|
Advanced Search Options
Case Laws
Showing 101 to 120 of 692 Records
-
2010 (5) TMI 865
Auctioneer’s service – Demand of service tax along with interest and penalty – Demand on the basis of figure worked out from the balance sheet – assessee submitted that actual amount received by them from the growers and buyers of tobacco for rendering ‘auctioning service’ is much less, and produced a copy of reconciliation statement – Matter remanded to adjudicating authority for fresh adjudication
-
2010 (5) TMI 864
Validity of the provisions of Companies Act, 1956 as amended by the Companies (Second Amendment) Act, 2002, which provides for setting up of National Company Law Tribunal and National Company Law Appellate Tribunal.
Whether such ‘wholesale transfer of powers’ as contemplated by the Companies (Second Amendment) Act, 2002 would offend the constitutional scheme of separation of powers and independence of judiciary, so as to aggrandize one branch over the other?
Held that:- Since the issues raised in the appeals are of seminal importance and are likely to have serious impact on the very structure and independence of the judicial system, the issue with regard to the constitution of the Tribunals and the areas of their jurisdiction needs to be given a fresh look and therefore, the matter deserves to be heard by a Constitution Bench.
-
2010 (5) TMI 863
Issues involved: Assessment of property value as on 1.4.1981, compliance with u/s 50C(2) of the I. T. Act.
Assessment of Property Value as on 1.4.1981:
The appellant contested the Ld. CIT(A)'s confirmation of the property value on 1.4.1981 at Rs. 1,49,525 instead of the Rs. 11,30,525 claimed by the assessee. The AO valued the property at Rs. 30,525 for land and Rs. 1,19,000 for the building, rejecting the assessee's claims for higher values. The AO also disputed the assessee's legal expenses claim of Rs. 10,00,000 due to lack of evidence. The AO calculated the indexed cost based on the asset holding year and determined the sale consideration at Rs. 91,57,930, adopting the value provided by the registering authority.
Compliance with u/s 50C(2) of the I. T. Act:
The appellant argued that the AO did not follow u/s 50C(2) by not referring the valuation to the Valuation Cell. The Ld. CIT(A) dismissed the appeal, stating that the appellant did not object to the proposed computation under Sec. 50C. However, the appellant contended that they requested valuation referral to the Valuation Cell, which the AO did not comply with. The ITAT found merit in the appellant's objection, noting the lack of basis for the property valuation on 1.4.1981. Consequently, the ITAT directed the AO to recompute the long term capital gain after referring the valuation to the Valuation Cell, allowing the appeal for statistical purposes.
Judges' Decision:
The ITAT allowed the appeal for statistical purposes, emphasizing the need for proper valuation procedures and compliance with statutory provisions, directing the AO to reevaluate the property value as on the sale date and 1.4.1981 through the Valuation Cell.
-
2010 (5) TMI 862
The Bombay High Court heard a case regarding the appellant-Revenue questioning if the respondent had passed on the burden of duty to customers, thus failing the test of unjust enrichment. The court admitted the case for consideration based on this substantial question of law.
-
2010 (5) TMI 861
Error of recruitment process of railways - Validity of an order issued by the Railway Board directing the Railway Recruitment Board (in short RRB) to conduct a re-test for recruitment to Group-D posts for those candidates who had obtained minimum qualifying marks in the first written examination against which large scale irregularities were noticed - 100 to 200 candidates were suspected to have obtained answers for the questions three hours before the examination through some middleman who had arranged answers by accepting huge bribe. Apart from the serious allegations of impersonation in respect of 62 candidates it was stated on close scrutiny of the answer sheets at least six candidates had certainly adopted unfair means to secure qualifying marks in the written test - High Court held that the materials available relating to leakage of question papers was limited and had no reasonable nexus to the alleged large scale irregularity - also referred to the reports of the CBI, which suggested certain measures to be adopted by the Board to rule out such malpractices in future. Reports of the CBI of course, were not available with the Railway Board when they took the decision on 04.06.2004 to conduct a re-test but only the vigilance report and the complaints received.
Whether the High Court was justified in directing the Board to go ahead with the recruitment process based on the first written test? - We fail to see how the High Court has concluded that there is no illegality in going ahead with the recruitment process on the basis of the first written test. We may indicate that the Railway Board had three alternatives viz., (1) to cancel the entire written test, and to conduct a fresh written test inviting applications afresh; (2) to conduct a re- test for those candidates who had obtained minimum qualifying marks in the first written test; and (3) to go ahead with the first written test (as suggested by the High Court), confining the investigation to 62 candidates against whom there were serious allegations of impersonation.
The High Court applying the Wednesbury's principle accepted the last alternative by rejecting the decision by the Railway Board to conduct a re- test for those candidates who had obtained minimum qualifying marks in the first written test. We are of the view that the High Court has wrongly applied the above principle and misdirected itself in directing the Board to accept the third alternative.
''Test of Wednesbury and Proportionality'' - Wednesbury applies to a decision which is so reprehensible in its defiance of logic or of accepted moral or ethical standards that no sensible person who had applied his mind to the issue to be decided could have arrived at it. Proportionality as a legal test is capable of being more precise and fastidious than a reasonableness test as well as requiring a more intrusive review of a decision made by a public authority which requires the courts to `assess the balance or equation' struck by the decision maker. Proportionality test in some jurisdictions is also described as the "least injurious means" or "minimal impairment" test so as to safeguard fundamental rights of citizens and to ensure a fair balance between individual rights and public interest.
We, hold, applying the test of Wednesbury unreasonableness as well as the proportionality test, the decision taken by the Board in the facts and circumstances of this case was fair, reasonable, well balanced and harmonious. By accepting the third alternative, the High Court was perpetuating the illegality since there were serious allegations of leakage of question papers, large scale of impersonation by candidates, mass copying in the first written test.
Writ Petitioners, in our view, have also no legal right to insist that they should be appointed to Group `D' posts. Final merit list was never published. No appointment orders were issued to the candidates. Even if a number of vacancies were notified for appointment and adequate number of candidates were found successful, they would not acquire any indefeasible right to be appointed against the existing vacancies. This legal position has been settled by a catena of decisions of this Court. Reference can be made to the judgment of this Court in Shankarsan Dash v. UOI[1991 (4) TMI 444 - SUPREME COURT].
We are also of the view that the High Court was in error in holding that the materials available relating to leakage of question papers was limited and had no reasonable nexus to the alleged large scale irregularity. Even a minute leakage of question paper would be sufficient to besmirch the written test and to go for a re-test so as to achieve the ultimate object of fair selection.
We, therefore, find no infirmity in the decision taken by the Board in conducting the second written test for those who have obtained minimum qualifying marks in the first written test rather than going ahead with the first written test which was tainted by large scale irregularities and malpractices. The Board can now take further steps to regularize the results of the second test and the appointments of the selected candidates. Ordered accordingly. Appeals are accordingly allowed and the judgment of the High Court is set aside.
-
2010 (5) TMI 860
Issues involved: The judgment involves issues related to the import of capital goods under the EPCG Scheme, compliance with Notification No. 29/97-Cus, conversion of duty schemes, retrospective effect of licensing authority's orders, and the benefit of policy changes.
Import of Capital Goods under EPCG Scheme:
The appellant imported capital goods and spares under the EPCG Scheme, opting for the 0% duty EPCG Scheme. They were required to export finished goods worth six times the value of the imported capital goods within eight years. However, they failed to meet the minimum value of imports within the stipulated period, leading to show-cause notices for recovery of duties and penalties.
Conversion of Duty Schemes and Compliance with Notifications:
The appellant applied for conversion from the 0% duty EPCG Scheme to the 10% duty EPCG Scheme, which was allowed by the licensing authority. The Customs authorities contested this conversion, leading to a Larger Bench referral on the powers of the DGFT to amend licenses retrospectively. The Larger Bench concluded that licensing authorities cannot amend licenses retrospectively, and Customs authorities cannot challenge such amendments.
Benefit of Policy Changes and Special Additional Duty:
The appellant claimed the benefit of a policy change under Notification No. 122/99-Cus, allowing importers of capital goods to claim the 0% duty benefit if imports were worth Rs 1 crore or above. Additionally, they argued against the recovery of Special Additional Duty (SAD) due to the omission of Section 3A from the Customs Tariff Act without a saving clause.
Decision and Remand:
The Tribunal set aside the impugned orders and remanded the case to the Commissioners of Customs for reconsideration. The appellant was granted the opportunity to raise the alternative plea and address issues related to SAD. All ancillary issues, including confiscation, redemption fines, and penalties, were to be reviewed by the lower authorities.
-
2010 (5) TMI 859
|
Unexplained credits u/s 68 - share capital and share premium unexplained - transaction entered into by the assessee was a scheme for laundering black money into white money or accounted money
HELD THAT:- In the present case, the appellant has furnished all the details relevant to share capital contribution before the A.O and also before me. AO except noticing certain unusual features in fund flow chain could not establish the link between the unaccounted incomes of the appellant company and share capital contributors. Having regard to the facts and circumstances of the case and respectfully following Hon’ble Supreme Court decision in the case of M/s. Lovely Exports Pvt. Ltd [2008 (1) TMI 575 - SC ORDER] share capital/premium received from investors is not liable to be treated u/s. 68 as unexplained credits and to be taxed in the hands of the appellant company.
In view of the above, and finding no contrary decisions brought on record by the revenue authorities, we find no infirmity in the order of the Ld. CIT(A) and the same is hereby upheld. The appeal of the revenue is, therefore, dismissed.
In the result, the appeal of the revenue is dismissed.
|
-
2010 (5) TMI 858
Addition on Work in progress - defective method of accounting - business of Dyeing and printing of cloth - job work basis - During assessment proceedings, AO noticed that assessee has not shown work-in-progress in the closing stock as on 31-03-2003. AO held that assessee had claimed all the expenses made during the year under consideration on un-dispatched gray cloth laying at different stages of processing, which should have been shown as work-in-progress as on 31-03- 2003. AO accordingly calculated work-in-progress. The Ld. CIT(A) deleted the addition on the ground that assessee is engaged in processing of material for outside parties and does not have stock of its own. Further, assessee is following the same method of accounting year-after-year. There is no justification in disturbing this method.
HELD THAT:- we are of the view that issue is now covered in favour of the assessee by the decision of Tribunal in the case of Pratik Processors Pvt. Ltd. wherein Tribunal has held that there cannot be any work in- progress in a case where business of Dyeing and printing of cloth is done on job work basis. He referred to para from that order as under:-
''At the time of hearing both the Representatives agreed the similar issue arose in an appeal by the revenue in the case of Vipul Industries Pvt. Ltd. V/s ACIT[1996 (1) TMI 144 - ITAT AHMEDABAD-C] held that the assessee which is engaged in the business of dyeing and printing of cloth on job work basis and where the assessee had not shown any work-in-progress at the year end, the same was estimated to be 50% of the job receipt of the likely stock remaining in process. However was deleted by the learned CIT(A).deletion was confirmed by the Tribunal.''
Disallowance of 25% on purchase price - purchases from Min Chemicals - HELD THAT:- In our considered view there is no case for interference in the order of Ld. CIT(Appeals). In the case of first two purchases Ld. CIT(A) has given finding that goods have actually come but from other parties but bills are procured from first two parties. This finding is not controverted.
We also hold that assessee has obtained goods from other parties but to what extent is not known. The quantity and quality of the goods purchased from other parties and, what price was paid is also not known. Therefore, there is no co-relation of quality and quantity of goods brought by the assessee, for which payment was made. In view of this we confirm the order of Ld. CIT(A) in disallowing 25% of purchase price. In respect of purchases from Min Chemicals it was not even established that any goods had actually come in respect of which the assessee had procured bills from this party. In view of this disallowance of purchase from this party is also confirmed.
As a result, we confirm the order of Ld. CIT(A) and dismiss appeal filed by Revenue and that of CO filed by assessee.
-
2010 (5) TMI 857
Issues Involved:
1. Depreciation u/s 32 on the basis of written down value.
2. Exclusion of interest written back u/s 41(1).
3. Deduction in respect of capital advances written off.
4. Determination of assessed income lower than the returned income.
Summary:
Issue 1: Depreciation u/s 32 on the basis of written down value
The assessee contended that depreciation should be granted u/s 32 based on the written down value of various block of assets as determined in earlier years. However, the Learned Counsel did not press this ground, and it was treated as withdrawn.
Issue 2: Exclusion of interest written back u/s 41(1)
The assessee argued that an amount of Rs. 2,91,51,000/- should be excluded from the total income as it pertains to interest not allowed as a deduction in earlier years. The CIT (A) confirmed the disallowance but directed that if the disallowance of interest in those cases is confirmed, the same should be excluded in the assessee's case. The Tribunal directed the Assessing Officer to exclude the amount of Rs. 2,91,51,000/- for the assessment year 2003-04, with the condition that if the assessee succeeds in claiming the amounts in the respective assessment years, the amount should be brought to tax in this assessment year.
Issue 3: Deduction in respect of capital advances written off
The assessee claimed a deduction for capital advances written off amounting to Rs. 10,53,587/-. The CIT (A) rejected the claim, stating it was in respect of advances made in the capital field and not bad debts. The Tribunal found that the CIT (A)'s finding was not based on record and directed the Assessing Officer to examine the claim afresh and consider it as per the provisions of the Act.
Issue 4: Determination of assessed income lower than the returned income
The Assessing Officer determined the total income at Rs. 2,39,83,053/-, which was lower than the returned income of Rs. 3,72,32,930/-. Consequently, the Assessing Officer accepted the returned income. The CIT (A) confirmed this action. The Tribunal, however, held that the Assessing Officer has the power to re-determine the total income according to the provisions of the Act, even if it results in an income lower than the returned income. The Tribunal directed the Assessing Officer to determine the total income according to the provisions of the Act, after giving effect to various orders of higher authorities of earlier years and also to this order.
Conclusion:
The appeal was partly allowed, with directions to the Assessing Officer to re-examine certain claims and determine the total income as per the provisions of the Act.
-
2010 (5) TMI 856
The petitioner filed a petition under section 482 Cr.P.C. to go abroad in a specific case. The High Court granted permission for seven days upon furnishing an FDR of Rs. Five lakhs and an undertaking to return. The respondent was directed to return the petitioner's passport for the travel. The petition was disposed of with these directions.
-
2010 (5) TMI 855
Issues Involved:
1. Deletion of addition on account of share application money.
2. Validity of reopening the assessment.
Detailed Analysis:
1. Deletion of Addition on Account of Share Application Money:
The Revenue was aggrieved by the CIT(A)'s deletion of an addition of Rs. 1,18,50,000 received as share application money from 16 parties, which the AO had added as unexplained cash credit under Section 68 of the IT Act. The AO's addition was based on information from the Investigation Wing indicating that the companies providing the share application money were not conducting actual business and were providing accommodation entries. The AO issued summons to these companies, some of which were unserved or uncomplied. Despite the assessee providing affidavits, confirmations, PAN details, and other documents proving the identity and genuineness of the transactions, the AO disregarded these and made the addition.
The CIT(A) found that the assessee had filed sufficient documentary evidence to establish the identity and genuineness of the transactions, including confirmations, PAN details, bank statements, and affidavits from the directors of the investor companies. The CIT(A) noted that the AO did not take further action to enforce the attendance of the investor companies or rebut the affidavits. The CIT(A) relied on several judicial pronouncements, including the Supreme Court's decision in CIT vs. Lovely Exports (P) Ltd., which held that once the identity of the shareholders is established, the share application money cannot be regarded as undisclosed income of the assessee.
The Tribunal upheld the CIT(A)'s decision, noting that the AO had not brought any material to prove that the share capital emanated from the assessee's coffers. The Tribunal emphasized that the identity of the shareholders was established, and the affidavits filed by the directors were not rebutted by the AO. The Tribunal also noted that the AO did not allow the assessee to cross-examine the witnesses whose statements were used against them, which was a fatal flaw in the assessment process.
2. Validity of Reopening the Assessment:
The assessee challenged the validity of the reopening of the assessment under Section 147/148, arguing that the AO did not apply his independent mind and merely relied on the Investigation Wing's information. The Tribunal, however, upheld the reopening, stating that the AO had specific information from the Investigation Wing about the transactions entered by the assessee. The Tribunal referred to the Supreme Court's decision in Asstt. CIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd., which held that "reason to believe" does not require the AO to have conclusively proven the escapement of income at the stage of issuing notice. The Tribunal found that the AO had a rational connection with the facts of the case, justifying the reopening of the assessment.
Conclusion:
The Tribunal dismissed both the Revenue's appeal and the assessee's cross-objection. The deletion of the addition on account of share application money was upheld, and the reopening of the assessment was deemed valid. The Tribunal emphasized the importance of establishing the identity of shareholders and following due process, including allowing cross-examination of witnesses whose statements are used against the assessee.
-
2010 (5) TMI 854
Issues Involved:
1. Constitutional validity of Section 41 of the Bihar Value Added Tax Act, 2005.
2. Constitutional validity of Rule 29 of the Bihar Value Added Tax Rules, 2005.
3. Mechanism for advance recovery of tax from works contractors.
4. Legislative competence of the State Legislature to impose tax on inter-State sales, outside sales, and sales in the course of import.
5. Adequacy of machinery provisions for tax determination and deduction.
Issue-wise Detailed Analysis:
1. Constitutional Validity of Section 41 of the Bihar Value Added Tax Act, 2005:
The petitioners challenged the constitutional validity of Section 41 of the VAT Act, arguing that it mandated the deduction of tax at source from the bills raised by works contractors without a proper mechanism for determination. They contended that this provision was arbitrary, unreasonable, and violated Article 14 of the Constitution of India. The court noted that Section 41 begins with "Subject to the provisions of section 6," which excludes inter-State sales, outside sales, and sales in the course of import from the tax net. The court held that the provision, as it stands, does not suffer from legislative incompetence and provides adequate guidance and mechanism for tax deduction, making it intra vires.
2. Constitutional Validity of Rule 29 of the Bihar Value Added Tax Rules, 2005:
Rule 29 of the VAT Rules was also challenged on similar grounds. The petitioners argued that the rule allowed for tax deduction on items beyond the legislative competence of the State Legislature. The court observed that Rule 29 specifies that no deduction shall be made on account of payments pertaining to labor charges, amounts paid to sub-contractors, charges for planning and designing, and other similar expenses. The court found that Rule 29 provides a clear mechanism for deductions and exclusions, making it consistent with the VAT Act and intra vires.
3. Mechanism for Advance Recovery of Tax from Works Contractors:
The petitioners argued that the VAT Act lacked a proper mechanism for the determination of tax at the pre-assessment stage, leading to arbitrary deductions. They cited the decision in Larsen and Toubro Ltd. v. State of Bihar, which held that a similar provision under the Bihar Finance Act was unworkable. The court distinguished the present provision from the earlier one, noting that Section 41 provides for obtaining a certificate from the Deputy Commissioner, Commercial Taxes, or other specified authorities, which serves as a machinery provision for tax determination. The court held that the provision is reasonably workable and does not impose an undue burden on contractors.
4. Legislative Competence of the State Legislature to Impose Tax on Inter-State Sales, Outside Sales, and Sales in the Course of Import:
The petitioners contended that the State Legislature lacked the competence to impose tax on inter-State sales, outside sales, and sales in the course of import. The court referred to the decisions in Steel Authority of India Ltd. v. State of Orissa and Nathpa Jhakri Joint Venture v. State of Himachal Pradesh, which held that State Legislatures cannot levy tax on such sales. The court noted that Section 41 of the VAT Act explicitly excludes these sales from the tax net, making the provision consistent with constitutional limitations and within the legislative competence of the State Legislature.
5. Adequacy of Machinery Provisions for Tax Determination and Deduction:
The petitioners argued that the VAT Act lacked adequate machinery provisions for tax determination, leading to arbitrary and unreasonable deductions. The court observed that Section 41 and Rule 29 provide a comprehensive mechanism for tax deduction, including obtaining certificates from specified authorities and excluding non-taxable items. The court held that the provision is not arbitrary or unreasonable and provides sufficient guidance for tax determination, making it intra vires.
Conclusion:
The court concluded that Section 41 of the VAT Act and Rule 29 of the VAT Rules are intra vires and do not suffer from any constitutional infirmities. The writ petitions were dismissed, and the provisions were upheld as valid.
-
2010 (5) TMI 853
Addition u/s 68 - amount introduced under the head “unsecured loan” from various parties - HELD THAT:- The Learned CIT(A) on appreciation of entire facts noticed that the amount was received by account payee cheques. These were repaid by account payee cheques. The loans were taken in the previous year relevant to the assessment year under appeal and the same were paid in the said financial year. The mere fact that prior to issue of cheque, there is some cash deposit, in our opinion, this alone is no ground to make the addition u/s 68. We found considerable force in submissions made by the ld. counsel of the assessee that the addition of ₹ 10,00,000/- was made on doubt and suspicion and the Learned CIT(A) has given cogent reason for deleting the same. We, therefore, incline to uphold the order of Learned CIT(A).
In the result, the appeal filed by the Revenue is dismissed.
-
2010 (5) TMI 852
Issues involved:
The judgment involves the consideration of whether the disallowance of deduction under section 54F of the Income Tax Act was justified in the case of capital gains arising from the transfer of residential house property. Additionally, it addresses the entitlement to indexation in respect of payments made for the acquisition of flats.
Issue 1: Disallowance of Deduction under Section 54F
The assessee, engaged in technical services, claimed deduction under section 54F for capital gains from the sale of two flats. The Assessing Officer denied indexation and exemption under section 54F, stating that the tentative allotment letter did not constitute an asset. The CIT(A) allowed indexation but upheld the denial of section 54F benefit, as the assessee owned multiple residential houses at the time of transfer. The ITAT concurred, ruling that the tentative allotment letter did not transfer a long-term capital asset, and the subsequent sale did not meet section 54F conditions. The appeal was dismissed.
Issue 2: Entitlement to Indexation for Payment Made
The revenue contested the allowance of indexation for payments made by the assessee towards acquiring flats. The CIT(A) permitted indexation, considering the rights acquired by the assessee. The ITAT disagreed, stating that indexation is applicable when the assessee becomes the owner of the property, which did not occur at the time of payment against the tentative allotment. The ITAT set aside the CIT(A) order, emphasizing that indexation is based on the year the asset is acquired, which, in this case, was post the agreement dated 22-11-2001.
In conclusion, the ITAT upheld the denial of section 54F benefit due to ownership of multiple residential houses and disallowed indexation for payments made before the acquisition of the asset.
-
2010 (5) TMI 851
Issues Involved:
1. Disallowance of liquidated damages.
2. Inclusion of excise duty and sales tax in total turnover for deduction u/s 80HHC.
3. Exclusion of various incomes from business profits for deduction u/s 80HHC.
Summary:
1. Disallowance of Liquidated Damages:
The issue pertains to the disallowance of liquidated damages amounting to Rs. 42,06,346/-. The Assessing Officer (A.O.) disallowed the amount, considering it a penalty not incurred wholly and exclusively for business purposes. The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the disallowance, referencing previous favorable decisions for the appellant by CIT(A) and the ITAT, Ahmedabad. The Tribunal upheld the CIT(A)'s decision, noting that the amounts were deducted due to delays inherent in the business and were allowable as business expenditure, supported by the case of Sardar Prit Inder Singh v/s. CIT 160 ITR 493.
2. Inclusion of Excise Duty and Sales Tax in Total Turnover for Deduction u/s 80HHC:
The A.O. included excise duty of Rs. 2,99,66,653/- and sales tax of Rs. 1,20,95,809/- in the total turnover for calculating deduction u/s 80HHC. The CIT(A) directed the A.O. to exclude these elements, following the Supreme Court decisions in Laxmi Machine Works (290 ITR 667) and Catapharma India (292 ITR 641). The Tribunal confirmed this, citing the Special Bench decision in IFB Agro Industries Ltd. Vs. DCIT 83 ITD 968(Cal.), which held that sales tax and excise duty are not part of the total turnover for u/s 80HHC computation.
3. Exclusion of Various Incomes from Business Profits for Deduction u/s 80HHC:
The A.O. excluded interest income of Rs. 3,94,774/-, GST set off of Rs. 12,98,202/-, write-off payment received of Rs. 1,15,767/-, and technical drawings income of Rs. 28,00,156/- from business profits for u/s 80HHC deduction. The CIT(A) included these incomes in business profits, referencing previous favorable decisions for the appellant. The Tribunal upheld the inclusion of GST set off and write-off payments, following the decision in Mazda Controls Ltd. For interest income, the Tribunal remanded the matter to the A.O. for verification of net interest income after setting off interest expenditure. Regarding technical drawings income, the Tribunal confirmed it as business income integral to the appellant's main business, dismissing the revenue's appeal on this part.
Conclusion:
The appeal of the revenue is partly allowed, with specific directions for verification and inclusion of certain incomes in business profits for the purpose of deduction u/s 80HHC. The Tribunal's decision aligns with established precedents and the inherent business nature of the expenses and incomes involved.
-
2010 (5) TMI 850
Issues Involved:
1. Applicability of Section 194C of the IT Act, 1961.
2. Validity of evidence for non-deduction of TDS.
3. Applicability of Section 40(a)(ia) of the IT Act, 1961.
4. Treatment of freight expenses not claimed in the P&L account.
Issue-wise Detailed Analysis:
1. Applicability of Section 194C of the IT Act, 1961:
The Revenue contested that the CIT(A) erred in concluding that there was no sufficient material to show a contract between the assessee and truck owners, thus not attracting Section 194C. The assessee, a transport firm, hires trucks from other owners when its own are insufficient. The AO aggregated payments exceeding Rs. 50,000 and held them liable for TDS under Section 194C. The CIT(A) found no evidence of a continuous contract for a specified period or quantity, thus each GR was treated as a separate contract. The Tribunal upheld CIT(A)'s decision, agreeing that the AO failed to provide sufficient evidence of a binding contract and confirming that the provisions of Section 194C were not applicable.
2. Validity of evidence for non-deduction of TDS:
The Revenue argued that the assessee did not provide evidence supporting its claim that payments were made to truck owners who did not own more than two trucks. The assessee claimed that Form No. 15-I, which was supposed to be evidence, got wet due to water entering the office. The CIT(A) accepted the assessee's submission of Form No. 15J, which supported the claim. The Tribunal agreed with CIT(A), noting that the AO did not sufficiently investigate the claim of document loss and failed to confront the assessee with adverse information. Thus, the Tribunal upheld the CIT(A)'s decision.
3. Applicability of Section 40(a)(ia) of the IT Act, 1961:
The assessee contended that Section 40(a)(ia) applies only to amounts payable at the end of the year, not to amounts already paid. The CIT(A) rejected this, stating that the section applies to all payments where TDS was deductible but not deducted or paid. The Tribunal upheld CIT(A)'s interpretation, agreeing that Section 40(a)(ia) applies to both paid and payable amounts, aligning with legislative intent to ensure TDS compliance.
4. Treatment of freight expenses not claimed in the P&L account:
The assessee argued that disallowance under Section 40(a)(ia) should not apply as freight expenses were not claimed in the P&L account. The CIT(A) found that the assessee received freight charges and paid truck owners, showing only the net commission in the P&L account. The Tribunal agreed, noting that the receipts were revenue income and payments were revenue expenditure. Thus, disallowance under Section 40(a)(ia) was applicable, and the CIT(A)'s decision was upheld.
Conclusion:
The Tribunal dismissed both the Revenue's appeal and the assessee's cross-objection, upholding the CIT(A)'s detailed and well-reasoned order on all issues. The findings confirmed that the provisions of Sections 194C and 40(a)(ia) were correctly interpreted and applied, and the evidence provided by the assessee was valid.
-
2010 (5) TMI 849
Issues Involved:
The judgment involves challenges to the deletion of additions of prior period expenses for assessment years 2003-04 and 2004-05.
Assessment Year 2003-04:
In this assessment year, the AO disallowed a claimed amount of prior period expenses by the assessee as no evidence was produced to show expenses crystallized during the year. The claim was rejected by the AO, but the CIT(A) allowed the deduction after finding that the expenses had crystallized during the assessment year under appeal. The CIT(A) based the decision on the material on record, including the certificate of completion of dismantling/erection work given in May 2002, which pertained to the assessment year under appeal. The CIT(A) held that the liability for the expenditure had crystallized during the relevant assessment year and allowed the deduction.
Assessment Year 2004-05:
Similarly, in this assessment year, the AO denied the claimed amount of prior period expenses by the assessee. However, the CIT(A) found that the liability for the expenditure, related to payment of employees for incentives and performance rewards, had crystallized during the assessment year under appeal. The working for these incentives was done in July 2003 based on the performance of employees in the earlier year. The CIT(A) held that since the liability crystallized during the relevant assessment year, the addition was deleted.
The Tribunal upheld the CIT(A)'s decision in both assessment years, citing legal precedents such as the decision of the Hon'ble Supreme Court in the case of Metal Box Company and the Hon'ble Gujarat High Court in the case of Saurastra Cement & Chemical Industry Ltd. The Tribunal found no infirmity in the CIT(A)'s order and dismissed the appeals of the Revenue.
In conclusion, the Tribunal confirmed the CIT(A)'s findings and dismissed both appeals of the Revenue.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
-
2010 (5) TMI 848
Issues involved: Appeal against deletion of penalty u/s 271(1)(c) by CIT (A) on disallowance of commission paid and addition on sales to associated concerns based on order u/s 92CA(3) by TPO.
Summary:
Issue 1: Disallowance of commission paid and addition on sales to associated concerns
During assessment, Assessing Officer disallowed an amount based on TPO's order, invoking section 271(1)(c) for furnishing inaccurate particulars of income. CIT (A) accepted that the difference in methods used for computing arms length price was a bona fide difference of opinion, not amounting to inaccurate particulars. The Revenue's appeal was considered ex-parte as the assessee did not appear. ITAT upheld CIT (A)'s order, citing the Supreme Court's ruling that incorrect claims do not necessarily constitute inaccurate particulars of income. The ITAT concluded that the difference in valuation methods did not warrant a penalty u/s 271(1)(c).
Key Phrases:
- Disallowance of amounts based on TPO's order
- Section 271(1)(c) invoked for furnishing inaccurate particulars
- Bona fide difference of opinion
- Ex-parte proceedings
- Supreme Court ruling on inaccurate particulars
Issue 2: Application of TNMM Method vs. CUP Method
The TPO adopted the CUP method while the assessee used the TNMM Method for valuation. ITAT held that this difference in approach was not grounds for penalty under section 271(1)(c). The ITAT emphasized that the assessee cannot be penalized for not anticipating the TPO's method of valuation, as long as the particulars provided were not inaccurate.
Key Phrases:
- TNMM Method vs. CUP Method
- No penalty for variance in valuation methods
- Assessee not liable for TPO's method choice
Conclusion:
The ITAT dismissed the revenue's appeal, upholding the CIT (A)'s decision to delete the penalty imposed by the Assessing Officer. The judgment was pronounced on 17th May 2010.
-
2010 (5) TMI 847
Issues:
1. Revocation of CHA license by Commissioner based on violation of CHA Licensing Regulations.
2. Tribunal's remand order and subsequent restoration of CHA license.
3. Appeal by Revenue against restoration order.
4. Maintainability of the appeal by Revenue against Commissioner's order under CHALR 1984.
Analysis:
1. The Commissioner proposed to revoke the Custom House Agent (CHA) license of the respondent for violating CHA Licensing Regulations. Despite the enquiry officer's reports favoring the CHA, the Commissioner revoked the license under Regulation 23(7) of the CHALR 1984.
2. The respondent appealed to the Tribunal, which allowed the appeal by remanding the matter back to the Commissioner. The Tribunal directed the Commissioner to communicate reasons if not accepting the enquiry officer's report, allowing the respondent to reply within three weeks. The Commissioner, after hearing the party, accepted the enquiry officer's report and restored the CHA license.
3. The Revenue appealed against the Commissioner's order restoring the CHA license, arguing that the order was not a speaking order and should be set aside for a fresh decision by the Commissioner.
4. The respondent raised a preliminary objection on the maintainability of the Revenue's appeal to the Tribunal under CHALR 1984. Citing legal precedents and the self-contained nature of the CHALR, the Tribunal agreed with the respondent's counsel that the appeal by the Revenue was not maintainable. Referring to previous decisions of the Hon'ble High Court, the Tribunal dismissed the Revenue's appeal.
This judgment highlights the process of revocation and restoration of a CHA license, the role of the Tribunal in remanding matters back to the Commissioner, and the legal principle regarding the maintainability of appeals under CHALR 1984.
-
2010 (5) TMI 846
Issues involved: Refund claim rejection based on unjust enrichment bar applicability.
Summary:
Issue 1: Unjust Enrichment Bar Applicability
The appellant appealed against the rejection of their refund claim due to the application of the unjust enrichment bar. The goods were imported through 53 bills of entry and were provisionally assessed. After finalization, a refund of Rs. 9,65,639/- was due to the appellant. The adjudicating authority sanctioned the refund but directed it to be credited to the Consumer Welfare Fund under Section 27 of the Customs Act, 1962. The appellant contended that prior to 13.7.2006, the provisions of unjust enrichment were not applicable, citing relevant case laws. They argued that the revenue deposit made was not part of the landed cost of the goods, thus entitling them to the refund. The appellant's submission was supported by a certificate from a Chartered Accountant and their balance sheet. The Departmental Representative agreed that the period involved was before 13.7.2006 but insisted on the applicability of the unjust enrichment bar. After careful examination, it was found that the amended provisions of Section 18, which attract the bar of unjust enrichment, were not applicable to the case. Citing the decision of the Hon'ble High Court of Gujarat, it was concluded that the bar of unjust enrichment did not apply, and the appeal was allowed with consequential relief.
............
|
9911796707
