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Showing 101 to 120 of 1515 Records
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2016 (1) TMI 1422
Territorial Jurisdiction - meaning of the term, “cause of action” - HELD THAT:- There is nothing in the petition so as to reveal the facts that form part of cause of action regarding territorial jurisdiction to entertain the present petition by this Court. On comparing the facts of the present petition with the facts of the aforecited case of Alchemist Ltd. & another, it would reveal that in the said case though some of the things had happened in Chandigarh, viz. the officers of the Bank visited Chandigarh for negotiation and deposited the amount in the State Bank at Chandigarh pursuant to the negotiation, however, in the present case any such cause event has not taken place within the territorial jurisdiction of this Bench.
No part of cause of action arises within the territorial jurisdiction to entertain this petition by this Bench - the writ petition is rejected on the sole ground of territorial jurisdiction.
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2016 (1) TMI 1421
Reopening of assessment - notice for reopening on the ground that AO had relied on the show cause notice issued by the Excise department to form a reason to believe that income chargeable to tax had escaped assessment - HELD THAT:- Tax Appeals are admitted for consideration of following substantial question of law :
“1 Whether the ITAT is justified in law as well as on facts in holding that reopening of the assessment under section 147 and 148 of the Act is bad in law and cannot be sustained and thereby further holding that the reassessment orders are required to be cancelled?
2. Whether the ITAT is justified in law as well as on facts in dismissing the appeal filed by the Department and quashed and set aside reassessment order passed by the Assessing Officer without considering the department appeal against order passed by the CIT(A) on merits?”
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2016 (1) TMI 1420
Adjustment of TDS - Adjustment of tax deducted of the amount so deducted from the main contractor towards tax arrears due by the petitioner - rejected on the ground that there is no provision under the Act for such adjustment of tax - HELD THAT:- The amounts paid to the sub contractor by the principal contractor which had already suffered tax in the hands of the principal contractors and that therefore the turn over once again could not be subjected to tax in the hands of the sub contractor and if it is done, it would be a case of double taxation. On that reasoning those petitions having been disposed of - The same principle will apply to the present case on hand.
The respondents are directed to adjust the tax already collected from the principal contractor in respect of the liability sought to be fastened on the petitioner - Petition disposed off.
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2016 (1) TMI 1419
Adjustment of tax already deposited by principal contractor - whether the respondents are justified in not adjusting the tax already deducted by the Principal Contractor, and once again seeking to tax the petitioners in respect of the same amount which has been deducted by the principal contractor? - HELD THAT:- The amounts paid to the sub contractor by the principal contractor had already suffered tax in the hands of the principal contractors and that therefore the turn over once again could not be subjected to tax in the hands of the subcontractor and if it is done, it would be a case of double taxation.
The petitions are accordingly disposed of holding that the petitioners could not be subjected to tax on the amounts which were already deducted by the principal contractor and of which tax had been collected.
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2016 (1) TMI 1418
The Gujarat High Court issued an oral order on a case with citation 2016 (1) TMI 1418. The respondent, the State of Gujarat, waived the service of notice through the learned Additional Public Prosecutor. The next hearing is scheduled for 6th January 2016.
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2016 (1) TMI 1417
Addition made towards Fringe Benefit Tax - contribution made to superannuation Fund - HELD THAT:- The assessee company has made a provision for contribution to superannuation fund and the same was paid in the next Financial year. There is no dispute about the provision and the payment and there is no escapement of value and same was subject to fringe benefit tax. Similar issue was considered by the Co-ordinate Bench in the case of M/s. Bharat Overseas Bank [2013 (2) TMI 881 - ITAT CHENNAI] wherein held that provision of contribution to the approved superannuation fund was not subject to charging of FBT. Accordingly, we direct the Assessing Officer to delete the addition. - Decided in favour of assessee.
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2016 (1) TMI 1416
Reopening of assessment u/s 147 - Addition u/s 68 - unexplained cash credits being share application money - HELD THAT:- No inquiries were made by the AO on the basis of the information supplied by the assessee we are in agreement with the finding of the CIT(A) that arguments and evidences provided by the assessee to substantiate that the transaction regarding Share Application Money received by' the assessee were genuine transactions and the same were not accommodation entries. We also do not find any evidence collected by the A.O. which could prove otherwise. Accordingly, the AO was not justified in treating the amount of share application money received by the assessee as its undisclosed income. CIT(A) has rightly deleted the addition made by the AO u/s. 68 of the I.T. Act, 1961 and has passed a well reasoned order on the issue in dispute. - Decided against revenue
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2016 (1) TMI 1415
Disallowance made under the head project risk expenses (PRE) - liquidated damages for breach of contract for delay in supply of goods - Allowable expenditure incurred for the purpose of business u/s 37(1) - HELD THAT:- As per the conditions of the agreement entered by the assessee with the HPCL, assessee had to compensate HPCL for delay in executing the project, that the factum of delay is not in dispute. Therefore, in our opinion the issue is directly covered by the decision of KCP Ltd. [1990 (6) TMI 111 - ITAT HYDERABAD-B]
As relying on BHARAT EARTH MOVERS VERSUS COMMISSIONER OF INCOME-TAX [2000 (8) TMI 4 - SUPREME COURT] liquidated damages for breach of contract for delay in supply of goods are allowable deduction in the assessment year relevant to the point of time when the breach occurred and not the point of delivery of goods and raising of bills.Ground no.1 is decided in favour of the assessee for the two amounts i.e. ₹ 1.26 crores and ₹ 81.00 lacs.As far as ₹ 31.83 lacs is concerned we are of the opinion that AO should add back the PRE while computing deduction u/s. 10A/B in view of the decision of Hon'ble Jurisdictional High Court delivered in the case of Gem Plus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT]
Adjustment on account of notional interest on overdue receivable - During the assessment proceedings,the AO found that the assessee had entered in to international transactions - HELD THAT:- The transaction in question is an international transaction and not a result of a transaction as argued by the AR.The assessee had provided specific services to its AE's therefore the series of events cannot be termed a result of international transaction. Once it has been decided that issue before us is a Transfer Pricing issue then the value of the transaction has to be determined.
It is a case where the TPO has relied upon on the agreement entered into by the assessee with its AE and has treated it as a Benchmark.We find that no independent source was searched or relied upon by the him.It is a fact that the agreements with the third parties did not contain any clause for charging interest for delayed payment.
Thus,the matter has its own peculiarities.The assessee has entered in to agreement with the AE.s.and value of the transaction will have to be decided.The arguments of factoring of delayed payment in the value of service cannot be brushed aside especially when it is found that the OPTC margin earned by the assessee was 29.41 % and it was quite higher than the parties compared with i.e.app.15%.The TPO had not considered these vital issues and had applied the flat rate of 2%,as mentioned in the agreement.In our,opinion the alternate argument advanced by the assessee of adopting LIBOR rate is worth considering,if the facts of the case under appeal are deliberated upon. In the interest of justice interest rate should be fixed at LIBOR+200 points for the delayed payments received by the assessee from its AE.s.for the period as mentioned in the agreements.AO is directed to recalculate the interest amount accordingly.Ground no.4-5 are decided in favour of the assessee,in part.
Disallowance of expenditure under the heads ‘communication and network services’ and ‘IT Infrastructure Services’ - HELD THAT:- Assessee had filed invoices and the basis of payments made under the heads communication and network related services and IT Infrastructure service charge (page- 418-425 of the PB). It is found that assessee had made submission in that regard before FAA and had produced group IT Service agreement.We find that same were not properly analysed by the TPO/ FAA.We are of the opinion that issue needs further verification and investigations. Therefore, in the interest of justice we are remitting back the matter to the TPO for fresh adjudication who will decide the issue after affording a reasonable opportunity of hearing to the assessee. The assessee is directed to produce all the necessary documents related to Communication and network related services and IT Infrastructure service charge to the TPO
Computation of deduction u/s 10A - reducing expenditure incurred in foreign currency for providing technical services from total turnover - HELD THAT:- Hon’ble Bombay High Court in assessee’s own case has decided the issue in íts favour for the AY.s. 2002-03-2005-06 [2013 (1) TMI 984 - BOMBAY HIGH COURT], [2013 (2) TMI 878 - BOMBAY HIGH COURT] and 2011 (7) TMI 1350 - BOMBAY HIGH COURT] wherein as held that the expenses reduced from the figure of export turnover should also be excluded from the figure of total turnover while computing deduction under section 10A & 10B
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2016 (1) TMI 1414
Revision u/s 263 - AO failed to examine as to whether the conditions specified in sec. 37(1) were satisfied or not in the claim so made by the assessee - Claim of club membership fee - HELD THAT:- Assessee’s explanation that the club membership fee was paid for a representative of the assessee was accepted by the AO on the face of it. The documents furnished along with the reply letter furnished by the assessee clearly show that the membership fee was paid for Mrs. Lata Vasvani. There should not be any dispute that the club membership fee was allowed u/s 37(1) of the Act, where in there is a requirement to show that the expenditure was incurred for the purpose of business, it was not personal expenditure or capital expenditure etc.
We notice that Mrs. Lata Vasvani was not an employee or a director of the assessee company. She was not paid any other kind of compensation from the funds of the company. Normal business practice is to take the membership in the name of the company or in the name of top employees as per their service terms and conditions. Hence, in our view, the assessing officer has failed to apply his mind on the reply given by the assessee. The assessing officer, in our view, has failed to examine as to whether the conditions specified in sec. 37(1) were satisfied or not in the claim so made by the assessee. Accordingly, we are of the view, the present case is a case of lack of enquiry on the claim made by the assessee.
In the absence of required enquiry, it cannot be said that the assessing officer has taken one of the possible views. Accordingly, we are of the view that there is no infirmity in the action of the Ld CIT in initiating the revision proceedings u/s 263 of the Act. - Decided in favour of assessee.
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2016 (1) TMI 1413
Net profit estimation - CIT-A estimating the net profit @ 2.5% of contract receipts of the assessee as against 8% adopted by the Learned AO - accounts of the assessee were duly subjected to tax audit u/s 44AB -HELD THAT:- Depreciation and interest is allowable as deduction from the estimated net profit of 8% by the Learned AO and the resultant profit figure was 2.1% of contract receipts and further hold that the Learned CIT(A) had rightly estimated the net profit @ 2.5% of contract receipts to meet the ends of justice. Hence we don’t find any infirmity in the order of the CIT(A). Accordingly, the grounds raised by the revenue are dismissed.
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2016 (1) TMI 1412
Condontion of delay - delay of 790 days in re-filing the appeal - HELD THAT:- The practice directions were issued after consultation with the bar and after giving sufficient time for the bar to get acquainted with the requirement of e-filing. Additionally, the Court has also provided scanning machines at the filing counter so that no difficulty is caused to the bar for switching over to the system of e-filing. In any event, the delay of over two years on this ground is wholly unacceptable.
The Court is not persuaded to condone the extraordinary delay of 790 days in re-filing the appeal. The application seeking condonation of the delay of 790 days in re-filing the appeal is dismissed.
Addition on account of technical know-how and royalty expenses paid by the Assessee to Honda Motor Co. Ltd, Japan - HELD THAT:- Payment made on account of entry tax; provision for warranty and sales services; software expenses and cost of air tickets and other travel expenses. It is not in dispute that for the earlier AYs in each of the above issues, the Court has answered the questions in favour of the Assessee and against the Revenue. The assessment order passed by the AO, in fact, notes that Question no.1 stands answered by this Court against the Revenue.
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2016 (1) TMI 1411
Power to remand the case back to the arbitrator - HELD THAT:- The objecting court has no power to remand the matter back to the arbitrator once the court has set aside the award. It is not the case where the arbitrator has omitted to refer to certain claims so exception.
Instead of pondering upon the calculations referred to during the course of arguments, I am of the view that the same shall be subject matter of the objecting court. In essence, both the parties shall be given one-one effective opportunity to submit their calculations viz-a-viz amount constituting 75% of the awarded amount as per award dated 21.6.2010 and thereafter the objecting court shall determine 75% of the awarded amount and give another fifteen days' time to the appellant to deposit 75% of the amount. In case of non-deposit of the same, objections shall be deemed to have been dismissed. If otherwise, the objecting court shall decide the matter pragmatically, much less in accordance with law.
Appeal disposed off.
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2016 (1) TMI 1410
CIT(A) power to correct jurisdictional errors - Disallowance u/s 14A - Non-recording of satisfaction results - whether the basic functions assigned to the assessing officer in the Act can be discharged by CIT(A) while exercising his coterminous power or not? - HELD THAT:- Under section 251 CIT(A) in an appeal against an order of assessment is empowered to confirm, reduce, enhance or annul the assessment but if the assessment order suffers from jurisdictional errors then CIT(A) has no power to correct such jurisdictional errors. The coterminous powers vested in CIT(A) does not imply that he can clothe himself with powers to correct the jurisdictional defects in the assessment order. It is well settled law that where the very initiation of assessment proceedings by the AO was invalid then Ld. CIT(A) cannot direct for making a fresh assessment. CIT(A) should annul the assessment where the assessment proceeding is a nullity in the sense that the AO had no jurisdiction ab initio to take the proceeding.
AO could take up the issue regarding disallowance u/s 14A only after recording satisfaction. Non-recording of satisfaction results into creeping of illegality in the assessment order and not a mere irregularity. The jurisdiction of recording satisfaction for invoking section 14A lies with the assessing officer and once he has not recorded such satisfaction then the said basic function of AO which clothes him jurisdiction to make disallowance u/s 14A cannot be usurped by CIT(A). We, therefore set aside the order of CIT(A). - Decided in favour of assessee.
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2016 (1) TMI 1409
Effect of amendment - Rule 8(8) of the Tamil Nadu Minor Mineral Concession Rules, 1959 which was amended by G.O. Ms. No. 391 dated 17.11.2000 - whether the amendment would have retrospective effect or will become operational prospectively i.e. only from 17.11.2000?
HELD THAT:- Rule 8(8) of the 1959 Rules which prescribes period for grant of lease is not procedural but substantive in nature. By amendment, change in the said Rule was effected with the classification of areas into "virgin area" and "other areas that is non-virgin areas". It is only in respect of virgin areas that the period of lease stands enhanced to ten years whereas in respect of other areas the period of lease continues to be five years. This was clearly a substantive amendment which had nothing to do with any procedure. There was no concept of "virgin area" in the unamended rule which has been introduced for the first time by way of aforesaid amendment.
An error is committed by the High Court in holding that fixation of period of lease is also procedural. When a decision to grant lease is substantive in nature, the period for which the lease is to be granted would also be substantive. Thus, the conclusion arrived at by the High Court is contrary to law.
It is to be borne in mind that a particular provision in a procedural statute may be substantive in nature and such a provision cannot be given retrospective effect.
Appeal allowed - decided in favor of appellant.
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2016 (1) TMI 1408
Adjustment restricted only on international transactions where the assessee has selected TNMM and applied the same on entity level by ITAT - Addition as the adjustment is with ±5 per cent - Tribunal deleting the addition as the adjustment is with ±5 per cent. as the Income-tax Appellate Tribunal has restricted the adjustment only on associated enterprise transactions which has resulted the adjustment within ±5 per cent. - Disallowance under section 14A - HELD THAT:- Delay condoned. Issue notice on Question No. (c) in the Special Leave Petitions.
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2016 (1) TMI 1407
Deduction u/s. 43B - expenses incurred by the assessee on account of taxes and fees not pertaining to the year under consideration - method of accounting followed by the company - HELD THAT:- Tribunal in assessee’s own case for the assessment year 2003-04 placing reliance on the decision rendered by the Special Bench in the case of DCIT Vs. Glaxo Smithkline Consumer Healthcare Ltd. [2007 (7) TMI 334 - ITAT CHANDIGARH] and hold that the deduction for tax, duty etc., is allowable under section 43B of the Income-tax Act, 1961 on payment basis before incurring the liability to pay such amounts. Accordingly, the first question is answered in affirmative and in favour of the assessee.
Expenditure and free services to the customers - HELD THAT:- This issue has also been considered in the assessee’s own case for the assessment year 2003-04 placing reliance on the decision of BHARAT EARTH MOVERS VERSUS COMMISSIONER OF INCOME-TAX [2000 (8) TMI 4 - SUPREME COURT] rejected the contentions of the Revenue and upheld the findings of Commissioner of Income Tax (Appeals) in favour of the assessee. What should be certain is the incurring of the liability. It should also be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain - Decided against revenue
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2016 (1) TMI 1406
TP adjustment - exclusion of certain companies and against inclusion of certain companies by the TPO and as confirmed by the DRP and exclusion of certain companies as directed by DRP - HELD THAT:- As regards Accentia Technologies Ltd., is concerned, assessee had contended that the company operates in a different environment from that of the tax- payer and further that it has intangibles of Brand/IPRs. It was also stated that Accentia Technologies Ltd., used its own software on which it owns IP rights and offers different services to its customers as is evidenced from the annual report. Assessee had also objected that the company operates in knowledge process outsourcing and provides data analytics, data management and process improvement solutions to global enterprise clients.
As regards Infosys BPO Ltd., is concerned, it was submitted that the company has huge turnover with global brand value and operates on large scale with lakhs of employees. It was submitted that the talent pool available with such companies is significantly different and high value and such companies having different functions, assets and risk profile is to be excluded.
As regards TCS E-Serve International Ltd., is concerned, the assessee had contended that the assessee is a subsidiary of TCS e-Serve Limited and being part of the group of a large conglomerate, this company has large client base.
As regards TCS E-Serve Limited, though TCS E-Serve International Ltd., has not been considered in any of the above decisions, we find that the rationale on which these companies have been excluded is also applicable to TCS E-Serve International Ltd. - we direct the TPO/A.O. to exclude TCS E-Serve International Ltd., also from the final list of comparables. Accordingly, Ground No.3 of the assessee is allowed
International transactions - Disallowance of expenditure of copyright infringement settlement expenses paid to the A.E. as non-operating and extraordinary expenditure while calculation of arms length margin - HELD THAT:- Unless it is found to be not relating to the normal business operations of the assessee company, it cannot be directed to be excluded from the operating expenditure of the assessee. Further, assessee’s contention that it does not relate to the relevant financial year is also to be verified by the A.O. In view of the same, we deem it fit and proper to remit this issue to the file of the TPO for re-determination as to whether it forms part of the operating expenditure of the assessee.
Seeking inclusion of two companies ICRA Online and Territory Services Ltd., as comparables to that of the assessee company, the Ld. Counsel for the assessee, has drawn our attention to the submissions of the assessee before the TPO and as to why the TPO has rejected these companies. He has also drawn our attention to the factual inconsistencies in the findings of the TPO against these two companies. Considering the same, we remit the issue to the file of TPO for reconsideration as to whether these factual inconsistencies do exist and after verification of the said details, the TPO may take a decision in accordance with law. Ground No.4 of the assessee is treated as allowed for statistical purposes
Addition u/s 36(1)(ii) loyalty rewards - HELD THAT:- We find that the loyalty rewards do not fall in the same category as bonus and commission as envisaged under section 36(1)(ii) of the Act. Therefore, respectfully following the judgment in the case of Sri Ram Ltd.. vs. CIT (2008 (4) TMI 273 - DELHI HIGH COURT), we direct the A.O. the allow this expenditure.
Deduction u/s 10A - Reduce the telecommunication charges from both the export turnover as well as total turnover for the purpose of computation of deduction under section 10A - This issue is covered in favour of the assessee by the decision in the case of CIT & another vs. Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT]
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2016 (1) TMI 1405
Reopening of assessment - income chargeable to tax has escaped assessment within the meaning of section 147 - addition on such other income found during the course of assessment proceedings - HELD THAT:- Assessing Officer has not made any addition with regard to the job work receipts alleged to have not been disclosed by the assessee. Therefore, in view of the case of Ranbaxy Laboratories Ltd. vs. CIT [2011 (6) TMI 4 - DELHI HIGH COURT] and CIT vs. Jet Airways (I) Ltd. [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] we are of the view that expression "and also" employed in section 147 of the Act has denuded the Assessing Officer to make any addition on any such other income found during the course of assessment proceedings unless addition is being made on an issue for which assessment is reopened. We allow the Cross Objections and quash the reassessment orders.
Addition u/s 68 - unexplained cash credit - loans from friends - HELD THAT:- Assessee has shown loans from friends and relatives and names of all these ten persons have been shown in the balance sheet. The credit balance against their names is identical as noticed by the Assessing Officer in para 11 of the assessment order. Thus these are the loans brought forward from earlier years. Addition u/s 68 can be made of the amount(s) which are noticed by the AO as credit balance in the account in the year in which they were introduced. These amounts have not been introduced for the first time in this year. Therefore, the nature and source cannot be enquired in this year. For this reason we allow this ground and delete the addition - Decided in favour of assessee
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2016 (1) TMI 1404
Revision u/s 263 - Ex-parte order - Depreciation on vehicles – whether to be allowed @ 30% or 15% - HELD THAT:- As find from the sample invoices submitted before us in the paper book that assessee raises separate charges for transportation of goods from CFS to Kolkata Port Trust and vice versa on per container basis. Hence it is proved that the transportation hire charges income is duly offered by the assessee in the sum of ₹ 53.60 lacs which is included in the total receipts of ₹ 349.28 lacs under the head ‘Income from services’.
This goes to prove that the vehicles of the assessee were used for transporting goods of the persons using assessee’s CFS facility. Hence it can be safely concluded that the vehicles were used by the assessee in the business of running them on hire thereby becoming eligible for depreciation @ 30% as against 15% stated by CIT in his section 263 order. AO had rightly appreciated the factual position of the assessee and had granted depreciation @ 30%. AO even in subsequent assessment year 2011-12 u/s 143(3) proceedings dated 27.2.2015 had allowed the depreciation on these vehicles @ 30%. Hence we hold that the order passed by the AO cannot be termed as erroneous.
Bogus purchases - based on report of DGIT (Inv.), Mumbai - No material provided to assesse - No material was part of record also - HELD THAT:- We find no details / evidence whatsoever has been mentioned in the impugned show cause elaborating on the so called ‘information’. We find that no specific information is discernible from the impugned notice. We also find that the assessee has not been provided with any specific evidence which would in any manner suggest that the purchases made by the assessee were bogus. Whether any statement on oath has been recorded from M/s DCL is not on record before us and even if it be, the same has not been provided to the assessee for his records and rebuttal. Hence we find that the show cause notice issued by the Learned CIT on this issue is only a mere allegation that has been raised against the assessee without any material evidence on record. The information alleged to have been obtained from DGIT (Inv.), Mumbai by the Learned CIT ought to have been shared with the assessee for his rebuttal in line with the principles of natural justice. Expecting an assessee to reply in a quasi judicial proceeding without knowing for what purpose he has been asked to do so, is not in accordance with law.
In the instant case before us, the assessee is definitely in a much better position than that of the assessee’s mentioned in the aforesaid judgements. As in the case before us, the assessee had even furnished the details of VAT payments and filing of VAT returns by the supplier before the Department of Sales Tax. The facts in the aforesaid case are squarely applicable to the facts of the case before us and hence we hold that the assessee had duly discharged its complete onus to prove the genuinity of purchases made from DCL and there is no scope for drawing any adverse inference with regard to the same in the facts of the case.
We also find that the Learned CIT having issued show cause notice u/s 263 of the Act to examine two specific issues of allowance of depreciation on vehicles and bogus purchases, ought not to have set aside the entire assessment to be done denovo as it would only result in giving another innings to the Learned AO to have a review on the concluded issues. grounds raised by the assessee are allowed.
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2016 (1) TMI 1403
CENVAT Credit - input services - pollution control - denial on account of nexus - Held that?:- The pollution being an evil that is eradiated by statutory provision and while doing so the expense incurred not being questioned and also the service tax thereon remain undisputed, disallowance of the service tax paid to grant CENVAT credit is inconceivable - appeal allowed.
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