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Showing 441 to 460 of 1238 Records
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2012 (12) TMI 799
Scheme of Arrangement - Held that:- The requirement of convening meetings of Equity Shareholders, Secured and Unsecured Creditors of the Petitioner Companies is dispensed with - Affidavit of service and publication of notice has been filed by the petitioners showing compliance regarding service of the petition on the Regional Director, Northern Region and the Official Liquidator.
Report of Official liquidator that he has not received any complaint against the proposed Scheme from any person/ party interested in the Scheme - approval accorded by the Shareholders and Creditors of the petitioner Companies, representations/ reports filed by the Regional Director, Northern Region and the official liquidator to the proposed scheme of Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement - The petitioner companies will comply with the statutory requirements in accordance with law with filing certified copy of the formal order with the ROC within 30 days - this order will not be construed as an order granting exemption from payment of stamp duty or any other charges - Petitioner Companies would voluntarily deposit a sum of Rs. 1 Lac in the Common Pool fund of the Official Liquidator within three weeks from today.
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2012 (12) TMI 798
Refund claim for the excise duty - denial of claim - Held that:- Purchaser being the defence organisation of Government of India, the question of passing on the excise duty to any other person does not arise and ordnance depot not being a manufacturer of any goods, could not have taken Cenvat Credit - Refund claim of respondent accepted - against Revenue.
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2012 (12) TMI 797
Carry forward and set-off of underutilized cenvat credit - change of status due to amalgamation - Held that:- Merger causes diminishing of the status of amalgamating companies after amalgamation. No Right existing before amalgamation cannot be claimed to be a right existing amalgamation - Carry forward and Set-off of unutilised cenvat credit in the hands of amalgamated company is denied - in favour of Revenue.
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2012 (12) TMI 796
Reversal of Credit proportionate to the inputs used in or in relation to the manufacture of the exempted goods - Held that:- The applicants are procuring iron ore and metallurgical coke and only screening the same and during the process of screening the iron ore fine and coke breeze come into existence which is not fit for use in the manufacture of pig iron and the same are being cleared without payment of duty. As the provisions of Rule 6 of the Cenvat Credit Rules are amended retrospectively and the manufacture has to reverse the credit proportionate to the inputs used in or in relation to the manufacture of the exempted goods, the applicants are directed to deposit Rs. 8,00,000/- within six weeks.
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2012 (12) TMI 795
Breakage of glass bottles during the manufacture of aerated beverages - denial of credit relying on Boards circular dated 9.7.2010 - Held that:- The period of demand in the present case is November 2009 to June 2010 i.e. prior to the issue of the circular dated 9.7.2010 to be treated as prospective in nature and cannot be held to be retrospective.
During the period in dispute, there was a Board circular dated 17.9.1975 which clarifies that the breakage of bottles in the manufacture of aerated beverages upto 0.5% is condonable and manufacturer is not liable to reverse the credit - in favour of Appellant.
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2012 (12) TMI 794
Condonation of Delay of 388 days - Held that:- The delay has consciously occurred in the hands of the appellant. The huge gaps between two actions like sending the order to the Circle office, advise of the advocate, subsequent visit of the Accounts Officer and handing over of papers to the advocate, reflects upon very casual approach adopted by the appellant which cannot be considered to be reasonable. As such no reason to condone the huge delay of 388 days - stay petition and appeal dismissed as barred by limitation.
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2012 (12) TMI 793
Refund of input service tax credit for the activities undertaken within the SEZs - Business Auxiliary Services - Held that:- As clarified by the Board in the Circular no. 105/8/2008 dated 16.09.2008 it is for the jurisdictional Excise/Service Tax authorities to deal with the refund claims filed by the SEZ units. Therefore, it is very clear that the appellant is eligible for refund of service tax paid which was not required to be paid under section 11B of the Act itself, provided that the appellant has filed the refund claim within the prescribed time-limit and the bar of unjust enrichment does not apply.
As the appellant has exported the output service the principle of unjust enrichment does not apply - remand the case back to the original adjudicating authority to examine the claim with respect to the time-limit involved and if the refund claim is in time, to sanction it - in favour of assessee by way of remand.
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2012 (12) TMI 792
Reverse charge - revenue neutral - extended period of limitation - External Commercial Borrowings (ECB) under "Banking and Other Financial Services" - Liability to pay Service Tax - Held that:- Appellants were eligible for CENVAT credit for the amount paid as Service Tax and, therefore, this is a situation which was revenue neutral and by not paying the Service Tax immediately, appellants have lost more than Rs.26,00,000/- paid by them as interest which would not have become payable if Service Tax was paid promptly and taken as credit. No service recipient would evade payment of Service Tax and become liable to pay interest which cannot be taken as credit.
Therefore, it cannot be said that there was mis-declaration or suppression in the action of the appellants rendering them liable to penalty under various Sections of the Finance Act, in view of the fact that the demand itself is time barred since extended period could not have been invoked.
Since appellants are not contesting demand for Service Tax and interest paid by them, the confirmation of demand for Service Tax and interest thereof has to be upheld as not contested and penalties have to be set-aside - appeal is allowed to the extent of penalties imposed under various sections which are set-aside.
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2012 (12) TMI 791
Denial of Cenvat Credit - seeking waiver of pre-deposit, Interest and Penalty - Custom House Agents service, Telephone service, Insurance service and repairs and maintenance of factory and vehicles services - Held that:- Cenvat credit in respect of Custom House Agents service was in connection with the export of goods from the port as held in the case of Rolex Rings Pvt. Ltd (2008 (2) TMI 295 - CESTAT, AHMEDABAD) credit of service tax paid on these services is admissible to the applicant.
Service tax paid on telephone and insurance charges in respect of plant and machinery and employees are also covered by the decision of Keltech Engineers vs. CCE [2008 (1) TMI 96 - CESTAT BANGALORE].
Insurance charges in respect of goods in transit - This service is availed by the applicant after removal of the goods from the factory to their buyers and it is not covered in the definition of the input service under the Cenvat Credit Rules. Therefore, applicant is directed to make pre-deposit of ₹ 15,000/- within four weeks and report compliance on 12/10/2012.
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2012 (12) TMI 790
RTI application to Superintendent in the State Excise Department (PIO) - information regarding the persons appointed through a reservation category, their names,joining and appointed date & the report of Caste Verification Committee of the persons selected from the reserved category & the persons whose caste certificate is forwarded after due date - whether there is any violation of principles of natural justice in the present case?
Held that:- The appellant had received the application from respondent No.2 requiring the information sought for on 3rd January, 2007. He had, much within the period of 30 days (specified under Section 7), sent the application to the concerned department requiring them to furnish the requisite information. The information had not been received. May be after the expiry of the prescribed period, another letter was written by the department to respondent No.2 to state the period for which the information was asked for. This letter was written on 11th April, 2007. To this letter, respondent No.2 did not respond at all. In fact, he made no further query to the office of the designated Public Information Officer as to the fate of his application and instead preferred an appeal before the Collector and thereafter appeal before the State Information Commission. In the meanwhile, the appellant had been transferred in the Excise Department from Nanded to Akola.
If the appellant was given an opportunity and had appeared before the Commission, he might have been able to explain that there was reasonable cause and he had taken all reasonable steps within his power to comply with the provisions. The Commission is expected to formulate an opinion that must specifically record the finding as to which part of Section 20(2) the case falls in. For instance, in relation to failure to receive an application for information or failure to furnish the information within the period specified in Section 7(1), it should also record the opinion if such default was persistent and without reasonable cause.
It appears that the facts have not been correctly noticed and, in any case, not in their entirety by the State Information Commission. It had formed an opinion that the appellant was negligent and had not performed the duty cast upon him. The Commission noticed that there was 73 days delay in informing the applicant and, thus, there was negligence while performing duties. If one examines the provisions of Section 20(2) in their entirety then it becomes obvious that every default on the part of the concerned officer may not result in issuance of a recommendation for disciplinary action. The case must fall in any of the specified defaults and reasoned finding has to be recorded by the Commission while making such recommendations. ‘Negligence’ per se is not a ground on which proceedings under Section 20(2) of the Act can be invoked. The Commission must return a finding that such negligence, delay or default is persistent and without reasonable cause. Thus it may be concluded that the Commission, in the present case, has erred in not recording such definite finding. The appellant herein had not failed to receive any application, had not failed to act within the period of 30 days (as he had written a letter calling for information), had not malafidely denied the request for information, had not furnished any incorrect or misleading information, had not destroyed any information and had not obstructed the furnishing of the information.
Besides finding that any of the stated defaults have been committed by such officer, the Commission has to further record its opinion that such default in relation to receiving of an application or not furnishing the information within the specified time was committed persistently and without a reasonable cause. Use of such language by the Legislature clearly shows that the expression ‘shall’ appearing before ‘recommend’ has to be read and construed as ‘may’.
The appellant here had shown that the default, if any on his part, was not without reasonable cause or result of a persistent default on his part. On the contrary, he had taken steps within his power and authority to provide information to respondent No.2. It was for the department concerned to react and provide the information asked for. In the present case, some default itself is attributable to respondent No.2 who did not even care to respond to the letter of the department dated 11th April, 2007. The cumulative effect of the above discussion is that unable to sustain the order passed by the State Information Commission dated 26th February, 2008 and the judgment of the High Court under appeal. Both the judgments are set aside and the appeal is allowed - direct the State Information Commission to decide the appeal filed by respondent No.2 before it on merits and in accordance with law.
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2012 (12) TMI 789
Deduction u/s 80-IA - Diagnostic Centre - an industrial undertaking - assessee established a new MRI unit - ITAT allowed the claim - Held that:- A joint reading of Section 80IA and Section 33B states the first condition spelt out in sub-section (2) (iii) is that the industrial undertaking “manufactures or produces any article or thing”, the second condition is that the “article or thing” should not be listed in the Eleventh schedule. The third aspect is that Section 33-B contains a somewhat wider definition of “industrial undertaking”, it posits that the unit should be an “undertaking which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining”.
As decided in Insight Diagnostic and Oncological Research Institute P. Ltd. v. DCIT [2003 (4) TMI 79 - BOMBAY HIGH COURT] the CT scan machine as installed in a diagnostic centre is not an industrial undertaking for the purpose of business manufacture. In this connection, one must read the expression “industrial undertaking” in the context of the Income Tax Act and not in the context of the Industrial Disputes Act and, if so read, it is clear that the activity should be of production of any article or thing and any activity which primarily concerns production of any article or thing would fall in the category of industrial undertaking…… - the report of patients coming from the CT scan machine did not amount to manufacture or production of article or thing and therefore, one of the basic tests laid down in CIT v Shaan Finance Pvt. Ltd (1998 (3) TMI 8 - SUPREME COURT) is not satisfied
The unit or undertaking must engage in production of an article or thing – be it in the context of Section 32A or Section 10 (15). Such consideration is equally important and relevant for applicability of Section 80-IA by virtue of Sub-section (2) (iii) of that provision. What emerges from all these decisions, and the relevant provisions – i.e. Sections 80-IA and 33-B that the unit or activity is deemed an industrial undertaking, if it is involved in production of goods or articles - as in the present case there is no change of the article, the intention of the service provider is not to produce the article – the film is the medium in which what is recorded is made available for interpretation by the physician or doctor. If it can be more conveniently given in a pen drive or even over the internet, the question of production of goods or article would not arise - in favour of the revenue
While the benefit which might flow to the general public if diagnostic facilities are deemed industrial undertakings is undeniable, as it would probably result in lower cost of diagnosis of diseases and conditions, yet that result cannot be achieved by doing violence to the statute, in the guise of interpretation. The remedy (to this perceived mischief) is clearly elsewhere.
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2012 (12) TMI 788
Rectification of mistake - the decision on the issue of profit attributable to the PE of the assessee in India has been decided by the Tribunal ignoring or overlooking Article 7(3) of India UK DTAA - Held that:- The controversy involved in relation to the issue was correctly understood by the Tribunal and even the reasons given by the CIT(Appeals) to give relief to the assessee on the said issue were identified by the Tribunal. One of the reasons so given by the CIT(A) as identified by the Tribunal was based on Article 7 of the India-UK treaty and the said Article including para 3 thereof was not only reproduced by the CIT(Appeals) in paragraph No. 6.5 of his impugned order but the same was also discussed and dealt with by him in paragraph No. 6.12 of the said order before giving relief to the assessee relying on the same.
As clearly mentioned by the Tribunal in paragraph No. 141 of its order, the legal position applicable to the issue was carefully considered by it which obviously included Article 7(3) of the India-UK treaty relied upon by the CIT(Appeals) and after taking the same into consideration, it was held by the Tribunal that the provisions of Article 7(1) in India-UK treaty included the same results as sought to be achieved by Article 7(1)(c) of the UN Model Convention. Accordingly, relying on the UN Model Convention commentary on this issue, a considered view was taken by the Tribunal that the connotation of "profits indirectly attributable to permanent establishments" did extend to incorporation of the force of attraction rule being embedded in Article 7(1). Keeping in view this text and context of the order of the Tribunal, it cannot be said that the Tribunal has ignored or overlooked Article 7(3) of India-UK treaty while rendering its decision on this issue and that there is any mistake apparent from record in the order of the Tribunal on account of non-consideration of the said article as alleged by the assessee.
Contention raised on behalf of the assessee that the scope of Article 7(1)(c) of U.N. Model Convention is limited to activities carried on in India only, it is observed that the Tribunal has taken a considered view on interpretation of the said Article that the entire profit relating to services rendered by the assessee whether rendered in India or outside India, in respect of Indian Project is taxable in India and it is not permissible to review the decision of the Tribunal in the guise of rectification u/s 254(2) - The decision in the present case, thus has been rendered by the Tribunal on its own facts and by applying the provisions of different Treaty. Thus it cannot be straightway inferred that the same is contrary to the decision of the Hon'ble Supreme Court in the case of Ishikawajima-harima Heavy Industries Ltd. (2007 (1) TMI 91 - SUPREME COURT ) giving rise to a mistake apparent from record - Miss application dismissed.
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2012 (12) TMI 787
Installation expenditure - Revenue v/s Capital - Held that:- This Court recalls the judgment of the Supreme Court in Challapalli Sugars Ltd. v. CIT [1974 (10) TMI 3 - SUPREME COURT] that whether an expenditure necessary to bring an asset into existence and to put it in working condition was capital or revenue - The test “all expenditure necessary to bring such aspects into existence and to put them in a working condition” is a determinative test for installation and other charges needed to effectuate the working condition of the leased equipment. In this case clearly the authorities have applied the test and held the expenditure in question (Rs.1,35,05,869/-) to be properly falling in the capital field. No reason to differ with them - in favour of the revenue.
Software expenses - Revenue v/s Capital - Held that:- The Tribunal had the benefit of considering all the documents which included the lease agreement with Bharti Telenet and the license agreement dated 11.11.1996 whereby the assessee secured license to exploit the software, provided it procured hardware as per agreed specification and also complied with order by the lessor UB Vest. The software as well as hardware were made an integral part of the arrangement. The software apparently caters to the hardware. In this case, it is necessary for the kind of software to cater to diverse activities such as billing regarding user and analyzing such like activities to promote speed and efficiency. That the parties chose to have a composite arrangement is one factor which the Tribunal was entitled to take into consideration. The Tribunal in our opinion correctly held that the test to discern whether the expenditure incurred by the assessee in this regard was capital or revenue did not in any manner differ from the content or character which were applicable while considering issue No.1 - no reason to differ from the Tribunal - in favour of the revenue.
Write off as bad debt as a business loss - Held that:- As held by Tribunal MOA & AOA shows sufficiently the intention of the assessee to pursue certain main objects. The frequency of the activity is sought to be highlighted as giving rise to a continuous and organized activity. As held by AO the main activity of the assessee company was the business of promoting, establishing telecom services. By no stretch of imagination can it be said that the assessee was engaged in the business of money lending. Since the business of the assessee was not that of money lending, it cannot be said that the sum in question represents money lent in the ordinary course of the business of money lending carried on by the assessee. Therefore, the claim of the assessee did not fall within the parameters of provisions of section 36(1)(vii) r.w.s. 36(2). The sum in question should be allowed as a deduction as a business loss cannot also be accepted, since the sum in question was not incurred as expenditure in the ordinary course of business of the assessee - as decided in Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT [1997 (7) TMI 4 - SUPREME COURT] inter-corporate deposit was not a trade debt or part of any money-lending business - no error in the findings by the Tribunal on this - in favour of Revenue.
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2012 (12) TMI 786
Assessment in case of search or requisition - Notice u/s 153A - assessee contested on no material which would implicate in the earning of any undisclosed income was unearthed during the search - Held that:- There exists sufficient and relevant material which could form the basis of the satisfaction note and the reason to believe that the petitioner has earned income which was not disclosed to the income tax authorities.
Section 153A was introduced by the Finance Act, 2003 w. e. f. 01.06.2003 and it provides for assessment in the case of search or requisition. It is mandatory for the assessing officer, whenever there is a search under section 132, to issue notice to the person searched requiring him to furnish the returns of income for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. There is an Explanation to the section which provides that all other provisions of the Income Tax Act shall apply to the assessment made under this section, which means that the provisions of section 142, 143, etc. are applicable and these provisions ensure that reasonable opportunity is afforded to the petitioner to put forth his case. Therefore, unable to accept the contention of the petitioner that he would be put to harassment because of the notices issued under section 153A. The section is couched in mandatory language which implies that once there is a search, the assessing officer has no option but to call upon the assessee to file the returns of the income for the earlier six assessment years.
It is not merely the undisclosed income that will be brought to tax in such assessments, but the total income of the assessee, including both the income earlier disclosed and income found consequent to the search, would be brought to tax. There is also a time limit for completion of the assessment under section 153A which is prescribed in section 153B. In these circumstances the petitioner's contention that he would be put through unnecessary harassment is a non-starter. He has to face the assessment proceedings and participate in them, in case he has evidence or material to show that he has not earned any income which is not disclosed to the income tax authorities or to rebut the material gathered during the search, it is perfectly open to him to do so - while a certain degree of hardship which would occur to any assessee whose premises are searched, that does not afford it any higher right or confer greater remedies, or expand the scope of a limited jurisdiction under Article 226. The present petition is therefore speculative, and misconceived - writ dismissed - costs quantified at Rs.75,000/- payable to the Prime Minister‟s relief fund to be paid by assessee.
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2012 (12) TMI 785
Re opening of assessment - whether a pre-condition for issuance of notice u/s 147/ 148 are satisfied ? - Royalty or Technical Fee received - India USA DTAA - Held that:- The declaration of law by the Supreme Court in Calcutta Discount Co. v. ITO, (1960 (11) TMI 8 - SUPREME COURT) applies squarely to the facts in this case it was held by the Supreme Court that the duty of the assessee to make full disclosure extends to primary facts. Once that is done, it is the AO's duty to draw the conclusion and inference flowing from the disclosure so made.
The assessment record reveals that the Master licensing agreement (MLA) had been placed on the record of the AO in the very first instance when the assessment was completed under section 143(3). Thereafter the reassessment proceedings were initiated in November, 2003 and completed in March, 2005; for those proceedings too what drove the Revenue to issue notice and reopen the proceedings was the master licensing agreement and the nature of "royalty income". The assessing officer in that instance consciously after going through the material concluded that the rate of taxation was 15% in the reassessment proceedings. The scope was the same as in the original proceeding and in the first reassessment proceedings i.e. the taxability of the royalty income under section 44D - the assessment record reveals that the MLA had been placed on the record of the assessing officer in the very first instance when the assessment was completed under section 143(3). Thereafter the reassessment proceedings were initiated in November, 2003 and completed in March, 2005, for those proceedings too what drove the Revenue to issue notice and reopen the proceedings was the master licensing agreement and the nature of "royalty income". AO in that instance consciously after going through the material concluded that the rate of taxation was 15% in the reassessment proceedings. The scope was the same as in the original proceeding and in the first reassessment proceedings i.e. the taxability of the royalty income under section 44D - the conclusions drawn by the CIT (Appeals) and ITAT cannot be faulted in law. The substantial question of law is answered in favour of the assessee.
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2012 (12) TMI 784
Re opening of assessment - assessee contested against non furnishing of “reasons to believe” - Held that:- The decision in G.K.N Driveshafts (India) Ltd. Versus ITO And Others (2002 (11) TMI 7 - SUPREME COURT) gives an indication that the requirement of passing the speaking order would provide an opportunity to the assessed to challenge the same by way of a writ petition under Article 226. To afford the assessee an opportunity to put before the tax authorities his point of view, before the reassessment proceedings are completed
The basic requirement of the statute is the recording of the “reasons to believe” under Section 147. That done, all the Supreme Court opined was about the necessity of providing reasons for issuance of notice under Section 147, if the same are sought, to afford a reasonable and fair opportunity to the assessee to file his objections, and dispose of the same by a speaking order. The rest has been left to the Court's concern to be dealt within individual cases. Having regard to the facts and circumstances, this Court is of the opinion that even the question whether the petitioner was afforded a reasonable opportunity could be gone into by the CIT( Appeals) before whom the appeal is pending. It is open to the assessee to urge the question of denial of opportunity along with the other issues on merits. All rights and contentions are expressly reserved.
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2012 (12) TMI 783
Deduction u/s 80IB – Denial of Profit from DEPB - gross sale v/s net sales - Held that:- This issue is no more res integra in view of the judgment of M/s Liberty India Versus Commissioner of Income Tax [2009 (8) TMI 63 - SUPREME COURT] wherin held that deduction u/s 80-IB cannot be allowed on the amount of DEPB and duty drawback credited to the profit and loss account - the case of M/s Topman Exports Versus Commissioner of Income Tax, Mumbai [2012 (2) TMI 100 - SUPREME COURT OF INDIA] relied upon by assessee is not applicable to the fact situation prevailing in these grounds - against assessee.
Exclusion of interest on fixed deposits from eligible profits for the purposes of deduction u/s 80-IB and 80HHC - Held that:- As decided in Pandian Chemicals Ltd. v. CIT [2003 (4) TMI 3 - SUPREME COURT] interest income does not qualify for deduction u/s 80-HH as it cannot be characterized as having been derived from industrial undertaking in the language of section 80-IB also, similar expression - Rs.derived from’- has been employed which is there in section 80-HH. As the interest on fixed deposits from bank cannot be held to be Rs.derived from’ eligible undertaking, in our considered opinion, the same cannot qualify for deduction u/s 80-IB. As the interest income in the present circumstances as 'Business income’, it will merit inclusion at the first instance and thereafter 90% of the net interest is to be allowed as per the mandate of the Hon’ble Supreme Court in the case of ACG Associated Capsules Pvt. Ltd. v. CIT [2012(2) TMI 101 - SUPREME COURT OF INDIA] - direct the AO to reduce 90% of the net interest income after verifying the amount liable to be deducted from the gross interest receipt
Deduction u/s 80-IB - Exchange fluctuation gain – Held that:- Assessee was held to be eligible for deduction in respect of foreign exchange gain relying on CIT v. United Riceland Ltd. []. No contrary judgment has been brought to notice - ground of appeal allowed.
Deduction u/s 80HHC on processing charges and Scrap sales – Held that:- As decided in CIT v. Dresser Rand India Pvt. Ltd. [2010 (4) TMI 153 - BOMBAY HIGH COURT] following the judgment in the case of K.Ravindranathan Nair [2007 (11) TMI 10 - SUPREME COURT OF INDIA] the amount of processing charges are not eligible for deduction u/s 80HHC but deserves to succeed insofar as the question of deduction u/s 80-IB on the amount of processing charges is concerned - the assessee to be eligible for deduction u/s 80HHC / 80-IB on the amount of scrap sales.
Deduction u/s 80HHC on DEPB license - Held that:- As per M/s Topman Exports Versus Commissioner of Income Tax, Mumbai [2012 (2) TMI 100 - SUPREME COURT OF INDIA] the assessee cannot be denied deduction u/s 80HHC on DEPB licenseb - in favour of assessee.
Addition in respect of MODVAT Credit – Held that:- Amount of tax, duty, cess etc. is liable to be included in the value of purchases, sales, opening and closing stock. It is not appropriate to include the closing Modvat in the figure of closing stock without modifying the figures of purchases, sales and opening stock as confirmed in CIT Versus MAHALAXMI GLASS WORKS P. LTD. [2009 (4) TMI 182 - BOMBAY HIGH COURT]- restore the matter to the file of A.O. for deciding it afresh in accordance with the afore-noted judgements and the provisions of section 145A - These grounds are, therefore, allowed.
Disallowance on account of life membership fee of N.S.C.I. – Held that:- The issue raised in this ground is fairly settled in assessee’s favour in view of the binding precedents of the Hon’ble High Court in the case of Otis Elevator v. CIT [1991 (4) TMI 53 - BOMBAY HIGH COURT] on the point - in favour of assessee.
Deduction u/s 80HHC - Rate difference, Discount received and Sundry expenses written off – Held that:- Assessee could not produce any material on record to indicate the details of such amounts. Also in the appeal of the assessee as well as Revenue, the third item has been mentioned as “Sundry expenses written off”. It is obvious that the Rs.write off’ of any amount is always debited to the Profit and loss account and hence there can be no question of any deduction on such amount. Be that as it may, the availability of deduction u/s 80-IB / 80HHC cannot be adjudicated in respect of these three amounts unless their nature is clearly put forth - set aside the impugned order and remit the matter back to AO for deciding this issue afresh.
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2012 (12) TMI 782
Delayed PF Payments u/s 43B – Following the decision of court in case of [CIT vs Cranes Ltd, 2007 (10) TMI 386 - BOMBAY HIGH COURT] if payment have been made during the financial year or before filing of return amount in question has to be allowed - matter should be remitted back to the file of the AO to verify the claim made by the assessee.
Disallowance on gifts and presentation – Held that:- Although expenditure incurred was wholly and exclusively for carrying out business but expenditure without evidence were not allowable - FAA has power coterminous with AO, but then his duties are same as that of the AO. Any adverse inference has to be confronted to the assessee before deciding an issue against the assessee - matter should be restored back to the file of the AO for fresh adjudication.
Disallowance of Commission – Held that:- Though assessee has claimed that necessary evidences were produced, yet from the order of the AO, it is clear that factum of rendering of service was not established. FAA has doubted the genuineness of the papers, but did not afford an opportunity to the assessee to rebut his conclusions. As FAA should have confronted the assessee with his above findings & as the AO had no occasion to go through the paper, so, in the interest of justice,the matter remitted back to the file of the AO.
Disallowance of Bad Debts – Held that:- Once assessee writes off the bad debts in his Books of Accounts he has to prove nothing - as decided in T.R.F. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee - Appeal of the assessee stands partly Allowed.
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2012 (12) TMI 781
Applicability of sec 50 C on transfer of Leasehold Rights – Held that:- From the plain reading of the language of Section 50C (1), it is clear that value of land or building or both adopted or assessed or assessable by the Stamp Valuation Authority shall, for the purpose of Section 48, deemed to be full value of consideration accruing as a result of such a transfer. Section 50C(1) is of a deeming provision and it extends only to land or building or both. Such a deeming provision has been incorporated to substitute the value adopted by the Stamp Valuation Authority in place of consideration received or accruing as a result of transfer. The deeming provisions as contemplated in Section 50C however does not extend to lease rights in a land - Thus, respectfully following the decisions Atul G. Puranik Versus ITO [2011 (5) TMI 576 - ITAT, MUMBAI] & DCIT Vs. Tejinder Singh [2012 (3) TMI 47 - ITAT, KOLKATA] provision of Section 50C would not be applicable on the transfer of lease hold rights on the land.
Thus going through the material placed on record like copy of agreement dated 5-11-1974 between MIDC and the assessee and the agreement dated 16-10-2006 between the appellant and Karamtara Engineering (P) Ltd. and also the valuation adopted by the Stamp valuation authority, it can be fairly concluded that it is a transfer of leasehold rights therefore, the finding given by the CIT(A) for non applicability of Sec 50C are confirmed - appeal filed by the department dismissed.
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2012 (12) TMI 780
Sale and Purchase of Shares – Business Income vs Capital Gain - Held that:- Appellant has earned business income on non delivery based transactions for A.Y.2004-2005 but that does not mean that income earned on sale of shares held as investment can be taxed as business income in the subsequent years. The appellant has made clear distinction between delivery based and non delivery based transactions and admitted income accordingly and except for A.Y.2004-2005, the appellant did not indulge in any non delivery based share transactions. Thus even shares purchased as investment had to be sold within a short time depending on the market conditions. Thus, the sale of shares was only with a view to protect the amount invested by the appellant which would not convert the investment into stock-in trade.
It is found from the balance sheet filed that the appellant held shares as investment and after transferring the shares in the name of the appellant the shares were sold as evidenced by the demat account and the STT was paid at a higher rate application to the investor and stand of the A.O. is no longer valid in the light of the decision of CIT Versus Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT] - in favour of assessee.
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