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Showing 121 to 140 of 1898 Records
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2015 (12) TMI 1781 - ITAT MUMBAI
TPA - comparable selection - ‘M/s. Man Diesel India Limited’, as comparable company - Held that:- The undisputed facts on record are that the aforesaid company was having RPT transactions which appear to be well above the accepted limits. Requisite documents evidencing these facts are already held on record. But, these facts were not examined by the lower authorities. In view of the judgments relied upon by the Ld. Counsel, we find that since this issue goes to the root of the matter, the assessee should be given opportunity to raise a legal plea even at this stage before the Tribunal. In all fairness and to meet ends of justice, we find it appropriate to send this issue back to the file of AO/TPO for a fresh decision with respect to the said company.
The assessee shall put forth all requisite material before the AO/ TPO in support of its claim, for which proper opportunity should be provided. With these directions, we send this issue back to the file of the AO/TPO. Thus, additional ground is treated to be allowed for statistical purposes.
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2015 (12) TMI 1780 - KARNATAKA HIGH COURT
Depreciation on investments on government securities "held to maturity" - whether such securities were held as a investments and not as 'stock-in-trade'? - Held that:- Appearing for the parties agree that the point in issue is covered by the decision of this Court in KARNATAKA VIKAS GRAMEEN BANK [2015 (12) TMI 1420 - KARNATAKA HIGH COURT] as held assessee was following the method of accounting namely, "at cost or market value, whichever is lower". It is not in dispute that this practice was accepted by the Revenue throughout - notwithstanding the preparation of the balance sheet and describing the security under a particular nomenclature in compliance with the directions/instructions issued by the RBI, the assessee would be lawfully entitled to submit the tax returns on the real taxable income in accordance with the method of accounting consistently and regularly adopted.- Decided in favour of assessee.
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2015 (12) TMI 1779 - ITAT DELHI
TPA - whether the internal comparables should be adopted over external comparables for the purposes of computing ALP, in respect of transaction pertaining to export of goods - TNMM has been accepted by both the parties as MAM - Held that:- Internal comparables are to be preferred to external comparables. There is no dispute that the assessee has internal comparables. Geographical differences are not relevant when FOB price is considered.
Set aside the matter to the TPO with a direction to consider the sale in respect of export to AE’s at FOB value. Even otherwise, except for export to Germany, there are no geographical variations. The ld.TPO is directed to apply internal comparables, at FOB value, as in his view, this value is the comparable value. The assessee is directed to furnish the audited financials of the segmental accounts - Restore the issue to the files of the TPO/AO, for fresh adjudication of the ALP, as per the directions given herein - Decided in favour of assessee for statistical purposes.
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2015 (12) TMI 1778 - GAUHATI HIGH COURT
Continuation of Order passed - no stay order obtained - benefit of exemption - Held that:- Though Special Leave Petition was filed, the respondents have not obtained any stay order and, as such, the order in question still operates - all the industries set up pursuant to the policy of 1997 and 2007 shall continue to enjoy the benefits of full exemption as per the policy and the notifications - petition disposed off.
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2015 (12) TMI 1777 - ITAT CHENNAI
Maintainability of appeal - tax effect - Held that:- On hearing the Ld. Departmental Representative, we find that the tax effect in these cases is less than ₹ 10 lakhs. The CBDT in its Circular No.21/2015 dated 10.12.2015 instructed its officers to withdraw all the appeals pending before the ITAT where the tax effect is less than ₹ 10 lakhs. This Tribunal is of the considered opinion that this Circular of CBDT is binding on the officers of the Department. Therefore, the Revenue cannot proceed further in these appeals. Accordingly, these appeals stand dismissed. - Decided against revenue.
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2015 (12) TMI 1776 - COMPETITION APPELLATE TRIBUNAL , NEW DELHI
Anti-Competitive Activity - cord blood banking - umbilical cord stem cell banking services - It is the case of the appellant that Cryo-Save based in Bangalore and Babycell based in Lonavala were prepared to pay higher amount per case, it chose Cryobanks because of better technology - Smt. Manju Jain entered into an agreement with LifeCell to obtain its umbilical cord stem cell banking services - appellant having an arrangement with Cryobanks and LifeCell cannot be permitted to provide its services to the hospital whee Smt. Manju Jain visited - alleged abuse of dominant position - contravention of Section 3(1) of Competition Act, 2002.
Whether the finding recorded by the majority of the Commission that the appellant is guilty of acting in violation of Section 3(1) of the Act is legally sustainable?
Whether the penalty of ₹ 3,81,58,303/- imposed by the Commission by taking into consideration total turnover of the appellant for last three financial years is legally justified?
Held that:- A plain reading of Section 3 makes it clear that sub-section (1) thereof can be invoked only if the agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services causes or is likely to cause an appreciable adverse effect on competition within India. Sub-section (2) of Section 3 is declaratory in nature. It provides that any agreement entered into in contravention of the provisions of Section 3(1) shall be void. Sub-section (3) contains a presumption of an appreciable adverse effect on competition if the agreement has any of the effects/consequences enumerated in clauses (a) to (d). Sub-section (4) lays down that any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, storage, sale or price of, or trade in goods or provisions of services including those specified in clauses (a) to (e) shall be an agreement in contravention of sub-section (1) if such agreement causes or is likely to cause an appreciable adverse effect on competition in India.
While recording a finding that the appellant is guilty of violation of Section 3, the Jt. DG and the Commission completely overlooked that the agreement entered into between the appellant and Cryobanks did not, in any manner, restrict the choice of the service provider in the relevant market i.e. market for stem cell banking. By virtue of the agreement, the appellant could provide stem cell banking services to the patients who wanted to avail such services only through Cryobanks but the latter was free to enrol any patient(s) for such services to be availed in any other hospitals, maternity homes etc. - The Jt. DG and the Commission confused the basic issue by presuming that the stem cell banking service was an integral part of the maternity services provided by the appellant hospital and this confusion has resulted in miscarriage of justice in as much as the appellant has been found to be guilty of violating Section 3(1) of the Act without any evidence that the refusal of the appellant to allow LifeCell to provide stem cell banking services to Smt. Manju Jain had appreciable adverse effect on competition.
Section 3 speaks of anti-competitive agreement and Section 4 deals with abuse of dominant position. A finding that the particular agreement is anti-competitive or any enterprise or group of enterprises are guilty of abuse of dominant position can be recorded only with reference to the particular goods, product or service. An enterprise may be engaged in manufacture, production, supply, distribution, etc. of multiple products. Another enterprise like the appellant may be engaged in providing multi-dimensional services. Such enterprise may be found guilty either of entering into anticompetitive agreement with reference to particular product/goods or services or may be held guilty of abuse of dominant position in respect of such product/goods or services, but the finding of violation of Sections 3 and/or 4 of the Act recorded by the competent authority i.e. the Commission cannot be made applicable to agreements entered into between the enterprise and another person in respect of other products, goods or services qua there is no allegation of anti-competitive agreements or abuse of dominant position and the turnover of other products and services cannot be clubbed with the one qua which a finding of violation of the provisions of the Act is recorded.
The appellant has been providing multiple healthcare services, maternity service being one of them and stem cell banking which is being provided by a third party (Cryobanks), can at best be considered as a small part of the maternity services provided to those who are desirous of availing such services. Therefore, even if the finding of the majority of the Commission that the agreement entered into between the appellant and Cryobanks is violative of Section 3(1) of the Act is to be upheld, the turnover of the appellant with reference to stem cell banking services only could be taken into consideration for the purpose of imposing penalty and not the turnover with reference to other services or income derived from other sources.
Appeal allowed.
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2015 (12) TMI 1775 - SUPREME COURT
Denial of Information sought - indiscretion disclosure of information - information sought for by the respondents from the petitioner-Bank have been denied mainly on the ground that such information is exempted from disclosure under Section 8(1)(a)(d) and (e) of the RTI Act - RTI Act, 2005.
Whether all the information sought for under the Right to Information Act, 2005 can be denied by the Reserve Bank of India and other Banks to the public at large on the ground of economic interest, commercial confidence, fiduciary relationship with other Bank on the one hand and the public interest on the other?
Held that:- The Right to Information Act, 2005 is a general provision which cannot override specific provisions relating to confidentiality in earlier legislation in accordance with the principle that where there are general words in a later statute it cannot be held that the earlier statutes are repealed altered or discarded - The Preamble of the RTI Act, 2005 itself recognizes the fact that since the revealing of certain information is likely to conflict with other public interests like “the preservation of confidentiality of sensitive information”, there is a need to harmonise these conflicting interests. It is submitted that certain exemptions were carved out in the RTI Act to harmonise these conflicting interests.
In the instant case, the RBI does not place itself in a fiduciary relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional “fiduciary” label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect - RBI is a statutory body set up by the RBI Act as India’s Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country’s banking sector. Under Section 35A of the Banking Regulation Act, RBI has been given powers to issue any direction to the banks in ublic interest, in the interest of banking policy and to secure proper management of a banking company. It has several other far-reaching statutory powers.
RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein - The baseless and unsubstantiated argument of the RBI that the disclosure would hurt the economic interest of the country is totally misconceived. In the impugned order, the CIC has given several reasons to state why the disclosure of the information sought by the respondents would hugely serve public interest, and non-disclosure would be significantly detrimental to public interest and not in the economic interest of India. RBI’s argument that if people, who are sovereign, are made aware of the irregularities being committed by the banks then the country’s economic security would be endangered, is not only absurd but is equally misconceived and baseless.
The exemption contained in Section 8(1)(e) applies to exceptional cases and only with regard to certain pieces of information, for which disclosure is unwarranted or undesirable. If information is available with a regulatory agency not in fiduciary relationship, there is no reason to withhold the disclosure of the same. However, where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship.
In the present case, we have to weigh between the public interest and fiduciary relationship (which is being shared between the RBI and the Banks). Since, RTI Act is enacted to empower the common people, the test to determine limits of Section 8 of RTI Act is whether giving information to the general public would be detrimental to the economic interests of the country? To what extent the public should be allowed to get information?
The Legislature’s intent was to make available to the general public such information which had been obtained by the public authorities from the private body. Had it been the case where only information related to public authorities was to be provided, the Legislature would not have included the word “private body”. As in this case, the RBI is liable to provide information regarding inspection report and other documents to the general public - Even if we were to consider that RBI and the Financial Institutions shared a “Fiduciary Relationship”, Section 2(f) would still make the information shared between them to be accessible by the public. The facts reveal that Banks are trying to cover up their underhand actions, they are even more liable to be subjected to public scrutiny.
We have surmised that many Financial Institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny. It is the responsibility of the RBI to take rigid action against those Banks which have been practicing disreputable business practices - From the past we have also come across financial institutions which have tried to defraud the public. These acts are neither in the best interests of the Country nor in the interests of citizens. To our surprise, the RBI as a Watch Dog should have been more dedicated towards disclosing information to the general public under the Right to Information Act.
Economic interest of a nation in most common parlance are the goals which a nation wants to attain to fulfil its national objectives. It is the part of our national interest, meaning thereby national interest can’t be seen with the spectacles(glasses) devoid of economic interest.
Thus, the Central Information Commissioner has passed the impugned orders giving valid reasons and the said orders, therefore, need no interference by this Court - case dismissed.
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2015 (12) TMI 1774 - GUJARAT HIGH COURT
CENVAT Credit - outward goods transportation agency service - Held that:- This issue is covered by the judgment of Division Bench of this Court in case of Commissioner of Central Excise & Customs v. Parth Poly Wooven Pvt. Ltd. [2011 (4) TMI 975 - GUJARAT HIGH COURT], where it was held that By no stretch of imagination can it be stated that outward transportation service would not be a service used by the manufacturer for clearance of final products from the place of removal - credit allowed - appeal dismissed - decided against Revenue.
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2015 (12) TMI 1773 - COMPETITION APPELLATE TRIBUNAL , NEW DELHI
Anti-competitive Activities - bid rigging - Cartel - contract for supply of feed valves by Respondent No. 2 - suppression of material facts - it was alleged that the appellants have indulged in bid- rigging/collusive bidding and thereby contravened the provisions of Section 3(1) read Section 3(3)(a) and 3(3)(d) of the Act - penalty imposed on average turnover - case of appellant is that findings recorded by the DG and the Commission on the issues of formation of cartel and bid rigging/ collusive bidding is perverse.
Held that:- The cartel is an association of producers who by agreement among themselves attempt to control production, sale and prices of the product to obtain a monopoly in any particular industry or commodity. Analysing the object of formation of a cartel in other words, it amounts to an unfair trade practice which is not in the public interest. The intention to acquire monopoly power can be spelt out from formation of such a cartel by some of the producers. However, the determination whether such agreement unreasonably restrains the trade depends on the nature of the agreement and on the surrounding circumstances that give rise to an inference that the parties intended to restrain the trade and monopolise the same.
The observation made by the Commission that the appellants had adopted a strategy which involved supplementary/complementary bidding by EL and FTRTIL is based on pure conjectures and is liable to be rejected because before making this observation, the Commission did not give any opportunity to the two appellants to have their say. Similarly, the observation made by the Commission that the Tender Committee committed an illegality in overlooking the bids of EL and FTRTIL is ex facie erroneous. Once the competent authority had laid down particular conditions required to be fulfilled by the tenderer and the two of the three tenderers failed to comply with the same, the Tender Committee and Respondent No. 2 cannot be said to have committed any illegality by not acting upon their tenders. The Tender Committee could have recommended for fresh tendering and Respondent No. 2 could have accepted that recommendation but their failure to do so cannot lead to an inference that they have acted with ulterior motive or that the Tender Committee ought to have waived the defects/deficiencies and allowed the two appellants i.e. EL and FTRTIL to participate in the bid or called them for negotiations.
The variation in the quantum of price quoted by the appellants is also evident from the statement furnished by the learned counsel for Respondent No. 2. Therefore, it must be held that both the DG and the Commission committed grave error by relying upon the so-called past conduct of the appellants in quoting identical price as a plus-factor for arriving at a conclusion that they had formed a cartel.
The findings and conclusions recorded by the DG and the Commission that the appellants are guilty of cartel formation and bid-rigging are legally unsustainable - also, the penalty imposed by the Commission is based on erroneous interpretation of Section 27(b) and is liable to be set aside.
The impugned order is set aside and the penalty imposed on the appellants by the Commission is quashed - Appeal allowed.
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2015 (12) TMI 1772 - BOMBAY HIGH COURT
Powers of liquidator - title to the paintings - Held that:- As subject property are very valuable and here is a person who claims the paintings belong to her whereas according to the Liquidator it belongs to/appears to belong to the company (in liquidation). It is necessary for the ends of justice that the practice and procedure of the court and provisions of the Code of Civil Procedure are applied. This would also be beneficial to Sheetal Mafatlal who will get an opportunity to prove that the paintings rightfully belong to her and not the company (in liquidation).
Sheetal Mafatlal to file an affidavit in evidence together with compilation of documents to prove that the 44 paintings lawfully/legally belong to her, that she is entitled thereto and she has title to those paintings and serve a copy thereof upon the Official Liquidator not later than 11th January, 2016. Ofcourse, the Official Liquidator will be entitled to cross examine and file further evidence as well to prove otherwise.
As the paintings are of high value and the petition has been pending since 1996, it is necessary that the issue of title to the paintings is decided quickly. It is made clear that no further time will be granted to Sheetal Mafatlal to file her evidence and compilation of documents.
As regards prayer clauses – (b), (c) and (d) in the Official Liquidator's Report, to the extent it relates to the paintings, the Official Liquidator may file further report after the issue of title to the paintings claimed by Sheetal Mafatlal is determined. As regards the other articles contained in prayer clauses - (c) and (d), the Official Liquidator may list those articles and file further reports as necessary.
As regards prayer clause – (a) in the Official Liquidator's Report, the ex-directors of the company (in liquidation) are directed to file within four weeks, the Statements of Affairs to the extent not submitted, as required under section 454 of the Companies Act, 1956 and handover the books of account/record of the company (in liquidation) to the Official Liquidator to enable the Liquidator to further in winding up proceedings.
Mr. Atulya Mafatlal, an ex-director of the company is directed to (a) file an affidavit in order to indicate his stand, with the necessary material, as to (i) original ownership of paintings; (ii) Fixed Asset Inventory; (iii) explain as to how the statutory auditor could have examined all records such as cash book, bank book, sale register, purchaser register, expense vouchers, sales invoice, purchase invoice, general ledger, stock register, minute book and list of fixed assets (containing location of fixed assets) if the account of records were lost in the floods of 26th July, 2005 and (b) produce the records mentioned in para 4(iii) that were perused by the Statutory Auditors for preparing Balance Sheets for the period between 11th January, 2006 to 31st March, 2007.
This affidavit to be filed and copy served on the Official Liquidator on or before 5th January, 2016. The Official Liquidator's representative is directed to take inventory and/or inspection and/or physical possession of the records from the factory premises at Bhiwandi, if not done already.
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2015 (12) TMI 1771 - TELANGANA AND ANDHRA PRADESH HIGH COURT
Recovery of tax dues - income tax demand of ₹ 1468.64 crores - attachment of stock stocks of beer, foreign liquor (FL), and Indian made foreign liquor (foreign liquor), lying in the various godowns of APBCL. - Companies, which manufacture and supply beer, foreign liquor and Indian made foreign liquor to APBCL, invoked the jurisdiction of this court, under article 226 of the Constitution of India, contending that the stocks lying in the godowns of APBCL (which were attached by the Income-tax Department) belonged to them ; and any delay in the sale of the attached stock of beer would result in wastage of the entire stock. - The sale of the attached property (beer, foreign liquor and Indian made foreign liquor), in terms of the interim orders passed by this court, yielded ₹ 489.07 crores.
Under the guise of deducting manufacturing expenses, and incidental expenses for delivery, almost the entire sale proceeds of ₹ 489.07 crores has been handed over by APBCL to the petitioners and the Government of A.P, leaving a paltry sum of ₹ 3.44 lakhs (rupees three lakhs forty-four thousand only) as the balance remaining in the separate account being maintained in terms of the interim orders passed by the Division Bench. - These acts of subterfuge has rendered the attachment order, passed by the Tax Recovery Officer, redundant for, even if the writ petitions were to be dismissed later, the Income-tax Department would be left only with ₹ 3.44 lakhs
Whether an interlocutory order, which travels beyond even the main relief sought for in these writ petitions and, in effect, results in the writ petitions being allowed, without even a counter-affidavit being filed by the respondent-Income-tax Department, can be passed at the stage of admission of the writ petitions?
Held that:- Power to grant ad interim ex parte orders should be exercised with great circumspection - Ordinarily ad interim orders, which have the effect of granting the main relief itself, should not be passed - Interim orders should not be passed for the mere asking.
Are the parameters for grant of, and in continuing, the interim orders, fulfilled in the present cases? - Held that:- Courts have to strike a balance between two extreme positions, on the one hand whether the writ petition would itself become infructuous if interim order is refused, and the enormity of losses and hardships which may be suffered by others if an interim order is granted, particularly having regard to the fact that, in such an event, the losses sustained by the affected parties thereby may not be possible to be redeemed - Before an interim order is passed, the court must consider the question as regards existence of a prima facie case, balance of convenience, and whether the Writ petitioners would suffer irreparable injury, if the interim relief sought for is refused.
Has a prima facie case been made out in the present batch of writ petitions? - Held that:- As the writ petitions have already been admitted, it must, necessarily, be presumed that the petitioners have made out a prima facie case. The fact, however, remains that a strong prima facie case, of a standard much higher than just a prima facie case, must be made out for an interim order to be passed, which would amount to granting the final relief in the writ petition. We are afraid that the petitioners have not made out a strong prima facie case for the grant of such relief.
Does the balance of convenience lie in favour of the petitioners, and would they suffer irreparable injury if the interim orders are vacated? - Held that:- Considerations of balance of convenience, and irreparable injury, forcefully tilting the balance totally in favour of the petitioners, would alone justify granting a final relief by way of an interim order. While the balance of convenience may be in favour of retaining the sale proceeds in a separate account, and the amount therein to be paid to the person held entitled thereto on the writ petitions being finally heard and decided, it is certainly not in favour of the petitioners being paid the entire sale proceeds even without an adjudication of their claim that they continue to retain title over the goods even after its delivery to APBCL - As the petitioners could have been paid these amounts later also, there were no compelling circumstances, for APBCL not to retain the sale proceeds in a separate bank account, otherwise than on account of the interim orders passed by this court earlier. The interim orders, to the extent it permitted the manufacturing expenses and incidental expenses for delivery, to be adjusted from the sale proceeds must be, and is hereby, vacated.
As a substantial part of the sale proceeds have already been paid by APBCL to the petitioners and the Government of Andhra Pradesh, what orders can this court pass consequent upon the interim orders, passed earlier, being vacated in part ? An order of stay, granted pending disposal of a writ petition or other proceeding, comes to an end with the dismissal of the substantive proceeding. It is the duty of the court, in such a case, to put the parties in the same position they would have been but for the interim order of the court, applying the doctrine of restitution. The jurisdiction to make restitution is inherent in every court, and should be exercised whenever justice of the case demands.
The petitioners herein and the Government of Andhra Pradesh shall forthwith and, in any event, on or before January 20, 2016, redeposit the amounts received by them from APBCL on the sale of the stocks (beer, foreign liquor and Indian made foreign liquor) attached by the Income-tax Department. Such redeposit would ensure that the entire sale proceeds (i.e., ₹ 489.07 crores less the TDS of ₹ 4.81 crores) remain in the separate account directed to be maintained by this court. The interests of the petitioners, the Income-tax Department, and the Government of Andhra Pradesh would be secured thereby as, after the writ petitions are finally heard and decided, these amounts can be paid to those entitled thereto. - The amount lying in the separate account, after redeposit of the amounts as directed hereinabove, shall be invested by the APBCL in short- term cumulative fixed deposits, and proof thereof shall be furnished to the Income-tax Department latest by January 26, 2016. The amounts invested in fixed deposits shall be subject to the result of the writ petition.
Petition disposed off.
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2015 (12) TMI 1770 - BOMBAY HIGH COURT
Assessment of income from the sale of 18 flats - selection of assessment year - “transfer” in terms of Section 2(47) - Held that:- Tribunal was justified in holding that the income from the sale of 18 flats to M/s Audi Constructions Pvt. Ltd., is not assessable in the year 2008-2009 as on the basis of the facts on record, the learned Tribunal found that the assessee had not delivered the possession of the flats to M/s Audi Constructions Pvt. Ltd. in the subject year. Tribunal also found that it is not the case of the appellant that the agreements executed by assessee are bogus or fictitious upon appreciating the evidence on record and as such, there is no substantial question of law which can arise in the above appeals as this Court in the present appeals cannot reappreciate the evidence on record.
Tribunal also refused the contention of the appellant upon appreciating the evidence on record to come to the conclusion that the provisions of Section 2(47) have not been satisfied. Substantial questions of law proposed by the appellant as such would require re-appreciation of evidence which exercise cannot be done in the above appeals under Section 260A of the Income Tax Act as the learned counsel appearing for the appellant as pointed out herein above has failed to show that there is any perversity in such findings or that any material evidence has been discarded or that the learned Tribunal has come to such conclusion by misreading the evidence on record.
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2015 (12) TMI 1769 - DELHI HIGH COURT
Claim of loss for the diminution in value of fertilizer bonds against the sale of fertilizers - Held that:- The assessment order itself shows that in its books, the Assessee categorised the bonds under the head ‘current investment assets’. In that view of the matter, the diminishing value of the bonds not being held as long term investment was in the nature of a revenue loss and could have been claimed as such by the Assessee. The stand of the Revenue that this was only a notional loss and not allowable, is not tenable since bonds held as stock-in-trade can be valued at market rate or cost whichever is less.
Disallowance u/s 14A - claim of the Assessee that it incurred no expenditure, other than the administrative expenses, for earning dividend income - Held that:- Under Section 14A(2) of the Act read with Rule 8D of the Income Tax Rules, 1962 the Assessing Officer is required to make an enquiry if he is not satisfied with the correctness of the claim of the Assessee in respect of such expenditure in relation to income which does not form part of the total income. In the present case it has been averred by the Assessee, and not contradicted by the Revenue, that no interest expenditure has been incurred by it for earning the exempt income. There was no basis for the AO to have disallowed any part of such income on that score. No substantial question of law arises
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2015 (12) TMI 1768 - ITAT AHMEDABAD
Disallowance of 50% of the indirect expenses incurred in cash - AO has passed ex parte assessment order u/s 144 - Best Judgement assessment - Held that:- Assessing Officer must not act dishonestly or vindictively or capriciously. He must make, what he honestly believe to be a fair estimate of the proper figure of assessment and for this purpose he must be able to take into consideration, local knowledge, reputation of the assessee about his business, the previous history of the assessee or the similarly situated assessee. It is also pertinent to mention that judgment is a faculty to decide matter with wisdom, truly and legally. Judgment does not depend upon the arbitrary, caprice of an adjudicator, but on settled and invariably principles of justice. Thus, in a best judgment, even if, there is an element of guess work, it should not be a wild one, but shall have reasonable nexus to the available material and circumstances of each assessee.
Admittedly the assessee was not in a position to produce supporting evidence, then ad hoc disallowance on account of such failure ought not to be made more than 20% of the expenses. - Decided partly in favor of assessee.
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2015 (12) TMI 1767 - ITAT PUNE
Scrutiny / regular assessment u/s 143(3) - validity of issue of notice - effect of revision of belated return - section 139(4) r.w.s. 139(5) - period of limitation - additions towards capital gains - long term or short term capital gain - Held that:- A perusal of sub-section (5) of section 139 would show that the provisions relating to filing of revised return are applicable only to the return filed u/s. 139(1) or return of income filed in pursuance to notice u/s. 142(1) of the Act. A bare reading of the provisions of sub-section (5) of section 139 makes it unambiguously clear that belated return filed under the provisions of section 139(4) cannot be revised.
Since, the revised return filed by the assessee is invalid and non-est in eye of law, the period of limitation for issuing notice u/s. 143(2) has to be calculated from the date of filing of original return. The original return was filed on 12-12-2008 i.e. in the financial year 2008-09 the period of limitation for issuing notice u/s. 143(2) with reference to original return comes to an end on 30-09-2009. Therefore, the notice was clearly issued beyond the statutory period of limitation.
Since, the notice issued u/s. 143(2) is barred by limitation, no valid assessment could have been made on the assessee by Assessing Officer in the absence of valid notice u/s. 143(2) of the Act.
Decided in favor of assessee.
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2015 (12) TMI 1766 - ITAT MUMBAI
Disallowance u/s 14A - expenses related to exempt incomes - assessee company received interest income on tax free bonds, income tax refund and fixed deposits - assessee company also claimed divided income - The assessee company submitted that out of abundant caution and to buy peace of mind and to avoid litigation , the assessee company has voluntarily offered for disallowance of expenditure of ₹ 14,42,900/- us/ 14A of the Act which includes ₹ 5,13,278/- suo moto disallowed in the return of income filed with the Revenue .The assessee company submitted that AO erred in saying that the assessee company has not offered for disallowance any expenditure u/s 14A of the Act in the return of income filed with the Revenue while fact of the matter is that the assessee company disallowed expenditure of ₹ 5,13,278/- u/s 14A of the Act.
Held that:- The contentions of the assessee company that the CIT(A) has accepted the method of computation adopted by the assessee company for assessment year 2005-06 and 2006-07 can not be accepted as first of all principles of res-judicata are not applicable to income tax proceedings, Secondly Rule 8D of Income tax Rules, 1962 is applicable from assessment year 2008-09.
On merits based on facts and circumstances of the case , we have observed above that the substantial activity of the assessee company is to make investments and substantial amount of revenue stream for the assessee company is from dividends and interest income which are exempt from tax. Thus, most humbly we reject the contentions of the assessee company and we uphold the disallowance of total expenditure of ₹ 43,48,277/- made by the AO under Section 14A of the Act read with Rule 8D of Income Tax Rules, 1962 , in the case of the assessee company keeping in view the peculiar facts and circumstances of the case.
Decided against the assessee.
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2015 (12) TMI 1765 - SUPREME COURT
Time Limitation - filing the written statement or giving version of the opponent - Section 13(2)(a) of the Consumer Protection Act, 1986 - Held that:- Upon receipt of a complaint by the District Forum, if the complaint is admitted Under Section 12 of the Act, a copy of the complaint is to be served upon the opposite party and as per provisions of Section 13 of the Act, the opposite party has to give his version of the case within a period of 30 days from the date of receipt of the copy of the complaint. There is a further provision in Section 13(2)(a) that the District Forum may extend the period, not exceeding 15 days, to the opposite party for giving his version.
Thus, the opposite party is given 30 days' time for giving his version and the said period for filing or giving the version can be extended by the District Forum, but the extension should not exceed 15 days. Thus, an upper cap of 45 days has been imposed by the Act for filing version of the opposite party.
The question arose in the case of Dr. J.J. Merchant [2002 (8) TMI 835 - SUPREME COURT] whether the Forum can grant time beyond 45 days to the opposite party for filing its version. After considering the aforestated section in the light of the object with which the Act has been enacted, a three-Judge Bench of this Court came to the conclusion that in no case period beyond 45 days can be granted to the opposite party for filing its version of the case - the judgment delivered in the case of Dr. J.J. Merchant holds the field and therefore, the District Forum can grant a further period of 15 days to the opposite party for filing his version or reply and not beyond that.
Reference disposed off.
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2015 (12) TMI 1764 - DELHI HIGH COURT
Claim of assessee with respect to club charges (one time entry fees) - revenue v/s capital expenditure - Held that:- Revenue does not dispute that Issue (iv) concerning one time club entry charges has been held to be a revenue expenditure and is covered in favour of the Assessee by the decision of this Court in CIT v. Samtel Color Ltd. [2009 (1) TMI 26 - DELHI HIGH COURT].
Rate of depreciation on computers and peripherals is covered in favour of the Assessee by the decision of this Court in Commissioner of Income Tax v. BSES Yamuna [2010 (8) TMI 58 - DELHI HIGH COURT].
TPA - ITAT allowing the exclusion of Vapi and WAPCOS as comparables and holding that they are not functionally comparable - Held that:- Court finds that while the Assessee provides marketing support services, the first excluded company WASCOS, as a comparable, provides engineering consultancy services and the second excluded company Vapi provides consultancy for water resource management. The reasons given by the ITAT for exclusion of those two entities as comparables appears, therefore, to be fully justified on facts as well as in law. No substantial question of law arises.
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2015 (12) TMI 1763 - PUNJAB AND HARYANA HIGH COURT
Addition made on account of interest income from investment in Co-Operative Societies u/s. 80P(2)(d) - A.O. computed the disallowance u/s. 14A r.w.r. 8D - Held that:- The matter is no longer res integra. This Court in The Punjab State Cooperative Milk Producers Federation Limited vs. Commissioner of Income Tax II [2011 (3) TMI 615 - PUNJAB AND HARYANA HIGH COURT] as held as per the bye-laws of the appellant- Federation, deductions were admissible to it under section 80P(2)(a)(i) of the Act on the income derived by it from its members by way of interest on its investments as loan and advances for their working capital - assessee is entitled to deduction under section 80P(2)(d) of the Act after excluding the expenditure attributable to the earning of such income - It may be noticed that section 80P was inserted in place of section 81 which was simultaneously deleted by Finance (No. 2) Act, 1967, with effect from 1-4-1968
Regarding Section 14A - on consideration of facts involved therein had concluded that there was no expenditure which had been incurred by the assessee for earning the income and the same did not form part of total income - Decided against the assessee
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2015 (12) TMI 1762 - ITAT MUMBAI
Benefit of exemption under section 11 denied - proof of charitable activities - Held that:- We fail to understand how a loan amount given to two Mazdoor Sabhas fit into the category of making investment or deposit as per provisions of section 11(5) of the Act, wherein investment have been referred to the investment in saving certificates of the Government as defined in clause (c) of section-2 of the Government Saving Certificate Act and deposits have been referred to being deposit in Post Office Saving Bank account or in Schedule Bank. Thus, it can be safely concluded that the assessee is not covered by the provisions of section 13(1)(d) of the Act.
Therefore, the decisions relied upon by the assessee as mentioned elsewhere do not support.
As mentioned elsewhere the assessee has clearly violated the provisions of section 13(1)(c) r.w.s. 13(3) of the Act. Hence, the assessee is not eligible for the benefit of exemption under section 11 of the Act. The denial of exemption is confirmed.
Taxability of the corpus fund is concerned, we direct the Assessing Officer to decide the issue afresh as per the provisions of the law. In so far as the claim of expenditure is concerned the Assessing Officer is directed to verify whether the amount is given as advance or charged to the P&L Account, after giving a reasonable opportunity of being heard to the assessee and decide this issue as per the provisions of the law.
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