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Showing 101 to 120 of 871 Records
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2012 (5) TMI 776
Relief and Rehabilitation Programmes - Held that:-a) The issues specified at point 1(a) and 1(b) of the CEC Report dated 20th April, 2012 are hereby referred for investigation by the Central Bureau of Investigation.
b) All the proceedings in relation to these items, if pending before any Court, shall remain stayed till further orders of this Court. The CBI shall complete its investigation and submit a Report to the Court of competent jurisdiction with a copy of the Report to be placed on the file of this Court within three months.
c) The Report submitted by the CEC and the documents annexed thereto shall be treated as 'informant's information to the investigating agency' by the CBI.
d) The CBI shall undertake investigation in a most fair, proper and unbiased manner uninfluenced by the stature of the persons and the political or corporate clout, involved in the present case. It will be open to the CBI to examine and inspect the records of any connected matter pending before any investigating agency or any court.
e) The competent authority shall constitute the special investigating team, headed by an officer not below the rank of Additional Director General of Police/Additional Commissioner forthwith.
f) Any investigation being conducted by any agency other than CBI shall also not progress any further, restricted to the items stated in Clause (a) above, except with the leave of the Court. The CBI shall complete its investigation uninfluenced by any order, inquiry or investigation that is pending on the date of passing of this order.
g) This order is being passed without prejudice to the rights and contentions of any of the parties to the lis, as well as in any other proceedings pending before courts of competent jurisdiction and the investigating agencies.
h) All pleas raised on merits are kept open.
i) We direct all the parties, the Government of the States of Andhra Pradesh, Karnataka and all other government departments of that and/or any other State, to fully cooperate and provide required information to CBI.
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2012 (5) TMI 775
Label mark registered - whether it cannot be said that the word mark contained therein is not registered - Held that:- In the present case, IPAB as well as the learned Single Judge has applied correct test in arriving at the conclusion that the two marks are deceptively similar and are likely to cause confusion in the mind of an average customer with imperfect recollection. The manner of comparison done by the IPAB can be found in Para 16 which we have already extracted above. The learned Single Judge contains detailed discussion on this aspect. With reference to Section 9(2)(a) of the Act, it is pointed out that the mark if it is of such nature as to deceive the public or cause confusion. It clearly follows that if a mark is deceptively similar to an earlier mark, it is not to be registered. As a fortiori, if it is registered, such a registration can be cancelled.
Section 11 (1)(b) of the Act also provides that a trademark shall not be registered if because of its similarity to an earlier mark and the identity or similarity of the goods or services covered by the trade mark, there exists a likelihood of confusion on the part of the public, which included the likelihood of association with the earlier trade mark. It is only honest concurrent use or other special circumstances shown by the applicant that which may provide exception to the aforesaid Rule as for the provisions of Section 12 of the Act permits the Registrar to register such a mark.
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2012 (5) TMI 774
Issues Involved:
1. Imposition of penalty u/s 15HA and 15HB of the Securities and Exchange Board of India Act, 1992.
2. Violation of regulations 3 and 4 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003.
3. Violation of Regulation 15(1)(b) relating to the code of conduct for sub-brokers specified in Schedule II of the Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) Regulation, 1992.
Summary:
1. Imposition of Penalty u/s 15HA and 15HB:
The appellant, a sub-broker, was penalized ` 5 lac for violating regulations 3 and 4 of the FUTP Regulations and the code of conduct for sub-brokers. The adjudicating officer imposed ` 3,50,000 for FUTP violations and ` 1,50,000 for code of conduct violations.
2. Violation of FUTP Regulations:
The investigation into the scrip of Rich Capital & Financial Services Limited revealed sharp price rises and heavy trading volumes. The appellant was accused of contributing to new high prices, trading at prices higher than the last traded price, and executing reversal/circular trades. The adjudicating officer found the appellant guilty of executing reversal/circular trades, leading to manipulation of the scrip. However, the appellant was absolved of any role in contributing to the price rise and placing orders above the last traded price.
3. Violation of Code of Conduct for Sub-Brokers:
The appellant's counsel argued that the adjudicating officer's findings were contradictory, as the appellant was found not involved in any connection with the client and counter parties. The appellant contended that the alleged reversal trades were insignificant and did not indicate deliberate manipulation. The adjudicating officer's decision was challenged on the grounds that the data relied upon was incorrect and the volume of trades was too insignificant to raise suspicion.
Adjudicating Officer's Findings:
The adjudicating officer concluded that the appellant's trades did not impact the price of the scrip and there was no substantive evidence of manipulation. The appellant was exonerated of influencing the price of the scrip and any connection with the counter parties. However, the appellant was found guilty of executing reversal/circular trades.
Tribunal's Analysis:
The Tribunal found that the adjudicating officer did not establish a pattern of reversal trades indicating fraudulent involvement. The appellant's role as a sub-broker was to place orders as per the client's directions, and there was no evidence of connivance with the client. The Tribunal noted that the appellant's transactions were not systematically manipulative and the adjudicating officer failed to establish a nexus between the parties.
Conclusion:
The Tribunal set aside the adjudicating officer's order, finding that the appellant had taken reasonable precautions to avoid malpractices and was not a party to reversal/circular trades. The appeal was allowed, and no costs were imposed.
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2012 (5) TMI 773
Entitlement to interest till the filing of the winding up petition - Held that:- Though the amount of ₹ 50 Lakhs was advanced by the appellant to the respondent company in the Year 1994 but the same was demanded from the respondent company only in the year 2002 and the winding up petition was filed only in the year 2006. Therefore we find ourselves unable to find the appellant entitled to any interest till the filing of the winding up petition.
Rate of interest - Considering all the facts and circumstances of the case, we are of the opinion that direction for payment of interest at the rate of 6% per annum from the date of filing of the petition for winding up and till deposit of the principal amount of ₹ 50 lakhs by the respondent company in the Court would sub-serve the interest of justice and restitution.
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2012 (5) TMI 772
Issues involved: Appeal against deletion of addition u/s 68 of the Income-tax Act, 1961 regarding share capital and share premium.
The judgment pertains to an appeal filed by the Revenue challenging the deletion of an addition of Rs. 9,00,000 made by the Assessing Officer u/s 68 of the Income-tax Act, 1961. The issue revolved around the genuineness of funds related to share capital and share premium. The Revenue contended that physical identity of the share applicants needed to be established, which was not done in this case. The Appellate Tribunal proceeded ex parte as the assessee did not appear for the hearing. The assessee, a private limited company, raised a total capital of Rs. 1,93,00,000 during the relevant year, out of which Rs. 38,60,000 was share capital and Rs. 1,54,40,000 was share premium. The Assessing Officer treated a portion of the funds as unexplained credit under Section 68 due to the inability to produce the person controlling a specific entity from which funds were received.
The Appellate Tribunal considered the arguments presented by the Revenue and examined the material on record. It was noted that the assessee had provided confirmations, PAN, address, bank details, and income tax return copies of the entity from which the funds were received. The Tribunal highlighted that information was gathered directly from the concerned entity under Section 133(6), confirming the transaction. Relying on relevant judicial decisions, including those of the High Court, the Tribunal agreed with the CIT(A) that the assessee had discharged the burden of proving the cash credit in its books of account, leading to the deletion of the addition.
The Tribunal emphasized the importance of the creditor affirming the transaction directly to the Assessing Officer, similar to the facts in a previous Apex Court case. It was noted that the assessee's case was even stronger than the precedent, as the creditor was found at the address and confirmed the transaction in response to the notice issued. Consequently, the Tribunal found no reason to interfere with the CIT(A)'s order and upheld the deletion of the addition. Ultimately, the appeal of the Revenue was dismissed, affirming the decision of the lower authorities.
Decision pronounced in the open Court on 25th May, 2012.
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2012 (5) TMI 771
Issues involved: Appeal against conviction u/s 7 and 13(1)(d) read with 13(2) of Prevention of Corruption Act, 1988 and u/s 120B of Indian Penal Code, 1860.
Summary:
The appeal was filed against the conviction of the appellants for offenses under the Prevention of Corruption Act, 1988 and the Indian Penal Code. The case involved a complaint regarding a demand for a bribe for issuance of a discharge ticket at a hospital. A trap was arranged, leading to the arrest of the appellants. The trial court found them guilty, and the High Court affirmed the decision. The defense argued that the prosecution failed to prove the demand of illegal gratification and that the trap case lacked independent eyewitness support. The prosecution contended that acceptance of tainted money was sufficient for conviction. The Supreme Court examined the evidence and upheld the lower courts' findings. It was established that the appellants demanded and accepted a bribe, supported by witness testimonies and trap details. The court emphasized the importance of proving demand of illegal gratification for conviction under the Act. The appellants' explanations were found lacking, and their guilt was upheld. The court cited precedents to support its decision. The appeal was dismissed, but the appellants' sentence was reduced due to health reasons and prolonged litigation.
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2012 (5) TMI 770
Supreme Court dismissed the special leave petition, condoned delay. No grounds for interference found.
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2012 (5) TMI 769
The Supreme Court dismissed the appeal in the case with citation 2012 (5) TMI 769 - SC. Judges were Mr. H.L. Dattu and Mr. Chandramauli Kr. Prasad.
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2012 (5) TMI 768
Issues involved: Appeal against order allowing interest expenditure claimed by the assessee in respect of shares applied in IPO but not allotted, quantum of assessment u/s 143(3) for assessment year 2006-200.
Summary:
1. The appeal was filed by the revenue against the order dated 02-07-2010, passed by the CIT(A)-31, Mumbai, regarding the allowance of interest expenditure claimed by the assessee in relation to shares applied in an IPO but not allotted. The Assessing Officer noted that only a small quantity of shares were allotted to the assessee out of those applied for through IPO. The entire interest costs paid on loans taken for share application were capitalized towards the cost of acquisition of shares. The CIT(A) decided in favor of the assessee, deleting the addition of short term capital gain made by the Assessing Officer, based on previous decisions of the ITAT Mumbai Bench and reasoning that interest expenditure on unallotted shares cannot be considered part of the cost of allotted shares.
2. The ITAT Mumbai Bench's decision in the case of Neera Jain and Shri Harshad N. Patel supported the assessee's position that interest paid on borrowed funds for acquiring shares through IPO should be allowed as a deduction. The Tribunal held that the entire interest paid on borrowed money for share acquisition should be treated as part of the cost of acquisition of shares, even if all applied shares were not allotted. Following these decisions, the appeal raised by the department was dismissed, and the interest expenditure was allowed as a deduction in computing short-term capital gain.
Judgment: The appeal filed by the revenue was dismissed based on the decisions of the ITAT Mumbai Bench, allowing the interest expenditure claimed by the assessee in relation to shares applied in an IPO but not allotted, as a deduction in computing short-term capital gain.
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2012 (5) TMI 767
Grant of bail - Held that:- The irresistible conclusion is that the impugned orders directing enlargement of bail of the accused persons, namely, Uttam Das, Abhimanyu Das and Murlidhar Patra by the Magistrate on their surrendering are wholly unsustainable and bound to founder and accordingly the said directions are set aside. Consequently the bail bonds of the aforenamed accused persons are cancelled and they shall be taken into custody forthwith. It needs no special emphasis to state that they are entitled to move applications for grant of bail under Section 439 of the Code which shall be considered on their own merits.
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2012 (5) TMI 766
Issues involved:
The judgment deals with the cancellation of assessment made u/s 143(3) due to the absence of a valid notice u/s 143(2) of the Income Tax Act, 1961.
Issue 1: Validity of assessment without proper notice
The Revenue appealed against the CIT(A)'s decision to quash the assessment, citing section 292BB of the Act which deems notice served if the assessee has cooperated in the proceedings. The CIT(A) annulled the assessment due to lack of valid notice u/s 143(2), supported by the Punjab & Haryana High Court's ruling. The Revenue argued that sec. 292BB applies to pending proceedings as of 1.04.2008, and since the notice was served on 30.09.2008, the assessment should stand.
Issue 2: Jurisdiction based on notice service
The AO completed the assessment without serving a valid notice u/s 143(2), leading to the challenge by the assessee on both merit grounds and jurisdiction. The CIT(A) agreed that the absence of a proper notice invalidated the assessment, in line with legal precedents. The Revenue contended that sec. 292BB should apply, as the assessee participated in the proceedings.
Issue 3: Application of sec. 292BB
The Tribunal noted that the assessee did not object to the notice service during assessment, rendering sec. 292BB's proviso inapplicable post-assessment. Referring to CBDT Circular No.1 of 2009, the Tribunal upheld that sec. 292BB applies to pending proceedings as of 1.04.2008. Following the Punjab & Haryana High Court's decision, the Tribunal concluded that the assessment could not be annulled based on notice service grounds.
Separate Judgment:
The Tribunal restored the Assessing Officer's order on jurisdictional grounds and remanded the case to the CIT(A) for a decision on merits, as the latter had not addressed the issue. The appeal filed by the Revenue was allowed, emphasizing the importance of proper notice service in assessment procedures.
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2012 (5) TMI 765
Issues involved:
Challenge to the impugned order de-paneling the petitioner without payment of outstanding dues and without affording any opportunity of hearing.
Details of the judgment:
1. The petitioner, a Public Limited Company, was appointed as an Enforcement Agent by the respondent-State Bank of India after responding to a public advertisement. The petitioner alleged that despite taking physical possession of secured assets under the SARFAESI Act, the Bank delayed payments and ultimately de-paneled the petitioner without notice or hearing.
2. The petitioner contended that the de-paneling was in violation of principles of natural justice as no hearing was provided before the action. Citing relevant judgments, the petitioner challenged the de-paneling decision.
3. The respondent-Bank opposed the petitioner's claim, referring to correspondence where the petitioner used intemperate language against the Bank officials. The respondent argued that empanelment did not confer a legal right, and the petitioner's actions did not entitle them to relief.
4. After considering the submissions, the Court found no merit in the writ petition. The petitioner's use of intemperate language in communications with the Bank, coupled with the absence of a legal right for continuation as an approved agent, supported the de-paneling decision.
5. The Court noted that the judgments cited by the petitioner did not apply to the de-panelment situation. Absence of prior notice before de-paneling was not deemed unlawful in this case.
6. The writ petition was dismissed, with the observation that the petitioner could seek recovery of outstanding dues through legal recourse if necessary.
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2012 (5) TMI 764
Notice inviting tenders (NIT) - challenge to the eligibility of respondent no 2 and allotment of the project work -
(1) that respondent No.2 had not filed the requisite certified balance-sheets for five years immediately preceding the issue of tender notice,
(2) that respondent No.2 did not have the requisite experience of executing a single integrated water supply scheme of the required value.
HELD THAT:- No legal flaw in the finding or the line of reasoning adopted by the High Court. It is true that the date of submission of tender was initially fixed but the same was extended. That being so, 5 years immediately preceding the issue of the tender notice would have included the year 2010- 2011 also for which financial year, audit of the company’s books, accounts and documents had not been completed. Such being the case, respondent No.2 could not possibly comply with the requirement of the tender notice or produce certified copy of the audited balance-sheet for the said year. All that it could possibly do was to obtain a certificate based on the relevant books, registers, records accounts etc., of the company, which certificate was indeed produced by the said respondent. The High Court has rightly observed that the appellant had not disputed the correctness of the turnover certified by the Chartered Accountant for the year 2010-2011 nor was it disputed that the same satisfied the requirement of the tender notice. therefore, fail and is accordingly rejected.
The High Court has, while examining the question of eligibility of respondent No.2 by reference to the execution of the single integrated water supply scheme, recorded a finding that the nature of the work executed by respondent No.2 for Upleta satisfied the requirement of the tender notice. That finding, in our view, is in no way irrational or absurd. We say so because the certificate relied upon by respondent No.2 sufficiently demonstrates that respondent No.2 had designed, and executed an integrated water supply scheme for Upleta which included raw water transmission from intake wells and transmission of treated clear water from WTP including providing, supplying and laying of pipelines, construction of E.S.R.s, Sumps, Pump houses and providing erecting pumping machinery.
In the absence of any mala fide or arbitrariness in the process of evaluation of bids and the determination of the eligibility of the bidders, we do not consider the present to be a fit case for interference of this Court. This appeal accordingly fails and is hereby dismissed with cost assessed at ₹ 25,000/- .
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2012 (5) TMI 763
Disallowance of salary expenses - Held that:- Salaries were reasonable and commensurate with the qualifications and work done by each employee.
Bogus share application money - Held that:- Assessing Officer who did not conduct any further investigation/verification or record statements. In the remand report, it was stated that the assessment order was passed on the basis of the information received from the investigation unit/wing. No further material or evidence to controvert the assessee was placed on record. The assessee had filed an affidavit of one Tarun Goel stating that the respondent/assessee had not arranged for bogus/accommodation entries as stated by the Assessing Officer.
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2012 (5) TMI 762
Issues Involved:
1. Addition on account of non-verification of creditors.
2. Application of net profit rate and assessment u/s 144.
3. Addition of interest on fixed deposits and other receipts.
4. Treatment of firm as AOP and disallowance of interest and salary to partners.
5. Verification of agricultural income.
Summary:
Issue 1: Addition on account of non-verification of creditors
- For the assessment year 2001-02, the ITAT remanded the issue of non-verification of creditors amounting to Rs. 30,00,000 and Rs. 4,92,322 back to the AO for fresh verification. The AO found it challenging to verify due to the time lapse and incomplete addresses. The ITAT observed that since the trading results were accepted, no addition u/s 68 could be made. The addition of Rs. 4,92,322 and Rs. 30,00,000 was directed to be deleted.
Issue 2: Application of net profit rate and assessment u/s 144
- For the assessment year 2005-06, the AO applied a net profit rate of 10% on gross receipts due to non-compliance by the assessee. The ITAT found the rate excessive and reduced it to 7%, considering past trends and lack of comparable cases.
- For the assessment year 2007-08, the AO applied a net profit rate of 10.5% on gross receipts. The ITAT, following its decision for 2005-06, directed a net profit rate of 7%.
Issue 3: Addition of interest on fixed deposits and other receipts
- For 2005-06, the AO assessed interest on fixed deposits of Rs. 14,07,003 as income from other sources, which was upheld by the ITAT.
- For 2007-08, the AO assessed interest on fixed deposits of Rs. 4,53,458 and other receipts of Rs. 6,69,340 as income from other sources. The ITAT upheld the treatment of interest but directed the deletion of the addition of other receipts as they were fully reflected in the books.
Issue 4: Treatment of firm as AOP and disallowance of interest and salary to partners
- For 2005-06 and 2007-08, the AO treated the firm as an AOP and disallowed interest and salary to partners under section 184(5) due to the assessment being made u/s 144. The ITAT upheld this treatment.
Issue 5: Verification of agricultural income
- For 2005-06, the AO added Rs. 18,00,704 as unexplained agricultural income. The ITAT held that the AO cannot make such an addition in the hands of the firm, following precedents, and upheld the CIT(A)'s deletion of the addition.
Conclusion:
- The appeals of the assessee in ITA No. 493(Asr)/2010 are allowed.
- The appeals of the assessee in ITA No. 494(Asr)/2010 and 495(Asr)/2010 are partly allowed.
- The appeals of the Revenue in ITA No. 381(Asr)/2010 are dismissed.
- The appeals of the Revenue in ITA No. 382(Asr)/2010 are partly allowed.
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2012 (5) TMI 761
Issues Involved:
1. Estimation of Net Profit (NP) by CIT(A).
2. Failure of the assessee to maintain books of accounts and vouchers.
3. Justification of expenses claimed by the assessee.
4. Applicability of Section 69C of the Income-tax Act, 1961.
5. Relief granted by CIT(A) based on the principle that to earn income, one has to spend money.
Summary:
1. Estimation of Net Profit (NP) by CIT(A):
The Revenue contended that the CIT(A) erred in estimating NP at 55% of the total receipts of Rs. 1,12,24,000/- without appreciating that the assessee failed to prove the source and availability of funds to substantiate his claim of having incurred expenses of Rs. 72,95,600/-. The CIT(A) estimated the NP at 55% of the total receipts, resulting in an income of Rs. 61,73,200/- and a net addition of Rs. 22,44,800/-.
2. Failure of the Assessee to Maintain Books of Accounts and Vouchers:
The assessee admitted to not maintaining any books of accounts. The only authenticated documents were the bank accounts and the account maintained with M/s Shipra Estates Ltd. The Revenue argued that the assessee failed to maintain any record or vouchers to support his claim of expenses, and the AO was justified in taking an adverse view as per Section 114 of the Indian Evidence Act.
3. Justification of Expenses Claimed by the Assessee:
The CIT(A) partly allowed the claim of the assessee, acknowledging that to earn income, one has to spend money. However, the Revenue argued that the CIT(A) allowed relief without any corroborative and cogent evidence. The assessee relied on a fund-flow statement, but there was no entry in the bank account demonstrating the availability of funds for incurring the claimed expenses. The AO allowed some expenses based on assertions made by the assessee but found no evidence to support the claim of the remaining expenses.
4. Applicability of Section 69C of the Income-tax Act, 1961:
The Revenue argued that the CIT(A) failed to appreciate that the assessee, having failed to prove the availability of funds for meeting the alleged expenditure, should have had the amount disallowed u/s 69C of the Act as unexplained expenditure.
5. Relief Granted by CIT(A) Based on the Principle that to Earn Income, One Has to Spend Money:
The CIT(A) granted relief to the assessee based on the principle that to earn income, one has to spend money. However, the Tribunal found that the CIT(A)'s findings were based on surmises and conjectures without any corroborative evidence. The Tribunal reversed the CIT(A)'s findings and restored the AO's findings, emphasizing that the burden of proof lies on the assessee to support his claim with cogent and corroborative evidence.
Conclusion:
The Tribunal allowed the appeal of the Revenue, reversing the CIT(A)'s findings and restoring the AO's findings. The order was pronounced in the Open Court on 10th May, 2012.
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2012 (5) TMI 760
Addition made under section 36(1)(iii) - Held that:- AO noted that the assessee had shown capital work-in-progress in its Balance Sheet and consequently computed disallowance in view of the provisions of proviso to section 36(1)(iii). The CIT (Appeals) has given the finding that no loan had been raised by the assessee company for the purchase of furnace or for the construction of building. The said finding of the CIT (Appeals) had not been controverted by the learned D.R. for the Revenue. Further the CIT (Appeals) has also noted that the total investment made by the assessee during the year on capital work-in-progress was ₹ 42.46 lacs spent on furnace and ₹ 33.23 lacs on the building as against the net profit of the assessee for the year at ₹ 1.97 crores. We find no merit in the disallowance made by the Assessing Officer. Uploading the order of the CIT (Appeals) we dismiss ground No.1 raised by the Revenue.
TDS u/s 194A - addition made by invoking provisions of section 40(a)(ia) - Held that:- The payment of interest being made to a bank is outside the purview of deduction of tax under section 194A of the Act. Thus, the assessee was not liable to deduct TDS on such payment of interest on the installment due to M/s UTI Bank Ltd. Upholding the order of the CIT (Appeals) we dismiss ground No.2 raised by the Revenue.
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2012 (5) TMI 759
Issues involved: Delay condonation application, re-opening of assessment u/s 21 of U.P. Value Added Tax Act, 2008, change of opinion.
Delay Condonation Application:
The revision was reported to be beyond time by 19 days, but the cause of delay was sufficiently explained in the affidavit filed. The delay was condoned, and the application was allowed. The office was directed to allot a regular number to the revision.
Re-opening of Assessment u/s 21 of U.P. Value Added Tax Act, 2008:
The revision was filed by the revenue against the order of the Tribunal under Section 58 of the Act. The assessment for the assessment year 2001-02 was re-opened under Section 21 on the ground that a relevant decision had been left out. The first appellate authority set aside the revised assessment order, stating it was a case of change of opinion without fresh material. The tribunal affirmed this decision. The assessing authority, under Section 21, cannot re-open or revise an incorrect order without fresh material. The court referred to a Division Bench decision stating that if the initial order is found incorrect, it does not fall under Section 21, as it would be a case of change of opinion without fresh material. The court held that the present case was also a change of opinion, and the first appellate authority and tribunal were correct in setting aside the re-assessment order. The revision lacked merit and was dismissed.
Conclusion:
The revision was dismissed as it lacked merit, and the re-assessment order was set aside due to being a case of change of opinion without fresh material.
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2012 (5) TMI 758
Issues involved: Appeal against order of Ld. Commissioner of Income-tax (Appeals)-XIV, Ahmedabad for assessment year 2008-09 regarding disallowance u/s.14A of the Income-tax Act, 1961.
Details of the Judgment:
1. The Assessing Officer (AO) observed that the assessee earned dividend income claimed as exempt u/s. 10(33) of the Act and incurred interest expenditure. The AO called for justification on why disallowance u/s 14A should not be made. The assessee claimed the investment in mutual funds was made from public issue proceeds, hence exempt income. The AO, not satisfied, made a disallowance u/s. 14A. The assessee appealed against this disallowance.
2. Before the Ld. CIT(A), the assessee argued that Rule 8D can only be applied if the AO is convinced of actual expenditure on exempt income. The CIT(A) partly allowed the appeal, stating no interest-bearing funds were invested in mutual funds earning exempt income, thus no disallowance u/s. 14A was justified. However, administrative expenses disallowance was upheld.
3. The Revenue challenged the CIT(A)'s order, arguing for confirmation of the AO's decision. The assessee supported the CIT(A)'s order, citing relevant judicial decisions.
4. The Tribunal noted the assessee's claim of no interest-bearing funds in the exempt income and the application of Rule 8D by the AO. Remanding the issue back to the AO, the Tribunal directed the assessee to establish the lack of nexus between exempt income and interest expenditure for a fresh decision.
5. The appeal by the Revenue was allowed for statistical purposes, setting aside the CIT(A)'s order and remitting the matter back to the AO for fresh consideration.
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2012 (5) TMI 757
Issues involved: Delay in filing appeal, treatment of sundry receipts as business income, addition of cess on green leaf.
Delay in filing appeal: The Revenue filed an appeal against an order dated 10.03.2010 of the ld. CIT-(A)-IV, Kolkata for A.Yr. 2006-07, with a delay of 26 days. The Revenue submitted a condonation petition explaining the reasons for the delay, which was accepted.
Treatment of sundry receipts as business income: The Revenue contended that the CIT(A) erred in directing the AO to treat sundry receipts of Rs. 56,10,000 as business income without considering the 60:40 division u/s 8. The AO disallowed the amount, but the CIT(A) allowed it, stating that the income was directly connected to tea business activities and qualified under Rule 8 of the IT Act. The Tribunal upheld the CIT(A)'s decision, noting that the receipts were integral to the tea business.
Addition of cess on green leaf: The AO disallowed Rs. 30,54,824 on account of cess on green leaf, stating it was not allowable from composite income. The CIT(A) allowed the deduction based on the decision of the Calcutta High Court. The Tribunal upheld the CIT(A)'s decision, citing judicial consistency and previous Tribunal rulings in favor of allowing such deductions.
Conclusion: The Tribunal dismissed the Revenue's appeal, confirming the decisions of the CIT(A) on both issues. The appeal was dismissed on 11.05.2012.
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9911796707
