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Showing 141 to 160 of 772 Records
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2005 (2) TMI 772 - ITAT AMRITSAR
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... ... ..... e. Therefore, the issue would fall outside the purview of the powers of the Tribunal vested under section 254(2) of the Income-tax Act, 1961. Exercise of powers by the Tribunal under section 254(2) in allowing such applications would amount to review of the orders which is not permitted under the law. Therefore, these applications deserve to be rejected on this count. Thus, in the light of these detailed discussions and legal position discussed above, we are of the considered opinion that the Tribunal did not commit any error in dismissing the appeals by relying on Instruction No. 1979 dated March 27, 2000 of the Central Board of Direct Taxes and such issues fall outside the scope of rectification mentioned under section 254(2) of the Income-tax Act, 1961. These miscellaneous applications filed by the Revenue will now go to the regular Bench for final disposal for a limited purpose whether the tax effect in these cases exceeds the prescribed monetary limit fixed by the Board.
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2005 (2) TMI 771 - ITAT MUMBAI
Applicability of limitation on deduction of expenses, set out u/s 44D - nature of services - expenditure incurred in earning the professional receipts - profit attributable - liability to tax - PE in India - DTAA between India and Singapore - business in India through a branch office - binding precedent - HELD THAT:- In our considered view, the scope of “fees for technical services” under article 12(4)(b) does not cover “consultancy services” unless these services are technical in nature. That admittedly is not the case here. Accordingly, we are of the considered view that the nature of services rendered by the assessee do not fit into the description of “fees for technical service” under the provisions of the India-Singapore tax treaty. As we have already held, in case the receipts, in respect of which profits are computed under article 7(3), do not fit the description of “royalties and fees for technical services”, the limitation on deduction of expenses u/s 44D does not come to the play. In the case before us, the receipts in question are such in nature that the provisions of article 12 are not attracted. Accordingly, in our considered view, the limitation u/s 44D is not to be applied for the purpose of deduction of expenses, in computing taxable profits, under article 7(3) of the India-Singapore tax treaty. We have already taken note of the position that section 44D, read with section 115A of the Indian Income-tax Act, and article 12 of the India-Singapore tax treaty are, similar in nature and offer alternative but similar models of taxation of income from royalties and fees from technical services, that these are two independent, mutually exclusive, and competing sets of provisions, and that once it is clear that these are competing modes of taxation of royalties and fees for technical services on gross basis, in the Income-tax Act and in the India-Singapore tax treaty, it has to follow that the provisions of the Income-tax Act cannot come to play unless these are more beneficial to the assessee which certainly is not the case here. We have held that in case a receipt is held to be outside the very scope of “royalties and fees for technical services” under the provisions of article 12, the same cannot be taxed under section 44D, read with section 115A either. For this reason also, section 44D and section 115A cannot have any application in the case before us.
We are of the considered view that the limitation on deduction of expenses, for the purpose of computing profits attributable to the permanent establishment in India, and in terms of the provisions of section 44D of the Act, is not applicable on the facts of this case. Our reasoning for arriving at this conclusion is different than that of the CIT (A) but then we agree with his conclusions. Accordingly, we approve the conclusions arrived at by the CIT (A) and decline to interfere in the matter.
In any event, it is certainly not the case that there is a binding precedent in favour of the Revenue. Therefore, even if there is a reasonably possible view in favour of the Revenue, this possibility per se does not clinch the issue. The view that we have accepted and elaborated earlier in this order is an equally, if not more, reasonable and possible view of the matter.
It is well settled in law that when two views are possible, and one of these views is in favour of the assessee, the ambiguity is to be resolved in favour of the assessee. The authority for this proposition is contained in the hon’ble Supreme Court’s judgment in the case of CIT v. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] held that “if two reasonable constructions of a taxing provision are possible, that construction which favours the assessee must be adopted”. In the light of these reasons, as also for the detailed reasons set out above, we see no reasons to deviate from conclusions arrived at to the effect that the limitation on deduction of expenses, for the purpose of computing profits attributable to the permanent establishment in India, and in terms of the provisions of section 44D of the Act, is not applicable on the facts of this case.
We also hold that in case the receipts, in respect of which profits are computed under article 7(3), do not fit the description of “royalties and fees for technical services” under the applicable tax treaty, the limitation on deduction of expenses u/s 44D does not come to the play.
In the result, the Revenue’s appeal is dismissed.
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2005 (2) TMI 770 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,
Settlement of case - Valuation ... ... ... ... ..... ve. Since the admitted duty liability has been paid by them immediately on being pointed out and before issue of SCN and since they have come out with true disclosure of duty liability and cooperated with the proceedings in the Settlement Commission, their request for immunities merits favourable consideration. 8. emsp Accordingly the case is settled under sub-section (7) of Section 32F of the Central Excise Act, 1944 as per the terms and conditions mentioned below - a. The duty liability is settled at Rs. 21,14,167/-. Since the applicant company has paid this amount, no further duty is payable by them. b. Immunity from interest, penalty as proposed in the SCN as well as prosecution under the provisions of the Central Excise Act, 1944 is granted. 9. emsp The above immunities are granted in terms of sub-section (1) of Section 32K of the Central Excise Act, 1944. Attention of the applicants is drawn specifically to the provisions of sub-sections (2) and (3) of Section 32K ibid.
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2005 (2) TMI 769 - ITAT BANGALORE
Rejection of accounts ... ... ... ... ..... same has been considered by learned CIT(A), reduction was allowed. He also relied upon the decision of Tribunal, Jaipur Bench, in Triveni Pharma v. ITO 2004 92 ITD 125 (JP)(TM). 6. We have carefully considered the relevant facts and argument advanced, we are inclined to accept the finding of learned CIT(A). The fall in GP is not a criteria to reject the books of account. There is no provision in the Act which suggest that day-to-day stock register has to be maintained or in absence thereof the books of account are liable to be rejected. What is required to invoke proviso to section 145 or to reject book results is to establish the incorrectness and incompleteness of the accounts, or where method or accounting followed by assessee is inconsistent with the accepted method of accounting. Since no such case has been made out by the Assessing Officer, the Assessing Officer is not justified in rejecting the book results and making addition. In the result, the appeals is dismissed.
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2005 (2) TMI 768 - CESTAT, KOLKATA
Demand - Cenvat/Modvat Credit ... ... ... ... ..... ferential quantity of 20.116 MT in the RG-I. Secondly, the appellant have sent 62.2745 MT of semi processed goods for job work during January, 1997 to March, 1997 under Challans as per Rule 57F(3) of the erstwhile Central Excise Rules. There is no evidence produced by the appellant. They have credited the amount equivalent credit of Central Excise duty on the inputs used in the said semi finished goods. In the circumstances, I feel that the Commissioner (Appeals) has rightly held that the contention of the appellant company has not been supported by any documentary evidence. It is further observed by him that they have failed to adduce any record to the effect that they used the modvatable and non-modvatable inputs on the ratio of 1 1 as a regular practice. I find that the appellants have failed to establish their case. Accordingly, I uphold the Order passed by the Commissioner (Appeals) and reject the Appeal filed by the Appellant. (Pronounced and dictated in the open Court)
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2005 (2) TMI 767 - CESTAT, MUMBAI
Stay/Dispensation of pre-deposit ... ... ... ... ..... s. 6,12,62,276/-, Rupees Three Crores has been paid. We accept the payment made by the applicant as sufficient for the purpose of Section 35F of CE Act, 1944 and waive pre-deposit of balance amount and stay recovery thereof pending appeal. The appeal is fixed for hearing on 4-5-2005. (Dictated in Court)
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2005 (2) TMI 766 - ITAT AHMEDABAD
Income escaping assessment ... ... ... ... ..... present case, and the case law relied upon by the ld. counsel of the assessee we are of the opinion that the ld. CIT(A) has rightly held that reassessment proceedings were not validly initiated as the same were not within the prescribed time as per the proviso to section 147. We are also in agreement with the findings of CIT (A) that the decision of Hon rsquo ble Supreme Court in the case of Sterling Foods (supra) was rendered on 15-4-1999 and there was ample time available with the department to reopen the assessment, had the department been vigilant to do so. The time was available with the department up to 31st March, 2001 and the department did not choose to initiate reassess- ment proceedings within the prescribed time. In such a position the department has missed the bus and its action for initiation of reassessment proceedings beyond the said time is unacceptable in law. Thus we decline to interfere in the order of CIT(A) and dismiss the appeal filed by the department.
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2005 (2) TMI 765 - ITAT CHENNAI
Preliminary expenses ... ... ... ... ..... rein by Parliament. The deductions allowable under the Act have necessarily to be allowed in accordance with the provisions of the Act as it exists. 10. In view of the decision of the Hon rsquo ble High Court, the scope of section 35D cannot be extended beyond its true limits. The word being as is used in the section is not illustrative. It connotes some meaning. Only those expenses which are specified in the statute can be allowed. Nothing further. We, therefore, direct the Assessing Office to recompute the deduction in accordance with the provisions of the Act. 11. In the result, the appeal filed by the assessee stands partly allowed. 12. ITA No. 997/Mds./99 - The solitary issue raised in the departmental appeal relates to the allowability of expenditure under section 35D of the IT Act. For the reasons recorded in ITA No. 888/Mds./99, supra, we decide this issue in favour of the assessee and against the Revenue. 13. In the result, the appeal of the Revenue stands dismissed.
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2005 (2) TMI 764 - ITAT CHENNAI
Business expenditure, Deductions ... ... ... ... ..... the assessee on the ground that the receipt reduced the cost of the capital asset. Therefore, it was a revenue receipt. The first Appellate authority found that the balance amount left after incurring the expenditure, was capital receipt, therefore, it could not be a taxable income. This view of the first Appellate authority was confirmed by the Tribunal. In those factual circumstances the Supreme Court held that the balance amount of Rs. 7,03,207 represented capital receipt in the hands of the assessee. In our considered opinion, this judgment of the Supreme Court is squarely applicable to the facts of the present case. The first Appellate authority by following the judgment of the Supreme Court has rightly treated the balance amount Rs. 17,79,919 as capital receipt. Therefore, we do not find any infirmity in the order of the lower authority. Accordingly we confirm the same. 28. In the result, I.T.A. No. 2704(Mds)/96 is partly allowed and I.T.A. No. 51 (Mds)/97 is dismissed.
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2005 (2) TMI 763 - ITAT BANGALORE
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... ... ..... cts, the Hon rsquo ble Supreme Court held that the assessee-company could not claim any relief under sections 70 and 71 since its business had not started and there could not be any computation of income or loss incurred by the assessee in the relevant accounting years. As rightly contended by the learned counsel for assessee, the decisions relied on by the authorities below are factually distinguishable. In the case of the assessee neither setting up factory or erection of machinery is required. The moment the assessee-company incorporated and the amounts advanced, it will lead to the conclusion that the business of the assessee has been commenced. Therefore, I find much more in the stand taken by the assessee. The income shown by the assessee has to be treated as income from business and necessary benefits or deductions claimed by the assessee have to be allowed in accordance with law. It is ordered accordingly. 5. In the result, the appeal filed by the assessee is allowed.
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2005 (2) TMI 762 - ITAT CHENNAI
Depreciation, Business expenditure, Assessment - Prima facie adjustment ... ... ... ... ..... the total income of the assessee for assessment year 1992-93, in our opinion, the matter requires a detailed investigation. In other words, the issue arises for consideration is a debatable one. Therefore, the Assessing Officer cannot disallow the same behind the back of the assessee in the guise of making a prima facie adjustment under section 143(1)(a). In our considered opinion, the matter ought to have been taken up for scrutiny under section 143 and an opportunity should have been given to the assessee. In this case, since the prima facie adjustment was made, in our view, it is not permissible under the provisions of section 143(1)(a). The issue arises for consideration requires a detailed investigation. Therefore, it is highly debatable in nature. In view of the above discussion, we set aside the order of the lower authorities and delete the disallowance of Rs. 13,24,424. 15. In the result, ITA No. 369 (Mad.)/98 is partly allowed and I.T.A. No. 370 (Mad.)/98 is allowed.
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2005 (2) TMI 761 - ITAT AHMEDABAD
Cash credits, Unexplained investment ... ... ... ... ..... t of the business. Moreover, according to the decision in the case of Shiv Shakti Timbers (supra), the onus is on the person in whose books of account the credit entries stand and in case of unsatisfactory explanation, the amount can be added to the income of said partner. 13. The said view is also supported by the decision of Allahabad High Court in the case of CIT v. Kapur Bros. 1979 118 ITR 741 (All.), the case mentioned in the grounds of appeal filed by the revenue. 14. In view of above factual position, I find that the Assessing Officer was right in adding a sum of Rs. 95,000 to the income of the assessee as in the present case, the same was found credited in the books of account of assessee-firm and assessee did not offer any explanation about the nature and source of the said credit, therefore, the same was rightly added to the income of assessee under section 68 of the Act. Thus, the second ground of the revenue is allowed. 15. In the result, appeal is partly allowed.
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2005 (2) TMI 760 - ITAT BANGALORE
Transfer of assets ... ... ... ... ..... , therefore, Explanation 1 cannot be applicable. Considering the circumstances above, I am of the view that issuance of notice under section 148 was not proper in the facts of the case. Accordingly, the consequential addition in the hands of the assessee cannot be sustained. 8. For the assessment year 1992-93 assessment under section 144 was framed by the Assessing Officer by clubbing the income of the wife in the hands of the assessee. Admittedly in that year also both the assessee and his wife was having equal amount of income. Thereafter by passing an order under section 154, the Assessing Officer further clubbed the income of the minor daughters in the hands of the assessee. The CIT(A) upheld the finding recorded by the Assessing Officer. This issue was discussed at length in the earlier paragraphs and following the said reasoning, I direct the Assessing Officer to delete the order of clubbing of income in the hands of the assessee. In the result, the appeals are allowed.
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2005 (2) TMI 759 - ITAT BANGALORE
Capital gains ... ... ... ... ..... n to the value of the asset) will still be capital gain and not income from business. It may be pointed out that in case the assessee had received money in kind from the landlord of Rs. 7 lakhs and spent the same in purchasing part of the land, it would have become a capital asset. In this case, the landlord was probably not in a position to spend and decided to give land in lieu of the compensation to the assessee for developing this property. Besides, the business activity was conducted before getting possession of the land whereas the income in this case is in the form of sale proceeds from the sale of the land amounting to Rs. 29,83,050 which assessee has duly shown as income from long-term capital gain. Therefore, we are of the opinion that we cannot deny the assessee the benefit of indexation and the income should be treated as income from capital gains and not as business income. It is ordered accordingly. 9. In the result, the appeal filed by the Revenue is dismissed.
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2005 (2) TMI 758 - ITAT MUMBAI
Unexplained expenditure, Survey ... ... ... ... ..... examine the assessee in this regard. 17. From the perusal of the assessment order, we find that the Assessing Officer has rejected the contention of the assessee that out of marriage expenses of Rs. 5,01,100 jewellery worth Rs. 2,25,000 was purchased. The detailed discussion regarding this contention in para 6 on page 6 of the assessment order, wherein, the Assessing Officer has stated that withdrawal shown by the bridegroom side is Rs. 5,01,100 is just sufficient to take care of many other customary, such as (i) Lagna, (ii) Bidai, ( iii) ladies programmes for 5 to 10 days, etc. etc. This aspect was completely overlooked by the CIT(A) while deleting the entire addition of Rs. 10 lakhs. Since, now the matter is restored to his file, the CIT(A) will readjudicate the addition of Rs. 10 lakhs afresh keeping in view the direction given hereinabove after affording opportunity of being heard to both the sides. 18. In the result, the appeal is partly allowed for statistical purposes.
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2005 (2) TMI 757 - ITAT BANGALORE
Estimation of profits ... ... ... ... ..... the ITO and set aside the orders of the Commissioner. On reference, the orders of the Tribunal were approved by the Hon rsquo ble High Court. While coming to a conclusion, the case of Chhabildas Tribhuvandas Shah v. CIT 1966 59 ITR 733 (SC) was referred and considered by the Hon rsquo ble Court. The Hon rsquo ble Court, in nutshell, held that assessee should be subjected to assessment on two different methods though the contract was one and parts of the contractual receipts were received in different years. Therefore, the Tribunal was justified in following its view expressed for the assessment years 1965-66 and 1966-67. Similar views were expressed by the Bangalore Benches of the Tribunal in the case of H.M. Constructions. There is a specific finding by the learned CIT(A) that the project was incomplete. In view of these facts, the order of the learned CIT(A) is correct and no fresh look is required. The same is upheld. In the result, the appeal of the revenue is dismissed.
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2005 (2) TMI 756 - ITAT AHMEDABAD
Block assessment in search cases ... ... ... ... ..... d by virtue of its inherent defect is to be vacated and proceedings are required to be left open. Therefore, we set aside this order and restore this issue to the file of Assessing Officer for fresh adjudication with a direction that he shall give opportunity to cross examine the three persons namely, S/Shri Suresh Patel, Manoj Vadodaria and Vijay Shah. The Assessing Officer shall further supply all the relevant documents required to be used against the assessee and invite the assessee rsquo s explantion on those materials. The assessee will be at liberty to produce any evidence in support of his explanation. Since we are setting aside the assessment order on preliminary issue, i.e. being passed in violation of natural justice. Therefore, our order shall not impair and injure the case of the Assessing Officer or prejudice the defence or explanation of the assessee on merit. With the above observation, this appeal of the assessee is treated as allowed for statistical purposes.
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2005 (2) TMI 755 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,
Settlement of case ... ... ... ... ..... duty liability remains to be discharged by them. (ii) In view of compliance as well as cooperation extended by the applicant, Commission grants immunity from payment of interest including penalty to the applicant as well as the co-applicants under the Act in so far as the present case is concerned. (iii) The Commission also grants immunity from prosecution under the Act to the applicant and the co-applicants in so far as the present case is concerned. 7. emsp The above immunities are granted in terms of sub-section (1) of Section 32K of the Act. The above immunities are liable to be withdrawn if it comes to the notice of the Commission at any time that the applicant has withheld any particulars material to the Settlement Commission or it gave false evidence or employed any fraudulent means in getting the settlement. Attention of all concerned is drawn to sub-section (2) and sub-section (3) of Section 32K of the Act so far as immunities granted under this order are concerned.
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2005 (2) TMI 754 - CESTAT, CHENNAI
Cenvat/Modvat - Process loss at job worker’s premises ... ... ... ... ..... ant case is not analogous to the input loss considered in the Board rsquo s Circular. 4. emsp After considering the submissions, I find that admittedly 2 of shampoo happened to be wasted during the course of repacking activity in the job worker rsquo s premises. This wastage occurred in or in relation to the manufacture of the final product i.e. shampoo in retail pack. Sub Rule (1) of Rule 57D, as this rule stood at the material time, allowed Modvat credit on such input waste. This legal position was recognised in the case of Godrej Soaps Ltd. (supra) . The decision of the 2-Member Bench in the case of Bush Boake Allen (I) Ltd. (supra) is also in support of this legal position. Appellants have thus established their claim for Modvat credit on the 2 input waste on the strength of Rule 57D and the cited case law, though they cannot claim support from the Board rsquo s Circular. The impugned order is set aside and the appeals are allowed. (Dictated and pronounced in open Court.)
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2005 (2) TMI 753 - CESTAT, NEW DELHI
Remission of duty - Breakage - Aerated water bottles ... ... ... ... ..... age in such store-room or other approved premises rdquo . 6. emsp In the present case, no duty demand has been raised in regard to lost goods independent of remission applications of the assessee. The quantities claimed as lost due to breakage by the assessee are very insignificant and not even a fraction of a norm fixed in the Board Circular. Therefore, prima facie, the claim of the appellant looks bona fide and correct. As already noted, the Board rsquo s Circular makes it clear that breakages should be checked from the records during inspection. Delay in filing the claim therefore, does not make much difference. In the case of the present assessee, it is seen that similar applications have been allowed in regard to their units at Chennai, U.P. There is no reason for treating the present claim differently. The appeal is, therefore, allowed after setting aside the impugned order. The appellant shall be entitled to consequential relief. (Dictated and pronounced in open Court)
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