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Case Laws
Showing 161 to 180 of 772 Records
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2005 (2) TMI 752 - ITAT AHMEDABAD
Deductions - Profits and gains from infrastructure undertaking ... ... ... ... ..... statute. Merely on the basis of accounting entry, the assessee cannot claim a deduction which is not available to him under the Act. Similarly on the basis of book entry department cannot restrain or deny a claim of deduction which is otherwise available as per provisions of law. From the order of the Assessing Officer, we find that the case laws discussed by him pertain to sections 80-I and 80HH. We have already discussed above the insertion of lsquo any business of rsquo in section 80-IA, during the assessment year 1995-96 under consideration. 14. In view of the above discussion and in the interest of justice, we restore this ground to the file of Assessing Officer to examine assessee rsquo s claim under section 80-IA in the light of composite contract for supply of goods manufactured by it to the destination and amount received on such sales, if part of sales itself. We direct accordingly. 15. In the result, appeal of the Revenue is allowed in part for statistical purpose.
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2005 (2) TMI 751 - ITAT BANGALORE
Rejection of accounts ... ... ... ... ..... may determine. Still, there must be a basis and a manner, which is subject to scrutiny by the higher authorities or even by the Court. On the other hand, if the finding on any of the question No. (1), (3) or (4) is in the negative (no), section 145(2) applies and the Assessing Officer may make a best judgment assessment in the manner provided in section 144. Even, there the books may not be disregarded altogether. The assessment may be adjusted to cure the extent of the infirmity found, so as to make it a lsquo best judgment rsquo assessment. Since the Assessing Officer failed to point towards any defect in the accounts whereby he was of the opinion that income cannot be properly deduced therefrom, the Assessing Officer is not justified in rejecting the book results. We, accordingly, set aside the assessment order and direct the Assessing Officer to accept the loss declared by the assessee and allow the same in accordance with law. In the result, both the appeals are allowed.
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2005 (2) TMI 750 - ITAT MUMBAI
Revision - Of orders prejudicial to interest of revenue, Deductions - Profits and gains from industrial undertakings, etc., after certain date
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2005 (2) TMI 749 - ITAT MUMBAI
Minimum alternate tax - liability to be taxed u/s 115JA - Sale of shares as part of ‘book profit’ in the Profit & Loss Account - Capital gains tax - Difference between sale price and revalued price at which the shares were shown in the books of account - HELD THAT:- Though there was capital gain on sale of shares under the Income-tax Act, 1961 the sale proceeds were invested in specified securities under section 54EA and hence the capital gain which would otherwise have been chargeable to tax stood exempted from capital gains tax. Shares of one company were sold and shares of another company, which were also specified securities u/s 54EA of the Income-tax Act, were acquired. The Accounting Standards referred to in the assessment order were incorporated in section 211 of the Companies Act with effect from October 1998 and hence were not applicable for preparation of accounts under the Companies Act for the previous year under consideration. Nothing has been brought to our notice to suggest that the accounts of the assessee-company prepared and submitted before the Assessing Officer were either rejected or modified by the authorities under the Companies Act or not approved/adopted in the Annual General Meeting of the assessee-company. Thus, the book profit of shown in the accounts of the assessee-company stood not only certified by the statutory auditors of the assessee-company but also accepted by all concerned under the Companies Act.
In the case before us, the accounts as also the book profits shown therein are duly certified by the statutory auditors of the assessee-company and the impugned adjustments sought to be made by the Assessing Officer are also not authorized by Explanation to sub-section (2) of section 115JA which is similar to Explanation to section 115J. Hence, the adjustments made by the Assessing Officer to the book profit shown by the assessee in the Profit & Loss Account cannot be sustained in law.
Having considered all the facts and circumstances of the case before us in the light of the law laid down by the Hon’ble Supreme Court in Apollo Tyres Ltd.’s case [2002 (5) TMI 5 - SUPREME COURT] and the Hon’ble jurisdictional High Court in Kinetic Motor Co. Ltd.’s case [2003 (1) TMI 47 - BOMBAY HIGH COURT], wherein an identical issue was involved and decided against the Department, we find no merit in the appeal filed by he Department.
Appeal filed by the Revenue is, therefore, dismissed.
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2005 (2) TMI 748 - ITAT MUMBAI
Deductions u/s 80-IA and 80HHC - Profits and gains from infrastructure undertakings - Unabsorbed depreciation - comparable market price - Duty drawback - Inclusion of sales tax in total turnover - Lease & Buyback - freight outward in closing stock - HELD THAT:- Accordingly, the deeming provision of section 80-IA(7) for treating the eligible industrial undertaking as the only source of income of assessee for computation of deduction u/s 80-IA(5) is applicable to assessment year 1996-97 and subsequent years, being succeeding to the "initial assessment year" which is assessment year 1995-96. In that view of the matter, the depreciation of Rs. 3.66 crores, allowed in respect of Kurkumbh unit for assessment year 1994-95 could well be set off against income/profit of assessee from other units in that year (assessment year 1994-95) as the aforesaid deeming provision of section 80-IA(7) was not applicable in assessment year 1994-95; and so the same was rightly set off in assessment year 1994-95 and in turn, the said notional unabsorbed depreciation amount of Rs. 3.66 crores, could not be carried forward in assessment year 1995-96 so as to deduct the same from the eligible profit of Kurkumbh unit in assessment year 1995-96 for the purpose of computing deduction under section 80-IA.
Thus, we find no fault with the impugned order of ld. CIT(A) in directing the Assessing Officer not to reduce the amount of Rs. 3.66 crores as unabsorbed depreciation from the eligible profits of Kurkumbh unit while computing deduction u/s 80-IA for assessment year 1995-96. We, therefore, decline to interfere with the same on this count.
Following the judgment of the Hon’ble Apex Court of India in the case of Tata Iron & Steel Co. Ltd. v. State of Bihar [1962 (9) TMI 49 - SUPREME COURT], we are of the considered view that whatever principle the assessee may have adopted in the cost audit records for value of captive or internal transfers, such transfers, will have to be assigned a commercial value in terms of sub-section (9) of section 80-IA.
We agree with the view has been held by the ld. CIT(A) that is the more appropriate market price will be the domestic price of the same goods actually purchased by the assessee in preference to the selling price of a very small quantity by the other undertaking of the assessee. It is necessary to bear in mind that sub-section (9) of section 80-IA does not at all mandate the market price has to be necessarily the selling price of goods actually sold by the assessee. On the other hand, the requirement is that the goods should be valued as per the market price.
If the actual selling price realized in a given factual situation is demonstrated by the assessee as not the appropriate market price then such a selling price can be discarded in favour of more appropriate and representative market price. Thus, we are of the considered view that the findings/conclusions drawn by ld. CIT(A) are justified.
Income from other sources should be excluded from eligible profit for the purpose of computing deduction u/s 80-IA - From the perusal of ld. CIT(A)’s impugned order it is clear that whatever alternative method is applied there is enough evidence on the record to signify that the profits of both the undertakings on the external sales have a higher rating compared to the Global Profit earned by the assessee.
As such, we are of the view that the adoption of the formula of global profit by Assessing Officer is not sustainable in view of clear findings of ld. CIT(A) based on evidence on record; and that the manner in which ld. CIT(A) has adopted transfer pricing policy is in line with the intent and purpose of section 80-IA(9). The approach of ld. CIT(A) in averaging the sales price and application of such average to the total transfers during the year should understandably be acceptable. If the market price on each day of transfer is not ascertainable then the principle of averaging will meet the test of the proviso to section 80-IA(9) also. Besides, in the case of wide fluctuations between two extremes, the adoption of the weighted average formula will avoid any distortion in the depiction of reasonable profits. The principle of averaging will result in a reasonable depiction of a representative market price, which can be applied to the totality of transfers during the year. We, therefore, find no fault with the decision of CIT(A) on the issue to the extended not disputed by the assessee.
Duty drawback - Since the method of computation of eligible profit for the purpose of deduction u/s 80-IA is the same in all the three years in respect of Kurkumbh and Patalganga II, the eligible units, as also the ineligible/other units; and ld. CIT(A) has accepted the method of computation of eligible profit in assessment year 1995-96 and which we have upheld, we do not find any valid reason for CIT(A) to differ in subsequent years 1996-97 and 1997-98. Therefore, the order of CIT(A) is modified in the manner that we direct the Assessing Officer to allow deduction u/s 80-IA in accordance with the computation submitted by assessee except with regard to ground No. 2(c) in assessment year 1996-97 and ground Nos. 1(c) and 1(d) in assessment year 1997-98, which were not pressed and subject to verification of OS income as directed by us above.
Thus ground No. 1 in revenue’s appeal for assessment years 1996-97 and 1997-98 comprised in issue No. 1 tabulated above, together with ground Nos. II and I in assessee’s appeals for assessment years 1996-97 and 1997-98 respectively, comprised in issue No. 2 in assessee’s appeals, stand disposed of by this decision.
In the result, assessee’s appeals are allowed in part as indicated above.
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2005 (2) TMI 747 - ITAT MUMBAI
Minimum alternate tax - difference between the revalued price of the shares and the book value of shares as shown prior to revaluation to the Investment Revaluation Reserve Account in the balance sheet - whether the ‘net profit’ as shown in the audited profit and loss account can be altered - HELD THAT:- In the case before us, we are concerned with section 115JA which brings "book profits", and not "total income", to the charge of Minimum Alternative Tax. Explanation to sub-section (2) of section 115JA defines "book profits" to mean "net profits as shown in the profit and loss account for the relevant previous year prepared under sub-section (2)", as increased or decreased by the amounts mentioned therein. It is clear that no discretion is available to the Assessing Officer to alter the ‘net profit’ as shown in the Profit and Loss Account prepared in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act except in the manner provided in the Explanation to sub-section (2) of section 115JA.
There is nothing before us to suggest that the accounts of the assessee-company prepared and submitted before the Assessing Officer were either rejected or modified by the authorities under the Companies Act or were not approved/adopted in the Annual General Meeting of the assessee-company. Thus, the book profit as shown in the accounts of the assessee-company stood not only certified by the statutory auditors of the assessee-company but also accepted by all concerned under the Companies Act. In other words, the book profit as shown in the accounts of the assessee was book profit for all intent and purposes under the Companies Act.
In the case before us, the accounts as also the book profits shown therein are duly certified by the statutory auditors of the assessee-company and the impugned adjustments sought to be made by the Assessing Officer are also not authorized by Explanation to sub-section (2) of section 115JA which is similar to Explanation to section 115J. Hence, the adjustments made by the Assessing Officer to the book profit shown by the assessee in the Profit & Loss Account cannot be sustained in law.
Thus, in the light of the law laid down by the Hon’ble Supreme Court in Apollo Tyres Ltd.’s case [2002 (5) TMI 5 - SUPREME COURT] and the Hon’ble jurisdictional High Court in Kinetic Motor Co. Ltd.’s case [2003 (1) TMI 47 - BOMBAY HIGH COURT], wherein an identical issue was involved and decided against the department, we find no merit in the appeal filed by the Department.
Appeal filed by the Revenue is, therefore, dismissed.
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2005 (2) TMI 746 - ITAT MUMBAI
Deduction of tax at source - ‘Assessee in default’ - interest u/s 201(A) - reimbursement of expenses - commission payment - payments made to other foreign entities other than the Lead Managers - nature of services - fees for technical services within the meaning of Article 113 of the DTA Agreement between India and U.K - HELD THAT:- The reimbursement of expenses made by the assessee amount are not taxable as it will not come within the purview of section 9(1)(vii) of the Income-tax Act. So also the payment to Bankers amounting to Rs. 4,38,150 and Rs. 8,76,065 and Rs. 6,85,654 are all payments for services rendered as they were admittedly paid towards fees and they arise in India and thus liable to be deducted tax at source u/s 195. However, in view of DTA with UK is applicable and these payments will not fall within the definition of ‘fee for technical services’ u/s 134(c) and hence they are not taxable in India and assessee is not liable to deduct tax from them. Consequently, it is not an ‘assessee-in-default’ u/s 201. Therefore, interest u/s 201(A) is not chargeable.
Since the assessee has not made application u/s 195(1) of the Income-tax Act to the Department, all the payments made by the assessee that are found liable for TDS on the entire lump-sum payment. Thus, we hereby find that all the issues raised by the assessee on merits are accordingly answered.
Admittedly, the assessee has not furnished the required details while filing the return for the year corresponding to the GDR issue in question, keeping vacant the relevant Column No. 6 available in the return. Therefore, the aspect of when the limitation starts in the absence of any specific direction given in the statute and it will not start unless the taxing authorities came to the knowledge of said issue. It is the contention of the Department that soon after it came to know the issue, they have issued show-cause notice stated supra and hence, the assessee could not show that the Department has committed any deliberate delay or it has not taken action within reasonable time in the absence of any specific time laid down by the statute. Thus, we find that this contention regarding limitation raised by the assessee will not stand for legal scrutiny. Accordingly, we hereby up-hold the same finding the issue raised by the assessee as devoid of merits and dismiss the same.
In the result, the appeal filed by the assessee is disposed off accordingly.
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2005 (2) TMI 745 - ITAT AHMEDABAD
... ...
... ... ..... e amended provisions of section 36(1)(vii) the assessee need not establish that debt has become bad and considering that the assessee had not been able to recover any amount despite filing suit and obtaining decree, there was no chance of recovery of the said debts and, therefore, CIT(A) had correctly allowed the assessee rsquo s claim. ITAT, Delhi Bench in the case of Vigyan Chemical Industries (supra). In Vigyan Chemical Industries rsquo case (supra) observed that where legal remedies were not perused institution of legal suit for recovery of due is not condition precedent for allowance of bad debts. Mere fact that legal proceedings were not instituted, does not warrant conclusion that debts have not become bad. 16. In view of the above discussion, we are inclined to reverse the findings of the lower authorities and direct the Assessing Officer to allow the assessee rsquo s claim for bad debts amounting to Rs. 12,23,598. 17. In the result, appeal of the assessee is allowed.
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2005 (2) TMI 744 - CESTAT, NEW DELHI
Demand and penalty ... ... ... ... ..... o different customers also. Regarding this, no explanation is coming forward from the appellants. The case law relied upon by the appellants is not applicable to the facts of the present case as in the present case statutory documents showing payment of duty were recovered from the premises of appellants and appellants are not denying the recovery of the same. The appellants particularly placed reliance to the Single Bench decision of this Tribunal in the case of the SKV Chemicals, supra, and we find that in this case the provisions of Rule 173G of Central Excise Rules were not taken into consideration while setting aside the demand. The provisions of Rules provide special procedure for cancellation of invoices, therefore, the ratio of the decision in the case of SKV Chemicals, supra, is not applicable on the facts of the present case. 7. emsp In view of the above, we find no infirmity in the impugned order. The appeal is dismissed. (Dictated and pronounced in the open Court)
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2005 (2) TMI 743 - CESTAT, BANGALORE
Confiscation and penalty - EOU - Duty free clearances - Notification No. 256/87-Cus. ... ... ... ... ..... missioner in this case itself adjudicated the case before him and imposed penalties for violation of the policy under which the goods were allowed to be imported. The Board rsquo s circular in question is issued so that premature action is not taken by the department as the Development Commissioner is empowered to extend the period of export obligation. In the present case, no such extension was given nor was contemplated when the adjudication proceedings were initiated by the department. The Revenue is well within its competence to issue notice and proceed for confiscation under Section 111(o) of the Customs Act. We do not find any infirmity in the order. However, having regard to the financial condition of the appellant and the attending circumstances, we modify the orders as under. Redemption fine is reduced to Rs. 5 lakhs. Personal penalty on the Managing Director is reduced to Rs. 25,000/-. 7. emsp The appeals thus are allowed partly. (Operative part pronounced in Court)
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2005 (2) TMI 742 - CESTAT, MUMBAI
Ship breaking ... ... ... ... ..... Dev Krupa Ship Breaking, was taken up in appeal by Revenue in the High Court of Gujarat at Ahmedabad. The Hon rsquo ble High Court vide their Order No. 537/2004 and after carefully going through the impugned order passed by CESTAT in Dev Krupa Ship Breakers case were of the considered opinion that no interference was called for by that Court in the appeal filed by Revenue, to determine the important question of law as they found no question of law arose. (d) Following the above decision in case of Dev Krupa Ship Breaking, we find no reasons to uphold the order of Commissioner (Appeals) impugned before us. The same is required lo be set aside and appeal of the assessee is to be allowed. 3. emsp In view of the above findings, the appeal has been allowed and order of Commissioner (Appeals) does not sustain, we would find no merits in the cross-objections filed. The same stand disposed in above terms. Appeal and Cross-objection stand disposed in above term. (Pronounced in Court)
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2005 (2) TMI 741 - CESTAT, MUMBAI
Refund - Destruction of goods ... ... ... ... ..... nataka Power Corporation Ltd. v. CC - 2002 (143) E.L.T. 482 (S.C.) as relied in Tribunal rsquo s order in the case of TELCO Ltd. v. CC, Mumbai - 2003 (158) E.L.T. 640 (Tri. - Mum.) allows re-assessment through a refund claim. Moreover, in the instance case, there is no dispute that there was a cyclone and the imported goods were damaged, which were not delivered to the appellants. The duty amount, which was paid prior to such damage being caused to the imported goods by the cyclone is required to be proportionately refunded to the appellants to whom the full quantity on which the duty was paid has not been delivered. As such, we set aside the impugned order-in-appeal and remand the matter to the original authority, who shall allow the refund subject to verification of the actual quantity of imported goods lost and damaged in the cyclone. Appeal is thus allowed by way of remand. The operative portion of the order was pronounced in the court on the date of hearing on 21-2-2005.
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2005 (2) TMI 740 - CESTAT, NEW DELHI
SSI Exemption - Demand - Brand name ... ... ... ... ..... Bhasin, authorised signatory admitted that they had cleared certain number of pieces with the brand names of others and the demand has been confirmed and the respondents are not contesting that demand. In respect of the other items, the contention is that the Revenue has not produced any evidence that the brand names belonged to some other manufacturers. 4. emsp In this case, now, the issue is in respect of the goods cleared with the brand names such as Welcome, Easy, Regal, Prestige, Airwell and Kranti and in respect of the Welcome. The respondents produced the evidence that these were assigned to them by the owners of the brand name. This fact is not disputed by the revenue. In respect of Regal, Airwell and Kranti there is no evidence on record to show that these brand names belonged to some other persons. 5. emsp In these circumstances, we find no merit in the appeal filed by the Revenue and the same is dismissed. (Order dictated and pronounced in open Court on 16-2-2005.)
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2005 (2) TMI 739 - CESTAT, NEW DELHI
Refund - Unjust enrichment ... ... ... ... ..... in the case of CCE, Mumbai-II v. Allied Photographics India Ltd. - 2004 (166) E.L.T. 3 (S.C.). 5. emsp We find that in this case the issue involved is whether burden of duty has been passed on to the customers. The onus is on the appellants to prove that the incidence of duty has not been passed on to their customers. The Adjudicating Authority in the adjudication order after examining the accounts of the appellants gave a finding on facts that duty has been recovered from the customers by the appellants. The Hon rsquo ble Supreme Court in the case of CCE, Mumbai-II v. Allied Photographics India Ltd. (Supra) held that the principles of unjust enrichment are applicable even in case where duty was under protest and the onus is on the assessee to prove that the burden of duty has not been passed on to the customers. In the present case, the assessee has failed to do so. Therefore, we find no merits in the appeal and the same is dismissed. (Pronounced and dictated in open court).
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2005 (2) TMI 738 - CESTAT, NEW DELHI
Confiscation and penalty - Non-accountal in statutory records ... ... ... ... ..... held similar views that goods found in fully manufactured condition but not entered in RGI register having not undergone quality control inspection and testing, goods not having reached RGI stage, confiscation of goods and imposition of penalty not sustainable. Ratio of the judgments of the Hon rsquo ble CESTAT cited supra, is squarely applicable to the instant case rdquo . 2.I have perused records and heard both sides. 3.The ingots in question were produced by remelting. They were found lying near furnace itself and the seizure memo onwards notes that they were ungraded. The appellant rsquo s contention is that ungraded ingots cannot be used in production or sold, since grading is required to be done. These submissions of the respondent were accepted by the Commissioner and he was following the Tribunal order also while passing his order. In these circumstances, there is no merit in the Revenue rsquo s appeal. The same is rejected. Pronounced and dictated in the open Court .
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2005 (2) TMI 737 - CESTAT, NEW DELHI
Cenvat/Modvat - Capital goods ... ... ... ... ..... tion made by M/s. Godfrey Phillips India Ltd. on the reverse side of the Bill of Entry is not in the form of a declaration. Whether it is called a declaration or certificate it conveys the purpose i.e., diversion of imported machines to the appellants for the purpose of availing cenvat credit. To this extent the requirement of para 4 of the Board rsquo s Circular dated 29-2-1996 stands complied with. It is also seen that one Shri Paramjit Singh has put his signatures with his stamp below the declaration made by M/s. Godfrey Phillips India Ltd. We find that both the lower authorities have not taken note of this signature. We are, therefore, of the view that the matter should go back to the adjudicating authority to examine as to whether this is the signature of Customs Officer endorsing the declaration made by the importer for diverting the machines to the appellants. The appeal is thus allowed by way of remand. (Operative part of the order dictated in open court on 28-2-2005)
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2005 (2) TMI 736 - CESTAT, NEW DELHI
Stay/Dispensation of pre-deposit ... ... ... ... ..... ppellant is also sold to M/s. Hindustan Lever Ltd. who in turn supplies the same to dealers and such dealers further supplied the same to the retailer. The Tribunal held that such ice-cream packages are assessable to duty under Section 4A of Central Excise Act. Further we find that Hon rsquo ble Madras High Court held that when small pouches can be sold to individual hence the provisions of Rule 34(b) of Weight and Measure Act are not applicable. emsp 5.In view of facts and circumstances of the case and above decisions of the Hon rsquo ble Madras High Court and Tribunal, prima facie, it is not a fit case for total waiver of duty. No financial hardship is pleaded before us. The applicants are directed to deposit an amount of Rs. one crore within a period of 10 weeks. On deposit of the above mentioned amount, pre-deposit of remaining amount of duty and penalty is waiver for hearing of the appeal. To come up for reporting compliance on 2-6-2005. Order dictated in the open Court.
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2005 (2) TMI 735 - CESTAT, MUMBAI
Stay/Dispensation of pre-deposit ... ... ... ... ..... unds of a new commercial commodity to be emerging shown we would consider at this prima facie stage that lsquo manufacture rsquo under Central Excise Act, 1944 to be not occasional. That would call for full waiver and stay of the amount required to be deposited under Section 35F. 2.Application to be allowed in above terms. 3.Ordered accordingly. (Pronounced in Court).
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2005 (2) TMI 734 - CESTAT, CHENNAI
Refund - Unjust enrichment ... ... ... ... ..... the material period showing the composite price and duty not indicated separately, itself is sufficient to show that incidence of duty has not been passed on to the customers. This view was followed by the Tribunal in another case i.e. CCE v. Metro Tyres Ltd., reported in 1996 (82) E.L.T. 95 and the appeal filed by the revenue against this decision, was dismissed by the Hon rsquo ble Supreme Court reported in 1997 (94) E.L.T. A51. In view of the settled position of law, as discussed above, I find no infirmity in the impugned order. The appeal filed by the revenue is rejected. rdquo emsp 5.There appears to be conflict of views between the decision of the Tribunal in the case Gopi Synthetics Ltd. (supra) and Corona Cosmetics and Chemicals (supra) and other cases. The file may, therefore, be placed before the Division Bench for deciding whether the issue is required to be considered by a Larger Bench or the judgments are distinguishable. (Dictated and pronounced in open Court).
-
2005 (2) TMI 733 - CESTAT, BANGALORE
Stay/Dispensation of pre-deposit - Classification of goods ... ... ... ... ..... aw samples from each consignment import for the purpose of changing the classification. The entire basis for changing the classification and passing a confiscation order of the goods, which were already cleared, is on the basis of earlier test results of EPTRI of previous consignment. In the light of the judgments cited, the appellants have made out a strong case in their favour both on merit as well as on time-bar. Prima facie, the department is aware of all the facts and it cannot be said that there was mis-declaration with an intention to evade duty and to take advantage of the Import and Export Policy in importing the prescribed goods. The stay applications are allowed unconditionally granting waiver of pre-deposit of duty and penalties and staying its recovery till the disposal of the appeal. As the appeals pertaining to the same issues are coming up for hearing on 22-3-2005, these matter to come up for hearing on 22nd March, 2005. (Pronounced and dictated in open Court)
............
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