Rane Brake Lining Ltd Vs ITO (ITAT Chennai) A perusal of the assessment order clearly shows that the Assessing Officer has not invoked the provisions of sec. 14A. In fact the Assessing Officer has pointed out that the total investment in shares as on 31.03.2003 was Rs. 26,00,31,694/- which included a sum of Rs. 5,28,82,350/- invested during the year. No dividend income has also been admitted during the relevant assessment year. A peRs.rusal of the order of the learned CIT(A) clearly shows that the assessee had put forward the plea that it had surplus and reserves sufficient to cover such investment in purchase of shares.
Assessment dispute: ITAT Chennai ruling on book profit computation, bad debts provision, and disputed tax liabilities under Section 115JB.
Siemens Aktiencesellschaft v. DCIT – ITAT Mumbai held that royalty received by the taxpayer was in pursuance to agreement entered into before 1976 and therefore not covered under Section 1 15A of the Act. The Tribunal has meticulously examined concepts such as novation/recession/modification and alteration as provided in the Contract Act to analyse the substance of the agreement and in conclusion rule that the 1981 agreement was an extension of 1974 agreement.
The above four appeals filed by the Revenue, for assessment years 2002-03 to 2005-06, are directed against the common order dated 27-5-2008 passed by the ld. CIT(A)-VIII, Chennai. In all these appeals almost identical issues are involved, therefore, for the sake of convenience and brevity, we are deciding them by a common order.
Recently, the Chennai bench of the Income-tax Appellate Tribunal in the case of Wheels India Ltd. v. ACIT I.T.A No. 1793/Mds/2006 (Chennai) held that payment made to US companies for ‘developing tooling’ and ‘validating new process for manufacture’ of wheels for commercial vehicle was ‘fees for included services’ as per Article 122 of the India-USA tax treaty.
The issue is whether the payments made to the parent company on account of reimbursement of salaries in relation to services rendered by the personnel on deputation to the JV attract the liability of TDS. The Counsel for the assessee and the DR made a contradictory statement with respect to the fact that the details have been furnished before the AO. In these circumstances, it is appropriate to set aside the issue to the file of the AO to verify the details of expenditure and examine whether the payments were actual reimbursement of expenses pertaining to personnel deputed with the assessee company. However the AO shall restrict himself to the evidences which have been submitted before the CIT(A) while deciding the issue in accordance with the law.
ITO v Murlidharan G Pillai – Neither the deposits are proved by the assessee nor the claim of peak is established by him. In fact assessee has also failed to show real destination of the money through bank draft so purchased by him out of the cash deposited in the bank account thereby suppressing material facts in understanding the nature of cash inflow and its destination. Entire transaction of deposits in the bank account remained under crowd of secrecy and, therefore, the explanation furnished by the assessee remained unsatisfactory. Even the benefit of withdrawal through ATM mentioned as above cannot be given importance because they are apparently for household purposes and cannot be said to be available for redeposit in absence of any other evidence of meeting out household expenditure by the assessee. We apparently uphold the contentions of Revenue that entire sum of Rs.17,48,500/- deserves to be confirmed. As a result, we uphold the order of AO setting aside the order of ld. CIT(A). Appeal filed by the Revenue is allowed whereas the Cross Objection filed by the assessee is dismissed.
Nayan Builders & Developers Pvt Ltd vs. ITO (ITAT Mumbai)- When the High Court admits substantial question of law on an addition, it becomes apparent that the addition is certainly debatable. In such circumstances penalty cannot be levied u!s 271(1)(c) as has been held in several cases including Rupam Mercantile Vs. DCIT [(2004) 91 ITD 237 (Ahd) (TM)] and Smt.Ramila Ratilal Shah Vs. ACIT [(1998) 60 TTJ (Ahd) 171].
Addl. CIT v Weizmann Ltd. ITAT, Mumbai * As long as the assessee has sufficient interest free funds, the presumption to be taken is that the investments are made out of such interest free funds. Mere fact of allowing interest free advance at a rate lower than the rate on which borrowings are made, cannot justify the disallowance of interest on borrowed funds. The CIT(A) was justified in making ad-hoc disallowance on account of foreign travelling expenses since the complete details of expenses were not provided by the assessee.
Ramesh Babu Rao vs. ACIT (ITAT Mumbai) – Considering the fact that assessee is not a broker or sub-broker and also not having any office establishment and also on the fact that all the shares as available on 0 1.04.2005 were sold mostly by the end of May and few shares at the end of September, assessee has intended to be an investor subsequent to the change in the scheme of tax by the Finance Act 2005. On these facts, we see no reason to interfere with the findings of the CIT(A) in holding that the assessee’s transactions are to be treated as capital gains, short term or long term depending on the period of holding.
