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Showing 101 to 120 of 1247 Records
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2012 (9) TMI 1159
Issues involved: The judgment involves the confirmation of levy of penalty u/s. 158BFA(2) of the IT Act, based on the grounds that the penalty order was time-barred and that penalty was not leviable on merits.
Summary:
1. Issue 1 - Time-barred Penalty Order:
The appellant challenged the penalty order on the grounds that it was time-barred u/s. 158BFA(3)(c) of the IT Act. The appellant argued that the penalty order was passed beyond the time specified in the statute, as the order from the Tribunal was received by the authorities before the penalty order was issued. The ld. CIT(A) upheld the penalty order, stating that the penalty was imposed within the limitation period as per the provisions of the Act. The Tribunal, however, disagreed with this interpretation, emphasizing that the penalty order was passed after the expiry of the limitation period provided under section 158BFA(3)(c). The Tribunal concluded that the penalty order was time-barred and therefore, no penalty could be levied against the assessee.
2. Issue 2 - Merits of Penalty:
Apart from the time-barred aspect, the appellant also contended that the penalty was not leviable on merits under the law. The Tribunal did not delve into this issue as it found the penalty order to be time-barred. Consequently, the Tribunal set aside the orders of the authorities below levying and confirming the penalty, and allowed the appeal of the assessee.
In conclusion, the Tribunal ruled in favor of the appellant, holding that the penalty order was time-barred u/s. 158BFA(3)(c) of the IT Act. As a result, the penalty imposed on the assessee was deemed invalid, and the appeal was allowed.
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2012 (9) TMI 1158
Issues Involved:
1. Validity of assessment order u/s 143(3) without filing a return of income.
2. Ownership of M/s. Associated Apparels.
3. Additions on account of investments and profits in M/s. Associated Apparels.
4. Estimation of household expenses.
Summary:
1. Validity of Assessment Order u/s 143(3):
The assessee contended that the assessment order u/s 143(3) was invalid as no return of income was filed, and notice u/s 143(2) was issued in the absence of a return. The CIT(A) upheld the assessment, stating that despite the technical error, the assessment was validly framed following due process of law and in pursuance of the CIT(A)'s order dated 24-03-1992. The Tribunal confirmed this finding, noting the assessee's failure to produce contrary materials.
2. Ownership of M/s. Associated Apparels:
The primary issue was whether the assessee, Mr. Rohit K. Mehta, was the real owner of M/s. Associated Apparels. The AO and CIT(A) concluded that Mr. Mehta was the owner based on evidence from a search and statements from involved parties. The Tribunal upheld this finding, noting that documents and statements indicated Mr. Mehta's ownership, despite his claims of being only a power of attorney holder.
3. Additions on Account of Investments and Profits:
- Investment of Rs. 2,60,000/-: The Tribunal, agreeing with the CIT(A), deleted this addition, finding no separate material to justify it apart from the confirmed investment of Rs. 18 lakhs in purchases.
- Profit of Rs. 7,20,000/-: The Tribunal confirmed this addition, agreeing with the CIT(A) that the assessee must have earned profit on the Rs. 18 lakhs investment in goods.
- Estimated Value of Goods Imported (Rs. 4,75,500/-) and Profit from Shortage of Goods (Rs. 1,26,900/-): The Tribunal allowed telescoping benefits, deleting these additions by considering them covered by the Rs. 18 lakhs investment and profit addition.
4. Estimation of Household Expenses:
The AO's addition of Rs. 40,400/- for household expenses was partly upheld. The Tribunal, agreeing with the CIT(A), reduced this to Rs. 30,000/-, noting the assessee's own submission that the expenses should not exceed this amount.
Conclusion:
The appeal was partly allowed, with the Tribunal confirming the ownership of M/s. Associated Apparels by Mr. Mehta, upholding the profit addition of Rs. 7,20,000/-, reducing the household expenses addition to Rs. 30,000/-, and deleting the additions of Rs. 2,60,000/-, Rs. 4,75,500/-, and Rs. 1,26,900/- by allowing telescoping benefits.
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2012 (9) TMI 1157
Issues involved: Re-opening of assessment u/s 263 of the Income Tax Act, 1961 for the Assessment Year 2000-2001.
Re-opening under Section 263:
The Supreme Court raised queries regarding the conversion factor applied by the assessee for the Assessment Year 2000-2001. The assessee had mistakenly used a conversion factor of 250 gms. per cake instead of the actual 75 gms. per cake for Dettol Soap Fresh. The Court decided that this issue needed reexamination and directed the Income Tax Appellate Tribunal to reconsider the conversion factor applicable to soap in the case. The Orders passed by the High Court and ITAT were set aside, and the matter was remitted to ITAT for fresh consideration.
Decision:
The civil appeal filed by the Department was allowed with no order as to costs.
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2012 (9) TMI 1156
Issues Involved:
1. Whether the amount of Rs. 20 lakhs received by the assessee from the Government of Maharashtra as a special incentive is a capital receipt or a revenue receipt.
2. Whether the amount should have been reduced from the cost of assets in terms of Explanation 10 to section 43(1) of the Income Tax Act for the purpose of calculating depreciation.
Summary:
Issue 1: Nature of the Rs. 20 Lakhs Incentive
The Revenue contended that the Rs. 20 lakhs received by the assessee from the Government of Maharashtra as a special incentive was a revenue receipt liable for taxation. The assessee, a registered partnership firm engaged in manufacturing DPEB/HDPE fabrics, received this amount under the Package Scheme of Incentive, 1993, aimed at promoting industries in backward areas. The Commissioner (Appeals) held that the subsidy was a capital receipt, referencing the Supreme Court's judgment in CIT v/s Ponni Sugars and Chemicals Ltd., which emphasized the "purpose test" to determine the nature of the subsidy. The Tribunal upheld this view, stating that the subsidy was for setting up a new unit in a backward area and was computed based on fixed capital investment, thus qualifying as a capital receipt and not taxable.
Issue 2: Reduction from Cost of Assets
The Revenue argued that if the Rs. 20 lakhs was considered a capital receipt, it should be reduced from the cost of assets as per Explanation 10 to section 43(1) of the Act for depreciation calculation. However, this issue was neither addressed in the assessment order nor in the Commissioner (Appeals)'s order. Consequently, the Tribunal dismissed this ground as not maintainable.
Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming that the Rs. 20 lakhs received by the assessee was a capital receipt and not taxable. The second ground regarding the reduction from the cost of assets was dismissed as it was not maintainable. The order was pronounced in the open Court on 21st September 2012.
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2012 (9) TMI 1155
Issues involved:
The issue involved in this case is regarding the rectification of an order by the Appellate Tribunal ITAT COCHIN u/s 254(2) of the Income-tax Act, concerning the applicability of limitation u/s 263 for deduction u/s 80IB for the assessment years 2002-03 and 2003-04.
For the assessment year 2002-03:
The taxpayer contended that the Commissioner's intervention u/s 263 was time-barred as it was initiated after the prescribed limitation period. The Tribunal found that the deduction u/s 80IB was already part of the original assessment, making the Commissioner's action unsustainable. The Tribunal rectified the order to reflect this finding, emphasizing that once an assessment is finalized, it cannot be revised beyond the limitation period.
For the assessment year 2003-04:
The Tribunal inadvertently overlooked the issue of limitation raised by the taxpayer and disposed of the appeal based on the lack of separate books of account. However, upon rectification, the Tribunal acknowledged the error and allowed the taxpayer's appeal for the assessment year 2003-04, aligning it with the decision made for the assessment year 2002-03. The Tribunal emphasized that the plea of limitation need not be explicitly raised in the original grounds and can be considered by the Tribunal based on legal principles.
Conclusion:
The Tribunal rectified the order by deleting certain paragraphs and inserting new ones to address the issue of limitation u/s 263 for deduction u/s 80IB. The rectification clarified that the Commissioner's intervention was not sustainable beyond the limitation period, as the deduction was already part of the original assessment. The Tribunal allowed the taxpayer's appeal for the assessment year 2003-04, emphasizing that the plea of limitation can be considered by the Tribunal even if not explicitly raised in the original grounds.
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2012 (9) TMI 1154
Income on sale and purchase of shares - income assessable under the head income from other sources OR long term capital gain - Held that:- No reason or logic in treating the purchase of 11,500 shares as bogus. The Lower Authorities could have directly verified the transaction from the company itself, whose shares were questioned to be bogus but both the Lower Authorities did not do this exercise. The Remand Report of the AO itself show that the transactions have been treated as genuine subsequently by the AO himself while sending the Remand Report to the CIT(A). We find that the sale transaction of 11,500 shares of M/s. Robinson Impex (India) Ltd (Robinson Worldwide Trade Ltd.,) has not been doubted or questioned by the Lower Authorities. A simple logical question arises if the shares were never purchased, how can they be sold subsequently?
After considering all the facts and submissions, we find that both the Lower Authorities have grossly erred in treating the sale consideration as ‘Income from un-disclosed sources’.
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2012 (9) TMI 1153
Issues Involved:
1. Addition of Rs. 42,02,267 as deemed dividend.
2. Disallowance u/s 14A.
3. Computation of book profits u/s 115JA.
4. Deduction u/s 80IA for power generated for captive consumption.
5. Penal interest of Rs. 1,53,902.
6. Provision for doubtful debts of Rs. 38,73,894.
Summary:
1. Addition of Rs. 42,02,267 as Deemed Dividend:
The A.O. added Rs. 42,02,267 as deemed dividend, considering the occupancy rights in YIPL properties as distribution of assets. The CIT (A) upheld this addition. However, the ITAT deleted the addition, referencing a prior decision where it was held that such rights acquired do not constitute a release of assets out of accumulated profits, thus not attracting section 2(22)(a).
2. Disallowance u/s 14A:
The A.O. disallowed Rs. 5,64,112 u/s 14A for expenses related to tax-free income, applying Rule 8D. The CIT (A) upheld this. The ITAT, referencing the Bombay High Court decision in Godrej & Boyce, held Rule 8D inapplicable for AY 2006-07 and deleted the disallowance, noting that the investments were funded by own funds, not borrowals.
3. Computation of Book Profits u/s 115JA:
(a) Disallowance u/s 14A: The ITAT held that since the disallowance u/s 14A was deleted, no addition to net profits for book profits computation was necessary.
(b) Deemed Dividend: The ITAT deleted the addition of Rs. 42,02,267 for computing book profits, following the precedent that such deemed dividend does not form part of book profit.
(c) Provision for Gratuity: The ITAT deleted the addition of Rs. 4,18,170, considering it an ascertained liability as per the Bombay High Court decision in CIT vs. Echjay Forgings Pvt. Ltd.
(d) Provision for Doubtful Debts: The ITAT upheld the addition of Rs. 38,73,894 due to retrospective amendment to Sec. 115JB.
4. Deduction u/s 80IA for Power Generated for Captive Consumption:
The A.O. disallowed the deduction, arguing the power was for captive use and notional profits were not considered. The CIT (A) allowed the deduction at the rate charged by GEB. The ITAT upheld this, referencing decisions in Jindal Steel & Power Ltd. and Tamilnadu Petro Products Ltd., affirming that profits derived from captive consumption are eligible for deduction.
5. Penal Interest of Rs. 1,53,902:
The A.O. disallowed Rs. 1,53,902 as penal interest. The ITAT allowed the interest paid to Central Excise as compensatory but disallowed interest on delayed TDS payment as it is part of income tax, not allowable u/s 40(a)(ii).
6. Provision for Doubtful Debts of Rs. 38,73,894:
The A.O. added the provision for doubtful debts to net profits for computing book profits. The ITAT upheld this addition due to the retrospective amendment to Sec. 115JB.
Conclusion:
The appeals by the assessee for AY 2006-07 and 2007-08 were partly allowed, while the appeals by the revenue for both assessment years were dismissed.
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2012 (9) TMI 1152
Issues Involved:
The judgment involves the issue of deletion of addition made u/s 14A of the Income Tax Act by the learned CIT(A) and the challenge by the Revenue regarding the same.
Deletion of Addition u/s 14A:
The Revenue contested the deletion of the addition of Rs. 44,15,229/- made on account of disallowance u/s 14A of the Income Tax Act. The crux of the Revenue's argument was that since the assessee made investments in shares out of a bank loan, section 14A should be applicable. The Revenue relied on various decisions to support their stance. On the other hand, the counsel for the assessee defended the impugned order by emphasizing that the cases cited by the Revenue were based on different facts and that the assessee did not show the income as exempt income, especially when substantial funds were available in the capital account. The counsel also highlighted the rule of consistency and presented necessary evidence to support the availability of funds with the assessee. The Tribunal considered the rival submissions and the material on record, noting the earnings by way of interest which exceeded the amount paid to the banks. The Tribunal found no justification for the disallowance and upheld the deletion of the addition.
Observations and Conclusion of CIT(A):
The CIT(A) had deleted the addition of interest paid to the bank amounting to Rs. 44,15,229/- based on the fact that the assessee had earned interest on amounts given to companies and on FDRs, totaling Rs. 59,44,945/-. The Tribunal noted that the Assessing Officer did not consider the earnings by way of interest, which were more than the amount paid to the banks. This factual aspect was not disputed by the Revenue, and no contrary material was presented. The Tribunal analyzed the assertions made by the respective parties and found a clear discrepancy in the treatment of interest earnings, leading to the deletion of the addition made u/s 14A.
Case Laws and Precedents:
The Tribunal discussed various case laws cited by both the Revenue and the assessee's counsel to support their arguments. The decisions highlighted by the Revenue were distinguished based on the specific facts of the present case, where the earnings by way of interest exceeded the payments to the banks. The Tribunal also referenced a decision from the Bombay High Court regarding the presumption that investments were made from interest-free funds available with the company when both interest-free funds and loans were present. The application of rule 8D was also discussed, emphasizing the need for a reasonable basis to determine expenditure related to income not forming part of the total income. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the decision of the CIT(A) to delete the addition u/s 14A.
Final Decision:
The Tribunal dismissed the appeal of the Revenue, upholding the deletion of the addition made u/s 14A of the Income Tax Act. The judgment was pronounced in open court on 4th September 2012.
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2012 (9) TMI 1151
Issues Involved: 1. Whether the arbitration award is enforceable against the petitioner who was not a party to the agreement. 2. Whether the arbitration award is unenforceable due to it not being duly stamped. Summary:Issue 1: Enforceability of Arbitration Award Against Non-partyThe petitioner contended that the arbitration award passed by GAFTA is not executable against them as they were not a party to the arbitration agreement. The lower court dismissed this objection, noting that the petitioner had participated in the arbitration proceedings and filed an appeal against the original award. Therefore, it cannot be said that the petitioner is not a party to the agreement. The High Court upheld this view, stating that the petitioner's participation in the arbitration process implies acceptance of the arbitration agreement. Issue 2: Requirement of Stamp Duty on Foreign AwardThe petitioner argued that the award is not enforceable as it is not duly stamped, relying on clause (bb) of the proviso to Section 3 of the Indian Stamp Act and Article 11 of Schedule 1-A, which mandates stamp duty on awards. The lower court dismissed this objection, stating that there is no specific provision under the Indian Stamp Act requiring stamp duty on a foreign award. The respondent supported this by citing Section 44 of the Arbitration & Conciliation Act (A & C Act), which defines a "foreign award" and argued that foreign awards are enforceable without stamp duty. The High Court agreed, referencing the Supreme Court's decision in M/s Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd., which held that a foreign award is enforceable as a decree and does not require separate proceedings for enforcement and execution. The court concluded that the foreign award is already stamped as a decree and is enforceable without additional stamp duty. Conclusion:The High Court dismissed the petition, holding that the foreign award is enforceable as a decree and does not require additional stamp duty, thus upholding the lower court's decisions. No order as to costs.
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2012 (9) TMI 1150
Issues involved:
The appeal under s. 260A of the IT Act of 1961 against the order of the Income-tax Appellate Tribunal, Amritsar, regarding the best judgment assessment u/s 144 for asst. yr. 2005-06 was dismissed as time-barred due to a delay of 890 days not being condoned.
Judgment Details:
Issue 1: Delay in filing the appeal
The assessee-appellant filed multiple appeals against the assessment order, following legal advice. The Tribunal observed that the delay of 890 days in filing the appeal should be condoned as the appellant was pursuing remedies based on legal advice. The Tribunal relied on s. 14 of the Limitation Act, Svt. 1995, which allows exclusion of time spent on other proceedings if based on the same cause of action and prosecuted in good faith. The right of one appeal is recognized in all jurisdictions, and the matter should have been decided on merits. The application seeking condonation of delay was accepted, and the appeal was restored for a decision on merits.
Conclusion:
The High Court allowed the appeal, setting aside the order of dismissal due to the time-barred appeal. The delay of 890 days was condoned, and the appeal was restored on the Tribunal's board for a decision on merits in accordance with the law. The parties were directed to appear before the Tribunal within one month.
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2012 (9) TMI 1149
Issues involved:
1. Invocation of sec. 14A of the Income Tax Act, 1961 for disallowance of interest expenditure.
2. Disallowance under sec. 40(a)(ia) of the Act for non-deduction of TDS on export commission to foreign agents.
Issue 1: Invocation of sec. 14A for disallowance of interest expenditure:
The assessee, a manufacturer of Friction materials, filed a return of income for the assessment year 2008-09. The Assessing Officer observed investments and secured loans in the company's financials. Despite no dividend income, interest expenditure was disallowed under sec. 14A read with Rule 8D. The CIT(A) upheld this decision. The Tribunal found that the Assessing Officer did not consider evidence presented by the assessee regarding borrowings not used for investments. The matter was remitted back to the Assessing Officer for a fresh decision.
Issue 2: Disallowance under sec. 40(a)(ia) for non-deduction of TDS:
The assessee paid &8377; 32.93 lakhs as export commission to foreign agents without deducting TDS. The Assessing Officer disallowed this amount under sec. 40(a)(ia) citing non-compliance with sec. 195 provisions. The CIT(A) affirmed this decision. The Tribunal noted that the Assessing Officer failed to establish a business connection requiring TDS deduction. Citing a Delhi High Court decision, it was held that no TDS was necessary in the absence of a business connection. Referring to a Madras Tribunal decision, it was concluded that concurrence from the Assessing Officer under sec. 195(2) was not required when no chargeable income was present. Consequently, the disallowance under sec. 40(a)(ia) was set aside.
Conclusion:
The Tribunal partially allowed the appeal for statistical purposes, remitting the first issue back to the Assessing Officer for reconsideration and ruling in favor of the assessee on the second issue based on the lack of a business connection and the non-necessity of TDS deduction in the given circumstances.
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2012 (9) TMI 1148
Issues Involved:
1. Violation of ILD license conditions.
2. Breach of principles of natural justice.
3. Legality of agreements with foreign operators.
4. Imposition of penalties.
Summary:
1. Violation of ILD License Conditions:
The Petitioners, holders of ILD licenses granted u/s 4 of the Indian Telegraph Act, 1985, entered into agreements with foreign operators like M/s Singapore Telecom Ltd. (STL) under the OSS and FCS modules. The Respondent issued show cause notices alleging that the Petitioners enabled STL to illegally sell IPLC circuits directly to Indian customers, violating the Act and specific clauses of the ILD license agreement.
2. Breach of Principles of Natural Justice:
The Petitioners contended that the impugned orders were passed in violation of natural justice principles. The first Committee allowed the Petitioners to make presentations and explain their agreements, but the second Committee, which imposed penalties, did not provide a hearing. The Tribunal emphasized that higher charges necessitate stricter adherence to natural justice principles, and the Petitioners were prejudiced by the lack of a hearing.
3. Legality of Agreements with Foreign Operators:
The agreements were based on ITU recommendations, which the Respondent argued were not accepted by the DoT. However, the Tribunal found no evidence that the agreements per se were illegal or violated any statute or license conditions. The Tribunal noted that the ILD licenses allowed agreements for providing IPLC services and that the customers involved were bona fide.
4. Imposition of Penalties:
The second Committee imposed a penalty of Rs. 50 crores on each Petitioner without providing reasons or detailing how the license conditions were violated. The Tribunal held that the imposition of penalties without a hearing and detailed reasoning violated the principles of natural justice. The Tribunal cited the necessity of assigning reasons as part of natural justice and found that the Petitioners were prejudiced by the process followed.
Conclusion:
The Tribunal set aside the impugned orders, allowing the Petitioners an opportunity to be heard, and emphasized the need for compliance with natural justice principles. No order as to costs was made.
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2012 (9) TMI 1147
The appeal was dismissed by the Appellate Tribunal CESTAT MUMBAI due to non-compliance with the conditions of the stay order to deposit 50% of the confirmed service tax, as directed on 29.5.2012.
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2012 (9) TMI 1146
Issues involved: Appeals filed by Revenue against CIT(A) orders for AY 2003-04 and AY 2004-2005.
For AY 2003-04:
The AO made additions on account of suppressed sales, gross profit rate, and lease rent. The CIT(A) deleted the additions, leading to the Revenue's appeal. The AO estimated production and sales outside books based on raw material consumption, which the assessee contested due to the nature of rubber components. The First Appellate Authority upheld the assessee's contentions, emphasizing the lack of opportunity given to the assessee and the flawed basis for estimating sales. The AO's error in not considering lease rent while calculating the GP ratio was corrected by the CIT(A), resulting in the dismissal of the Revenue's appeal.
For AY 2004-05:
The AO disallowed personal expenses claimed by the assessee, alleging fictitious loss and concealment of income. The CIT(A) found the expenses justified, especially regarding wages paid to leased workers, and dismissed the Revenue's appeal. The AO allowed certain expenses like director's remuneration, PF, and ESI, but disallowed a significant portion of personal expenses. The CIT(A) upheld the genuineness of the expenses based on evidence provided by the assessee, emphasizing that the AO cannot substitute his views for that of the businessman.
In both cases, the appeals of the Revenue were dismissed, and the orders of the CIT(A) were upheld.
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2012 (9) TMI 1145
Issues involved:
The appeal involves the interpretation of Section 260-A of the Income Tax Act, 1961, and the question of whether an order passed on a rectification application is appealable to the High Court.
Details of the Judgment:
1. Background and Questions Raised:
The Commissioner of Income Tax filed an appeal under Section 260-A against the order of the Income Tax Appellate Tribunal regarding assessment years 1987-88 to 1992-93. The appellant raised questions regarding the direction given by the Third Member of the Tribunal and the justification of answering some questions while not answering others.
2. Assessment and Tribunal Proceedings:
The Assessing Officer reduced the net loss claimed by the assessee, and the CIT (Appeals) recomputed the income on a cash basis. The Tribunal referred questions to the Third Member, who answered some and left others unanswered. The department's rectification application was dismissed, leading to the current appeal.
3. Maintainability of the Appeal:
The respondent-assessee argued that the order dated 7.4.2000, was not a final order of the Tribunal and therefore not appealable. The appellant contended that the order rejecting the rectification application is independent and maintainable under Section 260-A.
4. Decision and Observations:
The High Court held that the order dated 7.4.2000, rejecting the rectification application was not maintainable as it was not a final order of the Tribunal. The appeal was dismissed, with the observation that the department could raise the grounds in the pending appeal against the final order of the Tribunal dated 31.5.2005.
In conclusion, the High Court dismissed the appeal on the grounds of maintainability, emphasizing the distinction between a final order of the Tribunal and an opinion of the Third Member that required consequential action.
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2012 (9) TMI 1144
Addition on account of late payment of employees’ contribution of ESIC & PF - Held that:- We have no hesitation in holding that the employees’ contribution towards PF paid by the assessee before the due date of filing of return u/s 139(1) of the Act for the assessment year under consideration is admissible. Consequently, findings of the ld. CIT(A) are upheld. With these directions, ground no. 1 in the appeal is dismissed.
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2012 (9) TMI 1143
Validity of orders passed by the Debt Recovery Appellate Tribunal (DRAT) - Arbitration Act and Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDB Act) is to prevail over the other - Term 'arbitrability' relating to the jurisdiction of the arbitral tribunal - Whether the provisions of the Arbitration and Conciliation Act, 1996 (Arbitration Act) are excluded in respect of proceedings initiated by banks and financial institutions under the RDB Act - HELD THAT:- In the case of Booz Allen and Hamilton Inc.[2012 (10) TMI 459 - SUPREME COURT]. The Supreme Court in that case dealt with the issue of "arbitrability of disputes" and held that all disputes relating to ''right in personam'' are considered to be amenable to arbitration and disputes relating to ''right in rem'' are those disputes which are not arbitrable and require to be adjudicated by courts and public tribunals, being unsuited for private arbitration. The term 'arbitrability' has different meanings in different contexts. The three facets of arbitrability, relating to the jurisdiction of the arbitral tribunal;
(i) whether the disputes are capable of adjudication and settlement by arbitration? That is, whether the disputes, having regard to their nature, could be resolved by a private forum chosen by the parties (the arbitral tribunal) or whether they would exclusively fall within the domain of public fora (courts).
(ii) Whether the disputes are covered by the arbitration agreement? That is, whether the disputes are enumerated or described in the arbitration agreement as matters to be decided by arbitration or whether the disputes fall under the 'excepted matters' excluded from the purview of the arbitration agreement.
(iii) Whether the parties have referred the disputes to arbitration? That is, whether the disputes fall under the scope of the submission to the arbitral tribunal, or whether they do not arise out of the statement of claim and the counter claim filed before the arbitral tribunal. A dispute, even if it is capable of being decided by arbitration and falling within the scope of arbitration agreement, will not be 'arbitrable' if it is not enumerated in the joint list of disputes referred to arbitration, or in the absence of such joint list of disputes, does not form part of the disputes raised in the pleadings before the arbitral tribunal.
Merely because there were huge NPAs and lot of monies belonging to the banks and financial institutions was stuck up and the legislature in its wisdom decided to create a special forum to have expeditious disposal of these cases would not mean that decisions rendered by Debt Recovery Tribunal come in the realm of ''right in rem''.
So far as tribunal like Debt Recovery Tribunal is concerned, it is simply a replacement of civil court. There are no special rights created in favour of the banks or financial institutions. There are no special powers given to the Debt Recovery Tribunal except that the procedure for deciding the disputes is little different from that of CPC applicable to civil courts. Otherwise, the Debt Recovery Tribunal is supposed to apply the same law as applied by the civil courts in deciding the dispute coming before it and is enforcing contractual rights of the Banks. It is, therefore, only a shift of forum from civil court to the tribunal for speedy disposal. Therefore, applying the principle contained in Booz Allen and Hamilton Inc. (supra), we are of the view that the matters which come within the scope and jurisdiction of Debt Recovery Tribunal are arbitrable.
Once that conclusion is arrived at, obviously the parties are given a choice to chose their own private forum in the form of arbitration.
Another significant fact which has to be highlighted is that the bank entered into agreement with the respondent herein on its own standard form formats. The terms and conditions of the loan were set out and decided by the bank. The respondent signed on dotted lines. In this scenario, when it was the proposal of the bank to have an arbitration clause to which the respondent had agreed, bank cannot now be permitted to say that this arbitration clause is of no consequence. Accepting the contention of bank would mean that the arbitration clause is rendered nugatory. It defeats the very effect of the said arbitration clause which was foisted by the bank itself upon the respondent, though in law, it becomes mutually acceptable between the parties.
The Court cannot permit a situation where such an arbitration agreement becomes one sided agreement, namely, to be invoked by the bank alone at its discretion without giving any corresponding right to the respondent to have the benefit thereof. Therefore, we find that orders of authorities below are without blemish.
Finding no merit in this writ petition, the same is dismissed. However, since nobody had appeared on behalf of the respondent, we are not imposing any costs.
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2012 (9) TMI 1142
Whether the income in question is liable to be taxed as business income or as income from house property" - Held that:- From the records, we find that, for the earlier Assessment Year 2001-2002, the Income Tax Appellate Tribunal has taken the view that income in question is business income.
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2012 (9) TMI 1141
Issues involved: Appeal against disallowance u/s 40A(3) of the Income Tax Act.
Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) sustaining the disallowance of cash payments made under section 40A(3) of the Income Tax Act by the Assessing Officer for the assessment year 2008-09. The Assessing Officer disallowed cash payments made in excess of Rs. 20,000 for purchases made by the assessee, citing non-compliance with Rule 6DD of Income Tax Rules read with section 40A(3) of the Act.
The Commissioner of Income Tax (Appeals) upheld the disallowance, stating that the assessee failed to establish exceptional and unavoidable circumstances necessitating the cash payments. However, the counsel for the assessee argued that the payments were made to an associate concern for the purchase of stock-in-trade, with a significant portion made through account payee cheques. The counsel contended that the cash payments were due to business exigency and exceptional circumstances, supported by proper accounting and genuine transactions.
After hearing both sides, the Appellate Tribunal found that the genuineness of the payments and the identity of the payee were established. The Tribunal noted that the payments were made in the exigency of business considerations and that the provisions of section 40A(3) were not applicable in this case. Citing relevant case law, the Tribunal emphasized that the payments were genuine, identified, and made on business expediency, thus ruling in favor of the assessee and deleting the disallowance made by the Assessing Officer under section 40A(3) of the Act.
Therefore, the appeal of the assessee was allowed, and no disallowance under section 40A(3) was warranted in this case.
(Order pronounced on Tuesday, the 11th of September, 2012 at Chennai.)
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2012 (9) TMI 1140
Issues involved:
1. Claim of dividend income as exempt u/s. 10(33)
2. Treatment of business loss as speculative loss
Issue 1: Claim of dividend income as exempt u/s. 10(33)
The Assessee appealed against the Commissioner's order, contending that the dividend income of Rs. 80,48,977/- should be exempt u/s. 10(33) of the Income Tax Act, 1961. The Assessee argued that the Assessing Officer erred in treating the dividend income as taxable without considering the exemption provision. The Tribunal found that the Commissioner did not provide an effective opportunity for the Assessee to be heard before deciding the appeal. Citing legal principles, the Tribunal set aside the Commissioner's order and remanded the matter for fresh consideration, directing the Assessee to produce a legible certified copy of registration.
Issue 2: Treatment of business loss as speculative loss
The Assessee, engaged in share brokerage, claimed a loss of Rs. 85,18,583/- from the sale of units as a business loss, not a speculative loss. The Commissioner observed that the mutual fund involved was approved by SEBI, making the dividend income exempt u/s. 10(35)(a) and the loss from unit sales considered a business loss. However, the Commissioner rejected the Assessee's revised computation of income filed during assessment proceedings, as no revised return was submitted within the time limit u/s. 139(5). The Tribunal emphasized that the Assessing Officer cannot entertain claims without a revised return, citing legal precedents. The Tribunal remitted the issue back to the Assessing Officer for proper consideration based on merits.
In conclusion, the Tribunal allowed the Assessee's appeal for statistical purposes, emphasizing the need for proper consideration of the Assessee's contentions on merits.
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