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Showing 161 to 180 of 934 Records
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2013 (2) TMI 782
Issues Involved:
1. Rejection of application for registration u/s 12AA of the IT Act.
2. Whether educational activities qualify as charitable activities.
3. Procedural lapses in the conduct of enquiry and granting of hearing.
Summary:
Issue 1: Rejection of Application for Registration u/s 12AA of the IT Act
The appeal was directed against the order of CIT(A)-II, Agra, dated 26.07.2012, which rejected the assessee's application for registration u/s 12AA of the IT Act. The CIT noted that the assessee, engaged in educational activities, did not spend surplus funds on charitable activities and was operating on commercial lines. The CIT concluded that education per se is not a charitable activity and rejected the application.
Issue 2: Whether Educational Activities Qualify as Charitable Activities
The Tribunal highlighted that educational activities are per se charitable activities as per Section 2(15) of the IT Act, which includes education as a charitable purpose. The Tribunal referenced ITAT Agra Bench's decision in Shiksha Sankalp Society vs. CIT, which affirmed that educational institutions fulfilling the conditions of Section 80G(5) are eligible for registration u/s 12AA.
Issue 3: Procedural Lapses in the Conduct of Enquiry and Granting of Hearing
The Tribunal found significant procedural lapses in the conduct of the enquiry. The CIT did not personally conduct any proceedings or provide the assessee with a reasonable opportunity of being heard, as required by law. Instead, the enquiry was conducted by the ITO (Tech.), and the CIT merely approved the draft order without independent verification. The Tribunal noted that the CIT's actions were mechanical and violated the provisions of Rule 11AA(6) of the IT Rules, which mandates a decision within six months of the application.
Conclusion:
The Tribunal set aside the CIT's order, directing the CIT-II, Agra, to grant registration u/s 12AA of the IT Act to the assessee within one month from the date of the order. The Tribunal emphasized that the assessee's educational activities are genuine and charitable, and the procedural lapses by the CIT warranted the reversal of the rejection. The appeal was allowed in favor of the assessee.
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2013 (2) TMI 781
The Appellate Tribunal CESTAT MUMBAI directed the concerned officer to explain by 13/02/2013 why an order from 09/10/2012 has not been implemented, to avoid contempt of court proceedings. Dusti to be provided with a copy of the order.
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2013 (2) TMI 780
Issues Involved:
1. Levy of surcharge for the block assessment period.
2. Applicability of the proviso to Section 113 of the Income-tax Act.
3. Levy and quantification of interest u/s 158BFA(1) of the Income-tax Act.
Summary:
Issue 1: Levy of Surcharge for the Block Assessment Period
The Tribunal held that no surcharge could be levied for the block assessment period 01.04.1991 to 27.04.2001, as the proviso to Section 113 of the Act came into effect from 1.06.2002, and the search occurred on 27.04.2001, prior to the proviso's introduction. The High Court disagreed, stating that the proviso to Section 113 should be read with the Finance Act for each earlier assessment year within the block period, and surcharge should be levied from the inception of Chapter XIVB of the Act. The Court referenced the Supreme Court's judgment in CIT v. Suresh N. Gupta and noted that the matter was referred to a Larger Bench of the Supreme Court. Therefore, the Court answered this question in the negative against the Assessee and in favor of the Revenue, subject to the Supreme Court's final decision.
Issue 2: Applicability of the Proviso to Section 113
The High Court reiterated that the proviso to Section 113, though introduced by the Finance Act, 2002, with effect from 1st July 2002, was clarificatory. The Court held that the surcharge provision was already present in the relevant Finance Act for the search period. Thus, the Court answered this question in the negative against the Assessee and in favor of the Revenue, subject to the Supreme Court's final decision.
Issue 3: Levy and Quantification of Interest u/s 158BFA(1)
The Tribunal opined that interest u/s 158BFA(1) is compensatory and cannot be levied if the return is not filed within the due date. The High Court disagreed, stating that the levy of interest is a statutory provision and not linked to compensatory or penal nature. The interest is linked to the delay in filing the return pursuant to notice u/s 158BC. The Court noted that the return was filed late, and the Assessing Officer correctly levied interest for the delay. The Court rejected the Assessee's argument that the seized amount should reduce the tax liability before computing interest. The Court held that Section 132B is for realizing tax liability and not for reducing it before interest computation. Therefore, the Court answered this question in the negative against the Assessee and in favor of the Revenue.
Conclusion:
All substantial questions of law were answered against the Assessee and in favor of the Revenue. The appeal was allowed, setting aside the Tribunal's findings, but the answers regarding the levy of surcharge were made subject to the Supreme Court's final decision.
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2013 (2) TMI 779
Issues involved: Application for total waiver of interest and penalty u/s Rule 6 of the Cenvat Credit Rules.
Summary:
The applicants, engaged in manufacturing both dutiable and exempted goods, sought waiver of interest and penalty amounting to &8377; 5,96,79,470. The dispute arose from the credit availed on exempted goods under Rule 6 of the Cenvat Credit Rules. The appellant argued that they had already reversed a portion of the credit related to taxable services used in manufacturing exempted goods, and the total credit availed on common input services was justified considering the turnover of exempted goods. On the other hand, the Revenue contended that the demand was valid as the applicant did not comply with Rule 6 procedures. The Tribunal noted the retrospective amendment of Rule 6, requiring proportionate reversal of credit for inputs used in manufacturing exempted goods. Considering the amount already deposited by the appellant, the Tribunal waived the pre-deposit of remaining dues and stayed recovery for the appeal hearings. Stay petitions were allowed.
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2013 (2) TMI 778
Issues Involved:
1. Legality of the Income Tax Settlement Commission's order dated 24th April 2003.
2. Alleged arbitrary addition of Rs. 30 lakhs to the petitioner's income.
3. Alleged violation of principles of natural justice by the Settlement Commission.
4. Scope of judicial review of the Settlement Commission's order.
Summary:
Legality of the Income Tax Settlement Commission's Order:
The petitioner challenged the order of the Income Tax Settlement Commission (Settlement Commission) dated 24th April 2003 u/s 226 of the Constitution of India, seeking to quash the order and restore the matter for a fresh decision. The petitioner argued that the order was illegal and contrary to law.
Alleged Arbitrary Addition of Rs. 30 Lakhs:
The petitioner, a partnership firm engaged in project consultancy and real estate coordination, was subjected to search and seizure operations u/s 132 of the Income-tax Act, 1961. The petitioner filed an application u/s 245D [1] of the Act, offering additional income of Rs. 6,30,325 for settlement. The Settlement Commission, however, determined the undisclosed income at Rs. 1,06,30,325, adding Rs. 30 lakhs on an estimate basis for AYs 1994-95 and 1995-96. The petitioner contended that this addition was arbitrary and lacked a rational basis.
Alleged Violation of Principles of Natural Justice:
The petitioner argued that the Settlement Commission acted in gross violation of the principles of natural justice by not providing a proper opportunity to address the on-money receipts issue. The petitioner claimed that the method adopted for the additional estimate was irrational and perverse.
Scope of Judicial Review of the Settlement Commission's Order:
The court examined the scope of judicial review of the Settlement Commission's orders, referencing several precedents. It was noted that the Commission's decisions could be reviewed only if they were contrary to the provisions of the Act or if there was bias, fraud, or malice. The court emphasized that the proceedings before the Settlement Commission are distinct from regular assessment proceedings and that the Commission's orders carry a certain finality.
Court's Findings:
The court found that the Settlement Commission had provided cogent reasons for the addition of Rs. 30 lakhs, based on discrepancies in the on-money receipts and the lack of full and true disclosure by the petitioner. The court noted that the Commission had acted within its powers and had given sufficient opportunity for hearing. The court concluded that there was no arbitrary exercise of power or violation of natural justice principles warranting interference.
Conclusion:
The petition was dismissed, with the court upholding the Settlement Commission's order and finding no grounds for judicial review. The court emphasized that the Settlement Commission's decision-making process was unimpeachable and that the petitioner's contentions did not demonstrate any serious prejudice or breach of provisions.
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2013 (2) TMI 777
The Gujarat High Court disposed of the petition after the Assistant Commissioner of Commercial Tax assured that the refund due to the petitioner would be released by March 10, 2013. Petitioner has the liberty to apply again if needed.
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2013 (2) TMI 776
Issues Involved:1. Classification of the petitioner's establishment as a Hotel or Hospital. 2. Legality of the Tribunal's order (Ext.P5) and subsequent assessment order (Ext.P6). 3. Application of luxury tax under the Kerala Tax on Luxuries Act, 1986. Summary:1. Classification of the Petitioner's Establishment:In this Original Petition filed u/s Article 227 of the Constitution of India, the petitioner challenges Ext.P5 order passed by the Tribunal and seeks a declaration that the petitioner's establishment is an Ayurvedic hospital providing traditional Ayurvedic treatment and liable to pay luxury tax only w.e.f 1.4.2008. Ext.P2 is an order of assessment treating the petitioner's establishment as a Hotel u/s 2(e) of the Kerala Tax on Luxuries Act, 1986. The Tribunal initially accepted the petitioner's contention that it is a Hospital but upon remand by the Division Bench, re-evaluated and concluded that the establishment is a Hotel. The Tribunal examined the facilities provided by the petitioner, including luxurious air-conditioned villas, swimming pool, tennis and badminton courts, internet services, and sightseeing programs. It found these amenities more characteristic of a hotel or health resort rather than a hospital. The Tribunal noted that the majority of guests visited for holidays, leisure, and recreation, not for treatment of any disease. Further, the Tribunal observed that different tariffs for accommodation, pre-fixed charges for Ayurvedic packages based on accommodation type, and commissions to middlemen and tour operators are practices inconsistent with a hospital. The Tribunal concluded that the establishment is essentially a tourist resort with Ayurvedic treatment facilities, not a hospital. 2. Legality of Tribunal's Order (Ext.P5) and Subsequent Assessment Order (Ext.P6):The Tribunal upheld the levy of luxury tax on the charges collected for accommodation, amenities, and services provided to customers, excluding charges for medicines and food. It directed the assessing authority to accept the book figure and recompute the taxable income, rejecting the addition of 30% ordered by the assessing authority. In pursuance of Ext.P5, the assessing authority issued Ext.P6 modified assessment order, determining tax and interest dues for the assessment years 2003-04 to 2007-08. The petitioner filed applications u/s 6(6) of the Act seeking rectification of Ext.P5 and P6, which were dismissed by the Court as not reflecting any error as contemplated in Section 6(6). 3. Application of Luxury Tax:The Tribunal found that the petitioner's establishment fits the definition of 'hotel' u/s 2(e) of the Act and that the accommodation, amenities, and services provided meet the definition of "luxury provided in a hotel" u/s 2(f). Such hotels are liable to be taxed u/s 4(2) of the Act. The Court, applying the principles laid down by the Apex Court in Shalini Shyam Shetty and Another v. Rajendra Shankar Patil (2010 (8) SCC 329), concluded that the Tribunal's findings are based on available materials and supported by the provisions of the Act. No grounds for interference under Article 227 of the Constitution were found. Conclusion:Hence, the Original Petition merits only dismissal and it is ordered accordingly.
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2013 (2) TMI 775
Duty Drawback - recovery on the ground applicant failed to submit the Bank Realization Certificate in respect of export sale proceeds within-stipulated time - Held that: - The adjudicating authority was required to mention the shipping bill in the SCN. Applicant has claimed to have lost copy of SCN. In such a situation, the case is required to be remanded back to original authority to consider the matter afresh after intimating the details of shipping bills against which BRC was still pending as per records of department - appeal allowed by way of remand.
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2013 (2) TMI 774
Issues Involved:
1. Deletion of addition of Rs. 29,00,075/- by CIT(A).
2. Deletion of addition of Rs. 14,28,460/- on account of disallowance out of contract payment made to sub-contractor.
3. Direction by CIT(A) to work out addition on Rs. 57,59,910/- as closing work-in-progress by applying GP rate.
4. Rejection of books of accounts u/s 145.
5. Disallowance of payments made to sub-contractors u/s 40A(2)(b).
6. Interpretation of Accounting Standard-7.
Summary:
Issue 1: Deletion of addition of Rs. 29,00,075/- by CIT(A)
The A.O. added Rs. 29,00,075/- stating that the assessee showed lesser work-in-progress/closing stock. The CIT(A) deleted the addition after accepting the reconciliation furnished by the assessee, noting that part of the expenditure debited related to an earlier period. The Tribunal confirmed the CIT(A)'s order, stating that the A.O.'s calculation was not acceptable as it did not consider figures for the entire period.
Issue 2: Deletion of addition of Rs. 14,28,460/- on account of disallowance out of contract payment made to sub-contractor
The A.O. disallowed Rs. 14,28,460/- paid to sub-contractor Shri Yogendra Singh Jadon, stating it was excessive and not verifiable. The CIT(A) deleted the addition, noting that the A.O. failed to justify that the payments were excessive or not for work undertaken. The Tribunal confirmed the CIT(A)'s order, as the A.O. did not provide contrary material to dispute the payment.
Issue 3: Direction by CIT(A) to work out addition on Rs. 57,59,910/- as closing work-in-progress by applying GP rate
The A.O. applied an 11.2% profit rate on work-in-progress, which the CIT(A) restricted to Rs. 57,59,910/-. The Tribunal found both A.O. and CIT(A) incorrect in applying GP rate on work-in-progress, stating that profit element is not required to be added in work-in-progress as per Accounting Standard-7 and the Supreme Court ruling in Chainrup Sampatram vs. CIT. Thus, the Tribunal set aside the orders of the CIT(A) and A.O. on this issue.
Issue 4: Rejection of books of accounts u/s 145
The CIT(A) confirmed the A.O.'s rejection of books of accounts u/s 145. The Tribunal upheld the CIT(A)'s order as the assessee did not argue much on this issue.
Issue 5: Disallowance of payments made to sub-contractors u/s 40A(2)(b)
The A.O. disallowed payments made to sub-contractors Shri Sanjay Agarwal, Shri Subodh Agarwal, and Shri R.R. Agarwal, stating they were not genuine sub-contractors and invoking section 40A(2)(b). The CIT(A) confirmed the disallowance. The Tribunal agreed that the sub-contractors did not carry out the work but noted that the contract work was carried out by other means. The Tribunal disallowed 20% of the expenditure claimed as payment to sub-contractors, confirming an addition of Rs. 12,35,225/- and deleting the balance addition of Rs. 49,40,901/-.
Issue 6: Interpretation of Accounting Standard-7
The A.O. and CIT(A) applied GP rate on work-in-progress based on Accounting Standard-7. The Tribunal found no such requirement in Accounting Standard-7 and ruled that profit element is not required to be added in work-in-progress, setting aside the orders of the CIT(A) and A.O. on this issue.
Conclusion:
The appeal filed by the Revenue was dismissed, and the appeal filed by the assessee was partly allowed.
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2013 (2) TMI 773
Issues involved: Appeal against orders of CIT(A) regarding disallowance of depreciation for AY 2007-08 & 2008-09.
For AY 2007-08:
The Revenue appealed against the deletion of depreciation disallowance of Rs. 49,98,000. The main issue was whether a charitable trust is entitled to claim depreciation u/s 32 of the Income Tax Act, even if its income is not assessable under the head "profit and Gains from business and profession." The Revenue argued against the deletion, citing a Kerala High Court decision, while the assessee relied on a Gujarat High Court judgment in their favor. The Tribunal referred to previous decisions and upheld the CIT(A)'s order, dismissing the Revenue's appeal.
For AY 2008-09:
The grounds raised by the Revenue were identical to those in the AY 2007-08 appeal. Since the issues were already discussed and decided in the previous appeal, the Tribunal took a consistent view and dismissed the Revenue's appeal for AY 2008-09 as well.
In both cases, the Tribunal found in favor of the assessee, upholding the CIT(A)'s decision to allow the depreciation claimed by the charitable trust. The Tribunal referred to relevant case law and previous decisions to support its ruling. As a result, both appeals by the Revenue were dismissed.
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2013 (2) TMI 772
Whether even though Article 316 of the Constitution does not prescribe any particular procedure for appointment of Chairman of the Public Service Commission, having regard to the purpose and nature of the appointment, it cannot be assumed that the power of appointment of the Chairman of the State Public Service Commission need not be regulated by any procedure?
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2013 (2) TMI 771
Issues involved:
The judgment involves the following Issues:
1. Interpretation of deduction u/s.10A for assessment year 2004-05.
2. Eligibility criteria for exemption u/s.10A.
3. Consideration of reconstruction of existing business for exemption u/s.10A.
4. Assessment of profits from export of software services for deduction u/s.10A.
5. Determination of taxability of profits based on unit reconstruction.
6. Evaluation of Tribunal's order in light of relevant facts and evidences.
Interpretation of deduction u/s.10A:
The Tribunal allowed the assessee's claim of deduction u/s.10A by verifying if the profit resulted from the execution of work of goods exported by the undertaking. The Tribunal's decision was challenged by the revenue, questioning the correctness of this approach.
Eligibility criteria for exemption u/s.10A:
The Tribunal was questioned on whether it erred in appreciating that for exemption u/s.10A, the undertaking should not be established by splitting up or reconstruction of an existing business unit. The issue raised concerns the interpretation of the provisions of law regarding eligibility for exemption u/s.10A.
Consideration of reconstruction of existing business for exemption u/s.10A:
The Tribunal was further challenged on its decision to grant the assessee eligibility for deduction u/s.10A with respect to profits from the export of software services, despite the existing unit being a reconstruction of an old unit. The question of whether the reconstruction of the unit affects the eligibility for exemption u/s.10A was raised.
Assessment of profits from export of software services for deduction u/s.10A:
The Tribunal was questioned on its failure to appreciate that the alleged new unit of the assessee was a reconstruction of the old unit, and whether the profits from the financial year under consideration should be treated as taxable receipts. The issue involves the assessment of profits from export services for deduction u/s.10A.
Determination of taxability of profits based on unit reconstruction:
The Tribunal's decision was challenged on the grounds that the alleged new unit was formed by the reconstruction of the old unit, and that the entire profits of the assessee for the relevant financial year should be considered taxable receipts. The issue revolves around the taxability of profits based on the reconstruction of the business unit.
Evaluation of Tribunal's order in light of relevant facts and evidences:
The Tribunal's order was questioned for not appreciating and evaluating all the relevant facts and evidences, including circumstantial evidences. The issue raised concerns the thoroughness and correctness of the Tribunal's decision-making process.
The High Court dismissed the appeal by the revenue for the assessment year 2004-05, citing a previous decision in a similar case. The Court declined to entertain the questions of law raised by the revenue, leading to the dismissal of the appeal with no order as to costs.
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2013 (2) TMI 770
Sale of land - agricultural land - held that:- Assessing Officer has conclusively established that the lands sold by the assessee in the previous year relevant to the assessment year under appeal for a consideration of ₹ 26,40,00,000/- were not agricultural in nature, but, on the other hand, they are nonagricultural land. Therefore, it definitely comes under the category of “capital asset”. Accordingly, the gains arising out of transfer of that capital asset is exigible to capital gains tax.
When the basic nature of the land itself found to be nonagricultural, the arguments regarding status of the property, whether within metropolis or outside the limit of the metropolis, is irrelevant. A non-agricultural property, whether inside the municipality or outside the municipality or even in a remote village is a “capital asset” and transfer of the same may generate income liable for capital gains taxation. In the facts and circumstances of the case, we set aside the order of the Commissioner of Income-tax(Appeals) on this point and restore the order of the Assessing Officer.
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2013 (2) TMI 769
Issues involved: Release of seized car (Lexus LS 460) u/s 110(2) of the Customs Act, 1962 due to non-issuance of show cause notice within the stipulated period.
Summary:
1. The petitioner filed a writ petition against the respondents for not releasing the car seized by respondent No. 1 on 26-4-2011, without issuing a show cause notice u/s 124(a) of the Customs Act, 1962 within the extended period of one year as per u/s 110(2).
2. As per u/s 110(2), goods seized must be returned if no notice u/s 124(a) is given within six months, extendable by another six months by the Commissioner of Customs. The car was seized on 26-4-2011, and the one-year period expired on 25-4-2012, with no show cause notice issued. Subsequently, a notice was issued on 16-5-2012. The petitioner argued for the immediate release of the car based on the mandatory provisions of u/s 110(2), citing previous court decisions supporting this view.
3. The respondent's counsel compared the provisions of u/s 110(2) to bail provisions u/s 167(2) of the Code of Criminal Procedure, 1973, referencing a Supreme Court decision. However, the court reiterated that u/s 110(2) is mandatory, and failure to issue a show cause notice within the stipulated period requires the return of seized goods, without importing provisions from other laws like the Criminal Procedure Code.
4. In line with previous decisions, the court directed the unconditional release of the car to the petitioner, emphasizing that this ruling does not reflect on the merits of the case, which will be decided by the relevant authority following the show cause notice issued on 16-5-2012. The writ petition was disposed of accordingly.
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2013 (2) TMI 768
Issues involved: Challenge to penalty under section 271AA of the Income Tax Act 1961 for failure to maintain prescribed information and documents under section 92D of the Act.
Summary:
The appellant, a company engaged in the business of machine tools, challenged a penalty imposed under section 271AA of the Income Tax Act for failure to comply with documentation requirements related to international transactions with associate enterprises. The Assessing Officer observed that the appellant failed to maintain prescribed information and documents under section 92D of the Act, leading to the penalty imposition. The appellant contended that the required documents were maintained, but the Assessing Officer disagreed. The penalty was confirmed by the Commissioner of Income Tax (Appeals), prompting the appeal before the Appellate Tribunal.
During the hearing, the appellant argued against the penalty, citing case law and asserting that the penalty was unjustified. The Revenue, however, supported the penalty citing the CIT(A)'s order and distinguishing the case law presented by the appellant. After considering the arguments, assessment orders, and relevant provisions, the Tribunal found that the appellant had declared international transactions with its associate enterprises but had submitted the required Form 3CEB after the assessment finalization. The Tribunal noted that the penalty provision under section 271AA applies to failure to maintain documents, not delayed submission post-assessment. As there was no addition made in the assessment proceedings and no invocation of another penalty provision, the Tribunal concluded that the penalty was unwarranted. Consequently, the appellant's appeal was allowed, and the penalty was deleted.
The Tribunal's decision was pronounced on February 14, 2013, in Chennai.
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2013 (2) TMI 767
Disallowance of water expenses to 10% - Reason for disallowance of water expenses by the AO is that the assessee is having well and there is no need for purchase of water from outside - AO had not given any opportunity to the assessee to show that the water expenses incurred by the assessee are excessive - Hence the disallowance is restricted to 5% of the claim - Decided partly in favor of assessee
Disallowance of fire wood expenses to 10% - Held that:- wood was purchased from local labourers and farmers - It is very difficult to obtain third party vouchers - AO has disallowed 100% of the cash purchase and 25% of the total expenses on purchases from regular registered dealers - As regard to registered dealers The AO has not verified any details and disallowance disallow was not based on any adverse evidences - thus AO is directed to delete the addition - in respect of cash purchases, the disallowance of 5% would meet the ends of justice - Decided partly in favor of assessee
Whether to consider the claim of interest free suppliers’ credit as capital receipt or revenue receipt - Held that:- An agreement with windmill supplier states that in case wind mill fails to generate electricity of the units mentioned in the agreement, the supplier of the wind mill shall compensate the assessee for such failure of generation - As per Ao the said amount received is only a compensation for loss of profit and hence a revenue receipt - The performance guarantee clause of agreement clearly suggests that compensation would be paid for generation loss which is loss of earnings only - Thus is is revenue receipt exigible to tax - Decided against the assessee
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2013 (2) TMI 766
Issues involved: Appeals filed by the assessee against the order of CIT(A) for the assessment year 2007-08 and 2008-09.
Assessment Year 2007-08:
The assessee contested the disallowance of &8377; 75,616 for prior period expenses related to electricity and telephone bills. The Tribunal noted that the expenses were incurred in the last month of the financial year 2005-06 but paid in the financial year 2006-07. As the expenses were crystallized during the year under consideration and the genuineness of the expenditure was not in question, the disallowance was deemed unjustified.
Assessment Year 2007-08 (Continued):
The assessee also challenged the disallowance of &8377; 55 lakhs contribution to LIC under "Group Gratuity-cum Life Assurance Policy." The Assessing Officer disallowed the deduction citing non-approval of the gratuity fund. However, the Tribunal observed that the payment was a business deduction u/s 37, as it was a contractual payment made to safeguard the company from potential liabilities towards gratuity. Referring to a similar case, the Tribunal held that the disallowance was unwarranted, and the assessee was entitled to succeed on this point.
Assessment Year 2008-09:
In this year, the assessee's claim for a &8377; 65 lakhs contribution to LIC under the Group Gratuity-cum-Life Insurance Policy was also declined. Following the reasoning from the previous assessment year, the Tribunal directed the Assessing Officer to allow the claim.
In conclusion, both appeals of the assessee were allowed based on the above considerations, and the lower authorities' actions in declining the claims were deemed without merit.
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2013 (2) TMI 765
Issues involved: Challenge to order of ld.CIT(A)-XXI, Ahmedabad dated 04/02/2010 by Revenue and cross-objection filed by respondent-assessee.
Issue 1: Restriction of addition made on account of income from undisclosed source.
- Revenue challenged restriction of addition from Rs. 35,33,414 to Rs. 1,80,000.
- CIT(A) restricted addition based on analysis of bank transactions and lack of evidence.
- CIT(A) accepted transactions as related to retail trade but estimated income at Rs. 1.80 lacs u/s.44AF.
- Tribunal upheld CIT(A)'s decision, emphasizing the need for rational estimation in absence of evidence.
Issue 2: Treatment of cash deposits in bank account related to HUF or individual.
- AO noted cash deposits in bank account of Rs. 22,49,410 by individual.
- Assessee claimed account belonged to HUF, but AO was unconvinced due to lack of evidence.
- CIT(A) dismissed claim of business belonging to HUF, restricted addition to Rs. 1.80 lacs.
- Tribunal affirmed CIT(A)'s decision, rejecting Revenue's grounds and cross-objection of assessee.
Issue 3: Interpretation of bank transactions and determination of taxable income.
- AO taxed entire cash amount in hands of individual due to lack of evidence.
- CIT(A) analyzed bank transactions, accepted transactions as related to retail trade, estimated income at Rs. 1.80 lacs.
- Tribunal upheld CIT(A)'s decision, emphasizing rational estimation of taxable profit in absence of evidence.
Conclusion: Revenue's appeal and cross-objection of Assessee both dismissed by Tribunal, affirming CIT(A)'s decision to restrict addition and assess income in individual capacity.
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2013 (2) TMI 764
Issues involved: Appeal against order of CIT(A) regarding disallowance of depreciation on leased assets for A.Y. 2006-07.
Issue 1: Disallowance of depreciation on leased assets
The appellant raised ground no. 4 in its appeal, challenging the confirmation of depreciation amounting to Rs. 7,93,490 on assets leased to Western Railways. The Hon'ble Bench set aside the issue to the AO for fresh consideration after referring to the terms of the lease agreement, the AO's explanation, and a Special Bench decision. The appellant pointed out that in earlier years, the Hon'ble Bench had allowed depreciation on the same leased assets, considering them as operating leases based on the Supreme Court decision in the case of ABB Ltd. The appellant argued that sending back the issue for re-adjudication created confusion and was unjustifiable as the leased assets were already part of the block of assets. The Hon'ble Bench allowed the appellant's miscellaneous application, directing the case to be fixed before the regular Bench.
Conclusion: The appellant's miscellaneous application was allowed, and the case was directed to be fixed before the regular Bench.
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2013 (2) TMI 763
Issues involved: Deletion of penalty u/s.271(1)(c) on assessee's claim of deduction u/s.80IB(10) for a housing project.
Summary:
The appeal was filed by the Revenue challenging the deletion of penalty of Rs. 8,72,520/- levied on the assessee u/s.271(1)(c). The assessee, a builder, claimed deduction u/s.80IB(10) for a housing project approved by the Pune Municipal Corporation. The dispute arose regarding the eligibility of profits derived from construction on the amenity space for deduction. The Assessing Officer reduced the claimed deduction amount based on the profit calculation for the residential and commercial parts sold by the assessee during the relevant year.
The assessee contended that it was entitled to the full claim u/s.80IB(10) as per a decision of the Hon'ble Bombay High Court, but the claim was withdrawn during assessment proceedings for A.Y. 2003-04. The penalty was imposed on the original claim of deduction u/s.80IB(10), which was a debatable issue at that time. The CIT(A) deleted the penalty considering that the assessee had disclosed all relevant facts, acted bonafide, and accepted the Assessing Officer's opinion by withdrawing the claim instead of appealing. It was emphasized that penalty is not automatic after a quantum addition, and both penalty and quantum addition have distinct considerations.
Ultimately, the Appellate Tribunal upheld the CIT(A)'s decision to delete the penalty, stating that there was no need for interference in this matter.
Therefore, the appeal filed by the Revenue was dismissed by the Appellate Tribunal ITAT Pune on February 27, 2013.
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9911796707
