×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
1. Aforesaid appeal by revenue for Assessment Year [AY] 2011-12 contest the order of Ld. Commissioner of Income-Tax (Appeals)-28, Mumbai, [CIT(A)], Appeal No. CIT(A)-28/JCIT-12(1)/IT-79/2014-15 dated 30/03/2016 on following effective grounds: -
“1. On the facts & in the circumstances of the case, and in law, the Ld.CIT(A) has erred in directing the A.O.to delete the addition of Rs.22074697/- on account of unreported profit on sale of out of books production without appreciating the fact that the assessee has utterly failed to discharge its onus of disproving the findings given by the Assessing Officer arrived at pursuant to detailed analysis of production vis-a vis the power consumption.
2. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O.to delete the disallowance of deduction u/s.80IB of the Act in respect of Unit-Ill and Falandi Unit of the assessee, as the issue that these units are not established in consequence to restructuring of other Units of the assessee has not been conclusively established in assessment and appellate proceedings"
3a. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O. to delete the addition of Rs.1,61,87,146/-as deemed dividend u/s.2(22)(e) of the Act, relying upon certain decisions, which in principle have not been accepted by the Revenue"
3b. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in directing the A.O.to delete the addition of Rs.1,61,87,146/- as deemed dividend u/s.2(22)(e) of the Act, without appreciating the fact that the issue in akin circumstances has been decided in favour of Revenue by the Hon'ble Mumbai ITAT in the case of ITO vs. Sahir Sami Khatib, as reported in 57 taxmann.com 13"
The assessee has filed Cross objection on the following effective grounds: -
1. The learned Commissioner of Income Tax (Appeals)-28, Mumbai, hereinafter referred to as the "CIT(Appeals)", erred in dismissing the ground of appeal no. 1 before him that the sales tax of Rs.2,14,83,178/- embedded in the sales amount collected from customers is a capital receipt.
Your respondents submit that, on the facts and in the circumstances of their case, the sales tax amount of Rs.2,14,83,178/- included in the sales is a capital receipt and accordingly not includible in the total income assessable under the IT Act.
2. The "CIT(Appeals)" erred in not agreeing with the contention of the appellant that the interest received from associate and other concerns on temporary deployment of funds has to be netted off against interest expense for computing income from interest assessable under the head 'Income from other sources'. Your respondents submit that, on the facts and in the circumstances of their case, related interest paid on cash credit account ought to have been allowed as a deduction in computing the net income from interest assessable under the head 'Income from other sources'.”
The assessment for impugned AY was framed by Ld. Joint Commissioner of Income Tax-Range 12(1), Mumbai [AO] in scrutiny assessment u/s 143(3) on 25/03/2014 wherein the total income of the assessee was determined at Rs.1051.43 Lacs after certain additions /disallowances as against returned income of Rs.547.35 Lacs e-filed by the assessee on 28/09/2011 which was later revised to Rs.384.36 Lacs on 31/03/2012. The assessee being resident corporate entity was stated to be engaged in the business of manufacturing & trading of prestressed wires, standard wires & allied products. The assessee has six units namely PW-I, PW-II, PW-III at Silvassa, Unit at Falandi, Unit at Vikrampur and unit at Udwada. During impugned AY, the assessee had claimed deduction u/s 80IB in respect of Unit-III at Silvassa & Falandi Unit.
2.1 In the revised return of income, the assessee reduced its income by Rs.214.83 Lacs, being notional central sales tax embedded in the sales transactions, treating the same to be capital in nature in view of the fact that it enjoyed certain sales tax exemption as granted by the state government. It was submitted that as per the policy for Micro, Small and medium enterprises announced for Dadra & Nagar Haveli, concessions including sales tax facilities were granted to aid, assist, finance, promote, expedite and accelerate the economic development of the region and therefore, the notional central sales tax embedded in sale transactions was capital receipt in nature and hence not taxable. The Ld. AO denied