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Showing 1 to 20 of 1357 Records
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2015 (4) TMI 1364 - MADHYA PRADESH HIGH COURT
Condonation of delay in filing appeal - delay on the ground that appellants were rustic villagers - sufficient reasons for delay or not - Suit filed for declaration and injunction - exparte order - HELD THAT:- The submission of the appellants is that liberal approach ought to have been adopted, may be correct, but the facts and circumstances have been discussed by the appellate Court for the purpose of seeking condonation of delay not only the case of the appellants but also the case of the respondent/plaintiff was considered and it was found that it cannot be said that the appellants did not know the provisions of law because the appellants were litigating against respondent even in other case. Therefore, the plea of the appellants that they were rustic villagers was not found to be correct.
No substantial question of law is involved in this appeal. It is dismissed.
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2015 (4) TMI 1363 - ITAT DELHI
Unexplained credit u/s 68 - assessee company had received/ taken loan/ amounts - party had not responded to the notice issued u/s 133(6) - AO observed that the copy of account filed by the assessee was simply a piece of paper with a rubber stamp of M/s Sai Soft Securities and copy of account did not bear the PAN no. of the party, the details of the AO assailing the above party and its copy of return were not filed so as to establish the identity of the lender and its capacity to lend money
HELD THAT:- Assessee referred to ledger account of M/s Sai Soft Securities in the books of assessee is contained to demonstrate that there were regular transactions between assessee and M/s Sai Soft Securities. We find from the said ledger account that sum was given by assessee through banking channel and there are two debits regarding sale of shares. Thereafter assessee has again given cheque of Rs. 6 lacs. All these transactions are up to 30-10-2006 and thereafter there are two entries relating to purchase of shares and amounts received from M/s Sai Soft Securities. This ledger account has been confirmed by M/s Sai Soft Securities also giving the circle where it is assessed as well as the PAN no.
Considering the fact that the assessment was completed on account of being time barring, we are of the opinion that the matter needs to be restored back to the file of AO for de novo adjudication, particularly because in the remand report the AO has not given detailed findings. Assessee’s appeal is allowed for statistical purposes.
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2015 (4) TMI 1362 - ALLAHABAD HIGH COURT
Seeking grant of bail - Illegal smuggling of gold bars - HELD THAT:- In the present case two persons arrested by the Officers of D.R.I. and from their possession gold was recovered weighing 4,076 gms. worth of ` one crore, nine lacs, ninety eight thousand and eighteen recovered for which the arrested persons could not produce any valid documents for its importation from foreign country. Thereafter, the statement of the co-accused persons under Section 108 of the Custom Act were recorded wherein they have stated about the complicity of the applicant and one Prahlad Setia and consequent thereto the applicant was intercepted and arrested by the D.R.I. officials and the applicant's statement was also recorded under Section 108 of the Custom Act who has admitted that he is managing the affairs of the smuggling at the behest of Prahlad Setia and he is a paid employee is the sufficient proof of the involvement of the applicant alongwith other persons for smuggling goods. Merely because the goods have not been recovered from the possession of the applicant will not mollify the gravity of offence.
The applicant without coming into physical contact with the smuggled gold may yet be liable for having been concerned in its importation. It has been said that a man may be miles and miles away from the gold and yet if proof is available that he had an interest in or was concerned in its illegal transportation then he would be guilty of the offence and in the present case from the statement of the applicant and other arrested accused person it is quite evident that he did take some part in the series of steps which culminated in the gold being brought in the country. The statements of the applicant and other accused persons so recorded under Section 108 of the Custom Act are distinct and different from statement recorded by the police officers during the course of investigation under Criminal Procedure Code. It is a material piece of evidence collected by the Custom officials statement made by another accused persons inculpating the applicant therein, can be used as a substantive piece of evidence. The said statements under Section 108 of the Act are admissible in evidence.
It is hardly required to be stated that once a person is released on bail in such a serious offence where punishment is quite deterrent, the accused in order to get away from the clutches of the same indulge in various activities like tampering with the prosecution witnesses and evidence collected and also create problem of law and order situation. Release on bail in serious offence of such nature larger interest of the public and State always matter.
The prayer for bail is rejected.
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2015 (4) TMI 1361 - ITAT JAIPUR
Rejection of books of accounts - Correct Method of accounting - changing the recognized method of revenue generation based from Project Completion to % Completion Method - AO's allegation of non-maintenance of stock register and consequent non-compliance with AS-2 - application of Percentage of Completion method by Ld. AO in order to compute the income of assessee - Assessee filed its return at NIL income following Project Completion Method - rejection of methods of accounting regularly followed by assessessee is in accordance with the Accounting Standards recognized by the ICAI - reference made u/s 142A to the DVO - Accrual of income - non disclosure of advances received on booking of a flat - difference between the cost declared by assessee and determined by DVO.
HELD THAT:- Correctness of books become very material inasmuch as there is neither any gain nor motive for assesses to indulging in such practices when all the profits were deductible u/s 80IB. Besides the entire evidence and material has not been considered to come to a justiciable conclusion to reject the books of regularly audited accounts. A generalized observation about the ‘notorious trade practices’ in real estate business cannot be a reason for rejecting the books of accounts.
Hon'ble Apex Court in the case of Lalchand Bhagat Ambica Ram [1959 (5) TMI 12 - SUPREME COURT] and Discovery Estate Pvt. Ltd. [2013 (3) TMI 124 - DELHI HIGH COURT] held that practice of making additions on mere suspicions and surmises or by taking note of the ‘notorious trade practices’ prevailing in trade circles cannot be relied for making additions. Consequently and finding of “on-money transactions” based on assumption and in the absence of any incriminating material or examination of buyers is without any basis and justification. These observations, therefore, cannot be valid reasons for rejecting the audited books of account maintained by the assessee in regular course of its business as per past practices and accounting policies.
Substituting the method of accounting from Project Completion to % Completion by the authorities below is by observations that assessee’s have not followed Accounting Standards 9 & 7 which tantamount to not following Accounting Standard-1 as prescribed u/s 145(2) - It is admitted position that the appellant were regularly following project completion method from year to year and the assessments prior to the date of search were also framed by accepting project completion method.
As per ICAI guidelines real estate developer has an option to choose from Project Completion method or the Percentage Completion method as both are recognized methods for revenue recognition in such cases. Once the option is exercised by assessee, it is not open to the Assessing Officer to substitute his own opinion to change the method of accounting because mid way it is found that other method of accounting better suits the revenue. It is the accounting principle, consistent following of method and its earlier adoption which decides the issue and not the suitability or revenue.
In any case assessee’s are eligible for deduction u/s 80IB against their income, in this eventuality, take this method or that, the result is NIL taxable profits after deduction. Thus in these cases the substitution of method to % Completion Method is based on surmises, unwarranted facts, irrelevant considerations and a fruitless exercise. Except making some academic and theoretical rhetoric’s, the revenue has not been able to demonstrate that the method of accounting adopted by assessee is not in conformity with set accounting guidelines, provisions of sec. 145.
In the case of CIT vs. Smt. V. Sikka & Another [1983 (11) TMI 48 - DELHI HIGH COURT] held that if the method of accounting is accepted in first year and regularly followed in subsequent year it cannot be substituted at the whims of AO. It is not mandatory for a real estate developer to follow percentage of completion method as prescribed by the Institute of Chartered Accountants of India under AS-7.
AS-7 issued by the Institute of Chartered Accountants of India, recognizes the position that in the case of construction contracts the assessee can follow either the project completion method or the Percentage completion method. Neither the revised Guidance Notes 2012 issued by Institute of Chartered Accountants of India nor the Exposure Draft for Guidance Note on Recognition of Revenue issued by the Institute of Chartered Accounts of India in 2011 are mandatory or override the statutory provisions.
CIT(A) has also taken contradictory stand; on one hand it is held that there can be no revenue recognition unless 25% project is complete, rightly so as no builder can earn from plinth or pillars on other hand it is held that the property in flats stands transferred by booking amount. The project completion method followed by the appellants, therefore, could not be faulted with by the revenue. The assumptions made by the authorities below that by not following AS-9 & 7 the same tantamount to not following prescribed AS-1 u/s 145(2) is profoundly misplaced, unnecessary and uncalled for besides being contrary to principles of accountancy and interpretation of the statutory provisions. The same, therefore, could not be taken a valid basis for change of method regularly employed by the appellant. Thus we uphold the method of revenue recognition adopted by the assessee’s as “Project Completion Method. The other judicial precedents cited by the assessee mentioned in ITAT orders as well as written submissions support our view.
Addition addition based on loose paper found from third party - Apropos Annexure A-2/51 as well as the statement of Shri Naveen Bhutani recorded on 28.01.2009 u/s 132(4) of the Act regarding a print out taken from his laptop; he stated that it was in relation to Unique Dream Builders only and not the assessee entities. This person was not produced for cross examination by the appellants and AO himself admits that the print out inventorized as seized Annexure revealing net realization of Rs. 17.91 crores and a profit of Rs. 5.17 crores reflects only the estimates. The said document does not reveal the actual state of affairs of the projects done by the assessees.
No corroborative evidence has been found as a result of search on him or from either side of separated group to support that figures written therein for the area constructed, sold or transferred nor about the net realization or profits earned in any such projects. The said excel sheet data was prepared for marketing of Unique Builder’s projects products and could not be taken as a relevant and reliable information of business operations or earning any extra money or “on money” was received by the appellant which could enable the Assessing Officer to reject the accounts maintained in regular course. In fact, this document as such did not have any evidentiary value against the assessee.
The authorities below made some projections to convert these hypothetical figures into assessee’s business operations on hypothetical assumptions. The booking agreements of these flats were reached at different timings at different locations with different specifications. The appellants have made detailed submissions in the synopsis on this factual circumstances, inconsistencies in laptop projections, impossibility of such profits in real estate trade as extrapolated by department and explained variation in rates. The explanation is bonafide and remains uncontroverted by the revenue. The observation as well as findings reached by authorities below cannot be upheld as they lack in credibility being based on irrelevant considerations and pure conjectures. Looking at the gamut of inconsistencies and infirmities in the projections of department vis a vis laptop found from Mr. Bhutani, therefore, could not be a reason sufficient to endorse that the accounts maintained by the assessee are unreliable or they were not verifiable. Consequently assesses ground in this behalf deserve to be allowed. On these facts the ITAT Jaipur in similar group cases have already decided these issues in favor of the assessee, which we respectfully follow.
Reference u/s 142A by the ADIT to DVO, the relevant provisions have been mentioned above. It is clear that this Section empowers only the AO as authorized officer to make reference to the DVO u/s 142A of the Act. This Section does not use any term like ADIT being an authorized officer. Further it has not been disputed that what has been referred to for valuation of stock in trade of the assessee and not any investment referred u/s 69A or 69B; buillion, jewellery or any other valuable article referred to in Section 69A or 69B; is not a property referred u/s 56(2) of the Act.
In these eventualities, the judgment of Umiya Co-op Housing Society Ltd. [2006 (7) TMI 200 - GUJARAT HIGH COURT] and ME & Mummy Hospital vs. ACIT [2014 (2) TMI 898 - GUJARAT HIGH COURT] and various other judgements cited before us support the contentions of the assessee. Thus DVO reference is held to be invalid. We also find merit in the contention of the assessee that DVO ought to have applied the PWD rates in place of CPWD rates. Besides 2.5% rebate on account of self supervision and self bulk procurement of material is too meager. In our view this rebate ought to have been to at least to the scale of 5% as the assessees are the professional builders having their own engineering staff. Going by DVO valuation, the difference of valuation comes to 5.5% which amounts to nominal difference when viewed from the angle that its comparisons of two estimates which basically are two opinions. If the PWD rates are applied alongwith 5% rebate as mentioned above then it will leave no scope for any diferrence or addition on account of valuation report. Thus DVO’s reference is bad in law being void ab initio besides it has no merit. Consequently, any addition in respect of valuation cannot be made under the assessee's case.
Apropos revenue appeal we have already upheld that Project Completion Method adopted by the assessee being proper; books of accounts have been upheld, Projections of Mr. Bhutani having been found as not representing the actual business operations of the assessee. Consequently the findings of ld. CIT(A) about there being no revenue recognition unless 25% project if completed become redundant. Therefore, revenue ground becomes inconsequential.
Allowability of sec. 80IB deduction to assesses, we find no infirmity in the orders of ld. CIT(A) in as much as per material available on record assesses have complied with relevant conditions of sec. 80IB. Besides revenue grounds challenge admission of additional evidence u/r 46A and relief based thereon. Thus assessee’s eligibility on merits is not specifically challenged. In view thereof we see no infirmity in the order of ld. CIT(A) on the issue of allowing deduction u/s 80IB, furthermore it will be eligible in the year of revenue recognition. By upholding the Project Completion Method of accounting and upholding of books of accounts and rejection of estimates; there will be no taxable profits.
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2015 (4) TMI 1360 - MADRAS HIGH COURT
Liability to pay the entire tax liability although the petitioner had paid the tax to the selling dealer and claimed input-tax credit - HELD THAT:- This Court finds hardly any justification in the submission of the learned Government Advocate, since a direction to pay 25% of the tax liability would amount to double taxation, which is impermissible in law. The petitioner, being a dealer in leather, as per Section 19(1) of the TNVAT Act, for the purchases effected from the local registered dealer, has become eligible to claim and avail ITC. Besides, the vendors, who sold the goods to the petitioner, are also being a registered dealer under the TNVAT Act, having issued tax invoices after collecting the taxes at 5%, the petitioner was rightly under the bonafide belief that the vendors would have paid the taxes collected from them to the Sales Tax Department in Annexure-II of their monthly returns filed for the years 2009-10, 2011-12, 2012-13 and 2013-14.
The impugned orders are set aside - All the writ petitions shall stand allowed.
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2015 (4) TMI 1359 - ITAT BANGALORE
TP Adjustment - Foreign Exchange Gain as a part of Operating Revenue - contention of the assessee that the TPO erred in not treating the foreign exchange fluctuation as part of the operating profits and adding the same to the income from IT enabled services - HELD THAT:- Foreign exchange fluctuation has arisen as a result of the realization of the consideration for rendering software development services. It, therefore, arises or occurs in the normal course of business and hence there is no reason why it should be excluded from determining the operating revenue while computing the margin - we hold that the operating revenue of the assessee be computed by including the foreign exchange gain.
Donation to be excluded from operating revenue while computing the margin of the assessee - As already expressed the view that those expenses incurred / incomes earned in the normal, course of business are to be included for determining the operating revenue while computing the margins. By the same analogy, those expenses which are not part of normal business activities should get excluded for determining the operating revenue while computing the margin. As donation is not in the nature of the normal business activity of the assessee, we hold and direct that donation requires to be excluded from operating revenue, while computing the margin.
Comparable selection - Accentia Technologies Ltd. be excluded from the list of comparables in view of the occurrence of extra-ordinary event of the amalgamation which would impact financial results in the period under consideration thereby rendering it not comparable to the assessee in the case on hand.
eClerx Services Ltd. is to be excluded from the final list of comparables since it is engaged in providing high end services involving specialized knowledge and domain expertise rendering it functionally different from an IT enabled service company, as in the assessee in the case on hand.
Cosmic Global Ltd. was excluded because the only comparable segment, i.e. Accounts BPO segment has low volume of sales as compared to the entity level. Whether this finding of fact is also applicable to the assessee case, requires fresh examination as it has not been examined by the TPO and neither has this issue been agitated by the assessee either before the authorities below or before us in the present appeal. In this view of the matter, we deem it appropriate to remand this issue to the file of the TPO to consider the comparability of this company afresh in the light of the judicial pronouncements cited and the principles and observations laid out therein.
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2015 (4) TMI 1358 - ITAT ALLAHABAD
Expenses claimed or not incurred for earning exempt income - Amount received from Bharat Lok Shiksha Parishad - AO found the assessee is not a University or other Educational Institution and has also not claimed any Exemption u/s 10(23C) - AO found the expenses claimed in the financial statement are unconnected to the said receipt received from the Bharat Lok Shiksha Parishad, New Delhi - assessment has to be completed treating the assessee like any other business entity - HELD THAT:- We find that there is no dispute of the receipt of a sum from Bharat Lok Shiksha Parishad, New Delhi. However, the expenditure incurred by the assessee is required to be examined with evidences. There is no clarity in the orders of the revenue about the business connections of the assessee Bharat Lok Shiksha Parishad, New Delhi.
AO is required to examine the expenditure treating the assessee as independent business entity. The assessee is required to earn income and incur the expenditure like any business entity. This is the claim of the assessee that the expenditure incurred by the assessee should be construed on business expenses.
In our opinion, the matter should be remanded to the file of the AO for fresh adjudication of the issue after giving an opportunity of being heard to the assessee. Assessee should demonstrate that expenditure in incurred for business of the assessee only. Accordingly, the grounds raised by the assessee is allowed for statistical purposes.
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2015 (4) TMI 1357 - CALCUTTA HIGH COURT
Suspension of petitioner - petitioner remains suspended for more than eight months merely on the ground that a criminal complaint has been lodged against the petitioner and a charge-sheet has been filed in connection therewith - HELD THAT:- Merely because the petitioner has been charged with having accepted a bribe and marked currency notes may have been recovered from the petitioner, it does not imply that the petitioner is guilty before he is pronounced as such. However self-righteous and indignated the employer may feel, it would be arbitrary and unreasonable to subject an employee to an indefinite period of suspension over a criminal trial that the employee or the employer may not be able to control.
The indefinite period of suspension in case of the petitioner must end with immediate effect. Accordingly, the appellate order impugned dated March 18, 2015 and the decision of the bank to continue the suspension of the petitioner are set aside and the petitioner is permitted to join such duties as the bank may assign to the petitioner by the beginning of May, 2015 - It will be open to the bank to transfer the petitioner to some other branch or assign such duties that may not involve any contentious matter. The petitioner should be communicated his next place of posting within a period of a week from date. The petitioner will be entitled to the regular salary and emoluments from the day the petitioner resumes his duties.
Petition allowed.
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2015 (4) TMI 1356 - ITAT DELHI
TP adjustment - two international transactions, namely, payment of export commission and payment of royalty for export to the Associated Enterprises (AEs) - HELD THAT:- After considering the rival submissions and perusing the relevant material on record, we find that similar issues were raised in appeal by the assessee for the AY 2008-09 [2015 (5) TMI 350 - ITAT DELHI] which came to be heard simultaneously with the instant appeal.
We have passed separate order for the above referred AY 2008-09 in which the question of determination of ALP in respect of Export commission has been restored to the file of AO/TPO with certain directions and the payment of royalty for exports to AE has been accepted at arm’s length price. No distinguishing feature has been brought to our notice in the facts of the instant year vis-à-vis those of the above referred AY 2008-09.
We adopt the same reasons for the year under consideration as well and, accordingly, remit the international transaction of payment of ‘export commission’ to the file of AO/TPO for a fresh determination as per the guidelines given in our above referred order and delete the addition on account of payment of ‘royalty’ in respect of exports made to the AEs.
Disallowance being Sales tool expenses incurred by the assessee - HELD THAT:- After considering the rival submissions and perusing the relevant material on record, we find that similar issue has been raised by the assessee in its appeals for the AYs 2006-07 [2015 (4) TMI 502 - ITAT DELHI] and 2008-09 [2015 (5) TMI 350 - ITAT DELHI] for which separate orders have been passed. In the order passed for the AY 2006-07, we have remitted the matter to the file of AO for deciding this issue in conformity with the final view taken in earlier years. Since the fact situation remains similar for the instant year as well, inasmuch as neither the ld. AR nor the ld. DR could clearly inform about the final view taken on this issue for the earlier years, we set aside the impugned order and send the matter back to the file of AO for deciding it in conformity with the view taken by us in our order for the A.Y. 2006-07.
Appeal is allowed for statistical purposes.
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2015 (4) TMI 1355 - CESTAT BANGALORE
Levy of service tax - Tour Operator service - providing services in connection with religious trips Hajj and Umrah mainly to Mecca, Madina, Mina, Muzdalifa etc. - HELD THAT:- Both the sides agree that the issue involved in the present appeals has been considered by this Tribunal in the case of M/S COX & KINGS INDIA LTD., M/S TRAVEL CORPORATION OF INDIA LTD. AND M/S SWAGATAM TOURS PVT. LIMITED VERSUS CST, NEW DELHI [2013 (12) TMI 1024 - CESTAT NEW DELHI]. The Tribunal had decided the issue in favour of the appellant.
Appeal allowed.
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2015 (4) TMI 1354 - COMPETITION COMMISSION OF INDIA
Anti-competitive practices in the nature of ‘exclusive agreements’ with sellers of goods/services - It has been urged that due to such practices, the consumer is left with no choice in regards to terms of purchase and price of the goods and services as thebuyer/consumercan either accept the terms and conditions in totality of the e-portal or opt not to buy the product - contravention of the provisions of section 4 of Competition Act, 2002 - HELD THAT:- For analysing allegations pertaining to contravention of section 3 (4) read with section 3(1) of the Act, it is necessary to first establish the existence of an agreement/arrangement. Once the agreement is proved, the next enquiry is into the effects of such agreement/arrangement; the test being AAEC as per the factors laid down under section 19(3) of the Act.
Though the OPs have denied exclusive arrangements, accepting that such exclusive arrangement did in fact exist, the important question is whether such arrangements/agreements are anti-competitive. Section 3(1) of the Act unequivocally condemns only such agreement/arrangement/understanding which has or is likely to have an AAEC in the market. Section 3(3) of the Act presumes AAEC in case of certain horizontal agreements/arrangements which have been specifically identified therein. However, vertical agreements/arrangements under section 3(4) and other agreements/arrangements which do not fall under section 3(3) are anti-competitive only when AAEC is proved.
The bare perusal of the agreement on the touchstone of the factors laid out suggests that such agreements do not result into AAEC. It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints. For example, mobile phones, tablets, books, camera etc., are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appear that because of these exclusive agreements any of the existing players in the retail market are getting adversely affected, rather with new e-portals entering into the market, competition seems to be growing.
With regard to allegations pertaining to section 4 of the Act, the relevant market needs to be determined where OPs are operating. In this context, the Commission is convinced with the OPs that every product cannot be taken as a relevant market in itself. Irrespective of whether we consider e-portal market as a separate relevant product market or as a sub-segment of the market for distribution, none of the OPs seems to be individually dominant - the Commission does not consider it necessary to go into the question of abuse of dominance by the OPs as raised by the Informant and ADCTA.
The Commission is of the prima facie view that no case of contravention of the provisions of either section 3 or section 4 of the Act is made out against the OPs - the matter is closed under the provisions of section 26(2) of the Act.
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2015 (4) TMI 1353 - KERALA HIGH COURT
Exclusion of land from the data bank prepared under Section 5(4)(i) of Act 28 of 2008 - requirement to 3rd respondent therein to correct the entry regarding the description of the land contained in the Basic Tax Register and to note the same as garden land - HELD THAT:- The admitted factual position is that though the lands of the respondents also were included in the draft data bank prepared under Section 5(4) of Act 28 of 2008, on a consideration of Ext.P3 representation, the Local Level Monitoring Committee itself resolved to modify the entries in the draft data bank and the entry has been modified into converted land. This, therefore, means that, as a result of the above development, Act 28 of 2008 is rendered inapplicable to the lands owned by the respondents. In such a situation, in the light of the principles laid down by the Apex Court in the judgment in Revenue Divisional Officer v. Jalaja Dileep [2015 (3) TMI 813 - SUPREME COURT], automatically the provisions of the Kerala Land Utilisation Order, 1967 would be applicable. Therefore, if the status of the lands are to be changed in the manner as sought for by the respondents, they will necessarily have to move the authorities under the Kerala Land Utilisation Order, 1967.
Though it is true that in the judgment of the Apex Court, that principle has been laid down by the Apex Court in the background of Section 18 providing for rectification of mistakes. If an order is passed by the authority under the Kerala Land Utilisation Order or Act 28 of 2008 changing the description of the land, that cannot lead to a situation where Section 18 is attracted. On the other hand, such change of the description of the land would render the assessments already made under Section 6A of the Kerala Land Tax Act, 1961 redundant and instead what is called for is a fresh assessment in accordance with the said Act. Necessarily, as a consequence of such assessment, it would be open to the authorities also to make appropriate additions to the Basic Tax Register. Such a course is not forbidden by any of the principles laid down by the Apex Court, particularly those contained in para 21 of the judgment mentioned above.
Appeal disposed off.
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2015 (4) TMI 1352 - CESTAT NEW DELHI
CENVAT Credit - denial of credit on the ground that they have received only the invoices without the receipt of inputs in question - circumstantial evidences - third party evidences - corroborative evidences or not - HELD THAT:- The entire case of the Revenue is based upon the investigations conducted at the end of the manufacturing unit of M/s. Aggarwal Steel Rolling Mills & Metal Industries. Admittedly, the said manufacturer was also clearing the scrap or the defective goods, etc. to some extent. There is nothing on record to show that the goods were not actually received by the present appellant, which stands duly reflected by them in their RG-23 Part A register and stand utilised by them in the manufacture of their final product. Further, as seen from the impugned order of the Commissioner (Appeals), he has observed that there is circumstantial evidence available on record to indicate that the defective rounds produced by the manufacturer were not scrap. Such circumstantial evidence referred to by the Commissioner (Appeals) is the fact that the original manufacturing unit has shown more clearance of defective rounds than the prime quality rounds.
There is otherwise no evidence to show that such excess cleared defective rounds were received by the present appellant. They may have received defective goods/scrap, which was admittedly defective and was capable of melting in the furnace. In the absence of any evidence to the contrary, it is found that the denial of Cenvat credit on the basis of the investigations conducted at the third party end cannot be adopted as the sole basis for denial of credit.
Appeal allowed - decided in favor of appellant.
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2015 (4) TMI 1351 - ITAT MUMBAI
Deduction u/s 80IB - pro-rata deduction u/.80- IB(10) - project ‘Garden Estate’ was allowable on a proportionate basis or not, i.e., excluding the profit attributable to the area covered by the flats exceeding the upper limit of 1000 sq. ft., as prescribed u/s.80-IB(10)(c) of the Act - HELD THAT:- In the instant case, eighteen flats have admittedly been converted into nine duplex flats, implying at least nine allotments to the same allotee/s, or to his family member, attracting the rigor of s. 80-IB(10)(e)/(f). This aspect ought to have, in view of the changed law, providing for the eligibility of the project w.r.t. allotment, brought to our notice, which we consider as a serious failing, which gets in fact compounded in view of the earlier lapse in not clarifying to the tribunal the fact that the Revenue is also in appeal, so that the assessee’s appeal stood heard by it in isolation despite it being a case of cross appeals, and on the same issue.
So much so that we think that it was a proper case for recall of the assessee’s appeal for being heard along with the instant appeal, which again has not been attempted by the Revenue. In fact, the relevant facts came to light only on perusing the file; the matter, as afore-stated, being closed as a squarely covered matter, which it indeed is, i.e., qua facts. The purview of an appellate authority, it needs to be appreciated, is to ascertain the correct tax liability by enabling determination of the correct income chargeable to tax, and the parties are obliged to assist the court in arriving at the correct decision
The consequence would be that profit of the project ‘Garden Estate’ shall not be eligible for deduction u/s. 80-IB(10) for the current year; it being again trite that only a cumulative satisfaction of all the qualifying conditions would render a project as an eligible project.
This aspect of the matter, which we regard as legal in view of the admitted facts, being further determined by the tribunal in the assessee’s own case, and with reference to which the assessee pleads its facts as identical with that for the preceding year, even as stated by the ld. CIT(A), having not been either considered during the assessment or the first appellate stage, or even before us, we only consider it fit and proper to restore the matter back to the file of the ld. CIT(A) to consider the eligibility of the said project, particularly with reference to the amended law, i.e., clauses (e) and (f) to s. 80-IB(10), inserted with effect from the relevant assessment year, determining the said issue after allowing reasonable opportunity of hearing to both the sides, in accordance with law. Revenue’s appeal is allowed for statistical purposes.
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2015 (4) TMI 1350 - SUPREME COURT
Dishonor of cheque - Jurisdiction of Metropolitan Magistrate - Initiation of proceedings u/s 138 - Recording of evidences u/s 145 - HELD THAT:- we are satisfied that evidence had commenced in the present matter, as envisaged by Section 145(2) of the Negotiable Instruments Act, 1881, in terms of the clarification recorded in paragraph 22, in Dashrath Rupsingh Rathod's case [2014 (8) TMI 417 - SUPREME COURT]. That being the factual position, we are of the view, that the instant appeal is liable to be allowed. The same is accordingly allowed. The Metropolitan Magistrate, 11th Court, Calcutta will be deemed to have jurisdiction to entertain the controversy arising out of the complaint filed by the appellant under Section 138 of the Negotiable Instruments Act, 1881.
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2015 (4) TMI 1349 - CALCUTTA HIGH COURT
Entitlement to receive rebate as provided under Section 171(5) of the Kolkata Municipal Corporation Act, 1980 - It is contended on behalf of the writ petitioners that a flat in a building should be considered as a separate unit for the purpose of assessment of property keeping in view the ground realities and the definition "building" as obtaining in the Act of 1980 - writ petitioners contend that if any benefit is conferred by a provision of a statute imposing tax, the same should be interpreted in a manner to allow such benefit to be availed by the maximum number of the members of the public as possible.
HELD THAT:- In Bajaj Tempo Ltd. [1992 (4) TMI 4 - SUPREME COURT] it has held that a provision in a taxing statute granting incentives for promoting growth and development should be construed liberally. Similar view has been expressed in Mysore Minerals Ltd. [1999 (9) TMI 1 - SUPREME COURT].
In Ranbaxy Laboratories Ltd. & Ors. [2008 (5) TMI 653 - SUPREME COURT], R & B Falcon (A) Pty. Ltd. [2008 (5) TMI 2 - SUPREME COURT], A.N. Roy, Commissioner of Police & Anr. 2006 (7) TMI 660 - SUPREME COURT], Dr. Sattur's Sushrushalaya Nurshing Home & Anr. [1991 (8) TMI 26 - KARNATAKA HIGH COURT] and Gian Chand Ashok Kumar and Company & Ors. [1990 (3) TMI 13 - HIMACHAL PRADESH HIGH COURT] it has been held that in construing a provision of an Act, a situation giving rise to anomaly and absurdity must be avoided.
The flat occupied by the petitioner is to be considered as a separate unit or a "newly constructed building" within the meaning of Section 171(5) of the Act of 1980. This is amplified by the second proviso to Section 171(5) of the Act of 1980. The second proviso mandates rebate in respect of such building in so far as it is a single unit of assessment under Chapter XII of the Act of 1980.
The writ petitioners therefore satisfy the conditions laid down in sub-section (5) of Section 171 of the Act of 1980. The writ petitioners therefore are entitled to a rebate of 25 percent in the property tax as laid down in Section 171(5) of the Act of 1980. The first ground of refusal under Section 171(5) of the Act of 1980 recorded in the impugned communication is, therefore, perverse.
Whether the assessment of the flat has to be made on the date of the completion certificate and not the date of possession letter? - HELD THAT:- Sections 171(5) and 178(5) of the Act of 1980 allow benefits to assessees. Since the legislature has granted benefits to the assessees in the form of rebate under Section 171(5) and relaxation in the period of assessment under Section 178(5), these beneficial provisions of the Act of 1980 have to be construed so as to allow the benefits to these tax provisions to be made available to the maximum number of persons that may be found eligible thereto. The word "building" used in Sections 171(5) and 178(5) should be read in the context of the definition of "building" given in Section 2(5) of the Act of 1980 - A flat in a building should be construed as a separate unit for the purpose of assessment of property tax of a building within the meaning of Section 171(5) and 178(5) of the Act of 1980. Multistoried buildings are divided into flats or units.
A flat comes within the definition of building given in Section 2(5) of the Act of 1980. Consequently, a flat would also come within the meaning of building used in Sections 171(5) and 178(5) of the Act of 1980. Such an interpretation would be harmonious, and would not lead to an absurdity or an abnormality. This interpretation would also extend the benefit of Sections 171(5) and 178(5) of the Act of 1980 to the individual flat owners, who, in my view, these provisions are intended to benefit.
The orders impugned herein are quashed. The tax bills raised on the basis of the quashed impugned orders are set aside - petition allowed.
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2015 (4) TMI 1348 - SUPREME COURT
Maintainability of petition - HELD THAT:- Three weeks' time is granted to the petitioners to approach the authority concerned, if it so desire, inter alia, taking up all such objections which are available to them, including the grounds raised in these special leave petitions - The authority concerned shall decide the lis between the parties without being influenced by the affidavit filed before the High Court or any of the observations made by the High Court.
Petition dismissed.
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2015 (4) TMI 1347 - BOMBAY HIGH COURT
In the light of the judgment and order passed in a batch of appeals in Contintental Warehousing Corporation (Nhava Sheta) Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] one of which is concerned with the revenue's appeal against the decision of the Tribunal in the case of Commissioner of Income Tax V/s. M/s. All Cargo Global Logistics Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] which has been followed and applied. We do not find that the appeal raises any substantial question of law. It is accordingly dismissed. No order as to costs.
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2015 (4) TMI 1346 - ITAT CHANDIGARH
Nature of receipt - Carbon Emission Reduction Units - Revenue Receipt OR Revenue receipt - CIT(A) deleted the addition which was made by the AO by denying the benefit of deduction claimed by the assessee was not “derived from” the eligible business of the assessee - HELD THAT:- The facts of the case are identical to the facts of the case decided by Hyderabad Bench of the Tribunal in the case of My Home Power Ltd [2014 (6) TMI 82 - ANDHRA PRADESH HIGH COURT] carbon credit was in the nature of “an entitlement” received to improve world atmosphere and environment reducing carbon, heat and gas emissions. It was not an offshoot of business but an offshoot of environmental concerns. No asset was generated in the course of business. Credit for reducing carbon emission or greenhouse effect could be transferred to another party in need of reduction of carbon emission. It does not increase profits in any manner and does not need any expenses. In the nature of entitlement to reduce carbon emission, and there was no cost of acquisition or cost of production to get this entitlement. Carbon credit was not in the nature of profit or in the nature of income. The amount realized on transfer of carbon credit was not taxable.
This decision has been followed by Chennai Bench in two cases of Ambika Cotton Mills Ltd [2014 (3) TMI 428 - ITAT CHENNAI] and Sri Velayudhaswamy Spinning Mills P. Ltd [2015 (4) TMI 132 - ITAT CHENNAI]. Even Jaipur Beach has followed this decision in the case of Shree Cement Ltd [2015 (3) TMI 759 - ITAT JAIPUR] No doubt the DR has been able to point out the contrary decision rendered by Cochin Bench of the Tribunal in the case of Apollo Tyres Ltd [2015 (3) TMI 760 - ITAT COCHIN]. Since the decision of Hyderabad Tribunal Bench has already been confirmed by the Hon'ble Andhra Pradesh High Court and there is no contrary decision from any other High Court, in our opinion, we are bound to follow the decision of High Court. Therefore, following this decision we decide this issue against the Revenue.
Deduction u/s 80-IA - Receipt as ‘insurance receipt’ which was disallowed AO since the same was not “derived from” the eligible business of the assessee - HELD THAT:- This issue has not been discussed in detail by Assessing Officer and CIT(A) in their respective orders. Therefore, if it is a case of refund of only insurance premium then assessee would be entitled to deduction u/s 80IA on this amount also. However, this fact need to be verified, therefore, we set aside the order of Ld. CIT(A) and direct the Assessing Officer to verify the nature of insurance receipts and if the same was in the Revenue field, then deduction u/s 80IA should be allowed otherwise the issue may be decided in accordance with law.
Allowance of deduction u/s 80IA in respect of interest subsidy - The effect of the interest subsidy would be that normal interest expenditure would get reduced because of this subsidy. This in turn would lead to increase in normal profits which would entitle to deduction u/s 80IA, therefore, in our opinion, the Ld. CIT(A) has correctly decided this issue and we confirm his order. Thus the appeal is partly allowed for statistical purposes.
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2015 (4) TMI 1345 - TELANGANA HIGH COURT
Violation of principles of natural justice - cross-examination of witnesses - low turnover reported - whether the Sales Tax Appellate Tribunal is correct in accepting the extracts obtained from the check posts without any corroborative evidence in support thereafter? - Whether the Sales Tax Appellate Tribunal is correct in forming the estimation of turnovers with reference to sales with no corresponding consumption of power (electricity in the manufacturing premises of the dealer) and as to denial of opportunity for cross-examination of witnesses?
HELD THAT:- The cross-examination is not as of right for even no worth material placed much less any case made out to afford opportunity in cross-examination to elicit any material required for consideration. In fact, from the questions of law, claimed there is no question of law involved practically. No doubt so far as the estimation of turnovers on the basis of consumption of electricity is concerned, it is only one of the permissible modes and that too when there is no other evidence and only on showing there is any direct nexus between the consumption of electricity and the turn over, without which that cannot be taken as a basis as held by this Court in Venkata Ramana Stone Crushers Co., V. State of Andhra Pradesh [2010 (9) TMI 1095 - ANDHRA PRADESH HIGH COURT].
The assessing authority when taken every possible means to prove the nature of transactions and there were suppression of the estimated turnovers by Nil return or by return showing absolutely low turn over and the same was detected on cross verification from the extracts of the check post and also information from the banks and purchasing dealers which are very clearly discussed in corroboration of one to the other to substantiate with reasons to the best judgment assessment, that too after supply of all the copies and even when the assessee (revision petitioner) failed to deny any of the transactions through the books of accounts, weigh bills and other documentary evidence, but for by a stray sentence of all are as if fake or untrue, that is not suffice. Further more, the assessee who obtained weigh bills from the assessing authority failed to produce the triplicate copies and render account for its use when called for and came up with a plea of records destroyed as if in a fire accident with no any basis even to say muchless to substantiate.
The assessment order clearly speaks with reasons that was confirmed by the Appellate Deputy Commissioner of said version is untrue from the recorded evidence, but intentionally for evasion of tax by filing Nil returns or returns with utterly low turnover, there is for this Court while sitting in revision against the impugned order of the Sales Tax Appellate Tribunal in the two respective revisions nothing to interfere.
Revision dismissed.
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