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Archive: 06 February 2011

Posts in 06 February 2011

Depreciation cannot be allowed on membership card of Stock Exchange

February 6, 2011 919 Views 0 comment Print

The onus lying on the assessee to prove the nature and source of the credit is not discharged if the creditors in whose names amount is standing in the books of the assessee denied to have any knowledge of such credits. It is for the assessee to bring to the A.O. Shri R.N. Parikh and furnish necessary evidence that in fact, it was he who was using the accounts of the two persons and paying the money to the assessee on their behalf.

Assessment beyond a period of four years can not be re-opened where there is full and true disclosure of all material facts by assessee

February 6, 2011 850 Views 0 comment Print

No action can be taken under the section 147 after the expiry of four years from the end of the relevant assessment year unless the income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year

If assessee has made a full and true disclosure of all material facts for his assessment, action of re-opening assessment beyond a period of four years would stand barred

February 6, 2011 645 Views 0 comment Print

Where the revenue has failed to establish before the Court that there was a failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment, the exercise of the power to re-open the assessment beyond a period of four years of the end of the relevant assessment year would fail to fulfill the statutory condition precedent to a valid exercise of the power to re-open an assessment beyond a period of four years

A dress designer is an artist for purposes of section 80RR

February 6, 2011 1046 Views 0 comment Print

The work that the respondents perform is in the nature of a creative art and their work is neither subject to an order required from the Art Director nor from any of the artists. In performing their work, they have to bring to their work, their artistic ability, talent and a sense of perception for the purpose of production of drama involving in the course of such work, the application of the correct technique and the selection of the cast, the play, the manner of presentation, the light and effects and so on. In effect, the work they do is creative art which only a person with an artistic talent and requisite technique can manage. To call such a person, a skilled or a manual worker is altogether inappropriate.

Donations out of 15 Percent accumulation permitted under section 11(1)(a) are not to be restricted by Explanation to section 11(2)

February 6, 2011 9014 Views 0 comment Print

The Assessee for the relevant year filed return declaring “Nil” income. He case though processed under Section 143(1) was selected for scrutiny. The Assessee had shown the gross total income for the relevant year as Rs.6,92,453/- and deducted therefrom the amount applied for charitable purposes to the extent of Rs.27,28,001/-. The Assessee had made application of income by donation of Rs.26,66,000/- comprising of donation of Rs.25 lacs to BLB Trust as corpus donation and Rs.1,66,000/- to others. The source of the balance amount over and above the income of Rs.6, 92,453/- was from FDR encashment, MIP units a

Determination of ALP- TNM Method requires comparison of net profit margins and not operating margins of enterprises

February 6, 2011 1048 Views 0 comment Print

For arriving at the above conclusion, strength is drawn from the decision of Mumbai `L’ Bench of the Tribunal in the case of UCB India P. Ltd. v. ACIT [121 ITD 131 (Mum.)] where it was held that section 92C read with Rule 10B(1)(e) deals with Transactions Net Margins Method (TNMM) and it refers to only net profit margin realized by an enterprise fro

Ingredient about a bona fide claim is that assessee should be able to show or prove some intermediate steps in whole process of transaction

February 6, 2011 1332 Views 0 comment Print

Ingredient about a bona fide claim is that assessee should be able to show or prove some intermediate steps in whole process of transaction; if it is not able to give evidence in respect of any step in whole process of transaction then it can be said that explanation furnished by assessee is not bona fide and is nothing but a bald claim for purposes of section 271(1)(c).

If assessee had claimed certain depreciation to which it was not entitled, recognition under section 80G cannot be denied

February 6, 2011 540 Views 0 comment Print

If the facts of the case are tested on the ratio of aforesaid decisions, in our considered opinion, the Id. Commissioner cannot deny renewal of registration on the ground that the assessee had claimed double deduction in respect of depreciation as well as capital expenditure i or had not applied the requisite income for the objects. If the assessee had claimed certain depreciation to which it was not entitled the recognition under section 80-G cannot be denied.

Mere making a claim which is incorrect in law not amounts to giving inaccurate particulars

February 6, 2011 2056 Views 0 comment Print

Penalty proceedings- Mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of income of assessee, but if claim besides being incorrect in law is malafide, Explanation 1 to section 271(1)(c) comes into play and work to disadvantage of assessee.

When assessee commits default under a bona fide belief which is rectified by filing a revised return, it cannot be held liable for penalty under section 271(1)(c)

February 6, 2011 1544 Views 0 comment Print

In the light of the concurrent findings recorded by Commissioner (Appeals) as well as the Tribunal, it is apparent that the assessee had bona fide made a claim for deduction under section 80IA of the Act, which came to be rectified by filing a revised return withdrawing the claim and that as such there was no concealment or furnishing of inaccurate particulars of income on the part of the assessee. Moreover, the notice under section 154 of the Act issued by the Assessing Officer also does not remotely indicate anything to that effect. In the circumstances, Commissioner (Appeals) was justified in setting aside the penalty imposed under section 271(1) (c) of the Act.

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