Income Tax Judgment of SC, HC and ITAT

  • Oct
  • 24
  • 2014

AO can make adjustment to profit if books are not in accordance with established accounting principles

The assessee had contended that the Assessing officer was not entitled to make adjustments to book profit shown in the audited The question that had arisen was whether the Assessing officer was entitled to disturb the net profit shown by the assessee in the profit and loss account prepared as per the Companies Act, 1956. […]

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  • Oct
  • 24
  • 2014

Share broker business commences on the date on which assessee filed application for registration with NSE

The company was incorporated on 24-11-2004 under the Indian Companies Act with the authorized capital of Rs. 2,00,00,000/- being minimum capital for the company obtaining membership of stock broker. As per the object clause of memorandum of association of the assessee, the main object of the assessee was to carry on the business of stock […]

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  • Oct
  • 23
  • 2014

Cash seized during search cannot be adjusted against advance-tax liability

As per provisions of section 132B of the Act the assets seized u/s 132 or requisitioned u/s 132A may be adjusted towards the amount of any “existing liability”. The Explanation 2 attach to section 132B of the Act clarifies that for removal of doubts it is hereby declared that the “existing liability” does not include […]

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  • Oct
  • 23
  • 2014

AO can issue notice u/s 148 despite non expiry of time limit for issuing notice u/s 143(2)

condition precedent for proceeding under section 147/148 of the Act was that the Assessing Officer should have reason to believe that income had escaped assessment. The Hon’ble jurisdictional High Court further held, The notice under section 147/148 issued to the petitioner was not vitiated merely for the reason that notice under section 143(2) had not been issued to it.

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  • Oct
  • 23
  • 2014

Deemed dividend applies only where there is ‘actual payment’ & not on transaction in kind

CA Pankaj G. Shah Deemed Dividend – For invoking provisions of Section 2(22)(e) there should be actual payment, existence of Reserves at the time of making payment – Credit sale is not ‘loan’ or ‘advance’ for purpose of S.2(22)(e) – ITAT Indore Bench Please find attached a recent decision of Parag Desai v. Addl. CIT […]

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  • Oct
  • 23
  • 2014

Refund cannot be denied for failure on the part of Income Tax Department

There is no dispute about the fact that the order of penalty at annexure A dated 12.3.2010 was made against the petitioner on the basis of the assessment of income of the petitioner done by the assessing officer under section 143(3) of the Act. While completing the assessment, the assessing officer formed an opinion that […]

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  • Oct
  • 22
  • 2014

Payment of related Indian income tax by recipient foreign entity and disallowance for payment made without deduction of TDS

Payment of related Indian income tax by recipient foreign entity and its impact on the impugned disallowance In the present case, we are dealing with a situation in which payment has been made to a non-resident taxpayer but the said non-resident taxpayer has taken into account the receipts in question in his business income and […]

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  • Oct
  • 21
  • 2014

Penalty u/s 271(1)(c) cannot be levied for mere non acceptance of explanation furnished by the assessee

Issue -During the course of search certain valuables including jewellery was found and the assessee has filed detailed explanation regarding the source of acquisition of jewellery. The assessee has explained that out of the jewellery found, some part belongs to the wife of the assessee, and some part thereof was gifted by the mother of […]

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  • Oct
  • 20
  • 2014

Validity of order u/s 263 on a issue on a issue on which CIT (A) has already decided in favour of Assessee

Ld. Commissioner of Income  Tax in his notice u/s 263 dated 18.3.2014 stated that prima facie deduction claimed u/s 80IC of the Act by the assessee is not justifiable on the following grounds :- Assessee is assembling and trading LCDs and it is not carrying on manufacturing of goods. The unit of the assessee is […]

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  • Oct
  • 19
  • 2014

Interest Income of Co-Operative Bank on deposits with Co-operative Bank not eligible for Deductoion U/s. 80P

In the present case, we find that the assessee has earned interest income on fixed deposits made by the assessee with sub-treasury, Meenachili, Kadappattoor and SBI Pala totaling Rs. 20,21,909/- and the interest income earned on the surplus funds of the assessee cannot be considered as business income so as to be entitled for deduction […]

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