessee which was eligible to income tax - Rebate u/s. 88E of the Act provided for certain rebates available on the tax payable by an assesse - There would be no rationale to limit the plain words of s.88E of the Act and held that the rebate in payment of the tax was only applicable to tax as determined under the normal provisions of the Act and not available with respect to minimum alternative tax as computed u/s. 115JB of the Act - Purpose of s.88E of the Act was to grant an assessee, to a limited extent, credit in tax on account of Security Transaction Tax already borne by him in respect of the business carried out by him in dealing in securities - Rebate would be equally applicable to tax as computed u/s. 115JB of the Act as under the normal provisions of the Act - Earlier decision of HC in one case held that the rebate u/s. 88E of the Act would be available to tax as payable u/s. 115JB of the Act - Relevant extract from the said judgment was quoted that u/s.88E of Act, where the total income of an assessee in a previous year included any income chargeable under the head 'Profits and gains of business of profession', arising from taxable securities transactions, he should be entitled to a deduction, from the amount of income-tax on such income arising from such transactions - S.88E Act also provided the limit to which deductions should be given - Therefore, it was clear that the assessee was liable to pay Securities Transaction Tax when he entered into securities transaction - Tax was payable simultaneously after realizing the consideration - However, if that transaction was included in the total income of the assessee where the total income was assessed either under the provisions of the Act or u/s. 115JB of Act when tax chargeable on such income was arrived at, he was given the benefit of tax deductions of the amount, which he had paid u/s. 88E of Act by virtue of s. 87 of Act - When u/s. 82A of Act the assessee was made liable to pay tax with an assurance that it would be deducted and s. 87 of the Act gave effect to such promise made under the statute - That was the reason why the word used to rebate - Amount paid was handed back to the assesse - In other words, payment of tax twice on the same income was avoided - Therefore, the contention that this benefit was not available to the assessee whose total income was assessed u/s. 115JB of Act had no substance - In other words, when the total income was assessed and the tax chargeable was computed, it was from that tax which was chargeable, the tax paid u/s. 88E of Act was given deduction, by way of rebate, u/s. 87 of the Act - It was the legislative intent - That was a promise to give deduction of the tax already paid - It was the mode in which tax already paid was handed back at the time of final computation - Therefore, the judgment referred by the Tribunal was strictly in accordance with law and did not suffer from any legal infirmity, which called for interference - Appeals dismissed.
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Commissioner, Income Tax vs H. P. Tourism Development Corporation Limited
[HIMACHAL PRADESH HIGH COURT, 16 May 2013]
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Unitech Limited vs Additional Commissioner of Income Tax, Range 18, New Delhi and others
[DELHI HIGH COURT, 15 May 2013]
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Deputy Commissioner of Income-tax, Central Circle-XXVII, Kolkata vs Ashish Jhunjhunwala
[INCOME TAX APPELLATE TRIBUNAL, 14 May 2013]
Income Tax & Direct Taxes - Income-tax Act, 1961, ss. 10(34), 143(3) - Income-tax Rules, 1962, r. 8D(2)(iii), 8D(1), 8D - Assessment - Disallowance of dividend income - Legality - During course of assessment proceedings AO noticed that respondent/assessee has earned dividend income of Rs. 32,43,231/- and claimed same as exempt u/s. 10(34) of the Act - AO required assessee to furnish details of expenditure incurred for earning this dividend income - Assessee stated that no expenditure had been incurred to earn this dividend income because no new investment was made during year and no interest at all was paid on investments made for earning this dividend income and no loans were taken for making this investment for earning this dividend income - AO made disallowance simply by making calculation by applying r. 8D of the Rules - Aggrieved assessee challenged disallowance before CIT(A) - CIT(A) deleted the disallowance - Aggrieved, revenue/petitioner filed instant appeal - Whether AO had satisficing record about correctness of claim of assesse - Held, determination of amount of expenditure in relation to exempt income u/r. 8D of the Rules would only come into play when AO rejects claim of assessee in this regard - If one examines r. 8D (2) of Rule, Tribunal found that method for determining expenditure in relation to exempt income had three components - First component being amount of expenditure directly relating to income which does not form part of total income - Second component being computed on basis of formula given therein in case where assessee incurs expenditure by way of interest which was not directly attributable to any particular income or receipt - Formula essentially apportions amount of expenditure by way of interest other than amount of interest included in cl. (i) incurred during previous year in ratio of average value of investment, income from which does not or should not form part of total income, to average of total assets of assesse - Third component was an artificial figure - one half percent of average value of investment, income from which does not or should not form part of total income, as appearing in balance sheets of assessee, on first day and last day of previous year, It was aggregate of these three components which would constitute expenditure in relation to exempt income and it was this amount of expenditure which would be disallowed u/s. 14A of the Act - It was clear that in terms of said Rule, amount of expenditure in relation to exempt income had two aspects direct and indirect - It was found from facts of above case that AO had not examined accounts of assessee and there was no satisfaction recorded by AO about correctness of claim of assessee and without same he invoked r. 8D of Rules - While rejecting claim of assessee with regard to expenditure or no expenditure, as case might be, in relation to exempted income, AO had to indicate cogent reasons for same - From facts of present case it was noticed that AO had not considered claim of assessee and straight away embarked upon computing disallowance u/r. 8D of Rules on presuming average value of investment at ½% of total value - In view of above and respectfully following coordinate bench decision in case of J. K. Investors (Bombay) Ltd 2013 Indlaw ITAT 20, order of CIT(A) was upheld - Appeal dismissed.
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Commissioner of Income Tax-I, Lucknow vs Motilal Memorial Society, Lucknow
[ALLAHABAD HIGH COURT, 14 May 2013]
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(1) Assistant DIT (IT), Mumbai; (2) Clifford Chance C/o Bharat S. Raut and Company, Mumbai vs (1) Clifford Chance C/o Bharat S. Raut and Company, Mumbai; (2) Assistant DIT (IT), Mumbai
[INCOME TAX APPELLATE TRIBUNAL, 13 May 2013]
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Marudhar Fab Tex vs State of Rajasthan and others
[RAJASTHAN HIGH COURT, 10 May 2013]
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Commissioner of Income-Tax-III vs Samara India Private Limited
[DELHI HIGH COURT, 10 May 2013]
Income Tax & Direct Taxes - Income- Tax Act, 1961, ss. 260A, 32(1), 36(1)(7) - A/y 2004-2005 - Writing of advance rent amount as bad debt - Legality - Assessee was engaged in business and had taken property on lease from lessors - Assessee advanced certain sums to lessors which were liable to be adjusted against monthly rent for property in question - In addition to advance paid by assessee he also incurred substantial expenditure on development and interiors of property - An amount of Rs.33,47,489/- which was paid as an advance rent by assessee and had been written off as not recoverable in previous year relevant to A/y 2004-2005 - Commissioner Appeals held that assessee was pursuing its remedies by way of civil suit for recovery of amounts advanced it could not be held that amounts had become bad debts - Revenue accepted said order and did not file an appeal before Tribunal - Assessee preferred an appeal from decision of Commissioner Appeals - Tribunal upheld decision of AO and Commissioner Appeals with regard to amount of Rs.30,78,418/- spent by assessee on workshop as capital expenditure and granted relief with regard to addition made by AO in respect of advance rent of Rs. 33,82,289/- which had been written off by assessee in his profit and loss account as irrecoverable - Order passed by Tribunal in relation to A/y 2004-2005 for written off amount of Rs 64,60,707/- as irrecoverable was challenged by revenue u/s. 260 of the Act - Hence, instant appeal - Whether orders passed by Tribunal were sustainable - Held, that pendency of civil suit was not a bar on writing off debt if in opinion of assessee its probability of recovery was remote - It was not disputed that assessee had paid a sum of Rs. 33,82,289/- as advance which was to be adjusted against lease rents - Assessee had been carrying on business even prior to lease agreement with respect to which advance had been made - Assessee had come to a conclusion that chances of recovery of amounts claimed from lessors in near future were remote and therefore had written off amount of Rs.64,60,707/-as irrecoverable in previous year relevant to A/y 2004-2005 - For assessee to claim deduction in relation to bad debts it was no longer necessary for assessee to establish that debt had become irrecoverable and it was sufficient if assessee formed such an opinion and wrote off debt as irrecoverable in its accounts - SC had examined import of amendment in s. 36(1)(vii) of the Act and found that appeal did not raise any substantial question of law - Thus, orders of Tribunal was upheld - Appeal dismissed.
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(1) Convergys Customer Management Group Inc, New Delhi; (2) Assistant Director of Income-tax, New Delhi vs (1) Assistant Director of Income-tax, New Delhi; (2) Convergys Customer Management Group Inc
[INCOME TAX APPELLATE TRIBUNAL, 10 May 2013]
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