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Case Laws
Showing 341 to 360 of 380 Records
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2012 (1) TMI 77 - DELHI HIGH COURT
Society registered u/s 12A & 80G - pledged FDRs with a bank to enable some other societies to obtain loan from a bank – few members of the management committee of the respondent society and other two societies are common – Revenue contending violation of Section 13(1)(c)(ii) read with Section 13(3) and Explanation 3 (ii) – non-utilization of grant received fully – Held that:- A.O. has not been able to record any finding that the persons in control of the management of the three societies had, at any point of time, not less than 20% shares in the profits of such concern. This being the position, invocation of Section 13(1) (c) (ii) has to fail and is accordingly rejected. Grants were received for specific purposes/projects from the government, non-government, foreign institutions etc. In case of specific tied up grants, money is received for specific purposes and is to be utilized for the same. Unutilized amount has to be refunded back to the funding agencies. On the basis of the evidences placed on record, it is seen that the appellant is not free to use the funds voluntarily as per its will and, thus, these are not voluntary contribution as per Section 12 of the Act - Decided against the Revenue
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2012 (1) TMI 76 - KARNATAKA HIGH COURT
Revisionary powers of Commissioner u/s 263 - DTAAs with Canada and Thailand - Tribunal set aside the revisional orders of the Commissioner remanding matter to the A.O. to rework the credit in respect of Canadian and Thailand Tax claimed under Double Taxation Avoidance Agreement - Held that:- It is the duty of the assessing authority to support every conclusion and finding by it with reasons and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the revenue and therefore while the commissioner was justified in exercising the jurisdiction u/s 263, the tribunal was definitely not justified in interfering with this order of the commissioner in its appellate jurisdiction - Decided against the assessee. Reduction in tax relief on recomputation by A.O. - subject matter of appeal before Tribunal – Held that:- Tribunal had not examined the appeals of the assessee on its merits, but had simply allowed the appeals based on the premise that the revisional orders of the commissioner had been set aside by it and the revisional orders having now been restored by us in terms of the judgment in the above two appeals, the matter again has to necessarily go back to the tribunal - Decided in favor of Revenue.
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2012 (1) TMI 73 - ALLAHABAD HIGH COURT
Relief u/s 89(1) - ex-gratia payment received under VRS scheme – Revenue allowed exemption u/s 10(10C) but denied relief u/s 89(1) – Held that:- Similiar controversy is settled by the two Division Bench decisions of this Court in case of CIT vs Harendra Natah Tripathi and CIT vs Subhash Chand Goyal [2010 (7) TMI 754 - ALLAHABAD HIGH COURT] and their being no decision to the contrary. Relief u/s 89(1) is also admissible in such a case. Present appeal does not raise any question of law which requires to be decided by this Court – Decided in favor of assessee.
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2012 (1) TMI 72 - DELHI HIGH COURT
Validity of reopening of assessments - unexplained credits – amount received from company(entry provider) – assessee contending the amount to be share application money and discrediting the reasons recorded for reopening the assessment - information received by the A.O. from DIT (Inv.), who was in charge of the investigation into groups that operate as entry providers or entry operators - Held that:-Material present before the A.O. at the time of recording reasons for reopening the assessment did show a link between entry provider, with the petitioner herein together with date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the A.O., the existence of which is beyond challenge, it can hardly be said that the A.O. could not have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee. - Decided against the assessee.
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2012 (1) TMI 71 - SUPREME COURT
Plea for waiver of Pre-deposit – registered charitable society – Held that:- Having considered the matter in the light of the material on record, we are of the opinion that the ends of justice would be subserved if the appellant is directed to deposit 1/3rd of the demand raised against them towards the service tax. If the said deposit is made on or before 15th March, 2012, their appeal shall be heard by the Tribunal on merits.
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2012 (1) TMI 70 - DELHI HIGH COURT
Unlawful import of the gold - offences punishable u/s 135(1)(a) and 132 of the Customs Act – matter relates to year 1989 - petitioner has already undergone sentence for more than one month – Held that:- The instant case is of economic offence in the prospective. Therefore, while maintaining the conviction, the order dated 21.3.2003 is modified to the extent already undergone, accordingly he is released on the sentence already undergone. The criminal Revision Petition 1037/2003 is partially allowed, as prayed.
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2012 (1) TMI 68 - ALLAHABAD HIGH COURT
Simplified procedure for sanction of refund/rebate of unutilised credit/rebate claims in cases of export - denial of benefit of sanction of 80% of the rebate amount within 15 days as per Board's Circular No. 828/5/2006-CX dated 20.4.2006 on the ground that an offence has been booked against the company - show cause notice dated 21.10.2011 issued for payment of the Service Tax on 'Intellectual Property Services' received from foreign companies – Held that:- At this stage, we are not required to go into merits of the validity of the show cause notice, as proceedings of adjudication are still pending. Company has not been denied the rebate, it has only been disentitled to the benefit of the Board's Circular dated 20.4.2006. Rebate claims of the company will be processed or sanctioned as per provision of Section 11-B of the Central Excise Act, 1944. - Decided against the assessee.
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2012 (1) TMI 65 - ALLAHABAD HIGH COURT
Unexplained cash credit – deposit received – Revenue contending it to be adjustment entry & lender party to be non existing firm – Held that:- Tribunal has observed that lender company was having sufficient cash in hand, deposited the same in bank account and issued cheque in favor of assessee. lender company is an income tax assessee. Books of accounts together with Financial statements were produced. All these were taken sufficient by the Tribunal to prove the identity and source of the creditor. No infirmity is found in the order – Decided against the Revenue.
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2012 (1) TMI 60 - ITAT PUNE
Transfer Pricing – adjustment in ALP – Working Capital Adjustment to the unadjusted margins of the comparable companies – Held that:- Working capital is a factor which influence the price in the open market and constitutes a subject matter for adjustments in the matters relating to ALP in Transfer Pricing. It is the duty of the TPO to apply the provisions of rule 10B(1)(e). Net profit margin arising out of the comparable uncontrolled transactions should be adjusted to take into account differences, if any between the international transactions and filtered comparables of uncontrolled transactions or enterprises entering into such transactions, which could materially affect the amount of the net profit margin in the open market. Therefore, working capital adjustment is to be allowed while determining the Arm's Length operating Margin of the Comparables. Non granting of adjustments related to import expenses – Held that:- No doubt, a higher import content of raw material by itself does not warrant an adjustment in operating margins, but what is to be really seen is whether this high import content was necessitated by the extraordinary circumstances beyond assessee's control. Therefore, the issue should be set aside to the files of the TPO with direction to examine the claim of the assessee relating to the import cost factor and eliminate the difference if any. Applicability of proviso to section 92C(2) – Held that:- Tribunal in case of Cummins India LTD vs CIT (2011 - TMI - 207660 - ITAT PUNE) has decided in favor of the assessee in support of grant of deduction of 5%, when multiple prices in establishing the arithmetic mean are involved. Thus the assessee's ground on this issue is allowed. Incorrect computation of TP adjustment on the entire manufacturing segment sales instead of computing it sales relatable to the import of the components and spares procured from the AEs only – principle of proportionality - Held that:- TP adjustments are to computed not considering the entity level sales. Rather it should be done ideally considering the relatable sales drawing the quantitative relationship to the imports from the AEs, i.e. controlled cost. Issues related to International transaction pertaining to export of components and spares, short grant of TDS/SA and charging of interest u/s 234B and 234C of the Act – Held that:- Matters are remitted back to file of A.O. to grant necessary relief. Issues being decided in favor of assessee for statistical purpose. We remand these grounds with the direction to the AO to rework the addition.
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2012 (1) TMI 59 - HIMACHAL PRADESH HIGH COURT
Minimum Alternative Tax - computation of Book profit for the purpose of MAT – reduction of book profit by deduction allowable u/s 80HHC (Export Benefit) - whether deduction under clause (iv) of the Explanation to Section 115JB to be computed on the basis of the book profits and not on the basis of profits computed under the provisions of the Act – Held that:- The issue is no more res integra and has been decided in case of Ajanta Pharma Limited versus CIT (2010 - TMI - 77381 - Supreme Court).
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2012 (1) TMI 58 - ALLAHABAD HIGH COURT
Exemption u/s 10(10C) - ex-gratia payment received under VRS scheme – Revenue contending dis-allowance of exemption on ground that employer itself has not given any exemption U/s.10(10C) to its employees – Held that:- Similar controversy is settled by the two Division Bench decisions of this Court in case of CIT vs Harendra Natah Tripathi and CIT vs Subhash Chand Goyal (2010 -TMI - 208707 - ALLAHABAD HIGH COURT) and their being no decision to the contrary, the present appeal does not raise any question of law which requires to be decided by this Court. Further, relief u/s 89(1) is also admissible in such a case – Decided in favor of assessee.
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2012 (1) TMI 56 - CESTAT, NEW DELHI
Power of Commissioner(Appeals) to remand the matter u/s 122A of the Customs Act, 1962 - refund claim – Held that:- The power to remand the matter is specifically withdrawn u/s 122(A) of the Customs Act, 1962 and it is also upheld in case of Mil India Ltd. vs. CCE (2007 - TMI - 1196 - Supreme Court Of India). Thus, the impugned order is not sustainable. It is found that claim of refund was rejected by the adjudicating authority and documents produced before the Commissioner (Appeals) requires verification. Therefore, the matter is remanded to the adjudicating authority who will decide the matter afresh after taking into consideration the documents produced by the respondent. Appeal is disposed of by way of remand.
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2012 (1) TMI 55 - CESTAT, NEW DELHI
Commissioner (Appeals) dismissed the appeal on ground of time bar - delay of 180 days – Held that:- Section 35F of the Central Excise Act, 1944, provides that appeal is to be filed within 60 days from the date of receipt of the order and the Commissioner (Appeals) is empowered to condone further delay of 30 days. Supreme Court in the case of Singh Alloys held that Commissioner (Appeals) has no power to condone the delay beyond the period prescribed under the Central Excise Act, 1944. In the present case, there is a delay of 180 days in filing the appeal before the Commissioner (Appeals) which is beyond the condonable period. - Decided against the assessee.
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2012 (1) TMI 54 - CESTAT, BANGALORE
CENVAT credit on own final product returned by buyers – returned goods were remelted by using same machinery and fresh products emerged – duty paid on such goods – Held that:- As per Rule 16, as clarified in Chapter 18 of the Supplementary Instructions issued by CBEC, where the returned goods are subjected to a process amounting to manufacture, the manufacturer shall pay duty at the appropriate rate on the goods so manufactured, and for payment of such duty, the CENVAT credit of the duty paid on the returned goods could be utilized. - Decided in favor of assessee.
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2012 (1) TMI 53 - ALLAHABAD HIGH COURT
Rejection of application for condonation of delay – consequently dismissal of appeal on ground of limitation by Tribunal – papers of appeal were misplaced by counsel of assessee - Held that:- Tribunal ought to have taken a lenient view in the matter after all the appellant was not going to gain anything by not filing the appeal and the reasons given by the appellant was the mistake of its counsel who had also filed his personal affidavit. Therefore, Tribunal is directed to decide the appeal in accordance with law – Decided in favor of assessee.
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2012 (1) TMI 52 - SUPREME COURT
Scope of total income - Revenue seeks to tax the capital gains arising from the sale of the share capital of CGP on the basis that CGP, whilst not a tax resident in India, holds the underlying Indian assets. - Held that:- Applying the look at test in order to ascertain the true nature and character of the transaction, we hold, that the Offshore Transaction herein is a bonafide structured FDI investment into India which fell outside India’s territorial tax jurisdiction, hence not taxable. The said Offshore Transaction evidences participative investment and not a sham or tax avoidant preordained transaction. The said Offshore Transaction was between HTIL (a Cayman Islands company) and VIH (a company incorporated in Netherlands). The subject matter of the Transaction was the transfer of the CGP (a company incorporated in Cayman Islands). Consequently, the Indian Tax Authority had no territorial tax jurisdiction to tax the said Offshor Transaction.
FDI flows towards location with a strong governance infrastructure which includes enactment of laws and how well the legal system works. Certainty is integral to rule of law. Certainty and stability form the basic foundation of any fiscal system. Tax policy certainty is crucial for taxpayers (including foreign investors) to make rational economic choices in the most efficient manner. Legal doctrines like “Limitation of Benefits” and “look through” are matters of policy. It is for the Government of the day to have them incorporated in the Treaties and in the laws so as to avoid conflicting views. Investors should know where they stand. It also helps the tax administration in enforcing the provisions of the taxing laws. As stated above, the Hutchison structure has existed since 1994. According to the details submitted on behalf of the appellant, we find that from 2002-03 to 2010-11 the Group has contributed an amount of ₹ 20,242 crores towards direct and indirect taxes on its business operations in India.
Transfer outside India - held that:- On transfer of shares of a foreign company to a nonresident off-shore, there is no transfer of shares of the Indian Company, though held by the foreign company, in such a case it cannot be contended that the transfer of shares of the foreign holding company, results in an extinguishment of the foreign company control of the Indian company and it also does not constitute an extinguishment and transfer of an asset situate in India. Transfer of the foreign holding company’s share off-shore, cannot result in an extinguishment of the holding company right of control of the Indian company nor can it be stated that the same constitutes extinguishment and transfer of an asset/ management and control of property situated in India.
Section 9 has no “look through provision” and such a provision cannot be brought through construction or interpretation of a word ‘through’ in Section 9. In any view, “look through provision” will not shift the situs of an asset from one country to another. Shifting of situs can be done only by express legislation.
Capital gains are chargeable under Section 45 and their computation is to be in accordance with the provisions that follow Section 45 and there is no notion of indirect transfer in Section 45. - Section 9(1)(i), therefore, in our considered opinion, will not apply to the transaction in question or on the rights and entitlements, stated to have transferred, as a fall out of the sale of CGP share, since the Revenue has failed to establish both the tests, Resident Test as well the Source Test.
Deduction of TDS u/s 195 - Territorial jurisdiction - Article 246 of the Constitution gives Parliament the authority to make laws which are extra-territorial in application. Article 245(2) says that no law made by the Parliament shall be deemed to be invalid on the ground that it would have extra territorial operation. Now the question is whether Section 195 has got extra territorial operations. It is trite that laws made by a country are intended to be applicable to its own territory, but that presumption is not universal unless it is shown that the intention was to make the law applicable extra territorially.
Section 195, in our view, would apply only if payments made from a resident to another non-resident and not between two nonresidents situated outside India. In the present case, the transaction was between two non-resident entities through a contract executed outside India. Consideration was also passed outside India. That transaction has no nexus with the underlying assets in India.
Order of Bombay High Court set aside - decided in favor of assessee.
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2012 (1) TMI 48 - DELHI HIGH COURT
Preemptive purchase by the Central Government u/s 269 UD (1) - apparent consideration appeared to be understated - petitioner(transferee) argued for rebate to be allowed in the value of property determined by appropriate authority on following grounds - Appropriate authority, has ignored the encumbrances, suits and disputes with regard to the property – Held that:- Disputes with third party could have a depressing effect on the fair market value of the property. In present case disputes and suits were between the transferors and the petitioner which were ultimately settled , and not between transferors and third parties. Therefore value for a property has been rightly determined which was free from any disputes or suits. No title deeds to the property are available - absence of the title deeds to the property depresses its value – Held that:- Appropriate authority were informed about the loss of the original title deed to the subject property and the issue of a public notice in the newspaper regarding the loss of the original title deed was directed by this Court. No claim was made or dispute raised by any person on the subject property in response to the notice in the newspaper. Therefore, such loss of the original title deed cannot be said to have had any adverse impact on the fair market value of the property. Subject property was wrongly compared with another property - properties, considering their widely different locations, cannot be compared – Held that:- properties appear to be located in substantially comparable locations, both having quick access to schools, commercial areas, markets, etc. Further, petitioner has also not been able to bring on record any sale instance in the vicinity of the subject property. There are 9 transferors involved in the property - Held that:- Since no merit is found in the first argument of the petitioner, this limb of the argument also is rejected. Authority should record a finding of understatement of the sale consideration in order to justify the pre-emptive purchase of the property – Held that:- No requirement is laid down that the appropriate authority must record a finding of actual understatement. In present case, Petitioner has been informed of the sale instance of another property & its proposed comparison in the show cause notice. Thus a prima facie case of understatement of the true sale consideration was made out . Petitioner has been given full liberty of rebutting the allegation of under-statement of the apparent consideration which he has not attempted . Therefore the presumption has been rightly drawn about understatement. - Decided against the petitioner.
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2012 (1) TMI 47 - SUPREME COURT
Doctrine of restitution - Sales Tax incentive under the Government of Gujarat "Capital Investment Incentive to Premier/Prestigious Unit Scheme, 1995-2000" being opted by Essar – commencement of commercial production got delayed due to writ petition in the nature of PIL filed before the High Court - Government extended the time upto 15.08.2003 – request for further extension by company got denied - writ petition filed by company in High Court on ground that delay in commencement of commercial production was on account of the injunction granted by the High Court - High Court extended the time limit for commencement of commercial production from 15.08.2003 to 02.04.2007 - firstly on the principle of restitution and secondly, that the company cannot be made to lose the benefit under the Sales Tax Waiver Scheme, for an act of Court – Government argued that impugned judgment is not by consent – Held that:- The concept of restitution is a remedy against unjust enrichment or unjust benefit. Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. In present case, the State has not at all gained or received any benefit as a result of the stay orders passed by the High Court on the second PILs. Therefore, the principle of restitution cannot be applied against the State. The judgment of the High Court to that extent is erroneous. Regarding second principle that the company cannot be made to lose the benefit, for an act of Court - Held that:- Mere mistake or error committed by Court cannot be a ground for restitution. This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State. Therefore, judgement of High Court is set aside.
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2012 (1) TMI 42 - PUNJAB AND HARYANA HIGH COURT
Plea for restoring penalty imposed in the original order – shortage of inputs found during search - duty has been paid along with admissible interest – CESTAT upheld order of Commissioner(Appeals) reducing penalty - Held that:- Discretion exercised by the CESTAT does not suffer from any jurisdictional error nor it violates any provision of law. Further, Revenue has not been able to point out anything from the record for taking a view different than the one taken by the CESTAT and the Commissioner (Appeals). - Decided against the Revenue.
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2012 (1) TMI 40 - GUJARAT HIGH COURT
Validity of re-opening of assessment beyond the period of four years from the end of the relevant A.Y. 2004-05 - reasons recorded does not allege failure on the part of the assessee to disclose fully all material facts – Held that:- The only reason for re-opening of assessment was that the housing project developed by the petitioner occupied commercial establishment exceeding 5% of the constructed area. Admittedly, clause (d) of section 80IB(10) restricting commercial construction, not to be in excess of 5% was introduced subsequently and does not have retrospective effect. In that view of the matter, there was no scope for reopening the assessment already closed. Further, there is no allegation that the assessee had concealed any material particularly – Decided in favor of assessee.
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