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Showing 101 to 120 of 1428 Records
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2015 (3) TMI 1337 - KERALA HIGH COURT
Payment of tax at compounded rate - section 8(b) of KVAT Act - assessment years from 2008-09 to 2013-14 - whether the petitioners, who are admittedly dealers engaged in the production of granite metal with the aid of mechanized crushing machines, are entitled to claim exemption from separate assessment, in respect of the M-sand produced by them using VSI/HSI machines, that have not been reckoned for the purposes of compounding under Section 8(b) of the K.V.A.T. Act?
Held that:- The provisions of S. 8(b) of the K.V.A.T., as they stood during the relevant period, envisaged a payment of tax at compounded rates, as an alternative to the regular payment of tax under Section 6 of the Act, for dealers producing granite metal using the aid of mechanized crushing machines. The scheme of the compounding provision suggests that dealers could opt to pay a tax, that was computed as the sum total of the amounts chargeable on specified machines that were used by the dealer in the production of granite metal.
It was envisaged that once the dealer paid tax in accordance with the scheme, by paying a tax computed on the basis of the number of specified machines used by him, he would be entitled to an exemption from separate assessment in respect of the M-sand that was produced in the course of production of granite metal.
The legislative scheme envisaged the payment of compounded tax by reckoning only certain specified machines, from among the various machines that were used in the production of granite metal, and the VSI/HSI machine was not one of them - The demands made on the petitioners, in connection with a separate assessment of the M-sand or Manufactured sand obtained through the use of VSI/HSI machines, cannot be legally sustained - The notices and orders, impugned in these Writ Petitions, are consequently quashed.
Petition allowed.
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2015 (3) TMI 1336 - ITAT PUNE
Nature of expenditure - disallowance of product development expenditure - revenue or capital expenditure - Held that:- The expenditure under consideration is similar to the expenditure claimed by the assessee in the earlier years and following the same parity of reasoning, we hold that the assessee is entitled to the claim of expenditure on account of product development as revenue expenditure. See MAX INDIA LTD. [2006 (6) TMI 422 - ITAT AMRITSAR]
Claim of the sales tax subsidy - Held that:- As relying on assessee's own case we direct the Assessing Officer to treat the sales tax subsidy as capital receipt in the hands of the assessee.
Allowability of payments made to M/s L&T Infotech Ltd. on account of annual maintenance charges - Held that:- As in assessment year 2003-04, held that the said expenditure was revenue in nature as it cannot be said to have brought in enduring benefit. The expenditure claimed by the assessee, during the year under consideration, was similar to the expenditure claimed in the earlier years and following the same parity of reasoning, we hold that the annual maintenance charges of ₹ 24,37,500/- paid to L&T Infotech Ltd. is to be allowed as a revenue expenditure.
Expenditure incurred on technical know-how i.e. reimbursement of salary, etc. to John Deere India Pvt. Ltd. - The said disallowance was made in the hands of the assessee following the earlier years starting from assessment year 2001-02 - Held that:- From ratio laid down by the Tribunal in assessee’s own case from year to year, we find no merit in the ground of appeal Nos.3 and 4 raised by the Revenue and hold that the expenditure incurred on technical know-how i.e. reimbursement of salary payable to the John Deere India Pvt. Ltd. is an allowable expenditure
Allowability of deferred sales tax equalization liability confirmed.
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2015 (3) TMI 1335 - ITAT CHANDIGARH
Unexplained credit u/s 68 - CIT-A deleted the addition by admitting additional evidence at appellate stage - Held that:- As far as the issue of admission of additional evidences is concerned before us the assessee has filed only copies of the accounts and copies of the TDS certificate, which cannot be construed as evidences because for proving the loans u/s 68. Assessee is required to file confirmation as well as show credit worthiness of such parties therefore we decline to admit these papers as additional evidence because assessee is in the guise of these copies of accounts asking for more opportunity which is not permissible under the law. Therefore, application for admission of additional evidence is rejected.
In the light of the rejection of application for additional evidence the ground raised by the assessee required to be dismissed because assessee has miserably failed to prove the loans to the extent of ₹ 41,59,000/- because no confirmation or any evidence proving such transaction was furnished before AO or even before CIT(A) or even before us.
CIT(A) has discussed four items of loans in case of G.S.Bricks, New Bharat Shuttering Store, Pyare Lal Rajinder Kumar, Punjab Trading Co. from whom loans of ₹ 2 Lacs, ₹ 2 Lacs, ₹ 3 Lacs, and ₹ 3.50 lacs have respectively been taken. However the relief has been allowed to the extent of ₹ 20 lacs without any discussion in respect of the rest of the items amounting to ₹ 9,50,000/-. In the four cases, in our opinion the CIT has correctly accepted the loans because the amount comes through cheques and confirmation of PAN numbers were furnished.
However, since no discussion has been made in respect of other loans to the extent of ₹ 9,50,000/- therefore we set aside the order of Ld. CIT(A) in respect of the rest of the items amounting to ₹ 9,50,000/- and remit the matter back to his file with a direction to decide the issue after recording findings in respect of such items also - Appeal of the Revenue is partly allowed for statistical purposes.
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2015 (3) TMI 1334 - ITAT DELHI
Disallowance paid by the assessee to ITC Health Club and India Habitat Centre Health Club - Allowable business expenditure - Held that:- AR has canvassed that the assessee is a very eminent Doctor and he has taken the membership in order to visit the people who undergo cardio training/exercise at the health clubs and monitor their performance of heart functions in order to ascertain the necessity of cardio exercises for the wellness of heart and also to determine the correlation between the cardio exercise and its effect on the overall health of the people at these health clubs.
There is no documentary or any other evidence in support of such pleadings. Assessee’s plea is completely baseless and not convincing. Therefore, we are unable to agree with this contention of theAR. The membership taken by the assessee is purely for his personal benefit and it has nothing to do with the profession and business of the assessee. - Decided against assessee.
Disallowance of amount actually paid to event management services - amount was paid without deducting the TDS - Held that:- This amount for event management services was paid without deducting TDS. Assessee himself had given in writing that amount be offered for taxes. The assessee’s submission with regard to offering amount to taxes has in a way restricted Assessing Officer to make further inquiry on these expenses. In these factual matrix of this case, we find that the decision of ITAT, Special Bench in the case of Merilyn Shipping and Transporters vs. Addl. CIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] is not applicable to the facts of the assessee’s case. Therefore, we find no merits on this issue in the assessee’s appeal and the same is accordingly rejected.
Disallowance u/s 14A r/w Rule 8D - Held that:- We find that the expenditure related to the earning of exempted income like STT and brokerage were shown in the withdrawals. The assessee is also having personal drawings of ₹ 27,97,024/- for the year under consideration. All these facts show that the assessee is not debiting the expenditure related to the exempted income in its Income& expenditure account and the revenue has failed to pinpoint any specific instance in this regard. Therefore, we allow this ground of assessee’s appeal.
Disallowance u/s 14A r/w Rule 8D - direct and proximate nexus between the exempted income and the expenditure claimed - Held that:- Revenue has failed to pinpoint any expenditure in the Income & expenditure account. Further, the assessee is incurring such expenses from his personal drawings. Accordingly, this ground of assessee’s appeal is allowed.
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2015 (3) TMI 1333 - ITAT LUCKNOW
Receipt being rent of "Infrastructure Facilities" installed in the property Let Out - "Business Income" OR "Income from House Property" - whether receipts for providing certain facilities to its tenants can be called to be part of rental income of the assessee - Held that:- As perused the lease deed and infrastructure agreement executed on 1.9.2003 and other relevant documents we find that the assessee has claimed these receipts as income from house property in assessment year 2005-06 and the Assessing Officer has accepted the same.
Once the AO has treated these receipts as income from house property in assessment year 2005-06, we find no justification in treating the same receipts in succeeding year as business income - where the assessee has received certain charges for providing certain facilities along with rental income, the entire receipts shall be income from house property and not business income. We, therefore, find no merit in the order of the CIT(A) confirming the infrastructure receipts as business income of the assessee.
Disallowance of foreign travel expenses incurred towards the visit of the Director, Shri. U.S. Halwasia and his wife to Egypt and U.S.A - Held that:- We find force in the contention of the Revenue that if the assessee has undertaken the foreign travel to explore business opportunities, there must have been some correspondence exchanged between the assessee and its foreign clients/consultant/advisers, but nothing is placed on record. He has also placed reliance upon the aforesaid judgments, but on a careful perusal, we find that in those judgments, it has been held that onus is upon the assessee to prove that foreign visits were undertaken for the business purpose. No doubt, assessee can undertake foreign travel to explore business opportunities, but the onus is entirely upon the assessee to establish, by placing some documentary evidence, that the foreign travel was undertaken for the business purpose. In the absence of any documentary evidence, we are unable to accept the contention of the assessee that the foreign travel was undertaken to explore the business opportunities. We, therefore, find no infirmity in the order of the CIT(A) on this issue and we accordingly confirm the same.
Disallowance of the educational expenses incurred in connection with sponsorship of the educational expenses of Shri. Mukund Halwasiya, Director for his studies abroad for professional course in Accounts and Finance - Held that:- Tribunal in the assessee's own case for assessment year 2005-06 with the submission that the impugned issue was raised before the Tribunal and the Tribunal has decided the issue in favour of the assessee by holding that the expenditure was incurred for business purposes. Copy of the order of the Tribunal is placed on record. Since the impugned issue has already been adjudicated by the Tribunal in assessment year 2005-06 and the claim of expenditure incurred on education of Shri. Mukund Halwasiya was allowed, we find no reason to disallow the claim in the impugned assessment year. We, therefore, following the order of the Tribunal for assessment year 2005-06, allow the claim of the assessee after setting aside the order of the ld. CIT(A) in this regard.
Disallowance of business promotion - held that:- Disallowance was made on ad hoc basis. It has been repeatedly held by various judicial forums that if the Assessing Officer is not satisfied with the maintenance of the books of account, he may dispute the particular entry and make disallowance, but disallowance on ad hoc basis should be avoided. In the instant case, nothing is borne out from the orders of the lower authorities as to whether the AO has raised any query in respect of a particular entry. He has simply made ad hoc disallowance, which is not permissible under the law. We accordingly set aside the order of the ld. CIT(A) and delete the addition in this regard.
Disallowance under section 14A - Held that:- We are of the view that no disallowance under section 14A of the Act can be made on account of this investment made for allotment of shares under section 14A of the Act. Moreover, provisions of sub-section (1) and (2) of section 14A were introduced by the Finance Act, 2006 w.e.f. 1.4.2007 relevant to the assessment year 2007-08. Therefore, these provisions cannot be invoked for making disallowance under section 14A of the Act.
As carefully examined the provisions of rule 8D and we find that this rule was introduced w.e.f. 24.3.2008, and the relevant assessment year would be 2008-09. Therefore, computation of disallowance under rule 8D is not called for in the impugned assessment year i.e. assessment year 2006-07. CIT(A) has not examined the issue of investment in shares and mutual funds at ₹ 19,91,741/-, but in any case for making disallowance, sub-sections (1) & (2) of section 14A cannot be invoked in the impugned assessment year i.e. assessment year 2006-07, as it was introduced w.e.f. 1.4.2007 by the Finance Act, 2006. Therefore, we are of the considered view that no disallowance under section 14A is called for for investment in shares and mutual funds and advances given to M/s G.R. Maintenance & Services Pvt. Ltd. for allotment of shares. We accordingly set aside the order of the CIT(A) in this regard and delete the addition.
Disallowance u/r 8D - Held that:- AO as per rule 8D of the rules and we find that the Assessing Officer has treated the investment out of mixed funds and he has computed the disallowance by applying the formula given in rule sub-rule (2) clause (3) of rule 8D of the rules; whereas no disallowance can be made where it is established that the investment in shares are made out of own funds available with the assessee. In the instant case, it has been established that the investment in shares were made by the assessee out of own funds available with it. Therefore, no disallowance can be made on account of expenditure incurred by way of interest during the previous year. Whatever disallowances are to be made that can only be made as per clause (3) of sub-rule(2) of rule 8D of the rules. We, therefore, set aside the order of the ld. CIT(A) and direct the Assessing Officer to re-compute the disallowance as per clause (3) of sub-rule(2) of rule 8D of the rules.
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2015 (3) TMI 1332 - SC ORDER
Maintainability of appeal - Held that:- The appeal is dismissed in terms of the signed order - Leave granted.
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2015 (3) TMI 1331 - ITAT AMRITSAR
Deduction claimed u/s 10B denied - claim disallowed by the AO by holding that Prajna (India) was formed by a splitting up of the business of M/s. Dynamech - rectification petition - Held that:- As already held that for splitting up to be effective, transfer of assets needs must be there from the old unit, to the new unit, which is entirely absent here. Then, the facts of the present case are not in pari materia with those of ‘Chenab Information Technologies (P) Ltd.’ [2008 (8) TMI 597 - ITAT MUMBAI] in as much as it has been observed therein that the new unit carried on the existing business of the old unit, using the same employees.
Herein, as noted, the employees of M/s. Dynamech have not been proved to have carried on the business of Prajna (India). In ‘Chenab Information Techonologies (P) Ltd.’ (supra), some of the existing staff was found to have been shifted to the new office in the same area taken on lease by making a small investment of about ₹ 2 lakhs in furniture and equipment. These, evidently, are not the facts of the present assessee. In ‘Chenab Information Technologies (P) Ltd.’ (supra) itself, it has been observed that each case has to be evaluated on its own facts to determine whether it is a case of splitting up of existing business or not. In assessee’s case, as discussed, the facts do not lead to a conclusion of Prajana (India) having been formed by a splitting up of the business of M/s. Dynamech.
To sum up, we hold that:
a) The Tribunal rightly recalled its order dated 31.08.2009 in its entirety, for hearing afresh and no prejudice was caused to any interest of the Revenue thereby.
b) The ld. CIT(A) went wrong in holding it to be a case of transfer of capital from the existing business to the new one.
c) The ld. CIT(A) has erred in holding that orders for manufacture were shifted from the existing business to the new one.
d) The ld. CIT(A) has fallen into error in holding that there was a unity of control in the two businesses.
e) The ld. CIT(A) has wrongly held that there was a shifting of staff from the existing unit to the one newly set up.
f) The ld. CIT(A) has erroneously held that tax evasion was the sole reason for setting up the new unit.
f) The ld. CIT(A) has, on the basis of the above misplaced findings, incorrectly held it to be a case of splitting up of existing business.
Thus we hold that the ld. CIT(A) has misdirected himself in sustaining the disallowance of deduction claimed by the assessee u/s 10B of the Act. - Decided in favour of assessee.
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2015 (3) TMI 1330 - BOMBAY HIGH COURT
Exemption u/s 80P denied - income byway of interest generated on the deposits made in National Saving Certificates and Kisan Vikas Patras cannot be treated as income forming part of the banking business and as such the same is not exempted under Section 80P( 2)(a)(i) - Held that:- The Division Bench of this Court in the case of CIT vs. Ratnagiri Dist. Central Cooperative Bank Ltd. [2001 (9) TMI 60 - BOMBAY HIGH COURT] considered income by way of interest derived by assessee formed part of banking business and therefore entitled for exemption under Section 80P(2)(a)(i).
The Judgment of the Apex Court in a case of Madhya Pradesh Cooperative Bank Ltd. vs. Additional C.I.T., referred [1996 (1) TMI 8 - SUPREME COURT] relied on by the Appellant has been overruled in the subsequent Judgment in the case of Commissioner of Income Tax vs. Karnataka State Cooperative Apex Bank [2001 (8) TMI 9 - SUPREME COURT]. In the said case, the Apex Court came to the conclusion that interest income arising from investment made out of reserve fund is exempted under Section 80P( 2) (a)(i) of the Income Tax Act. Tribunal has rightly considered that the said deposit is concerned with the banking business and as such the assessee is entitled for exemption under Section 80P(2)(a)(i) - Decided against revenue.
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2015 (3) TMI 1329 - CALCUTTA HIGH COURT
Revision u/s 263 - reassessment passed under Section 148 - Change of registered office - sufficient cause from attending the hearing - Held that:- The petitioner company changed its registered office upon due intimation to the assessing officer and by filing the relevant Form 18 under the Companies Act, 1956, but the notice issued by the Commissioner was at the old address.
Since it is evident that the petitioning assessee was prevented by sufficient cause from attending the hearing or otherwise participating in the proceedings under Section 263 of the Act, it is desirable that the order impugned dated March 21, 2014, which the petitioners have received on February 6, 2015, be set aside with a direction on the relevant Commissioner to issue a notice to the petitioners at the petitioner company’s present address at Room No.865, 8th Floor, 33/1, Netaji Subhas Road, Kolkata-700001.
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2015 (3) TMI 1328 - BOMBAY HIGH COURT
The appeal is admitted on the substantial question of laws as raised in clauses (a) to (e) of paragraph 4 of the Appeal - appeal is admitted.
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2015 (3) TMI 1327 - MADRAS HIGH COURT
Application for transfer of appeals on the file of the learned IInd Additional Judge, City Civil Court, Chennai - Jurisdiction - powers and rights of Sessions Judge - power of the Sessions Judge to recall or make over cases to other Additional Judges - Protection of Women from Domestic Violence Act, 2005 - Whether the words, "Criminal Court" referred in Section 408(1) Cr.P.C., means a lower or subordinate Court to a Sessions Judge? - Whether the words "Criminal Court" in Section 408(1) Cr.P.C., includes the Court of Additional Sessions Judge, also?
Held that:- Under the Constitutional Scheme, I am empowered to decide, a question of law, independently of what the other High Courts, have decided and for that matter, the decisions of the other High Courts, may have a persuasive value and they do not a binding precedent. It is true that there must be certain degree of certainty in the law, to be interpreted and applied to all the persons, to which, the Constitution of India, extends, but that principle, does not mean that a High Court is bound by the decision of another High Court, whether it is of the same strength or of a higher composition.
No doubt, Judicial Precedents, across the country should maintain uniformity, and that there should be harmony in deciding a point of law, to be followed, but that does not mean that a High Court cannot decide a question of law, on its own, but have to simply follow the decision, decided by another High Court. In a given case, when a Central law is interpreted, every High Court is empowered to independently consider, the question of law, dehors the decisions of other High Court.
Power is conferred on the Sessions Judge in Sub-Section (1) of Section 408 Cr.P.C., to transfer a case from one Criminal Court to another Criminal Court, in the same Sessions Division and such power can be exercised, only for the reasons, stated in sub-Section (2) of Section 408. If the Sessions Judge, deems it expedient for the ends of Justice, to transfer any particular case, from one Criminal Court to another Criminal Court, in his Sessions Division, either on the report of the lower Court or on the application of the party interested or on his own initiative and if the words, "criminal Court" have to be meant to be inclusive of an Additional Sessions Court also, then the Section 408, has to be read, as conferring powers on the Sessions Judge, to withdraw any case, even after the commencement of the trial of a case - As per Section (2) of Section 409, a Sessions Judge may withdraw, trial of a case or hearing of an appeal, from the file of the Additional Sessions Judge, only before the commencement of the trial of a case or hearing of an appeal. Now it is the case of the petitioners that the Sessions Judge, in exercise of the his powers, under Section 408 Cr.P.C., can transfer a case or an appeal, even after the commencement of trial or hearing of an appeal, on the application of a party interested, if it is expedient for the ends of justice. If the principle, what cannot be done directly by the Sessions Judge, in exercise of his administrative powers, under Section 409(2) Cr.P.C., cannot also be done indirectly by the Sessions Judge, under Section 408 Cr.P.C., is applied, then the Sessions Judge, cannot transfer the trial of a case or hearing of an appeal, from one Additional Sessions Judge, to another, within his Sessions Division.
In Section 408 Cr.P.C., the Legislature has used the words, "any particular case", from one Criminal Court to another Criminal Court, in his Sessions Division and whereas, in Section 409 Cr.P.C., when the Sessions Judge, exercises the administrative power, the words, "any case or appeal", are employed. Thus, there is an inbuilt restraint in Section 409(2) Cr.P.C., in exercise of the power conferred on the Sessions Judge and he cannot recall or withdraw any case or appeal, after the commencement of the trial or hearing of an appeal, pending before the Additional Sessions Judge and that is why, the Legislature is cautious in stating that such power can be exercised, at any time, before the trial of the case or hearing of the appeal - The expression "any particular case" used in Section 408(1) Cr.P.C., should be given its natural meaning and effect.
The words "criminal Court" in Sub-Section (1) of Section 408 Cr.P.C., must be read in the context in which it is explained in sub-Section (2) of the same Section, i.e., lower Court and in such circumstances, it can comprehend that, that the words, Criminal Court, refers only to a lower Court and not to a Court of equal jurisdiction. Though the words "Criminal Court" at the first blush, may appear to mean all the criminal Courts, within the Sessions Division of a Sessions Judge, but a close scrutiny of sub-Section (2) of Section 408 Cr.P.C., would make it clear that there is no obscurity and vagueness.
In the light of the law declared by the Apex Court, on the interpretation of statutes or the Section, this Court is of the humble opinion that a Section or any part in the section, has to be read, as a whole and each word, as a whole, used in Section has to be given its meaning to the context, in which, it is used. Each word employed in the legislation has to be given the plain, literal and grammatical meaning and Courts are not empowered to delete or substitute the same, by way of interpretative process. Therefore, it is not open to the petitioners to contend that the opening sentence of sub-Section (2) of Section 408 Cr.P.C., ie., on the report of the lower Court or in particular, the use of the words, "lower Court", is illogical to the context, in which, sub-Section (1) to Section 408 Cr.P.C., is enacted by the Legislature, in the matter of transfer of a case, i.e., from a Criminal Court to another Criminal Court.
By legal fiction, the Sessions Court can, at best, (1) transfer any particular case from a Criminal Court, subordinate to its authority, to an equal, subordinate Court or (2) if such case, is pending on the lower Court, to any superior Court, and (3) not a case pending in the Court, exercising equal jurisdiction. - Powers conferred on the High Court, under Section 407 Cr.P.C., cannot be imported to Section 408 Cr.P.C., not conferred on the Sessions Judge, by High Court. By legislative process, the Sessions Court can only stay the proceedings in the subordinate Court.
The transfer applications filed by the revision petitioners, to transfer Appeal Nos. 142, 144, 176 and 177 of 2014, on the file of the learned IInd Additional City Civil Court, Chennai, are not maintainable in law - There is no manifest illegality in the impugned orders, warranting intervention.
Revision Cases are dismissed.
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2015 (3) TMI 1326 - GUJARAT HIGH COURT
Reversal of cenvat credit - ‘furnace oil’ used to generate electricity - supply of electricity to another 100% EOU - Held that:- The appeal is admitted on substantial questions of law.
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2015 (3) TMI 1325 - BOMBAY HIGH COURT
Maintainability of appeal before High Court - sub-section (2) of Section 35 of the Central Excise Act, 1944 - Classification of service - services rendered to Oil and Natural Gas Commission during the period of 1st May, 2008 to June 2010 - contention of the Revenue that the case involves classification of the services provided by the Appellant to his clients and in view of sub-section (2) of Section 35 of the Central Excise Act, 1944 the appeal against the order impugned would lie before the Apex Court and not this Court.
Held that:- In the present case the substantial questions of law with regard to interpretation of subsection (zzzzj) of Section 65(105) arises for consideration - in the present case, no question which has a relation to the rate of duty excise or service tax is involved. As such, the Appeal would be very much tenable before this Court.
Appeal admitted.
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2015 (3) TMI 1324 - ITAT PUNE
Nature of expenditure - capital expenditure or revenue expenditure - amortization of premium paid for acquisition of securities categorized as Held to Maturity (HTM) - Held that:- The issue arising in the present appeal is identical to the issue decided in the case of Pune District Central Cooperative Bank Ltd. (2015 (4) TMI 662 - ITAT PUNE) and in the case of HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT), and following the same parity of reasoning, we hold that the assessee is entitled to the deduction being the premium on Amortization of Securities. We hereby affirm the action of CIT(A) in deleting the disallowance representing amortization of premium paid on Government Securities under the HTM category. - decided against revenue
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2015 (3) TMI 1323 - CESTAT BANGALORE
Whether the appellant is required to reverse 10% of the value the exempted goods cleared to SEZ in terms of the provisions of Rule 6 of CENVAT Credit Rules?
Held that:- The issue is covered by the decision in the case of Sujana Metal Products Ltd Vs CCE Hyderabad [2011 (9) TMI 724 - CESTAT, BANGALORE], where it was held that supplies made to SEZ from DTA units shall be treated as export.supplies made to SEZ are held to be “export” provisions of Rule 6 of CCR does not arise at all - appeal allowed - decided in favor of appellant.
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2015 (3) TMI 1321 - DELHI HIGH COURT
Grant of Leave to Appeal - Return of cheque on the ground of 'stop payment' - denial of legally recoverable debt - it was claimed that the cheque was issued to book the deal in respect of the land, which being cancelled, the order of stop payment was given - Held that:- It was only in the legal notice that it was claimed for the first time that a friendly loan of ₹ 12 lacs had been advanced to the accused by the respondent. No details with regard to the same had been furnished; no receipt had been produced; it was not disclosed as to how the said loan was disbursed; when it was disbursed; to whom it was disbursed, and; where it was disbursed. He submits that the accused was a stranger to the petitioner and its director. Admittedly, the director of the petitioner had met the accused only on 26.10.2009 at the time of execution of the sale deed - Even though it was claimed that the said liability is reflected in the audited balance sheet of the petitioner company, the same was not produced.
It appears rather strange that someone who is purchasing a property worth ₹ 1,72,26,000/- would obtain a "friendly" loan from the seller of the property - who is a stranger. The entire sale consideration was paid at the time of execution of the sale deed. When such a large amount of ₹ 1,72,26,000/- flowed from the account of the accused and his wife, it does not make sense for the accused to obtain a loan of ₹ 12 lacs from the complainant. Even if one were to imagine that the accused was short of ₹ 12 lacs, and the complainant was willing to accommodate the accused, the sale deed would have recorded that the balance amount of ₹ 12 lacs would be payable after sometime. The averment of the petitioner in the complaint is bald and devoid of any particulars as to how the legally recoverable debt had arisen. The respondent having raised a probable defence, the presumption against the respondent stood dislodged.
It is well settled that the Court would not grant leave to appeal, where neither material evidence and circumstances have been ignored, nor inconsequential circumstance have been given prominence more than what is required. The Court would not grant leave to appeal where the conclusion drawn is not found to be so illogical that no person would draw the same - Leave to appeal can be granted where, it is shown that the conclusion arrived at by the Trial Court is perverse, or there is mis application of law or any legal principle.
Petition dismissed.
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2015 (3) TMI 1320 - ITAT CHANDIGARH
Payment made on account of corporate services - ALP determining - Held that:- How assessee has received the financial services which have led to the benefits to the assessee to the tune of ₹ 8.88 crores. Therefore, we set aside the order of Assessing Officer and direct him to re-compute the amount of adjustment by reducing 50% of ₹ 8.88 crores from the total Corporate service charges i.e. ₹ 7,99,31,741/- minus ₹ 4.44 crores (i.e. 50% of ₹ 8.88 crores) i.e. (Rs. 7,99,31,741 – ₹ 4,44,00,000) = ₹ 3,55,31,741/-. The Assessing Officer may also examine the amount of benefit calculated by the assessee and verify the amount if the conclusion is different, the Assessing Officer may decide the issue accordingly. Otherwise adjustment shall be made for ₹ 3,55,31,741/-.
Payment of commission to the non resident parties to the file of Assessing Officer for reexamination in terms of direction contained in the order of Tribunal for assessment year 2006-07. Therefore, this aspect is allowed for statistical purposes.
Disallowance u/s 14A - Held that:- If there is no exempt income then provisions of section 14A cannot be invoked. Therefore, in our opinion, if there was no income during the year then no disallowance is called for. Since in the case before us investment itself has been written off, therefore, there could not be any income. Accordingly we delete this addition.
Disallowance of proportionate interest in terms of provisions of section 36(1)(iii) - Held that:- No particular loan has been taken for the asset which has been shown under the head ‘capital work in progress’ then disallowance could not have been made. However, each loan and its utilization requires fresh examination, therefore, we remand this issue to the file of Assessing Officer with a direction to ascertain details of various loans and how they were fully utilized and then only decide the issue in accordance with law.
TDS u/s 194H - non deduction of tds - Held that:- It is not clear from the records whether these amount pertains to bank charges because Schedule 20 simply shows financial charges, therefore, we remit this matter back to the file of Assessing Officer with a direction to verify whether assessee has paid bank charges to different banks, then no disallowance is required to be made otherwise the issue may be decided in accordance with the law.
Ex. gratia paid for earlier years u/s 43B read with section 36(1)(ii) - Held that:- Ex.gratia payment made to employees which consists of bonus payment over and above the Bonus Act should be allowed as business expenditure. Therefore, if sum of the ex.gratia payment was payable for that year, the same was required to be allowed on accrual basis as part of the business expenditure. Since this aspect has not been examined by the Assessing Officer, therefore, we set aside his order and remand the matter back to his file for reexamination of the computation of the ex.gratia payment and if some of the ex.gratia payment pertains to the assessment before us i.e. Assessment year 2009-10, then the same should be allowed on accrual basis as business expenditure otherwise the issue may be decided in accordance with law.
Taxable income on account of provisions written back - Held that:- No details are available in assessment order. We have also gone through paper book but do not find any detail therein, therefore, in the interest of justice we set aside the order of Assessing Officer and remit the same back to his file to examine whether any claim of expenditure was allowed in the earlier years when this provision was created. If no such expenses was allowed then writing back of the provisions cannot be treated as income, However, if such expenditure was allowed in the earlier years then the same is required to be added in the income. Therefore, he should decide the issue after examining these facts.
Penalty on custom duty - Held that:- Firstly the amount is ₹ 0.2 million i.e ₹ 2 lakhs and not ₹ 20 lakhs. Secondly, a contingent liability represents a liability which may arise or not arise on happening of a particular event and it is not the actual liability. Therefore, it cannot be said that assessee has claimed this amount as expenditure. Accordingly the amount mentioned under the head ‘contingent liability’ cannot be disallowed, therefore, we set aside the order of Assessing Officer and delete this addition.
Revenue expenditure - payment of royalty - Held that:- We set aside the order the Assessing Officer and hold that expenditure incurred for payment of royalty is allowable and therefore, delete the addition.
Disallowance on account of training expenses - Held that:- In any case when separate disallowance has been made for ₹ 14,82,137/- on account of training expenses this would amount to double disallowance. Therefore, in the interest of justice we set aside the order of Assessing Officer and remit the same back to his file for re-examination of the issue and, the same should be decided after considering the contention of double disallowance on account of training expenses as well as after verification of the supporting bills filed before the DRP.
Bad debt which are clearly allowable, by writing off such amounts because simply an amount has been shown as discount the same cannot be disallowed. Therefore, we set aside the order of Assessing Officer and delete this addition.
TDS u/s 195 - reimbursement of expenses incurred on the training of a particular employee abroad - Held that:- Merely reimbursement of expenses incurred on the training of a particular employee abroad cannot be termed as fee for technical services. Even if, assuming for the argument sake that this would amount to fee for technical services, then it is to be seen that such service was rendered in India, which has not happened. Therefore, in our opinion this amount of reimbursement of expenses does not attract provisions of section 195 and tax was not deductible. Accordingly we set aside the order of Assessing Officer and delete this addition.
MAT computation - provision for wealth tax and provision for FBT - Held that:- Wealth Tax is not enumerated in the provision to section 115JB, therefore, the same cannot be added to the book profits. This position was also confirmed by the Hon'ble Bombay High Court in the case of CIT v Echjay Forgings Pvt. Ltd [2001 (2) TMI 56 - BOMBAY HIGH COURT]. In our opinion, the same logic would apply in case of FBT. Therefore, we set aside the order of Assessing Officer and direct him to reduce the provision for wealth tax and provision for FBT from the book profit.
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2015 (3) TMI 1319 - ITAT AMRITSAR
Non maintaining books of accounts - AO estimating the income of the assessee by applying net profit rate in the assessment order passed u/s 143(3) without invoking the provisions of s. 145(3)- best judgment assessment under s. 143(3) without invoking the provisions of s. 145(3) of the Act instead of making assessment under s. 144 - Held that:- The assessee has not complied with the two situations mentioned in s. 144 the assessee has not complied with the provisions of s. 142(1) where the assessee has failed to produce accounts, documents, information and statement of assets and liabilities. Secondly, having made a return filed and fails to comply with all the terms of a notice issued under s. 143(2) and moreover, as per proviso to s. 144, no show-cause notice for making ex parte assessment under s. 144 has been issued to the assessee.
AO was required to make best judgment assessment under s. 144 of the Act, which in fact, has not been made. AO proceeded to make assessment under s. 143(3) of the Act on the premise that the assessee has submitted some details and explanations called for which in fact have not been furnished is a matter of record. Such assessment made under s. 143(3) is liable to be quashed. We accordingly, direct the AO to quash the assessment so made by the AO.
Even if the assessment has been made under s. 143(3) or in a manner provided under s. 144 of the Act, the AO should have invoked the provisions of s. 145(3) of the Act, which has not been done. In the facts and circumstances of the case also, the assessment made by the AO is bad in law and is directed to be quashed. - Decided against revenue
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2015 (3) TMI 1318 - ITAT HYDERABAD
Rate of estimation of income in the hands of the firm - estimation of income at 8% - allowance of deduction towards interest and remuneration paid to partners u/s.40(b) - Held that:- As seen from assessee's P&L A/c assessee's sales stood at ₹ 2.71 Crores, whereas its closing stock was at ₹ 2.88 Crores. Construction cost during the year is about ₹ 3.81 Crores. This indicate that the project has not yet been completed or partly completed. However, as seen from the P&L A/c placed on record which was basis for the Assessing Officer to make disallowances, assessee has earned gross profit at 15% and Net Profit 5.4%. Assessee has major liability in the form of interest on term loans for reduction in profit from 15% gross to 5% net. Keeping these factors and also the fact that assessee paid ₹ 14,51,871/- as interest on the term loans, apart from other expenditure to indicate that estimation by the CIT(A) at 8% on the gross receipts is reasonable. Revenue has not brought on record anything to counter how this estimation is less on the given set of facts. In view of this, we uphold the estimation at 8%.
Statutory allowance of deduction u/s.40(b)- Allowance of interest on partners' capitals and partners' remunerations - Held that:- All firms are uniformly assessable as firms only and there is no difference in tax rates. The profit derived from the partnership firm is exempt in the assessment of the partners as the same is being taxed at normal rates in the assessment of the partnership firm itself. Only salary or interest paid to the partners is subject to tax in the assessment of the partners as the same is excluded from the assessment of the partnership firm. Provisions of Section 40(b) allows interest paid to partners and remuneration paid to the partners as an allowable deduction, subject to certain conditions mentioned in Section 40(b) of the Act. Therefore, there is a change in the provisions itself from a disallowance provisions to allowance provisions subject to restrictions. Thus, w.e.f. 1993-94, Section 40(b) is enabling a deduction towards interest and remuneration paid to the partners by way of statutory deduction. Therefore, jurisdictional High Court judgment given for AY.1981-82 in the context of the provisions then existing is no longer applicable to the revised assessment procedure. This same view was held by various co-ordinate Benches - Decided against revenue
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2015 (3) TMI 1317 - SUPREME COURT
Demand for bribe to settle certain central excise cases - Held that: - There is no dispute that the Competent Authority to grant sanction in the present case is the Finance Minister. Before the matter reaches the Finance Minister, naturally, it has to be processed at different levels and what we find from the nothings in the Original File is that certain authorities at different levels may have taken one view or the other of the matter. All such views which were earlier recorded in the file nothings were placed before the Finance Minister by cataloging the events in chronological order. It is on a consideration of the totality of the facts including the manner in which the matter had been processed at different levels, that the Finance Minister eventually accorded his approval for grant of sanction on 8th August, 2009. The file, in fact, had not reached the Finance Minister at any earlier point of time.
This Court has laid down that the validity of a Sanction Order, if one exists, has to be tested on the touchstone of the prejudice to the accused which is essentially a question of fact and, therefore, should be left to be determined in the course of the trial and not in the exercise of jurisdiction either Under Section 482 of the Code of Criminal Procedure, 1973 or in a proceeding Under Article 226/227 of the Constitution.
The High Court was not at all justified in passing the impugned order and in interfering with the sanction order dated 21st October, 2009 - appeal allowed - appeal allowed.
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