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2014 (10) TMI 1056 - MADRAS HIGH COURT
Dishonor of Cheque - existence of debt and liability or not - prosecution under Section 138 of Negotiable Instruments Act - liability for act of the partners of the firm - vicarious liability or not - HELD THAT:- The settled position of law is that the act of the partners of the firm can well be construed as an act on behalf of all the partners if the circumstances warrants such a conclusion. Also, that the Firm is not presumed, conversely, to be an agent of the individual partner, in the considered opinion of this Court. Every partner is in contemplation of the law the general and accredited agent of the partnership, or as it is some times expressed each partner is praepositus Negotiis Societaties, and may resultantly bind all the other partners by his acts in all matters which are within the ambit and objects of the partnership.
As per Section 25 of the Indian Partnership Act, 1932 every partner is liable, jointly with all other partners and also severally for all acts of the Firm done while is a partner. Admittedly, a Firm is not a legal entity. It is only a collective or compendious name for all the partners, as opined by this Court. To put it differently, a Firm does not have any existence away from its partners. Each partner shall be liable as if the 'Debt" of the firm has been incurred on its personal liability - The obligation of the Respondent / Accused that at the time of the offence was committed he was not incharge and was not responsible to the Firm for the conduct of the business of the Firm wold arise only when firstly the Appellant / Complainant make proper and necessary averments in the complaint and establishes that fact.
As a matter of fact, the mere writing or filing of an acknowledge of the debt by one partner does not necessarily of itself bind its co-partner unless he had Authority, express or imply to do so. Furthermore, the proof of authority from other partner is quite essential and necessary and cannot be presumed. Also that after dissolution, however, express authority must be proved. A partner will have no imply authority to bind the firm unless it can be shown that giving of guarantees is necessary for carrying on the business of the firm in ordinary fashion. When an Negotiable Instrument is regularly drawn by a partner in a trading Firm in a transaction ancillary to form business another partner is not less liable because his name does not appear on the face of the instrument.
Without filing a complaint against the partnership firm, filing a complaint against the Respondent / Accused in his individual capacity is per se not maintainable in the eye of Law - Ordinarily, a complaint based on bald / vague averments can only be construed to be a case of utilising the process of Court in an otiose fashion. Also that, in the instant case, though Ex.P1 Cheque appears in the name of the Respondent / Accused as partner for 'Sri Karpaga Vinayagar Jewellery' yet the principal offender viz., Jewellery partnership firm was not arrayed as the principal Accused along with other Partners / Accused, if any. Only when the 'Sri Karpaga Vinayagar Jewellery' (Partnership Firm) was shown to have committed an offence under Section 138 of Negotiable Instruments Act, 1881, the Respondent / Accused can be roped in as an Accused in the capacity as partner of the said Jewellery Firm and then only he along with other partners, if any, can be liable for the dishonour of Ex.P1 Cheque in issue.
The Criminal Appeal is dismissed
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2014 (10) TMI 1055 - SUPREME COURT
Maintainability of complaint - public servants and Gazetted officers of the State Government of Chhattisgarh - initiation of criminal proceedingswithout prior sanction from the appointing authority as per Section 197 of the Code of Criminal Procedure - Whether prior sanction of the competent authority to prosecute the Appellants, who are admittedly public servants, is mandatory Under Section 197 of the Code? - whether the complaint filed by the Respondent is motivated and afterthought, after losing the battle in civil litigation and amounts to misuse and abuse of law? - HELD THAT:- The Respondent had filed the civil suit challenging the decision of the Electricity Board in returning his tender documents on the ground that the same were not as per pre-qualifying conditions of the tender. He had thus resorted to the civil remedy. However, he failed therein as for the reasons best known to him, he sought to withdrew the same and accordingly the same was dismissed for non-prosecution. It is trite that once the suit is withdrawn, that acts as constructive res judicata having regard to the provision of Order XXIII Rule 1 of the Code of Civil Procedure. Also, when suit is dismissed under Order IX Rule 8 Code of Civil Procedure, fresh suit under Order IX Rule 9 is barred. The legal implication would be of that the attempt of the Respondent in challenging the decision of the Tender Committee in not considering his tender remained unfaulted.
No doubt, the Respondent in his complaint has right to colour his complaint by levelling the allegations that the Appellants herein fabricated the records. However, on the facts of this case, it becomes difficult to eschew this allegation of the Respondent and we get an uncanny feeling that the contents of FIR with these allegations are a postscript of the Respondent after losing the battle in civil proceedings which were taken out by him challenging the action of the Department in rejecting his tender. When he did not succeed in the said attempt, he came out with the allegations of forgery. It is thus becomes clear that the action of the Respondent in filing the criminal complaint is not bonafide and amounts to misuse and abuse of the process of law.
The attempt is made by the Respondent to convert a case with civil nature into criminal prosecution. In a case like this, High Court would have been justified in quashing the proceedings in exercise of its inherent powers Under Section 482 of the Code. It would be of benefit to refer to the judgment in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD & ORS [2006 (7) TMI 575 - SUPREME COURT], wherein the Court adversely commented upon this very tendency of filing criminal complaints even in cases relating to commercial transaction for which civil remedy is available is available or has been availed.
Order of the High Court is set aside - appeal allowed.
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2014 (10) TMI 1054 - ITAT BANGALORE
Income from other sources - Interest earned by the assessee on funds temporarily parked - rejecting the claim of the assessee that interest income is not chargeable to tax at all - HELD THAT:- We are also of the view that the decision in the case of KUIDFC [2006 (2) TMI 114 - KARNATAKA HIGH COURT] will be squarely applicable to the facts of the present case wherein answered the question Interest earned by Governmental nodal agency set up for development activities on funds provided by Central Government but parked in banks for the period of non-utilisation is income chargeable to tax in negative.
CIT(A) has not followed the aforesaid decision on the basis that KUIDFC was engaged in welfare activities to transform Bangalore to a mega city, whereas the assessee was engaged in trading of agricultural produce. In our view, this distinction sought to be made out by the CIT(A) cannot be accepted. The assessee as well as KUIDFC are engaged in welfare activity wholly owned by State Government. KUIDFC is also a company. The assessee is also engaged in welfare activity and formed for the purpose of helping the agricultural produce and procession of export.
Therefore the ratio laid down by the Hon’ble Karnataka High Court in the case of KUIDFC (supra) will clearly apply to the facts of the present case also. The fact that the Assessee would charge commuters for use of metro rail service which is an infrastructure to be created by the Assessee cannot be the basis not to follow the decision in the case of KUIDFC (supra). KUIDFC would also charge fee for use of infrastructure facility that it creates from the end users. CIT(A) would call this a nominal fee and distinguish the fare charged by a commuter of metro rail. We are of the view that the distinction sought to be made out by the CIT(A) from the case of KUIDFC (supra) and the Assessee’s case in our view cannot be sustained - we hold that the interest income in question cannot be brought to tax as income of the assessee - Decided in favour of assessee.
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2014 (10) TMI 1053 - MADRAS HIGH COURT
Dishonor of Cheque - application of presumption laid down in Section 118 of Negotiable Instruments Act when the defendants have completely denied the execution of Ex. B6 - improbabilities of the execution of the transaction referred to in the Ex. A.6 in view of Ex. B.1 - whether the parties have discharged the onus cast upon them in establishing their respective cases? - HELD THAT:- The main mortal attack on the plaintiff's case is based on Ex. B.1. According to the learned counsel for the appellants, Ex. B.1 completely consigned Ex. A.6 to the coffin and this had resulted in eclipsing the effect of Section 118 of the Negotiable Instruments Act to Ex. A.6. Expanding his this submission, the learned counsel for the appellants would submit that the alleged old promissory note is dated 15.06.2013, while in his Ex. B.1 letter dated 26.08.2013, just few months after the old promissory note how plaintiff could have been lamented about non-payment of interest and amount for a long period - There was no reference in Ex. B.1 that it has been written in connection with the promissory note debt. Ex. B.1 would not absolve the defendants from their very duty to rebut the presumption arose under Section 118 of the Negotiable Instruments Act.
The arising of the presumption under Section 118 of the Negotiable Instruments Act noticed by the First Appellate Court with reference to Ex. A.6 rightly resulted in vacating the judgment and decree of the trial Court and substitution of them with its own judgment and decree, decreeing the suit.
Appeal dismissed.
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2014 (10) TMI 1052 - GUJARAT HIGH COURT
Direction regarding disbursement of the amount - HELD THAT:- The Official Liquidator has distributed forms for disbursement pursuant to the said orders. The members of the applicant-Association shall submit back those forms duly filled. In respect of the grievance made by learned advocate Mr.Vasavada that Official Liquidator has been insisting for mentioning the date of the order, it is observed that such incident is uncalled for in asmuch as the directions of the Division Bench are clear and operative, as they stand today.
The process of disbursement in compliance of the directions of the Division Bench shall not be haulted - the matter shall stand over to 14th November, 2014.
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2014 (10) TMI 1051 - SUPREME COURT
Whether Chapter IIB of the West Bengal Land Reforms Act would be applicable qua the Appellants in view of the fact that they belonged to a place which was in erstwhile State of Bihar and by virtue of the State Reorganisation Act, their lands were included in the State of West Bengal? - HELD THAT:- The land in question was transferred from the State of Bihar to the State of West Bengal pursuant to the enactment of Bihar and West Bengal (Transferred Territories) Act, 1956 and the provisions of West Bengal Land Reforms Act were extended to the transferred territories. Consequently, the land in question was shown to have been vested in the State and the Appellant challenged the said order of vesting by filing a writ petition being CR No. 3466 of 1984. The said writ petition was allowed by the Calcutta High Court in terms of Order dated 25.11.1994 and the said order of vesting was quashed on the ground of non applicability of Chapter IIB of the aforesaid Act.
It is well settled that even if the decision on a question of law has been reversed or modified by subsequent decision of a superior court in any other case it shall not be a ground for review of such judgment merely because a subsequent judgment of the single judge has taken contrary view. That does not confer jurisdiction upon the tribunal to ignore the judgment and direction of the High Court given in the case of the Appellants.
The High Court also fell in error in affirming the order of the tribunal, hence these orders cannot be sustained in law - Appeal allowed - decided in favor of appellant.
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2014 (10) TMI 1050 - GUJARAT HIGH COURT
Dishonor of Cheque - liability of administrator/partner of a partnership firm - Whether an administrator/partner of a partnership firm would be liable for prosecution under Section 138 of the Negotiable Instruments Act, 1881 without partnership firm being arraigned as an accused? - HELD THAT:- In the present case, the original complainant has not joined the partnership firm as an accused, and the complaint is filed only against the driver of the firm, and therefore, in view of the decision rendered by the Honourable Apex Court in the case of In the present case, the original complainant has not joined the partnership firm as an accused, and the complaint is filed only against the driver of the firm, and therefore, in view of the decision rendered by the Honourable Apex Court in the case of ANEETA HADA VERSUS GODFATHER TRAVELS & TOURS (P.) LTD. [2012 (5) TMI 83 - SUPREME COURT], all the aforesaid impugned complaints in the present three cases are not maintainable. Hence, this Court can exercise the powers under Section 482 of the Cr.P.C. for quashing and setting aside the impugned complaints.
All the aforesaid impugned complaints in the present three cases are not maintainable. Hence, this Court can exercise the powers under Section 482 of the Cr.P.C. for quashing and setting aside the impugned complaints.
Application allowed.
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2014 (10) TMI 1049 - ITAT CHENNAI
Disallowance of employees contribution of provident fund & ESI in computing taxable total income - Contribution remitted beyond the due date for payment but within the due date for filing of return applying the provisions of section 43B - HELD THAT:- This issue has been decided in favour of the assessee by various High Courts following the decision in the case of CIT Vs.Alom Extrusions Ltd [2009 (11) TMI 27 - SUPREME COURT] held that omission of second proviso to section 43B and amendment of first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively and thus with effect from 1.4.1988 i.e. the date of insertion of first proviso. The co-ordinate Bench of this Tribunal considering a similar issue in the case of M/s. Venkateswara Electrical Industries P.Ltd. Vs. DCIT [2014 (8) TMI 960 - ITAT CHENNAI] following the decision of Amil Ltd. [2014 (8) TMI 960 - ITAT CHENNAI] held that even the employees contribution to provident fund is to be allowed as deduction if it is paid within due date for filing of return - Decided in favour of assessee.
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2014 (10) TMI 1048 - ITAT CHENNAI
Exemption u/s 11 - refusing registration u/s 12AA - Proof of charitable object u/s 2(15) - non-approval of the state government for running educational institutions - HELD THAT:- There is no dispute that the assessee’s objects hereinabove point out education and ancillary activities are ‘charitable purposes’ prescribed u/s 2(15) of the Act. There is no preference given to any particular group of people. We find from page 43 of the paper book that the Directorate of Tamil Nadu Matriculation Schools, Chennai has already accorded approval on 4.3.2014 permitting the assessee to open a school for LKG to VIIIth class from academic year 2014-15. Therefore, the first objection does not survive.
Assessee has not commenced its charitable activities and its activity as a commercial organization - the assessee has already enrolled students in the school. The hon'ble jurisdictional high court in DIT(E) vs M/s Seervi Samaj Tambaram Trust [2014 (2) TMI 32 - MADRAS HIGH COURT] has held that registration u/s 12AA of the Act ought not be refused on the ground of non-commencement of charitable activities.
Lack of genuineness in the assessee’s activities as well - we accept the assessee’s contentions and hold it entitled for registration u/s 12AA of the Act. Needless to say, the issue of commercial activities and lack of genuineness abovesaid are left to be examined in the course of assessment as per law. - Decided in favour of assessee.
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2014 (10) TMI 1047 - ITAT DELHI
Revision u/s 263 by CIT - As per CIT AO has wrongly granted deduction u/s 80IC - HELD THAT:- On perusal of the above paragraph in the assessment order, coupled with the facts that in the earlier assessment year the same AO denied the exemption u/s 80IC to the assessee on the very same grounds and the facts that the CIT (Appeals) has reversed such addition, we are of the opinion that the AO has properly applied his mind and hence take a plausible view. Thus applying the proportions laid down in the case of CIT vs. Max India Ltd.[2007 (11) TMI 12 - SUPREME COURT] and case of Malbar Industries Co. Ltd. Vs. CIT 243 ITR 83 (SC)[2000 (2) TMI 10 - SUPREME COURT] we conclude that order passed u/s 263 is bad in law. - Decided in favour of assessee.
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2014 (10) TMI 1046 - KARNATAKA HIGH COURT
Exemption u/s 11 - Withdrawal of registration u/s 12AA by the CIT - Whether the Tribunal is justified in holding that the activities of the KLE University are genuine and withdrawal of registration by the CIT was erroneous? - HELD THAT:- Our answer to the above point is in the affirmative for the following reasons:
i. that the donations received by the KLE society cannot be construed as capitation fee for the admission of students by the KLE university;
ii. that the revenue appears to have not properly appreciated the legal point that though the Chairman and few members of ‘the Society’ are the Chairman and members of ‘the KLE University’, they are separate legal entities;
iii. that there is no violation of any of the conditions stipulated under the IT Act, warranting for cancellation of registration of the society;
iv. that the Tribunal on proper appreciation of the grounds urged by the Society and the Revenue has rightly restored the registration.
In view of the above, there is no merit in the contentions urged by the learned counsel for the Revenue and the decisions cited by him are of no avail.
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2014 (10) TMI 1045 - ITAT AHMEDABAD
Disallowance of interest expenditure u/s 36 (1)(iii) - disallow interest expenses in total disregard of the facts and figures furnished to establish acquisition and use of asset by the appellant - interest was paid on account of capital borrowed towards the acquisition of asset - HELD THAT:- The purpose of the borrowing has to be determined on the facts of each case. Then the use of the capital borrowed is required to be examined. From A.Y. 2004-05 the borrowing is shown specifically for the purpose of acquiring a capital asset. So, the out come of this proviso is that the interest would not be admissible for deduction till date the new asset is brought to use. An option is available to the assessee to capitalized the interest amount. The effect of the “proviso to Section 36(1)(iii) inserted with the fact of 2004-05 is to disallow interest on Money borrowed for acquiring capital asset till the date on which the asset is brought to use; even if it is for expansion of existing business. As per our humble understanding, the law had always made a difference between money borrowed for existing business, whether it is for expansion or otherwise, with that the money borrowed for setting up an altogether new business - now as per this insertion of the proviso the Revenue Department felt that the expansion of business should be put on par with a new business and that interest on borrowing for capital asset for the purposes of expansion should also be treated as part of capital expenditure in the case of Hindustan Zinc Limited . [2003 (7) TMI 21 - RAJASTHAN HIGH COURT].
The undisputed fact is that in terms of the agreements, which are placed on record; the assessee ‘APPL’ has agreed to purchase the said unit. The agreement dated 21st day of May, 2003 has clearly mentioned that MIL desired to transfer and APPL had desired to purchase the said unit with a clear and marketable title. From this agreement, it is also evident that MIL had only permitted APPL as licensee to enter upon the said unit till the completion of sale. Which means that the process of transfer of the property was going on at the time when those agreements were signed, the assessee was in the process of acquiring the said units, (an asset) during the relevant period. Therefore, the AO was of the view that an expenditure incurred, such as interest expenditure, was required to be capitalized for the period during which the capital asset has not been transferred in the name of the assessee. A serious option has been raised by the AO that had this property was owned by the assessee “APPL”, then it should have been disclosed in the balance sheet under the schedule of assets, but it was not so. Reasons given by the AO for the impugned disallowance appears to be sustainable in the eyes of law.
We have to see the applicability of the proviso annexed to Section 36(i)(ii) that whether interest is allowable in respect of money borrowed for “acquisition” of an asset. Then, the appellant has cited the case law of Bright Automobiles and Plastics Ltd. [2004 (9) TMI 24 - MADHYA PRADESH HIGH COURT] to explain the definition of term “acquiring” is for the purpose of Sec.35AB and held that assessee need not become absolute owner of know-how. We are of the view that there in point in mixing up the issue with the other provisions of IT Act and to be strictly decided in the light of the language of Section 36(i)(iii) to be read alongwith the proviso inserted by the statute. Exactly this was opined by the Hon’ble Supreme Court in the case of Core Health Care Ltd.[2008 (2) TMI 8 - SUPREME COURT] that Section 36(i)(iii) has to be read on its own terms because it is a code by itself. Therefore; finally we hereby conclude that the disallowance was rightly made by the Revenue Department in all the years hence confirmed. Resultantly grounds are dismissed.
Disallowance of depreciation was that the Director of the Company had purchased the motor car in his name - HELD THAT:- The bill for the purchase of the car was also in the name of the Director. Hence, it was held that since the assessee company was not the legal owner of the motor car, therefore, claim of depreciation was not allowable. CIT(A) has confirmed the action of the AO. Now before us an order in the case of ITO Vs. Typhoon Financial Services [2011 (1) TMI 1567 - ITAT AHMEDABAD] as held CIT(A) gave a specific finding that the motor car was purchased out of the funds of the assessee-company and was also used for the purpose of business of the assessee-company. Merely because the registration was in the name of one of the directors would not disallow the claim of the assessee. - Decided in favour of assessee.
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2014 (10) TMI 1044 - ITAT MUMBAI
Extension of stay in respect of the stay already granted by Tribunal - HELD THAT:- The stay was granted for a period of six months or the disposal of assessee’s appeal, whichever is earlier. We found that all the conditions stipulated by the Tribunal in its order dated 14-3-2014 have duly been complied with by the assessee. We also found that after grant of stay, whenever the case was fixed for hearing the department has sought for adjournment.
Thus we found that it is a fit case for grant extension of stay. Accordingly, we extend the stay till 27th February, 2015 or the date of passing of the order by the Tribunal, whichever is earlier. We further direct that if the assessee seeks any adjournment, the stay so granted will be automatically withdrawn.
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2014 (10) TMI 1043 - SUPREME COURT
Retention of bill amount payable to Respondent No. 2 - criminal complaint for criminal breach of trust - charges Under Section 406 Indian Penal Code - HELD THAT:- In proceedings instituted on criminal complaint, exercise of the inherent powers to quash the proceedings is called for only in case where the complaint does not disclose any offence or is frivolous. It is well settled that the power Under Section 482 Code of Criminal Procedure should be sparingly invoked with circumspection, it should be exercised to see that the process of law is not abused or misused. The settled principle of law is that at the stage of quashing the complaint/FIR, the High Court is not to embark upon an enquiry as to the probability, reliability or the genuineness of the allegations made therein.
Section 420 Indian Penal Code deals with cheating. Essential ingredients of Section 420 Indian Penal Code are: (i) cheating; (ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security, and (iii) mens rea of the accused at the time of making the inducement.
In the present case, looking at the allegations in the complaint on the face of it, there are no allegations are made attracting the ingredients of Section 405 Indian Penal Code. Likewise, there are no allegations as to cheating or the dishonest intention of the Appellants in retaining the money in order to have wrongful gain to themselves or causing wrongful loss to the complainant - Excepting the bald allegations that the Appellants did not make payment to the second Respondent and that the Appellants utilized the amounts either by themselves or for some other work, there is no iota of allegation as to the dishonest intention in misappropriating the property.
Since no case of criminal breach of trust or dishonest intention of inducement is made out and the essential ingredients of Sections 405/420 Indian Penal Code are missing, the prosecution of the Appellants Under Sections 406/120B Indian Penal Code, is liable to be quashed - appeal allowed - decided in favor of appellant.
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2014 (10) TMI 1042 - ITAT AHMEDABAD
Nature of expenditure - Product registration expenses - revenue or capital expenditure - assessee had obtained valuable marketing benefits in several countries; hence, the expenditure was in capital field and not a revenue expenditure - AO has disallowed the assessee’s claim of additional depreciation in respect of such machinery which were generating electricity on the ground that those machineries were not producing any “article or thing” hence not eligible for additional depreciation as prescribed u/s.32(1)(iia) - HELD THAT:- Assessee in these cases were involved in different items of manufacturing and purchased windmills. On the identical issue, M/S. VTM LIMITED [2009 (9) TMI 35 - MADRAS HIGH COURT],TEXMO PRECISION CASTINGS [2009 (10) TMI 140 - MADRAS HIGH COURT] AND M/S. HI TECH ARAI LIMITED [2009 (9) TMI 60 - MADRAS HIGH COURT] held that assessee are entitled to additional depreciation on cost of windmill acquired. It is also held that the plant and machinery purchased need not be operationally used for manufacturing articles or things. Since the only objection of the assessing officer was that newly purchased machinery generated electricity which is not articles or thing, is no longer a relevant issue in the light of these decisions.
From the facts narrated in the assessment order and in the appellant's submission, it is clear that appellant fulfilled all the conditions required for claim of additional depreciation on machinery purchased by it. The addition of machinery was after 31st of March 2005. Appellant was already in the business of manufacturing articles for things. The machine purchased is not covered by any clause of proviso to this section. The same was not used by any person before installation. It is not installed in office or residential premises. This is not office appliance or road transport vehicle - these machines are also not eligible for 100 percent depreciation in one year. Considering this appellant fulfils all the conditions required for claim of additional depreciation. Respectfully following the decisions of Madras High Court relied upon by the appellant, assessing officer is directed to allow additional depreciation on new plant and machinery purchased - Decided against revenue.
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2014 (10) TMI 1041 - ITAT CHENNAI
Computation of Deduction u/s 10B - AO deducting expenditure on the leased telecommunication line and other expenses incurred in foreign exchange from export turnover in computing the deduction u/s 10B - HELD THAT:- We find that assessee originally made claim under section 10B and an alternative claim was also made under section 10A of the Act during the assessment proceedings. The Commissioner of Income Tax (Appeals) directed the AO to verify conditions as per section 10A and allow the claim of the assessee. Since the CIT (Appeals) has already directed the AO to verify the claim of the assessee and allow deduction under section 10A, we remit this issue back to the file of the AO to decide this issue also afresh in accordance with law keeping in view the decision of ITO Vs. Sak Soft Ltd. [2009 (3) TMI 243 - ITAT MADRAS-D] relied on by the assessee. Appeal of the assessee is allowed for statistical purposes.
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2014 (10) TMI 1040 - CESTAT NEW DELHI
Penalty on CHA u/s 114 of CA - exporter was fictitious firm not available at the address given in the shipping bills - control over the “G” and “H” Card holders - allegation based on assumptions and presumptions or not - HELD THAT:- There are no direct allegations either in the show cause notice or direct finding in the impugned order to conclude that it was the present CHA himself who filed shipping bills. The adjudicating authority has relied upon the sole statement of Shri Rakesh Kumar of M/s. Sky Liner Transhipment - As against the statement of Shri Rakesh Kumar, there is statement of Shri S. Malik, proprietor of present CHA denying having filed the shipping bills. As such, the sole statement of Shri Rakesh Kumar, which is also being faced with the statement of Shri S. Malik without any collaborating evidence, cannot be made basis for penalizing the appellant.
The entire case of the Revenue is based upon the assumption and presumption inasmuch as the notice alleges allowing of misuse by the CHA and the impugned order holds him responsible for any misuse or his having no control over the “G” and “H” Card holders without coming to a finding who filed the shipping bills. There is no handwriting opinion in respect of signatures appearing on the shipping bills nor their CHA card holder examined by the Revenue.
There are no merits in the Revenue’s stand of involvement of the present CHA - penalty set aside - appeal allowed - decided in favor of appellant.
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2014 (10) TMI 1039 - ITAT BANGALORE
Revision u/s 263 - Narration in the cash books which reflected deposits in cash to the bank accounts of trade creditors’ and Non-examination of books of account with reference to the deposits into trade creditors’ bank accounts - as per CIT that provisions of section 40A(3) were attracted to cash deposits made directly to the accounts of suppliers - HELD THAT:- There is no dispute that the issue regarding application of section 40A(3) of the Act was verified by the AO during the course of assessment proceedings. That, queries were raised in this regard and assessee had given reply on 8.3.2013 is clear from the paperbook filed by the assessee.
It might be true that there are some decisions of different High Courts which could lead to a view that payments effected directly to suppliers’ bank account in cash would also attract section 40A(3) - it cannot be said that the view taken by AO is not a lawful one, especially when the co-ordinate Bench of the Tribunal in the case of Sandur Sales & Services Pvt. Ltd. [2012 (11) TMI 1305 - ITAT BANGALORE] had held in favour of the assessee in similar facts and circumstances, relying on the decision of Hon’ble Apex Court in Attar Singh Gurmukh Singh [1991 (8) TMI 5 - SUPREME COURT]
So, effectively, the ld. CIT was trying to substitute a lawful view taken by AO with that of his own. The Hon’ble Apex Court in the case of Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] had clearly held that when two views are possible and ITO had taken one view with which Commissioner does not agree, it could not be treated as an erroneous order prejudicial to the interest of revenue, unless view taken by ITO was unsustainable in law. The Hon’ble Bombay High Court in Gabriel India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] has clearly held that section 263 did not visualize substitution of judgment of Commissioner with that of ITO. We are, therefore, of the opinion that this was not a fit case where powers u/s. 263 could have been invoked. The original assessment order could be stated to be erroneous insofar as it was prejudicial to the interests of revenue. Order of the CIT u/s. 263 is quashed. - Decided in favour of assessee.
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2014 (10) TMI 1038 - ITAT CHENNAI
Characterization of receipt - Clean Development Mechanism [CDM] receipts - revenue receipt or capital receipt - HELD THAT:- The Hyderabad Bench of the Tribunal in the case of M/s My Home Power Ltd. v. DCIT [2012 (11) TMI 288 - ITAT HYDERABAD] has held carbon credit as capital receipts. Also see SRI VELAYUDHASWAMY SPINNING MILLS (P) LTD. VERSUS DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE, TIRUPUR [2015 (4) TMI 132 - ITAT CHENNAI] - Thus we hold that the amount received by the assessee on account of CDM (carbon credits) is capital in nature. The impugned order is set aside, the appeal is allowed.
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2014 (10) TMI 1037 - ITAT CHENNAI
TDS credit - Revenue contends that once the assessee had not shown the aforesaid subscriptions as its own income, its TDS claim ought not to have been granted in the lower appellate proceedings - HELD THAT:- There is no quarrel about the factual position that the assessee had collected subscription at the behest of M/s Sun TV Network Ltd. Its payees could only deduct TDS in its name and not that of the latter entity which has already admitted these very payments in return filed. The 'tribunal' in identical circumstances [2013 (12) TMI 900 - ITAT CHENNAI] had held the assessee entitled for TDS credit u/s 199 - In our view, plea of ‘low tax effect’ does not merit acceptance as the department could have treated this issue as a recurring one. There is also no material on record to take a different view as well. In these circumstances, we hold that the CIT(A)’s findings do not warrant any interference. The Revenue’s grounds are rejected.
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