The Assessing Officer disallowed expense of Rs. 1,27,500 u/s 37(1) of Income Tax Act on finding that the said expenditure relates to some advertisements connected to demise / birthday greetings / congratulating some politicians, etc.
Once the cancellation of registration had been set aside and registration granted under section 12A had been restored by the Tribunal, CIT(Appeals)’s decision for disallowance of exemption under section 11 became redundant, hence, had to be set aside.
India Meditronic (P) Ltd Vs ACIT (ITAT Mumbai) – Non-compete fee was allowable as capital expenditure and depreciation could be claimed on the same.
Depreciation could not be disallowed due to assets were not in use as assessee had not close down the business but it was not going on because of illegal strike by the workers and therefore manufacturing had been stopped temporarily.
Property tax levied by the Municipal Authority is a charge on the property. Undisputedly, the licensor is the owner of the property, hence, liable to pay the property tax. That being the case, the amount equivalent to the property tax reimbursed to the licensor cannot be treated as rate, tax, fee, cess, etc., as provided under section 43B(a) of the Act.
Addition in case of bogus purchases was required to be made only to the extent of lower GP declared by assessee on bogus purchases as compared to G.P. on normal purchases. Thus, no addition was warranted in case of assessee as GROSS PROFIT declared by assessee in respect of alleged bogus purchases was more than the GROSS PROFIT declared in the normal purchases.
Hon’ble Court has held that the addition has to be made on the basis of GP of the assessee. Accordingly, ITAT set aside the order of CIT(A) and direct the AO to apply a rate of 3% on the bogus purchases.
We say so as it may well, in view of the joint residence, be that no area (portion) is specified in the rent agreements. The number of family members living jointly; their living requirements – which may not be uniform; fair rental value of the property, etc., are some of the parameters which could be considered for the purpose. The AO shall adjudicate thereon per a speaking order, giving definite reasons for being in disagreement, where so, in whole or in part, with the assessee’s working, within a reasonable time. We decide accordingly. In the result, the assessee’s appeal is partly allowed on the aforesaid terms.
The issue under consideration is that whether the rent received as per the option agreement is chargeable to tax under the head ‘ Income from house property’ or under the head ‘ Income from Other sources’?
Service tax component need not be included in the total turnover for the purpose of computing income under section 44BB of the Income Tax Act, 1961. ITAT further held that receipts on account of reimbursement of equipment Lost in Hole will not form part of gross receipts for the purpose of section 44BB.
