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Showing 101 to 120 of 941 Records
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2008 (9) TMI 949
Disallowance made pertaining to the exaggerated profit of captive power generating unit by claiming higher rate than the cost price or the market price charged by it on the supply of power made by it to 3rd party i.e., State Electricity Board - Decided against the revenue.
Permission to claim depreciation on WDV basis - The assessee’s return of income was processed u/s 143(1) on 29-9-2000 and no adjustment in that behalf was made by the AO. According to the learned counsel for the assessee the return of income filed before the due date of furnishing the return u/s 139(1) for assessment year 1999-2000. made proper compliance to the requirements of the second proviso to rule 5(1A) of Income-tax Rules. On consideration of the matter we accept this argument - No substantial questions of law.
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2008 (9) TMI 947
The Bombay High Court dismissed the appeal challenging the Tribunal's order, stating that no error was found in the Tribunal's interpretation of section 143(3) of the Income Tax Act. The appeal was dismissed, and no costs were awarded. (2008 (9) TMI 947 - BOMBAY HIGH COURT)
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2008 (9) TMI 946
Issues involved:
The issues involved in this judgment are:
1. Dispute regarding the change in method of accounting for recognizing export benefits.
2. Disallowance of expenses incurred on Research and Development (RandD) claimed by the assessee u/s. 35(1)(iv) of the Act.
Issue 1: Change in method of accounting for recognizing export benefits:
The appeal was filed by the assessee against the decision of the CIT(A) confirming the action of ignoring the revised return filed by the assessee and holding that the change in method of accounting was not bonafide. The assessee, a company, initially filed a return declaring a loss, which was later revised with the same loss amount. The company changed its method of accounting for recognizing export benefits under advance license, resulting in a significant write-off. The Assessing Officer (A.O.) added a sum to the total income of the assessee, stating that the change was without reasonable cause and the revised return did not provide necessary details. The assessee contended that the change was genuine and for bonafide reasons, following industry practices and accounting principles. The Tribunal held that the change in accounting method was bonafide and consistent, following Accounting Standard-9 and real income theory. The Tribunal directed the A.O. to accept the revised return and the profits shown by the assessee after adopting the changed method of accounting.
Issue 2: Disallowance of RandD expenses claimed u/s. 35(1)(iv) of the Act:
The assessee claimed a total expenditure on RandD, but only 1/6th was shown as an expense in the Profit and Loss account. The A.O. disallowed the claimed amount, stating that the assessee could not take two different positions. The CIT(A) upheld this decision. The assessee argued that the entire expenditure was allowable under Section 35(1)(iv) of the Act in the year of incurrence, regardless of accounting treatment. The Tribunal agreed, stating that the genuineness of the expenditure and the applicability of the Act's provisions were not in question. The Tribunal directed the A.O. to allow the total claim made by the assessee under Section 35(1)(iv) of the Act.
In conclusion, the Tribunal ruled in favor of the assessee on both issues, directing the A.O. to accept the revised return and the profits shown after the change in accounting method, as well as allowing the total RandD expenses claimed under Section 35(1)(iv) of the Act.
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2008 (9) TMI 945
Issues involved: Assessment of penalty u/s 271(1)(c) of the Income-tax Act, 1961 in connection with deduction claimed u/s 80HHD.
Summary:
Levy of Penalty u/s 271(1)(c) in connection with deduction u/s 80HHD:
The appeals arose from a Tribunal order related to assessment years 2000-01 and 2001-02 concerning the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961, in relation to the deduction claimed u/s 80HHD. The Tribunal accepted the exclusion of disclaimed foreign exchange receipts for computing the deduction under section 80HHD, which was upheld by the Court. The Tribunal concluded that the basis for imposing penalty under section 271(1)(c) did not exist in this scenario. The Tribunal's decision was based on the acceptance of the assessee's position in the quantum proceedings, leading to the dismissal of the appeal by the Court.
Inclusion of Interest Income for Deduction u/s 80HHD:
Regarding the inclusion of interest income in business income for computing deduction under section 80HHD, the Tribunal considered it a debatable issue pending before the Court. The Tribunal found the assessee's claim for deduction under section 80HHD to be bona fide, based on a possible interpretation, and supported by all relevant material facts. It was determined that the assessee did not conceal income by providing inaccurate particulars, thus not warranting penalty under section 271(1)(c). The fact that the claim was not fully accepted in the quantum proceedings did not justify the imposition of penalty under the said Act.
Conclusion:
The Court agreed with the Tribunal's findings on the penalty proceedings, stating that the Tribunal correctly applied the law and facts. No grounds for interference were found, and no substantial question of law arose for consideration. Consequently, the appeals were dismissed.
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2008 (9) TMI 944
Valuation of the property - sale of office premises - invocation of provisions of s. 50C - HELD THAT:- We find that the contention of the assessee that the agreement to sell the property was entered into on the date of first instalment of the amount in consideration i.e. 11th May, 2002 and handed over the possession of the property in question by the seller to the assessee (sic) on the payment of entire consideration on 4th Sept., 2002 has not been accepted by the lower authorities in absence of a written agreement on those dates.
With the above contentions, the assessee intended to make a case that sale was completed well before coming into operation of the provisions of s. 50C of the Act w.e.f. 1st April, 2003, hence the provisions of s. 50C of the Act are not applicable in the present case merely because the sale deed was registered two years later on 10th March, 2004. We thus in the interest of justice while setting aside the orders of the lower authorities remand the matter to the file of the AO.
An alternative contention of the ld AR remained that if the sale is considered to have come into effect on the date of registration of sale deed i.e. 10th March, 2004, then the relevant AY for the invocation of provisions of s. 50C of the Act would be the AY 2004-05 and not the AY 2003-04 under consideration. Since we have remanded the matter to the file of the AO, the AO is directed to consider this aspect of the matter while deciding the issue as directed above. The ground No. 1 is accordingly allowed for statistical purposes.
Valuation of the property - difference between the value of land estimated by the Valuation Officer and shown by the assessee - CIT(A) upheld the action of the AO for invoking provisions of s. 50C and made addition - HELD THAT:- We concur with the contention of the ld AR which is also supported by the decision of Jodhpur Bench of the Tribunal in the case of Navneet Kumar Thakkar vs. ITO [2007 (3) TMI 317 - ITAT JODHPUR] that provisions of s. 50C cannot be invoked in absence of a registered document i.e. in absence of the value adopted or assessed by any authority of State Government i.e. the stamp valuation authority for the purpose of payment of stamp duty in respect of such transfer.
Admittedly, in the present case, there was no registered sale deed to enable the AO to adopt or assess the value assessed by the stamp valuation authority for the purpose of s. 48 treating the same as full value of the consideration received or accruing as a result of such transfer. There was also no evidence that the assessee had received higher amount in consideration against the sale of that plot than shown by the parties in the agreement to sale. We thus while setting aside orders of the lower authority direct the AO to delete the addition in question.
The ground No. 2 is thus allowed. The appeal is accordingly partly allowed.
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2008 (9) TMI 943
Addition u/s 68 - unexplained cash credit - Disallowance of deferred revenue expenditure.
Addition u/s 68 - unexplained cash credit - HELD THAT:- We have heard the ld counsel for the appellant and have examined the findings returned by the Tribunal as well as those returned by the CIT (A) and find ourselves to be in agreement with the conclusions arrived at by the Tribunal. The AO is not permitted to examine the source of the source once the assessee has been able to establish that the transaction with his creditors is genuine and that the creditors identities and creditworthiness have been established. In this case, this had been done, therefore, it was not open to the AO to make the addition after entering upon an examination of the source of the source - Consequently, we feel that no interference is called for on this conclusion in the impugned order passed by the Tribunal.
Disallowance of deferred revenue expenditure - We note that this is a clear finding of fact and the Tribunal has accepted the findings returned by the CIT (A) and has permitted the deduction of expenses towards advertisement which were admittedly of a revenue nature. The assessee had deferred the revenue expenditure in the year preceding the previous year relevant to the assessment year in question. The advertising expenses had been incurred on account of the franchise agreements - The finding of the CIT (A) is that the business has commenced in the year in question. He has also returned a finding that due to certain reasons, the franchisee agreements got revoked in this year also. There was no option left with the assessee but to claim the deduction in this year after having deferred the revenue expenditure in the preceding year. The Tribunal confirmed the findings of the CIT (A).
We do not find any infirmity in the impugned order. In any event, no substantial question of law arises for our consideration. The appeal is dismissed.
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2008 (9) TMI 942
The petitioners have prayed for an alternative place for investigation or in any case, his Counsel may be permitted to remain present at the time of interrogation - Held that: - the applicants' advocate is permitted to remain present though at a distance from where he can see the proceedings of the interrogation. However, in any case, the lawyer shall not be permitted to interfere in the proceedings - decided in favor of applicant.
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2008 (9) TMI 941
Issues involved: Interpretation of Section 10A for claiming exemption.
Summary:
The High Court of Calcutta, in the case, addressed the issue of whether the assessee could benefit from Section 10A. The department argued that certain activities like fixing buttons, ironing, and packing garments did not amount to manufacturing, thus the assessee was not eligible for exemption under Section 10A. The Court questioned whether a garment could be considered finished goods without undergoing manufacturing processes like stitching and button-holing. It was emphasized that cloth needed to be transformed into finished goods through manufacturing processes to qualify for exemption under Section 10A. The Court agreed with the Tribunal's decision that the activities performed by the assessee constituted manufacturing, making them eligible for the benefits under Section 10A.
The Court upheld the Tribunal's decision based on the facts and circumstances of the case, citing relevant circulars, decisions, and licenses to support the conclusion that the assessee's activities qualified as manufacturing under Section 10A. The Court found no reason to interfere with the Tribunal's well-reasoned order and rejected the Revenue's grounds for appeal. Consequently, the appeal (ITA No. 657 of 2008) was dismissed, and parties were instructed to act on a signed copy of the order. Urgent certified copies of the order were to be provided to the parties upon application and compliance with formalities.
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2008 (9) TMI 940
Issues involved: Appeal u/s 260-A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal confirming the treatment of transaction as unexplained investment u/s 69 of the Act.
The appellant filed a return of income declaring total income and was selected for scrutiny. The assessing authority found the transaction regarding the sale of jewellery and diamonds not genuine, treating the profits as unexplained investment. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal confirmed parts of the order but differed on the treatment of diamond sales. The Tribunal held that the income from diamond sales cannot be considered unexplained investment. The appellant appealed under Section 260-A of the Income Tax Act, 1961.
The substantial question of law was whether the finding that the income from the sale of jewellery was an unexplained investment was arbitrary due to non-consideration of whether the goods sold were the same as those declared under the VDIS Scheme. The Court referred to a previous decision and held that if the goods sold were proven to be the same as those declared under VDIS, then it would not be considered unexplained investment. The Court allowed the appeal, set aside the Tribunal's order, and remitted the matter for fresh consideration by the Income Tax Officer.
This judgment highlights the importance of proving the origin of goods sold to avoid being classified as unexplained investment under Section 69 of the Income Tax Act, 1961. The Court emphasized the need for consistency in the declaration of goods to prevent disputes regarding the nature of transactions and tax liabilities.
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2008 (9) TMI 939
The Supreme Court dismissed the appeal in the case with citation 2008 (9) TMI 939. Judges were S.H. Kapadia and B. Sudershan Reddy.
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2008 (9) TMI 938
The Supreme Court dismissed a civil appeal based on Tribunal decisions in favor of the Assessee, which were upheld in earlier appeals by the Revenue.
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2008 (9) TMI 937
CENVAT credit - debonding of units - Circular No. 185/19/96-Ces dated 19-3-1996 - Held that: - It is clear from the record that at the time of debonding, amount equal to excise duty was paid by the respondent and, therefore, after debonding the appellant would be entitled to avail credit of that amount - reliance rightly placed on Circular No. 185/19/96-Ces dated 19-3-1996 - credit allowed - appeal dismissed - decided against Revenue.
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2008 (9) TMI 936
The Supreme Court issued notice on the Special Leave Petition and the prayer for interim relief. No coercive steps shall be taken in the meantime. The Punjab and Haryana High Court's order was challenged, which held that determining annual production capacity of furnace should be based on the capacity of the induction furnace recorded in the supplier's invoice, not on other materials like certificates of Chartered Engineers or sanctioned load of electricity. The High Court also ruled that not utilizing the furnace to its full capacity is not a valid reason to assess lower capacity.
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2008 (9) TMI 935
Whether during the course of progress or work or thereafter or after recession of the contract, shall be referred to the arbitration as provided in the condition No.51 of the Heading "scope and performance" in the Tender documents and shall be deemed to be reference within the relevant provisions of the Indian Arbitration Act, 1940, and or any statutory modification of enactment there under?
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2008 (9) TMI 934
Issues: Duty evasion by undervaluing clearances, computation of duty, applicability of SSI Notification, imposition of penalty, time limitation for demand.
Issue 1: Duty Evasion by Undervaluing Clearances
The case involved the clearance of Patent or Proprietary Medicines by the respondents as free goods and free samples, along with replacing time-expired returned goods with fresh manufactured goods without paying duty. The Joint Commissioner found that the respondents had avoided paying the due duty by incorrectly computing the value of clearances below the threshold of Rs. 30 lakhs for the years 1994-95 and 1995-96. The Commissioner (A) scrutinized the transactions and discovered discrepancies in the valuation, including instances where higher discounts were given than accounted for by the Joint Commissioner. Ultimately, the Commissioner (A) determined that the clearances were within the exemption limit of Rs. 30 lakhs for both fiscal years, leading to the dismissal of the demand for duty.
Issue 2: Computation of Duty and Applicability of SSI Notification
In the appeal by the Revenue, it was argued that the Commissioner (A) had inaccurately considered the value of clearances by applying a flat discount of 40%, which was deemed arbitrary. However, the appeal lacked specific figures to support this claim. The Tribunal noted that the Commissioner (A) had based the duty determination on a review of invoices and discrepancies in discount allowances. Due to the absence of precise calculations in the appeal and the lack of representation from the respondents, the Tribunal concluded that the Revenue's appeal could not be entertained.
Issue 3: Imposition of Penalty and Time Limitation for Demand
The Tribunal further analyzed the imposition of penalty and the time limitation for the demand. It was observed that the investigation by the department was completed in 1996, with a subsequent Show Cause Notice (SCN) issued in 1998 for the short-paid amount. The Tribunal found that the demand had become time-barred due to the delay in issuing the SCN. As there was no rebuttal to the respondent's assertion regarding the limitation period in the lower authorities' orders, the Tribunal upheld the decision to vacate the demand and penalty. Consequently, the appeal filed by the Revenue was dismissed.
In conclusion, the Tribunal ruled in favor of the respondents, dismissing the Revenue's appeal due to insufficient evidence for duty computation, time limitation constraints, and discrepancies in discount allowances. The judgment highlighted the importance of accurate valuation in duty assessment and adherence to statutory limitations in demand enforcement.
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2008 (9) TMI 933
Issues involved: Interpretation of Notification No. 4/97-CE u/s 5A of Central Excise Act, 1944 for clearance of grey cotton fabrics by a 100% Export Oriented Unit in Domestic Tariff Area.
Summary:
The appeal by the Revenue concerns the dispute over the clearance of grey cotton fabrics by a 100% Export Oriented Unit (EOU) in the Domestic Tariff Area under Notification No. 4/97-CE u/s 5A of the Central Excise Act, 1944. The Revenue argues that the benefit of the said Notification is not applicable to goods manufactured by a 100% EOU as it does not specifically provide for such exemption. They contend that the grey fabrics should be cleared at the tariff rate, not the effective rate. The issue has been previously addressed by the Hon'ble Gujarat High Court and the Tribunal in related cases.
The Hon'ble Gujarat High Court in the case of Lucky Star International vs. UOI and subsequent Supreme Court confirmation held that Notifications issued under Section 5A were not in accordance with the law. The Tribunal in the case of Ratangiri Textile Ltd. vs. CCE established that clearances by a 100% EOU to Domestic Tariff Area should be levied at the effective rate under exemption Notifications, not the tariff rate. Additionally, a clarification by the Ministry of Finance supported this position, stating that duty for clearances by a 100% EOU should be at the effective rate, allowing them to clear goods under Notification No. 8/97-CE read with Notification No. 4/97-CE. It is emphasized that Revenue cannot contest the clarification provided by the Board.
Therefore, considering the legal precedents and the clarification by the Ministry of Finance, the Tribunal found no merit in the Revenue's appeal and rejected the same.
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2008 (9) TMI 932
The High Court dismissed the appeal under Section 35G of the Central Excise Act, 1944. The appellant, an export-oriented unit, was found to have suppressed facts and contravened exemption provisions, leading to evasion of excise duty. The court found the penalty imposed by the authorities to be legally sustainable.
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2008 (9) TMI 931
The High Court of Delhi dismissed the appeal regarding the assessment year 1994-1995 as the notice issued under section 148 by the Assessing Officer had a jurisdictional defect. The Tribunal upheld the decision, stating that no substantial question of law arose. The appeal was in favor of the assessee.
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2008 (9) TMI 930
Issues Involved:
The judgment involves the issue of clandestine removal of goods and the demand for central excise duty from two parties, M/s Bihariji Manufacturing Pvt Ltd. and M/s Hindustan Silicate and Chemicals.
Clandestine Removal of Goods:
The Customs Excise and Service Tax Appellate Tribunal found that the revenue failed to prove that fully manufactured goods were removed from the premises of the mentioned parties. The tribunal emphasized the requirement of positive evidence to establish clandestine removal, stating that it cannot be based on presumptions or suppositions. It was noted that no material was presented to support the revenue's claim that the goods were manufactured and sold through a specific individual. The tribunal concluded that without concrete evidence, the charge of clandestine removal could not be upheld, leading to the dismissal of the duty demand and the non-liability of the seized goods for confiscation.
Legal Considerations:
The High Court, after examining the impugned order, determined that the tribunal's findings were factual and did not raise any substantial question of law for consideration. Consequently, the appeal under Section 35 G of the Central Excise Act, 1944 was dismissed.
This summary highlights the key aspects of the judgment, focusing on the issues of clandestine removal of goods and the legal considerations leading to the dismissal of the appeal.
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2008 (9) TMI 929
SFP is just an extension of BCI and two units were being run as one unit only and the goods actually manufactured in BCI were being cleared through SFP without payment of duty, claiming SSI exemption - the decision in the case of BOX & CARTON INDIA PVT. LTD. Versus COMMISSIONER OF C. EX., DELHI-IV [2008 (4) TMI 109 - CESTAT NEW DELHI], contested, where it was held that clubbing of clearances of BCI and SFP for the purpose of determining the aggregate value of clearances, is justified - Held that: - the decision in the above case upheld - appeal dismissed.
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