By way of this appeal, the Assessing Officer has challenged correctness of CIT(A)’s order dated 29th March 2010, in the matter of assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 2 004-05, mainly on the following ground:
Assessee has been following cash system of accounting and this method has been regularly employed by the assessee in recording its day today business transaction. It is not a case where the assessee has been maintaining its accounts of day to day business under the mercantile system of accounting and thereafter prepares accounts in accordance with cash system of accounting for income tax purposes. The AO has placed strong reliance on the decision of the ITAT Delhi in the case of Amarpali Mercantile Pvt. Ltd.(supra).
DCIT Vs BP India Services Pvt Ltd (ITAT Mumbai)- Decisive factors for determining inclusion or exclusion of any case in/from the list of comparables are the specific characteristics of services provided , assets employed, risks assumed, the contractual terms and conditions prevailing including the geographical location and size of the markets, costs of labour and capital in the markets etc. Nowhere, the higher or lower profit rate, as presumed by the ld. CIT(A), has been prescribed as the determinative factor to make a case incomparable. Rightly so, because profit is not a factor in itself, but consequence of the effect of various factors. Only if the higher or lower profit rate results on account of the effect of factors given in rule 10B(2) read with sub-rule (3), that such case shall merit omission. If however such extreme profit rate is achieved because of factors other than those given in the rule, then such case would continue to find its place in the list of comparables.
Dredging International NV vs. ADIT (ITAT Mumbai) – DRP cannot issue any directions which are at variance from the proposed draft order. Further, any provision made towards foreseeable losses is an allowable expenditure. The arguments are that the assessee has already shown the revenue receipt, i.e. work-in-progress at Rs. 19,83,63,908/- which was more than the contract receipts determined by the DRP at Rs.13,12,94,847/- and so the question of estimating revenue on the amount as directed by the DRP does not arise as contested in ground No. 3. Further, since assessee claimed the future loss of Rs.32,86,17,293/- and this future loss was proposed to be disallowed by the A.O. in the draft assessment order, the DRP cannot direct the A.O. to estimate the profit on 20% of the contract at 8%, which is at variance with the proposed draft order.
The Indian Hume Pipe Co. Ltd. Vs DCIT (ITAT Mumbai)- Composite water supply which includes manufacturing, supplying, laying, joining of pipeline and includes construction of pump house, delivery, commissioning of turbine pump sets, installation of booster mains, branch mains and elevator reservoirs cannot be termed as development of infrastructure facility as defined in explanation (c) to Section 80IA(4).
Synthetic Colour Chem Industries Vs DCIT (ITAT Mumbai)- The survey was conducted on 18.2.2005 when the loose papers being the pages 26, 27, 28, 29, 30 were found which had been duly signed by the partner of the assessee firm based on entries and based on the said papers the partner of the assessee had declared undisclosed income of Rs.1.05 crores.
Mrs. Asha Bharat Shah Vs ITO (ITAT Mumbai)- The Ld. Counsel submitted that the DVO has determined the fair market value of the property as on 1.4.1981 at 29.62 lakhs as against the value declared by the assessee at 43.10 lakhs.
Saraf Chemicals Ltd. Vs DCIT (ITAT Mumbai)- If the expenditure is made for the initial outlay or for the expansion of the business or a substantial replacement of the equipment, then it would fall under the capital expenditure.
DCIT Vs Rediff.com India Limited (ITAT Mumbai) – Certificate issued by a Chartered Accountant has no decisive impact on tax ability of income in the hands of a non-resident but it is only prima-facie evidence about the tax ability.
DCIT Vs Rediff.com India Limited (ITAT Mumbai)- A.O. disallowed the claim of bad debts on the ground that the transactions pertain to the current year and the same was written off by the assessee in the same year itself.
