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2010 (8) TMI 1174
... ... ... ... ..... ng that the assessee is carrying out activities incidental to the main objects of the Corporation for which it has been granted registration under Section 12AA? (ii) whether on the facts and in the circumstances of the case, the ld. ITAT is right in law in holding that the assessee Trust is eligible or exemption u/s 11 and 12 of the Income-tax Act, 1961 notwithstanding that the dominant activities of the assessee are of business activities with profit motives and are not in the nature of charity? 3. Questions of law in other appeals are also identical. 4. We have heard learned counsel for the parties. 5. It is not disputed that the above questions are covered by order passed today in ITA No. 563 of 2006 (Commissioner of Income-tax, Panchkula v. The Haryana Warehousing Corporation). Accordingly, the questions are answered against the revenue and in favour of the assessee. 6. The appeals are dismissed. 7. A photo copy of this order be placed on the files of the connected cases.
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2010 (8) TMI 1172
... ... ... ... ..... ontroversy is covered by the decision rendered in ITA No. 439/2008 (Van Oord ACZ India (p) Ltd. vs. Commissioner of Income Tax) decided on 15th March, 2010 whereby the appeal preferred by the assessee has been allowed. In view of the aforesaid, the present appeal is allowed and the order passed by the tribunal is set aside in terms of the order in ITA No. 439/2008. There shall be no order as to cost.
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2010 (8) TMI 1156
... ... ... ... ..... On the contrary the same are duly audited as required under section 44AB of the Act. The duty draw back will always be part of trading results. If such amount is included while computing gross profit, the results declared by the assessee are better. In such circumstances, no addition could have been made by rejecting the book results. No specific defect has been pointed out in the books of account i.e. whether the purchases are inflated or sales are not recorded. In such circumstances, no addition could “have been made by estimating the gross profit. We, therefore, delete the addition of ₹ 25,04,914/-.” 5. In our opinion, the factual findings of the final fact finding authority are neither perverse nor contrary to record. Accordingly, we find that no substantial question of law arises in the quantum appeal. Since the quantum appeal is, bereft of merit, the question of imposing any penalty does not arise. Accordingly, present appeals are dismissed in limine.
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2010 (8) TMI 1135
... ... ... ... ..... the individual assessments in accordance with law. Such amounts cannot be regarded as undisclosed income under section 68 of the assessee company. Applying the said principles to the facts of the present case, the Assessing Officer having traced out the source of funds to specific persons who had invested the same in shares of the assessee company, it was open for the Assessing Officer to proceed against the said persons. The funds not having emanated from the assessee company, there was no warrant for making addition of the said amount as undisclosed income under section 68 of the Act in its hands. In the circumstances, the Tribunal was justified in deleting the addition of ₹ 50,00,000/- made under section 68 of the Act. The question stands answered accordingly, that is, in favour of the assessee and against the revenue. 10. In the light of the aforesaid, there being no infirmity in the impugned order of the Tribunal, the appeal is dismissed with no orders as to costs.
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2010 (8) TMI 1134
Condonation of delay in filling appeal before ITAT - delay of 310 days - due to change of Managing Director, took their own time to get the papers signed and to file the appeal - Whether constitute a sufficient cause u/s 5 of the Limitation Act - HELD THAT:- In the instant case, it is not disputed after the order came to be passed, the Managing Director was changed and thereafter, the Chartered Accountant took a decision to prefer the appeal and though papers were sent for signature was not signed and appeal was not filed. What is to be seen in such matters is that, the appellant was negligent and by not filing the appeal within time, whether there is any valuable right of the appellant, which would be taken away by not condoning the delay in the matters arising under the Income-tax Act, ultimately the question is, what is the tax payable under law.
It is not an adversary litigation. An assessee cannot be charged without statutory authority. Under these circumstances, the approach of the Tribunal cannot be accepted. In that view of the matter, the reasoning given by the Tribunal for not condoning the delay is unsustainable in law. Hence, we are satisfied that the appellant has made out a sufficient cause for condoning the delay in preferring the appeal. Hence, we pass the following:
(i) The appeal is allowed.
(ii) The impugned order passed by the Tribunal dismissing the appeal as barred by limitation is hereby set aside. The application filed for condonation of delay of 310 days in preferring the appeal before the Tribunal is allowed.
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2010 (8) TMI 1115
... ... ... ... ..... as obtained instruction from the Department and the Department vide its letter dated 10.03.2010 has stated that the issue will not affect the income of the assessee and the matter is tax neutral. For this reason alone, we dismiss this appeal, leaving the question of law raised open.
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2010 (8) TMI 1109
... ... ... ... ..... it petition under Article 226 of the Constitution of India, is not maintainable. Their lordships have not considered various statutory provisions discussed hereinabove in their true spirit. With profound respect, we are in disagreement with the judgment of Karnataka High Court. 23. In view of the above, we are of the view that in case application under section 254(2) of the Act is rejected by the Tribunal, then appeal under section 260A of the Act, shall not be maintainable. The only option with the Revenue is to approach the High Court under writ jurisdiction. With liberty to appellant to invoke writ jurisdiction. The questions are answered in favour of the assessee and against the Revenue to the extent of maintainability. Since the appeal is not maintainable, no finding is recorded with regard to controversy on merit with liberty to appellant to approach the appropriate forum or to invoke writ jurisdiction. 24. Subject to above, the appeal is dismissed as not maintainable.
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2010 (8) TMI 1102
... ... ... ... ..... om COD to prefer the appeal. In view of the aforesaid, the present appeal is permitted to be withdrawn with liberty to refile after the approval is obtained. We have said so, as the appeal stands disposed of with liberty to refile when the approval is obtained.
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2010 (8) TMI 1074
... ... ... ... ..... he notional interest is not to be added, can such a huge interest-free security deposit (which does not appear to have any rationale with the agreed rent) be totally ignored while determining the "fair rent" which the property might reasonably be expected to yield ? Or else, in a case like this, can it be inferred that the tenant paid part rent by giving interest-free deposit and agreed rent is not what reflected in the lease deed, but part of it is hidden in the form of security ? 19. These aspects were not considered by the Calcutta High Court or this Court in the aforementioned cases, as such abnormal circumstances did not exist in those cases. We are, therefore, of the opinion that the questions posed above, should be answered by a Larger Bench. We accordingly direct that the matter be placed before Hon'ble the Chief Justice for constituting Full Bench to consider these aspects touching the interpretation that needs to be given to s. 23(1)(a) of the IT Act.
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2010 (8) TMI 1067
... ... ... ... ..... . The Tribunal has also concurred with the finding of Commissioner (Appeals) that the recovery of the document may be a clue for further investigation but cannot be a conclusive piece of evidence to make any addition. The Tribunal has even indicated the entity who might be liable to actually explain the said seized documents. 11. In light of the aforesaid findings recorded by Commissioner (Appeals) as reproduced hereinbefore, it is not possible to find any legal infirmity in the impugned order made by the Tribunal upholding the deletion of the additions in hands of the respondent assessees. It is apparent that both the appellate authorities have appreciated the facts on record and recorded findings of fact. 12. In the aforesaid facts and circumstances of the case, it is not possible to state that any question of law as proposed in any of the two appeals, much less a substantial question of law, arises in any of the two appeals. Accordingly, both the tax appeals are dismissed
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2010 (8) TMI 1063
... ... ... ... ..... (A) and dismissed the appeal. Hence, the present appeal by the revenue. 3. We have heard learned counsel for the revenue. None appears on behalf of the assessee. 4. The solitary issue raised by the revenue in this appeal is - whether an assessee is entitled to deduction on account of interest paid on loans when net profit rate has been applied by the Assessing Officer for determining the taxable income of the assessee. 5. The matter is no longer res integra. The similar issue came up for consideration before this Court in Girdhari Lal v. Commissioner of Income-tax, Jalandhar and another, 2002 256 ITR 318 and no separate deduction was held admissible to the assessee on account of payment of interest where net profit rate was applied by the Assessing Officer. That being so, the Tribunal was in error in allowing the claim of interest to the assessee-respondent. 6. Accordingly, the appeal is allowed and the question is answered in favour of the revenue and against the assessee.
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2010 (8) TMI 1062
... ... ... ... ..... unt may be directed to be refunded to the petitioner without prejudice to the contentions of the petitioner that no amount can be deducted from the amount seized. 3. I have considered the rival contentions in detail. 4. I am of opinion that insofar as even if everything goes against the petitioner, the amount payable would only be ₹ 60,24,333/-. The balance amount with the income-tax authorities can be refunded to the petitioner subject to further proceedings under the Income-tax Act and without prejudice to the contentions of the petitioner in the matter. Accordingly, this writ petition is disposed of with a direction to the income-tax authorities to return the amounts retained by them after deducting an amount of ₹ 65,00,000/- (Rupees sixty five lakhs only) pending further proceedings to be taken by respondents 3 and 4 without prejudice, of course, to the contention of the petitioner that no amount is due from him. The amount shall be refunded within one month.
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2010 (8) TMI 1060
... ... ... ... ..... epreciation putting up of additional construction, which are not in dispute, clearly shows than these leasehold rights was treated a the asset of the partnership firm. Even the will in 1996 subsequent reconstitution of the partner-ship deed is held to be a sham transaction that would in no way takeaway the effect of the leasehold rights which has been for more than two decades at an undisputed point of time. In that view of the matter, the Tribunal is justified in holding that it was an asset of the partnership firm stood earlier to the relevant dated and therefore, when partners retire the consideration paid to them, representing the leasehold rights will not fall within the definition capital gains and therefore, not tax is payable. 6. In view of the undisputed aforesaid facts and the legal position we are of the view that no substantial question of law would arise for consideration in these appeals. 7. Accordingly, all these appeals are rejected at the stage of admission.
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2010 (8) TMI 1053
Bad and doubtful debts - allowable deduction - Commissioner (Appeals) held as the Assessee did not give paticulars about the provision for bad and doubtful debts and as the credit entry continued, he held, the assessee it not entitled to claim deduction and therefore, he dismissed the appeal - Tribunal held that it is the absolute satisfaction of the Assessee while writing off any bad debt, which has to be seen and Assessee is not required to prove that the debt he become bad in the relevant previous year - HELD THAT:- After referring the claim in respect of each year, in the end, the order passed by the Assessing Officer as well as the Appellate Authority was set aside with a direction to the Assessing Officer to allow the claim in the light of the findings they have recorded. Further, the Assessing Officer was directed to grant sufficient opportunity to the Assessee of being heard in the matter and to furnish the details. In fact, a common order came to be passed in respect of 08 assessment years.
In that view of the matter, we decline to answer the aforesaid substantial question of law But, affirm the order of remand to the AO to consider the claim for bad debts, in the light of the observations made by the Tribunal and in the light of the judgments in the case of Vijaya Bank Vs CIT and Another [2010 (4) TMI 46 - SUPREME COURT] and T.R.F. Ltd. V/s CIT and Another [2010 (2) TMI 211 - SUPREME COURT].
Computation of deduction u/s 90HHC - whether excise duty should form part of the total turnover and the computation provided in section 90HHC r.w.s 80AB? - HELD THAT:- In the case of CIT Vs Laxmi Machine Tools [2007 (4) TMI 202 - SUPREME COURT] held that It is important to bear in mind that excise duty and sales-tax are indirect taxes. They are recovered by the assessee on behalf of the Government. Therefore, if they are made relatable to exports, the formula u/s 90HHC would become unworkable. Accordingly we hold that the excise duty cannot form part of the turnover for computing deduction u/s. 90HHC.
Deduction u/s 80HH and 80-I - ITAT allowing notional/hypothetical cost for ascertainment of purchase price of raw material for deduction - assessee set up a unit manufacture of toilet soap in the year 1983-84 at Amalner, and basic raw materials required for the manufacture of toilet soap being fatty acid and glycerin, was not available in and around Amalner - Therefore, assessee was purchasing non-edible oils from up-country suppliers and processed the same at Mumbai, the nearest place to Amalner, thus used to pay octroi at Mumbai for non-edible oils and also at Amalner on fatty acid and glycerin. It used to pay transport charges for transportation of raw materials from Amalner to Mumbai and from Mumbai to Amalner for transportation of finished goods - octroi at Mumbai Municipality, freight from Mumbai to Amalner and Amalneroctroi should be excluded for computing the transfer price of fatty acid from FAGP to toilet soap unit. Accordingly, after working out certain percentage of profits would stand reduced. The same was challenged by the assessee - Tribunal has allowed the appeal and has held in the absence of actual sale for the purpose of 80HH and 80I the assessee was justified in taking the market price prevailing in Bombay
HELD THAT:- In the appeal preferred against the very same judgment in respect of the assessment for several (other) years, a Division Bench [2008 (12) TMI 681 - KARNATAKA HIGH COURT] has already held that the market value would mean that the price of the goods would ordinarily fetch in the open market. It connotes the price at which the seller is willing to sell and the price at which the purchaser is willing to buy. It does not mean only the cost of production. Either way, the cost of the goods at the nearest available market would have to be reckoned and to that the cost of transportation, octroi, local taxes etc. has to be added. The figures so arrived at would in terms of the explanation to Section 80-I(8) would constitute the market value.
In the light of the aforesaid judgment rendered between the very same parties for the earlier assessment year, we do not find any justification to have a different view.
Computation of deduction u/s 90HHC - Income from software exports - for earlier year it has claimed exemption. However for the current year, it did not claim any exemption u/s 90HHC - Tribunal holding that income from software exports do not form part of other income mentioned in explanation (baa) to section 90HHC of the Act which is liable to be excluded before the Computation of deduction under section 90HHC of the Act - HELD THAT:- As both the appellate authorities that for the current assessment year when the said amount is not claimed as a deduction u/s. 90HHC and deduction was claimed u/s.10A of the Act, the question whether the assessee could claim deduction of the said amount in addition to the income derived out of the sale of goods and merchandise which had been produced and manufactured in India and exported would not arise for consideration. Therefore, the aforesaid substantial question of law is wrongly framed and there is no need to answer the said question as it would not arise for consideration in the facts of this case.
Exemption u/s.10A - corporate overheads remaining unallocated under section 10(A) including interest can be notionally attributed to the units claiming exemption under section 10(A) - tribunal on appreciation of the admitted facts of the case held, in the absence of any specific finding by the authorities below that the expenditure is incurred by various units claiming exemption/deduction, artificial way of allocating is not justifiable. The profits of undertaking under Section 10A of the Act is correctly worked out and no artificial working can be attributed thereto - HELD THAT:- A perusal of the statement shows the Corporate Office has spent towards the expenses consisted of salaries etc. excluding interest less revenues. They allocated to the various sub-divisions other than the software export sub-division similarly they have recovered from software exports sub-division in the process the excess recoveries. Further, the interest out go to intra business and external agencies. The interest earned from deployment of founds intra-business and with external agencies.
Considering the facts, it does not represent the expenditure incurred by the Corporate Office in respect of its sub-division. In those circumstances, the AO and the First Appellate Authority were not justified in allocating the substantial portion of the amount as the expenses incurred in respect of Section 10A and disallowing the deduction. That is precisely what the Tribunal has held on proper appreciation of the material on record. In that view of the matter we do not find any justification to interfere with the well considered order of the Tribunal. Accordingly, this question of law is answered in favour of the assessee and against to Revenue.
Exemption u/s 10(A) - special import licence premium income and other miscellaneous income considered as income derived from the industrial undertaking - As per AO as the said income is not derived from export of goods manufactured by the assessee as it is in the nature of a by-product, the said amount is not allowable for exemption - HELD THAT:- This special import licence has a direct nexus with the manufacture and export of the products. It falls within the first degree as explained by the Apex Court in more than one judgment. In the judgments relied on by the revenue, as there was no direct nexus and the income did not belong to the first degree and more so the exemption claimed was under Section 80HH not under 10A such exemption was not granted.
Tribunal rightly held those judgments have no application to the facts of the case. This case arises under Section 10A and this special import licence has direct nexus with the manufacturing and export activity of the assessee and this special import licence is a special incentive given to improve the importing of goods. Therefore, the income derived from sale of licence constitutes profits and gains derived by the assessee from the industrial undertaking under Section 10A of the Act and is eligible for exemption. In that view of the matter, we do not see any justification to interfere with the well considered order passed by the Tribunal. Accordingly, this question is held in favour of the assessee and against the revenue.
Deduction u/s 10A - Income from sale of old newspapers deemed to be held as income derived from eligible export oriented units - HELD THAT:- While calculating the profit of the eligible business the expenses and the income of the same unit are required to be netted out. The expenses and the income are relatable to the same nature. Therefore, they directed the computation should be made after netting out expenditure by reducing the income in dispute. Without properly understanding the case put forth by the assessee, the authorities have proceeded on the basis that it is an income derived from the business which has no nexus and, therefore the assessee is not entitled to claim exemption u/s 10A. Therefore, the Tribunal was justified in setting aside those findings and granting the deduction sought for by the assessee. In that view of the matter in the first place the said question do not arise for consideration. We decline to answer the same in the facts of the case.
Revenue or capital expenditure - Expenditure on imported software when the expenditure per se is capital in nature and is not allowable - assessee company claims import of software for the purpose of retail trading pre loading into the Hardware sold and also for in house use. The software is a commodity having copyrights - Tribunal held they cannot go into the question whether the expenditure is capital in nature as that is not what was urged before the lower authorities - HELD THAT:- Assessee claimed deduction on the ground that it falls under revenue expenditure. When the assessing officer accepted the case of the assessee to the substantial portion, merely because the imported goods were used in house by the assessee he was of the opinion that was housed for catering into the requirements of the clients and, therefore, it amounts to royalty and TDS should have been deducted, the same having not been done, the entire amount cannot be claimed as deduction.
Commissioner rightly pointed out it is not a royalty, it is a revenue expenditure and the entire amount is held to be deductible. In those circumstances, it was not open to the revenue to contend that it constitutes and asset. Therefore, the Tribunal declined to entertain the said contention and affirmed the order of the Appellate Authority. In those circumstances, the substantial question of law as framed do not arise for consideration in this appeal and we decline to answer the same.
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2010 (8) TMI 1052
... ... ... ... ..... nsactions and capacity of the depositors by filing relevant details. Thus, both Tribunal as well as CIT(A) have recorded concurrent findings of fact which clearly show that the assessee had discharged the onus under s. 68 of the Act and had proved the identity of the creditors, genuineness of the transactions, as well as capacity of the creditors by furnishing relevant material. In the light of the concurrent findings of fact recorded by the Tribunal it is not possible to state that the conclusion arrived at by the Tribunal is in any manner unreasonable or perverse. On behalf of Revenue, nothing is pointed to show that the Tribunal has taken into consideration any irrelevant material or that any relevant material has been ignored. In the circumstances, there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law, much less a substantial question of law, so as to warrant interference. The appeal is, accordingly, dismissed.
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2010 (8) TMI 1048
... ... ... ... ..... y debatable one has also opined that the assessee had acquired the shares of its principal company itself shows that the intention of the assessee was to retain control and the same was obviously earning of the dividend on account of this holding is incidental. It is urged by him that the assessee has preferred an appeal against the determination of quantum and if the said finding remains intact in this appeal, the revenue may face difficulties in the quantum appeal. At this juncture, Mr. Vohra, learned counsel for the assessee, submitted that the said aspects were in the realm of submission of the assessee. Mr.Sanjeev Sabharwal fairly stated that if they are in the realm of submission of the assessee, he has no objection if they are allowed to stay. In view of the aforesaid, we clarify that the said observations of the tribunal would be treated as submissions of the assessee for all purposes. With the aforesaid observation, the appeal stands dismissed. No order as to costs.
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2010 (8) TMI 1047
... ... ... ... ..... n 149 of the Act is still available. 13. The learned Senior Counsel would fairly submit that section 245HA(4) of the Act, provides that the period spent before the Settlement Commission and in this writ petition before this Court shall be excluded while computing the period of limitation. Regarding this legal position, there can be no controversy. Therefore, if the Assessing Authority decides to reassess the escaped income of the petitioner for the relevant years in question in this writ petition, for doing so, the time spent before the Settlement Commission and in this writ petition shall be excluded while computing the period of limitation. 14. In view of all the above, the writ petition is allowed, the impugned order of the Commission is set aside and the application filed by the petitioner before the Settlement Commission shall stand rejected with liberty to the Assessing Authority to proceed further under sections 147 and 148 of the Act, if it is so warranted. No costs.
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2010 (8) TMI 1033
Jurisdiction of AO for service of notice u/s 143(2) - Facts of the case, Notice was duly served u/s 143 along with detailed questionnaire by the Dy. CIT, which was served upon the assessee on 21st April, 2006 when the jurisdiction stood transferred to him. Sec. 124(3) specifically provides for limitation of one month, inter alia, from the date of service of notice u/s 143(2).
HELD THAT:- In the present case, admittedly objection was not taken within one month. Therefore, for this reason, we are of opinion that the order of the Tribunal holding that the assessment proceeding for the block period was without jurisdiction is not correct. We, thus, decide the question in favour of the Revenue and against the assessee. As a result thereof, the impugned order passed by the Tribunal is set aside and the matter is remanded back to the Tribunal to decide the appeal on merits.
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2010 (8) TMI 1026
... ... ... ... ..... y the Commissioner (Appeals). 9. Thus both, Commissioner (Appeals) as well as the Tribunal have recorded concurrent findings of fact to the effect that the assessee had already shown the excess income in the earlier years, the same income had been taxed in the earlier years and then the difference has been written off in the year under consideration. When the assessee had already paid tax on the interest income in the earlier years, no fault can be found in the impugned order of the Tribunal in holding that the assessee was entitled to write off the excess income shown in the earlier years, inasmuch as the same income cannot be taxed twice, once in the earlier years and then again in the year under consideration. 10. In the light of the aforesaid, there being no legal infirmity in the impugned order of the Tribunal, no question of law as proposed or otherwise, much less a substantial question of law can be stated to arise out therefrom. The appeal is, accordingly, dismissed.
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2010 (8) TMI 1015
... ... ... ... ..... the position, we feel for the ends of justice hearing of the matter should be postponed. In view of the submission as aforesaid, no order need be passed on this application. However, liberty is given to Ms. Dasgupta’s (nee Banerjee) client to do what have been stated before us. Once the order of withdrawal is placed before this Court the matter pending before this Court will be taken up for consideration. The application is thus disposed of.
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