The perusal of the profit and loss account placed at page 9 of the paper book reflects the assessee to have followed project completion method, i.e., it has shown the receipts and corresponding expenditure in respect of each of its venture separately and had over and above the same claimed expenditure of Rs. 35,27,560. The schedule of the said expenses totalling Rs. 35,27,560 is placed at page 19 of the paper book.
Employees’ contribution towards PF paid by the assessee before the due date of filing of return u/s 139(1) of the Act for the assessment year under consideration is admissible.
Assessees have made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessees in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessees have merely made investments in shares.
On identical facts in ITA No. 6600/Mum/2011 wherein we have held that penalty cannot be levied u/s. 271(1)(c) when the income is computed as per the provisions of Sec. 115JB of the Act. In that case, we have followed the decision of Hon’ble Delhi High Court in the case of CIT Vs Nalwa Sons Investments Ltd. (2011) 37 ITCL 218 (ITA No. 1420/2009).
S.80IB(3)(ii) provides for deduction to small scale industrial units engaged in manufacture or producing articles or things. S.80IB(14)(b) defines a small scale industrial undertaking, which is regarded as such under S.11B of the Industries(Development and Regulation) Act, 1951.
We are mentioning even at the cost of repetition that in order to treat any person as permanent establishment within the meaning of paras 5 and 6 of Article-5 of the DTA, it is of utmost importance that such person should first answer to the description of ‘dependent agent’ and then such dependent agent must perform either of the three activities as mentioned in para 5 of Article 5 of the DTA
With a view to prevent channelisation of unaccounted money to these institutions by way of anonymous donations, a new section 115BBC has been inserted to provide that any income of a wholly charitable trust or institution by way of any anonymous donation shall be included in its total income and taxed at the rate of 30 per cent.
The first reason assigned by the Director for denying registration to the assessee under section 12A was that the object of the assessee are not for the benefit of general public but for specific members viz., benefit of companies who are engaged in commercial activities to improve their production or profitability. Section 2(15) defines charitable purpose to include relief of the poor, education, medical relief, and the advancement of any other object of general public utility.
These two cross appeals – one by the assessee and the other by the Revenue – arise out of the order passed by the Commissioner of Income-tax (Appeals) on 05.08.2010 in relation to the assessment year 2007-2008. Since common issues are raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.
It is important to bear in mind uncontroverted claim of the assessee that there were sufficient reserves and surplus, which were eligible for distribution as ‘dividend’, and the NIPL had sufficient cash balances as well. The nature of amounts distributed as dividend has not been altered as a result of, what the revenue authorities describe as, colourable device to evade taxes.
