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2016 (12) TMI 1887 - ITAT BANGALORE
Deduction u/s 80JJAA - whether the new employees, being software engineers, were eligible for the said deduction as they did not come within the ambit of the term ‘workman’? - New workman employed for period of 300 days in relevant previous year are eligible for deduction u/s 80JJAA and no reference to new employees employed in the preceding year is made in the section - HELD THAT:- From the Para re-produced from the order of the Tribunal in assessee’s own case for assessment year 2010-11 [2016 (7) TMI 1012 - ITAT BANGALORE] we find that the Tribunal has followed the earlier Tribunal order in assessee’s own case for the assessment year 2007-08 to 2009-10 and thereafter, the Tribunal has restored the matter back to the file of the AO for fresh decision in accordance with law. Accordingly, in the present year also, we set aside the order of the ld. CIT(A) on this issue and restore this matter back to the file of the AO for fresh decision in accordance with law with same directions as were given by the tribunal in assessment year 2010-11.
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2016 (12) TMI 1886 - KARNATAKA HIGH COURT
Smuggling - cocaine - it is alleged that the accused persons procured cocaine from one UC (Uchee) and were indulged in sale of the substances - HELD THAT:- So far the qualitative and quantitative report of impunitive substance seized from the possession of the petitioners is not placed on record by the Investigation Officer. As per the standing instructions 1.18 issued by the Central Government under the N.D.P.S. Act, these reports should have been procured within 30 days. As per the remand application filed by the Investigation Officer, this petitioner is no more required for custody for the purpose of further investigation. In the given circumstances, there is no impediment to allow the petition.
The petitioner is granted bail on executing a self-bond for a sum of Rs.2,00,000/- with one surety for the likesum to the satisfaction of the concerned Court, on the conditions imposed - application allowed.
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2016 (12) TMI 1885 - PUNJAB AND HARYANA HIGH COURT
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - interpretation of the proviso to Section 2(15) “charitable purpose” includes relief of the poor, education, medical relief, preservation of environment (including watersheds, forests and wildlife) and preservation of monuments or places or objects of artistic or historic interest, and the advancement of any other object of general public utility - HELD THAT:- It is admitted that the result in these appeals follows the result in Commissioner of Income Tax vs. Improvement Trust Moga [2017 (1) TMI 53 - PUNJAB AND HARYANA HIGH COURT] which was disposed of by a separate order and judgment passed today. Accordingly, for the reasons stated therein, these appeals filed by the revenue are dismissed.
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2016 (12) TMI 1884 - ITAT AHMEDABAD
None appeared on behalf of the assessee - HELD THAT:- Notice of hearing was sent by Registered Post with Acknowledgement Due to the assessee on 13.10.2016 fixing the date of hearing on 05.12.2016. The said notice has been served upon the assessee on 15.10.2016 as is evident from the postal acknowledgment slip which is placed on record. When the case was called for hearing, none appeared on behalf of the assessee and neither any adjournment application was filed. This shows that the assessee is not interested in pursuing with his appeal. Therefore, in view of the decision in the case of Estate of Late Tukojirao Holkar vs. CWT [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] and of CIT vs. Multiplan India (Pvt.) Ltd. [1991 (5) TMI 120 - ITAT DELHI-D]. we dismiss the appeal of the assessee in limine.
The assessee may, if so advised, file an application before this Tribunal for restoration of his appeal and hearing on merits by showing reasonable cause for not appearing before the Tribunal on the date of hearing. The Bench, if so satisfied, may recall its order and restore the appeal to its original number for hearing on merits.
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2016 (12) TMI 1883 - CALCUTTA HIGH COURT
Dishonor of Cheque - insufficiency of fund - discharge of existing liability or not - time limitation - part payment of cheque is enough to defeat the entire cause of action or not? - bar under Section 29 of the Criminal Procedure Code - Whether the demand notice was defective as because a part payment to the tune of Rs. 1,00,000/- was accepted and that is the departure from the cause of action itself? - HELD THAT:- This Court is of the considered view that simply because Rs. 1 lakh was received by the complainant after issuance of statutory notice is enough to deviate from the cause of action - this Court is satisfied that simply because of Rs. 1 lakh was paid by the accused/revisionist after issuance of the statutory notice that is not enough to take away the right of the holder of the cheque to enforce the cause of action regarding non-payment of the residue amount.
Whether the complaint is barred by limitation? - HELD THAT:- In the instant case before this Court the payment of Rs. 1 lakh was made on 11.03.2000 and according to this court it is the starting time of the period of limitation. The complaint was filed within three days of that that is on 14.03.2000 and as such the complaint was filed perfectly within time. This court reiterates that the complaint is not hit by the period of limitation as prescribed under Sections 138 and 142 of the Act of 1881 - It may not be out of place to mention that it is the admitted position that the relationship between the parties was that of client and advocate and naturally such relationship was fiduciary one and there was nothing wrong on the part of the complainant when he advanced Rs. 2,85,000/-.
Whether the cheque was issued in discharge of existing liability? - HELD THAT:- Regarding the applicability of Section 8 and Section 13 of the West Bengal Moneylenders Act, this Court is of the view that the said act has not barred money lending but it has only regulated the money lending. Thus, even if one person who has no money lending licence cannot be debarred from granting any accommodation loan to his friend or other person on him he has confidence. The opposite party took the accommodation loan and he now cannot take the shelter of the West Bengal money lenders' act to defraud the person who accommodated him - this issue is answered in favour of the appellant.
Whether the part payment of cheque is enough to defeat the entire cause of action? - HELD THAT:- This court has already answered the issue that part payment cannot defeat the entire cause of action. Thus, this point is answered in favour of the appellant.
Whether the learned Trial Court had authority to impose the fine amount to the tune of Rs. 2,85,000/- in view of the bar under Section 29 of the Criminal Procedure Code? - HELD THAT:- It is true that as per Section 29 of the Code of Criminal Procedure, 1993 no Judicial Magistrate of the first class can impose any fine exceeding Rs. 10,000/- but in the instant case before this court the learned Judicial Magistrate imposed fine amount to the tune of Rs. 2,85,000/- and according to this court the learned trial court exceeded its jurisdiction to that extent. The question now is whether the entire finding of the trial court is to be set aside for such careless approach. This superior court has inherent power under Section 482 of the Act of 1973 to cure any irregularity to prevent abuse of process of any court or to secure the ends of justice - It is true that as an advocate who has great esteem in the society that the said accused/opposite party would not have troubled his client who accommodated him during his hard days for as many as 17 long years (from 30.12.1999 till this date) and this court prefers to reduce the substantive sentence to make it simple imprisonment for ten days but at the same time the fine amount is being converted to compensation under Section 357 (3) of the Code of 1973 and the amount is enhanced from Rs. 2,85,000/- to 3,70,000/- in default of such payment the accused/opposite party will suffer simple imprisonment for further one year.
The substantive sentence is reduced from 4 months Simple Imprisonment to 10 days. The fine is converted as compensation but the amount is increased to Rs. 3,70,000/- being double of the amount of Rs. 1,85,000/-. If this amount is not paid then this opposite party accused will have to suffer further Simple Imprisonment for one year more - Such payment of Rs. 3,70,000/- (three lakhs seventy thousand) is to be deposited by the opposite party before the learned trial court by way of demand draft in the name of the complainant appellant within one month from this day. The opposite party/accused must surrender before the learned trial court to serve out the sentence within one month from this day. Failure to comply with this order will entitle the learned trial court to issue warrant of arrest against this accused/opposite party.
This criminal revisional application succeeds in part.
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2016 (12) TMI 1882 - SUPREME COURT
Classification as permanent employees - fixation of pay of Petitioners at the minimum of the regular pay-scale attached to the respective posts - whether the Petitioners are also entitled to the increment? - Madhya Pradesh Industrial Employment (Standing Orders) Act, 1961 - HELD THAT:- Merely by putting in six months' satisfactory service, an employee can be treated as 'permanent employee'. Rights which would flow to different categories of employees including 'permanent employee' are not stipulated in these Rules or even in the parent Act. It can be gathered from Rule 11 of the said Rules, which relates to termination of employment, that in case of a 'permanent employee' one month's notice or wages for one month in lieu of notice is required when the employment of a 'permanent employee' is to be terminated. On the other hand, no such notice or wages in lieu thereof is needed to be given to any other category of employees. Additional obligation casts on the employer is to record reasons for termination of service in writing and communicate the same to the employee.
The issue came up again in the case of M.P. State Agro Industries Development Corporation Ltd. and Anr. v. S.C. Pandey [2006 (2) TMI 721 - SUPREME COURT] wherein this Court held that only because a temporary employee has completed 240 days of work, he would not be entitled to be regularized in service. The Court also reiterated that the Standing Orders categorize the nature of employment and do not classify individual employees in different post according to the hierarchy created in the Department and thus proviso to Rule 2 does not apply to promotions or regularization in higher grade.
Though a 'permanent employee' has right to receive pay in the graded pay-scale, at the same time, he would be getting only minimum of the said pay-scale with no increments. It is only the regularisation in service which would entail grant of increments etc. in the pay-scale.
Contempt petition dismissed.
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2016 (12) TMI 1881 - CALCUTTA HIGH COURT
Assignment of debts - petitioner submits that the said deed was not taken into consideration in the earlier proceeding as the said deed was not registered and having regard to the fact that the said deed is registered, there cannot be any impediment to pray for the reliefs claimed in the petition - HELD THAT:- The prayers as made in the petition cannot affect right of any of the parties since admittedly it appears that at least one of the secured creditors has assigned the debt in favour of the petitioner. The purpose is to formulate a scheme which could be acceptable to all the creditors and would be beneficial for all.
The petitioner shall hold separate meetings of the secured and unsecured creditors including debenture holders, if any, after publishing advertisements once in the English daily “The Times of India”, once in the Bengali daily “Aajkal” and once in the Hindi daily “Dainik Vishwamitra”. Mr. Sondwip Mukherjee, Advocate, Bar Library Club, is appointed as the Chairperson of the meeting of all the creditors at an initial remuneration of 4000 GMs. to be paid by the petitioner. The notice of publication and other details shall be settled by the Chairperson. There shall be an order in terms of prayer (f) of the petition. The matter is made returnable on 30th January 2017.
The interest of the unsecured creditors is not going to be affected in the event a meeting is called of all classes of creditors. However, a copy of the petition has been made over to Ms. Agarwal in court today.
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2016 (12) TMI 1880 - BOMBAY HIGH COURT
Interpretation of Section 9A of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 - whether the stipulation of six months for production of Validity Certificate is only directory? - HELD THAT:- In Central Board of Dawoodi Bohra Community and anr. v. State of Maharashtra and anr. [2004 (12) TMI 350 - SUPREME COURT], the Supreme Court and the Full Bench of this Court have traced the power of the Chief Justice to make reference to the Full Bench to the very position of the Chief Justice being 'Master of the Roster' as also to Clause 36 of the Letters Patent. The Full Bench also makes reference to Rule 7 of Chapter -I of the Bombay High Court Appellate Side Rules, 1960. No provision was pointed out in support of the submission that the power of the Chief Justice to make a reference to the Full Bench can be exercised only when a conflict is noticed between the decisions of two or more coordinate Benches. Rather, the provision in Rule 7 Chapter - I, suggests the absence of any such fetter.
A brief reference to the legislative history will assist in determination of the scope and import of Section 9A. This section has its genesis in the constitution (74th Amendment) which introduced Part - IX A in the Constitution comprising Article 243-P to 243-ZG. Particular reference is necessary to Article 243-T which mandates that seats shall be reserved for scheduled caste and scheduled tribes at election to local bodies. Clause 6 of Article 243-T provides that nothing in Part-IXA shall prevent the legislature of a State from making any provision for reservation of seats in any Municipality or offices of chairpersons in the Municipalities in favour of backward class of citizens.
It is clear that the first proviso enables such person to contest the election. The second proviso provides for consequences where the beneficiary of exception or the concession fails to comply with the conditions subject to which the exception or the concession was availed. It provides that where such person fails to produce Validity Certificate within period of six months, as statutorily provided and as undertaken by him from the date of his election, then, the election of such person shall be deemed to have been terminated retrospectively and he shall be disqualified from being a Councillor.
In the present case also the legislature in enacting Section 9A has provided for a statutory fiction, which is evident from the use of expression "his election shall be deemed to have been terminated retrospectively and he shall be disqualified being a Councilor". The statutory fiction must be allowed to have its full play. No other provision or reason has been pointed out to take the view that consequences prescribed under second proviso to Section 9A are not automatic or would require any further adjudication once it is established that the person elected has failed to produce the Validity Certificate within a stipulated period of six months from the date of his election - the validation of caste claim of the elected Councillor by the Scrutiny Committee beyond the prescribed period would have no effect upon the statutory consequences prescribed under the second proviso to Section 9A i.e. deemed retrospective termination of the election of such Councillor and his disqualification for being a Councillor. The subsequent validation or issue of the Validity Certificate will therefore be irrelevant for the purpose of restoration of the Councillor's election but, such validation will obviously entitle him to contest the election to be held on account of termination of his election and the consequent vacancy caused thereby.
The time limit of six months prescribed in the two provisos to Section 9A of the said Act, within which an elected person is required to produce the Validity Certificate from the Scrutiny Committee is mandatory - in terms of second proviso to Section 9A if a person fails to produce Validity Certificate within a period of six months from the date on which he is elected, his election shall be deemed to have been terminated retrospectively and he shall be disqualified for being a Councillor - Such retrospective termination of his election and disqualification for being a Councillor would be automatic and validation of his caste claim after the stipulated period would not result in restoration of his election.
The questions raised, stand answered accordingly.
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2016 (12) TMI 1879 - ITAT CHENNAI
Disallowance u/s.36(1)(viii) in respect of the interest on mortgaged back security and interest from loans advanced to deposits holders - A.R submitted that only the net interest to be considered for disallowance u/s.36(1)(viii) of the Act and not the gross interest - HELD THAT:- As rightly pointed out by the ld.D.R, provisions of Sec. 36(1)(viii) are applicable only in respect of loans granted for construction or purchase of house in India for residential purpose, as such Ld.CIT(A) rightly confirmed the disallowance. However, while computing the disallowance u/s.36(1)(viii) of the Act, only net interest income to be considered from the activities of mortgaged back security and interest from loans advanced to deposit holders. This ground of appeal is partly allowed.
Disallowance u/s.36(1)(viii) in respect of the interest being the referral fee from insurance companies and other income - HELD THAT:- Getting properties and persons insured is not a mandatory requirement for carrying on the business of providing long term housing finance. Therefore, the income received by way of commission has no direct nexus or its not incidental to the long term housing finance. Accordingly, this issue was decided against the assessee.
CIT(A) had not admitted the additional grounds raised by the assessee - exclusion of income earned on the land loans which were extended by the assessee in the normal course of business, and exclusion of the entire interest income from the computation of eligible profits for the purpose of deduction u/s.36(1)(viii) - HELD THAT:- We have gone through the assessment order for assessment year 2006-07 wherein the AO reworked the deduction u/s.36(1)(viii) of the Act by segregating the profit on the basis of various activities carried on by the company. On the same manner we direct the AO to compute u/s.36(1)(viii) of the Act for this assessment year also.
Interest income on SLR investment is eligible for deduction u/s.36(1)(viii).
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2016 (12) TMI 1878 - ITAT JAIPUR
TDS u/s 195 - Disallowance of commission u/s 40(a)(ia) - HELD THAT:- As decided in own case [2016 (2) TMI 1339 - ITAT JAIPUR] CIT(A) has given a clear finding that the services rendered and expenditure incurred is in the nature of commission. Given the fact that the commission has been paid in relation to export of garments outside India and the fact that the no services have been rendered in India we are unable to accede to the arguments of the Ld. DR that the subject payments are taxable in India. Assessee paid commission in relation to export of garments as apparent from the agreement as well as working of the commission payments. Accordingly, provisions of section 195 are not attracted in the instant case - Decided in favour of assessee.
Addition made for depositing the employee’s contribution to PF &ESI beyond the prescribed time limit provided in the respective Acts - HELD THAT:- As employees contribution to ESI and PF has been paid before filing of the return of income u/s 139(1) of the IT Act. In view of the consistent stand taken by this Bench and respectfully following the decision of the Hon’ble Rajasthan High court in the case of State Bank of Bikaner and Jaipur [2014 (12) TMI 65 - RAJASTHAN HIGH COURT] and others, the ground taken by the Revenue is dismissed and assessee’s cross-objection is allowed.
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2016 (12) TMI 1877 - BOMBAY HIGH COURT
Provisional release of vehicle - drill ship - vessel is deployed for operations of ONGC in India - HELD THAT:- Mr. Jetly, on instructions, has stated that so long as the vessel is deployed for operations of ONGC in India, the respondents would have no objection for such deployment within India. However, Mr. Jetly submits that in the event the vessel is required to be moved out of India, the petitioners would have to take all the requisite steps in accordance with law for obtaining the clearance from the Competent Authorities for such movements.
The notice of motion is disposed off.
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2016 (12) TMI 1876 - ITAT AHMEDABAD
Addition on account of unexplained investment u/s 69 - parties were alleged to be paper-company of M/s. M.D. Patel Group - HELD THAT:- Similar issues reached ITAT in various cases including Smt. Alkaben Amrutram Guru and Smt Kanchanlal Natwarlal Rana [2016 (8) TMI 1563 - ITAT AHMEDABAD] as observed that these assessees are connected to M/s. M.D. Patel Group thus facts about Settlement Commission owning up of the income by the kingpin M/s. M.D. Patel Group etc. are not on the record. In view thereof these appeals are set aside and restored back to the file of the Assessing Officer to call the assessees to demonstrate that the subject matter raised in these appeals is covered by the alleged settlement petition of M/s. M.D. Patel Group and the result thereof. It is made clear that the Assessing Officer will verify necessary records and the assessees will fully co-operate in this matter. In case of non-cooperation by the assessees, the ld. Assessing Officer will be at liberty to take appropriate view in accordance with law. Accordingly, both the appeals are allowed for statistical purposes.
Addition of additional grounds - addition made on unexplained gifts received by the assessee and on substantive basis on account of alleged unexplained capital/interest income/donation etc - HELD THAT:- All these issues involve Settlement Petition and income owned up by M/s. M.D. Patel Group in respect of all the constituents. It is not disputed that the assessee is connected to M D Patel Group and the fact that the additions in question are subject matter of reassessed income as well as impugned reframing of assessment u/s 143(3) r.w.s. 263 of the Act. The doubt of ld. DR that the additional grounds will require verification of fresh evidence and facts seems to be out of place inasmuch as the relevant record of the Settlement Petition and other relevant evidence is on the record of the AO in multiple proceedings. In any case, host of assessments are being set aside and restored back to the file of AO in view the Settlement Petition and owning up of income by M/s. M.D. Patel Group. Consequently the application for admission of additional grounds deserves merit.
In consideration of entirety of facts and circumstances, contentions and judicial precedents relying on the judgments of National Thermal Power Corporation & Jute Corporation of India Ltd (supra), the additional grounds as raised by the assessee are admitted.
Following the ITAT judgment in the case of Smt. Alkaben Amrutram Guru and Kanchanlal Natwarlal Rana (supra) to which the undersigned is a party, the assessments are set aside which will include the admitted additional grounds as above
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2016 (12) TMI 1875 - ITAT KOLKATA
Penalty u/s.271E - violation of Section 269T - assessee has repaid a loan in cash - assessee explained that he is a partner in the said firm and it is a payment between partner and his firm and pleaded that Section 269T is not applicable - HELD THAT:- As decision in the case of CIT vs Lokhpat Film Exchange (cinema) [2007 (1) TMI 165 - RAJASTHAN HIGH COURT] held under the general provision relating to Partnership Act that partnership firm is not a juristic person and for inter relationship different remedies are provided to enforce the rights arising out of their inter se transactions, the issue about separate entities apart, it cannot be doubted that the assessee has acted bona fide and his plea that inter se transactions between the partners and the firm are not governed by the provisions of ss. 269SS.
We find that the CIT-A found examined and satisfied that the assesse is a partner in a firm i.e M/s.C.M.Roy & Sons and the AO also during the course of assessment proceedings on perusal of the ledger account in respect of advance receipt and payment found that the Assessee credited as advance from customers with an endorsement “To advance memo no- to- from customers” and also found the entire sale to M/s.C.M.Roy & Sons.
The assessee takes advances from its customers and makes payment to its firm time to time for meeting the business needs. We hold that the money received or paid in the above circumstances specially between the partners and its firm can be treated in the nature of advance and not loan or deposit as contemplated in sec.269SS of the Act and that the payments between the partnership firm and its partner and vice versa are payment to self. As discussed above the advances received by the assessee were from proper source and there is no doubt the genuineness of the transactions. In such circumstances, the penalty imposed u/s.271E of the Act is not maintainable - we cancel the penalty levied by the A.O. u/sec.271E - Decided against revenue.
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2016 (12) TMI 1874 - DELHI HIGH COURT
Disallowance of expenses deducted as cost of Employees Stock Auction Plan (ESOP) - Revenue contends that the assessee/Revenue fell into error inasmuch as even though took note of the decision of this Court for the previous year as relied on CIT Vs. Oswal Agro Mills Limited [2015 (11) TMI 301 - DELHI HIGH COURT] has not applied the law correctly - HELD THAT:- The judgment in Commissioner of Income Tax Vs. Havells India Limited [2012 (5) TMI 449 - DELHI HIGH COURT] was considered specifically in Oswal Agro’s case [2015 (11) TMI 301 - DELHI HIGH COURT] i.e. decided on 04.08.2015. Havells’case (supra) had taken note of the various judgments including Punjab State’s case [1996 (12) TMI 6 - SUPREME COURT]. Moreover, this Court notices that the question of law arose only for two years i.e. Assessment Years 2008-09 and 2009-10. There were previous orders which cover Assessment Year 2008-09. In the circumstances, having regard to the overall circumstances and the fact that the previous orders took note of the relevant judgments, it is held that no substantial question of law arises. Appeal dismissed.
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2016 (12) TMI 1873 - ITAT MUMBAI
Disallowance u/s 14A - Assessee had received dividend income and claimed it as exempt - HELD THAT:- AO has clearly stated in the assessment order that from the books of account of the assessee it was not possible to work out the exact amount of expenses incurred by it in earning the exempt income. Under these circumstances, it would be difficult to hold that the aforesaid rule has been invoked by the AO without recording any satisfaction. Thus, this argument of the assessee is rejected.
We find force in argument of assessee that investment in the subsidiary / group companies should be excluded while working out the average amount of investments since investment in these companies have been made not for the purpose of earning exempt income but for acquiring control and for strategic reasons. As relying on Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT], CIT vs Oriental Structural Engineers Pvt Ltd [2015 (3) TMI 102 - DELHI HIGH COURT], Garware Wall Ropes Ltd [2015 (2) TMI 628 - ITAT MUMBAI] and JM Financial Ltd [2014 (4) TMI 752 - ITAT MUMBAI]. Therefore, the AO is directed to exclude the amount of investment made in the group companies for strategic reasons. For this limited purpose, this issue is sent back to the file of the AO, who shall decide this issue afresh s a result, ground 1 is partly allowed.
Disallowance applying provisions of section 40A(2) with regard to the goods purchased from M/s Ganesh Polychem Ltd. - HELD THAT:- AO has rightly brought out the facts that the rates charged by the sister concerns were exorbitant in comparison to other independent concerns. It is noted that the rates charged by M/s.Ganesh Polychem Ltd were almost double the uncontrolled rates. Therefore, under these circumstances, there was heavy burden upon the shoulder of the assessee to show that when the purchases were made from M/s.Ganesh Polychem Ltd in March / April, 2007, then at that time, the rates in the open market were equivalent to the price charged by the sister concern. No such evidence was brought on record by the assessee. Under these circumstances, it would be very difficult to believe that within two months period, the rates were reduced to half in the open market. In any case, no such evidence was brought on record by the assessee. It is also noted that the Ld. CIT(A) has already given appropriate relief by re-working the amount of disallowance at correct rates. We do not find any need for making any further interference in the order of the Ld. CIT(A) on this issue and, therefore, the same is hereby upheld. This ground is dismissed.
Addition on account of difference in the balance shown in the account of Rashtriya Chemicals & Fertilizers Ltd (RCF, hereinafter) and M/s. Amarjyot Chemicals Pvt Ltd (ACP) - HELD THAT:- As noted by us that the assessee had submitted before the Ld. CIT(A) appropriate reconciliation wherein the reason was given for the difference and the same was duly reconciled. But, Ld. CIT(A) simply rejected the submission of the assessee by stating that he was not convinced with the submissions of the assessee. Thus, order passed by Ld. CIT(A) is neither properly speaking nor well reasoned. Under these circumstances, we find it appropriate to send this issue back to the file of the AO where the assessee shall get adequate opportunity of hearing to submit the reconciliation statement and other required details and evidences. The AO shall also consider all the arguments of the assessee including the arguments that the impugned difference is not leading to suppression of income, and therefore, no addition could be made on account of impugned difference. With these directions, this ground is send back to the file of the AO for deciding it afresh after giving adequate opportunity of hearing to the assessee. As a result, this ground may be treated as allowed, for statistical purposes.
Depreciation claimed on the basis of letter of approval dated 10-10-2010 - In the appeal before Ld. CIT(A), the assessee submitted in detail that required approval from DSIR was received by the assessee and the same was produced before Ld. CIT(A) - HELD THAT:- As stated by the Ld. Counsel that since required certificate has been provided by the assessee which has been examined by the Ld. CIT(A), and only thereafter relief has been provided by him in line with earlier years’ orders which have been confirmed by the Tribunal. Ld. DR could not point out anything incorrect or wrong in the factual finding of the Ld. CIT(A). Under these circumstances, we do not find any justification to interfere in the order of the Ld. CIT(A) on this issue. Thus, ground 1 raised by the Revenue is hereby dismissed.
Disallowance made of claim of weighted deduction u/s 35(2AB)(3) of the Act - HELD THAT:- We find that the relief has been granted by the Ld. CIT(A) after verifying the requisite approval in proper form. Nothing wrong or contradictory has been brought before us by the Ld. DR. Thus, we do not find any need or justification to interfere in the order of the Ld. CIT(A). Therefore, the order of the Ld. CIT(A) is upheld. Thus, ground of the Revenue is dismissed.
Disallowance made by the AO on account of interest u/s 36(1)(iii) on loans advanced to subsidiary companies - as submitted by the Ld. Counsel of the assessee that this issue has been decided in favour of the assessee by the Ld. CIT(A) following the order of the Tribunal for A.Y. 2007-08 .HELD THAT:- DR could not point out any distinction between the facts of A.Y. 2007-08 and the impugned year. Thus, in view of the order of the Tribunal for AY 2007-08, we find that the order of Ld. CIT(A) deserves to be upheld. Therefore, this ground is dismissed.
Deduction u/s 10B - interest and finance charges should be allocated on the basis of CWIP as against on the basis turnover as was done by the AO - HELD THAT:- It will not be appropriate to apportion the interest entirely on the basis of fixed assets. Similarly allocation on the basis of turnover may also not be a proper criteria for the purpose of allocation of interest keeping in view the peculiar facts and circumstances of the case. Therefore, in our considered opinion, as far as interest on unsecured loans (i.e. ₹ 3,60,32,974) and term loans (i.e. ₹ 7,05,53,202) is concerned, the same should be apportioned on the basis of fixed assets held under the gross block, i.e. 5.60% of such interest cost should be allocated to 10B unit and 94.40% should be allocated to non 10B unit. However, interest paid on working capital loans amounting to ₹ 25,61,18,560 should be apportioned in the ratio of net current assets, i.e. 5.81% of such interest should be allocated to 10B unit and 94.19% should be allocated to non- 10B units. The disallowance should be recomputed by the AO accordingly. As a result, this ground is partly allowed.
Addition of expenditure was not debited to the P & L Account by the assessee - HELD THAT:- Since the impugned amount was not debited by the assessee in the P&L Account, the disallowance made by the AO has been rightly deleted by Ld. CIT(A). No interference is called for in his order.
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2016 (12) TMI 1872 - MADRAS HIGH COURT
Dishonor of cheque - Legally enforceable debt or not - offence under Section 138 of the Negotiable Instruments Act proved beyond reasonable doubt, or not - acquittal of accused under Section 255(1) Cr.P.C. - HELD THAT:- A perusal of Section 190 Cr.P.C. indicates that it permits anyone to approach the Learned Magistrate to file a complaint. In fact, it does not prescribe has any qualification for an individual eligible to prefer a complaint. No wonder, any one can set the Criminal Law in Motion by filing a complaint of facts constituting an offence before the Magistrate concerned, who is empowered to take cognizance. One cannot brush aside an important fact that an explicit assertion as to the knowledge of 'Power of Attorney Holder' about the transaction in issue must be stated in the complaint, as opined by this Court. If a 'Power of Attorney Holder' who is not possessing any knowledge as to the transaction in question, then, he cannot be examined as a witness in a given case.
A 'Power of Attorney Holder' can adduce evidence before the Court concerned and also to prove the averments of the complaint, he can verify on oath, but the rider is that a 'Power of Attorney Holder' should have witnessed the transaction as an Agent of the Payee/Holder in Due Course should possess the requisite knowledge about the transaction in question - the strict liability under Section 138 of the Negotiable Instruments Act can be enforced only when cheque was issued in discharge of any legally enforceable debt or other liability partly or wholly. However, the onus to establish that cheque was not issued against a legally enforceable debt was on the Respondent/Accused.
There is no two opinion of an important fact that a cheque must be issued in respect of either post or existing debt or other liability. One of the essential ingredients of an offence under Section 138 of the Negotiable Instruments Act is that the cheque was drawn for discharge in whole or part of liability. If this aspect is not covered in the complaint petition, then, it will be a fatal one. Furthermore, an offence as defined in Section 2(n) of the Criminal Procedure Code includes not only the doing of possible act, but by omitting to do something as well - Under the Negotiable Instruments Act, the arising of cause of action is not mere presentation of cheque nor mere dishonour of cheque alone, real cause of action is non payment of cheque sum or non compliance of demand through notice by the 'Drawer' within the statutory period.
The strict liability under Section 138 of the Negotiable Instruments Act, 1881 could be enforced only when cheque was issued in discharge of any legally enforceable debt or other liability, partly or wholly the burden to prove the cheque was not issued against the legally enforceable debt, of course is on the Respondent/Accused. Moreover, the term 'Payee' means the party to whom a bill of exchange, cheque or note is payable - this Court is of the considered view that in the instant case, based on the materials available on record, it is not possible for this Court o pronounce a Judgment and therefore opines that 'Remand of the Matter' is just, fair and necessary, otherwise there would be a failure of Justice. Also that, this Court is of the earnest opinion that the evidence of the Complainant is necessary to prosecute the complaint (filed by P.W.1) in order to render a correct Judgment in the case.
The Criminal Appeal is allowed.
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2016 (12) TMI 1871 - CESTAT DELHI
Finalization of provisional assessment - Non-issuance of show cause notice - Demand of duty with interest - HELD THAT:- it appears from the impugned order that there is no provision of issuance of show cause notice or granting any opportunity of personal hearing before the finalization of the provisional assessments. We also find that in Rule 9 B there is no provision of issuance of show cause notice or for granting any opportunity of personal hearing before the finalization of provisional assessment.
Needless to mention that Rule 9B is pertaining to provisional assessment. But before us the dispute is regarding finalization of the assessment. When it is so, it appears that the principle of natural justice has not been followed as per the doctrine of AUDI ALTERAM PARTEM.
The order set aside - Matter remanded back to the Commissioner (A) to pass fresh order on merit after providing a reasonable opportunity of hearing to the appellant. Fresh evidence, if need be, may be admitted as per law.
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2016 (12) TMI 1870 - CESTAT KOLKATA
Levy of penalty u/s. 76 of FA - entire amount of Service Tax paid along with interest, for the delayed period before issuance of the show cause notice - HELD THAT:- It is observed that the Order-in-Revision was issued on 26-4-2010. The revision powers of the jurisdictional Commissioner were done away with as per the substituted Section 84 of the Finance Act, 2009 w.e.f. 19-8-2009. Order-in-Revision passed by the Commissioner after 19-8-2009 is thus without jurisdiction and is set aside.
Appeal allowed.
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2016 (12) TMI 1869 - KARNATAKA HIGH COURT
Input tax credit - Respondent Assessee has not proved the transaction between it and M/s Mahesh Steel Centre & M/s Rajahans Metals - whether the finding recorded by the Tribunal for the discharge of the burden by the assessee could be said as perverse to the record or not? - Section 70 of the KVAT Act - HELD THAT:- Once the purchaser dealer-assessee satisfactorily demonstrates that while purchasing goods, he has paid the amount of VAT to the selling dealer, the matter should end so far as his entitlement to the claim input tax credit. If the selling dealer has not deposited the amount in full or a part thereof, it would be for the Revenue to proceed against the selling dealer. But thereby the benefit of input tax credit cannot be deprived to the purchaser dealer.
Petition dismissed.
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2016 (12) TMI 1868 - ITAT PUNE
Revision u/s 263 by CIT - order passed by the AO u/s 153A r.w.s 143(3) - Assessment u/s 153A of the Act after obtaining approval of Additional CIT u/s 153D - HELD THAT:- In the present appeals for six assessment years, it is seen that except for AY 2010-11 where the assessment was framed u/s 143(3), for all the other five years, the assessments were framed u/s 153A r.w.s. 143(3) meaning thereby that while framing the assessments in those respective years, the necessary approval of Addl.CIT was obtained and that apart from AO the Addl.CIT had also applied his mind to the facts before passing the assessment orders - we find force in the submission of ld.A.R. that it cannot be said that the necessary inquiries were not made while passing the assessment orders u/s 143(3) r.w.s. 153A - it is a settled position that the assessment orders cannot be set aside or revised for inadequate inquiry by ld. CIT u/s 263 of the Act. We therefore find force in the submission of ld.A.R. that revisionary proceedings u/s 263 cannot be initiated in the present cases and for which we also find support from the following decisions. - Decided in favour of assessee.
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