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2014 (2) TMI 1212 - ITAT JAIPUR
Capital gains from transfer of industrial property - Held that:- Section 50C of the Act applies only to capital asset being land or building or both but it cannot apply to lease rights in a land. Since the assessee has transferred the lease right for 99 years in the plot and not ownership in land itself, the provision of Section 50C cannot be invoked.
Therefore, full value of consideration in this case has to be taken at ₹ 42.25 lacs. The decisions relied on by the assessee in its written submissions also support our above finding. - Decided in favour of assessee.
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2014 (2) TMI 1210 - ITAT JAIPUR
Revision u/s 263 - Held that:- In the present case, from para 3 of the impugned order, it is noticed that the notice dt. 9th Jan., 2013 under s. 263 of the Act was issued only on receipt of the proposal under s. 263 of the Act from the ITO, Ward-1(2), Kota and the assessee explained, vide written submission which has been reproduced in para 4 of the impugned order, each and every objection raised by the ITO, Ward-2, Sawai Madhopur.
It is well-settled that the learned CIT while exercising the revisionary powers under s. 263 of the Act may call for and examine the records of any proceedings and thereafter if he considers that any order passed therein is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify. Therefore, before taking any action, learned CIT himself shall apply his mind after examining the record of any proceedings and his satisfaction is must. However, in the present case, the satisfaction was of the ITO (Tech.) who proposed action under s. 263 of the Act, but not of the learned CIT. Therefore, issuance of notice under s. 263 of the Act on the basis of the proposal made by the ITO was void ab initio; We, therefore, set aside the same. - Decided in favour of assessee
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2014 (2) TMI 1209 - ITAT AHMEDABAD
Disallowance of interest u/s 14A read with rule 8D - CIT(A) deleted the disallowance in part - Held that:- CIT(A) observing that the facts are identical to the facts of the Assessment Year 2005-06, by following the order of the Tribunal passed in the case of the assessee itself in Assessment Year 2005-06 has restricted the disallowance u/s 14A to 2% of the dividend income and deleted the balance amount of disallowance. - Decided against revenue
Disallowance being 50% of payment made to related party towards fees and legal charges - CIT(A) deleted the disallowance - Held that:- The genuineness of the payment is not in dispute. The Assessing Officer after observing about the loss incurred by the assessee company has brought no material on record after making investigation to show that the assessee has not received the services for which payments were made by the assessee. Rather, on the other hand, the allowance of deduction at the rate of 50% shows that the Assessing Officer also agreed that services of the staff of the payee company were utilized by the assessee company for its business purpose. No material was brought on record to show that the consideration for services received by the assessee was so excessive as to warrant any disallowance out of the same. It is also observed that the amount of consideration paid was as per Memorandum of Understanding entered into by the assessee with the payee company. In view of the above facts and circumstances, we do not find any good reason to interfere with the order of the Ld. CIT(A) - Decided against revenue
Disallowance u/s 36(1)(va) read with section 2(24)(x) being the employees’ contribution to Provident Fund not deposited within the stipulated time - Held that:- Hon’ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT ) held that with respect to the sum received by the assessee firm from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va).the issue was covered in favour of the Revenue by the above cited decision of the Hon’ble Gujarat High Court. Therefore, we set aside the order of the Ld. CIT(A) and restore back the order of the Assessing Officer. - Decided in favour of revenue
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2014 (2) TMI 1208 - ITAT DELHI
Deemed dividend u/s 2(22) - Held that:- Thus issue is squarely covered in favour of assessee as in the case of Mr. Anil Bansal [2013 (8) TMI 514 - ITAT DELHI] under similar facts and circumstances, the Hon'ble Tribunal has considered similar transactions as Current Account transactions and has not as deemed dividend.
The facts in the present case are similar as in the present case also. Credit balances remained in the period 2.8.2005 to 27.8.2005. For the rest of the periods the account remained in debit and that too with much larger amounts than the amounts where account was in credit. Therefore respectfully following the order of the Tribunal we allow this ground of appeal. - Decided in favour of assessee
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2014 (2) TMI 1207 - ITAT MUMBAI
Revision u/s 263 - FCCB funds diverted to the M/s Reliance Info Investment without charging interest - Commissioner held that the interest free fund would be deemed to be transfer of an asset in view of the provisions of sections 60 to 63 of the Act - Held that:- Tribunal has considered all the contention of the department regarding applicability of section 60 to 63 of the Act to the interest income and then gave a finding that the issue was debatable and provisions of section 263 could not be invoked when the AO has already conducted an enquiry and taken one of the possible view. There is no quarrel on the point that for the year under consideration, the AO conducted an enquiry on the issue therefore we do not find any reason for distinguishing either the fact or the finding of the Tribunal on the issue for the A.Y. 2007-08.- Decided in favour of assessee
Mark to market loss/gain - AO disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging - Held that:- It is clear that the Tribunal while decided the issue for the A.Y. 2007-08 has also considered the CBDT instruction no. 3/2010 which has been heavily relied upon by the Commissioner as well as the ld. DR. We further note that the AO has examined this issue and disallowed the net loss after adjusting the gain on account of foreign currency derivatives for hedging and therefore it is manifest from the record that the issue has been examined by the Assessing Officer and taken a possible view. The Tribunal on the identical facts has decided this issue by holding that the view of the Commissioner cannot be countenanced with. Accordingly, we do not find any reason to take a different view from that of already taken by the Tribunal for the A.Y. 2007-08 - Decided in favour of assessee
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2014 (2) TMI 1206 - ITAT BANGALORE
TDS u/s 194C - Non deduction of TDS - payment for sub-contract works - Held that:- Since the payees / recipients i.e. G. Ramesh and Ramesh Kotian have already shown these amounts in their respective books of account audited under section 44AB of the Act; declared and offered the same to tax in their returns of income for the relevant period, thus by virtue of the amendment to the provisions of section 40(a)(ia) of the Act by insertion of the second proviso to section 40(a)(ia) of the Act w.e.f. ;1.4.2013, the provisions of section 40(a)(ia) of the Act would not be attracted to the payments made by the assessee i.e. Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000. This view of ours, is in accordance with the decision of the co-ordinate bench of this Tribunal in the case of Ananda Markala (2014 (12) TMI 613 - ITAT BANGALORE) wherein it was held that the insertion of the second proviso to section 40(a)(ia) of the Act should be read retrospectively from 1.4.2005 and not prospectively from 1.4.2013. In this view of the matter, the provisions of section 40(a)(ia) of the Act is not attracted to the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 since the object of introduction of section 40(a)(ia) of the Act is achieved for the reason that the payees / recipients have declared and offered to tax the payments received from the assessee in their respective hands.
As regards the issue of non-furnishing of Form No.26A, we are of the view that since the second proviso to section 40(a)(ia) of the Act is held to be retrospective in operation w.e.f. 1.4.2005, similarly, Form 26A was to be filed for an assessee not to be held as an assessee's in default as per proviso to section 201 of the Act. In all fairness, the assessee in the period under consideration i.e. Assessment Year 205-06 could not have contemplated that such a compliance was to be made and therefore in the interest of equity and justice we set aside the order of the learned CIT (Appeals) and remit the matter to the file of the Assessing Officer directing the Assessing Officer to consider the allowance or otherwise of the expenditure claimed amounting to ₹ 4,23,96,500; being the payments made by the assessee to Sri G.Shankar of ₹ 2,69,21,500 and to Sri Ramesh Kotian of ₹ 1,54,75,000 after affording the assessee adequate opportunity to file Form No.26A and only after due verification of whether the aforesaid two payees / recipients have reflected the same receipts in their books of account and have offered the same to tax. In these circumstances, we hereby set aside the order of the learned CIT (Appeals) to the file of the Assessing Officer only for the limited purpose as directed above. - Decided in favour of assessee for statistical purposes.
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2014 (2) TMI 1205 - RAJASTHAN HIGH COURT
Addition u/s 68 - receipt of accommodation entry - Held that:- ITAT and CIT(A) concluded that AO failed to show that the transaction for purchase and sale of shares was bogus and the appellant paid cash to the broker for availing accommodation entry in the form of sale proceeds of shares. Suspicion, strange coincidences and grave doubts, how so ever strong it may be, cannot take place of legal proof. Therefore, the AO erred in treating the entire transaction of long term capital gains as a sham transaction and bring it to tax as unexplained cash credit u/s 68 of the Income tax Act, 1961.
The findings as concurrently recorded by the CIT(A) and the ITAT, that addition under Section 68 of the Act was not sustainable, remain essentially in the realm of appreciation of evidence. The Appellate Authorities have returned the finding of fact in favour of the assessee after due appreciation of evidence on record, on relevant considerations, and on sound reasonings. The finding neither appears suffering from any perversity nor is of such nature that cannot be reached at all. - Decided in favour of assessee.
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2014 (2) TMI 1204 - CESTAT AHMEDABAD
Rejection of appeal - Bar of limitation - date of delivery of order in original - Held that:- Report from Asstt Commnr,indicates that all possible efforts were made to trace documentary proof in respect of service of OIO by all the alternative means provided under section 37 C of Central Excise Act 1944, but the same is not traceable. On such categorical report, the first appellate authority, in my considered view should have held with the alternative method of service has provided under sec. 37 C were not exhausted. - there is nothing on record to show that the revenue has exhausted all the modes of serving of OIO on the appellant before embarking on pasting of the OIO on the premises of the appellant. In my view, division bench in the case of M/s Trans Global Agencies Pvt Ltd., vs CCE, Daman, [2009 (3) TMI 722 - CESTAT, AHMEDABAD] which is of would cover the issue directly in favour of the appellant. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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2014 (2) TMI 1203 - CESTAT NEW DELHI
Denial of CENVAT Credit - credit of the CVD and used it for payment of duty on the repaired transformers cleared from the appellant’s factory - Held that:- Admittedly, the duty was paid by the appellant on the full value of the transformer including the value of the damaged parts. It is not the case of the Revenue that parts were imported separately and duty was paid on the separate parts. It is a complete transformer, which was imported on payment of duty and it is the complete transformer which was subsequently converted into a new transformer, which was cleared on payment of duty. As per the provisions of Rule 3 (1) (vi) of CENVAT Rules 2001, an assessee is entitled to take the CENVAT credit of the additional duty on customs leviable on the goods imported and paid under Section 3 of the Customs Tariff Act, 1975. The Bill of Entry filed by the appellant clearly reveals the payment of CVD on the complete transformer. Merely because on account of under-going through sea-voyage from India to Holland and back, some of the parts might have got damaged requiring re-attaching, re-conditioning/repair cannot be made a ground for denial of the duty paid on the said parts. Even at the cost of repetition, I would like to observe that it is not the parts, which were imported by the appellant but the complete transform and at the time of payment of CVD on the complete transformer, including the damaged parts, the customs authorities did not object to payment of duty on the damaged parts. As such, I find no justification for denial of the credit. - Decided in favour of assessee.
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2014 (2) TMI 1202 - CESTAT NEW DELHI
Valuation - Enhancement in value - Held that:- In the case of Ganesh Trading Co., reported in [2014 (1) TMI 64 - CESTAT NEW DELHI] this Tribunal has held that although Bill of Entry has been assessed and value has been enhanced and goods have been cleared on enhanced value without any protest, the importers cannot be precluded from challenging assessed bill of entry on the sole ground that goods cleared at enhanced value. Therefore, case relied upon by learned AR is not applicable to the facts of this case. In this case learned Commissioner (Appeals) himself has asked the basis of enhancement of value of the impugned goods which had been replied by the concerned Astt. Commissioner and gave reasons for enhancement. In these circumstances, we hold that enhancement has been done without any basis. Therefore, transaction value has been accepted. Impugned order is set aside. - Decided in favour of assessee.
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2014 (2) TMI 1201 - CESTAT NEW DELHI
Denial of benefit of notification - Held that:- there was no notification benefit at the initial stage of import. When such benefit was forgone that cannot be claimed by a subsequent act at later stage. Law is well settled that pleading not made at the initial stage suit cannot be amended by an affidavit. Such repair is not permissible by law - Decided against Assessee.
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2014 (2) TMI 1200 - CESTAT MUMBAI
Condonation of delay - Held that:- Same was not endorsed to the present appellant it is only the addendum dated 26-6-2008 is endorsed to the present appellant. In these circumstances, we find merit in the contention of the applicant that the impugned order was received by the applicants only in the month of June, 2008 along with the addendum. Thereafter appellant approached the Hon’ble Punjab & Haryana High Court and the High Court returned the petition to the appellant vide letter dated 28-2-2013 to present the same before the appropriate court along with order passed by the Hon’ble Punjab & Haryana High Court. Thereafter appellant filed present appeal on 18-3-2013. - As per the provisions of Section 129A(5) of the Customs Act 1962, Tribunal is empowered to condone the delay on showing sufficient cause for not filing the appeal within the normal period of limitation. In the present case as much time is consumed in the proceedings before the Hon’ble High Court by way of filing writ petition. In these circumstances, we condone the delay in filing the appeal. - Matter remanded back - Delay condoned.
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2014 (2) TMI 1199 - BOMBAY HIGH COURT
Rejection of books of accounts on the basis of findings during the assessment proceedings and relying on the electricity consumption - Regular assessment v/s assessment u/s. 153A - Held that:- The finding is that nothing incriminating was found in the course of search relating to these assessment years. The additions, therefore, were not corresponding to the seized material during the course of search. The relevant income tax returns, in normal course, are disclosing the particulars. They were already on record. The returns have been accepted. In such circumstances, the Tribunal, as also, the Commissioner of Income Tax (Appeals) have in their orders, held that there are several factors which have to be taken into consideration and while arriving at a conclusion with regard to the alleged production calculated on the basis of electricity consumption. Rejection of books for these years only on the ground that there has been divergence in the consumption of electricity, therefore, was held not justified.
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2014 (2) TMI 1198 - ALLAHABAD HIGH COURT
Legality of notice - Held that:- notice which has been issued, as we read it, is merely advisory by which the petitioner has been advised that a service tax is payable since the service which is rendered is taxable service under Section 65 of the Finance Act, 1994. The petitioner has been advised to pay service tax in order to avoid any penal action. - need not make any observation on that aspect as a notice is to be issued before determining the issue in accordance with law. - Petition disposed of.
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2014 (2) TMI 1197 - ANDHRA PRADESH HIGH COURT
Eligibility of deduction under Section 10(1) - whether activity of development and marketing seeds is purely a commercial activity and does not fall under Agricultural activity - ITAT allowed claim - Held that:- We are unable to accept the far-fetched idea that artificial production of seeds can be sold or used for commercial purpose.
May be a few hybrid seeds could be produced by artificial method in a laboratory. The seeds so produced with non-agricultural activity again will have to be sown in the agriculture field to have a larger quantity for sale in the market. Accordingly, we hold that the seed is a product of agricultural activity. Therefore, the sale of the same cannot be brought under the provisions of the Income Tax Act. We, therefore, upheld the decision of the learned Tribunal in this matter. - Decided in favour of assesse.
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2014 (2) TMI 1196 - CESTAT BANGALORE
Consideration of trader as manufacturer – Demand of differential CVD – Appellant claim that they are selling fans only to industrial consumers, manufacturers, and there is no retail market for these fans since only manufacturers can use it – Taking view that appellant is trader and cannot be considered as class of buyer, proceedings were initiated against appellant which has culminated in confirmation of demand for differential CVD with interest and penalty – Whether appellant being trader can be considered as manufacturer for purpose of applicability of packaged commodity – Held that:- if class of buyer is not examined and insisted upon at time of importation, it would not be possible to ensure that conditions of packaged commodities would be followed subsequently – Therefore, treatment of appellant as trader as done by impugned order seems to be correct view – Admittedly show cause notice was issued on 25-6-2013 i.e. that out of 9 months of 2012-2013, demand for first three months has to be reduced – Therefore, approximately liability that would arise on appellant is about ₹ 25 lakhs – Even though financial difficulty was mentioned during hearing, no documentary evidence was produced to show any financial difficulties – Under said circumstances, appellant directed to deposit amount – There shall be waiver of pre-deposit of balance dues and stay against recovery during pendency of appeal – Decided partially in favour of Assesse.
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2014 (2) TMI 1195 - HIGH COURT OF PUNJAB AND HARYANA
Non-compliance of provision of NDPS act – Appeal aginst Conviction – Appeal is directed against judgment of trial whereby appellant was convicted for offence under Section 15 of NDPS Act, 1985 and sentenced to undergo rigorous imprisonment alongwith fine – Appellant assailed case of prosecution on ground that appellant was apprehended on outskirts of village but no independent witness from village joined and also that there was non-compliance of provisions of Section 50 – Held that:- It cannot be believed that Inspector was not aware of fact that his colleague Inspector posted at same place was not gazetted officer – Where statute has provided deterrent type of punishment for person found in possession of narcotic it is required that case be investigated by complying all required legal formalities – Manner in which search for contraband and recover was conducted reflects that only formality was completed by police without having any real intention of giving option to appellant for his search before gazetted officer or Magistrate – Non-joining of independent witness is not such circumstance which render official witnesses totally unreliable – Case of prosecution suffers from lapses, entire process of recovery from appellant; joining of independent witness; calling of gazetted officer at spot; non-production of case property before SHO of police station reflect casual manner in which police had proceeded – Therefore, judgment of trial Court set aside – Decided in favour of Appellant.
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2014 (2) TMI 1194 - GUJARAT HIGH COURT
Provisional Release of Goods - Petitioners were alleged to have been indulged in secret removal of goods without payment of duty – Addl. Commissioner passed order and permitted provisional release of goods seized on condition of executing full value bond along with 25% cash security – According to petitioners, recording of quantity of goods, raw material as well as finished products was not accurate – Held that:- it would be appropriate to permit petitioners to clear finished goods as per provisional release order, subject to fulfilment of condition mentioned in current judgment – On application that may be made by petitioners, provisional release of raw material also permitted by competent authority – Petition disposed of.
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2014 (2) TMI 1193 - KARNATAKA HIGH COURT
Jurisdiction of Court - Confiscation - DEEC Scheme- the appellant was the holder of two DEEC Advance Licence bearing No. 07002638 dated 21-8-1998 and No. 0710000070 dated 13-5-1999, incorporating the actual user condition and issued under EXIM Policy under 1997-2002 by the licensing authority - Held that:- following the decision on the case of Commissioner of Customs, Bangalore v. Motorola India Ltd., [2011 (4) TMI 1014 - KARNATAKA HIGH COURT] ; it is held that the case does not fall within the jurisdiction of this Court as contemplated by Section 130 of the Customs Act, 1962 - Matter remanded back - Decided against Revenue.
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2014 (2) TMI 1192 - MADHYA PRADESH HIGH COURT
Penalty under Rule 27 - Delay in making duty payment - Held that:- Tribunal has allowed the entire appeal of the petitioner and the penalty imposed under Rule 25 has been quashed. However, admittedly, as there was delay in deposit of the duty, the general penalty clause under Rule 27 is enforced and a general penalty of ₹ 2,000/- was imposed for each default. In doing so, no error has been committed by the Tribunal which warrants interference - Neither, any prejudice caused was demonstrated or established before us nor is any illegality pointed in the matter of imposing general penalty under Rule 27. Admittedly, the appellant had committed a delay in deposit of the duty and if the duty was not deposited within the stipulated period, the general penalty under Rule 27 could be imposed and in doing so, as no illegality is committed and no breach of statutory provision is established, that being so, we see no reason to interfere into the matter. - Decided against assessee.
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