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Showing 121 to 140 of 1967 Records
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2014 (1) TMI 1849
Tax appeals are admitted for consideration of the following substantial questions of law :
(1)Whether on the facts and in the circumstances of the case, the tribunal was right in law in holding that the appellant was not a developer of the infrastructure facility but was a mere contractor thereof, and therefore not entitled to the deduction under section 80IA?
(2)Whether on the facts and in the circumstances of the case, the tribunal was right in law in disallowing the deduction under section 80IA when in the preceding year 2006-07 it stood allowed in a scrutiny assessment on identical facts?
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2014 (1) TMI 1848
Claim of deduction towards incidental expenditure incurred on substitution of high interest cost of NCDs - expenditure fully and exclusively for the purpose of business leviable under section 37(1) - Held that:- This Court in the case of Commissioner of Income-Tax vs. Gujarat State Fertilizers and Chemicals Ltd. reported in [2013 (7) TMI 701 - GUJARAT HIGH COURT] has dealt with this very issue and held CDR expenses have been rightly held by both the CIT (Appeals) and the Tribunal as revenue in nature and the same has rightly not been held to be capital in nature. For the waiver of the loan, the payment has been made to the financial consultants. This was for the purpose of business and the same was held to be allowable under Section 37(1) - decided against revenue
Expenditure on replacement of core engine of captive power plant - Held that:- Tribunal, it held that the leased property cannot be held as a property belonging to the assessee, and therefore, expenditure incurred on the property is in the nature of the revenue expenditure. While so doing, it had followed Commissioner of Income-Tax vs. Madras Auto Services (P) Ltd. [1998 (8) TMI 1 - SUPREME COURT] noting the fact that this was a lease asset and the Tribunal having rightly approached the issue treating the same as revenue expenditure, we see no reason to interfere in this question as well.
Payment of lease amount to its holding company which is GNFC Limited, in respect of certain assets taken on lease - According to the Assessing Officer this was a financial transaction - Held that:- The Tribunal noted that GNFC Limited had shown lease rent as income under the head “Business income” and in case of the lessor, the issue had been consistently decided that the assets were owned by the GNFC, and therefore, the lease rent received by the assessee was to be assessed as business income. See Deputy Commissioner of Income Tax, Bharuch Circle vs. Gujarat Narmada Valley Fertilizers Co.Ltd [2013 (8) TMI 300 - GUJARAT HIGH COURT] - Tribunal, therefore, has committed no error in allowing the appeal of the assessee
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2014 (1) TMI 1847
Addition u/s 40A - cash transaction exceeding permissible limit - Held that:- Considering the magnitude of the transactions of cash amount exceeding ₹ 20,000/-, both the authorities rightly observed verification was neither practicable nor was done by the Assessing Officer in each and every case.
Being satisfied that substantiating the claim, cogent evidences were relied upon by both the authorities to conclude that the purchases were made from agriculturists as also through common agents, we hold that the case of respondent was correctly held to be falling under exception provided under clause (e) and (k) of Rule 6DD of Income Tax Rules. The assessee had disclosed additional income on account of violation of section 40A(3) and addition of ₹ 15 lacs has already therefore been retained in view of the statement made before the authority, we see no reason to interfere in absence of any question of law much less substantial question of law arising in these Tax Appeals.
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2014 (1) TMI 1846
Claim of deduction u/s 80IA/80IB - Held that:- The issue before us stands decided in the case of the assessee for preceding Assessment Year 2005-06 [2012 (5) TMI 793 - ITAT NEW DELHI] wherein it was held that issue raised by the revenue has been repeatedly and consistently held in favour of the assessee from Assessment Years 1998-99 to 2004-05.
Addition of excise duty on exports made during the year - Held that:- As decided in assessee's own case the drawback does not immediately accrue on export. Drawback is payable post actual export. It requires submission of an application, completion and compliance with formalities and acceptance. After exports are affected, for claiming drawback the assessee has to file application within the prescribed time before the authorities in terms of various rules and regulations. The said Rules/regulations stipulate conditions when drawback is payable or not payable. Application claiming drawback is merely a claim. The amount claimed has to be verified, quantified and determined by the authorities who are empowered under the statutory provisions - decided against assessee
Disallowance of depreciation on computer accessories and UPS - Held that:- Claim allowed as relying on COMMISSIONER OF INCOME TAX VERSUS ORIENT CERAMICS & INDS. LTD [2011 (1) TMI 26 - DELHI HIGH COURT] and COMMISSIONER OF INCOME TAX VERSUS BSES YAMUNA POWERS LLD. / BSES RAJDHANI POWERS LTD. [2010 (8) TMI 58 - DELHI HIGH COURT]
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2014 (1) TMI 1845
Reopening of assessment - excessive allowance of the deduction under Section 80HHC - sale proceeds of the quota cannot be considered as export turnover but represented business income covered u/s 28(iv) and had to be reduced to the extent of 90% from the business income as per section 80HHC(baa) - Held that:- SLP dismissed. HC order confirmed. [2013 (1) TMI 177 - DELHI HIGH COURT]
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2014 (1) TMI 1844
Disallowances made on account of excise duty - Held that:- All the points urged by the revenue in this appeal are now covered either by the judgment of the Supreme Court or of the Tribunal itself. In that view of the matter, there is nothing for us to examine.
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2014 (1) TMI 1843
Addition on account of deposition of PF/ESI - contribution of employees beyond the prescribed time but before filing of the returns for respective assessment years - Held that:- The law on the issue stands settled that in case assessee deposits PF/ESI employees contribution before the due date of filing of return, it cannot be disallowed under section 36(1)(va). We have gone through the decision of the Tribunal inter-alia, therefore, by respectfully following the same specifically the Tribunal's order in assessee's own case, for A.Y. 2005-06, we confirm the impugned deletion and cannot allow ground No. (i) of the Revenue's appeal.
Allowance of 80% depreciation on the complete structure of Wind Turbine Generator Machine (WTGM) - Held that:- Referring to decision rendered for A.Y. 2005-06 & 2006-07 in assessee's own case where depreciation on wind mill including civil construction and other allied activities has been allowed @ 80% without segregating the building and the plant.
disallowance in Foreign Exchange resulting in speculation loss - Held that:- Where the foreign exchange contracts were only incidental to the assessee's regular course of business, these cannot be treated as disallowance in Foreign Exchange resulting in speculation loss. CIT Vs. Elecon Engineering Company Ltd. (2010 (2) TMI 23 - SUPREME COURT OF INDIA)
Disallowance of expenses under section 14A - Held that:- As per Assessing Officer, making of investment, maintaining or continuing investment and time of exit from investment are well informed and well coordinate management decisions involving not only inputs from various sources but also acumen of senior management functionaries. Thus, the assessee incurred incidental expenditure like telephone, follow up etc. to earn the dividend income and such expenditure has been debited in the normal business expenses shown towards earning of taxable income. We have found from the record that the reasoning given to disallow this impugned amount has not been disputed specifically by stating that the assessee did not incur incidental expenditure like telephone etc. but it was argued that the assessee did not use borrowed funds on which interest had been paid and was nothing should be disallowed under section 14A of the Act.
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2014 (1) TMI 1842
Application for temporary injunction - whether the Division Bench of the Bombay High Court could have passed the order of injunction restraining the arbitration at Singapore between the parties?
Held that: - the arbitration agreement does not become “inoperative or incapable of being performed” where allegations of fraud have to be inquired into and the court cannot refuse to refer the parties to arbitration as provided in Section 45 of the Act on the ground that allegations of fraud have been made by the party which can only be inquired into by the court and not by the arbitrator.
The Division Bench of the High Court has held that the Facilitation Deed was part of several agreements entered into amongst different parties commencing from 25.03.2009 and, therefore, cannot be considered as stand apart agreement between the appellant and the respondent and so considered the Facilitation Deed as contrary to public policy of India because it is linked with the finances, funds and rights of the BCCI, which is a public body. This approach of the Division Bench of the High Court is not in consonance with the provisions of Section 45 of the Act, which mandates that in the case of arbitration agreements covered by the New York Convention, the Court which is seized of the matter will refer the parties to arbitration unless the arbitration agreement is null and void, inoperative or incapable of being performed.
We have not expressed any opinion on the dispute between the appellant and the respondent as to whether the Facilitation Deed was voidable or not on account of fraud and misrepresentation. Clause 9 of the Facilitation Deed states inter alia that all actions or proceedings arising in connection with, touching upon or relating to the Facilitation Deed, the breach thereof and/or the scope of the provisions of the Section shall be submitted to the ICC for final and binding arbitration under its Rules of Arbitration. This arbitration agreement in Clause 9 is wide enough to bring this dispute within the scope of arbitration.
Appeal allowed.
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2014 (1) TMI 1841
Determination of the arms’ length price - benefit of adjustment of +5% denied - ITAT confirming CIT'A order in denying adjustment - Held that:- SLP dismissed. HC Order confimed [2013 (3) TMI 489 - DELHI HIGH COURT]
HC fairly concluded tribunal confirmed the findings of the lower appellate authority denying benefit of adjustment it does not mean that the Tribunal has acted illegally or irregularly.
In the present case, the Tribunal had examined the findings of the Commissioner of Income Tax (Appeals) in detail and had given an opportunity to the departmental representative to controvert or rebut the findings and conclusions arrived at by the CIT (Appeals). However, despite that opportunity, it is recorded in the order, that the departmental representative had not been able to controvert those findings and point to any material to enable the Tribunal to take a view other than the view taken by the CIT (Appeals).Assessee made a specific submission about the benefit of adjustment of +5% to be given while determining the arms Length Price, the ld. Counsel for the Assessee has not been pointed out as to who and in what manner, the order of the CIT (A) in rejecting this claim of the Assessee is improper and unjustified. - Decided against assessee.
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2014 (1) TMI 1840
Addition on account of write off of principal portion of cash credit loan waived by Banks - whether waiver of the cash credit loan is not liable to tax as the said amount was not received in the course of trading transaction? - Held that:- This issue has been considered by the Hon'ble High Court of Delhi in the case of Logitronics P. Ltd. Vs. CIT and CIT Vs. Jubilant Securities P. Ltd. (2011 (3) TMI 607 - DELHI HIGH COURT) as considered the decision of the Hon'ble Supreme Court in the case of CIT Vs. T.V. Sundaram Iyengar and Sons Ltd.[1996 (9) TMI 1 - SUPREME Court] the waiver thereof may result in the income more so when it was transferred to the profit and loss account - CIT(A) has rightly confirmed the addition made by the AO to the extent of waiver to the cash credit loan - Decided against assessee.
Addition on account of section 35(2AB) - assessee has not approved by prescribed authority in the Form No. 3CM - Held that:- The assessee filed the copy of the approval received from the competent authority. It is true that it is not in clear terms in Form No. 3CM which has been prescribed under the Income-tax Rule, 1962. We concur with the finding of the Ld. CIT(A) that if the approval is not in prescribed Form No. 3CM is not a serious discrepancy which should result in disallowance of the deduction to the assessee u/s. 35(2AB) of the Act. In this case, it is not disputed that the assessee has applied to the competent authority for getting the approval/recognition and only after the verification of all the details the Prescribed Authority have issued the approval letter. In our opinion, the Ld. CIT(A) has rightly allowed the claim of the assessee
Addition of write-off of interest portion of amount waived by Banks - Held that:- Though we agree with the CIT(A) that if the assessee has not claimed the deduction in respect of above amount, the same cannot be disallowed u/s. 43B nor the addition u/s. 41(1) can be made as the said amount of the interest has never been claimed as an expenditure. At the same time we find that there is a contradiction in the fact noted by the Assessing Officer as well as the Ld. CIT(A). We, therefore, for the limited purpose of the verification, remit this issue to the file of the Assessing Officer whether the assessee has claimed deduction in respect of the element of the amount of the interest waived in one time settlement.
Waiver of the principal amount of the loan which the assessee had claimed towards the capital account - Held that:- In this case the nature of the loan which has been waived in one time settlement is not disputed. In our opinion, the assessee’s case is squarely covered by the decision in the case of M/s. Xylon Holdings Pvt. Ltd. (2012 (9) TMI 449 - BOMBAY HIGH COURT) as the amount waived pertains to the term loan which was taken by the assessee for acquition of the assets. CIT(A) rightly deleted the addition made by the Assessing Officer on account of principal amount of waiver of loan.- Decided in favour of assessee
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2014 (1) TMI 1839
Registration u/s 12A eligibility - proof of charitable activities - Held that:- Decided in favour of the assessee by holding that the assessee is a public charitable fund, set up to advance an object of general public utility and therefore, the registration u/s 12A has been wrongly denied by the authority. We set aside the impugned order of the DIT(Exemption) with the direction to grant registration u/s 12A of the Income Tax Act to the assessee. See Interconnected Stock Exchange Investors Protection Fund Vs DIT(2013 (10) TMI 1134 - ITAT MUMBAI ) - Decided in favour of assessee
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2014 (1) TMI 1838
Penalty u/s 271C - order for levying the penalty passed by the Additional CIT which is barred by limitation - Held that:- In the instant case, the proceedings for levying the penalty under section 271C was initiated vide order dated 19/03/2009 which falls in the financial year 2008-09 and ends on 31/03/2009 and the action for imposition of the penalty was initiated on 24/12/2009 when a reference was made by the AO to the Addl. CIT (TDS), Udaipur, accordingly 6 months expired on 30/06/2010. Therefore, the order for imposing of penalty under section 271C could have been passed on or before 30/06/2010, but the order for levying the penalty u/s. 271C has been passed by the Additional CIT on 18/08/2010, which is barred by limitation. Therefore, the penalty levied under section 271C of the Act vide order dated 18/08/2010 was clearly hit by the barred by limitation which deserves to be set aside.
The penalty under section 271C levied in the present case was not justified. - Decided in favour of assessee.
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2014 (1) TMI 1837
Taxability - brand/franchise fee - transfer of right to use - royalty.
Whether, the FAA is correct in deciding that brand franchise and technical fees realised by the appellant from beer Contract Bottling Units (CBUs) are not transactions of transfer of right to use brand name/trade mark and such transactions fall outside the purview of the Act and hence not exigible to tax? - Held that: - The franchise fee received by the appellant is nothing but the licence fee and does not involve any transfer of right to use the brand name or trade mark - From the close reading of the all the clauses and sub-clauses of the agreement between the appellant and the CBUs confirms the fact that it is only the permission in the nature of licence to use the brand name or trade mark for which the franchise fee is received which is being reflected in the financials. Therefore, there cannot be any doubt to come to the conclusion that there is no transfer of right to use the brand name/trade mark of the appellant by the CBUs. The brand name of the appellant has been given simultaneously to other CBUs also which by itself proves that there is no transfer of right to use the brand name exclusively by any specific CBU - the brand franchise and technical fees realised by the appellant from beer contract bottling units are not transactions in the nature of transfer of right to use brand name/trade mark and the same is purely a service simpliciter which falls outside the purview of Section 2(1)(t)(iv) of the KST Act, 1957 - answered in the affirmative.
Whether, the State has established in the cross appeals that the impugned orders of the FAA is incorrect? - Held that: - the ownership of the brand name always wrests with the appellant only - the levy of tax by the AA on franchise fee and technical fee has to be held as incorrect and this Bench comes to the conclusion that the FAA is correct in deciding the said issue while allowing the appeal in part - the cross appeals of the State fails and liable to be dismissed - answered in the affirmative.
Whether, the FAA is correct in deciding that the royalty realised by the appellant amounts to transfer of right to use the brand name "Kingfisher' to the licensees to manufacture and sale of packaged water with that brand name? - Held that: - The clauses present in the licence agreement relating to the use of brand name to manufacture package drinking water, Clauses 1, 2, 4, 5, 6, 7, 11, 12, 13 and 15 clearly establishes that at any point of time, the brand name 'Kingfisher' has not been assigned exclusively to the licensees. Furthermore, it is to be noted that the appellant has not done in the main line of business i.e., manufacture and sale of beer and package drinking water and even not that of sale of its business assets. Therefore by any stretch of imagination to hold that the agreements entered by the appellant with the licensees involved transaction of deemed sales falling under Section 2(1)(t)(iv) of the Act, in the absence of any activity in the lines of business carried by the appellant cannot be held incidental or ancillary to the main lines of business - answered in negative.
Appeal allowed in part.
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2014 (1) TMI 1836
Undisclosed jewellery u/s 69A - search & seizure operation - exemption in regard to 'Streedhan' - applicability to CBDT circular No.1916 dated 11.5.1994 which contains guidelines to be followed in the matters of seizure of gold and jewellery during the course of search action - Held that:- The quantum and the worth of the gifts also depend upon the social as well as financial status not only of the donor but of the donee also. As per CBDT circular No.1916 dated 11.5.1994 which contains guidelines to be followed in the matters of seizure of gold and jewellery during the course of search action, it is apparent that in case of a person not assessed to wealth-tax, gold jewellery and ornaments to the extent of 500 gms. per married lady, 250 gms. per unmarried lady and 100 gms. per male member of the family need not be seized. Clause (iii) of the said guidelines wherein it has been mentioned that the authorized officer may, having regard to the status of the family, and the custom and practices of the community to which the family belongs and other circumstances of the case, decide to exclude a larger quantity of jewellery and ornaments from seizure.
In the case of "CIT vs. Ratanlal Vyaparilal Jain"(2010 (7) TMI 769 - Gujarat High Court) has held that though the said circular had been issued for the purpose of non seizure of the jewellery, but the basis for the same recognizes customs of gifts of jewellery by the relatives and friends on certain occasions such as marriages, birthdays, marriage anniversary and other festivals. In such circumstances, unless the Revenue shows anything to the contrary, it can be safely presumed that source to the extent of the jewellery stated in the circular stands explained. - Decided in favour of assessee
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2014 (1) TMI 1835
Security agency service - penalty - Held that: - the conclusion by the primary authority as confirmed by the Appellate authority, that the appellant had provided security agency service is seen to be correct. The appellant was subsequently registered for providing security agency service and had also reflected in its accounts that the consideration received was for providing security agency service during the relevant period - penalties also upheld - appeal dismissed - decided against appellant.
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2014 (1) TMI 1834
Issues Involved:
- Appeal against order of CIT(A)-I, Nagpur, relating to A.Y. 2008-09.
- Whether assessee is deemed to have been granted registration u/s. 12AA of the I.T.Act.
- Examination of income application for charitable purposes.
- Application of receipts for trust purposes under section 11(1)(a).
- Expenditure on cricket coaching as charitable purpose.
- Treatment of expenditure on new stadium at Jamtha for commercial purposes.
- Benefit of exemption u/s. 11 and 12 of the Income tax Act, 1961.
- Addition on account of development expenditure as capital in nature.
Analysis:
- The appeal was filed by the Revenue against the order of the CIT(A)-I, Nagpur, for A.Y. 2008-09. The Revenue raised multiple grounds challenging the decision of the CIT(A). These grounds included issues related to the grant of registration u/s. 12AA, examination of income application for charitable purposes, application of receipts for trust purposes, treatment of specific expenditures, and the benefit of exemption under sections 11 and 12 of the Income Tax Act, 1961.
- The learned counsel for the assessee pointed out that similar issues had been decided in favor of the assessee in previous years by the CIT(A) and confirmed by the Tribunal in appeals for A.Y. 2006-07 and 2007-08. The Tribunal found no infirmity in the order of the CIT(A) for the year under consideration as the facts were similar to those of the earlier years. Consequently, the Tribunal did not see any reason to interfere with the findings of the CIT(A) and dismissed the appeal by the Revenue.
- The Tribunal's decision was based on the consistency of the facts with previous years' cases and the lack of merit in the Revenue's appeal. By following the precedent set by earlier Tribunal orders and finding no discrepancies in the CIT(A)'s decision, the Tribunal upheld the order of the CIT(A) for the year in question. The appeal was ultimately dismissed, and the order was pronounced in the E-Court on January 22, 2014.
This detailed analysis covers the various issues raised in the appeal and provides a comprehensive understanding of the Tribunal's decision in the case.
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2014 (1) TMI 1833
Quantum of punishment - whims and fancies of the Court in deciding punishment - Held that: - the minimum sentence fixed by the legislature is five years, however, the court in an appropriate case alter recording the reason may award the sentence lesser than five years, but the fine shall not be less than ₹ 15,000/- or the amount of the value of such dowry, whichever is more - we are not able to understand as under what circumstances without recording any reason whatsoever it was permissible for the trial Court to award the sentence less than five (5) years. Awarding of punishment of 3 months by the trial Court was hopelessly disproportionate particularly in view of the fact that no mitigating circumstance has been pointed out by the trial court.
Undoubtedly, imposition of sentence is in the realm of discretion of the court and unless the sentence is found to be grossly inadequate, the appellate court would not be justified in interfering with the discretionary order of sentence.
Matter remanded back to the High Court to determine the quantum of punishment - appeal allowed by way of remand.
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2014 (1) TMI 1832
Applicability of Rule 6(3) of CENVAT Credit Rules - Sulphuric Acid has been cleared by the appellant to the fertilizer manufacturers which is exempt - only ground in appeal is that exempted goods include goods attracting ‘nil’ rate of duty and the Notification No.4/2006 specifies ‘nil’ rate in respect of Sulphuric Acid cleared to fertilizer manufacturers.
Held that: - the issue is squarely covered by the decision of the Tribunal in the case of Dharamsi Morarji Chemical Co. Ltd. Vs. CCE, Raigad [2010 (3) TMI 561 - CESTAT MUMBAI] wherein it was held that in respect of Sulphuric Acid cleared to fertilizer manufacturer under the same Notification and under the same conditions, assessee need not have to maintain separate accounts and has not to pay amount specified under Rule 6(3) of CENVAT Credit Rules - appeal dismissed - decided against Revenue.
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2014 (1) TMI 1831
The judgment by Appellate Tribunal CESTAT Bangalore in 2014 (1) TMI 1831 involved a refund claim filed by the appellant following an earlier order. The appeal by Revenue was rejected as it was a consequence of the earlier decision made by the Commissioner(Appeals).
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2014 (1) TMI 1830
Deduction u/s.80IB - income computed from the business of an undertaking developing and building a housing project - land and approval is not in assessee’s name and construction is not as per approved plan - CIT-A allowed the claim - Held that:- We are fortified with the decision of Hon’ble Madras High Court in the case of Viswas Promoters Pvt.Ltd. vs. ACIT (2012 (11) TMI 1117 - MADRAS HIGH COURT), wherein under the identical facts held that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression “housing project” as referring to construction of any building and the wordings in Section 80IB(10) - mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft., per se, would not result in nullifying the requirement under section 80IB(10)(c) of the Act. Therefore, respectfully following the ratio laid down in the case of Viswas Promoters Pvt.Ltd. vs. ACIT(supra) coupled with the fact that the ld.CITR(A) has given a detailed finding on fact that meets all the objections of the Assessing Officer. Thus, these grounds of Revenue’s appeal are dismissed.
TDS u/s 194C - amount paid to M/s.Parmar Builders for construction of ‘B & C’ building without deducting TDS - disallowance of expenditure u/s.40(a)(ia) - Held that:- CIT(A) has allowed this ground by observing that additional disallowance made do not loose the characteristic of being derived from the housing project developed by an undertaking as its original source. Therefore, even if the expenditure is disallowed, the same is entitled for deduction u/s.80IB of the Act on the income computed from the business of an undertaking developing and building a housing Project. Since the Revenue could not controvert this finding of the ld.CIT(A), therefore we hereby upheld the order of the ld.CIT(A) and reject this ground of Revenue’s appeal.
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