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Showing 41 to 60 of 1429 Records
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2014 (2) TMI 1393
Addition made under the head ‘capital gains’ - Joint Development agreement taken as ‘sale deed’ - assessee argued merely signing of a tripartite Joint Development Agreement by the Society with M/s. Hash Builders and with M/s. Tata Housing Development Co. Ltd (THDC), did not result into accrual of the alleged capital gain to the assessee - relevant provisions of section 2(47) as also the provisions of section 53A of the Transfer of property Act - HELD THAT:- As decided in SHRISATNAM SINGH KAINTH [2013 (9) TMI 229 - ITAT AMRITSAR] and CHARANJIT SINGH ATWAL [2013 (8) TMI 364 - ITAT CHANDIGARH] When the plots remain unallotted and obviously legal ownership and beneficial ownership belonged to the society. Had the plots been allotted to some members before entering into the JDA then it could have been said that the plots have already been allotted and therefore, the society was not responsible for the same. Once the plots were owned by the assessee obviously the transfer of the same would lead to arising of profit which has to be taxed u/s 45. We are of the opinion that lower authorities have correctly rejected the arguments that income from such plots, if any, should be charged under the head "business profits" because it is a settled law that if an income falls under specific head of income contained in Section 14 under Chapter IV then the same has to be taxed under that head. - Decided against assessee.
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2014 (2) TMI 1392
Disallowance of provision for damaged goods - CIT-A allowed the claim - HELD THAT:- Since Ld. CIT(A) has followed the earlier order of the Tribunal for A.Y. 2005-06 [2010 (7) TMI 1202 - ITAT AHMEDABAD] in assessee’s own case, we are not inclined to interfere with the order of Ld. CIT(A) and the same is hereby upheld. This ground of revenue’s appeal is dismissed.
Disallowance of depreciation on intangible assets in the form of non-compete territory rights - HELD THAT:- CIT-A following the Tribunal decision, A.O. is directed to decide the issue in the light of the final decision of the Hon’ble High Court for A.Y. 2002-03 [2012 (7) TMI 958 - GUJARAT HIGH COURT] This ground of appeal is allowed, subject to the final decision of Hon’ble Gujarat High Court [2012 (7) TMI 958 - GUJARAT HIGH COURT] Since Ld. CIT(A) has decided this ground following the order of the Tribunal for A.Y. 2005-06 in assessee’s own case, we are not inclined to interfere with the order of Ld. CIT(A) and the same is hereby upheld. This ground of revenue’s appeal is also dismissed.
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2014 (2) TMI 1391
Proceedings under Section-5 of the Prevention of Money Laundering Act, 2002 - HELD THAT:- NOTICE returnable on 13.3.2014. The respondent No.2 shall not decide the proceedings under Section-5 of the Prevention of Money Laundering Act, 2002, till then. DS is permitted.
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2014 (2) TMI 1390
Carry forward of Unabsorbed depreciation - treatment to brought forward unabsorbed depreciation claim - HELD THAT:- As decided in PIONEER ASIA PACKING P. LTD. [2007 (11) TMI 285 - MADRAS HIGH COURT] and GENERAL MOTORS INDIA PVT. LTD [2012 (8) TMI 714 - GUJARAT HIGH COURT] by virtue of the provisions of Sec.32 (2), as amended by Finance Act, 2001, unabsorbed depreciation available in the assessment year 1997-98, 1999-00, 2000-01 & 2001-02 could be carried forward and set off during the succeeding years. Accordingly, we hereby hold that in the relevant assessment year, the assessee shall be entitled to set off unabsorbed depreciation carry forward from the earlier years - Assessing Officer is therefore, directed to modify his order accordingly. Thus, this ground raised by the assessee is allowed in its favour.
Interest for borrowed funds - Advances to sister concerns - HELD THAT:- Assessee has own funds far exceeding the advance made to its sister concerns. Further the claim of the assessee that it had transferred accumulate losses to its sister concerns has not been looked into by the Ld.AO, need less to mention that in such case disallowance of interest expense on the premises that interest bearing funds have been diverted would be incorrect. However the following decisions rendered by various higher judiciary has held that if the assessee has own funds exceeding the advances made to sister concerns, then interest expenditure cannot be disallowed on the premises that the assessee has diverted interest bearing fund to its sister concerns.
Considering the above decisions in the case CIT Vs. Reliance Utilities And Power Ltd.[2009 (1) TMI 4 - BOMBAY HIGH COURT] & in the case CIT Vs. Bharti Televenture Ltd [2011 (1) TMI 326 - DELHI HIGH COURT] which are identical to the facts of the case before us, we are of the opinion that the Ld. Assessing Officer has erred by disallowing the interest expenditure incurred by the assessee on the premises that interest bearing funds have been diverted to the sister concerns. Therefore, we hereby delete the addition made by the Ld. Assessing Officer, which was further confirmed by the Ld. CIT (A) on this issue - Decided in favour of assessee.
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2014 (2) TMI 1389
Murder - charge of abduction - Shyamal and Prosanta were charged with having abducted Paritosh and thereafter having murdered him - HELD THAT:- The High Court believed the testimony of Dipak and Panchu and came to the conclusion that they had crossed the river along with Paritosh, Shyamal and Prosanta. However, the High Court did not take into consideration the view of the Trial Court, based on the evidence on record, that it was doubtful if the five persons mentioned above boarded the boat belonging to Asit Sarkar to cross the river as alleged by the prosecution. The High Court also did not consider the apparently incorrect testimony of Animesh who had stated that he had gone to the police station and given his version but despite this, he was not cited as a witness. The version of Animesh was specifically denied by the Investigating Officer.
When the basic fact of Paritosh having boarded a boat and crossing the river with Shyamal and Prosanta is in doubt, the substratum of the prosecution's case virtually falls flat and the truth of the subsequent events also becomes doubtful. Unfortunately, the High Court does not seem to have looked at the evidence from the point of view of the accused who had already secured an acquittal. This is an important perspective as noted in the fourth principle of Chandrappa - Merely because the High Court disagreed (without giving reasons why it did so) with the reasonable and possible view of the Trial Court, on a completely independent analysis of the evidence on record, is not a sound basis to set aside the order of acquittal given by the Trial Court. This is not to say that every fact arrived at or every reason given by the Trial Court must be dealt with - all that it means is that the decision of the Trial Court cannot be ignored or treated as non-existent.
The facts of this case demonstrate that the first link in the chain of circumstances is missing. It is only if this first link is established that the subsequent links may be formed on the basis of the last seen theory. But the High Court overlooked the missing link, as it were, and directly applied the last seen theory. In our opinion, this was a rather unsatisfactory way of dealing with the appeal - we are unable to agree with learned Counsel for the State and are of the opinion that there was really no occasion for the High Court to have overturned the view of the Trial Court which was not only a reasonable view but a probable view of the events.
The view taken by the Trial Court was a reasonable and probable view on the facts of the case. Consequently, there was no occasion for the High Court to set aside the acquittal of Shyamal and Prosanta. Accordingly, their conviction and sentence handed down by the High Court is set aside - Appeal allowed
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2014 (2) TMI 1388
Disallowance u/s.43B - interest amount ‘paid’ by the assessee - AO held that the term ‘paid’ means that the amount should have been actually paid. Transfer of amount from one account to another account cannot be treated as ‘paid’ thus made the disallowance - HELD THAT:- The interest amount has been paid from the cash credit account of the assessee in which the balance keeps on varying every day depending upon the receipts and payments of the assessee. The embargo put by Explanation 3C and 3D of section 43B is not attracted in the facts of the present case. The interest amount has not been converted into loan or advance. The interest amount has actually been ‘paid’ by the assessee through Overdraft/Cash Credit account. In view of our above findings, the dis-allowance made u/s.43B is set aside and the appeals of the assessee are allowed.
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2014 (2) TMI 1387
Deduction u/s 80IB(10) denied - project was not a housing project as envisaged under section 80-IB(10) - Whether project was not a housing project as envisaged under section 80-IB(10)? - assessee had claimed himself to be ‘developer’ of a plot measuring 14.75 acres alongwtih all basic amenities like roads, parks, street lights, children play area etc - HELD THAT:- An identical claim of deduction had been disallowed by the Assessing Officer in assessment year 2009-10 and the ‘tribunal’has confirmed similar findings of the CIT(A) deleting the same. [2013 (11) TMI 1745 - ITAT CHENNAI] as transpires that in preceding as well as the impugned assessment year, the Assessing Officer had made disallowance of deduction u/s 80IB(10) qua the very project ‘ Chettinadd Enclave’ sought to have been developed by the assessee on similar analogy of reasons (supra).
We find from the tribunal’s order that similar grounds were raised wherein issue of deduction stands decided in favour of the assessee. In these circumstances, by following the order of the ‘tribunal’ in assessee’s own case for the very project in the nature of deduction u/s 80IB(10) of the Act , we see no reason to adopt a different view in the impugned assessment year. Consequently, the CIT(A)’s findings are affirmed. - Decided against revenue.
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2014 (2) TMI 1386
Accident - vehicle hit against a scooty and resultantly a two year old child travelling in the scooty fell down and the tractor ran over the child and she succumbed to the injury - main defence of the Appellant before the trial court was that there was no evidence to hold that he was the driver of the tractor at the relevant time - offences under Section 187 and 197 of the MV Act - HELD THAT:- According to the prosecution, there is no direct evidence. Even the injured witness PW-5, who was driving the scooty, has not identified the driver. The High Court, on the only evidence that the Appellant was scolded by people in the hospital, has come to the conclusion that the Appellant was the driver of the tractor. There is also no direct evidence with regard to the ingredients of Sections 279 and 304A of Indian Penal Code. The High Court, on re-appreciation of the evidence, has taken another view so as to convict the accused.
The High Court in the impugned judgment does not seem to have taken a view that the judgment of the trial court acquitting the accused is based on no material or it is perverse or the view by the trial court is wholly unreasonable or it is not a plausible view or there is non-consideration of any evidence or there is palpable misreading of evidence, etc. - It is not the stand of the High Court that there had been some miscarriage of justice in the way the trial court has appreciated the evidence. On the contrary, it is the only stand of the High Court that on the available evidence, another view is also reasonably possible in the sense that the Appellant-accused could have been convicted. In such circumstances, the High Court was not justified in reversing the acquittal.
The High Court itself having acquitted the Appellant under Section 187 of the MV Act on the ground of no evidence, whether it was possible, to hold him guilty under Sections 279 and 304A of Indian Penal Code, is itself a seriously doubtful question. However, it is not necessary to pronounce on that issue since the Appellant is liable to succeed otherwise.
Appeal allowed - decided in favor of appellant.
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2014 (2) TMI 1385
Termination of services of an employee - principal contention of the learned counsel for the petitioner that the employee had been discharging supervisory and managerial functions by controlling three branches of the petitioner company at different locations - HELD THAT:- In the present instance, it is not a case of jurisdictional error but, at best, an adjudicatory error, if any. Further, the order of the first appellate authority cannot be treated as a nullity. The adjudicatory authority lacking the inherent jurisdiction is one thing and the applicant not fitting into the framework of a statute under which the authority does have power is another thing. In this case it cannot be stated that the petitioner company is not covered by the provisions of the Act, which in section 2(5) defines 'commercial establishment', which the petitioner is. In the same breath, it cannot be further said that the first appellate authority is not the proper authority under the said Act to exercise his quasi judicial jurisdiction over the petitioner company. The entire issue hinges on the categorisation of the deceased employee - whether he was an employee in terms of section 2(8). Even otherwise, there are disputed questions of fact to be adjudicated as has already been indicated.
It is a truism to state that a decision is an authority to what it actually decides, more particularly, in the factual setting of the said case. The constitutional courts have always leaned towards the common man when he has come to the court with a grievance that he has been a victim of executive excesses or administrative vagaries. Under those circumstances the benefit of public law remedy cannot be thwarted on technicalities. Under a writ of certiorari the jurisdiction of the High Court is extremely restricted, for it looks at the decision making process rather than the decision itself -
Going by the settled principles of law as to the writ of certiorari, it is difficult to see any error in the decision making process. It is only in the interest of Justice that this court desires to provide ample scope for the respective parties to agitate their issues, compendiously and comprehensively involving disputed questions of fact as well as the status of the parties, before a statutory authority, that is the second appellate authority - Going by the settled principles of law as to the writ of certiorari, it is difficult to see any error in the decision making process. It is only in the interest of Justice that this court desires to provide ample scope for the respective parties to agitate their issues, compendiously and comprehensively involving disputed questions of fact as well as the status of the parties, before a statutory authority, that is the second appellate authority.
This Court is of the considered opinion that it is not a case of inherent lack of jurisdiction on the part of the first appellate authority, nor is it a case of laying challenge against statutory provisions as ultra vires. No infraction of principles of natural Justice has been pleaded, either. It is a simple case of determining whether the deceased employee is an employee in terms of section 2(8) of the Act - Petition dismissed.
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2014 (2) TMI 1384
Revision u/s 263 - TDS deduction on foreign agent export commission - AO allowed assessee’s foreign agent commission payments as expenditure without deduction of any TDS - HELD THAT:- Admittedly, the assessee had made payment to its overseas export agent in lieu of getting export orders and did not deduct any TDS qua the said payments. Per Revenue, the assessee was supposed to deduct TDS in question. The assessee places reliance on the circulars of the ‘board’ bearing No.23 dated 23.7.1969, No.163 dated 29.5.1975 and No.786 dated 7.2.2000. In the first circular, the ‘board’ had clarified that a foreign agent of Indian exporter is not liable to pay any income tax in India.
This position continued till the year 2009. It was only in the year 2009 i.e after the impugned assessment year 2008-09 that the ‘board’ decided to withdraw the circular on 22.10.2009. We notice that the hon'ble Delhi high court in the case of CIT vs Angelique International Ltd (supra) has held that the action of the ‘board’ in issuing withdrawal of earlier circulars with effect from 22.10.2009 is only prospective and not retrospective. As a result, we also observe that since the impugned assessment year is 2008-09 i.e well before 22.10.2009, the circular issued in the year 2009 did not have any effect in the assessee’s case.
That being so, the Assessing Officer had rightly followed the circular in allowing the assessee’s foreign agent commission payments as expenditure without deduction of any TDS. Rather, in the case of Faizan Shoes Pvt. Ltd [2014 (1) TMI 440 - ITAT CHENNAI] the co-ordinate bench of the Chennai ‘tribunal’ holds that even in assessment year 2009-10, the circular dated 22.10.2009 does not apply. Thus, we hold that the Assessing Officer had taken the only possible view by following the circular issued by the ‘board’ which provided that in case of foreign agent commission payments the said income could not be taxed in India. In this manner, the argument of the assessee challenging the sole reason stated in the section 263 show cause notice succeeds.
That leaves us with the latter reason in the impugned order that since the Assessing Officer did not carry out any investigation/ enquiry to determine nature of the commission payments and therefore, the CIT has only remitted the matter back to the Assessing Officer to re-examine the issue which causes no prejudice to the assessee. After considering this plea of the Revenue, it emanates from the case file that factually, the assertion is correct. However, in the show cause notice issued by the CIT, there is no such reason of lack of enquiry forthcoming. We make it clear that in section 263 proceedings, the jurisdiction of the CIT is confined to only those issues which form part of the show cause notice. In this manner, the order under challenge traverses beyond the show cause notice. Since we are dealing with a ‘fiscal’ statute, the powers of the Revenue have to be strictly interpreted. Assessee’s appeal is allowed.
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2014 (2) TMI 1383
Addition u/s 68 - unexplained cash credit - assessee has only proved the identity of the company and the details of flow of money through the banking channels and it has failed to prove the credit worthiness of M/s Great Valley P Ltd in terms of sec.68 - contentions of the Ld A.R was that the provisions of sec. 68 cannot be applied to an International Transaction - HELD THAT:- In the case of Pondu Metal and Rolling Mill [2007 (2) TMI 652 - DELHI HIGH COURT], the issue related to the “Share Application Money” received by the assessee therein. In the instant case, the assessee has received loans in the form of “Debentures” and hence, in our view, the ratio of the said decision cannot be applied to the facts of the instant case.
In the case of Russian Technology Centre [2013 (4) TMI 659 - ITAT DELHI] the issue was related to “Share Application money” received from a foreign parent company.However in the instant case, there was no prior approval of Indian Government authorities (if required) and further the assessee has miserably failed to prove the source available with M/s Great Valley Co. Pvt Ltd, i.e., the credit worthiness of the said company with supporting evidences. In fact, the submission of the Ld A.R was that the assessee could not enforce the above said company to furnish the financial details, which appears to be very strange to us. Hence, in our view, the assessee cannot take support of this decision also.
The issue considered in the case of Smt. Susila Ramasamy [2009 (4) TMI 554 - ITAT CHENNAI] was about the applicability of provisions of sec. 69 of the Act on an assessee, who was a Non- Resident Indian. In the instant case, we are concerned with the applicability of the provisions of sec. 68 to an Indian assessee on the loan received by it. Hence, in our view, the assessee cannot take support of the case of Smt. Susila Ramasamy (supra) also.
In the instant case, it is a fact that the assessee did not furnish any material to prove the credit worthiness before the AO. However, before the Ld CIT(A), the assessee has furnished a certificate obtained from M/s Barclays Bank to the effect that the funds were transferred to the assessee company from out of the balance available in a Bank account. It is pertinent to note that the said certificate is very bald in nature, i.e., it did not give any detail about the Bank account, i.e., the Bank account number, the account holder name, when the account was opened, details of dates and amounts of deposit in the said bank account etc. Be that as it may, the fact remains that the said certificate has not been examined by the Ld CIT(A) or by the AO (in the remand proceedings). Whatever may be the worth, the assessee has furnished a certificate obtained from M/s Barclays bank in order to prove the credit worthiness of the foreign company, referred above and hence, in our view, the tax authorities should have examined the same and there after, they should have taken a decision. Hence, in our view, the issue before us needs to be examined afresh at the end of the assessing officer - Appeal of the assessee is allowed for statistical purposes.
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2014 (2) TMI 1382
Seeking return of security on the basis that the suit was filed and security obtained for the plaintiff's claim in arbitration - Lifting of Corporate Veil - HELD THAT:- It is trite law that a company is a separate juristic entity distinct from the shareholders; its assets are separate and distinct from those of its members; it can sue and be sued exclusively for its own purpose; its creditors cannot obtain satisfaction from the assets of its members; the liability of the members or shareholders is limited to the capital invested by them; similarly, the creditors of the members have no right to the assets of the corporation and unless fraud is asserted or at least alleged in the plaint, as required under Order VI Rule 4 and in such a way that it will be sustained at the time of trial, the question of lifting a corporate veil does not arise. To accept the plaintiff's submissions that there need not be any fraud or underlying element of dishonesty in formation of corporate entities would amount to violating and shaking these fundamental tenets of corporate law.
Simply because the shareholders, the Directors (in this case were not common) the addresses of the two companies that own the two ships are common or the constituted attorney who was appointed to buy the vessel is the same or that both the ships were purchased pursuant to the board meeting on the same day does not mean that the efforts of the subscribers were to conceal that fact and does not automatically mean that the intention to register the two ships in different names was to play a fraud. There is no bar in purchasing ships in different names if that is the way a person wants to do his business. There is of course an exception that the intention was to mask the true owners and the companies are a sham - Under order VI Rule 4 of Code of Civil Procedure, it is provided that if party pleading relies on any fraud then particulars with dates and time and the nature of fraud has to be stated in the pleading, i.e., the plaint. There are no particulars as required under Order VI Rule 4 of CPC of fraud stated in the plaint. Moreover, all these factors were known to the plaintiff or the plaintiff is deemed to have known prior to entering into the management agreement with the plaintiff. It is not the plaintiff's case that they would not have entered into the management agreement otherwise.
The plaintiff has not made out a case for lifting or piercing the corporate veil and hence defendant no. 1 cannot be a sister of M.V. Eastern Light. The foundation of the plaintiff's case that defendant no. 1 and M.V. Eastern Light are sister ships itself is not sustainable, let alone security to be continued till the suit is heard and disposed.
The notice of motion is allowed.
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2014 (2) TMI 1381
Addition to value of closing stock on account of CENVAT credit u/s 145A - assessee has been consistently following exclusive method of accounting for valuation of closing stock of excluding the CENVAT - AO revalued the closing stock by including CENVAT/MODVAT credit in closing stocks on the ground that non inclusion of CENVAT credit is not only improper but also cannot depict the true and fair picture of taxable profit of the business - HELD THAT:- Jurisdictional High Court in the case of Mahalaxmi Glass Works P. Ltd [2009 (4) TMI 182 - BOMBAY HIGH COURT] wherein it has been held that to give effect u/s 145A, if there is any change in closing stock at the end of the year there must be necessarily of corresponding adjustment in the opening stock of that year and accordingly directed the AO to calculate disallowance/addition after verification.
Tribunal in the case of Jindal Iron & Steel Company Ltd. [2013 (1) TMI 182 - ITAT MUMBAI] has held that if unutilized MODVAT credit is added to closing stock, then similar adjustment should be made even in opening stock and purchases. The Tribunal further held that from the plain reading of provisions of section 145A, it is evident that for the purpose of valuation of purchase and sale of goods and inventories on account of tax, duty, cess or fee actually paid are incurred by the assessee has to be made. Excise duty component in the form of MODVAT in the raw materials has to be included while valuing the purchases and sales of goods and inventories as it has direct bearing on valuation of stock. The Tribunal in the said decision has considered the decision of the Hon’ble Bombay High Court in the case of Mahalaxmi Glass Works P. Ltd (supra) which has been relied by the Ld.CIT(A). Therefore, following the aforementioned decision of the Tribunal, we modify the direction of the Ld.CIT(A) in such a manner that the issue is remitted back to the file of the AO with the direction to make the adjustments as per section 145A on account of CENVAT credit to the value of purchases/sales of opening and closing stock and accordingly re-compute the addition if any to be made on this issue. Appeal filed by the assessee is allowed for statistical purpose.
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2014 (2) TMI 1380
Dishonor of Cheque - time limitation - section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- In the case on hand, even if the averments of complaint and evidence of complainant are accepted at their face value, dishonoured cheque was issued on 30.10.2001 to discharge the debt, which had become due on 20.05.1997. Therefore, I hold dishonoured cheque was issued to discharge time barred debt - The learned trial Judge taking into consideration material discrepancies in the evidence adduced by complainant and also having regard to question of limitation has held that complainant has failed to prove the case beyond reasonable doubt and acquitted accused.
Therefore, the impugned judgment can be sustained dehors affidavit evidence of accused. In the circumstances, there is no need to remand the matter to trial court. There are no reasons to interference with impugned judgment - Appeal dismissed.
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2014 (2) TMI 1379
Set off of the carried forwarded capital loss against the current year long term capital gain - HELD THAT:- The assessee mentioned that these issues stand covered in favour of the assessee by virtue of the judgment of Ace Builders P. Ltd. [2005 (3) TMI 36 - BOMBAY HIGH COURT] and many other decisions of this Tribunal such as (1) Geetanjali Traing Ltd[2013 (3) TMI 194 - ITAT MUMBAI] and Manali Investments [2011 (4) TMI 116 - ITAT MUMBAI] - Some of these decisions were not available to the AO / CIT (A) at the appropriate point of time. Therefore, in our considered opinion, the issue should be remanded to the files of the CIT (A) with a direction to examine the applicability of the said decisions to the facts of the present case and decide the grounds.
MAT Computation - provisions for diminution of the value of investment constitutes an allowable deduction for the purpose of computing the book profits or not? - HELD THAT:- As assessee says issue stands covered by the decision of the ITAT, Kolkata Bench in the case of DCIT vs. Mcleod Russel India Ltd [2013 (4) TMI 315 - ITAT KOLKATA] direct the CIT (A) to examine the said decision and decide the claim of the assessee.
Appeal treated as allowed for statistical purposes.
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2014 (2) TMI 1378
Disallowance of deduction u/s.80IA on the profits derived from Trikampura Division - Sole argument of assessee is that the facts are similar to the facts of the Assessment Year 2001-02 and therefore, the arguments advanced for Assessment Year 2001-02 be treated as arguments for the year under consideration.
HELD THAT:- We find that in the Assessment Year 2001-02, we vide order of even date [2014 (2) TMI 1377 - ITAT AHMEDABAD] found that there was no good reason to interfere with the orders of the lower authorities in respect of this issue. Therefore, we decline to interfere with the orders of lower authorities for the year under consideration also. Therefore, this ground of appeal of the assessee is dismissed.
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2014 (2) TMI 1377
Disallowance of deduction claimed u/s 80IA - income represented by other sales of the Indore division and the Moraiya division - CIT(A) allowed the claim of the assessee on the ground that they are eligible for deduction u/s 8-IA as they form part and parcel of the industrial activity carried on by the assessee and that the sale of these items goes to reduce the cost of production and the cost of the same was debited in the accounts - HELD THAT:- As decided in own case undisputed position that the issues are covered by a decision of this Court in the case of Dy. CIT Vs. Harijivandas Juthabhai Zaveri [1999 (12) TMI 5 - GUJARAT HIGH COURT] in which the court upheld the decision of the Tribunal granting benefit of deduction under section 80I of the Act on various incomes, such as job work receipt, sale of empty soda ash bardan, sale of empty barrels and plastic waste. Such questions are, therefore, not required to be considered.
Deduction u/s 80HHC on export profits arrived at on the basis of the export turnover and the total turnover exclusive of the receipts of excise duty and sale tax - HELD THAT:- the issue is now settled in favour of the assessee by the decision of the Hon’ble Supreme Court in the case of CIT Vs. Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] wherein it was held that sales tax and excise duty don’t have any element of ‘turnover’ and that excise duty and sales tax are indirect costs which are recovered by the assessee on behalf of the Government and if they are made relatable to exports, the formula u/s 80HHC would become unworkable. Therefore, this ground of appeal of the Revenue is dismissed.
Disallowance of deduction u/s 80IA/80IB on other sales viz., Iron Scrap Sale, Misc Sales and Metal Scrap Sales - HELD THAT:- Set aside the orders of lower authorities and remand the matter back to the file of the Assessing Officer to readjudicate the issue afresh as per law after taking into consideration the above quoted decision of the Hon’ble Supreme Court in the case of Associated Capsules Private Limited. [2012 (2) TMI 101 - SUPREME COURT]
Disallowance of late payment of Provident Fund and ESI u/s 43B - HELD THAT:- Issue was now covered in favour of the assessee by the decision of Hon’ble Supreme Court in the case of CIT Vs. Alom Extrusions Limited [2009 (11) TMI 27 - SUPREME COURT] wherein it was held that if the contribution to PF and ESI was deposited by the assessee before the due date of filing of return under the Income Tax Act, then the assessee would be entitled to deduction. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of appeal of the Revenue.
Disallowance out of other expenses on account of provisions of section 37(1) - HELD THAT:- This issue is covered in favour of the assessee by the order of the Tribunal in Assessment Year 1999-2000.
Disallowance of prior period expenses - HELD THAT:- As gone through the observations of the assessing officer in the assessment order. The assessing officer has not examined the issue in detail. For deciding the allowability of these expenses, each item will have to be examined and it will have to be seen when the liability has arisen/crystallized/ascertained and whether such expenses are allowable u/s 37(1). Having considered the facts of the case, the assessing officer is directed to verify when the liability has arisen. If the liability to pay the same has arisen during the year under consideration and if the expenses are allowable as per the provisions of the Act, the A.O. is directed to allow the same as the appellant company is following mercantile system of accounting. If the same has not arisen during the year under consideration or otherwise not allowable, the same should not be allowed.
Deduction u/s 80IA on account of income from Trikampura Unit - HELD THAT:- In the instant case, no material could be brought before us to show that any part of the manufacturing activity was carried out by the assessee at Trikampura Unit. In the above circumstances, we do not find any good reason to interfere with the order of the lower authorities. Therefore, this ground of appeal of the assessee is dismissed.
Deduction u/s 80HHC - HELD THAT:- We find that it is not in dispute that interest income earned by the assessee is assessable under the head profits and gains of business and as evidenced by the fact that Assessing Officer has excluded 90% of the gross interest income for computing profits of business out of the income under the head profits and gains of business. We, therefore, set aside the orders of lower authorities and direct the Assessing Officer to reduce 90% of net interest income while computing deduction u/s 80HHC.
Charge interest u/s 234C of the Act while computing the income of the assessee u/s 115JB.
Disallowance of interest claimed as Revenue expenditure u/s 36(1)(iii) - HELD THAT:- It is no doubt that the assessee is engaged in the business of manufacture of soap and the soda ash and 'lab' so produced is used by way of captive consumption. When such facts viewed in light of the findings of the CIT (Appeals) and the Tribunal, we have no reason to interfere with the ultimate conclusion. Had it been a case of entirely a new project undertaken by the assessee as canvassed by the counsel for the Revenue, a serious question of claiming pre-operative expenditure of interest by way of revenue expenditure would arise. However, when the authorities below found that it was an expansion of the existing business, applying the tests laid down by this Court in the case of Alembic Glass Industries Ltd. [1975 (11) TMI 42 - GUJARAT HIGH COURT] in view of the decision of the Supreme Court in the case of Deputy CIT v. Core Health Care Ltd [2008 (2) TMI 8 - SUPREME COURT] the fact whether the borrowing is capital or revenue expenditure would be of no consequence.
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2014 (2) TMI 1376
Condonation of delay - delay of 183 days in filing the present appeal by the assessee - HELD THAT:- Assessee has explained a reasonable cause for not filing the appeal within the period of limitation as there was an inadvertent mistake at the office of the Chartered Accountant of the assessee as explained in the affidavit. It is always a question as to whether the explanation and reason for delay was bonafide or was merely a device to cover an ulterior purpose or an underhand attempt to save the limitation. When it is brought on record that the party has not acted in malafide but the reasons explained are factually correct, then the court should be liberal in construing the sufficient cause and should lean in favour of such party.
Reasons explained by the assessee are not malafide or a device to cover the ulterior purpose as there is nothing on record to infer that by filing a belated appeal the assessee could have achieved an ulterior purpose. Accordingly, we are satisfied with the reasons explained by the assessee that the assessee was having sufficient cause for not filing the appeal within the period of limitation. Hence, we condone the delay of 183 days in filing the present appeal.
Unexplained cash credit u/s 68 - Revenue doubted the source of the share application money - whether transactions of allotment of share is a sham transaction? - HELD THAT:- Disallowance of the claim of the assessee and addition made by the AO under Section 68 is purely based on assumption, guess work without substantiated by any evidence or material. This is not a case of bogus shareholders as all these parties are the company, which are in existence and subjected to Income Tax as the assessee has produced the relevant evidence. Therefore, when the assessee has produced all the relevant evidences, and if the department has doubted the source of the share application money, then it is free to take necessary action in respect of these parties
In the case of CIT Vs. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SC ORDER] has held that if the share application money is received by the assessee company from alleged bogus shareholders whose names are given to the AO then the department is free to proceed to reopen their individual assessment in accordance with law but it cannot be regarded as undisclosed income of the assessee company. There is nothing on record to show that these transactions of allotment of share is a sham transaction, then the department cannot treat the said share capital money as undisclosed income of the assessee. - Decided in favour of assessee.
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2014 (2) TMI 1375
Grant of Interim relief - Fraudulent transfer of shares - shares purportedly pledged by the Plaintiff with Defendant Nos.1 and 2 under loan agreements - It is the case of the Plaintiff that in spite of recovery of the entire outstanding loan with interest, Defendant Nos.1 and 2 have fraudulently sold or transferred shares held as security in breach of the loan agreements as also in breach of trust - whether Defendant No. 3 is bound by this alleged pledge and therefore, not entitled to deal with the security?
HELD THAT:- The suit pledge was admittedly not created with the previous approval of the depository or intimation from the then beneficial owner of the securities, namely, the Plaintiff. There was no compliance with Regulation 58 - Naturally, there were no entries in the records of the depository to that effect as a result. Such entries could have been the only evidence of pledge recognized by sat 13/17 nm (l) 2150-2013.doc the Act. This being the position, Defendant No. 3 (depository participant) could not be expected to act on any pledge, to which Defendant Nos. 1 and 2 (the beneficial owners) were parties. So also, Defendant Nos. 4 and 5 (the depositories) could not be prevented from effecting transfer of the shares on behalf the beneficial owners.
This court, in the case of JRY INVESTMENTS (P.) LTD. VERSUS DECCAN LEAFINE SERVICES LTD. [2003 (3) TMI 601 - HIGH COURT OF BOMBAY], considered the rights of an owner of shares who had transferred the same with intention of creating security, to prevent dealing in such shares by the transferee in the event of failure of consideration for such security. A similar argument, as in our case, was advanced that the transferee had no title to pass on - In Jry Investments Case, this court on the basis of the analysis of the provisions, held that the transfer could not be prevented. The ratio of that case would apply to the facts of our case as well.
In the absence of any pleading that the transferee had notice of any defect in the title of the transferor, it is difficult to accept the case suggested by the learned Counsel on the basis of some reference in an affidavit filed in the Notice of Motion. Non-filing of any affidavit by Seksaria, who is supposed to have attended the alleged meetings, is also of no consequence in the premises. Events of 29 and 30 October do prima facie show that there was some anxiety on the part of Defendant No. 3 to hurriedly sell or confiscate the shares, just when the adinterim order was being considered and later when it was passed.
Learned Counsel for Defendant No. 3 submits that Defendant No. 3 had no knowledge of the adinterim application made on 29 October and sold/transferred the shares on 29 October and 30 October 2013, before the court orders were communicated to Defendant No. 3. In an appropriate case, it would have been necessary to go sat 17/17 nm (l) 2150-2013.doc deeper into this aspect. But, here I am convinced that even if I were to eventually find that there was indeed an attempt to overreach the court, that does not imply that the Plaintiff is therefore entitled to any equitable relief. The Plaintiff has not, on his pleadings, made out any case for such relief. On this aspect, it is sufficient for me to record a prima facie finding that the conduct of Defendant No. 3 does not imply any knowledge or acknowledgment on its part of the rights of the Plaintiff, as suggested by Mr. Chinoy.
There is no case made out for grant of any interim relief to the Plaintiff - Notice of Motion dismissed.
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2014 (2) TMI 1374
Concealment of income - imposition of penalty - Validity of notice u/s 271(1)(c) - Whether there was no concealment of income and there was no cessation of liability but it was on assesses agreement additions have been made and therefore no penalty is attracted despite there being no evidence to substantiate such a conclusion and consequently recorded a perverse finding? - Whether the notice issued u/s 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is valid and legal and the proceedings initiated by the Assessing Authority was Legal and valid Penalty proceedings - Whether justification in holding that the basis for initiation of the penalty proceedings is the satisfaction of the Appellate Authority in coming to a conclusion based totally on a different ground other than the ground on which the Assessing Authority had passed the assessment order and the proceedings initiated by the Assessing Authority was legal and valid? - HELD THAT:- SLP dismissed.
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