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ITAT upheld disallowance of Rs 2 lakhs to plug possible leakages

Dr Vikaramsinha Kakasaheb paid a salary of Rs 19.5 lakhs to his doctor wife, who worked at his nursing home. A.O. observed that assessee had made higher payments to his wife as compared to other doctors. A.O. considered Rs 6 lakhs as reasonable salary and balance of Rs 13.5 lakhs as unreasonable u/s 40A(2)(b). CIT(A) sustained a disallowance of Rs 2 lakhs to plug possible leakages. ITAT upheld CIT(A)s order. - 500439

Security deposit should be refunded on termination of lease

A lease deed for 6 years was executed between Dentsply and Shashi Gupta. It had a clause, which gave right to either party to terminate lease by giving 3 months notice. After termination, Shashi did not refund security deposit. So, Dentsply filed a suit for recovery. On hearing, Court ordered Shashi to refund security deposit along with the interest.

Depreciation could be claimed @ of 25% on intangible assets acquired, ITAT

Assessee traded in two wheeler brake systems & components. It acquired intangible assets. It claimed, depreciation on intangible assets @ 25%. AO & DRP disallowed it. On appeal ITAT allowed the depreciation. ITAT held, in case of intangible assets (being commercial/business rights) diminution in value or physical wear & tear is not essential condition for admissibility for dep. u/s 32, if they were used as business tool for earning in ...

Exempt. u/s 11 of I.T.Act allowed as requirements u/s 2(15) I.T.Act fulfilled.

Assessee-sty promoted & advanced med. science & promoted improvem't of public health & med. educat'n. In return, it claimed exempt. of income u/s 11. AO held, assessee sty. failed to comply with requirements of Sec 2(15), thus he rejected assessee's claim. CIT(A), held assessee's activities fell u/s 2(15), thus allowed claim. On appeal ITAT held, assessee has endorsed products on claims of health & nutritional benefit, thus claim ...

HC denied writ jurisdict'n as grievances of petit'nr factual & not perverse.

Petitioner applied to CBDT for approval of its Industrial Park u/s 80-IA of I.T. Act. CBDT had denied approval u/s 80-IA of Income Tax Act. On writ, HC held, In view of conduct of petitioner in putting before Authority figures which when confronted with were substituted with new figures. Also, grievances of petitioner being factual which are not shown in any manner to be perverse/ arbitrary, would not warrant exercise of writ jurisd ...

As exp. nt resulted in capital asset, so to be recorded as exp. in capital field

Assessee incurred certain exp. on brand building which was claimed as deduct'n u/s 37(1). AO held, exp. resulted in enduring benefit. Thus, he disallowed claim by treating it as capital exp.. However, CIT(A) allowed exp. in entirety holding it as routine operational exp..On appeal, ITAT held, As exp. has not resulted in capital asset, so has to be recorded as exp. in capital field. It can't be attributed to capital exp. on brand building.

No int. levied u/s 234B, even though assessee declared NIL income in return, HC

Assessees, NR Co's, manufactured equipment relating to oil & gas, energy & transportat'n for supply to customers in India. AO in reassessment found assessees had Permanent Establishment (PE) in India. AO levied interest u/s 234B for failure to pay advance tax. On appeal CIT(A) deleted it. ITAT upheld it. On appeal HC held, no interest is leviable on assessees u/s 234B, even though they filed returns declaring NIL income at stage of reasse ...

Use of patents in CDMA handsets sold in India, held taxable u/s9(1)(vi)(c).

Assessee was American Co..It developed & supplied CDMA based integrated circuit. It claimed, royalty received by it, from manufacturers of OEMs in Indian. AO held such royalties taxable in India u/s 9(1)(vi) & Art.12(7)(b) of Indo-US Tax Treaty. DRP rejected assessee's objection against it. On appeal, ITAT held, to be in respect of use of patents in CDMA handsets sold in India, will be taxable u/s 9(1)(vi)(c) but after requisite exa ...

Exempt. u/s 10B allowed as product'n of raw honey held manufacturing in nature.

Assessee mfd. raw honey exported it. In return it claimed exempt. u/s 10B. AO allowed it. Commissioner held, assessee removed moisture from raw honey & repacked it, which is not manufacturing activities. Thus, set aside assessm't. On appeal ITAT held AO correct, as process carried on by assessee reflected steps undertaken by it to bring into existence finished product distinct from raw honey which is collected by beekeepers from bee-hiv ...

As payments non-taxable in India as per DTAA between USA & India,Thus, No TDS.

Assessee paid data storage space charges to INetU, a NR. AO in assessm't held, assessee did'nt deduct TDS at time of making payment, said amt. was not allowable as deduct'n u/s 40(a)(i). CIT(A) allowed claim of assessee holding, payments in Q. were not taxable in India as per DTAA between USA & India & therefore they were not liable for TDS. On appeal ITAT uphled it as, findings of CIT (A) have not been rebutted with any evidence by revenue.-0003 ...

Reject'n of Addit'nl ground raised by assessee before Tribunal held incorrect.

Assessee challenged Tribunal's order of refusal to admit additi'nl ground raised as it did not arise out of order of First Appellate Authority. HC held, Commissioner may or may not have rendered any view on it as First Appellate Authority, does not mean that Tribunal was precluded in law from considering same after it was specifically raised by assessee before it. Thus, question of law answered in favor of the assessee & against the revenue. -000 ...

On basis of subsequent info received by AO, proceedings u/s 147 held justified.

Tribunal quashed proceeding u/s 147 due to non-mentioning of reason that there was failure on part of assessee to disclose all material facts fully & truly necessary for assessment. On appeal HC held, immaterial, If ITO in original assessment found genuineness of transaction or not. If later info. satisfy that assessee had not made full & true disclosure of material facts during original assessment. Concluded, taxable income escaped asses ...

Reg. application declined by ITO as firm belonged to 1 partner only, right, SC

A new firm was constituted by partners. application for reg. made u/s 26A. ITO declined reg., holding that firm belonged solely to C, & there was only pretense of firm. On appeal AAC, allowed it. On appeal Tribunal & HC held ITO right. On appeal SC held, Tribunal order proceeded on solid facts that speculation about motive of C did not make any material diff. to finding reached. There was material on which finding could be based.-010517

Sec. 5(7A) is ultra vires Art.14 of Consti. & so is Sec. 64(5)(b) held SC.

Petitioner-firm carried business as manufacturer & seller of bidi. Petitioner was informed by ITO, that in pursuance of order u/s 5(7A), his assessment records were transferred from Calcutta Office to Ranchi. ITO, Ranchi, called upon petitioner to submit his return for relevant assessment year. On writ HC held, Sec. 5(7A) is ultra vires article 14 of Consti. & so is Sec. 64(5)(b ) in so far as it makes an order u/s 5(7A) inviolate.-010398

If assessee Res./ NR u/s 4A to be considered, when assessable inc. determined

Assessee-Co had head office in London & branches in Ind.. EPTO treated assessee as NR in assesmnt. yr. as its foreign profits more than Indian profits & determined standard profits. AAC confirmed order of EPTO. On appeal Tribinal held, question, whether assessee was resident or NR u/s 4A to be considered at stage when assessable income was being determined. HC & SC upheld it: EPTO to have added both Indian profits & London profits for both years.