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Showing 41 to 60 of 14810 Records
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2013 (12) TMI 1726
Issues Involved:
1. Reduction of agricultural income.
2. Disallowance of brick expenses.
3. Disallowance of labor charges.
Summary:
1. Reduction of Agricultural Income:
The first issue concerns the reduction of agricultural income from Rs. 2,95,535/- to Rs. 1,77,323/-. The A.O. observed that the assessee did not furnish proof of agricultural income and expenditure during the assessment proceedings despite multiple opportunities. Consequently, the A.O. treated the entire agricultural income as undisclosed income. The CIT(A) partly allowed the appeal, reducing the agricultural income by considering 40% of the receipts as expenditure. The Tribunal, after hearing the arguments and considering the evidence, decided that 30% of the receipts should be considered as expenditure and directed the A.O. to re-compute the agricultural income accordingly.
2. Disallowance of Brick Expenses:
The second issue involves the disallowance of brick expenses amounting to Rs. 5,04,567/-. The A.O. treated the purchases as bogus due to non-response from the suppliers and lack of evidence from the assessee. The CIT(A) upheld the disallowance, not admitting additional evidence. However, the Tribunal admitted the additional evidence under ITAT Rule 29, noting that the A.O. had recorded statements from the brick suppliers during the remand report. The Tribunal directed the A.O. to make necessary inquiries and take a decision as per law, setting aside the CIT(A)'s order.
3. Disallowance of Labor Charges:
The third issue pertains to the disallowance of labor charges. The A.O. disallowed Rs. 50,000/- out of Rs. 59,38,958/- due to unverifiable cash payments through self-made vouchers. The CIT(A) restricted the disallowance to Rs. 30,000/-, considering the nature of the business. The Tribunal upheld the CIT(A)'s decision, finding it reasonable given the circumstances.
Conclusion:
The assessee's appeal is partly allowed, with directions for re-computation of agricultural income and further inquiry into the brick expenses, while the disallowance of labor charges is confirmed.
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2013 (12) TMI 1725
Issues Involved:
1. Validity of notice u/s 148 of the Act.
2. Reopening of assessment beyond four years.
3. Full and true disclosure of material facts by the assessee.
4. Computation of "profits of the business" for deduction u/s 80HHC.
Summary:
1. Validity of notice u/s 148 of the Act:
The assessee challenged the validity of the notice issued u/s 148, arguing it was issued after four years from the end of the relevant assessment year, and the original assessment was made u/s 143(3). The assessee contended that the notice's validity depended on the fulfillment of conditions prescribed in the first proviso to section 147, which requires a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment.
2. Reopening of assessment beyond four years:
The Tribunal noted that the reasons recorded by the Assessing Officer (AO) for reopening the assessment did not contain any averment that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Citing the judgment of the Hon'ble Bombay High Court in Titanor Components Ltd. vs. ACIT, it was held that the absence of such an averment rendered the initiation of proceedings u/s 147 legally infirm.
3. Full and true disclosure of material facts by the assessee:
The Tribunal found that the assessee had made a full and true disclosure of all material facts in relation to the assessment, including the computation of income and the claim for deduction u/s 80HHC. The AO had duly applied his mind to the issue during the original assessment proceedings, as evidenced by the detailed records and the Chartered Accountant's certificate in Form No. 10CCAC.
4. Computation of "profits of the business" for deduction u/s 80HHC:
The issue revolved around the determination of "profits of the business" as defined in Explanation (baa) to section 80HHC. The AO's action of excluding 90% of Rs. 98,43,701/- from the "profits of the business" was contested. The Tribunal concluded that the assessee had disclosed all material facts fully and truly, and the AO had applied his mind during the original assessment. Therefore, even if a wrong claim was allowed, it could not justify reopening u/s 147 as there was no withholding of material facts by the assessee.
Conclusion:
The Tribunal held that the initiation of proceedings u/s 147 was bad in law due to the absence of failure on the part of the assessee to disclose fully and truly all material facts. Consequently, the assessment was annulled, and the appeal of the assessee was allowed.
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2013 (12) TMI 1724
Issues involved: The issues involved in the judgment are the interpretation of statutory provisions regarding adjustment of State Development Tax, the validity of circulars issued by the Commissioner Trade Tax, and the proportionate adjustment of State Development Tax in relation to exemption or reduction in the rate of tax.
Interpretation of Statutory Provisions:
The Court emphasized that the State Development Tax shall be adjustable in the monetary limit specified in the eligibility certificate issued under section 4-A of the U.P. Trade Tax Act. It was clarified that the adjustment of the State Development Tax should not be proportionate to the trade tax under a notification dated 31.3.1995, as the two taxes are distinct and governed by separate provisions. The Court held that until a clarification or amendment is made by the Legislature, the entire State Development Tax can be adjusted up to the monetary limit prescribed in the eligibility certificate.
Validity of Circulars:
The Court declared that no notification or circular issued by the department can override the statutory provisions of the Act. It was emphasized that the statutory provisions should be followed as they are without any additional interpretations or modifications. The Court stayed the operation of certain notices issued by the Deputy Commissioner (Assessment) Trade Tax, which aimed at allowing only proportionate adjustment of State Development Tax, contrary to the statutory provisions.
Proportionate Adjustment of State Development Tax:
In a related case, the Court clarified that the interpretation of the Commissioner, suggesting proportionate adjustment of State Development Tax based on the exemption or reduction in the rate of tax, was incorrect. The Court highlighted that the adjustment of State Development Tax should be based on the monetary limit specified in the eligibility certificate, without considering proportional changes in the rate of tax. Consequently, the Assessing Authority was directed to pass appropriate orders for adjustment of State Development Tax in accordance with the Court's decision, expeditiously.
This judgment provides clarity on the adjustment of State Development Tax, emphasizing adherence to statutory provisions and rejecting the notion of proportionate adjustment based on other tax rates or circular interpretations.
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2013 (12) TMI 1723
Issues involved:
The judgment deals with the issue of whether the petitioner, who is facing criminal charges, should be permitted to travel abroad for business purposes.
Details of the judgment:
1. The petitioner, a businessman facing criminal charges, sought permission to travel abroad for business reasons. The Trial Court initially rejected the request due to the petitioner's past absconding. The petitioner argued that he had been regularly attending trial proceedings since his release on bail and should be allowed to travel. The petitioner's right to travel abroad for livelihood was emphasized.
2. The C.B.I. opposed the petitioner's request, citing the seriousness of the offence and the petitioner's past conduct. The Court noted the lengthy trial process ahead, with numerous witnesses and documents involved.
3. The Court acknowledged the petitioner's fundamental right to travel abroad as part of the right to life and personal liberty under Article 21 of the Constitution of India. It emphasized the need for restrictions on this right to be reasonable and proportionate to the case's circumstances.
4. Considering the facts of the case and the ongoing trial, the Court decided to allow the petitioner to travel abroad to Thailand and the United Kingdom for business purposes. Specific conditions were imposed, including providing a bond, daily reporting to the C.B.I., and returning to India by a specified date.
5. The Court directed the C.B.I. to ensure compliance with the imposed conditions and to assist the petitioner in availing the travel permission. The revisional application was allowed, permitting the petitioner to travel abroad within the specified itinerary.
6. The judgment balanced the petitioner's right to travel for business with the need to ensure his presence for trial, highlighting the importance of upholding fundamental rights while considering the administration of criminal justice.
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2013 (12) TMI 1722
Issues Involved:
1. Deletion of disallowance of various expenses.
2. Deletion of disallowance of commission expenses.
3. Deletion of disallowance of Kharajat expenses.
4. Deletion of disallowance of unexplained cash credit.
5. Deletion of disallowance u/s 68.
6. Deletion of disallowance u/s 69A.
7. Deletion of disallowance of unexplained outstanding credits.
8. Deletion of disallowance of interest chargeable on interest-free advance.
Summary:
1. Deletion of disallowance of various expenses:
The A.O. disallowed Rs. 74,732/- on account of vehicle and telephone expenses, citing lack of supporting bills and personal use. The CIT(A) deleted the disallowance, noting that such expenses are petty and usually incurred in cash without verifiable receipts. ITAT upheld the A.O.'s addition as the Assessee had agreed to it during assessment proceedings.
2. Deletion of disallowance of commission expenses:
The A.O. disallowed Rs. 14,400/- out of Rs. 72,000/- commission expenses paid in cash, suspecting suppression of profits. CIT(A) deleted the disallowance, stating the commission was paid to the Assessee's father for business supervision, and the genuineness was not disputed. ITAT upheld the A.O.'s addition as the Assessee had not objected during assessment.
3. Deletion of disallowance of Kharajat expenses:
The A.O. disallowed Rs. 2,59,940/- out of Rs. 10,39,760/- Kharajat expenses due to lack of verifiable documents. CIT(A) reduced the disallowance to 10%, granting partial relief. ITAT further reduced the disallowance to 15%, considering the substantial cash expenses and lack of third-party evidence.
4. Deletion of disallowance of unexplained cash credit:
The A.O. added Rs. 60,000/- as unexplained cash credit due to a discrepancy in the balance shown by Lakhani Enterprises. CIT(A) deleted the addition, accepting the Assessee's explanation of accounting the draft in the subsequent year. ITAT upheld the A.O.'s addition due to lack of evidence supporting the Assessee's explanation.
5. Deletion of disallowance u/s 68:
The A.O. added Rs. 10 lakhs as unexplained cash credit u/s 68, questioning the genuineness of the loan from Markandeshwar Scrap Traders. CIT(A) deleted the addition, noting the Assessee had provided sufficient documentary evidence, and the onus was on the A.O. to disprove it. ITAT remitted the issue back to CIT(A) for fresh examination due to contradictory statements and lack of evidence.
6. Deletion of disallowance u/s 69A:
The A.O. added Rs. 16.50 lakhs u/s 69A, suspecting unrecorded income. CIT(A) deleted the addition, accepting the explanation of Markandeshwar Scrap Traders. ITAT remitted the issue back to CIT(A) for fresh examination due to contradictory statements and lack of evidence.
7. Deletion of disallowance of unexplained outstanding credits:
The A.O. added Rs. 83,19,857/- as unexplained outstanding credits due to lack of confirmations and supporting documents. CIT(A) deleted the addition, noting the transactions were business-related and the Assessee had provided sufficient details. ITAT upheld CIT(A)'s decision as the Revenue could not controvert the findings.
8. Deletion of disallowance of interest chargeable on interest-free advance:
The A.O. disallowed Rs. 4,02,177/- interest expense, citing interest-free advances given by the Assessee. CIT(A) deleted the addition, noting the A.O. failed to establish a nexus between interest-bearing loans and interest-free advances. ITAT upheld CIT(A)'s decision as the Revenue could not provide contrary evidence.
Conclusion:
The appeal of the Revenue is partly allowed for statistical purposes.
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2013 (12) TMI 1721
Issues involved: Validity of initiation of proceedings u/s 153A and claim of deduction u/s 80IB in respect of scrap sales.
Validity of initiation of proceedings u/s 153A:
The appeals by the assessee challenged the order of the learned CIT(A)-I, New Delhi for the AY 2008-09 & 2009-10, specifically contesting the initiation of proceedings u/s 153A of the Income-tax Act, 1961. Ground No.1 in both years was against the validity of the initiation of proceedings under Section 153A. However, during the hearing, no specific arguments were presented against the validity of the notice under Section 153A. Consequently, the Tribunal treated ground No.1 as not pressed and rejected the same.
Claim of deduction u/s 80IB in respect of scrap sales:
The second ground of the assessee's appeal related to the claim of deduction under Section 80IB concerning scrap sales. The Assessing Officer had allowed the deduction under Section 80IB but excluded the scrap sales from the profit of the industrial undertaking for the years under consideration. The learned counsel argued that the issue was favorably decided for the assessee by the Hon'ble Jurisdictional High Court in a specific case. The Departmental Representative, however, contended that the facts of the present case differed from the case relied upon by the assessee. After considering the arguments and facts, the Tribunal agreed with the assessee's contention, citing the decision of the Hon'ble Jurisdictional High Court which held that receipts from scrap sales are part of the gains derived from the industrial undertaking for computing deduction under Section 80IB. Consequently, the Tribunal directed the Assessing Officer to compute the deduction under Section 80IB by including the scrap sales. As a result, the appeals of the assessee were partly allowed.
Decision:
The decision was pronounced in the open Court on 20th December 2013 by the Appellate Tribunal ITAT Delhi, with Shri G.D. Agrawal, Vice President, and Shri Aby T. Varkey, Judicial Member presiding over the case. The legal representatives for the appellant and respondent were Shri Niren Gupta, CA, and Shri S.N. Bhatia, DR, respectively.
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2013 (12) TMI 1720
Issues Involved:
1. Determination of rent payable.
2. Termination of tenancy.
3. Entitlement to possession.
4. Entitlement to use and occupation charges.
5. Alleged concealment of material facts.
6. Relief.
Summary:
1. Determination of Rent Payable:
The primary issue was whether the rent of the premises was Rs. 60,000/- per month or Rs. 40,000/- per month as per the registered lease deeds. The Trial Court had held the rent to be Rs. 60,000/- per month based on three lease deeds, two registered and one unregistered. However, the High Court found this to be incorrect, stating that the terms of a registered lease deed cannot be varied by an unregistered document. The unregistered lease deed was inadmissible as evidence due to non-registration, and thus, the rent was determined to be Rs. 40,000/- per month as per the registered lease deeds.
2. Termination of Tenancy:
The respondents/plaintiffs had terminated the tenancy via notice dated 08.01.2007, effective from 28.02.2007. The appellants/defendants did not respond to this notice, making their possession unauthorized from 01.03.2007.
3. Entitlement to Possession:
The Trial Court had passed a decree of ejectment on 03.09.2008, which was complied with, and possession was delivered on 13.02.2009. The High Court upheld this decree.
4. Entitlement to Use and Occupation Charges:
The Trial Court had awarded mesne profits/damages at Rs. 6,000/- per day from 01.07.2008 till 13.02.2009 based on a clause in the lease deeds. The High Court found this erroneous, citing the absence of evidence for mesne profits and the principle that penalty clauses cannot be enforced without proof of actual loss. Thus, the High Court awarded mesne profits at the rate of Rs. 40,000/- per month from 01.12.2006 to 13.02.2009.
5. Alleged Concealment of Material Facts:
The Trial Court found no concealment of material facts by the respondents/plaintiffs, and the High Court did not overturn this finding.
6. Relief:
The High Court set aside the Trial Court's judgment and substituted it with a decree for recovery of arrears of rent/mesne profits at Rs. 40,000/- per month from 01.12.2006 to 13.02.2009, with interest at 9% per annum from 13.02.2009 till payment. The matter was remanded to the Registrar General for determination of the amounts paid by the appellants/defendants and the amounts due to the respondents/plaintiffs. The deposited amount of Rs. 15,00,000/- was to be adjusted accordingly.
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2013 (12) TMI 1719
Issues Involved:
1. Review of the judgment and order dated 10.04.2012.
2. Alleged admission of liability by Durga Builders in its balance sheet.
3. Alleged forgery and fraud in the appeal process.
4. Applicability of Section 18 of the Limitation Act, 1963.
Summary:
1. Review of the Judgment and Order Dated 10.04.2012:
The review petition challenges the judgment and order of this Court dated 10.04.2012, which reversed the learned Single Judge's decision allowing MGF's application u/r XII Rule 6 CPC for a decree on admission against Durga Builders.
2. Alleged Admission of Liability by Durga Builders in its Balance Sheet:
MGF filed a suit for recovery of Rs. 3,56,82,220/- based on three Inter Corporate Deposits (ICDs) allegedly given to Durga Builders. MGF claimed that Durga Builders admitted liability of Rs. 1,93,00,000/- in its balance sheet for the year ending 31.03.2004. The learned Single Judge decreed the suit to the extent of Rs. 1.93 crores based on this admission and the statement of Mr. R.K. Nanda, Managing Director of Durga Builders. However, the appellate court reversed this decision, stating that the admission was not "clear and unequivocal" and required a full trial to resolve the issues.
3. Alleged Forgery and Fraud in the Appeal Process:
MGF contended that the appeal was obtained through fraud, as the affidavit and vakalatnama were allegedly forged. The Court found no merit in this contention, noting that a duly stamped vakalatnama and other documents signed by Mr. Nanda were on record, thus dismissing the argument of forgery.
4. Applicability of Section 18 of the Limitation Act, 1963:
MGF argued that the acknowledgment of debt in the balance sheet extended the period of limitation u/s 18 of the Limitation Act, 1963. The Court noted that even if the question of limitation was decided against Durga Builders, several issues, including the existence of a mortgage and the nature of the loan, remained unresolved and required a full trial. The Court emphasized that the balance sheet's acknowledgment could be explained away and was not unimpeachable evidence.
Conclusion:
The Court found no errors apparent or sufficient cause to recall its judgment and order dated 10.04.2012. The review petition was dismissed along with the pending application, with no order as to costs. The claims advanced by both parties must be tested at trial.
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2013 (12) TMI 1718
Deduction u/s 10B - Business of granite export. - AO observed that the assessee’s activity could not be termed as ‘manufacture or production’ since the granite had only been made fit for transportation. - CIT(A) deleted the additions and allowed deduction. - HELD THAT- The assessee was allowed the benefit of section 10B by the ITAT [2011 (2) TMI 1415 - ITAT CHENNAI] on the ground that the assessee had exported polished granite. While doing so, the Tribunal had observed that the assessee extracts granite blocks from the quarry, dresses them and polishes them before exporting. We have perused the Tribunal order and have considered the entire facts and evidence available before us. We are in agreement with the ld. CIT(A) that there is no change in the business of the assessee from earlier years and similar type of export is being done in this year too. Therefore, assessee becomes entitled to deduction u/s 10B under identical facts and circumstances.
Decision in favor of assessee.
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2013 (12) TMI 1717
Issues Involved:
1. Legality of the consolidation of share capital.
2. Allegations of oppression and unfair treatment of minority shareholders.
3. Validity of the amended article 62A of the articles of association.
4. Compliance with the provisions of the Companies Act, 1956.
Summary:
1. Legality of the consolidation of share capital:
The appellant challenged the order of the Company Law Board (CLB) dismissing their petition u/s 397 and 398 of the Companies Act, 1956, which sought to declare the special resolution for consolidation of equity share capital as ultra vires, illegal, and void. The consolidation increased the nominal value of shares from Rs. 10 to Rs. 2,50,000, effectively consolidating 25,000 equity shares into one. The CLB found that the consolidation was done as per the Act and the articles of association, and the exit offer of Rs. 1,630 per share was just and equitable.
2. Allegations of oppression and unfair treatment of minority shareholders:
The appellant argued that the consolidation was a mala fide action aimed at driving out minority shareholders. However, the CLB held that there were no materials to support this claim and that the consolidation was approved by an overwhelming majority of shareholders. The court cited the case of Sandvik Asia Ltd. v. Bharat Kumar Padamsi, which held that a company can reduce its share capital in any way, provided the procedure laid down by the Companies Act is followed and the amount offered to shareholders is just and fair.
3. Validity of the amended article 62A of the articles of association:
The appellant contended that the amended article 62A was contrary to the provisions of the Companies Act and Table A of Schedule-I. The court, however, found that the amendment was legally permissible and in accordance with section 94(1)(b) of the Act, which allows for the consolidation and division of share capital into shares of larger amounts. The court also noted that the amendment provided a mechanism for dealing with fractional entitlements, which was approved by the majority of shareholders.
4. Compliance with the provisions of the Companies Act, 1956:
The court held that the consolidation of shares and the amended article 62A were in accordance with the provisions of the Companies Act, 1956. The court rejected the appellant's argument that the amendment was contrary to law, noting that section 94(1)(b) expressly provides for the consolidation of shares. The court also found that the procedure adopted to take over fractional shares was legal and could not be faulted.
Conclusion:
The court dismissed the appeal, finding no merit in the appellant's arguments. The consolidation of shares and the amended article 62A were held to be legally permissible and in accordance with the provisions of the Companies Act, 1956. The court concluded that the appellant was not entitled to any of the relief sought.
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2013 (12) TMI 1716
Issues Involved:
1. Exemption u/s 11 & 12 of the Act.
2. Corresponding allowance of expenditure.
3. Claim of depreciation.
4. Plurality of objects in form no.10.
5. Reopening of assessment u/s 148.
6. Exemption u/s 10(26AAB).
Summary:
Issue 1: Exemption u/s 11 & 12 of the Act
The first issue pertains to the non-granting of benefit u/s 11(2) due to delay in filing form no.10 and accumulation for several objects. The CIT(A) allowed the assessee's contention to accept the form no.10 based on the Supreme Court's decision in CIT Vs. Nagpur Hotel Owners Association, but upheld the assessing officer's contention that the notice for accumulation did not specify a specific purpose. The Tribunal directed the assessing officer to reconsider the claim of section 11(2) in light of relevant judgments, restoring the issue for fresh examination.
Issue 2: Corresponding Allowance of Expenditure
The second issue involves the grant of relief for various payments made as per the directions of the Director of Marketing, which the assessing officer did not allow. The CIT(A) sustained the addition due to the absence of the Director's directions. The Tribunal referred to the Andhra Pradesh High Court's decision in CIT Vs. Agricultural Market Committee, Giddalore, which recognized the government's power to direct such payments. The Tribunal directed the assessing officer to verify and allow the claims as per the Director's directions.
Issue 3: Claim of Depreciation
The third issue concerns the claim of depreciation not allowed due to lack of details. The Tribunal cited various judicial authorities, including the Punjab & Haryana High Court in CIT Vs. Market Committee, Pipli, which upheld that depreciation is allowable on capital assets from the income of charitable trusts. The Tribunal directed the assessing officer to allow the depreciation after obtaining necessary details from the assessee.
Issue 4: Plurality of Objects in Form No.10
In some appeals, the assessing officer denied exemption u/s 11(2) due to alleged violation of section 13 and plurality of objects in form no.10. The Tribunal, referring to the first issue, restored the matter to the assessing officer for fresh examination.
Issue 5: Reopening of Assessment u/s 148
In several appeals, the ground on reopening the assessment u/s 148 was not pressed and accordingly treated as withdrawn.
Issue 6: Exemption u/s 10(26AAB)
The issue of exemption u/s 10(26AAB) was considered against the assessee by the Andhra Pradesh High Court in a batch of appeals involving various Agricultural Market Committees. The Tribunal dismissed the grounds related to this issue.
Conclusion:
The Tribunal restored various issues to the assessing officer for fresh consideration and verification, allowing the appeals partly for statistical purposes. The Tribunal directed the assessing officer to consider the issues accordingly, following the principles laid down in relevant judicial decisions.
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2013 (12) TMI 1715
Issues involved:
The appeal by revenue against the order of CIT(A) deleting the addition of unexplained cash credits worth Rs. 14.75 lakhs.
Details of the Judgment:
Issue 1: Addition of unexplained cash credits
The revenue appealed against the CIT(A)'s deletion of the addition of Rs. 14.75 lakhs as undisclosed source, citing lack of creditworthiness of loan creditors. The AO added unsecured loans as income from undisclosed sources u/s. 68 of the Act due to insufficient evidence provided by the assessee. However, the CIT(A) observed that the appellant had submitted loan confirmations, PAN cards, bank statements, and replies to notices u/s. 133(6) from the loan creditors, establishing the genuineness of the loans. The CIT(A) found that the appellant fulfilled the onus of proving the identity and creditworthiness of the loan creditors, while the AO failed to provide any material casting doubt on the transactions. The High Court precedent emphasized that when the identity and genuineness of the transaction through account payee cheques are established, the AO should verify the transactions with the creditor, especially when the creditor is an income tax assessee. As the appellant provided complete details and followed the High Court's principle, the order of the CIT(A) was upheld, and the revenue's appeal was dismissed.
Conclusion:
The appeal by revenue was dismissed, and the order was pronounced on 24th Dec., 2013.
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2013 (12) TMI 1714
Issues Involved:
1. Application of incorrect 'peak credit' by the Assessing Officer (AO).
2. Invocation of provisions u/s 68 of the Income Tax Act.
3. Addition of commission income along with peak credit.
Summary of Judgment:
Issue 1: Application of Incorrect 'Peak Credit'
The assessee contested the AO's application of incorrect 'peak credit' for AY 2009-10 and 2010-11. The AO assessed peak credits of Rs. 5.05 lakh and Rs. 39.95 lakh for the respective years, rejecting the assessee's calculation of Rs. 1 lakh and Rs. 6.50 lakh. The CIT(A) upheld the AO's assessment, stating that the AO rightly applied the combined peak theory after considering all entries in the undisclosed bank accounts.
Issue 2: Invocation of Provisions u/s 68
The AO invoked provisions u/s 68 of the Income Tax Act, which the assessee argued was not applicable as no sum was found credited in the books of account. The CIT(A) supported the AO's decision, referencing similar cases where the ITAT, Kolkata upheld the addition to income by the combined peak credit theory.
Issue 3: Addition of Commission Income
The assessee argued that once the peak credit was added, the commission income should not be added again. The CIT(A) disagreed, confirming the addition of commission income as it was admitted by the assessee and disclosed in the return of income.
Tribunal's Decision
The Tribunal set aside the common issue to the file of the AO for verification of facts and fresh adjudication according to law. The AO was directed to examine the source of cash deposits, the names and addresses of beneficiaries, and whether the cash withdrawals were utilized for investments. The appeals were allowed for statistical purposes.
Order Pronounced: The appeals were allowed for statistical purposes and the order was pronounced in the open court on 19th Dec., 2013.
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2013 (12) TMI 1713
Issues Involved:
The judgment deals with the taxation of interest earned on deposits kept with banks by a cooperative society before the commencement of its business activities.
Issue 1:
The first issue pertains to the justification of the Commissioner of Income Tax (Appeals) in taxing the interest earned on bank deposits under Section 56 of the Income Tax Act, even when the business of the assessee was not set up.
The Appellate Tribunal upheld the decision of the CIT(A) based on the precedent set by the Hon'ble Supreme Court in Tuticorin Alkali Chemicals & Fertilizers Ltd. case, stating that interest earned on surplus funds deposited in banks is taxable as income from other sources.
Issue 2:
The second issue questions the correctness of taxing the interest income as income from other sources, despite the deposits having a direct link with the establishment of the business and no intention to earn income at that stage.
The Assessing Officer held that only interest received from cooperative banks is exempt under Section 80(p), while interest from nationalized banks is taxable. The Tribunal agreed with this interpretation and upheld the taxability of the interest earned on bank deposits.
Issue 3:
The third issue challenges the decision of the CIT(A) in following the judgment of the Hon'ble Supreme Court in Tuticorin Alkali Chemicals & Fertilizers Ltd. case, which was later practically overruled by the Supreme Court in subsequent cases.
The Tribunal found that the interest earned during the construction period on deposits kept with nationalized banks is assessable as income from other sources, as per the decisions of the Supreme Court in similar cases. Therefore, the appeal of the assessee was dismissed.
In conclusion, the Appellate Tribunal upheld the decision of the CIT(A) to tax the interest earned on bank deposits under Section 56 of the Income Tax Act, dismissing the appeal filed by the assessee.
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2013 (12) TMI 1712
The High Court of Uttarakhand dismissed the appeal without interference, following a similar judgment in Income Tax Appeal No. 39 of 2009.
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2013 (12) TMI 1711
The High Court of Uttarakhand upheld the judgment in Income Tax Appeal No. 39 of 2009 (Commissioner of Income Tax vs. M/s The Nainital Bank Limited, Nainital) without interference. The appeal was dismissed.
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2013 (12) TMI 1710
Additions to the assessee's income on account of unaccounted credits - Disallowance u/s 40A(3) on payments made in cash - HELD THAT - Alleged cash payments are appearing in bank statement of payee and not being cash payments. Also , books of the assessee were duly tallied with the books of the payee company and the payment of purchases were duly settled periodically. In [1995 (8) TMI 108 - ITAT PUNE] , it was held that since the genuineness of payment was proved and the accounts were tallying, it is an allowable expenditure.
Decision in favor of assessee.
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2013 (12) TMI 1709
Issues involved: Interpretation of whether the land sold by the assessee falls within the definition of "capital asset" u/s 2(14) of the Income Tax Act.
Summary:
1. The appellant sold certain plots of lands inherited from forefathers during F.Y. 2006-07. The appellant claimed the lands were agricultural and thus not a "capital asset" u/s 2(14) of the Act, hence no capital gains tax was disclosed. However, the AO assessed the profit under Section 45 as Long Term Capital Gain.
2. On appeal, the ld. CIT(A) referred to a Tribunal decision regarding agricultural land situated within a certain distance from Municipalities or Cantonment Boards, as notified by the Central Government. The Tribunal held that the appellant's land, located outside Rajarhat Municipality and 2.5 KM away from its limits, did not fall within the definition of "capital asset" u/s 2(14)(iii) of the Act. Therefore, no capital gains tax was chargeable on the sale transaction.
3. The ld. CIT(A) relied on the Tribunal's decision and held that the land transferred by the appellant was agricultural and did not constitute a "capital asset" u/s 2(14) of the Act. The AO was directed to delete the addition made on account of long term capital gains.
4. The Revenue appealed against the CIT(A)'s order, arguing that the issue was covered in favor of the assessee based on the Tribunal's previous decision regarding a co-owner of the property. The Tribunal upheld the CIT(A)'s decision, stating that the land in question was agricultural and did not fall within the definition of "capital asset" u/s 2(14) of the Act.
5. The Tribunal confirmed the CIT(A)'s order, dismissing the Revenue's appeal.
Judges: Shri Mahavir Singh (Judicial Member) and Shri Shamim Yahya (Accountant Member)
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2013 (12) TMI 1708
Issues Involved:
1. Deduction u/s 80IA of the Income Tax Act, 1961.
2. Sales tax incentive and its qualification for deduction u/s 80IA.
3. Initial assessment year for the purpose of section 80IA(4)(iv).
4. Nature of sales tax incentive as capital subsidy.
5. Disallowance of indirect expenditure from windmill business profits.
6. Disallowance u/s 14A of the Income Tax Act, 1961.
7. Disallowance of foreign travel expenditure.
Summary:
1. Deduction u/s 80IA of the Income Tax Act, 1961:
The primary dispute was the interpretation and application of section 80IA(5) of the Act regarding the computation of profits from the windmill business. The Tribunal upheld the assessee's stand, following its own decision in the assessee's case for AY 2006-07 and the judgment of the Hon'ble Madras High Court in Velayudhaswamy Spinning Mills (P) Ltd. vs. ACIT. The CIT(A)'s approach was deemed incorrect for not following judicial discipline. The Tribunal directed the AO to re-compute the deduction following its earlier decision.
2. Sales tax incentive and its qualification for deduction u/s 80IA:
The AO and CIT(A) concluded that the sales tax incentive received by the assessee did not qualify for deduction u/s 80IA. The CIT(A) noted that the assessee had accepted the AO's finding based on the Supreme Court decision in Liberty India vs. CIT. The Tribunal found no reason to interfere with this conclusion, and the ground was dismissed.
3. Initial assessment year for the purpose of section 80IA(4)(iv):
The Tribunal did not separately address this issue in detail but upheld the assessee's interpretation of section 80IA(5) as discussed in the first issue.
4. Nature of sales tax incentive as capital subsidy:
The Tribunal followed its earlier decision in the assessee's case for AY 2006-07, which was based on the precedent set in Rasiklal M. Dhariwal (HUF) vs. DCIT, and dismissed the ground, holding that the sales tax incentive was not a capital subsidy exempt from income tax.
5. Disallowance of indirect expenditure from windmill business profits:
The AO allocated indirect expenses to the windmill business based on turnover, which the CIT(A) upheld. The Tribunal affirmed the CIT(A)'s direction to re-calculate the disallowance based on the assessee's working, finding no error in the approach of the lower authorities.
6. Disallowance u/s 14A of the Income Tax Act, 1961:
The AO made a disallowance of Rs. 9,91,140/- invoking section 14A r.w. rule 8D. The Tribunal remanded the matter back to the AO to determine afresh whether the interest expenditure was related to funds used for acquiring shares/mutual funds yielding exempt income. The AO was directed to allow a reasonable opportunity to the assessee before passing an order.
7. Disallowance of foreign travel expenditure:
The Tribunal followed its decision in the assessee's case for AY 2006-07, directing the AO to restrict the disallowance to 50% of the expenditure claimed.
Conclusion:
The appeals for AY 2008-09 were partly allowed, and the decisions applied mutatis mutandis to AY 2004-05 and 2005-06. The order was pronounced in the open Court on 30th December, 2013.
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2013 (12) TMI 1707
Issues Involved:
1. Allegations of malpractices in clinical trials.
2. Compliance with court orders regarding information and affidavits.
3. Strengthening regulation of clinical trials.
4. Approval and monitoring of clinical trials.
Summary:
1. Allegations of Malpractices in Clinical Trials:
The matter alleges malpractices in clinical trials by government and non-government entities as well as independent investigators. The court sought detailed information from the Secretary, Ministry of Health and Family Welfare, and the Central Drugs Standard Control Organisation (CDSCO) on the number of new clinical entities (NCEs) approved, deaths and serious side effects suffered by subjects, and details of compensation paid.
2. Compliance with Court Orders:
The court noted non-compliance with its order dated 8-10-2012, as an affidavit filed by the Deputy Drugs Controller was deemed insufficient. A proper affidavit was directed to be filed within four weeks. The court also recorded the statement of the Additional Solicitor General that clinical trials of new chemical entities would be conducted strictly in accordance with Schedule Y of the Drugs and Cosmetics Rules, 1945, under the direct supervision of the Secretary, Ministry of Health and Family Welfare.
3. Strengthening Regulation of Clinical Trials:
The court was informed about measures taken to strengthen the regulation of clinical trials, including amendments in GSR 53(E), GSR 63(E), and GSR 72(E), which specify procedures for analyzing serious adverse events, conditions for conducting clinical trials, and requirements for Ethics Committee registration. The Drugs and Cosmetics (Amendment) Bill, 2013, containing strict penal provisions, was also introduced. The court directed the Secretary, Ministry of Health, to convene a meeting with Chief Secretaries/Health Secretaries of State Governments and Administrators of Union Territories to discuss the legal framework for clinical trials.
4. Approval and Monitoring of Clinical Trials:
The court reviewed the approval process for clinical trials, noting that 162 approvals were given by the DCGI, with 157 approvals granted before the court's order on 3-1-2013 and 5 approvals after. The court directed that the 157 cases be evaluated by the Technical Committee and the Apex Committee, keeping in view safety and efficacy aspects. For the 5 cases approved after 3-1-2013, the court required audio-visual recording of the informed consent process and preservation of documentation.
Further Proceedings:
The court scheduled further consideration of the matter, including the evaluation of the 157 cases and the suggestions received from various stakeholders, for subsequent dates. Interlocutory applications were also addressed, allowing the Indian Pharmaceutical Alliance to intervene in the case.
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