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Showing 101 to 120 of 1266 Records
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2012 (10) TMI 1179
Issues involved:
The judgment addresses the issues of whether gain arising from forward exchange contracts should be assessable as capital gains under the Indio-Singapore DTAA and the charging of interest under section 234B.
Issue 1: Gain from forward exchange contracts
The appellant, a Foreign Institutional Investor (FII) incorporated in Singapore, claimed short term capital gains on forward exchange contract transactions as not taxable. The Assessing Officer (AO) treated it as income from other sources, but the CIT(A) ruled in favor of the assessee, considering the gain as capital gain. The Tribunal referred to previous cases and held that income from such transactions for an FII should be treated as capital gain due to its direct nexus with the investment, thus not chargeable to tax under the DTAA.
Issue 2: Charging of interest under section 234B
The judgment notes that the charging of interest under section 234B has become consequential in the present case based on the circumstances. The facts and circumstances for the subsequent assessment year were similar to the earlier one, and no separate submissions were made. The Tribunal upheld the impugned order for the later year as well, leading to the dismissal of both appeals.
The judgment was pronounced on 03rd October, 2012, by the Appellate Tribunal ITAT Mumbai, with Shri R.S. Syal as the Accountant Member and Shri Amit Shukla as the Judicial Member. The appeals related to assessment years 2005-06 and 2006-07, with common issues addressed in both appeals for convenience in disposal. The Tribunal upheld the CIT(A)'s decision regarding the treatment of gain from forward exchange contracts as capital gains for the FII appellant, in line with previous rulings, and dismissed both appeals.
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2012 (10) TMI 1178
Issues involved: Condonation of delay in filing appeal, application for registration u/s 12A, consideration of public interest in condonation of delay, fresh assessment for charitable activity exemption u/s 11 and 12.
Condonation of delay in filing appeal: The appellant sought condonation of delay of 750 days in filing an appeal against the Tribunal's order dated 3.4.2009, citing a bonafide mistake by the department. The appellant referenced Supreme Court decisions to support the contention for condonation.
Consideration of public interest in condonation of delay: The respondent's counsel argued against condonation of delay, citing Supreme Court decisions emphasizing that public interest should not always be the dominant criteria for condonation. However, the Court noted a liberal approach for condonation of delay where public interest is involved, as per the Supreme Court's decision in West Bengal Infrastructure Development case.
Fresh assessment for charitable activity exemption u/s 11 and 12: The Court, after considering submissions from both counsels, remanded the matter to the Assessing Officer for a fresh assessment. This allowed both parties to establish whether the activities of the assessee qualify as charitable and are eligible for exemption under Sections 11 and 12, based on the facts and material presented.
Conclusion: The Court allowed the application for condonation of delay and condoned the delay. The appeal was partly allowed, with the matter remanded for a fresh assessment regarding the charitable activity exemption under Sections 11 and 12.
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2012 (10) TMI 1177
Issues involved: Appeal against order of CIT(A) for AY 2007-08; Disallowance u/s 40(a)(i) of ITA.
Issue 1: Order passed without granting opportunity to appellant
- Assessee raised grounds challenging order of CIT(A) passed without granting opportunity to explain services rendered by agent.
- Assessee did not press this ground during hearing, which was subsequently dismissed.
Issue 2: Disallowance made u/s 40(a)(i)
- Assessing Officer disallowed payment made to agent for non-deduction of TDS.
- Assessee contended payment was for commission agent services outside India, not taxable in India.
- AO considered payment for managerial services, falling under 'fee for technical services' u/s 9(1)(vii) of IT Act.
- CIT(A) upheld disallowance, stating payment included fees for technical services taxable u/s 195 of IT Act.
Arguments before ITAT:
- Assessee argued payment was commission for services as per agreement with agent.
- Assessee pointed out no disallowance in earlier years, hence sec. 195 not applicable.
- Revenue argued services provided by agent were managerial, falling under 'fee for technical services'.
- ITAT examined agency agreement clauses and payment details, concluding payment based on sales turnover, not for specific services.
- ITAT held payment was commission to agent, not taxable in India, deleted disallowance u/s 40(a)(ia).
Conclusion:
- ITAT partly allowed the appeal, ruling in favor of the assessee.
- Disallowance u/s 40(a)(ia) was deleted.
- Order pronounced on 30th Oct 2012.
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2012 (10) TMI 1176
Disallowance made under the head “Provisions on Standard Assets” - Held that:- Provision for contingent or unaccured liability is not allowable as deduction - We direct the Assessing Officer to delete such disallowance and allow the claim of the assessee in this regard.
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2012 (10) TMI 1175
Suit for specific performance - part performance of the contract - no registration of the contract - Held that:- (a) a suit for specific performance, based upon an unregistered contract/agreement to sell that contains a clause recording part performance of the contract by delivery of possession or has been executed with a person, who is already in possession shall not be dismissed for want of registration of the contract/agreement;
(b) the proviso to Section 49 of the Registration Act, legitimises such a contract to the extent that, even though unregistered, it can form the basis of a suit for specific performance and be led into evidence as proof of the agreement or part performance of a contract.
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2012 (10) TMI 1174
Issues involved: Reopening of assessment u/s 147 of the Income Tax Act, 1961 and computation of deduction u/s 80-IB.
Reopening of assessment u/s 147:
The appeal was filed against the order of CIT (A)17, Mumbai dated 27.1.2011 for the assessment year 2005-2006. The assessee challenged the reopening of the assessment u/s 147 of the Income Tax Act, 1961. The Assessing Officer excluded the unabsorbed depreciation of Rs. 27,37,487/- while computing the allowable deduction based on a Supreme Court judgment. The assessee relied on a High Court judgment which stated that unabsorbed depreciation cannot be reduced before computing the deduction u/s 80-IB. The CIT (A) dismissed the legal ground relating to reopening and confirmed the AO's view on the set-off of unabsorbed depreciation. The CIT (A) followed the Supreme Court judgment in the case of CIT vs. Kotagiri Industries Co. of Tea Factory Ltd. Aggrieved, the assessee appealed.
Computation of deduction u/s 80-IB:
Regarding the computation of the allowable deduction u/s 80-IB vis-a-vis the unabsorbed depreciation of Rs. 27,37,487/-, the assessee argued that the profits of the eligible unit should be computed on a standalone basis without reducing the unabsorbed depreciation. The assessee cited a Tribunal order and a High Court judgment to support this argument. The Tribunal found that losses from other eligible units cannot be set off against the profits of the eligible unit for calculating the deduction under section 80-IB. The Tribunal held that the eligible business's profits should not be reduced by setting off losses or unabsorbed depreciation. The issue required adjudication by the CIT (A) based on the Tribunal's decision. The appeal was partly allowed.
Separate Judgment: No separate judgment was delivered by the judges.
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2012 (10) TMI 1173
Issues Involved:
1. Classification of income from the sale of shares as either 'business income' or 'short term capital gains'.
Summary:
Issue 1: Classification of Income from Sale of Shares
The primary issue in this case was whether the income from the sale of shares should be classified as 'business income' or 'short term capital gains'. The assessee argued that the investment in shares was made with the intention of capital appreciation and not for trading purposes. The assessee provided several points to support this claim, including the lack of registration with a stock exchange, the treatment of shares as investments in the books of accounts, and the holding period of shares being more than 100 days for a significant portion of the transactions.
The CIT(A) analyzed the submissions and various case laws, ultimately directing the AO to treat the gains as short term capital gains. The Revenue, aggrieved by this decision, appealed to the ITAT, arguing that the AO had correctly treated the income as business income based on the volume, frequency, and nature of transactions.
The ITAT referred to the decision in the case of CIT Vs. P.V.S. Raju & Anr. and other relevant case laws. The ITAT emphasized that the classification of shares in the books as investments is not conclusive. The intention at the time of purchase, frequency of transactions, and the nature of activities are critical factors. The ITAT found that the assessee's activities exhibited high volume, frequency, and regularity, indicating a business activity rather than mere investment.
Conclusion:
The ITAT set aside the order of the CIT(A) and restored the order of the AO, classifying the income from the sale of shares as 'business income'. The appeal of the Revenue was allowed.
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2012 (10) TMI 1172
Disallowance the depreciation on motor car registered in the name of the director - Held that:- The assessee is entitled to depreciation on the cars as though they are named in the name of director were to be used for the business of the assessee and not for personal use. Accordingly, we, while deleting the disallowance made by the A.O. and enhancement made by the ld. CIT(A) in this regard, allow the claim of the assessee.
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2012 (10) TMI 1171
Reopening of assessment - Held that:- It is not the case of change of opinion which has resulted in initiation of proceedings under section 147 and 148. Therefore, we uphold the findings of the CIT(A) and dismiss this ground of appeal of the assessee.
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2012 (10) TMI 1170
Issues Involved:1. Jurisdiction to validate the sale of shares post winding-up order. 2. Bona fide nature of the transaction and its implications on the revival of the company. Summary:Issue 1: Jurisdiction to validate the sale of shares post winding-up orderThe point for consideration was whether the Court had jurisdiction to validate the sale of shares of the company after the winding-up order. The applicant argued that there was no restriction on the Court's jurisdiction in this regard, while the Liquidator and secured creditors opposed the relief sought. The Court referred to Section 536(2) of the Companies Act, which allows the Court to validate any disposition of property or transfer of shares made after the commencement of winding up unless the Tribunal otherwise orders. The Court concluded that its jurisdiction extends until the company is dissolved, and thus it can validate transfers made after the winding-up order but before dissolution. Issue 2: Bona fide nature of the transaction and its implications on the revival of the companyThe applicant contended that he had taken various steps for the revival of the company, including purchasing shares with the intention to discharge the company's dues and initiate revival steps. The Official Liquidator and secured creditors challenged the bona fide nature of the transaction. The Court examined the evidence, including communications between the applicant and creditors, payments made by the applicant towards the company's dues, and efforts for an out-of-court settlement. The Court found that the applicant's actions were bona fide and aimed at the company's benefit. Consequently, the Court validated the transfer of shares, rejecting the objections raised by the respondents. Conclusion:The Court validated the transfer of shares post winding-up order, recognizing the applicant's bona fide intentions and efforts towards the company's revival. The applications were ordered as prayed for, providing statutory protection and equitable consideration to the applicant's transactions.
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2012 (10) TMI 1169
The Appellate Tribunal CESTAT Ahmedabad dismissed the appeal due to non-compliance with the High Court's order to deposit the amount within the specified time. The High Court declined to grant an extension for depositing the balance amount.
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2012 (10) TMI 1168
Agreement of Hire Purchase - On Default of Loan Instalments Forcibly taken away the Vehicle from Lawful Possession - HC power in quashing of criminal proceeding - The respondent financers had forcibly taken away the vehicle financed by them and illegally deprived the petitioner from its lawful possession and thus, committed a crime.
HELD THAT:- In an agreement of hire purchase, the purchaser remains merely a trustee/bailee on behalf of the financier/financial institution and ownership remains with the latter. Thus, in case the vehicle is seized by the financier, no criminal action can be taken against him as he is repossessing the goods owned by him. Therefore, The HC has rightly quashed the proceedings and no interference is required.
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2012 (10) TMI 1167
Issues involved:
The judgment involves the application for Special Leave to Appeal u/s 378 of the Code of Criminal Procedure against the dismissal of a complaint case u/s 138 of the Negotiable Instruments Act by the Judicial Magistrate, Ranchi.
Issue 1: Statutory appeal vs. Special Leave to Appeal
The petitioners sought Special Leave to Appeal u/s 378(4) of the Code of Criminal Procedure, arguing errors in facts and law by the trial Court. The State-A.P.P. contended that the statutory appeal provision u/s 372 should be exhausted first before approaching the High Court. The State emphasized that when the complainant is also the victim, the statutory appeal must be availed before seeking Special Leave to Appeal.
Issue 2: Victim and complainant being the same person
The petitioners, being both the victims and complainants, relied on certain decisions to support their application for Special Leave to Appeal. However, the Court noted that the statutory right to appeal u/s 372 of the Code of Criminal Procedure is available to the victims/complainants in such cases, rather than directly seeking Special Leave to Appeal u/s 378(4).
Judgment:
The Court dismissed the appeal, emphasizing that the petitioners, as victims and complainants, should first exhaust the statutory remedy of appeal u/s 372 before the Sessions Judge/Judicial Commissioner, Ranchi. It was highlighted that in cases where the complainant and victim are the same, the statutory appeal should be preferred over seeking Special Leave to Appeal directly. The Court underscored the importance of following the judicial hierarchy and exhausting lower forum remedies before approaching higher forums. The refusal to grant Special Leave to Appeal was based on the principle of "ubi jus ibi remedium," indicating that the petitioners were not without a remedy under the statutory appeal provision u/s 372.
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2012 (10) TMI 1166
1. ISSUES PRESENTED and CONSIDERED The legal judgment considered the following core legal questions: (i) Whether an appeal filed by the victim under the proviso to Section 372 of the Criminal Procedure Code (Cr.P.C), challenging acquittal, conviction for a lesser offence, or awarding inadequate compensation, is maintainable when the State has also filed an appeal against the same order for the same purpose. (ii) Whether an appeal filed by the State should not be entertained if the victim has already filed an appeal under the proviso to Section 372 of Cr.P.C. against the same order. (iii) Whether a victim, when preferring an appeal challenging the acquittal under the proviso to Section 372 of Cr.P.C., is required to first seek leave of the Court, as is required in the case of an appeal being preferred by the State. 2. ISSUE-WISE DETAILED ANALYSIS Issue (i): Victim's Appeal Maintainability - Legal Framework: The proviso to Section 372 of Cr.P.C. grants victims the right to appeal against acquittals, convictions for lesser offences, or inadequate compensation. This right is independent and not contingent upon the State's actions. - Court's Interpretation: The court emphasized that the victim's right to appeal is a substantive right conferred by statute and cannot be diluted by judicial pronouncement. The victim's appeal is independent of the State's appeal. - Key Evidence and Findings: The court noted the legislative intent behind the amendment to provide victims with a substantive right of appeal, recognizing victims as distinct parties in the criminal justice process. - Application of Law to Facts: The court applied the statutory provisions to affirm that both the victim and the State can independently file appeals against the same order. - Competing Arguments: The State argued that the victim's appeal should be dependent on the State's appeal, but the court rejected this, emphasizing the independent nature of the victim's right. - Conclusion: The victim's appeal is maintainable irrespective of the State's appeal. Issue (ii): State's Appeal Maintainability - Legal Framework: Section 378 of Cr.P.C. provides the State with the right to appeal against acquittals, subject to certain procedural requirements. - Court's Interpretation: The court held that the State's right to appeal is not affected by the victim's appeal. Both appeals can coexist independently. - Key Evidence and Findings: The court observed that the legislative framework allows for both the State and the victim to pursue appeals independently. - Application of Law to Facts: The court applied the statutory provisions to affirm the maintainability of the State's appeal. - Competing Arguments: It was argued that the State's appeal should not be entertained if the victim's appeal is admitted, but the court disagreed, citing the independent statutory rights. - Conclusion: The State's appeal is maintainable regardless of the victim's appeal. Issue (iii): Requirement of Leave for Victim's Appeal - Legal Framework: Section 378 requires leave for appeals against acquittals, but the proviso to Section 372 does not explicitly impose such a requirement on victims. - Court's Interpretation: The court differentiated between victims who are complainants and those who are not. If the victim is also the complainant, leave is required; otherwise, it is not. - Key Evidence and Findings: The court noted the absence of any legislative amendment to Section 378 to require leave for victims not being complainants. - Application of Law to Facts: The court applied the statutory provisions to clarify the procedural requirements for victims' appeals. - Competing Arguments: There was debate over whether victims should seek leave, but the court concluded that the statutory language should be strictly followed. - Conclusion: Leave is required only if the victim is the complainant; otherwise, no leave is necessary. 3. SIGNIFICANT HOLDINGS - Verbatim Quotes: "The right of appeal being statutory one, the language employed by the legislature should be strictly followed." - Core Principles Established: The judgment established that the victim's right to appeal is independent and substantive, not contingent upon the State's appeal. Both the victim and the State can maintain appeals independently. - Final Determinations: The court concluded that both the victim's and the State's appeals are maintainable independently. The requirement of leave depends on whether the victim is also the complainant. The judgment provides a comprehensive analysis of the statutory rights of victims and the State in criminal appeals, emphasizing the independent nature of these rights and clarifying procedural requirements.
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2012 (10) TMI 1165
Issues Involved:
1. Validity of the imposition and recovery of liquidated damages/penalty without judicial/quasi-judicial determination.
2. Applicability of the dispute redressal mechanism under Clause 24 of the General Condition of Contract.
3. Legal principles governing the recovery of damages for breach of contract.
Summary:
1. Validity of the Imposition and Recovery of Liquidated Damages/Penalty:
The petitioner challenged the imposition of damages/penalty amounting to Rs. 5,42,90,686/- by the respondents, arguing that no liability on account of damages/penalty has been crystalized as there is no judicial/quasi-judicial determination thereof either by any Court or by the Arbitrator. The court held that the respondents cannot recover the amount of penalty and liquidated damages without adjudication by the Arbitral Tribunal/Court when the imposition of the penalty/liquidated damages is challenged by the petitioner. The court emphasized that as per Section 73 of the Contract Act, compensation for breach of contract can only be awarded after proving actual loss or damage suffered. The court cited the Supreme Court's ruling in Union of India Vs Raman Iron Foundry, AIR 1974 SC 1265, which stated that a claim for liquidated damages does not give rise to a debt until the liability is adjudicated and damages assessed by a decree or order of a Court or other adjudicatory authority.
2. Applicability of the Dispute Redressal Mechanism:
Clause 24 of the General Condition of Contract provides a dispute redressal system, which includes referring disputes to a competent authority and, if necessary, to a Standing Empowered Committee. The court noted that the petitioner had previously withdrawn writ petitions with liberty to invoke the alternative remedy of arbitration available under the contracts. The court reiterated that disputes between the parties should be redressed based on the mechanism provided under Clause 24.
3. Legal Principles Governing the Recovery of Damages for Breach of Contract:
The court discussed the principles under Sections 73 and 74 of the Contract Act, highlighting that damages for breach of contract must be proved and are awarded to compensate for actual loss or damage suffered. The court referred to the Supreme Court's decision in ONGC Ltd. Vs Saw Pipes Ltd., AIR 2003 SC 2629, which held that reasonable compensation can be claimed for breach of contract, whether or not actual loss is proved, provided it is a genuine pre-estimate of loss. The court concluded that even if there is a clause of liquidated damages, it is for the court to determine whether it represents a genuine pre-estimate of damages, and the person claiming liquidated damages must prove that legal injury resulted from the breach.
Conclusion:
The court quashed the impugned communication dated 11.06.2012 addressed to the respondents No. 04 to 42, ruling that the respondents cannot recover the imposed penalty/liquidated damages from other contracts being executed without judicial determination. The writ petition was allowed, and the rule was made absolute.
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2012 (10) TMI 1164
Issues Involved:
1. Furnishing security by Defendant No.1.
2. Default on repayment/redemption of bonds.
3. Misrepresentation and siphoning of sale proceeds.
4. Valuation of Cloud Computing Business.
5. Attachment before judgment.
6. Undertakings and status quo by Defendants.
Summary:
1. Furnishing Security by Defendant No.1:
The Plaintiff applied for ad-interim relief directing Defendant No.1 to furnish security of Rs. 500 crores to secure the Plaintiff's claim. Defendant No.1 had issued convertible bonds in 2006 and 2007, which matured in 2011 and 2012, respectively, but failed to make any payments upon maturity.
2. Default on Repayment/Redemption of Bonds:
Defendant No.1 did not repay or redeem the bonds when they matured. The Plaintiff, acting as trustee for the bondholders, issued demand notices and declared the 2012 bonds as due and payable. Despite these notices, Defendant No.1 did not make any payments.
3. Misrepresentation and Siphoning of Sale Proceeds:
The Plaintiff alleged that Defendant No.1 misrepresented to its shareholders and the Bombay Stock Exchange that the sale proceeds of its MSD business would be used to repay the bonds. However, the Plaintiff claimed that Defendant No.1 siphoned off the sale proceeds and did not pay any amount towards the redemption of the bonds.
4. Valuation of Cloud Computing Business:
The Court directed the valuation of Defendant No.1's Cloud Computing Business. Initially valued at Rs. 598 crores by M/s. Ernst & Young Pvt. Ltd., a subsequent valuation by Grant Thornton valued it between Rs. 198 crores and Rs. 239 crores. The Division Bench found the initial valuation unsatisfactory and directed a revaluation, which estimated the business between Rs. 194 crores and Rs. 211 crores.
5. Attachment Before Judgment:
The Plaintiff sought attachment of Defendant No.1's assets u/s Order 38 Rules 5 and 6 of the CPC, 1908. The Court considered the Plaintiff's claim and the Defendants' conduct before the suit, noting that the Defendants had not disposed of any properties post-filing of the suit. The Court referenced precedents, including the Supreme Court's decision in Sardar Govindrao Mahadik and Raman Tech. & Process Engg. Co., emphasizing that attachment before judgment is to ensure the Plaintiff's decree is satisfied.
6. Undertakings and Status Quo by Defendants:
Defendant Nos. 1, 5, and 6 undertook not to dispose of their Cloud Computing Business, fixed assets, investments, and money held in a joint escrow account. They also agreed to ensure the return of loans from subsidiaries amounting to Rs. 25 crores within six months, to be deposited in a fixed deposit and not utilized.
Conclusion:
The Court accepted the undertakings provided by the Defendants and disposed of the application for further ad-interim reliefs. The hearing of the suit was expedited, and the Chamber Summons for revocation of leave granted to the Plaintiff was scheduled for hearing on 30th October 2012.
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2012 (10) TMI 1163
Offence nder the provisions of the N.D.P.S. Act - huge quantity of Schedule ‘H’ drug containing narcotic substance was being transported - Held that:- Since the appellants had no documents in their possession to disclose as to for what purpose such a huge quantity of Schedule ‘H’ drug containing narcotic substance was being transported and that too stealthily, it cannot be simply presumed that such transportation was for therapeutic practice as mentioned in the Notifications dated 14.11.1985 and 29.1.1993. Therefore, if the said requirement meant for therapeutic practice is not satisfied then in the event of the entire 100 ml. content of the cough syrup containing the prohibited quantity of codeine phosphate is meant for human consumption, the same would certainly fall within the penal provisions of the N.D.P.S. Act calling for appropriate punishment to be inflicted upon the appellants. Therefore, the appellants’ failure to establish the specific conditions required to be satisfied under the above referred to notifications, the application of the exemption provided under the said notifications in order to consider the appellants’ application for bail by the Courts below does not arise.
As far as the grievance raised on the ground that the appellants were illegally detained beyond 24 hours by the police is concerned, the conclusion of the High Court having been based on the satisfaction reached by it, we do not find any scope to interfere with the same.
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2012 (10) TMI 1162
Issues Involved: Appeal against penalty order u/s. 271(1)(c) of the Income Tax Act for treating expenditure as capital instead of revenue.
Issue 1: Proper appreciation of facts and case laws
The appellant appealed against the penalty order passed by the Assessing Officer u/s. 271(1)(c) of the Income Tax Act, alleging that the Commissioner of Income-tax (A) erred in confirming the penalty order without proper appreciation of facts and the case laws submitted before him.
Issue 2: Difference in opinion leading to penalty
The appellant contended that the penalty order was confirmed despite the disallowance arising from a difference in opinion without any intention to conceal income, challenging the decision of the Commissioner of Income-tax (A).
Issue 3: Ignoring precedent set by ITAT
The appellant argued that the Commissioner of Income-tax (A) erred in ignoring the judgment of the Honorable ITAT for the assessment year 2000-01, where it was concluded that a portion of the repairs claimed as capital expenditure should be treated as revenue expenditure.
Issue 4: Request for amendment of grounds of appeal
The appellant requested the authority to add, delete, amend, alter, or modify any grounds of appeal as deemed necessary.
In the assessment, the Assessing Officer observed that the appellant had claimed an expenditure under the head 'Repairs' for restructuring and modernizing its factory premises, which was treated as capital expenditure. The disallowance made by the AO was upheld by the First Appellate Authority (FAA) and the ITAT.
Penalty proceedings u/s. 271(1)(c) were initiated based on the disallowance, and the penalty was imposed by the AO. The appellant challenged the penalty order before the FAA, who upheld it invoking explanation 1 of Section 270(1)(c).
During the proceedings, the Authorized Representative argued that the disallowed expenditure was treated as revenue by the appellant, and the disagreement with the AO did not amount to inaccurate particulars being filed. The Departmental Representative, however, supported the orders of the AO and FAA, alleging inaccurate particulars were filed.
The Tribunal found that the disallowed expenditure being treated as capital did not automatically imply inaccurate particulars were filed. The claim made by the appellant, supported by documentary evidence, did not warrant penalty under Section 271(1)(c) for concealing income. The Tribunal differentiated between a false claim and a genuine claim, emphasizing that penalty cannot be imposed solely based on a claim being rejected in assessment proceedings.
Referring to the case law of Reliance Petro Products P. Ltd, the Tribunal concluded that since details of expenditure were provided during assessment, the penalty imposed by the AO and confirmed by the FAA was unwarranted. Consequently, the appeal filed by the appellant was allowed, and the penalty was set aside.
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2012 (10) TMI 1161
Issues involved: Appeal u/s 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding addition made under Section 69-B of the Act.
Summary:
The appeal was filed challenging the Tribunal's order regarding the addition made under Section 69-B of the Income Tax Act. The respondent, a private limited company running a cold storage, declared a loss for the Assessment Year 1997-98. The company had shown a cost of construction in its books of account, which was later assessed by the Valuation Officer. The Assessing Officer made additions under Section 69-B based on the Valuation Officer's report. The Commissioner of Income Tax (Appeals) allowed the appeal, stating no addition was required. The Revenue appealed to the Tribunal, which dismissed the appeal.
The High Court noted that unless the books of account of the assessee are rejected, the Assessing Officer cannot refer the matter to the Valuation Officer, as per the decision in Sargam Cinema v. CIT [2010] 328 ITR 513. In this case, the books of account of the respondent-assessee were not rejected; only certain expenditure was disallowed, and an enhancement was made in the cost of construction based on the Valuation Officer's report. Therefore, the addition made based on the Valuation Officer's report was deemed unwarranted. The High Court upheld the Tribunal's order, stating that no interference was necessary, and consequently, the appeal was dismissed.
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2012 (10) TMI 1160
Capital Gain under Section 45 - Consideration received under the family settlement on transfer of right, title and interest in the family property - transfer under Section 2(47) - Held that:- ITAT following the decision of the Apex Court in the case of Maturi Pullaiah and Anr. v. Maturi Narasinham and ors. [1966 (3) TMI 81 - SUPREME COURT] held that there is no transfer of assets in the family arrangement and the amount received by the assessee is part of the family arrangement and not towards the transfer of any capital assets and hence no Capital Gains Tax liability arises. In our opinion, the decision of the ITAT is based on finding of facts, hence no question of law arises.
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