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Showing 101 to 120 of 1287 Records
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2014 (11) TMI 1191
Addition of renovation expenditure - unexplained investment on renovation of house is liable to assessed to tax - Held that:- Once the house does not belong to the Assessee, there is no evidence found during the course of the search that the Assessee has invested in the renovation of the house, u/s 69 the onus is on the Revenue to prove that the Assessee has made the investment which are not recorded in the books of accounts, if any, maintained by the Assessee.
The house where the renovation has been carried out does not belong to the Assessee. The papers and documents on the basis of which the addition has been made has been found from the house in which not only the Assessee, but the family of the Assessee was putting up. The renovation was to be carried out by the person to whom the house belonged. No cogent material or evidence has been brought on record even on the basis of the materials seized that the expenses for renovation have been incurred by the Assessee - onus lies on the Revenue by making the addition to prove that the Assessee had made the investment - if any addition has to be made for the renovation of the house, same should be made in the hands of the mother of the Assessee as well as the son of the Assessee to whom the house belongs. We, therefore, delete the addition - Decided in favour of assessee.
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2014 (11) TMI 1190
Long term capital gain exemption u/s 54F - Held that:- Section 54F(4) is pari materia with Section 54(2). Therefore, what follows is that when the statute prescribes expressly when the capital gain is to be offered to tax. It shall be treated accordingly. If the said amount is deposited in a Nationalized Bank as required under law, in capital gain account the deposit is construed as investment in new asset.
Subsequently if the amount deposited is not utilized the entire capital gain or the unutilized capital gain chargeable u/s 45 is to be offered for tax only in the previous year in which the period of three years from the date of the transfer of the original asset expires. Therefore, assessing the said amount for the assessment year 2005-06 when the property is sold on 28-04-2005 is erroneous. Though the assessee purchased a site on 26-09-2005, he could not put up construction because of business exigencies and thus sold the property on 6-10-2006. Immediately thereafter he offered the said amount for tax in the assessment year 2007-08. The authorities erred is assessing the income of the assessee for the assessment year 2005-06 in respect of the capital gain is contrary to law and therefore, it requires to be set aside. - Decided in favour of the assessee.
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2014 (11) TMI 1189
Validity of the assumption of jurisdiction u/s 153A - existence of conditions for issuance of warrant u/s 132A - Held that:- Additional grounds raised by the assessee, the AO has clearly not only not rebutted the contentions of the assessee but also has remained silent as to whether the conditions for issuance of warrant of search existed at all. In such circumstances, CIT(A) ought to have at least satisfied herself about the existence of conditions before concluding that that the jurisdiction has been validly exercised by the AO in view of the judgment of the jurisdictional High Court in the case of Ramaiah Reddy (2010 (9) TMI 862 - KARNATAKA HIGH COURT) on which the assessee has placed reliance upon. All the subordinate courts and authorities are bound by the decision of the jurisdictional High Court and has to follow the same in its letter and spirit.
We deem it fit and proper and remand the appeals for all the assessment years back to the file of the CIT(A) for proper adjudication of the additional ground of appeal relating to the validity of the jurisdiction u/s 153A as well as the existence of conditions for issuance of warrant u/s 132A of the Act. The other grounds of appeal raised by the assessee with regard to the merits of the disallowance of the addition made by the AO and as confirmed by the CIT(A) are not adjudicated at this stage and the assessee shall be at liberty to agitate the same in case the CIT(A) decides the ground of jurisdiction against the assessee - Appeals of the assessee are treated as allowed for statistical purposes
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2014 (11) TMI 1188
Addition on account of adjustment of Arm's length price of the international transaction on payment of royalty - application of CUP method - MAM selection - Held that:- DR could not justify the application of CUP method to Arms Length working.
The products manufactured by the appellant were developed from technology support provided by the AE, it would not have been possible so without the continuous AE support. The rights of access to the ongoing technical support and development of new products received by the appellant were clearly provided in the agreements entered into with the AE.
The cost benefit test as worked out by the TPO was not based on proper appreciation of the facts and thus CUP method applied by the AO / TPO was not justifiable. The judicial citations relied on by ld. CIT(A) as well as further judgments relied on by the assessee including Hon'ble High court in the case of Delhi EKL Appliances Ltd. (2012 (4) TMI 346 - DELHI HIGH COURT) support the view taken by ld. CIT(A). - decided against revenue
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2014 (11) TMI 1187
Area based exemption - development of industries in the Northeastern region, which continued to be the backward region - exemptions in respect of Sales Tax and Municipal Tax - doctrine of promissory estoppel
Held that:- Almost all the industry sectors in these areas are paying maximum duty through PLA and difference with all India ration is quite alarming. The above analysis coupled with the details of cases booked by DGCEL and representation of industry associations further prove that there appears to be a general tendency to bring raw materials on non-duty paid invoices or to show bogus production or bogus purchase to maximize payment of duty in cash. In fact, when other units in the country avails CENVAT Credit of say 68% of total duty (32% in PLA), there cannot be any plausible reasons to a vail credit to say 24% (76% in PLA) by units in these areas. This analysis clearly brings out a fact that misuse of excise duty concessions is rampant and it is across the industry.
Misuses are on account of administrative failure to tackle evasion. However, when the trend of evasion is seen across the industry, such misuse cannot be handled with any amount of enforcement and the only available option is to think of modifying the scheme itself. Moreover, investigation of such cases is very time consuming as each purchase and sale transaction along with transport records, which involve a large number of parties at different part of the country, is required to be investigated.
The State does not dispute the Industrial Policies of 1997 and 2007 and also the grant of concession pursuant to the said notifications. However, the dispute revolves round the justification for issuing the modified notifications, in question. It is to be seen whether any superior public interest is evident, which prompted the Government to issue the modified notifications - The instances of misuse noticed in the inquiry are hardly consists of about 41 cases and most of the cases, as per Annexure-A, are still under adjudication, it is not finally decided whether the industries concerned in the Northeastern region are guilty of any misuse.
The scheme of the policy and the notifications insist that there should be payment of the excise duty and thereafter, they should apply for refund. The Department, at the time of refund, can very well thoroughly scrutinize all these aspects regarding misuse and malpractice alleged. Therefore, the allegation that for the instances of malpractice stated above, there has to be a partial withdrawal of concessions, does not appear to be justifiable ground.
Doctrine of promissory estoppel - Held that:- The State has failed to show any prejudice to the superior public interest and that there is also no contra legislation in this regard. The respondents and the petitioners have all set up industries allured by the promise of tax concessions and made substantially investments. The setting up of an industry an d commencement of production requires a thorough compliance of formalities and c heck up by every Department. The industries, in question, have complied with all the requirements of law and have set up industries and all of them have started production - Within a span of a year after the issuance of notification of Industrial Policy of 2007, the change in the stand to withdraw the concessions does not appear to be sound and proper and the grounds made out are so feeble and fragile which do not offer a concrete objective material for this Court to believe that really superior public interest prompted the issuance of modified notifications.
Petition allowed.
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2014 (11) TMI 1186
Penalty u/s 11C - mandatory Penalty - assessee Paid the duty amount prior to the issuance of show cause notice - equivalent to 25% of the duty amount - Held that:- Some of petitions delinked - fr rest of petitions, if there is any Substitution application, the same is allowed - delay condoned in filing and refiling SLP - Appeal dismissed.
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2014 (11) TMI 1185
Winding up petition - substantial delay in execution of the work by the petitioner - Held that:- Company’s defence raised in the affidavit-in-opposition is substantially at variance from the company’s defence alleged in its reply to the statutory notice. Whereas in the reply to the statutory notice the company contended that no extra work was awarded to the petitioner, in its affidavit-in-opposition the company admitted that additional work was, in fact, awarded to the petitioner. Company contends that there was substantial delay in execution of the work by the petitioner for which the company is in the process of filing a suit claiming damages, however, till date no such suit has been filed. Also significant that the company’s cheques amounting to ₹ 92,38,399/- were dishonored upon presentation. The company claims that after the cheques were dishonored a sum of ₹ 1,32,81,250/- was paid by it to the petitioner but it is not clear whether such payment was wholly in respect of the contract for supply of fixture and furniture or whether part of it was in respect of the ID Works contract.
In case such deposit is made, the Registrar, Original Side will invest the sum in a fixed deposit in a nationalized bank of his choice. In case, the deposit is not made as directed, the winding up petition shall stand admitted and the petitioner will be at liberty to publish advertisement once in ‘The Telegraph’, English edition and once in ‘Ananda Bazar Partika' within four weeks from the date of admission of this winding up petition. The deposit is made by the company as directed above and the petitioner does not file a suit within four weeks, thereafter, the winding up petition shall stand dismissed and the company will be at liberty to withdraw the amount deposited by it with the Registrar, Original Side of this Court. Let this matter appear under the heading “adjourned motion” in the monthly list of January, 2015 before the Company Court for further orders.
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2014 (11) TMI 1184
Winding up petition - crystallization of amount due - proof of bonafide dues - Held that:- In the instant case, the petitioner has neither made any averment nor has placed any document on record to demonstrate that the respondent is commercially insolvent. On the other hand, from the documents on record, it is evident that the respondent is a profit making solvent company and is in a position to meet its debt as and when it arises. The petitioner has failed to show that the respondent has omitted to pay the debt without reasonable excuse and conditions of insolvency in the commercial sense exist.
The Company Court exercises in equitable jurisdiction. It is well settled in law that a winding up petition is not legitimate means of seeking to enforce for payment of dues which is bonafide disputed by the respondent.
It is evident that the amount due in the instant case has not crystalized and there is a bonafide dispute with regard to liability of the respondent to pay the amount in question to the petitioner. The petitioner has also failed to prove that the condition of insolvency in the commercial sense in respect of respondent exists. For the reasons aforementioned, no case for winding up of the respondent is made out.
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2014 (11) TMI 1183
Assessment of Non-Performing Assets - accrual of income - Held that:- It appears, for the assessment years 2007-08 and 2008-09, the Tribunal held in favour of the assessee. In the impugned judgment, the decision of the Hon’ble Supreme Court in the case of SOUTHERN TECHNOLOGIES LIMITED v. JOINT COMMISSIONER OF INCOME TAX, COIMBATORE [2010 (1) TMI 5 - SUPREME COURT OF INDI ] was not considered by the Tribunal. According to us, consideration of that decision is also required. However, learned counsel for the appellant submits that in the case of Southern Technologies Limited (supra), the Hon’ble Supreme Court held in favour of the appellant. We think this can be considered by the assessing authority in terms of the direction of the Tribunal.
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2014 (11) TMI 1182
Rectification of Mistake/Recall of order - CENVAT credit - invoices raised by unknown/nonexisting firms - Held that:- At the first instance, when this Court is expected to examine only substantial question of law, we refuse to undertake such an exercise. Instead, we leave it to the Department to approach the Tribunal either for rectification or for recalling the order by pointing out relevant facts and the reason why the departmental representative might have been misled into giving such a concession.
The concession on facts or law given by the legal representative of a party, may not bind the party. However, entertaining the dispute of the Department before us would deprive us of the analysis and opinion of the Tribunal on the comparison of facts - appeal disposed off.
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2014 (11) TMI 1181
Waiver interest under Sections 234A, 234B and 234C - Settlement Commission directed that interest under Sections 234A and 234C, wherever applicable was to be charged as per law and interest chargeable under Section 234B would be charged upto the date of order passed under Section 245D(1) and that interest under Section 220(2), applicable on the sustained demand outstanding as on various dates would be charged upto the date of the order passed by the Settlement Commission - Held that:- The learned counsel for the petitioners seeks leave to withdraw this Special Leave Petition so as to approach the Income Tax Settlement Commission for an appropriate remedy.
Permission is granted with the above liberty.
The Special Leave Petition is, accordingly, disposed of as withdrawn.
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2014 (11) TMI 1180
Sale of undivided share of Land by the Sister unit - dishonor of Cheque for want of sufficient funds - Section 55(4)(b) of the Transfer of Property Act, 1882 - Held that:- Initially the defendant misled the District Consumer Forum by false complaint and obtained an order. When the plaintiff filed a civil suit for recovery, the defendant again made a serious attempt before the civil Court by producing Ex. B3/forged receipt to show as if she had paid ₹ 3,19,970/- to the plaintiff. Clear findings have been given by the trial Court that the defendant had marked the forged receipt under Ex. B3 to disprove and defeat the plaintiff's case and claim.
When a party approaches the High Court, he/she must place all the facts before the Court without any reservation and if there is a false statement or a twisted fact placed before Court, then the Court should not hesitate to curb such practice by imposing exemplary costs, in the present case, when the defendant made a false story before the District Consumer Forum against the plaintiff that she had paid a huge amount of ₹ 3,19,970/- under Ex. B3 a forged document and attempted to deceive the abovesaid amount, this Court is of the considered view that she should be made to pay the same amount to the plaintiff, accordingly, the defendant is directed to pay a sum of ₹ 3,19,970/- under Ex. B3 to the plaintiff within a period of four weeks from the date of receipt of a copy of this order.
Appeal allowed.
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2014 (11) TMI 1179
Orders prejudicial to the interest of revenue u/s 263 - Held that:- where two views are possible, and merely because the revisional authority did not like the view taken by the assessing authority, there is no ground for interfering u/s 263 - also where the order passed by AO is not prejudicial to the interest of the revenue, the question of exercising the power under section 263 does not arise - Decided in favor of assessee.
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2014 (11) TMI 1178
Penalty u/s 78 - respondent has paid the tax before the issuance of the SCN - Held that: - the department has introduced voluntary disclosure scheme where if the assessee has paid tax voluntarily the entire interest is waived let alone the penalty - penalty set aside - appeal dismissed - decided against Revenue.
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2014 (11) TMI 1177
Minimum Alternate Tax (MAT) on SEZ units - Applicability of provisions of section 115JB on unit located in Speical Economic Zone - Income relating to 10A unit as includible in the book profit - Held that:- As decided in Genesys International Corporation Ltd. v. ACIT (2012 (12) TMI 491 - ITAT MUMBAI) that a unit located in Speical Economic Zone (in short SEZ) is covered by sub section (6) of section 115JB irrespective of the fact that such unit is claiming deduction u/s 10A and, therefore, the book profit of the SEZ unit could not be included while computing book profit under section 115JB for A.Y. 2008-09, despite the fact that clause (f) of Explanation 1 to section 115JB(2) has been amended to apply the provisions of MAT to units which are entitled to deduction under section 10A. - Decided in favour of assessee.
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2014 (11) TMI 1176
Revision u/s 263 - valuation of the plot by DVO u/s 55A((b)(ii)- Held that:- As observed by us that the assessment was framed subject to valuation by the DVO. This, by itself is a deficiency in the order under section 143(3).
The proposal was received by the CIT from the AO, which clearly means that there has been no independent application of mind by the CIT - Since the proceedings got in the infirmity zone at the first stage, it is not necessary for us to proceed further on merits. - Decided in favour of assessee.
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2014 (11) TMI 1175
Penalty u/s 271(1)(c) - Provision for leave encashment u/s 43B disallowed - Held that:- There is merit in the contentions of the assessee. The claim of provision for leave encashment is otherwise allowable as deduction, but for the specific provisions of sec. 43B. Thus, the said claim could not be substantiated in law. Hence, the decision rendered by Hon’ble Supreme Court in the case of Reliance Petro Products (P) Ltd [2010 (3) TMI 80 - SUPREME COURT] shall squarely apply to this claim. In respect of Project expenses, the question whether it was capital expenditure or revenue expenditure is, as submitted by Ld A.R, is a debatable question. It is well settled principle that the penalty u/s 271(1)(c) shall not lie in respect of such deductions, which are debatable in nature. Accordingly, we are of the view that the impugned penalty order could not be sustained. - Decided in favour of assessee
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2014 (11) TMI 1174
Disallowance u/s 14A - Held that:- CIT(Appeals) has given a factual finding that no interest expenditure was incurred for earning taxable income. Loan was from the government and it was for working capital assistance. Interest was paid on delayed payment of electricity bills, PF and ESI dues and interest to Selling Agents on the security deposits, interest to employees on the security deposits etc. This factual finding could not be controverted by the Ld.CIT, D.R. Thus the deletion of the disallowance of ₹ 1,07,82,277/- by the FAA is upheld. The third element is disallowance of other indirect expenses under Rule 8D(2)(iii). AO’s finding has been upheld by the Ld.CIT(A) and hence there is no grievance to the Revenue. In the result this ground of the Revenue is dismissed.
Disallowance of prior period expenses - Held that:- The assessee has incurred prior period expenses of ₹ 16,61,43,508/-. It had prior period income of ₹ 10,22,60,782/-. The net prior period amount of ₹ 63,88,272/-, was already added by the assessee in the computation of income. Thus, the finding of the First Appellate Authority that there is a double addition of ₹ 63,88,272/- is factually correct.
As far as the balance amount is concerned the assessee’s contention is that the amount has crystallised during the year, as the assessee came to know about these expenses only in the F.Y. 2008-09. 7.4. The second limb of the argument of the assessee is that, which has been consistently following the policy of netting out prior period income with prior period expenses and the net effect was disclosed in the computation of income. It was also submitted that such a treatment was accepted by the Revenue for the AY 2007-08 and 2008-09. First Appellate Authority has, on the principle of consistency, accepted the contentions of the assessee.
Disallowance of foreign exchange fluctuation loss - Held that:- The assessee claimed foreign exchange fluctuation loss under the head “financial charges” in the Profit and Loss a/c. Admittedly the foreign exchange fluctuation loss pertains to the rate difference arising on account of purchase of plant and machinery. The disallowance was upheld by the FAA. The alternative contention of the assessee was that the foreign exchange rate difference goes to increase the cost of plant and machinery as per provisions of S.43A read with S.32(1)(ii) and (ii a) of the Act. CIT(A) directed grant of depreciation @ 15% and an additional depreciation @ 20%. This finding could not be controverted by the Ld.CIT,DR. Thus the same is upheld.
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2014 (11) TMI 1173
Income accrued in India - presence of the Assessee in India is through an agent - PE in India - DTAA benefits - Held that:- The Tribunal has rightly observed that even during the course of the proceedings before it, no material was placed on record, which would prima facie demonstrate or even indicate that the transactions between the principal namely the Assessee and the agent are not under at arm's length conditions. Once this onus is not discharged by the Revenue and the Tribunal has confined its observations and conclusions to the facts and circumstances peculiar to the Assessee's case and for the particular assessment year, then, we agree with Mr. Irani that this Appeal does not raise any substantial question of law.
However, we do not find any basis for the submission made by Mr. Singh that the Tribunal should have examined the matter in the light of applicability of Article 5(1)(2) of the DTAA. The departmental representative has given up that because there was no finding rendered by the Assessing Officer. The Tribunal as rightly held was not obliged to go into the same. Even on this ground the Tribunal's order cannot be faulted.
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2014 (11) TMI 1172
Entertainment Tax - nature of the exhibition conducted by the petitioner - Held that: - The exhibition conducted by the petitioner included live fashion show by designers which according to the petitioner, is not an entertainment but promotion where instead of mannequins, it was demonstrated by live models - There is a statutory appeal available to the petitioner before the Karnataka Appellate Tribunal on the order of the Joint Commissioner of Commercial Taxes. The petitioner has to exhaust his remedy before the Karnataka Appellate Tribunal before he approaches this Court - petition disposed off.
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9911796707
