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2013 (12) TMI 1586
Works contract of civil works - iron and steel - classification of goods - taxable at 4% or 12.5%? - Held that: - Merely because iron and steel are cut into a particular length depending on the requirement and they are bound by wire and converted into a particular shape, the iron and steel do not lose their original characteristics. It continues to be the same product. Even after these beams, pillars, roofs are cast, the rod and steel continues to be in the same position in the buildings or the bridge which is constructed. At no point of time the iron and steel is transformed into a new product/ goods. There is no value addition to the said steel rods and beams. In fact, steel rods and beams. In fact, steel rods are used only to reinforce the cement concrete. It is used because it is iron and steel rod and it continues to be iron and steel rod even after the completion of the building or the bridge which is constructed, in which these iron and steel rods are used. Therefore, it continues to be the declared goods. By virtue of Section 15 of the CST Act, the state has an authority to impose tax. It cannot impose tax more than the tax prescribed in Section 15 of the Act - the Assessing Authority was justifies in levying on these iron and steel rods at 4%.
Point of taxation - Held that: - the sale of goods takes place either by transfer of title or by delivery of possession or at the tome of incorporation of the goods in the course of execution of any works contract. It is a deeming provision. Therefore for any amount to be included in the turnover, the condition precedent in there should be a sale or delivery of possession or incorporation of the goods in the course of execution of any works contract. If none of these events have happened, there is no turnover, If consideration of entering into the works contract, if amounts are paid in advance as mobilization advance, that amount is paid to the contractor to take steps to execute the work. On the date of amount is paid, the contractor neither transfers title in the property nor delivers possession nor incorporates any goods in the work. Therefore the question of treating the advance amount paid as part of consideration for transfer of property in goods would not become turnover and therefore the explanation added to Rule 3 with the object of levying sales tax on advance receipt runs counter to the aforesaid statutory provisions as well as the constitutional provisions.
Tax on bullet tanks - Held that: - the steel plates before it was incorporated has undergone the process of manufacture and ceased to be the steel plates and it has been taken the form of either section or bullet tank. Therefore, the value of the steel plates at the time of acquisition is not the same at the time of incorporation. It was the declared goods at the time of acquisition. It ceased to be declared goods at the time of incorporation. Before incorporation. Before incorporation there is value addition to the steels plates by the process of manufacture. Therefore, the prohibition contained under section 15 of the CST is not attracted and the state legislature has the power to levy tax in terms of Item No.23 of Sixth Schedule on these goods as it does not fall within any of the categories mentioned from Item Nos. 1 to 22 and also for the reason that it is not a declared goods as stipulated under section 14 of the CST Act - the authorities were justified in levying tax at 12.5% in terms of Item No.23 of Sixth Schedule on the bullet tanks.
Appeal allowed - decided partly in favor of appellant.
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2013 (12) TMI 1585
The Appellate Tribunal CESTAT, Chennai directed the applicant to deposit the entire amount of service tax of Rs. 59,09,543 within 4 weeks to waive predeposit of interest and penalty and stay recovery during the appeal. Compliance to be reported by 05-02-2014.
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2013 (12) TMI 1584
Deduction under section 54F - Held that:- In the present case, the assessee is said to have incurred expenditure in the form of modular kitchen, TV, show case, bath room fittings and POP work. In our opinion, if these expenditure have been incurred for the purpose of remodeling of flat in normal course after purchasing the readymade flat, it is allowable expenditure. However, if it is for beautifying the flat by removing the previous one, it cannot be considered for deduction under section 54F. We, therefore, remit the issue to the file of the Assessing Officer to examine this issue with reference to the agreement entered by the assessee with the builder/developer (construction agreement) thereafter decide whether the developer has provided these things or not and decide the issue in accordance with law. Accordingly, this issue is remitted to the file of the Assessing Officer for fresh consideration.
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2013 (12) TMI 1583
Issues involved: Service tax demand u/s 78 of the Finance Act, 1994 on various taxable services including Renting of Immovable Property, Construction of Complexes, Business Support services, Maintenance and Repair services, Manpower recruitment services, and Works Contract service.
Renting of Immovable Property: The petitioner, being an instrumentality of the State, contended immunity from federal taxation under Article 289 of the Constitution. However, the tribunal was not convinced, stating that properties and incomes of State instrumentalities are not exempt from service tax unless specifically provided in the Act. The tribunal deferred detailed consideration on the actual receipts and apportionment of consideration for lease and sale transactions to the final hearing.
Construction of Complexes and Other Services: The adjudication authority's analysis of the petitioner's defense was deemed unsatisfactory by the tribunal. The petitioner had engaged contractors for construction, not for providing services to others. Lack of reference to agreements with contractors and failure to analyze the defense led to erroneous conclusions regarding tax liability on services provided. The tribunal found the analysis inadequate and granted waiver of pre-deposit pending further proceedings.
Final Decision: The tribunal granted a waiver of pre-deposit and stayed further proceedings on the condition that the petitioner remits a specified amount within twelve weeks. Failure to comply would result in the appeal being rejected. The stay application was disposed of, providing clarity on the petitioner's obligations under the order.
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2013 (12) TMI 1582
Issues Involved:
1. Applicability of two different tariff notifications for the same goods.
2. Legality of rebate claim and method of refund.
3. Compliance with Central Board of Excise & Customs (CBEC) instructions.
4. Judicial precedents and applicability of case laws.
Summary:
Issue 1: Applicability of Two Different Tariff Notifications
The applicant, M/s. Cadila Healthcare Ltd., paid central excise duty at 4% (later 5%) for home consumption under Notification No. 4/2006-C.E. and 10% for exports under Notification No. 2/2008-C.E. The applicant argued that they could choose the most beneficial notification for each consignment, citing that both notifications were approved by the Indian Parliament. The Government observed that the general tariff rate was reduced through various notifications, and the effective rate of duty was prescribed separately. It was concluded that the duty was payable at the effective rate of 4% or 5% on exported goods, and the rebate could not be granted on the duty paid in excess of this rate.
Issue 2: Legality of Rebate Claim and Method of Refund
The adjudicating authority sanctioned cash rebate at 4% or 5% and allowed recredit of the remaining amount in the Cenvat credit account. The applicant contended that the rebate should be given by cheque as per Chapter 9 of the Supplementary Instructions of CBEC. The Government upheld the original authority's decision, stating that the excess duty paid is to be treated as a voluntary deposit and should be returned in the Cenvat credit account.
Issue 3: Compliance with CBEC Instructions
The Government emphasized that CBEC instructions are binding on departmental authorities. The instructions stated that export goods should be assessed in the same manner as goods for home consumption, implying the use of the effective rate of duty. The Government found that the applicant could not assess export goods at a higher rate while assessing home consumption goods at a lower rate.
Issue 4: Judicial Precedents and Applicability of Case Laws
The applicant cited various case laws to support their claim of choosing the most beneficial notification. However, the Government noted that these precedents did not apply to the context of rebate claims. The cited judgments were related to the admissibility of exemption benefits and not to the sanctioning of rebate claims. The Government also referred to other case laws supporting the view that rebate should be allowed at the effective rate and excess duty should be refunded in the Cenvat credit account.
Conclusion:
The Government rejected the revision applications, upholding the orders-in-appeal and confirming that the rebate is only admissible to the extent of duty paid at the effective rate of 4% or 5%. The excess duty paid is to be treated as a voluntary deposit and returned in the Cenvat credit account. The applications were dismissed as devoid of merit.
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2013 (12) TMI 1581
Issues involved: Valuation of physician samples for duty assessment u/s Section 4(1)(a) or Section 4A.
Summary:
The Appellate Tribunal CESTAT MUMBAI addressed a common issue involving five appeals related to the valuation of physician samples manufactured by the assessees and sold to brand name holders on a principal to principal basis. The period in question was from 1-4-2005 onwards, coinciding with the introduction of MRP based assessment for P & P Medicaments. The key question was whether these samples should be assessed to duty u/s Section 4(1)(a) or Section 4A.
The Tribunal referred to a previous judgment in the case of M/s. Gelnova Laboratories (I) Pvt. Ltd. v. Commissioner of Central Excise, Belapur, where it was established that P.P. Medicaments are covered by Section 4A of the Central Excise Act, 1944. The Tribunal noted that the requirement of displaying the retail price is only for goods intended for sale, and since physician samples are not intended for sale, the need to indicate the retail sale price does not apply. Additionally, the Tribunal had consistently held the view that physician samples manufactured on a principal to principal basis should be assessed under Section 4(1)(a) of the Central Excise Act.
Consequently, the appeals filed by the assessees were allowed, while those filed by the Revenue were dismissed.
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2013 (12) TMI 1580
Issues involved: Interpretation of clause 70.8 of the General Conditions of Contract (GCC) and applicability of Division Bench decisions in arbitration petitions under Section 34 of the Arbitration and Conciliation Act, 1996.
Interpretation of clause 70.8 of GCC:
The learned Single Judge rejected the submission of the petitioner based on two reasons. Firstly, it was found that the submission did not align with a plain reading of clause 70.8 of the GCC. Secondly, the issue had already been addressed in three judgments of the Division Bench of the court, namely in cases involving National Highways Authority of India against various entities. The judgments cited were FAO(OS) No. 451/2012, FAO(OS) No. 48/2012, and FAO(OS) No. 347/2013. As the matter was deemed to be covered by these decisions, the appeals were dismissed accordingly, with no costs imposed.
Applicability of Division Bench decisions in arbitration petitions under Section 34 of the Arbitration and Conciliation Act, 1996:
The learned Single Judge based the decision on the Division Bench rulings related to similar issues involving the National Highways Authority of India. By following the precedents set in the judgments of FAO(OS) No. 451/2012, FAO(OS) No. 48/2012, and FAO(OS) No. 347/2013, it was concluded that the present appeals should be dismissed in line with the established legal interpretations. No costs were awarded in this regard.
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2013 (12) TMI 1579
Disallowance u/s 14A - Held that:- It is a fact that the relevant assessment year is 2007-08 under consideration is outside the scope of provisions of Rule 8D. The said provisions cannot be treated as applicable to the A.Y.2007-08 under consideration indirectly when the same is precluded by the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT, reported in (2010 (8) TMI 77 - BOMBAY HIGH COURT ) Bom). Ppercentage of the exempt income can constitute a reasonable estimate for making disallowance in the years earlier to the assessment year 2008-09
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2013 (12) TMI 1578
Assessment u/s 153C - Held that:- To invoke the jurisdiction for “Assessment in case of search or requisition” there are two aspects, the searched person on whom notice u/s 153A shall be served and as a consequence of which assessment u/s 143(3)/153A shall be made. The other aspect is that in the course of search if certain documents are found, which would pertain to a third person, in such a situation, the AO having jurisdiction over the searched person shall record reasons and hand over the material to the AO having jurisdiction over the third person. In that case, the AO having jurisdiction over the person other then the person searched, shall initiate the proceedings by the issue of notice u/s 153C. The instant case pertains to this aspect, i.e. proceedings u/s 153C.
In the case before us, search took place on the new management and admittedly no document as such was found which indicated that there was certain income belonging to the assessee, which had not been disclosed to the department in the impugned assessment years. Since the search was on the new management, the assessee company became the person other then the person searched. In these circumstances, issue of notice u/s 153C and assessment to be framed under this provision is imperative, as the provision is non obstante. In these circumstances, we hold that the additions made u/s 153C are sustainable.
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2013 (12) TMI 1577
Deemed dividend addition u/s 2(22)(e) - Held that:- Inter-corporate deposits cannot be treated as a loan falling within the purview of section 2(22)(e) of the Act. In view of the decision taken by the coordinate Bench that intercorporate deposits received cannot be considered as a loan or advance so as to visit an assessee with the hazards of section 2(22)(e) of the Act, Ld. CIT(Appeals) was in our opinion justified in deleting the addition
Disallowance under section 14A - Held that:- CIT(Appeals) after verifying the cash flow statement came to a conclusion that loans raised were not used by the assessee for the purpose of any investment earning dividend income claimed as exempt. Disallowance of interest as stipulated in sub-clause (ii) of clause (2) of Rule 8D can be done only when an assessee has incurred expenditure by way of interest which is not directly attributable to any particular income or receipt. Ld. CIT(Appeals) had given a clear finding after verifying the cash-show that the loan amounts were not used for any investment resulting in the dividend income. Nothing has been brought on record by the Revenue to show that the finding of ld. CIT(Appeals) is not according to facts. We are therefore not inclined to interfere with the order of ld. CIT(Appeals)
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2013 (12) TMI 1576
Issues Involved:
1. Status of the assessee as an AOP or firm.
2. Preparation of Profit & Loss account and Balance Sheet by the assessee.
3. Allocation of contract work and payments among members.
4. Applicability of TDS provisions under section 194C.
5. Re-allocation of contracts and its classification as sub-contracting.
6. Control and responsibility of the assessee over the contract.
7. Applicability of the Supreme Court judgment in the case of Ch. Achaiah.
8. Differentiation from the case of Geoconsultant ZT GMBH.
Issue-wise Detailed Analysis:
1. Status of the Assessee:
The Assessing Officer (AO) initially mentioned the status of the assessee as a firm, but the assessee clarified that the status was an Association of Persons (AOP) as reflected in the returns filed manually till A.Y. 2006-07. The error in electronic filing from A.Y. 2007-08 was due to a computer glitch. The CIT(A) confirmed the status as AOP, noting that the status was consistently shown as AOP in the computation of total income and PAN application forms.
2. Preparation of Profit & Loss Account and Balance Sheet:
The assessee argued that the joint venture did not execute any contract work itself but was formed to obtain contract work and distribute payments among members based on their share of work done. The contract account and Balance Sheet of the joint venture showed only the apportionment of contract receipts, assets, and liabilities between members, without booking any expenditure or preparing a Profit & Loss Account. The CIT(A) accepted this explanation, noting that no profit or loss arose to the assessee per se.
3. Allocation of Contract Work and Payments:
The joint venture allocated the contract work and corresponding payments to its members in the ratio of the work done. The CIT(A) observed that the joint venture transferred the gross revenue and corresponding TDS to its members, who accounted for the revenue in their respective returns. The CIT(A) found no relationship of contractor and subcontractor between the joint venture and its members, negating the applicability of TDS provisions under section 194C.
4. Applicability of TDS Provisions under Section 194C:
The CIT(A) held that there was no applicability of TDS provisions under section 194C as the joint venture did not retain any share in the revenue and passed the entire gross revenue along with TDS to its members. The CIT(A) noted that the Department had issued tax apportionment certificates every year to enable the members to claim TDS credits in their respective cases.
5. Re-allocation of Contracts and Classification as Sub-contracting:
The CIT(A) rejected the AO's view that the re-allocation of contracts among members amounted to sub-contracting. The CIT(A) distinguished between revenue sharing and sub-contracting, noting that in revenue sharing, there was no principal-agent relationship, and the joint venture did not retain any share in the revenue.
6. Control and Responsibility of the Assessee over the Contract:
The CIT(A) found that the joint venture acted as a conduit between the contractee and its members, with no control over the execution of the contract work. The CIT(A) noted that the joint venture's role was limited to receiving payments and distributing them among members based on their work share.
7. Applicability of the Supreme Court Judgment in the Case of Ch. Achaiah:
The CIT(A) distinguished the present case from the Supreme Court judgment in Ch. Achaiah, noting that the joint venture did not execute any contract work itself and did not retain any share in the revenue. The CIT(A) held that the AO's reliance on the Ch. Achaiah judgment was misplaced.
8. Differentiation from the Case of Geoconsultant ZT GMBH:
The CIT(A) accepted the assessee's stand that the facts of the present case were distinguishable from the case of Geoconsultant ZT GMBH, where the joint venture was held to be an AOP. The CIT(A) noted that in the present case, the joint venture did not execute any contract work and acted only as a conduit for distributing payments among members.
Conclusion:
The appeal filed by the revenue was dismissed, with the CIT(A)'s findings upheld. The CIT(A) rightly held that there was no question of disallowance under section 40(a)(ia) of the Income-tax Act, 1961, in this case. The Tribunal found no reason to interfere with the CIT(A)'s order, following the reasoning in the assessee's own case for A.Y. 2008-09 and similar cases decided by the ITAT Pune Bench.
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2013 (12) TMI 1575
Transfer pricing adjustment - Held that:- By our detailed reasoning we have held that the departments stand is correct as unique geographical market conditions of the source country in the present facts of the case have no relevance for bench-marking purposes. We have held the focus has to be on India prices as the market for the product of the assessee is India and any third uncontrolled entity for selling similar product would pay the price for the said product going by India specific prices as such they should form the basis for benchmarking. Accordingly we set aside the impugned order and restore the issue back fact to the TPO to readjudicate the issue afresh by way of a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. The TPO shall also consider the benefit of +/- 5%, it available to the assessee on facts of the case. The impugned orders as such are set aside.
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2013 (12) TMI 1574
Disallowance of advances for purchase of capital goods written off - Held that:- There is no material has been placed on record that the supplier of goods have refused to refund the advances given to them. There is no material on record as to what efforts were made by the assessee for recovering the advances. Therefore, under these circumstances, the ld.CIT(A) was not justified in treating the same as business loss and allowable u/s.37(1) of the Act. Thus, this ground of the Revenue’s appeal is allowed.
Disallowance in respect of parts imported for SMS project - Held that:- We find that the assessee has not placed anything on record with regard to the contention that the assessee was unable to clear the parts due to inability to pay customs duties and other charges. The ld.CIT(A) has not given any finding that how much duty and other charges were payable by the assessee and how much has been paid by obtaining the parts even if it is assumed that non-clearance of parts by the assessee was resulted into business loss, then also the assessee is required to substantiate its claim by placing relevant material on record. So far the undisputed fact remains that the parts were to be utilized for commissioning of a new project, therefore, are in the nature of capital assets.The ld.CIT(A) has erred in not considering this aspect. After considering all aspects of the matter, we restore this issue back to the file of ld.CIT(A) to decide it afresh, after giving opportunity of hearing to the respective parties.
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2013 (12) TMI 1573
Puja expense incurred on occasion of Diwali and Mahurat are customary expenses and going by the turnover of the assessee-company and the nature of the business of the assessee, we feel that these are incurred for the harmony of the assessee-company’s employees and these are for the purpose of business. Similar are the reasons for incurring temple expense
Addition on account of cess on green leaf - Hld that:- This issue is covered by the decision of Hon’ble jurisdictional High Court in the case of AFT Industries Ltd. V. CIT (2004 (7) TMI 81 - CALCUTTA High Court ), wherein it has been decided by Hon’ble jurisdictional High Court that cess on green leaf is a normal business expenditure
TDS liability - disallowance u/s 40(a)(ia) - Held that:- The commission paid to foreign agents, who are not having permanent establishment business place in India and they are providing services outside India and even the payment is directly made outside India in foreign exchange. Assessee's income does not accrue or arise in India and once income does not accrue or arise in India, the assessee is not liable to deduct TDS on foreign payments
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2013 (12) TMI 1572
Issues involved:
The issues involved in the judgment include rejection of a misc. application for revocation of an original order by the Tribunal, direction to approach the Committee of Disputes (CoD) constituted under the Supreme Court's order, dismissal of a misc. application for recalling the original order, and the right to be heard on merits in an appeal before the Tribunal.
Rejection of Misc. Application:
The Tribunal rejected a misc. application filed by the petitioner for revocation of the original order, directing the petitioner to first approach the Committee constituted by the Apex Court for settlement of disputes, as per the judgment of the Supreme Court in a specific case.
Adjudicating Authority's Order:
The adjudicating authority confirmed the demand of Service Tax and Education Cess under Section 73(1) of the Finance Act, 1994, imposed penalties under Sections 76 and 78 of the Act, and ordered payment of interest on the unpaid amounts.
Appeals and Tribunal Orders:
An appeal was filed before the Commissioner (Appeals) against the adjudicating authority's order, which was dismissed, leading to a further appeal before the Tribunal. The Tribunal directed the petitioner to raise grievances before the Committee of disputes as per the Supreme Court's directions, allowing for revival of the appeal upon obtaining clearance.
Dismissal of Misc. Application:
A later misc. application for recalling the Tribunal's original order was dismissed on the grounds that the petitioner failed to approach the CoD as directed, despite the Committee's constitution being set aside by the Apex Court in a subsequent judgment.
Arguments and Decision:
The petitioner argued that the matter should be remitted back for a hearing on merits, considering the changed scenario after the Apex Court's observation on the CoD's constitution. The respondents opposed, stating the petitioner had sufficient time for compliance. The Court held that the petitioner should be afforded the opportunity to be heard on merits in the appeal.
Court's Decision:
The Court allowed the writ petition, quashing the Tribunal's orders, restoring the appeal, and remitting the matter for a hearing on merits. The parties were directed to appear before the Tribunal for further proceedings.
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2013 (12) TMI 1571
Issues involved: Appeal against service tax liability, interest, and penalties due to undervaluation of services by not including value of free supply of cement and steel from service recipient.
Judgment Summary:
Issue 1: Undervaluation of services
The appeal was filed against the order imposing service tax liability, interest, and penalties on the grounds of undervaluation of services due to the exclusion of the value of free supply of cement and steel from the service recipient. The Appellants contended that the issue was covered by the judgment of the Larger Bench of the Tribunal in the case of Bhayana Builders (P) Ltd. The departmental representative also acknowledged that the issue was settled by the Larger Bench in the mentioned case. Upon reviewing the records, it was found that the inclusion of the value of free goods supplied by the service recipient to the Appellant for the discharge of service tax liability was addressed by the Larger Bench in para 16 of their judgment. The Larger Bench concluded that the value of goods supplied free of cost by the service recipient should be outside the taxable value or the gross amount charged, as it does not constitute consideration paid by or flowing from the service recipient to the benefit of the service provider. Therefore, the impugned order imposing service tax liability was set aside, and the appeal was allowed.
Conclusion:
The impugned order imposing service tax liability, interest, and penalties was set aside based on the judgment of the Larger Bench in the case of Bhayana Builders (P) Ltd., which clarified that the value of free supplies by the service recipient should not be included in the gross amount charged for service tax purposes.
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2013 (12) TMI 1570
Disallowance of the claim u/s. 80IB(10) - Held that:- The assessee has not violated any of the conditions of Sec. 80IB(10) to gain eligibility for claiming the deduction and hence both the authorities below erred by denying the deduction to the assessee. We, accordingly, allow the assessee’s claim of deduction on the above reason and direct the Assessing Officer to allow the deduction u/s. 80IB(10). We also make it clear that as the amenity building is treated as an independent project, the assessee is not entitled to include the profit earned from the sale of any of the unit in the said building for claiming the deduction u/s. 80IB(10).
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2013 (12) TMI 1569
Short term capital gain - applicability of provisions of Section 2(47)(v) - Held that:- Commissioner of Income Tax (Appeals) as well as the learned Tribunal upon basis of the factual material placed before it and upon interpretation of the agreement entered between the assessee and the developer has found that the assessee was liable to pay capital gain in the year 2008-09, inasmuch as there was no possession handed over to the developer under Section 53A of the Transfer of Property Act in the assessment year 2003-04. It can thus be seen that finding recorded are upon appreciation of material led before the Commissioner of Income Tax (Appeals) and the Tribunal and upon consideration of the documents placed for its consideration. The said question therefore cannot be said to be a question of law, leave aside, the substantial question of law.
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2013 (12) TMI 1568
Issues Involved:
1. Treatment of income from letting out of poultry sheds as income from house property versus business income.
2. Treatment of sale of agricultural lands as long-term capital gains versus exempt agricultural income.
3. Disallowance of depreciation on poultry lands.
Detailed Analysis:
1. Treatment of Income from Letting Out of Poultry Sheds:
The assessee, a private limited company engaged in the business of poultry farms, leased out poultry sheds for eight months and reported the rental income as business income. The Assessing Officer (AO) treated this income as income from house property, disallowing the business expenditure claimed by the assessee. The CIT(A) upheld the AO's decision, referencing several judicial precedents, including Sultan Brothers Pvt. Ltd. vs. CIT and Shambhu Investments Pvt. Ltd. vs. CIT, which emphasized that for an activity to be assessed as a business, there must be an organized set of actions for earning income. The CIT(A) found no such organized activity in the assessee's case and confirmed the treatment of rental income as income from house property. The Tribunal upheld the CIT(A)'s decision, rejecting the assessee's grounds.
2. Treatment of Sale of Agricultural Lands:
The Revenue contested the CIT(A)'s decision to delete the addition of long-term capital gains on the sale of agricultural lands, which the assessee claimed as exempt agricultural income. The AO argued that the lands were used for poultry farming and were within 8 kilometers of Bibinagar, thus not qualifying as agricultural lands. However, the assessee provided additional evidence, including certificates from local authorities, proving that the sold lands were different from those used for poultry farming and were situated approximately 17 kilometers from the nearest municipality. The CIT(A) accepted the assessee's contention and deleted the addition. The Tribunal upheld the CIT(A)'s order, confirming that the lands sold were indeed agricultural and exempt from capital gains tax.
3. Disallowance of Depreciation on Poultry Lands:
For the assessment year 2006-2007, the Revenue challenged the CIT(A)'s direction to the AO to reconsider the disallowance of depreciation on poultry lands. The assessee argued that the depreciation claimed was on a distinct property, not the poultry sheds yielding rental income. The CIT(A) remitted the issue to the AO for examination. The Tribunal upheld the CIT(A)'s order, noting that the CIT(A) had not directed the allowance of the claim but merely asked for a re-examination.
Conclusion:
The Tribunal dismissed the cross-appeals for both assessment years, upholding the CIT(A)'s decisions on all issues. The treatment of rental income as income from house property was confirmed, the deletion of long-term capital gains on the sale of agricultural lands was upheld, and the remand for reconsideration of depreciation on poultry lands was validated.
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2013 (12) TMI 1567
Addition U/s 14A - Held that:- The burden is on the assessee to submit the details of volume of transactions in relation to activity regarding dividend income and other activities from which the assessee has earned taxable income and then the Assessing Officer should work out the amount of disallowance in the ratio of such transactions undertaken by the assessee for earning dividend income and other transactions resulting into taxable income. The Assessing Officer should pass necessary order as per law as per above discussion after providing reasonable opportunity of being heard to the assessee. Ground No. 1 of Revenue’s appeal stands partly allowed for statistical purposes.
Addition on purchased/received the vehicle - Held that:- If the assessee establishes this fact that the assessee received the delivery of the vehicle on 31/03/2007 and got it registered in his name on the first day of the next year then the assessee is eligible for depreciation even if the same was registered in the next year but since this fact is not verifiable from the record and no finding is available, we set aside the order of learned CIT(A) on this issue and restore the matter to the Assessing Officer for fresh decision. We would like to make it clear that the burden is on the assessee to furnish the proof of delivery of vehicle on 31/03/2007 and thereafter, the Assessing Officer should pass necessary order as per law. This ground of appeal is allowed for statistical purposes.
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9911796707
