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Archive: 01 May 2013

Posts in 01 May 2013

Sec.40A(2) – Concrete evidence or material must to allocate unreasonable &excessive expenses for purpose of disallowance

May 1, 2013 2069 Views 0 comment Print

Here in this case, it is not disputed fact that the assessee is sharing staff, office premises, etc. with its parent company. The allocation of the expenses have been identified as per the memorandum of understanding with regard to nature and the quantum of expenses which were to be borne out by the parent company and to be reimbursed by the assessee. Nowhere the Assessing Officer has spelled out as what were the expenses, which have been reimbursed are unreasonable or excessive looking to the fair market value of the services and expenses reimbursed.

Foreign trip Expenses on spouse of Director not allowable unless connected with business

May 1, 2013 13830 Views 1 comment Print

Expenses incurred by the assessee on the foreign tour of spouses of the Directors were wholly gratuitous and for a purpose outside the course of its business. As the incurred expenditure was for extra-commercial reasons, so, same is not deductible under section 37(1) of the Act.

Payments to Government for diversion of forest land for non-forest purposes, amounts to compensation is revenue expense

May 1, 2013 3415 Views 0 comment Print

We find force in the submission of the learned counsel that payments to the government are to be paid once the mining lease is obtained and such payments are governed by various Acts along with the Apex Court making a ruling for State Governments to participate in the granting of mining lease by recovering compensation when their forests are uprooted. Therefore for this purpose, the funds are used for a natural regeneration which the assessee participates indirectly. Therefore at no point of time could it be said that the assessee had incurred a capital expenditure giving the assessee a benefit of enduring nature for the purpose of earning segmented income to render the same to income tax. In other words, the authorities below have not pointed out the income generated against the purported deferred Revenue expenditure so proposed by them in their impugned orders. The amount was incurred as a Revenue expenditure and is directed tobe allowed in the year it has been incurred

Tribunal cannot dismiss appeal only for want of prosecution without same being decided on merit

May 1, 2013 2294 Views 0 comment Print

Rule 24 of the Income Tax Rules, 1963 makes it abundantly clear that the Tribunal cannot dismiss the appeal without adverting to the merits. Even on the day on which the hearing is adjourned, the appellant chose not to appear in person or through an authorised representative. It is incumbent upon the Tribunal to dispose of the appeal on merits after hearing the respondent and afterwards if the appellant appears and satisfy the Tribunal, sufficient cause for its non-appearance on the date of hearing, the Tribunal can set aside the ex parte order and restore the appeal. However, reliance of the Tribunal on the decision of the Delhi Bench in the case of Multiplan India (P.) Ltd. (supra) is erroneous and, therefore, requires to be set aside. In the instant case, it can be noted from the letters addressed by the present appellant to the Tribunal that it was awaiting transfer of both the appeals of 1998-99 and 1999-2000 since CIT (Appeals) had relied upon such orders of earlier years.

Gift not bogus if Assessee proves identity / creditworthiness of donor & genuineness of transaction

May 1, 2013 2202 Views 0 comment Print

In the instant case, as can be noted from the findings of the Tribunal, Assessing Officer had not summoned any of the donors. However, it had issued the letters under section 133(6) of the Act. Assessing Officer had also called for confirmation letters which were received by it. The assessee also had furnished all other requisite documents like copies of DD, gift deed, copy of PAN cards, copy of acknowledgment of returns of the donors along with computation and balance sheet. It also found that all the donors were assessed to tax except one who was based at USA. On thus having found identity of the donors so also creditworthiness and genuineness of the transaction having been established, Tribunal did not accept the say of the Revenue that the gifts were bogus.

HC upheld addition for unaccounted stock, rejects plea of stock borrowal from Sister Concern

May 1, 2013 471 Views 0 comment Print

In survey, an unaccounted stock was found lying at the railway plot of the assessee. The assessee claimed that the said stock was borrowed by it from sister concern OGPL to meet its export requirements for shipment in the month of March, 2005 and said quantities were returned to OGPL on purchase of order in the last weeks of March, 2005 and since the transaction was settled in the same year, it was not necessary to raise debit note or other documents as sought for by revenue.

Reassessment Notice for mere change of opinion is impermissible in law

May 1, 2013 705 Views 0 comment Print

The learned counsel for the respondent had sought to argue that the present writ petitions were different and distinct from the earlier writ petition which resulted in the judgment dated 10.01.2013 inasmuch as in respect of three of the years in question i.e., assessment years 2001-02 to 2003-04, the issue of the proviso to Section 147 pertaining to full and true disclosure was not attracted. It is only in respect of the assessment year 1999-2000 where the proviso would come into play.

CBDT notifies ITR for A.Y. 2013-14 / FY 2012-13

May 1, 2013 18873 Views 0 comment Print

Notification No. 34/2013 – Income Tax In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:— 1. (1) These rules may be called the Income-tax (3rd Amendment) Rules, 2013.

Under-Recovery on Diesel effective 1.5.2013 declines sharply to Rs 3.80 per litre

May 1, 2013 571 Views 0 comment Print

Under-Recovery on Diesel effective 1.5.2013 declines sharply to Rs 3.80 per litre OMCs incurring Daily Under-Recovery of Rs 256 Crore Under-recoveries on Domestic LPG and PDS Kerosene lower at Rs 378.38 per cylinder & Rs. 27.93 per litre respectively Total Under-Recoveries during 2012-13 significantly higher at Rs 1,61,029 crore Daily Crude Oil Price for Indian […]

Powers of High Court under Article 226 cannot be invoked in the matter of recovery of dues

May 1, 2013 997 Views 0 comment Print

Powers, which were conferred on the civil court, now stands conferred on a Tribunal under Section 17 of the Act thereby it can deal with applications from banks and financial institutions for recovery of debts due to such banks and financial institutions. We are of the view when a specific remedy is made available to the aggrieved party under Section 20 of the Act, learned Single Judge of the High Court, in exercise of its jurisdiction under Article 226 of the Constitution of India, was not justified in interfering with the orders passed by the Debt Recovery Tribunal.

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