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2013 (12) TMI 1686
Issues involved: Refund of duty paid by a 100% EOU upon de-bonding, denial of refund due to procedural violations including lack of registration under Central Excise Rules and failure to issue invoices, and the need for verification of exported goods.
In the judgment, Member (J) Archana Wadhwa addressed the issue of the appellant, a 100% EOU, seeking a refund of duty paid upon de-bonding. The authorities had denied the refund citing procedural violations such as non-registration under Rule 9 of the Central Excise Rules, 2002, and failure to issue invoices under Rule 11. However, it was noted that as a 100% EOU, the appellant could not have been registered under Central Excise Rules. Referring to precedent, the Tribunal's decision in CCE Jaipur II vs. Stainless India Ltd. was cited, where it was held that procedural lapses cannot stand if the final product was indeed exported. This decision was upheld by the Hon'ble Rajasthan High Court in Union of India vs. Stainless India Ltd. The judgment also mentioned another relevant case, Alpha garments vs. CCE, New Delhi.
Regarding the verification of exported goods, the learned advocate submitted that evidence including stock registers and statutory records had been provided to show that goods manufactured post de-bonding were indeed exported. However, these documents were not examined by the lower authorities. In light of this, Member (J) Wadhwa set aside the impugned order and remanded the matter to the adjudicating authority for verification of the documents to determine if the goods available at the time of de-bonding were exported. If confirmed, the appellant would be entitled to the refund. The original adjudicating authority was directed to conduct this verification within two months from the date of receipt of the order, and the appeal was allowed accordingly.
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2013 (12) TMI 1685
Issues involved: Appeal against order of CIT(A) u/s 50C(2), jurisdiction in re-opening assessment u/s 147, valuation as per provisions of Sec 50(2.
Appeal against order of CIT(A) u/s 50C(2): The assessee objected to value adopted by stamp valuing authority, requested not to invoke provisions of section 50C. AO treated market value at higher amount, computed capital gains. CIT(A) dismissed appeal as assessee did not furnish comparable cases. Assessee argued AO should refer matter for valuation by DVO as "may" in section 50C(2) should be read as "shall." Coordinate benches held referring to DVO is mandatory when objection raised. Tribunal agreed, set aside AO and CIT(A) orders, directed valuation by DVO for fair market value.
Jurisdiction in re-opening assessment u/s 147: Assessee withdrew objection regarding jurisdiction in re-opening assessment u/s 147 during arguments, ground treated as withdrawn.
Valuation as per provisions of Sec 50(2): Assessee argued for valuation by DVO as "may" in section 50C(2) should be read as "shall." Tribunal agreed, directed AO to refer issue to DVO for fair market value consideration. Coordinate benches consistently held referring to DVO is mandatory when objection raised by assessee.
Conclusion: Tribunal allowed appeal for statistical purposes, directed valuation by DVO for fair market value consideration.
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2013 (12) TMI 1684
Issues involved: Appeal against disallowance of interest rate difference u/s.40A(2)(b) for AY 2006-07.
Grounds of appeal:
1. Disallowance of interest rate difference confirmed by CIT(A).
2. CIT(A) not proving higher interest rate than market rate.
3. Sec.40A(2)(b) inapplicable to interest receipts.
4. Directors taxed at higher rates, no tax evasion.
5. Non-compliance with CBDT circular.
6. CIT(A) ignoring relevant facts.
7. CIT(A) disregarding appellant's reply and judicial precedent.
8. Request for amendment of grounds of appeal.
Judgment details:
The Assessee's appeal challenged the disallowance of Rs. 1,430,681 for interest rate difference in lending and borrowing loans u/s.40A(2)(b) for AY 2006-07. The AO added the amount based on the difference in interest rates, which the CIT(A) upheld. The Assessee argued that the interest recipients paid tax at the maximum rate, citing CBDT Circular No.6-P and a Bombay High Court decision. The Sr.DR supported the lower authorities' decisions, referencing a previous ITAT ruling against the Assessee for AY 2005-06.
The ITAT Ahmedabad noted that the Assessee failed to prove in AY 2005-06 that interest recipients paid tax at the maximum rate. However, for AY 2006-07, evidence showed recipients paid the maximum marginal rate, indicating no tax evasion. Transactions were between related parties u/s.40A(2)(b), with the Assessee paying 15% interest but receiving 10%. The AO's addition was based on the excessive payment of interest without commercial expediency. Following the Bombay High Court decision, the ITAT directed the AO to delete the addition, as no tax evasion was evident, and the payments were not unreasonable or excessive.
Therefore, the Assessee's appeal was allowed, and the addition was deleted.
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2013 (12) TMI 1683
Issues Involved:1. Whether any unearned increase is payable to the respondent in terms of the guidelines for management of industrial land in Delhi. 2. Whether any unearned increase is payable to the respondent in terms of the condition contained in the lease document. Summary:The petitioner, a private limited company, applied to the respondent - DSIIDC for allotment of an industrial plot in Narela Industrial Complex under its Relocation Scheme. The plot was provisionally allotted on 7.7.1990, and possession was handed over on 17.5.1993. The respondent sent lease papers on 9.10.2006, but the lease deed has not been executed. The petitioner seeks a writ of mandamus directing the respondent to execute the lease deed. The respondent contends that changes in the shareholding pattern and directorship of the petitioner company necessitate the calculation of unearned increase, as shares were transferred outside the family. The guidelines define "family" narrowly, excluding sister-in-law and nephews. However, as of 29.9.2007, the original shareholders held 50% shares each. The first issue is whether unearned increase is payable per the guidelines. The guidelines do not provide for charging unearned increase when shares in a private limited company are transferred to non-family members. Clauses 1(iii)(a) and (b) apply to proprietorship or partnership concerns, not to private limited companies. Therefore, the policy decision cited by the respondent does not entitle them to claim unearned increase from the petitioner. The second issue concerns the lease conditions. Clause 5(a) of the lease format prohibits selling, transferring, or assigning the plot without prior written consent of the lessor, who can recover 50% of the unearned increase upon granting such consent. However, the petitioner company, as a legal entity, continues to own the land despite changes in shareholding. Unearned increase can be charged if control of the company shifts due to transfer of majority shares or issuance of additional equity to non-family members. In this case, the original shareholders always held more than 50% shares, maintaining control of the company. Since Mr. Davender Kumar Gupta and Mr. Dinesh Kumar Gupta always held more than 50% shares, control never shifted to outsiders. Therefore, the respondent is not entitled to recover any unearned increase from the petitioner company. The writ petition is disposed of with a direction to the respondent to execute the lease deed in favor of the petitioner company within six weeks, subject to completion of all formalities. There shall be no orders as to costs.
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2013 (12) TMI 1682
Issues involved:
The issues involved in the judgment are impleadment of a third party in a suit for declaration and perpetual injunction, the right of light and air, and the legality of a notice issued under Section 452 of the Greater Hyderabad Municipal Corporation Act, 1955.
Impleadment of Third Party:
The respondent filed a suit seeking declaration and injunction against the Municipal Corporation and the Assistant City Planner, challenging a notice issued under Section 452 of the Municipal Act. The appellant, a neighbor, sought impleadment in the suit claiming infringement of his right of light and air due to the plaintiff's construction. The trial court allowed the appellant's application for impleadment, considering that he had a grievance related to the construction, even though he did not claim any title over the property. The High Court dismissed the plaintiff's revision petition, citing a previous order involving similar circumstances. However, upon review, the High Court recalled its earlier order and directed the trial court to reconsider the impleadment applications, emphasizing the need to assess the necessity of the appellant's presence based on the relief sought in the suit and the disputed notice.
Legal Jurisdiction and Review:
The High Court's review of its earlier order was deemed flawed by the Supreme Court. The Court highlighted that review jurisdiction is limited and should only be exercised in case of a mistake apparent on the face of the record. The High Court's reconsideration of the merits of the order dated 08.06.2011 exceeded the scope of review, as it essentially re-evaluated the decision rather than focusing on any evident mistake. The Supreme Court held that the High Court was unjustified in reviewing the order and set aside the impugned order dated 13.12.2011, allowing the appeals with no costs incurred.
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2013 (12) TMI 1681
Issues involved:
The judgment involves issues related to the de-notification of land acquisition, legality of land purchase during pending litigation, application of doctrine of lis pendens, and the authority of the Revenue Minister in land acquisition proceedings.
De-notification of land acquisition:
The petitioners challenged the de-notification of land acquisition by the Government of Karnataka. The High Court dismissed their writ petition, and the subsequent Writ Appeal was also rejected. The Supreme Court held that the de-notification was not valid as possession of the land had already been taken, making the application for release of land from acquisition not maintainable. The Court cited previous cases to support the principle that once possession is taken, the land vests in the State free from encumbrances.
Legality of land purchase during pending litigation:
The petitioners purchased the land during the pendency of the appeal filed by the respondent society. The Court held that the doctrine of lis pendens applied in this case, preventing the petitioners from challenging the acquisition proceedings. The Court emphasized that a purchaser of land after the issuance of a Section 4 notification cannot challenge the acquisition proceedings and can only claim compensation based on the vendor's title.
Application of doctrine of lis pendens:
The Court explained the doctrine of lis pendens, stating that during litigation, no new transactions should affect the subject matter of the dispute. The Court highlighted that a transferee pendente lite is bound by the decree just as if they were a party to the suit. The Court referred to various judgments to support the application of this doctrine in land acquisition cases.
Authority of the Revenue Minister:
The petitioners argued that the Revenue Minister had the competence to deal with the acquisition proceedings. However, the Court found no merit in this argument and dismissed the petitions. The Court clarified that the petitioners would be entitled to compensation as determined under the provisions of the Land Acquisition Act 1894.
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2013 (12) TMI 1680
Issues Involved:
1. Deletion of addition of Rs. 34,02,404/- in respect of undervaluation of closing stock.
2. Allowance of disallowances in respect of telephone expenses and vehicle expenses of Rs. 10,000/- and Rs. 3,000/- respectively.
Summary:
Issue 1: Deletion of Addition of Rs. 34,02,404/- in Respect of Undervaluation of Closing Stock
The A.O. observed that the assessee, engaged in the business of sale of gold ornaments, did not maintain a quantitative stock register and valued the closing stock at Rs. 50,01,037/-. The A.O. noted discrepancies in the valuation method, as the assessee used an average rate method instead of the cost or market price, whichever is lower, leading to an undervaluation of Rs. 34,02,404/-. The A.O. rejected the book results u/s 145(3) of the IT Act, relying on the Supreme Court decision in British Paints India Pvt. Ltd. and the Gujarat High Court decision in Kwality Steel Vs CIT.
The CIT(A) allowed the assessee's appeal, noting that the assessee consistently followed the weighted average method, a recognized method as per AS-2 issued by ICAI and the Government of India. The CIT(A) found the A.O.'s method of using a small sample of purchase bills for valuation inappropriate and observed that the A.O. did not disturb the opening balance, leading to an unrealistic G.P. rate of 288.67%. The CIT(A) directed the deletion of the addition.
The Tribunal directed the A.O. to verify if the assessee consistently followed the weighted average cost method and to ask for carat-wise details of opening and closing stock, purchase, and sale. The A.O. was instructed to take a decision as per law. This ground of appeal was allowed for statistical purposes.
Issue 2: Allowance of Disallowances in Respect of Telephone Expenses and Vehicle Expenses
The A.O. disallowed Rs. 10,000/- for telephone and vehicle expenses, citing personal use, and Rs. 3,000/- for shop expenses due to payments made in cash and self-made vouchers. The CIT(A) deleted these additions, stating they were made on an ad-hoc basis without plausible reasons.
The Tribunal reversed the CIT(A)'s order, noting that personal use elements are always present in such expenses. The Tribunal allowed the Revenue's appeal, emphasizing the need for evidence of non-business purposes and considering the assessee's low household withdrawals and income.
Conclusion:
The Revenue's appeal was partly allowed, with the Tribunal directing further verification for the undervaluation of closing stock and reversing the CIT(A)'s deletion of disallowances for telephone and vehicle expenses. The order was pronounced in open court on 17.12.2013.
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2013 (12) TMI 1679
Issues Involved:
1. Addition of Rs. 10.17 crores as unexplained cash credit u/s 68.
2. Disallowance of business loss as speculation loss.
3. Charging of interest u/s 234B.
Summary:
1. Addition of Rs. 10.17 crores as unexplained cash credit u/s 68:
The assessee, engaged in trading shares and securities, filed a return declaring nil income. During assessment, the AO noted that the assessee repaid a loan of Rs. 10.17 crores to Madhavpura Mercantile Co-operative Bank Ltd. using funds from the allotment of preference shares. The AO investigated and found that directors of 28 companies, who subscribed to the shares, stated they received cash from the assessee in exchange for their investment. The AO, relying on similar findings in the case of M/s Chat Computers Pvt. Ltd., added the amount as unexplained cash credit u/s 68. The CIT(A) confirmed this addition.
The Tribunal observed that the AO did not conduct an independent inquiry and relied solely on the ADIT(Inv) report and un-cross-examined statements. The Tribunal noted that the assessee provided sufficient documentary evidence, including share applications and bank statements, proving the genuineness of the transactions. The Tribunal emphasized the violation of natural justice principles, as the assessee was not allowed to cross-examine the directors whose statements were used against it. Citing precedents, the Tribunal held that the addition could not be sustained without corroborative evidence and deleted the addition made by the AO and confirmed by the CIT(A).
2. Disallowance of business loss as speculation loss:
The assessee did not press this ground during the hearing. Consequently, the Tribunal dismissed this ground as not pressed.
3. Charging of interest u/s 234B:
Similarly, the assessee did not press this ground during the hearing. The Tribunal dismissed this ground as not pressed.
Conclusion:
The appeal of the assessee was partly allowed, with the deletion of the addition of Rs. 10.17 crores u/s 68, while the other grounds were dismissed as not pressed. The order was pronounced in the open court on 20/12/2013.
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2013 (12) TMI 1678
Issues involved:
The judgment deals with an Income Tax Appeal filed u/s 260-A of the Income Tax Act, concerning substantial questions of law related to the presumption u/s 132 (4A) of the Act, ownership presumption u/s 292C, and the assessment of agricultural income.
Presumption u/s 132 (4A) of Act:
The ITAT dismissed the appeal of the revenue, holding that the presumption u/s 132 (4A) is limited to documents/material seized during a search and not available for framing assessment. The ITAT's decision was based on the provisions of Sec.292C inserted by the Finance Act, 2007, allowing the use of material found in possession/control of any person in assessment proceedings. However, the ITAT found the presumption under Section 292C (1) to be rebuttable, and the assessee failed to rebut the ownership presumption against him.
Assessment of Agricultural Income:
The ITAT considered the agricultural income issue, noting that the assessee had provided the intikhab-Khatauni before the AO, indicating ownership of agricultural land and income from the sale of sugarcane. The ITAT accepted the income of Rs. 1 lac from agriculture based on the yield of sugarcane and sale consideration per quintal.
Analysis of Orders:
The CIT (A) and ITAT examined the diary seized during search operations, with the AO using it to determine undisclosed income. However, the CIT (A) did not agree with the AO's assessment, and the ITAT found the diary to be a general household record, not exclusively related to business transactions. The ITAT upheld the CIT (A)'s findings, stating that the explanations provided by the assessee were not adequately considered by the AO, leading to no undisclosed income being established.
Conclusion:
The High Court dismissed the Income Tax Appeal, affirming the findings of fact by the CIT (A) and ITAT regarding the diary entries and agricultural income. The Court held that these findings did not raise substantial questions of law as framed in the appeal memo, leading to the dismissal of the appeal.
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2013 (12) TMI 1677
Issues involved: Assessment under Central Sales Tax Act, 1956 and U.P. Trade Tax Act, 1948 for the year 2006-07.
Central Sales Tax Act, 1956 Assessment:
The assessee, involved in manufacturing and selling Indian made foreign liquor, faced tax liability under Section 3F of the U.P. Trade Tax Act, 1948 for transactions related to the trade mark of the company. The contention was whether these transactions constituted a transfer of right to use the trade mark or were mere licenses. The tribunal, through an order dated 8.3.2013, ruled in favor of the assessee, holding it to be a mere license. The decision was based on the criteria set by the Supreme Court in the case of Bharat Sanchar Nigam Ltd. Vs. Union of India, which outlined five conditions for a transaction to be considered a transfer of rights to use goods.
U.P. Trade Tax Act, 1948 Assessment:
The Supreme Court's conditions for a valid transfer of rights to use goods were analyzed in the context of the trade mark transactions. It was noted that in the present case, the right to use the trade mark had been permitted to various companies simultaneously, without any evidence of exclusivity for the transferee. As a result, the 4th and 5th conditions specified by the Supreme Court were not met. Consequently, the permission granted for the use of the trade mark was deemed to be a license and not a transfer of right to use, falling outside the purview of Section 3F of the Trade Tax Act.
Conclusion:
Based on the above analysis, the tribunal's decision to delete the tax liability under Section 3F of the Trade Tax Act was upheld, as the permission to use the trade mark was considered a license and not a transfer of right to use. Therefore, the revisions were dismissed for lacking merit.
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2013 (12) TMI 1676
Penalty u/s 45A of the KGST Act - discrepancy in quantity recorded by the petitioner as transported in trucks - Held that:- In the present case, the petitioner have shown 1,000kgs in the delivery note, whereas he has actually transported 10,000kgs. As against 600 kgs he would have transported 6,000 kgs. and likewise, in respect of all the delivery notes, he had transported 10 times the quantity that is shown as per the delivery note and the books of account.
There is a clear finding that when the vehicle was having a capacity of 6,000 kgs to 10,000 kgs and that too national permit vehiclesowned by petitioner. Hence there is every possibility that the petitioner would have carried at least ten times quantity as shown the delivery note. In fact, the assessing officer had only taken ten times, whereas, it is possible that the petitioner would have even carried the full capacity of the truck involved - In fact, the assessing officer had only taken ten times, whereas, it is possible that the petitioner would have even carried the full capacity of the truck. Under these circumstances,we do not think that the petitioner/appellant is justified in contending that the quantum of penalty is excessive.
Appeal dismissed.
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2013 (12) TMI 1675
Issues Involved:
1. Maintainability in law of the deletion of income assessed as dividend income u/s.2(22)(d) of the Income Tax Act, 1961.
2. Assessee's alternate contention that even if the income is held as dividend, it would be exempt u/s.10(34) r.w.s. 115-O of the Act.
Summary:
Issue 1: Maintainability in Law of the Deletion of Income Assessed as Dividend Income u/s.2(22)(d)
The Revenue's appeal questioned the deletion of Rs. 16,74,85,500/- assessed by the Assessing Officer (A.O.) as dividend income u/s.2(22)(d) of the Income Tax Act, 1961. The Revenue argued that the transfer of shares by the assessee did not represent a buy-back of shares in terms of section 77A of the Companies Act, 1956, as it was not on a proportionate basis to all shareholders. The assessee contended that the reduction of capital was pursuant to a scheme u/ss.391 to 394 of the Companies Act, approved by the jurisdictional High Court, and thus should be considered under sections 100 to 102 of the Companies Act. The Tribunal held that the receipt of Rs. 1674.85 lacs, to the extent attributable to the accumulated profits of the company, would be considered as dividend u/s.2(22)(d) r.w.s. 2(24)(ii) of the Act. The Tribunal found the Revenue's case unexceptional and concluded that only the sum received over and above that referable to the accumulated profits would bear the character of a capital receipt and be liable to tax u/s.45(1) of the Act.
Issue 2: Assessee's Alternate Contention for Exemption u/s.10(34) r.w.s. 115-O
The assessee's Cross Objection (CO) claimed that even if the income is held as dividend u/s.2(22)(d), it would be exempt u/s.10(34) r.w.s. 115-O of the Act. Section 10(34) exempts income by way of dividends referred to in section 115-O from tax. The Tribunal confirmed that the amount under reference falls u/s.2(22)(d) to the extent of the transferee company's accumulated profits and is thus considered as dividend within the contemplation of section 115-O. Consequently, the dividend is covered by the provision of section 10(34) of the Act, making the assessee's claim valid in law. The Tribunal concluded that the dividend is liable to additional income-tax u/s.115-O in the hands of the company paying the same, although this aspect was not directly under consideration in the present case.
Conclusion:
Both the Revenue's appeal and the assessee's CO were partly allowed. The Tribunal pronounced the order in the open court in December 2013.
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2013 (12) TMI 1674
Issues Involved:
1. Jurisdiction u/s 263 by CIT.
2. Conduct of CIT (DR) during proceedings.
3. Merits of the penalty order u/s 271(1)(c).
Summary:
1. Jurisdiction u/s 263 by CIT:
The assessee challenged the CIT's assumption of jurisdiction u/s 263, arguing that the penalty order dated 29-05-2009 was neither erroneous nor prejudicial to the interest of revenue. The CIT had set aside the penalty proceedings, which the assessee contended was unjustified. The ITAT noted that the assessee's claim of depreciation at 40% was based on a bona fide belief, supported by the ITAT's own order for A.Y. 2005-06, which had deleted the penalty on similar grounds. The ITAT held that the penalty order dropping proceedings u/s 271(1)(c) was not erroneous or prejudicial to the revenue, and thus, quashed the CIT's order u/s 263.
2. Conduct of CIT (DR) during proceedings:
The ITAT expressed strong disapproval of the conduct of CIT (DR) Shri D.K. Mishra, who was absent at the beginning of the hearing and unprepared when he arrived. His behavior was deemed contemptuous and obstructive to the judicial process. The ITAT imposed a cost of Rs. 1,000 on Shri Mishra, to be deducted from his salary, and directed the Registry to forward copies of the order to relevant authorities for appropriate action. The ITAT also noted that any case laws filed by Shri Mishra after the hearing would not be considered.
3. Merits of the penalty order u/s 271(1)(c):
The ITAT examined the merits of the penalty order, noting that the assessee had claimed depreciation at 40% based on a bona fide belief that the C.T. scan machine was eligible for such depreciation. The ITAT found that the assessee's belief was upheld in the preceding year by the ITAT, and thus, the same belief in the subsequent year could not be penalized. The ITAT concluded that the penalty proceedings were dropped after due consideration of the assessee's explanation and relevant case laws, including Dharamendra Textile Processors. The ITAT held that a cryptic order by the AO, in this context, did not render it erroneous or prejudicial to the revenue.
Conclusion:
The ITAT allowed the assessee's appeal, quashing the CIT's order u/s 263 and upholding the AO's decision to drop the penalty proceedings u/s 271(1)(c). The conduct of CIT (DR) Shri D.K. Mishra was condemned, and appropriate actions were directed against him.
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2013 (12) TMI 1673
Eviction on the ground of illegal subletting - Unlawful subletting by the respondent-company - Seeking eviction of the Company in liquidation from the premises - Tenancy rights of the company in the tenanted premises are not the assets for the purpose of liquidation proceedings - rights of the company w.r.t. the landlord or tenants did not change- liberty to mention - Plea of RES JUDICATA- HELD THAT - The suit premises were not required by the liquidator for effective management of the winding up proceedings and the order was passed without prejudice to the rights and contentions of the official liquidator and further it was observed that it would be open for the official liquidator to raise all such contentions as permissible in law. The learned Company Judge also took note of the fact that the tenancy right of the company had not been disputed by the plaintiff and no decree could be passed without a full-fledged trial in the suit. Being of this view, he dismissed the application.
The official liquidator had no objection for releasing the premises in favour of the landlord and as the sub- tenant was the only contesting party, and accordingly granted leave. The principle of res judicata debarring the appellant to file an application for grant of leave and further the observation “liberty to applicant to apply” does not enable the appellant to get out from that legal labyrinth because it does not confer a right on a party to re-agitate the matter.
It operates at the successive stages in the same litigation but the basic foundation of Res Judicata rests on delineation of merits and has at least an expression of an opinion for rejection of an application. In order to attract it, it must be manifest that there has been conscious adjudication of an issue. A plea of res judicata cannot be taken aid of unless there is an expression of an opinion on the merits. It is well settled in law that principle of res judicata is applicable between the two stages of the same litigation but the question or issue involved must have been decided at earlier stage of the same litigation
The appeal was allowed and the order of set aside was passed by the Division Bench and restore that of the learned Company Judge. The first respondent is directed to pay ₹ 50,000/- to the appellant towards costs of the appeal.
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2013 (12) TMI 1672
Issues involved: The judgment involves issues related to addition of unaccounted investment in land, valuation of excess stock found, and addition made on account of various items.
Addition of unaccounted investment in land: The Assessing Officer made additions on account of unaccounted investment in land for multiple assessment years. The assessee contended that no evidence was brought forth to justify these additions and that there was no incriminating document found during the search. The Assessing Officer did not enforce the attendance of witnesses to verify the transactions. The Tribunal held that additions based on presumption cannot be sustained, especially when there is no documentary evidence of unaccounted transactions. Relief was granted to the assessee for most years, except for cases where the landowners confirmed receiving extra monies beyond documented prices. The Tribunal upheld the CIT(A)'s decision in this regard for all relevant assessment years.
Valuation of excess stock found: The judgment also addressed the valuation of excess stock found in various accounts, including items like soya seeds, crude and refined oil, stock on stores, stock in silos, and purchase of tin plates. The Tribunal examined each item individually based on the explanations provided by the assessee. In cases where the discrepancies were adequately explained, relief was granted. For instance, in the case of excess stock of crude and refined oil, the Tribunal found that the difference was explained by production and consumption during the day, leading to the deletion of the addition. Similarly, in other instances, where the assessee provided reasonable explanations supported by evidence, the Tribunal upheld the relief granted by the CIT(A).
Conclusion: The Tribunal dismissed all appeals of the revenue department, upholding the decisions made by the CIT(A) regarding the addition of unaccounted investment in land and the valuation of excess stock found. The judgment was pronounced on December 31, 2013, by the Appellate Tribunal ITAT Pune.
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2013 (12) TMI 1671
Issues involved: Appeal regarding pre-deposit of duty amount, consideration of legal merits, factual position, and various judgments.
In the judgment by the High Court of Bombay, the court admitted the appeal and identified a substantial question of law regarding the appellant's case. The question revolved around whether the appellant's case was arguable on merits, limitation, and factual position, considering the definition of inputs and capital goods, along with relevant legal precedents. The appellant argued that the lower authorities had not adequately considered these aspects, leading to undue hardship due to the order for pre-deposit of 50% of the duty amount. The court directed the appellant to deposit 50% of the duty amount, approximately Rs. 2.5 Lacs, within six weeks. Upon this deposit, the tribunal was instructed to proceed with the pending appeal without requiring further pre-deposit, providing interim relief to the appellant.
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2013 (12) TMI 1670
Issues involved: Appeals regarding disallowance u/s 14A of the Act and deletion of addition of compensation from customers.
Disallowance u/s 14A of the Act:
The appeals involved cross appeals by the assessee and the Revenue regarding the disallowance u/s 14A of the Act for the AY 2007-2008. The Tribunal considered both appeals together due to identical issues. The Counsel for the assessee argued for remanding the Revenue's appeal to the AO based on a previous Tribunal order. The Tribunal agreed and remanded the issue to the AO for fresh consideration. The disallowance under section 14A should be made only after considering the books of accounts and issues of reasonableness, without indirectly applying Rule-8D of IT Rules. The Tribunal referred to judgments of the Bombay High Court to support this stance. The AO was directed to restrict the disallowance to 2% of the total exempt income in line with the High Court's decisions. Both parties' grounds were allowed for statistical purposes.
Deletion of addition of compensation from customers:
The Revenue's appeal also raised the issue of deletion of an addition of Rs. 30,00,000 made on account of compensation from customers. The Tribunal remanded this issue to the AO with identical directions as a similar issue was remanded for a subsequent assessment year. The Tribunal allowed the Revenue's appeal on this ground for statistical purposes.
In conclusion, both the Revenue and the assessee's appeals were allowed for statistical purposes, with the Tribunal providing detailed reasoning and directions for the issues of disallowance u/s 14A of the Act and deletion of addition of compensation from customers.
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2013 (12) TMI 1669
Issues Involved:
1. Territorial Jurisdiction of the Principal Bench to entertain the writ petition.
2. Interpretation of Article 226 of the Constitution regarding territorial jurisdiction.
3. Role of the High Court registry in scrutinizing writ petitions.
Summary:
Territorial Jurisdiction of the Principal Bench:
The primary issue was whether the Principal Bench at Bangalore had the jurisdiction to entertain the writ petition when there is a provision to file it at the Circuit Bench at Gulbarga. The petitioner, a resident of Bidar District, challenged his suspension order before the Karnataka Administrative Tribunal (KAT) in Bangalore. The Tribunal dismissed his application, prompting the petitioner to file a writ petition at the Principal Bench in Bangalore. The office raised an objection regarding the maintainability of the writ petition at the Principal Bench, suggesting it should be filed at the Gulbarga Bench.
Interpretation of Article 226:
The judgment extensively discussed the scope of Article 226 of the Constitution, emphasizing that the power of judicial review vested in the High Courts under Article 226 is an integral and essential feature of the Constitution. It was noted that the jurisdiction of a High Court under Article 226 depends on whether the cause of action, wholly or in part, arises within its territorial jurisdiction. The judgment cited several Supreme Court decisions to elucidate that even if a small fraction of the cause of action arises within the jurisdiction of the Court, the Court would have territorial jurisdiction to entertain the writ petition.
Role of the High Court Registry:
The judgment clarified that the High Court registry does not have the authority to decide the maintainability of a writ petition based on territorial jurisdiction. It is the prerogative of the Judge or Judges hearing the matter to determine whether the jurisdiction of the Court is rightly attracted by the alleged cause of action. The registry can only bring the issue to the notice of the learned Judge through a note in the order sheet but cannot compel the petitioner or his advocate to take back the papers and present them before another Bench.
Conclusion:
The Court overruled the office objection, holding that the writ petition filed before the Principal Bench at Bangalore was maintainable. The petitioner had the choice to file the writ petition either at the Principal Bench or the Gulbarga Bench, as part of the cause of action arose within the jurisdiction of the Principal Bench. The judgment emphasized that the registry's role is limited to listing the writ petition before the Court for preliminary hearing, and it is the learned Judge who has the jurisdiction to decide the question of maintainability.
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2013 (12) TMI 1668
Grant from government received - Interest earned on unutilised portion kept in FD - AO and CIT(A) claims interest income is revenue in nature and to be treated as income from ‘other sources’ and brought to tax - Whether grant in aid given by the Government is capital receipt of revenue receipt - HELD THAT- In the case [1996 (5) TMI 71 - GUJARAT HIGH COURT], it was held that interest received in respect of grant in aid cannot be treated as income of the assessee in view of the specific directive of the Government that interest earned will be treated as part of grant in aid. Thus the interest income received on grant in aid parked in FD pending utilization is not chargeable to tax. The opinion of Expert Advisory Committee of ICAI that the aforesaid amount should be capitalised and not treated as income will be applicable.
Decision in favor of assessee.
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2013 (12) TMI 1667
Issues Involved:
1. Validity of the stop work notice and height restriction on Wing 'C'.
2. Correlation between DCR 23 and DCR 38(34) regarding recreational area.
3. Justification of exemptions from DCR 31(1) under DCR Nos. 33(7), (8), and (9).
4. Impact of additional FSI on traffic.
5. Adequacy of fire safety mechanisms for high-rise buildings.
Summary:
Issue 1: Validity of Stop Work Notice and Height Restriction
The Supreme Court addressed the appeal against the Bombay High Court's order quashing the stop work notice dated 22.12.2011 and the height restriction on Wing 'C' to four floors. The Court noted a settlement between the parties, which agreed to limit the Public Parking Lot (PPL) to ground + 4 upper floors and three-level basements, with captive parking from the 5th to 13th floors in Wing 'C'. The Court emphasized that this settlement did not invalidate the Municipal Circular dated 22.6.2011.
Issue 2: Correlation Between DCR 23 and DCR 38(34)
The Court examined whether the recreational area required under DCR 23 could be reduced by providing it on a podium as per DCR 38(34). It concluded that the minimum recreational area mandated by DCR 23 must be provided at the ground level and cannot be reduced by relying on DCR 38(34). Recreational space on the podium can only be additional to the ground-level requirement.
Issue 3: Justification of Exemptions from DCR 31(1)
The Court scrutinized the exemptions from height restrictions under DCR 31(1) for schemes under DCR 33(7), (8), and (9). It highlighted the need for a scheme-wise approach and proper supervision, suggesting that the impact of high-rise buildings on the locality and traffic should be examined before granting such exemptions. The Court recommended that these considerations be included in the new Development Plan for Greater Mumbai.
Issue 4: Impact of Additional FSI on Traffic
The Court noted the significant increase in vehicular population and the resulting traffic congestion. It recommended that the impact of additional FSI on traffic should be assessed locality-wise, and measures should be taken to manage traffic effectively. The Court suggested that the new Development Plan should consider these aspects to ensure sustainable urban development.
Issue 5: Adequacy of Fire Safety Mechanisms
The Court addressed the adequacy of fire safety mechanisms for high-rise buildings, particularly those exceeding 70 meters. It found the second proviso to DCR 43(1)(A), which allowed reduced open space for fire engine access in certain redevelopment schemes, to be hazardous and discriminatory. The Court held that even for plots up to 600 sq. mts. under DCR 33(7), a minimum open space of 6 meters must be maintained for fire engine maneuverability.
Additional Directions:
1. The decision on recreational space and fire safety requirements will apply prospectively to constructions where plans are not yet approved or where the Commencement Certificate (CC) has not been issued.
2. The Government of Maharashtra is directed to reconstitute the 'Technical Committee for High-Rise Buildings' with additional terms of reference, including addressing grievances related to development schemes under DCR 33(7), (8), (9), and (10), and making recommendations for the new Development Plan.
3. The Appellant-Municipal Corporation is directed to provide necessary assistance and honorarium to the committee members.
Conclusion:
The appeal was disposed of in light of the settlement and the Court's determinations on the additional issues. The parties were directed to bear their own costs.
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