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Case Laws
Showing 361 to 380 of 1407 Records
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2015 (2) TMI 1052
Valuation of goods - Inclusion of charges for loading, unloading, transportation and warehousing - Held that:- The goods are not sold and these are cleared from the factory, but these are transported and stored in Hyderabad in transporter's warehouse. As and when appellant gets the order, they direct transporter/warehouse owner to deliver the said goods to the customer's place. Thus, the act of sale takes place on premises of the customer and for this purpose appellant is charging ₹ 65 per drum, as freight, loading, unloading charges. - Following decision of Hard Castle Petrofer Pvt. Ltd. (2014 (4) TMI 336 - CESTAT NEW DELHI) - No merit in appeal - Decided against assessee.
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2015 (2) TMI 1051
Valuation of goods - Inclusion of excess amount collected as freight charges - Held that:- differential amount not includible in the assessable value since the duty of excise is on manufacture and not on profit made by the dealer on transportation. - Following decision of Baroda Electric Meters Vs. Commissioner of Central Excise - [1997 (7) TMI 126 - SUPREME COURT OF INDIA] - Decided in favour of assessee.
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2015 (2) TMI 1050
Invocation of extended period of limitation - Whether the CESTAT , after holding by majority that royalties/ licence fees paid on import of beta/ digibeta tapes containing films are includable in the assessable value of the tapes, is right in law in holding that the extended period of limitation is not invokable and consequently setting aside the demand of duty, interest and penalty as time barred - Held that:- The Tribunal may not have referred to all the decisions, the Assessee also has been faulted in this case for not abiding by the provisions of law in the teeth of some clear judicial pronouncements, however, the question was, when the consignment or goods were imported, was the Assessee guilty of not complying with the provisions of law and willfully. That there were certain orders and the decisions of the Tribunal against the Revenue being an undisputed fact, the Tribunal concluded that the extended period could not have been invoked. If the Assessee cannot be faulted for taking advantage of the unclear or doubtful legal position, then, the demand rightly fails. The Tribunal has, by majority, held that during the period when the goods were imported in India, there were certain decisions against the Revenue. The allegation of suppression with intent to evade payment of duty, therefore, is not established and proved. In the circumstances, the third Member agreed with the Member Judicial that the order confirming the demand, confiscation of the goods and imposition of penalty is not sustainable and must be set aside. While we can appreciate the anxiety of the Revenue, when the Assessee succeeded on technical ground, but, the doubtful legal position and which is required to be cleared by the higher Courts is something for which we cannot hold either the Assessee or the Revenue responsible. In the circumstances, we do not think that the Appeal raises any substantial question of law. - Decided against Revenue.
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2015 (2) TMI 1049
Classification of goods - Export of Menthol Crystals - Whether in the facts and circumstances of the case the Appellate Tribunal is right in holding that Menthol Crystals are spices within the meaning of Section 2(n) of the Spices Board Act, 1986 - Held that:- If one peruses the show cause notice, it is apparent that the allegations therein proceed on the footing that the appellants are exporting what is styled as "spice". However if the show cause notice allegations are perused they would reveal that the assessee has exported various consignments of the product described as menthol BP / USP and as menthol crystals BP / USP in the shipping bills. The Ministry of Commerce Notification is relied upon so as to claim the export cess. That is on the footing that the goods mint are one of the spices on which export cess is leviable. All types of menthols are covered within the expression "mint" and export cess leviable has also been paid on the export of the goods by the exporters . The show cause notice proceeds on the footing that the assessee does not seem to dispute this position because it made several representations to the Ministry. However, we do not find that the matter has proceeded on any admitted position and particularly by the assessee . Had it been the position, there was no need for the adjudicating authority to have rendered a specific finding and which is to be found in the order in original. There are extensive conclusions and which have been rendered. In the circumstances, the correctness of these findings and founded on the conclusion that menthol BP / USP and menthol crystals BP / USP can be assessed as spice ought to have been considered by the Tribunal in appropriate details.
In the circumstances instead of this Court being required to go into all the details and depriving parties of a valuable right of appeal, that we are of the opinion that the impugned order deserves to be quashed and set aside and the matter remitted and restored to the file of the Tribunal for a decision afresh on merits and in accordance with law. - Decided in favour of assessee.
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2015 (2) TMI 1048
Clearance of goods - provisional assessment - Held that:- In the light of the allegations in the writ petition and the reply thereof it would not be proper for us to make any observations on merits of the controversy. We keep all contentions of the petitioner open for being raised during such proceedings as are contemplated in law and in the affidavit-in-reply. We would highly appreciate if the investigations stated to be ongoing and continuing are concluded expeditiously and further steps are taken by the Revenue and in accordance with law. - Petition disposed of.
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2015 (2) TMI 1047
Waiver of pre deposit - notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him - Held that:- The requirement of pre-deposit of 7.5% of the duty or penalty, in cases where both have been imposed, as a pre-condition for maintaining the appeal before the Appellate Tribunal, is one that was introduced under the Customs Act with effect from 06.08.2014. As per the said condition, if an assessee pre-deposits the said amount, then the appeal itself is taken up for hearing by the Appellate Tribunal and there is no requirement of filing a further application for waiver of pre-deposit and stay pending disposal of the appeal. This has been clarified by the CBEC Circular No.984/08/2014 CX dated 16.09.2014. On a consideration of the statutory provisions therefore, I am of the view that the right of appeal granted by the statute is a conditional one and the conditions are not so onerous as to deprive the petitioner of an effective right of appeal.
What is required to be deposited by the petitioner, as a condition for maintaining the appeal, is only a small percentage of the duty/penalty amount confirmed against him, and the said amount has to be refunded to the petitioner in the event of his succeeding in the appeal before the Appellate Tribunal. In that view of the matter, I am not inclined to interfere with the direction in Ext.P10 notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him by Ext.P8 order, as a condition for maintaining the appeal before the Appellate Tribunal. - however, time period to make pre deposit is extended. - Decided in favour of assessee.
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2015 (2) TMI 1046
Power to publish the Photographs of default borrowers/guarantors in newspapers/magazines etc. under SARFAESI Act -
Held that:- It is well settled principle of law that when a stature requires a thing to be done in a particular manner, it should be done in that manner alone or not at all. I proceed to hold on the said principle that a secured creditor is not free to take any action it wishes for enforcing its security interest; it is empowered and authorized to take such action that the statute permits it. There is absolute lack of legislative sanction in relation to publication of photographs of defaulting borrower(s)/guarantor(s). The SARFAESI Act and the rules framed thereunder not having conferred any power on the secured creditors to publish their photographs, they cannot resort to such action on the ground that publication of photograph is not prohibited. For the secured creditors, the test is not as to whether publication is prohibited by the statute but whether such publication is permitted by it. Prohibition has to be inferred in the absence of express authorization
For the reasons aforesaid, the petitioners’ challenge restricted to the threat of publication of their photographs is upheld. Publication of photographs in newspapers, magazines etc. neither being permissible in terms of the SARFAESI Act or the rules framed thereunder nor under any other rule/notification/guideline having binding effect, I further hold that the threat to publish photographs borders on extra-legal means to recover the dues. The secured creditors are, accordingly, restrained by a prohibitory order from taking such recourse. - Decided in favour of appellants.
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2015 (2) TMI 1045
Jurisdiction of Company Law Board (CLB) - Jurisdictional bar in entertaining application under Section 340 of Code of Criminal Procedure, 1973 - Forged and fabricated document - Succession of Shares - Held that:- The Company Law Board in the present case has not been approached with an application under section 340 CrPC as a Second Court but as the First Court before which a forged and fabricated document has been filed and made the basis of the petition. In the case of Kuldeep kapoor [2005 (12) TMI 553 - DELHI HIGH COURT], held that a document, which is tampered or forged and is produced during the Court proceedings, the Court would have jurisdiction to conduct an inquiry under Section 340 of the Code and decide whether the bar contained under Section 195 partially or in its entirety is attracted in the facts and circumstances of the case or not. An offender cannot take advantage of its own offence and wrongs committed, and give an interpretation of the provisions of law, which is destructive of the legislative intent and spirit of the statute.
This Court has thus held that even if a document was tampered/forged prior to institution of the legal proceedings, the Court will have jurisdiction to entertain an application under section 340 of the Code if the document has been produced in Court proceedings. Further it is laid down that making of false averment in the pleading pollutes the stream of justice. It is an attempt at inviting the Court into passing a wrong judgment and that is why it must be treated as an offence. Where a verification is specific and deliberately false, there is nothing in law to prevent a person from being proceeded for contempt.
The Company Law Board was not barred from entertaining the application under section 340 CrPC and has thus erred in refusing to entertain the application filed by the Appellant.The impugned order is accordingly set aside. - Decided in favour of appellant.
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2015 (2) TMI 1044
Contravention of Section 9 (1) (b) and (d) of the Foreign Exchange Regulation Act, 1973 - Whether in a case where an offence was punishable with a mandatory sentence of imprisonment, a company incorporated under the Companies Act, can be prosecuted, as the sentence of imprisonment cannot be imposed on the company? - Held that:- In view of the decision of the Supreme Court in Standard Chartered Bank's case (2006 (2) TMI 272 - SUPREME COURT OF INDIA), which has also been rendered under the provisions of the Foreign Exchange Regulations Act, the plea of the appellant that on his acquittal in the criminal case, no penalty is imposable on him, does not merit consideration, since the Supreme Court has categorically held that adjudication and prosecution are two independent proceedings and the finding in one is not conclusive in the other. In view of the above decision of the Supreme Court, this Court finds no reason to interfere with the order passed by the Appellate Tribunal. - Decided against appellant.
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2015 (2) TMI 1043
Entertainment tax on Direct-to-home service providers (DTH) under provisions of the Jharkhand Entertainment Tax Act, 2012 - Taxable under service tax under category broadcasting service - Ultra virus provisions to the Constitution of India - Covered under entry 92C of the Union list or entry 62 of the State list - Doctrine of harmonious construction - Aspect theory -
Held that:- In our view, the respondents as a cable operator, for the purpose of levy and collection of tax under sub-section (4a) of section 4A of the Act have direct and close nexus with the entertainments made available to the viewer through their cable television network. The performance, film or programmes shown to the viewers through the cable television network come within the meaning of entertainments and therefore within the legislative competence of the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution of India to make law for the levy and collection of tax on such entertainments.
We also see no substance in the submission that the impugned legislation impinges on the field occupied by the Central legislation. The aforesaid Central legislation has been enacted to regulate the operation of cable television network in the country and matters connected therewith or incidental thereto whereas the State legislation is for levy of entertainment tax on entertainment within the legislative field exclusively assigned to the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution. Thus the objects sought to be achieved by two different Acts enacted under two different legislative fields exclusively assigned to the respective Legislatures are entirely distinct and separate. The Cable Television Networks (Regulation) Act, 1995 of the Union Legislature does not denude the State Legislature for levying entertainment tax on entertainment.
In this context, it is important to refer to the case of Express Hotels Private Ltd. [1989 (5) TMI 52 - SUPREME Court] in which the Constitution Bench had dealt elaborately with Western India Theatres Ltd. [1959 (1) TMI 23 - SUPREME COURT]. In the said case, with reference to entry 50 in Schedule VII of the Government of India Act, 1935, which is identical to entry 62, contention was raised that levy with respect to luxuries, entertainments or amusements can be made on person's receiving such luxuries or entertainment and that there can be no levy of tax on those who are givers or providers of such luxuries, entertainments, etc. While rejecting such a contention that it is only the receivers who can be taxed and not the giver, the learned judges observed that there can be no reason to 'differentiate between the giver and the receiver of entertainments and amusements and both may with equal propriety be made amenable to the tax'.
Therefore, there is no substance in the contention that taxable event is entertainment and there can be no tax if there is no entertainment. As held by the Constitution Bench, existence of means of providing entertainment would be sufficient to support a law imposing tax thereon and that means of providing entertainment provides the nexus between the taxing power and the subject of tax.
In the case of Kesoram Industries Ltd. [2004 (1) TMI 71 - SUPREME Court] , the honourable Supreme Court referred to the aspect theory and pointed out that the transaction may involve two or more taxable events in its different aspects. Merely because they overlap, the same does not detract from the distinctiveness of the aspects. Thus, there could be no question of a conflict solely on account of two aspects of the same transaction being made a subject-matter of legislation by two Legislatures falling within two fields of legislation respectively available to them. So long as the essential character of the levy is not departed from within the four comers of the particular entry, the measure of tax or the manner of levying the tax would not have any vitiating effect.
In the present case the question which is required to be determined is whether the levy of tax by the State Legislature was on the service aspect or the entertainment aspect. As has been held in the case of Federation of Hotel [1989 (5) TMI 50 - SUPREME Court] by the honourable apex court, if the same transaction involved two or more taxable events in its different aspects, the fact that there is an overlapping does not detract from the distinctiveness of the aspect which can be subjected to legislation under different legislative power of the Union and the State Legislature.
The distinction between the two aspects/spheres/profession on the one hand and service on the other hand, was considered by the honourable Supreme Court in the All India Federation of Tax Practitioners [2007 (8) TMI 1 - Supreme Court].The honourable Supreme Court drew distinction between the two aspects/spheres, i.e., profession on the one hand and service on the other hand and upheld the levy of service tax on chartered accountants or cost accountants.
The validity of the levy of entertainment tax on DTH providers by the State of Uttarakhand was challenged before the High Court of Uttarakhand. Referring to the distinction drawn by the apex court between the two aspects/spheres, i.e., profession on one hand and service on the other hand in All India Federation of Tax Practitioners [2007 (8) TMI 1 - Supreme Court] and treating the similar distinction between the two aspects/spheres on DTH broadcasting service, i.e., service on the one hand and entertainment on the other hand, the Uttarakhand High Court held.
We fully agree with the view taken by the Uttarakhand High Court and we hold that there are two different aspects/spheres of "direct-to-home" (DTH). One is broadcasting service, for which service tax is levied and another one entertainment, for which entertainment tax is levied by the State of Jharkhand. Applying the doctrine of "aspect theory" in a similar case reported as Tata Sky Limited [2010 (10) TMI 930 - PUNJAB & HARYANA HIGH COURT] , the Punjab and Haryana High Court held that levy of service tax on the providing of service vide entry 97 read with entry 92C of List I and levy of entertainment tax covered by entry 62, List II of the Seventh Schedule to the Constitution of India can co-exist and can be harmonized on being different aspects.
In the case of Purvi Communication P. Ltd. [2005 (3) TMI 438 - SUPREME COURT OF INDIA] , the honourable Supreme Court upheld the levy of "entertainment tax" on cable television by the State of West Bengal. Ratio of the decision in Purvi Communication upholding the levy of entertainment tax on cable operators by the West Bengal Legislature is squarely applicable.
The contention of the petitioners is that the value of set top box or other equipments cannot be included in valuable consideration and gross collection. The learned senior counsel for the petitioner urged to segregate the cost of set top box or other equipments and other instruments of like nature from valuable consideration received by the assessee and from gross collection. By reading of section 2(aj), we do not think that the value of set top box is included as valuable consideration. What is stated as valuable consideration in section 2(aj)(ii) in respect to direct-to-home (DTH) broadcasting service means any cash, deferred payment by way of contribution, subscription, installation or rent or security or activation charges or connection charges or any other charges collected in any manner whatsoever for direct-to-home (DTH) broadcasting service with the aid of any type of set top box or any other instrument of like nature at a residential or non-residential place. We are of the view that the connection charges are integral part of "entertainment" and have to be taken into account for the valuable consideration received by the assessee for calculating the gross collection.
Jharkhand Entertainment Tax Act, 2012 levying tax on "entertainment" through direct-to-home (DTH) in pith and substance, is on entertainment which falls under entry 62 of List II of the Seventh Schedule. The levy of "entertainment tax" is different from the levy of tax on "broadcasting service" which falls under entry 92C of List I of the Seventh Schedule to the Constitution of India.
Entry 62 of State List and entry 92C of the Union List operate in two different spheres. There is no transgression or encroachment upon the field of Union legislation and the levy of tax on "entertainment" through direct-to-home (DTH) by the State Legislature is not ultra vires the power of the State Legislature provided under entry 62 of List II of the Seventh Schedule to the Constitution of India.
In view of the fine distinction between direct-to-home service and cable T. V., levy of "entertainment tax" at the rate of 10 per cent. on direct-to-home (DTH) service vis-a-vis 7.5 per cent. on the "entertainment" through cable TV, is not discriminatory.
Applying the R. M. D. Chamarbaugwalla [1957 (4) TMI 56 - SUPREME COURT] the principle of severability, section 2(s)(v) read with section 2(aj)(ii) of Jharkhand Entertainment Tax Act shall not include the cost of set top box or any other instrument or equipment of like nature to levy entertainment tax.
The impugned demand notices issued to the writ petitioners are in consonance with the provisions of the Jharkhand Entertainment Tax Act, 2012, the prayer sought for by the petitioners to quash the impugned notices is liable to be rejected. - Decided against the appellants.
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2015 (2) TMI 1042
Refusal to accept compromise / settlement between the parties - Power of high court under Section 482 of the Code of Criminal Procedure to quash the proceedings - Held that:- We find from the impugned order that the sole reason which weighed with the High Court in refusing to accept the settlement between the parties was the nature of injuries. If we go by that factor alone, normally we would tend to agree with the High Court approach. However, as pointed out hereinafter, some other attendant and inseparable circumstances also need to be kept in mind which compel us to take a different view.
We have gone through the FIR as well which was recorded on the basis of statement of the complainant/victim. It gives an indication that the complainant was attacked allegedly by the accused persons because of some previous dispute between the parties, though nature of dispute etc. is not stated in detail. However, a very pertinent statement appears on record viz., “respectable persons have been trying for a compromise up till now, which could not be finalized”. This becomes an important aspect. It appears that there have been some disputes which led to the aforesaid purported attack by the accused on the complainant. In this context when we find that the elders of the village, including Sarpanch, intervened in the matter and the parties have not only buried their hatchet but have decided to live peacefully in future, this becomes an important consideration.
The evidence is yet to be led in the Court. It has not even started. In view of compromise between parties, there is a minimal chance of the witnesses coming forward in support of the prosecution case. Even though nature of injuries can still be established by producing the doctor as witness who conducted medical examination, it may become difficult to prove as to who caused these injuries. The chances of conviction, therefore, appear to be remote. It would, therefore, be unnecessary to drag these proceedings. We, taking all these factors into consideration cumulatively, are of the opinion that the compromise between the parties be accepted. - Decided in favour of appellants.
Principles lay down by which the High Court guided :- 1) Power under Section 482 to quash the criminal proceedings even in those cases which are not compoundable, is to be exercised sparingly and with caution.
2) When parties have reached the settlement and petition for quashing the criminal proceedings is filed, the guiding factor would be to secure ends of justice or to prevent abuse of the process of any court.
3) Such a power is not be exercised in those prosecutions which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society.
4) Similarly, for offences alleged to have been committed under special statute like the Prevention of Corruption Act or the offences committed by Public Servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender.
5) On the other, those criminal cases having overwhelmingly and pre-dominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties have resolved their entire disputes among themselves.
6) The High Court is to examine as to whether the possibility of conviction is remote and bleak and continuation of criminal cases would put the accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal cases.
7) Offences under Section 307 IPC would fall in the category of heinous and serious offences and therefore is to be generally treated as crime against the society and not against the individual alone. However, the High Court would not rest its decision merely because there is a mention of Section 307 IPC in the FIR or the charge is framed under this provision.
8) While deciding whether to exercise its power under Section 482 of the Code or not, timings of settlement play a crucial role. Those cases where the settlement is arrived at immediately after the alleged commission of offence and the matter is still under investigation, the High Court may be liberal in accepting the settlement to quash the criminal proceedings/investigation. It is because of the reason that at this stage the investigation is still on and even the charge sheet has not been filed.
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2015 (2) TMI 1041
Entitlement to claim deduction under section 80-IA - Held that:- All the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision of Velayudhaswamy Spinning Mills V. Asst. CIT reported in (2010 (3) TMI 860 - Madras High Court), there appears to be no distinction on facts. - Decided in favour of the assessee
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2015 (2) TMI 1040
Entitlement to claim deduction under section 80-IA - Held that:- All the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision of Velayudhaswamy Spinning Mills V. Asst. CIT reported in (2010 (3) TMI 860 - Madras High Court), there appears to be no distinction on facts. - Decided in favour of the assessee
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2015 (2) TMI 1039
Set off the brought forward depreciation loss against capital gains - whether unabsorbed depreciation loss of earlier years cannot be adjusted against short term capital gains arising on sale of business assets? - Held that:- In the present case, the Tribunal came to hold that the depreciation for set off relates to the assessment year 1997-1998 and the business is still continuing. In such a situation, the Tribunal went on to hold that Section 32(2) (i) and 32(2) (ii) do not get attracted. This is not the case of the appellant/assessee. The only plea is that if Section 32(2) (iii) provides that unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and it shall be set off against profit and gains, if any, of any business or profession carried on by him and assessable for that assessment year in terms of Section 32(2)(iii)(a) of the Income Tax Act. The following assessment year in this case is 1999-2000.
Unfortunately, the Tribunal has not addressed the issue in the light of the said provision Section 32(2)(iii)(a) of the Income Tax Act. Tribunal says in paragraph 9 of the order is that, though it is abundantly clear that Section 32(2)(iii) is operational in the case of the assessee, it only says that unabsorbed depreciation can be carried forward to the successive years. That is not the issue raised in the appeal. Furthermore, the decisions of the Supreme Court in the case of CIT Vs Cocanada reported in [1965 (4) TMI 11 - SUPREME Court] raised in the grounds of appeal by the assessee have also not been adverted to. Thus remand the matter back to the Tribunal to consider and pass orders on the entire issues raised by the assessee. - Decided in favour of assessee for statistical purposes
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2015 (2) TMI 1038
Reopening of assessment - Tribunal concluded that the reopening proceedings have been initiated on a mere change of opinion and thus impermissible - Held that:- The impugned order of the Tribunal has recorded a finding of fact that all the issues which form the basis of the reopening notice, was a subject matter of consideration during the regular assessment proceedings. On the above facts the impugned order records that reconsideration of the same material would amount to a review of an assessment order which is not permissible. The Apex Court in CIT Vs. Kelvinator of India Ltd. reported in [2010 (1) TMI 11 - SUPREME COURT OF INDIA ] has held that jurisdiction to reopen an assessment is not jurisdiction to review the assessment order. The contention urged by the revenue that it was wrong application of law by the Assessing Officer while passing original assessment order does not detract from the fact that there was an opinion formed during the regular assessment proceedings. The Assessing Officer has to at the very outset satisfy the condition precedent under Section 147 and 148 of the Act before he can exercise the jurisdiction to reopen an assessment. In the present facts, the reopening notice is based on a change of opinion as all the grounds were admittedly a subject matter of inquiry during regular assessment proceedings.
In view of the above, we find that the impugned order of the Tribunal has merely applied the well settled position in law that power to reopen an assessment is not the power to review an assessment and that reopening of an assessment cannot be taken place on a mere change of opinion. Decided in favour of assessee.
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2015 (2) TMI 1037
Addition u/s 68 - ITAT confirming the order of the CIT (Appeals) who had reversed the AO's decision to disallow share application money of ₹ 1.65 crores under Section 68 - Held that:- AO’s suspicions formed the basis of including the amounts under Section 68 of the Act; whilst suspicion can be the basis for further enquiry, it can never be the ground for a conclusion. In the present instance, the AO apparently had the books and all the relevant information pertaining to the share applicants. n the present case, the course of proceedings indicates that the CIT(Appeals) had called for the Remand Report. That Remand Report clearly pointed to the three share applicants not only being genuine business concerns but also having substantial business activities and further having reasonably sized turnovers. In these circumstances, to establish implausibility on the part of the share applicants to have possessed the means when they applied, the AO ought to have probed further. He did not do so as is evident from the Remand Report where the AO did not offer any comments upon the materials taken into account by the CIT (Appeals). Consequently, the ITAT’s order cannot be faulted. - Decided in fvaour of assessee.
Unaccounted cash deposits - ITAT deleted addition - Held that:- AO did not comment adversely in respect of the assessee’s explanation pertaining to the cash deposits in the bank accounts even in the remand report, the inference drawn by the CIT (A) that when the balance matches with the balance sheet and cash book, no addition u/s 68 of the Act is sustainable and later the ITAT cannot be held unreasonable - Decided in fvaour of assessee.
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2015 (2) TMI 1036
Addition made u/s 68 - assessee claimed that the amounts were repaid through its sister concerns - Held that:- In the absence of any documentary evidence to prove the genuineness of transaction and creditworthiness of the creditors, the explanation of the assessee does not inspire confidence. The assessee’s contention before us that what is being doubted is the ‘repayment’ and not the ‘credit’ itself, again, only needs to be stated to be rejected. Section 68 applies only to a credit appearing in the books of account of the assessee, so that the fact or the existence of the credit is a condition precedent for the application of section. The several doubts, which we have held as valid, qua repayment, only exhibit that the genuineness of the credit/s, i.e., of it representing a genuine liability of the assessee, is in serious doubt, much less proved, as required, i.e., if it is not to be considered as the assessee’s income in view of section 68 of the Act, the case law on which is legion. Accordingly, in the facts and circumstances of the case except in the case of Textile Product Marketing Agency where there is actual transaction of supply of goods, in all other cases we do not find any error or illegality in the orders of authority below. Hence the addition under section 68 in respect of 21 parties is confirmed. - Decided against assessee.
Adhoc disallowance of motor car expenses, depreciation and telephone expenses - AO has disallowed 20% of the expenditure debited on account of motor car, depreciation and telephone on the ground of personal use of car and telephone - Held that:- Disallowance was made by AO because the assessee has not produced the log book for running the car to verify the exclusive use of car for business purposes. Similarly the personal use of telephone was not ruled out because the assessee has not furnished the details. Thus as the assessee being a partnership firm the personal use of car and telephone cannot be ruled out. However, the disallowance of 20% in our view is excessive and we find that 10% of the disallowance on account of personal use will be just and proper. Accordingly we restrict the disallowance of expenses on account of car depreciation and telephone to 10%. - Decided partly in favour of assessee.
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2015 (2) TMI 1035
Entitlement to deduction u/s 80P(2)(a)(i) - whether the society being a co-operative bank providing banking facilities to members is not eligible to claim deduction u/s 80P(2)(a)(i) after the introduction of sub-section (4) to section 80P? - Held that:- Assessee has not to be regarded to be a primary co-operative bank as all the three basic conditions are not complied with, therefore, it is not a co-operative bank and the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee is entitled for deduction u/s 80P(2)(a)(i). We, therefore direct the assessing officer to allow deduction to the assessee u/s 80P(2)(a)(i) on the income generated for providing banking or credit facilities to its members. - Decided in favour of assessee.
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2015 (2) TMI 1034
Penalty u/s 275(1)(c) - late filing of AIR returns - main contention of the assessee he was ignorant of law i.e. about the provisions of section 285BA of the I.T. Act - Held that:- Provisions of section 285BA of the Act was introduced by the Finance (No. 2) Act, 2004 w.e.f. 1.4.2005, it is not the case that this section has been introduced for the first time by Finance (No. 2) Act, 2004. The plea taken by the assessee for ignorance of law is not sustainable in the eyes of law, because the ignorance of law is not an excuse, as per the decision in the case of UOI & Ors. vs. Dharmendra Textile Processor [2007 (7) TMI 307 - SUPREME COURT OF INDIA], Patan Nagrik Sarkari Bank Ltd. vs. DIT (2011 (3) TMI 719 - Gujarat High Court ) and Moti Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors. reported in (1978 (12) TMI 45 - SUPREME Court).
Assessee has not established any reasonable cause for not filing the Annual Information Return (AIR) within time. Secondly, assessee has also failed to file any documentary evidence supporting the version submitted before the Revenue Authority as well before us. Assessee has also failed to establish any bonafide in not filing the AIR within time, inspite of the fact that assessee is holding a very responsible post and discharging very important duties which directly affect the exchequer of the country. Since the AIR to be filed by the assessee is very much essential for further cause of action on the same for which the assessee has failed to submit within time. Therefore, the penalty in dispute has rightly be levied by the Revenue Authorities, hence, we uphold the penalty in dispute by dismissing all the Appeals filed by the Assessee. - Decided against assessee.
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2015 (2) TMI 1033
Write off of bad debts in respect of export sales disallowed - CIT(A) giving relief of ₹ 24,57,522/- on account of bad debts - Held that:- Disallowance of bad debts is to be allowed in the present year because it is not in dispute that debits were written off in the present year. Regarding the objection of the Assessing Officer that these bad debts are in respect of export sales, we are of the considered opinion that in consequence to the claim of the assessee regarding write off of bad debts in respect of export sales, it has to be seen as to whether such sale was considered for the purpose of allowing deduction u/s 80HHC in the year of sale. Normally export sales are reduced by the amount of sale, which was not realized within the prescribed period. Still we feel that in the interest of justice, the Assessing Officer should look into this aspect and examine the details of the year of sale for which debts were created and now written off. The assessee should furnish these details before the Assessing Officer and Assessing Officer should thereafter allow deduction to the assessee in the present year in respect of write off of bad debts but consequently, he should examine the assessment of the concerned year in which the sale took place and for that year, the assessee should establish that these unrealized sales were not included in the export sales for the purpose of computing deduction u/s 80HH- Decided in favour of revenue for statistical purposes.
Disallowance u/s 14A - CIT(A) deleted the addition - Held that:- Disallowance of interest expenditure of ₹ 7,57,380/- does not survive and in respect of disallowance out of administrative expenses, we feel that the disallowance was worked out by the Assessing Officer under Rule 8D to the extent of 0.5% of the average investments. As per the judgment of Hon'ble Bombay High Court rendered in the case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT), reasonable disallowance can be made before insertion of Rule 8D and in our considered opinion, disallowance of ₹ 50,000/- is reasonable in the facts of the present case. We, therefore, uphold the disallowance u/s 14A to the extent of ₹ 50,000/- and balance disallowance is deleted. - Decided partly in favour of revenue.
Non serving of notice u/s 143(2)on the assessee within the prescribed time - Held that:- We find that prior to 01/04/2008, the time available for serving notice u/s 143(2) was 12 months from the end of the month in which return is furnished. In the present case, return was filed on 31/10/2005 and therefore, time was available upto 30th September, 2006 for serving notice u/s 143(2). As per the assessment order, such notice u/s 143(2) was issued on 13/09/2006 and the same was duly served on the assessee. - Decided against assessee.
Disallowance of vehicle running expenses - Held that:- As relying on Sayaji Iron and Engg. Co. vs. CIT [2001 (7) TMI 70 - GUJARAT High Court] no disallowance is called for in the case of a company on the basis that there was personal user of vehicles. Even if there is personal use of vehicles by the Directors of the company then the value thereof can be added in the perquisites of the concerned director but no disallowance can be made in the hands of the company. - Decided in favour of assessee.
Exclusion of "Duty Draw Back" from the computation of eligible profit for the purposes of relief under section 80IB - Held that:- This issue is now squarely covered against the assessee by the judgment of Hon'ble Apex Court rendered in the case of Liberty India vs. CIT [2009 (8) TMI 63 - SUPREME COURT ] wherein held Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act - Decided against assessee.
Short deduction allowed by the Assessing Officer u/s 80G - Held that:- As per the assessment order, we find that it is noted by the Assessing Officer that regarding the claim of ₹ 15 lac related to Shyam Behari Mishra Memorial Charitable Trust, no details have been filed by the assessee and therefore, the Assessing Officer has not allowed the claim of the assessee for deduction u/s 80G in respect of this amount of ₹ 15 lac. Neither before CIT(A) nor before us, any detail has been furnished by the assessee and therefore, on this issue, we do not find any merit in the grounds raised by the assessee - Decided against assessee.
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