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Showing 101 to 120 of 1235 Records
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2012 (8) TMI 1140
Issues involved: Appeal by revenue against order passed by CIT(A)-19, Mumbai u/s 16(3) read with section 17 of the W.T. Act, 1957 for assessment years 2003-04, 2004-05, 2005-06, 2006-07 & 2007-08.
Issue 1 - Interpretation of Wealth Tax Act provisions:
The assessee's rented properties were assessed under Section 2(ea)(i) of the Wealth Tax Act. The Assessing Officer determined the total wealth of the assessee based on the rental income from commercial properties. The CIT(A) accepted the contention that the properties were exempt from wealth tax under Section 2(ea)(i)(v) as they were used for commercial purposes, not for the assessee's own business. The decision was supported by relevant legal precedents.
Issue 2 - Application of legal provisions:
The Assessing Officer rejected the assessee's explanation that the properties were not liable to wealth tax as they were used for commercial purposes. The CIT(A) upheld the assessee's contention, emphasizing the exclusion provided in Section 2(ea)(i) for properties in the nature of commercial establishments or complexes. The Tribunal concurred with the CIT(A)'s interpretation, dismissing the revenue's appeals for all relevant assessment years.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
This judgment dealt with the interpretation and application of provisions of the Wealth Tax Act regarding the taxation of rented commercial properties. The Tribunal upheld the CIT(A)'s decision that the properties in question were exempt from wealth tax as they fell under the category of commercial establishments or complexes. The legal arguments presented by both parties were carefully considered, leading to the dismissal of the revenue's appeals for all the assessment years in question.
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2012 (8) TMI 1139
Issues involved: Challenge to deletion of addition of commission payment without deducting TDS u/s 40(a)(ia) of the I.T. Act, 1961.
Facts and Decision:
- The assessee, a partnership firm, engaged in the export business, made commission payments to a foreign party, M/s AV International, New Zealand, without deducting TDS u/s 194H.
- The Assessing Officer disallowed the commission payment u/s 40(a)(ia) for non-deduction of TDS.
- Assessee contended that no TDS was required as the foreign agent had no business activity in India and relied on case law to support the claim.
- CIT(A) deleted the addition, stating that no TDS was warranted as the services were rendered outside India, and the non-resident agent had no PE in India.
- The department appealed against the CIT(A)'s order, but the Tribunal upheld the deletion of the addition, finding the CIT(A)'s reasoning sound and convincing.
- The Tribunal dismissed the department's appeal, affirming the CIT(A)'s decision.
This judgment addressed the issue of whether TDS u/s 40(a)(ia) was required on commission payments made by the assessee to a non-resident overseas agent. The Assessing Officer disallowed the commission payment for non-deduction of TDS, but the CIT(A) deleted the addition, emphasizing that no TDS was necessary as the services were rendered outside India, and the non-resident agent had no Permanent Establishment in India. The Tribunal concurred with the CIT(A)'s decision, finding the reasoning sound and dismissing the department's appeal.
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2012 (8) TMI 1138
Receipt of fixed deposit and the compensation of the spread-over period - Deemed to be accrual of Income or Not - Freezer deposit - HELD THAT:- The agency agreements in the instant case are live and continuing. Accordingly, we hold that the deposits collected from vendors cannot be considered as income of the assessee so long as the agency agreement continues. Accordingly, we set aside the order of the Ld. CIT(A) on this issue and direct the Assessing Officer to delete the addition relating thereto.
In the result, the appeal filed by the assessee is allowed.
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2012 (8) TMI 1137
Issues Involved:1. Classification of gain on sale of shares as capital gains or business income. 2. Disallowance of expenses u/s 40(a)(ia) due to late payment of TDS. Summary:Issue 1: Classification of Gain on Sale of SharesThe common grievance of the Revenue for the assessment years 2006-07 and 2007-08 relates to treating the gain on sale of shares as capital gains instead of business income as held by the Assessing Officer. The Assessing Officer observed that the assessee was engaged in trading business as well as investment in shares, and treated the short-term capital gain of Rs. 21,04,055/- as business income. However, the CIT(A) held that the capital gain earned on sale of shares were short-term capital gains and not business income. The CIT(A) noted that the assessee held the shares as investment and not as stock in trade, and the surplus should be assessed as capital gains only. The CIT(A) followed this finding for the assessment year 2007-08 as well. Issue 2: Disallowance of Expenses u/s 40(a)(ia)For the assessment year 2007-08, the Assessing Officer made disallowance by invoking the provisions u/s 40(a)(ia) in respect of the payment made for transportation charges. The assessee incurred transportation charges, labor & sub-contractor charges, and hire charges, and deducted TDS on some payments in March, depositing the entire tax deducted on 31/10/2007. The Assessing Officer disallowed amounts paid till February 2007 on which TDS was not deducted and paid in the financial year itself. The CIT(A) deleted the disallowance, noting that the amendment by Finance Act, 2010, which allowed TDS deducted to be paid before the due date of filing the return, was curative and retrospective in nature. The CIT(A) allowed the appellant's claim in full, stating that the amendment was designed to eliminate unintended consequences causing undue hardship to taxpayers. Appeal by Revenue:The Revenue appealed against the orders of CIT(A). The ld. CIT DR argued that the amendment by Finance Act, 2010, was not retrospective and should apply from 01.04.2010. The CIT DR relied on the decision of Hon'ble Supreme Court in the case of Gym Granites and Raghubir Singh, emphasizing that the retrospective application of an amendment should be gathered from the language of the provision itself. The CIT DR also cited the I.T.A.T. Special Bench decision in Bharti Shipping Yard Limited, which held that the amendment by Finance Act, 2010, was not retrospective. Decision:The Tribunal considered the rival submissions and various decisions, including the decision of Hon'ble Kolkata High Court in the case of Virgin Creations, which held that the amendment by Finance Act, 2010, was retrospective from 01.04.2005. The Tribunal upheld the CIT(A)'s decision, noting that the payment to the Government treasury was made before the last date of filing the return, and thus the disallowance u/s 40(a)(ia) could not be made. Regarding the treatment of capital gain as business income, the Tribunal found that the assessee was making investments in shares out of own funds and received substantial dividend income, confirming the CIT(A)'s action of treating the income from sale of shares as capital gains. In the result, both the appeals of the Revenue were dismissed. This order has been pronounced in the open court on 31st August, 2012.
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2012 (8) TMI 1136
Issues Involved:1. Validity of assessment proceedings u/s 153A. 2. Addition on account of bogus gifts. 3. Addition on account of short-term capital gains from share transactions. 4. Addition on account of unexplained cash found during the search. Summary:1. Validity of Assessment Proceedings u/s 153A:During the hearing, the ld. Authorized Representative conceded that the issue is covered by the order of the Special Bench in the case of M/s. All Cargo Global Logistics Limited vs. DCIT. The ITAT observed that once a search is initiated, the Assessing Officer is obligated to issue a notice requiring the filing of returns for the six years preceding the search. The ground raised by the assessee regarding the validity of assessment proceedings u/s 153A was dismissed in all appeals. 2. Addition on Account of Bogus Gifts:The AO made additions based on the discovery of gift deeds during the search, which were found to be bogus. The CIT(A) confirmed the addition, noting that the donors admitted that the gifts were managed by the donee's family members and were not genuine. The ITAT upheld the CIT(A)'s decision, stating that the assessee failed to explain the source of deposits in their bank accounts and that the gifts were used as a conduit for routing unaccounted funds into the company's books. 3. Addition on Account of Short-Term Capital Gains from Share Transactions:During the search, the AO found that the assessee had shown short-term capital gains from the sale of shares in Agrasen Corporation Limited, which were found to be bogus. The CIT(A) confirmed the addition, stating that the transactions were only eye-wash to take benefit of set-off of carry-forward capital losses. The ITAT upheld the CIT(A)'s decision, noting that the assessee failed to establish the genuineness of the transactions by not providing distinctive numbers of shares and not producing the broker despite summons u/s 131. 4. Addition on Account of Unexplained Cash Found During the Search:During the search, cash amounting to Rs. 30,55,430/- was found from the residential premises of the appellant, out of which Rs. 30,00,000/- was found in the bedroom of the appellant. The AO made an addition of Rs. 30,00,000/- as unexplained cash u/s 69A. The CIT(A) deleted the addition, stating that the cash belonged to M/s. Rajat Gems & Jewelleries Pvt. Ltd., and was generated from unaccounted sales. The ITAT restored the matter to the AO to compute the extra cash generated and income offered by RGJPL on account of unaccounted sales to find out the availability of extra cash. The AO was directed to decide the matter afresh. Conclusion:All the appeals filed by the assessee were dismissed, whereas the appeals filed by the Revenue were allowed in part as per the directions provided.
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2012 (8) TMI 1135
The Gujarat High Court heard a case involving the adjustment of arm's length price of international transactions of software services and Human Resource Management services. The court admitted the case and formulated substantial questions of law regarding the errors made by the Appellate Tribunal in reversing the Assessing Officer's orders. The court issued a notice to the respondents for further proceedings.
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2012 (8) TMI 1134
The Bombay High Court quashed the CESTAT's order dated 24th August, 2009 regarding the sale of scrap by issuing fictitious invoices. The matter is restored to CESTAT for a fresh decision. All contentions are kept open. No costs are awarded.
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2012 (8) TMI 1133
Issues Involved:
The judgment involves the disallowance of deduction under Section 10-A of the Income Tax Act by the Assessing Officer, the subsequent allowance of the exemption by the Commissioner of Income Tax (Appeals), and the dismissal of the appeal by the Income Tax Appellate Tribunal.
Issue 1: Disallowance of Deduction under Section 10-A by Assessing Officer
The respondent, engaged in the manufacturing and export of gems and silver jewelries, claimed a deduction under Section 10-A of the Income Tax Act, which was initially disallowed by the Assessing Officer. The Commissioner of Income Tax (Appeals) allowed the exemption, stating that the funds were not diverted but invested in the new company. The Tribunal concurred with this finding, emphasizing that the new company was not a reconstruction of the old business, and upheld the exemption under Section 10-A.
Issue 2: Legality of Orders by Commissioner of Income Tax (Appeals) and Tribunal
The appellant argued that both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal erred in setting aside the Assessing Officer's order. However, the Commissioner of Income Tax (Appeals) considered all factual aspects, concluding that the exemption under Section 10-A was correctly claimed by the assessee. The Tribunal also found no infirmity in the Commissioner's decision, stating that the assessee was entitled to the deduction under Section 10-A. The Tribunal emphasized that the company was an independent unit, not a restructured entity, and confirmed the Commissioner's order.
Conclusion:
The High Court dismissed the appeal, stating that no substantial questions of law were involved, and they could not interfere with the concurrent findings of fact recorded by the lower courts. The judgment highlights the importance of factual considerations in tax appeals and the limitations of the High Court in reviewing such matters.
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2012 (8) TMI 1132
Issues involved: Appeal against order directing treatment of rental income as income from house property instead of income from business.
Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal filed by the department against an order of the ld CIT(A)-23, Mumbai for the assessment year 2008-09. The main issue was the treatment of rental income amounting to Rs. 4,79,28,371. The department contended that the income should be considered as income from business, not from house property, due to the nature of the assessee's business and the intention behind leasing the unsold unit.
During the hearing, the ld A.R. pointed out that a similar issue had been decided in favor of the assessee for the assessment year 2006-07 in a previous order. The Tribunal had dismissed the revenue's appeal in that case as well. The ld D.R. did not contest this argument.
Considering the submissions and the precedent set in the assessee's own case for the assessment year 2006-07, where a similar issue was decided in favor of the assessee, the Tribunal upheld the order of the ld CIT(A) and rejected the department's appeal.
Ultimately, the appeal filed by the department was dismissed by the Tribunal. The decision was pronounced in open court on 10th August 2012.
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2012 (8) TMI 1131
Issues involved:
The issues involved in this case are related to the addition of undisclosed income u/s 133A, assessment based on survey findings, discrepancies in sale consideration, cross-examination of witnesses, and the validity of registered sale deed.
Summary:
Issue 1: Addition of undisclosed income u/s 133A
The appeals filed by the Revenue were against the order of CIT (A) directing to delete the addition of Rs. 8,20,150 without considering the confirmation given by a witness. The survey u/s 133A revealed discrepancies in the sale consideration of a property leading to the addition of undisclosed income by the Assessing Officer (AO). The ITAT set aside the assessment and directed the AO to allow cross-examination of witnesses.
Issue 2: Discrepancies in sale consideration
The assessee contended that the vendor's claim of receiving Rs. 26,00,000 was false and unsupported by evidence. The CIT (A) held that the value mentioned in the registered sale deed should be accepted as the consideration, as the vendor's statement lacked verifiable evidence. The ITAT rejected the Revenue's appeal, emphasizing the importance of the registered sale deed in determining the actual consideration.
Issue 3: Cross-examination of witnesses
Despite the ITAT's direction to allow cross-examination, the assessee was not given a fair opportunity to do so. The lack of proper cross-examination raised doubts about the authenticity of the vendor's claim and the witness's statement regarding the sale consideration.
Conclusion:
The ITAT dismissed the Revenue's appeals, upholding the CIT (A)'s decision to delete the addition of undisclosed income. The importance of the registered sale deed and the lack of substantial evidence to contradict its value were crucial in determining the outcome of the case.
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2012 (8) TMI 1130
Issues Involved:
1. Disallowance of cess on 'green tea leaves'
2. Deletion of addition toward interest on interest-bearing loans and advances
3. Deletion of disallowance of contribution to a non-government organization
4. Claim of depreciation on plant and machinery acquired out of withdrawals from NABARD
Summary:
1. Disallowance of cess on 'green tea leaves':
The first issue raised by the Revenue concerns the disallowance of cess on 'green tea leaves' amounting to Rs. 160.15 lakhs. The Assessing Officer (AO) disallowed this cess in computing the assessee's business income, which was later deleted by the Commissioner of Income-Tax (Appeals) [CIT(A)]. The Revenue argued that the entire amount of cess should be deducted from the 60% of the composite income deemed as agricultural income. The Tribunal noted that the issue is covered by the jurisdictional High Court's decision in CIT v. A.F.T. Industries Ltd. (2004) 270 ITR 167 (Cal), which has been consistently followed, including in the assessee's own case for the previous year. The Tribunal found the Revenue's arguments without merit and upheld the CIT(A)'s decision, stating that the cess is a tax on agricultural production, not income, and should be deducted in computing the composite income.
2. Deletion of addition toward interest on interest-bearing loans and advances:
The second ground contested by the Revenue was the deletion of an addition of Rs. 12,87,900/- towards interest on interest-bearing loans and advances. The CIT(A) deleted this addition based on the Tribunal's order in the assessee's own case for the preceding year. The Tribunal observed that the interest-bearing advances were sticky, and the accrual of income is a matter of fact. The Tribunal restored the matter to the AO to determine the satisfaction of section 43D of the Act, which prescribes the parameters for considering a loan or advance as non-performing, and decide the matter afresh according to law.
3. Deletion of disallowance of contribution to a non-government organization:
The third ground involved the deletion of a disallowance of Rs. 10 lakhs paid by the assessee to a non-government organization for constructing an auditorium. The CIT(A) allowed this deduction based on a similar decision in the assessee's case for A.Y. 2006-07 and the decision in Assam Brook Ltd. v. CIT (2004) 267 ITR 121 (Cal). The Revenue argued that the payment was a donation with no connection to the assessee's business. The Tribunal remitted the matter back to the AO for fresh adjudication, emphasizing that the onus to establish the claim u/s 37(1) of the Act is on the assessee.
4. Claim of depreciation on plant and machinery acquired out of withdrawals from NABARD:
The fourth ground, raised as an additional ground during the hearing, concerned the claim of depreciation on plant and machinery acquired out of withdrawals from NABARD, which was disallowed at Rs. 48,30,249/-. The CIT(A) allowed this claim based on the Tribunal's decision in the assessee's own case for A.Y. 2001-02. The Revenue argued that the actual cost of the assets should be nil as per section 43(1) of the Act. The Tribunal, following its consistent view and the decision in the assessee's own case, confirmed the deletion of the disallowance of the depreciation claim.
Conclusion:
The Tribunal partly allowed the Revenue's appeal for statistical purposes, remitting certain issues back to the AO for fresh adjudication while upholding the CIT(A)'s decisions on other grounds.
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2012 (8) TMI 1129
Income From Undisclosed Sources - Finding of Fact - Non genuine and creditworthiness of unsecured loan and creditors - HELD THAT:- On perusal of the orders passed by the Tribunal, it is found that the Tribunal has elaborately dealt with this issue. The Tribunal by appreciating the material on record has recorded finding of fact to the effect that the genuineness of the transaction is proved. While reaching to the said conclusion, the Tribunal has taken note of the reasoning of the assessing officer as well as CIT (Appeals) and has also considered the other material on record. The Tribunal on its own independent analysis of the matter has reached to the factual conclusion about the genuineness of the transaction and in this process the Tribunal has taken note of the fact that the detailed account of the concerned parties were filed by the assessee and the entries in the account were through account payee cheques, the source of deposit in the bank was not in dispute and the identity of the parties was established and also that the creditworthiness of the creditors was also established.
The aforesaid finding which has been recorded by the Tribunal is essentially a finding of fact. In view of the Division Bench judgment of this Court in the matter of Gyan Chand Anil Kumar v. ITO [2001 (3) TMI 40 - MADHYA PRADESH HIGH COURT] such a finding is a pure finding of fact which does not involve substantial question of law. Learned counsel for appellant has failed to point out any error or perversity in the said finding of fact.
Thus, the appeal does not involve any substantial questions of law requiring consideration by this Court which is accordingly dismissed.
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2012 (8) TMI 1128
Issues involved: Delay in providing information under RTI Act, non-compliance by former CPIO, imposition of penalty under Section 20(1) of the Act.
The Central Information Commission, in the case involving delay in providing information under the RTI Act, found that the former CPIO did not fulfill the obligations cast upon him u/s 7(1) of the Act. The Commission directed the current CPIO to provide specific point-wise information to the appellant and imposed a penalty of Rs. 25,000 on the former CPIO for not discharging his functions as required by the Act. The former CPIO's casual approach in disposing of the matter was noted, and the Commission emphasized that expecting the appellant to visit the office to gather information is not a valid substitute for providing the information as mandated by the Act.
Furthermore, the Commission ordered the recovery of the penalty amount from the salary of the former CPIO, to be remitted to the Central Information Commission. The amount of Rs. 25,000 was to be deducted at the rate of Rs. 5000 per month starting from September 2012, with the total amount to be remitted by March 2013. The responsibility for recovering and remitting the penalty amount was assigned to the I.G. Police, UT Chandigarh, ensuring compliance with the Commission's directive.
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2012 (8) TMI 1127
Issues involved: Disallowance of TDS credit and depreciation on mobile phone.
Disallowance of TDS credit:
The Assessing Officer disallowed TDS credit of `38,270 as the assessee followed cash system of accounting and did not receive corresponding receipts during the year. The Assessing Officer held that credit for balance TDS was not allowed as per section 199 of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) upheld this decision. However, the ITAT Delhi referred to section 199(1) which states that any deduction made and paid to the Central Government shall be treated as payment of tax on behalf of the assessee from whose income the deduction was made. The ITAT Delhi found that the assessee's action was in accordance with the provisions of section 199 and allowed the credit of TDS amount.
Depreciation on mobile phone:
The Assessing Officer disallowed depreciation of `2,525 on a mobile phone that was lost during the year. The Commissioner of Income Tax (Appeals) confirmed this decision. The ITAT Delhi noted that in such a situation, the entire cost of the mobile phone should be taken out from the block. The ITAT Delhi remitted this issue to the file of the Assessing Officer to consider afresh in light of the observation and relevant section of the Income Tax Act.
In conclusion, the ITAT Delhi partly allowed the appeal filed by the assessee for statistical purposes, setting aside the orders of the authorities below regarding TDS credit and depreciation on the mobile phone.
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2012 (8) TMI 1126
Issues Involved:
1. Reasonableness and arbitrariness of pre-qualification criteria in the tender.
2. Allegations of exclusion of the Appellant-Company from the tender process.
3. Judicial review of administrative actions in tender processes.
Summary:
Issue 1: Reasonableness and Arbitrariness of Pre-Qualification Criteria
The Appellant-Company challenged the pre-qualification criteria specified in Condition Nos. 2(a) and 2(b) (amended Condition Nos. 4(a) and 4(b)) of Tender No. G-23-07 dated 05.07.2007, arguing that they were "unreasonable, arbitrary, discriminatory and opposed to public interest in general." The Court noted that the KSRTC had issued the tender with specific pre-qualification criteria to ensure the supply of good quality tyres. The criteria were set by the Contract Management Group (CMG) of KSRTC, consisting of high-level officials with technical knowledge, and were aimed at obtaining reliable and quality materials from experienced suppliers. The Court found that the criteria were reasonable and not arbitrary, discriminatory, or mala fide.
Issue 2: Allegations of Exclusion from Tender Process
The Appellant-Company alleged that the pre-qualification criteria were included to exclude them from the tender bidding process with an ulterior motive. The Court reviewed the materials and found that the criteria aimed to ensure safety and quality for the passengers and public interest. The CMG had deliberated on the conditions and revised them to avoid any confusion, showing no intention to exclude any particular company unfairly. The Court concluded that the decision to include these criteria was made in the best interest of KSRTC and the public, and was not intended to exclude the Appellant-Company or any other similarly situated companies.
Issue 3: Judicial Review of Administrative Actions
The Court emphasized the principles governing judicial review of administrative actions in tender processes. Citing various precedents, the Court reiterated that judicial review is limited to checking whether the decision was made lawfully, without arbitrariness, irrationality, bias, or mala fides. The Court should not interfere unless the process adopted or decision made is so arbitrary and irrational that it could not have been reached by any responsible authority acting reasonably. The Court found that KSRTC's actions were reasonable, fair, and in public interest, and thus did not warrant interference.
Conclusion:
The appeal was dismissed, affirming the High Court's judgment that the pre-qualification criteria were not discriminatory or unreasonable. The Court upheld the KSRTC's right to set high standards for tender eligibility to ensure quality and safety in public transportation.
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2012 (8) TMI 1125
Issues Involved:
1. Disallowance u/s 14A of the Income-tax Act, 1961.
2. Disallowance of depreciation on civil construction towards ETP/STP plant.
3. Disallowance of depreciation on electric installation.
Summary:
Issue 1: Disallowance u/s 14A of the Income-tax Act, 1961
The assessee challenged the disallowance of Rs. 40,00,000/- for AY 2007-08 and Rs. 60,16,000/- for AY 2008-09 u/s 14A, which pertains to expenses incurred in relation to income that does not form part of the total income. The CIT (A) upheld the disallowance, referencing the Hon'ble Delhi ITAT Special Bench decision in M/s. Cheminvest Ltd. vs. ITO and M/s Daga Capital Management. The Tribunal, considering the submissions and the judgment in Maxopp Investments Ltd. & Ors. Vs. CIT, restored the issue to the Assessing Officer for a fresh decision. The grounds related to disallowances u/s 14A in both Assessment Years were allowed for statistical purposes.
Issue 2: Disallowance of depreciation on civil construction towards ETP/STP plant
The assessee contested the disallowance of Rs. 27,12,770/- on civil construction towards ETP/STP plant, claiming it as an integral part of the plant entitled to 100% depreciation. The CIT (A) upheld the disallowance, stating the appellant failed to prove the civil structures were integral to the ETP/STP process. The Tribunal, noting the inadequate evidence, directed the Assessing Officer to inspect the site and decide afresh whether the civil construction is an integral part of the ETP/STP. This ground was allowed for statistical purposes.
Issue 3: Disallowance of depreciation on electric installation
The assessee challenged the disallowance of Rs. 51,74,135/- for AY 2007-08 and Rs. 22,57,685/- for AY 2008-09 on electric installations, arguing these should be classified as part of plant and machinery and eligible for 15% depreciation. The CIT (A) upheld the disallowance, categorizing the items as electrical fittings eligible for 10% depreciation. The Tribunal reviewed the details and concurred with the lower authorities, stating the majority of expenses were towards electrical fittings, not plant and machinery. The grounds of appeal were dismissed.
Conclusion:
Both appeals of the assessee were partly allowed for statistical purposes. The Tribunal restored the issues related to disallowances u/s 14A and civil construction depreciation to the Assessing Officer for fresh consideration, while upholding the disallowance of depreciation on electric installations.
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2012 (8) TMI 1124
The Rajasthan High Court dismissed the appeal as infructuous due to a subsequent order. The citation is 2012 (8) TMI 1124. The judges were Chief Justice Mr. Arun Mishra and Mr. Justice Narendra Kumar Jain-I. Shri R.B. Mathur represented the appellant.
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2012 (8) TMI 1123
Power of Tribunal - Seeking to recall the order sanctioning of a compromise or an arrangement - prejudicial Of the interest - HELD THAT:- The power of the Court to enforce the compromise and arrangement which is sanctioned under Section 391 of the Companies Act is prescribed/set out u/s 392 of the Companies Act. It has clearly empowered the Court to give directions and allow modifications in the compromise or arrangement but has not given any powers to the Court to recall/rescind/cancel the order sanctioning the compromise or arrangement. If at all the Court is satisfied that the compromise or arrangement sanctioned u/s 391 cannot be worked satisfactorily with or without modifications, the Court can suo motu or on the Application of any person interested in the affairs of the Company make an order winding up the Petition. In fact, in view of the decision of the Hon'ble Supreme Court in Meghal Homes (P.) Ltd.[2007 (8) TMI 447 - SUPREME COURT], it is now well settled that if a Company desires to modify a sanctioned scheme despite the same not being necessary for the proper working thereof, the Company cannot do so under any other provisions except by following the required procedure prescribed u/s 391 of the Companies Act.
As submitted on behalf of the Regional Director, even on facts no case is made out for recalling of the order sanctioning the scheme. The reason cited by the Company for seeking to recall the order sanctioning the scheme is essentially that the Scheme is not workable and is adversely affecting the interests of the Companies. Apart from the fact that this can hardly be a ground for seeking cancellation of the scheme at this stage, not a single piece of evidence is produced before this Court to show that the contracts already entered into by the Demerged Company with their clients have been cancelled by the said clients or that they have refused to allow the Resulting Company to execute and complete the said contracts. There is nothing produced on record to even show that any of the proposed clients have refused to deal with the Resulting Company because the name of the Resulting Company does not include anything about the Facility Management Services or because the proposed clients are revaluating the entire process of the Resulting Company in terms of net worth, technical know how, qualification, ability to perform such contracts etc.
In any event, all these factors were surely considered by the applicants before proposing the scheme of arrangement and inter alia stating therein on oath that the said scheme is in the interest of the Company and its shareholders. Again, in any event if the scheme is not workable then the Company can certainly seek directions or modifications to the scheme in order to make it workable. It cannot cancel the scheme on this ground. However, if the Applicants are determined to have the scheme rescinded/cancelled, in view of the facts and law set out hereinabove, they will have to follow the procedure prescribed u/s 391 of the Companies Act and revert back to status quo ante.
Thus, both the Applications are dismissed.
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2012 (8) TMI 1122
Issues involved: Appeal by revenue against deletion of additional depreciation on wind mill and cross objection by assessee against disallowance under section 14A of the Income Tax Act, 1961.
Appeal by Revenue - Additional Depreciation on Wind Mill:
The revenue appealed against the deletion of additional depreciation on a wind mill, arguing that it had no connection with the core manufacturing activity. The CIT(A) allowed the additional depreciation under section 32(1)(iia) as the wind mill indirectly contributed to the manufacturing business by generating electricity. The CIT(A) cited the Finance Act of 2005 which removed the condition of substantial expansion for claiming additional depreciation. The Tribunal upheld the CIT(A)'s decision, stating that the conditions for additional depreciation were met, and rejected the revenue's appeal.
Cross Objection by Assessee - Disallowance under Section 14A:
The assessee objected to the disallowance of a certain amount under section 14A of the Income Tax Act, 1961. The AR argued that no interest-bearing borrowed funds were used for share investments, and the disallowance was unjust. The AO applied Rule 8D for disallowance, but the Tribunal noted that Rule 8D was not applicable for the relevant assessment year. The Tribunal also considered a Special Bench decision overruled by the Bombay High Court. Ultimately, the Tribunal partially allowed the assessee's objection, reducing the disallowance amount based on the absence of interest-bearing borrowed funds and the specific circumstances of the case.
In conclusion, the Tribunal dismissed the revenue's appeal regarding additional depreciation on the wind mill and partially allowed the assessee's cross objection against disallowance under section 14A of the Income Tax Act, 1961.
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2012 (8) TMI 1121
Issues involved:
The judgment deals with the imposition of penalty u/s 271B of the Income Tax Act on an assessee for failure to get the accounts audited under section 44AB of the Act, specifically in the context of a charitable trust claiming exemption under section 11 of the Act for the assessment year 2006-07.
Details of the judgment:
1. The AO imposed a penalty of Rs. 26,572 u/s 271B for failure to get the accounts of a hospital audited u/s 44AB, despite the assessee being a charitable organization claiming exemption under section 11. The AO rejected the contention that the accounts were not required to be audited due to the charitable status, noting the business income declaration in the return filed by a Chartered Accountant.
2. The Ld. CIT(A) upheld the penalty, leading to an appeal by the assessee represented by Sh. Surinder Mahajan, CA. The Ld. DR supported the lower authorities' orders.
3. The ITAT considered whether the assessee, as a charitable trust with exempt income u/s 11, was liable for audit u/s 44AB meant for business entities. It was argued that Chapter III (exempt incomes) prevails over Chapter IV (business incomes) of the Act, rendering section 44AB inapplicable to the assessee.
4. Referring to case law precedent, including ACIT vs. India Magnum Fund, the ITAT concluded that the assessee's exempt status under section 11 precluded the application of section 44AB. The penalty under section 271B was deemed unjustified and canceled.
5. The ITAT also considered the assessee's bonafide belief in not attracting section 44AB and cited relevant case laws to support the decision to cancel the penalty.
6. Consequently, the ITAT allowed all grounds of appeal by the assessee, reversing the Ld. CIT(A)'s order and canceling the penalty imposed u/s 271B.
7. The appeal in ITA No.185(Asr)2012 was allowed, and the order was pronounced on 6th August 2012.
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