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2014 (12) TMI 1366 - ITAT AHMEDABAD
No interest in prosecuting appeal by assessee - HELD THAT:- In this case, notice fixing hearing on 28.11.2014 was sent to Assessee on 10.10.2014 through Registered A.D. but the notice was returned unserved by postal authorities with the remark “Left”. On the date of hearing i.e. on 28.11.2014 none appeared on behalf of Assessee nor any adjournment application was filed on behalf of the Assessee.
Assessee has also not placed on record its present address and this indicates that the Assessee is no more interested in prosecuting the appeal, therefore, following the decision of ITAT Delhi Bench in the case of CIT Vs Multiplan India (Pvt.) Ltd.[1991 (5) TMI 120 - ITAT DELHI-D] we dismiss the appeal of the assessee. The assessee shall however be at liberty to approach the Tribunal for recalling of this order, if prevented by sufficient cause for non-appearance on the date of hearing. Appeal of the Assessee is dismissed.
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2014 (12) TMI 1365 - ITAT KOLKATA
Penalty levied u/s 271(1)(c) v/s 271AAA - search and seizure action carried out - As per revenue disclosure of the income was not made voluntarily by the assessee company and such income would not have been disclosed by the assessee in the absence of a search - Whether case comes under the purview of section 271AAA? - HELD THAT:- As per the mandate u/s 271AAA of the Act after search initiated u/s 132 on or after 1st June, 2007 but before 1st July, 2012 penalty was leviable u/s 271AAA of the Act. Sub-section (3) of 271AAA clearly provides that in such case no penalty u/s 271(1)(c) of the Act can be imposed.
We agree with the ld.counsel of the assessee that no penalty u/s 271(1)(c) of the Act was leviable, in as much as the case comes under the purview of section 271AAA of the Act. There is no ambiguity in this regard, and the view is also supported by the tribunal decision in the case of Cario International
[2013 (10) TMI 1543 - ITAT DELHI] - Decided in favour of assessee.
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2014 (12) TMI 1364 - DELHI HIGH COURT
Territorial Jurisdiction - Dishonor of Cheque - territorial jurisdiction to entertain and try cases filed under Section 138 of NI Act - whether Delhi Courts would have territorial jurisdiction to try the cases instituted under Section 138 of NI Act merely because the cheques in question are 'payable at par' at all branches of drawee bank being 'multi-city cheques' and one of the branches of drawee bank is situated at Delhi?
HELD THAT:- No doubt, a cheque which is made 'payable at par'/ 'multi-city' cheque can be presented at any of the branches of bank, which has been nominated as CBS branch of the drawee bank in terms of the recent guidelines issued by Reserve Bank of India vide circular dated 10.08.2012 (Annexure P-5 with the petition) . However, it is to be noticed that the said guidelines had been issued by Reserve Bank of India with altogether different object. The said object is to facilitate speedy encashment of amount against cheques more particularly in cases of out stationed cheques. It is a matter of common knowledge that in the past, there used to be considerable delay in collection of out- stationed cheques which led to number of complaints from customers and members of public at large. The average time consumed in the out-stationed cheque used to be somewhere between seven days to one month. In order to improve the service with regard to collection of out-stationed cheques, facility of cheques which are 'payable at par'/ 'multi-city cheques' was introduced in the banking system. In order to regulate the same, Reserve Bank of India also issued policy which is known as Policy on Multi-city/payable at par CTS 2010 Standard Cheques. A perusal of the said policy would reveal that certain limit has been prescribed on payment of multi-city cheques at non-home branches as mentioned therein.
There is another reason due to which the contention raised on behalf of petitioner/ complainant cannot be sustained. The cheque amount is supposed to be paid from the account of accused/respondents maintained at home branch of drawee bank. It is merely as a result of computerization of all the branches of bank, facility has been provided for encashment of cheques payable at par at any branch irrespective of the fact that account holder was not having bank account in the branch where the cheque is presented. Merely because the cheque has been presented at non-home of drawee bank, it does not in any manner, become the drawee bank for the obvious reason that before encashing the cheque payable at par, the non-home branch is still required to verify from home branch of the drawee branch as to whether or not there was any impediment in encashment of the cheque drawn at home branch.
Delhi Courts have no territorial jurisdiction to entertain and try the complaint(s) which are subject matter of the present petition - petition dismissed.
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2014 (12) TMI 1363 - SUPREME COURT
Principles of Habeas Corpus - Validity of Detention Order - Section 3 (1)(a)of the National Security Act 1980 - detention order challenged mainly on the ground that the detenu was detained on the solitary ground case and the sponsoring authority has failed to place any material before the detaining authority to show that either the detenu himself or his relatives have taken any step to file bail application in a solitary ground case - Whether if the impugned order passed by the High Court is quashed, can the detenu be then asked to undergo the remaining period of detention?
HELD THAT:- The impugned order passed by the High Court quashing the order of detention on solitary ground case is erroneous in law.
The detenu was taken into custody in September, 2012, and the order of detention was passed in December, 2012. The said order of detention was finally quashed by the High Court in terms of Order dated 26.4.2013. Apparently, therefore, a long time has lapsed inasmuch as the period of detention fixed in the order of detention has already expired in April, 2014. Even if the impugned order passed by the High Court is set aside, the detenu cannot and shall not be taken into custody for serving the remaining period of detention unless there still exist materials to the satisfaction of the detaining authority for putting him under detention. In other words, initial detention order having been expired long back, it is for the detaining authority to take a decision in accordance with law.
The impugned order passed by the High Court cannot be sustained - Appeal allowed.
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2014 (12) TMI 1362 - SUPREME COURT
Enforcement and execution of Foreign Award - Sections 47 and 48 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- There may not be any dispute with regard to the settled proposition of law that an agreement even if not signed by the parties can be spelt out from correspondence exchanged between the parties. However, it is the duty of the court to construe correspondence with a view to arrive at the conclusion whether there was any meeting of mind between the parties which could create a binding contract between them. It is necessary for the court to find out from the correspondence as to whether the parties were ad idem to the terms of contract.
It is equally well settled that while construing an arbitration agreement or arbitration clause, the courts have to adopt a pragmatic and not a technical approach.
An arbitration agreement even though in writing need not be signed by the parties if the record of agreement is provided by exchange of letters, telex, telegrams or other means of telecommunication. Section 7(4)(c) provides that there can be an arbitration agreement in the exchange of statements of claims and defence in which the existence of the agreement is alleged by one party and not denied by the other. If it can be prima facie shown that the parties are at ad idem, then the mere fact of one party not signing the agreement cannot absolve him from the liability under the agreement. In the present day of e-commerce, in cases of internet purchases, tele purchases, ticket booking on internet and in standard forms of contract, terms and conditions are agreed upon. In such agreements, if the identity of the parties is established, and there is a record of agreement it becomes an arbitration agreement if there is an arbitration clause showing ad idem between the parties. Therefore, signature is not a formal requirement under Section 7(4)(b) or 7(4)(c) or under Section 7(5) of the Act.
In the instant case, admittedly, the respondent issued a sales contract for supply of goods incorporating in the said sales contract various terms including hundred per cent payment against letter of credit and also providing the governing terms as “Singapore Commodity Exchange”. Though the appellant issued purchase order dated 21-8-2008 on terms and conditions set out therein but the appellant requested the respondent to change the payment terms mentioned in the sales contract. The request for amendment was accepted by the respondent.
It is true that the question in the present case is a question of competence of the arbitrator which in a sense is a question of jurisdiction, but it is not like the jurisdiction of a court, because the jurisdiction of arbitrators is derived from consent of the parties - It is clear that for construing an arbitration agreement, the intention of the parties must be looked into. The materials on record which have been discussed hereinabove make it very clear that the appellant was prima facie acting pursuant to the sale contract issued by the respondent. So, it is not very material whether it was signed by the second respondent or not.
There are no valid ground to oppose the enforcement of the foreign award. The High Court in the impugned order has rightly held that the foreign award is enforceable under Part II and is binding for all purposes on the parties - appeal dismissed.
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2014 (12) TMI 1361 - ITAT AHMEDABAD
Unaccounted income deposited in undisclosed bank account - Whether only peak amount worked out, in accordance with accepted principles of accountancy, should have been added as income in the hands of the assessee - HELD THAT:- We are unable to accept the stand of the Revenue that the assessee should be put to prove that the there was a direct nexus between the debit and credit entries in the bank account of the assessee with ICICI Bank.
Assessee claimed that the peak amount in this case, with regard to ICICI Bank comes to ₹ 2,97,297/-. In these facts of the case, we restore the issue in the grounds of the appeal of the assessee to the file of the AO with direction to make the addition of only the peak amount in the bank account of the assessee with ICICI Bank. The claim of the assessee that the peak amount comes to ₹ 2,97,297/- should be verified by the AO and the after verification, the correct figure of peak amount may be added as income in the hands of the assessee. We direct accordingly, and the ground of the appeal of the assessee is partly allowed.
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2014 (12) TMI 1360 - GUJARAT HIGH COURT
Deduction u/s 80IA(4) - generation of power for captive consumption - HELD THAT:- Appeal ADMITTED to consider the following questions of law;
“(i) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in upholding the decision of CIT(A) that deduction u/s 80IA(4) is allowable to the assessee for generation of power for captive consumption?”
(ii) Whether the Tribunal was right in law in allowing the assessee’s claim of deduction of ₹ 1954 Crores u/s 80IA(4) of the I.T. Act, 1961, when the assessee had adopted rate of power generation at ₹ 4.73 per unit, rate on which the GEB supplied power to its consumers, ignoring the rate of ₹ 2.36 per unit, the rate on which power generating company supplied its power to GEB?
(iii) Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in holding that adjustment made on account of disallowance u/s 14A of the Act in computation of Book Profit u/s 115JB of the Act is not as per law without appreciating that the amount disallowable under section 14A is covered under clause (f) of Explanation 1 to section 115JB(2) and, thus, said amount has to be added back while computing amount of book profits?
(iv) Whether that ITAT was justified in law in not following the decision of its own division bench on this issue in the case of Gujarat State Fertilizers and Chemicals Ltd.[ 2013 (1) TMI 135 - ITAT AHMEDABAD ] which was also confirmed by the Hon’ble Gujarat High Court vide order [2013 (6) TMI 776 - GUJARAT HIGH COURT]?”
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2014 (12) TMI 1359 - ITAT MUMBAI
TDS u/s 194J - payments to the stockiests - order u/s 201(1) read with section 201(1A) - Whether relationship between the assessee and the stockiest is of “principal to principal‟ basis ? - HELD THAT:- As decided in PIRAMAL HEALTHCARE LTD. [2012 (5) TMI 203 - ITAT MUMBAI] relationship between the assessee and the stockiests is in the nature of “principal to principal‟ relationship and not that the appointment of the Manager by the assessee. The same was answered by the assessee and against the Revenue. It is the finding of the Hon‟ble High Court [2015 (1) TMI 873 - BOMBAY HIGH COURT] .that the provisions of section 194J of the Act are not to be invoked with assessee is not making any payments to the stockiests. When the provisions of section 115J are not attracted by such transactions, it is the finding of the Hon‟ble High Court that the question is to whether there is a relationship of “principal to principal‟ or relationship of Manager becomes academic.
TDS u/s 194J to the payments made by the assessee towards “Director‟s Sitting Fees" - Non deduction of tds - HELD THAT:-Provisions of section 194J of the Act need not be invoked in respect of the payments made to the Director‟s sitting fees considering the newly inserted provisions of section 194J(1)(ba) of the Act. Accordingly, we grant relief to the assessee in respect of ground no.2.
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2014 (12) TMI 1358 - DELHI HIGH COURT
Condonation of procedural lapse of supplying goods to SEZ only under ARE-1 without Bills of Exports - advance authorization scheme - deemed exports - According to the petitioner, the products supplied to the SEZ would qualify as exports and would discharge the petitioner from its export obligations against the Advance Authorizations - HELD THAT:- The petition is disposed of with liberty to the petitioner to make a fresh representation alongwith all documents relied upon by the petitioner within a period of two weeks from today. It is directed that if such representation is made, the DGFT shall consider and dispose of the same within a period of eight weeks after affording the petitioner an opportunity of being heard.
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2014 (12) TMI 1357 - ITAT MUMBAI
Disallowance of Lease Equalization Reserve - Disallowance of expenditure it is not a prescribed expenditure u/s 30 to 37 - HELD THAT:- We have gone through the order passed by the Tribunal for AY 1998-99, wherein the Tribunal has extracted the observations made by the co-ordinate bench in the order passed for AY 1994-95 to 1997-98, wherein the Tribunal has explained the concept of Lease equalization charge and accordingly restored the matter back to the file of the assessing officer for carrying out fresh examination. Consistent with the view taken by the Tribunal in the earlier years, we set aside the orders of Ld CIT(A) in this year and restore the same to the file of the assessing officer with the direction to decide the issue afresh in the light of discussions made by the Tribunal in AY 1994-95 to 1997-98.
MAT Computation - addition of “Provision for Non-Performing Assets” while computing the book profit u/s 115JB - assessing officer added the same by treating as “unascertained liability” - HELD THAT:- We notice that the Finance Act 2009 has made amendment in sec. 115JB of the Act with retrospective effect from 1.4.2001 by inserting the following item to be added to the book profit:- “(i) the amount or amounts set aside as provision for diminution in the value of any asset.”
Hence, the provision for non-performing assets”, being a provision for diminution in the value of asset, the same is required to be added to the book profits. Accordingly, we confirm the order of Ld CIT(A) on this issue.
Addition of “Provision for diminution in the value securities” - HELD THAT:- We notice that the claim of the assessee that the securities are forming part of stock in trade has not been examined by the tax authorities. Further the claim of the assessee that it was following the system of valuing the securities under the principle, viz., “cost or market value whichever is lower” also requires examination at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer to examine the claim of the assessee afresh and take appropriate decision in accordance with the law.
Expenditure incurred on clubs - Allowable revenue expenditure u/s 37 - HELD THAT:- A.R submitted that this issue is now covered by the decision of Hon’ble Supreme Court in the case of CIT Vs. United Glass Mfg. Co. Ltd [2012 (9) TMI 914 - SUPREME COURT] as held that the club membership fees paid for employees is allowable u/s 37 of the Act. Hence, we are of the view this issue requires fresh examination in the light of decision rendered. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO for fresh consideration.
Claim of depreciation made on leased assets - HELD THAT:- Tribunal has allowed the claim of depreciation on leased assets by following the decision of Hon’ble Supreme Court in the case of ICDS Limited [2013 (1) TMI 344 - SUPREME COURT] There should not be any dispute that the assessee is entitled to depreciation, if it has leased out the assets under operating lease. AO had taken the view that the lease transactions entered into by the assessee were not genuine lease transactions. CIT(A) has come to the conclusion that the lease transactions were genuine in nature and he held so by placing reliance on the decision rendered in the preceding years. It was submitted that the lease transactions has been accepted by the Tribunal in the earlier years and accordingly depreciation was allowed. Accordingly, consistent with the view taken in the earlier years, we uphold the order of Ld CIT(A) on this issue.
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2014 (12) TMI 1356 - ITAT CHENNAI
Disallowance of provision for gratuity u/s 43B - ascertained liability as allowable as deduction under section 40A(7)(b) - HELD THAT:- On a perusal of the decisions relied on by the assessee, we find that this issue has been considered by various High Courts and held that the provision made by the assessee towards contribution to approved gratuity fund is an ascertained liability and is allowable as deduction under section 40A(7)(b)of the Act. It was further held that the provisions of section 40A(7)(b) overrides section 43B of the Act - See MEWAR SUGAR MILLS LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [1998 (2) TMI 169 - ITAT JAIPUR], BECHTEL INDIA (P) LTD [2007 (11) TMI 2 - HIGH COURT , DELHI] and COMMON WEALTH TRUST (P.) LTD., COMMISSIONER OF INCOME-TAX VERSUS COMMON WEALTH TRUST (I.) LTD. [2004 (4) TMI 51 - KERALA HIGH COURT]
Thus we uphold the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance made for approved gratuity funds. -Decided in favour of assessee.
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2014 (12) TMI 1355 - DELHI HIGH COURT
Effect of granting post facto approval - Permission accorded u/s 29(1)(b) of the Foreign Exchange Regulation Act, 1973 for the purchase of shares u/s 19(1)(a) FERA for the export of the shares issued to the country of the residence of the non-resident investors as well as under Section 29(1)(a) FERA for non-resident participation in CCL exceeding 40% - HELD THAT:- As 'explained by the Supreme Court in Life Insurance Corporation of India v. Escorts Ltd. [1985 (12) TMI 289 - SUPREME COURT] , the discretion is with the RBI whether to grant permission or not; whether it is an ex post facto or any other permission. The wisdom of the RBI in granting post facto approval is not to be interfered with.
The effect of granting post facto approval is as if the infraction did not occur in the first place and it stands regularized with respect to the date of such infraction. If the orders passed by the RBI dated 9th February 1989 and 11th April 1989 are carefully examined, the post facto approvals virtually cover every aspect of the twelve show cause notices that were issued subsequently to CCL and its directors. In fact the whole idea of a post facto approval was that the failure to obtain prior permission as emphasised in various provisions of the FERA was condoned and therefore regularized. Therefore, this Court fails to understand how despite noticing the above aspect of the aforementioned two letters of the RBI, the SD proceeded to impose penalties as far as SCNs VI-VII are concerned. Only because prior permission was not obtained, this Court has no hesitation in holding that the findings under SCNs VI-VII and the consequent penalties imposed are misconceived and cannot be sustained in law.
Turning to SCN No. VIII, the bone of contention appears to be that there is no specific permission for payment of commission to the individual directors whereas the post facto permission was granted for the payment of the salaries. Admittedly, the word 'salaries' is not defined in the FERA. There is no rational explanation as to why the definition of salary under the Income Tax Act, 1961 could not be adopted for the purposes of determining whether the payment of such commission was also regularized by the RBI. In these circumstances, this Court is unable to agree with the conclusion reached by the SD as regards SCN No. VIII and the penalty imposed thereunder also cannot be sustained.
As far as SCN No. IX is concerned, the view of the SD was that the act of CCL in granting loans was not with specific approval. This finding overlooks the actual wording of the letter dated 11th April 1989 of the RBI. It begins by noticing "your granting of loan to NRI shareholders for investing in companies to shares and issue of bonus/rights shares". Once the allotment of shares had been approved and specific permission had also been given under Section 29(1)(b) FERA to the NRI shareholders for purchasing the shares clearly the entire act of granting loans was itself regularized. Therefore, this Court is unable to sustain the finding of the SD as regards SCN No. IX and the consequent penalties imposed.
The crux of the SCN No. IX concerns para (d) of the letter dated 11th April 1989. The condition for grant of the approval was that the dividends accruals had to be deposited to the investor's ordinary non-resident account and since that was not shown to have been the case, there was violation of Section 9(1)(a) FERA. A careful perusal of SCN No. IX would show that no such allegation has been made and that the notice having not been put on notice on whether or not they have deposited dividends in the ordinary non-residents account, it was not justified to find violation on that basis. As pointed out by Mr. Narang, learned counsel for the Appellant that the Appellants on having been put to notice on such violation could have produced material to explain that they had in fact complied with such condition. In that view of the matter the finding on SCN No. X cannot be sustained and the penalties imposed therein are also hereby set aside.
The issue as far as SCN Nos. XI to XVII is concerned is about the value of the shares allotted to the directors. The SD proceeded' on the basis that the letter dated 11th April 1989 approved the allotment of 5,50,000 shares of ₹ 10 each, and any value in excess of that would be unauthorized. The above approach is based on the fact that the approval by the RBI granted vide letter dated 11th April 1989 was not only for allotment of shares but also for allotment of consequential bonus/right shares. Once the original allotment of shares is regularized then it goes without saying that any consequential allotment of bonus shares would also stand regularized. In respect of each of the directors explanation is available on record as to how they have been allotted bonus shares. This Court is, therefore, unable to accept the reasoning given in the AO order as regards SCN Nos. XI to XVII and the consequent finding regarding violation of Section 29(1)(b) and 19(1)(d) FERA. As a result the AO order dated 15th October 1990 is hereby set aside. The consequent order dated 30th May 2008 of the Appellate Tribunal is also hereby set aside. The appeals are at-lowed in above terms.
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2014 (12) TMI 1354 - GUJARAT HIGH COURT
Deduction u/s 80I - Does the Income derived from an industrial undertaking include income from service/maintenance contracts in respect of the goods manufactured and supplied by the industrial undertaking so as to be eligible for deduction ? - HELD THAT:- The Apex Court in the case of Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT] held that in several assessment Years, the Department accepted the order of the Tribunal in favour of the assessee and did not pursue the matter any further but in respect of some assessment years the matter was taken up in appeal before the High Court. The Department could not be allowed to flip flop on the issue and it ought let the matter rest rather than pursue litigation.
The Bombay High Court in the case of International Data Management Ltd. [2003 (2) TMI 50 - BOMBAY HIGH COURT] held that the assessee derived income as it rendered services and maintenance facility to its clients for which it charged for maintenance and services. Therefore, there was a direct nexus between the receipts from rendering services and maintenance facility to its clients and lease rent and the main business activity of the assessee. There was also recorded as a finding of fact by the Tribunal. The assessee was entitled to deduction under Section 80I in respect of that income.
Considering above we are of the considered opinion that the Tribunal ought to have granted the benefit to the assessee under Section 80I of the Income Tax Act for the assessment Year 1992-92 also. - Decided in favour of assessee.
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2014 (12) TMI 1353 - ITAT RAIPUR
Addition on account of suppressed sales - GP on the suppressed sales - HELD THAT:- The assessee had maintained regular books of account and the AO had not come across any unaccounted purchase or suppressed sales. Only on the basis of power consumption, no addition could be made or sustained. It is a known fact that several factors affect the consumption of electricity-like loss of heat, poor quality of raw material inputs, poor workmanship/supervisory skills, presence of moisture, contents and fluctuation in the electricity supply. Most of the above factors are beyond management’s control and explanation cannot be pinpointed to any single reason. It is also a fact that the assessee was not manufacturing one item. Therefore, arithmetical formula should not have been applied for arriving at a conclusion. In our opinion, the FAA was fully justified in holding that the assessee had explained the variation in power consumption citing cogent reasons. The cases referred by the AR also support the views taken by us - FAA does not suffer from any legal infirmity. Upholding his order, we decide first ground of appeal against the AO.
Disallowance u/s. 40A(2)(b) - HELD THAT:- Selective study of the transactions in the year concerned is not appropriate for arriving at a definite conclusion. He should have considered the average price for the whole year before making the disallowance. FAA has given a categorical finding of fact that in certain months, the average prices of goods/material purchased from the sister concern of the assessee was less or equal to the market rate. We have also taken note of the fact that the assessee has purchased the goods on credit from its sister concern.
AO has not brought on record comparable cases to justify the disallowance. In our opinion, the provisions of section 40A(2)(b) can be invoked in special circumstances where considering the market rate of goods/services, the AO arrives at a conclusion that the price charged by the assessee was at variance to the market rate. In the case before us, the AO has not brought on record any facts which prove that he had undertaken such an exercise. In the present case no evidence whatsoever was brought on record by the AO to prove that the justification assigned for making payment to the sister concern was false and the same was not proved to have been made for extra commercial considerations. For all the reasons mentioned above, the impugned disallowance, made on mere hypothetical estimations, cannot be endorsed
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2014 (12) TMI 1352 - ITAT RAIPUR
Addition on account of lower rice yield shown by the assessee - HELD THAT:- While making the addition AO had applied a mathematical formula claimed to have been adopted from FCI guidelines. It is very strange that before fastening tax liability to the assessee he did not consider it necessary to incorporate the reply of the assessee and rebut it. Principles of natural justice demand that the assessee is entitled to get a reasoned and speaking order.
A reasoned order cannot be passed without considering the reply of the assessee filed by the assessee and without giving reasons as to why the reply was not acceptable. Once the assessee had made submission about the FCI Web site it was duty of the AO to give a clear finding about it, but he chose to remain silent about it. He had the case records of the assessee of earlier assessment years and he could have easily found as what was the yield for those years.
Without referring to the statistics available with him, the AO made the addition. He has not referred to any comparable case that could prove that the stand taken by him about the yield of broken-rice and rice was based on any scientific or logical basis. In short, there was no justification of any kind to hold that the yield shown by the assessee about broken rice and rice was lower as compared to other comparable cases or yield shown in earlier years. - Decided against revenue
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2014 (12) TMI 1351 - KARNATAKA HIGH COURT
Government securities allowable deduction - when it as kept under the classification ‘available for sale’ was not in the nature of stock-in-trade by ignoring the subsequent RBI guidelines - allowing the claim of the assessee without taking into consideration the instructions of the RBI dated 2.9.2003 and the CBDT Circular 665 dated 05.10.1993 which did not contemplate such an allowance? - HELD THAT:- This Court had an occasion to consider similar questions in the case of Karnataka Bank Ltd. –vs- Assistant Commissioner of Income Tax [2013 (7) TMI 656 - KARNATAKA HIGH COURT] assessee has maintained the accounts in terms of the RBI Regulations and he has shown it as investment. But consistently for more than two decades it has been shown has stock-in-trade and depreciation is claimed and allowed.
Therefore, notwithstanding that in the balance sheet, it is shown as investment, for the purpose of Income tax Act, it is shown as stock-in-trade. Therefore, the value of the stocks being closely connected with the stock market, at the end of the financial year, while valuing the assets, necessarily the Bank has to take into consideration the market value of the shares. If the market value is less than the cost price, in law, they are entitled to deductions and it cannot be denied by the authorities under the pretext that it is shown as investment in the balance sheet - Decided in favour of the assessee and against the revenue
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2014 (12) TMI 1350 - MADHYA PRADESH HIGH COURT
Profit offered on sale of assets being STT paid on listed shares - “income from business” OR “income from short term capital gains” u/s 111 (1) (I) on which tax is leviable at flat rate of 10% - HELD THAT:- In the present appeal, we note that the assessee made investment in shares with intention to earn dividend income on appreciation of price shares. Therefore, it cannot be said that the assessee was doing business. More specifically when the assessee either utilized his own funds / family funds or did not pay any interest and depicted the transactions in shares under investment portfolio. During hearing, it was also explained by the learned counsel for the assessee that accounts were maintained by the assessee in two separate capacities i.e. trader and investment and never treated the same as holdings of shares as stock in trade which clarifies the intention of the assessee. - Decided in favour of assessee.
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2014 (12) TMI 1349 - BOMBAY HIGH COURT
Recovery of service tax - Section 73 (1) of the Finance Act, 1994 - suppression of facts - HELD THAT:- The finding of fact is based on a proper appreciation of the material on record and since no material was placed by the appellant – Department to show that there was suppression of facts by the respondent – Agency, the Tribunal rightly held that the appellant Department was not liable to levy the service tax for a period extending one year - Since none of the ingredients mentioned in the proviso to Section 73 of the Act applied to the facts of the case, the Tribunal rightly found that the imposition of penalty on the respondent was not justified as penalty could be levied under Section 78 of the Act, only if either of the five ingredients in the proviso to Sub Section 1 of Section 73 of the Act, which are also the ingredients mentioned in Section 78 of the Act for imposition of penalty, were satisfied.
Since the finding recorded by the Tribunal does not give rise to any substantial question of law, the appeal is dismissed with no order as to costs.
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2014 (12) TMI 1348 - DELHI HIGH COURT
Initiation of adjudicating proceedings - failure to furnish the exchange control copy of bill of entry in confirmation of having imported materials for which foreign exchange was remitted to the account of SACL at Punjab National Bank, Kasturba Gandhi Marg, New Delhi (PNB) - contravention of Sections 8(3) and 8(4) read with Section 68 of the Foreign Exchange Regulation Act, 1973 (FERA) - Time limitation - HELD THAT:- In the present case, the AT was in error in holding that the appeals before it were barred by limitation since they were filed beyond the outer limit of 90 days. The AT ought to have considered the explanation given by the Appellants for the delay in filing the appeals - Having considered the explanation offered by the Appellants for the delay in filing their respective appeals, the Court is of the view that the delay was for bonafide reasons and ought to be condoned.
The Court notes that the question of the consequences of the failure to make the pre-deposit has been considered by the AT in the context of FERA and not FEMA. Secondly, the merits of the appeals have been considered only in relation to one of the transactions of the paper division of SACL involving US$20,000 and not the other transaction at serial No.8 of the SCN, concerning the fertiliser division of SACL valued at US $ 174,000.
Impugned order set aside - appeal allowed.
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2014 (12) TMI 1347 - SUPREME COURT
Grant of Bail - Whether the impugned order passed by the High Court deserves legitimate acceptation and put in the compartment of a legal, sustainable order so that this Court should not interfere with the same in exercise of jurisdiction Under Article 136 of the Constitution of India?
HELD THAT:- We are not oblivious of the fact that the liberty is a priceless treasure for a human being. It is founded on the bed rock of constitutional right and accentuated further on human rights principle. It is basically a natural right. In fact, some regard it as the grammar of life. No one would like to lose his liberty or barter it for all the wealth of the world. People from centuries have fought for liberty, for absence of liberty causes sense of emptiness. The sanctity of liberty is the fulcrum of any civilized society. It is a cardinal value on which the civilisation rests. It cannot be allowed to be paralysed and immobilized. Deprivation of liberty of a person has enormous impact on his mind as well as body - A democratic body polity which is wedded to rule of law, anxiously guards liberty. But, a pregnant and significant one, the liberty of an individual is not absolute. The society by its collective wisdom through process of law can withdraw the liberty that it has sanctioned to an individual when an individual becomes a danger to the collective and to the societal order. Accent on individual liberty cannot be pyramided to that extent which would bring chaos and anarchy to a society. A society expects responsibility and accountability from the member, and it desires that the citizens should obey the law, respecting it as a cherished social norm. No individual can make an attempt to create a concavity in the stem of social stream.
Coming to the case at hand, it is found that when a stand was taken that the 2nd Respondent was a history sheeter, it was imperative on the part of the High Court to scrutinize every aspect and not capriciously record that the 2nd Respondent is entitled to be admitted to bail on the ground of parity. It can be stated with absolute certitude that it was not a case of parity and, therefore, the impugned order clearly exposes the non-application of mind - the order has to pave the path of extinction, for its approval by this Court would tantamount to travesty of justice, and accordingly we set it aside.
The Respondent No. 2 is commanded to surrender to custody forthwith failing which it shall be the duty of the Investigating Agency to take him into custody immediately - the order passed by the High Court admitting the Respondent No. 2 on bail is set aside - Appeal allowed.
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