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Showing 121 to 140 of 1510 Records
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2015 (1) TMI 1400
Unexplained cash credits u/s 68 - Whether the Tribunal was right in deleting the addition u/s 68 by applying correct principles – company who take the decisions, controls and manage them - HC held apparent, patent, and conspicuous facts were ignored by the first appellate authority and the Tribunal - section 68 of the Act was rightly invoked and is applicable - Held that:- Leave granted.
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2015 (1) TMI 1399
Addition u/s 68 - Held that:- If the revenue authorities had any information then, without the knowledge of the assessee, the same was exchanged by the AOs and consequently held against the assessee. In this proceeding, assessee was not even involved. It is a fact that the assessee did not have any dealings with either Hitech or Citibase Multimedia.
This fact, even the revenue authorities were not able to controvert. In the statement of Mr. N C Trivedi, proprietor of Hitech, had submitted the sales tax no., its stock accounts and the bank statements and he had stated that Hitech who had a turnover of over 5.60 crores had advanced funds to LFPL. But the revenue authorities went further and quizzed the director of Citibase Multitrade, who stated that they were providing book entries. Probably, this was the reason, why the revenue authorities had been using the pharse, “unholy nexus”. If the learned AO was in possession of any such information, why instead of supplying the same to respective AO of said parties, the same was used against appellant as there is no connection whatsoever between us and the dealings of said parties.
Once the creditor was established, there was no occasion for the revenue to go further to find out whether creditor of creditor was also genuine and creditworthy. Meaning whereby, as in the appeal before us, the AO of Hightech should have corresponded that the transaction with Hightech and LFPL was not genuine. - Decided in favour of assessee
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2015 (1) TMI 1398
Amendment application rejected - plaintiff, realized that market value of the property in question was around ₹ 1,20,00,000/- and therefore, filed an application for amending the plaint - Specific performance of a contract in relation to the suit property - Held that:- As per the provisions of Order 6 Rule 17 of the Civil Procedure Code, the amendment application should be normally granted unless by virtue of the amendment nature of the suit is changed or some prejudice is caused to the defendant - In the instant case, the nature of the suit was not to be changed by virtue of granting the amendment application because the suit was for specific performance and initially the property had been valued at ₹ 13,50,000/- but as the market value of the property was actually ₹ 1,20,00,000/-, the appellant-plaintiff had submitted an application for amendment so as to give the correct value of the suit property in the plaint.
The main reason assigned by the trial court for rejection of the amendment application was that upon enhancement of the valuation of the suit property, the suit was to be transferred to the High Court on its original side - this is not a reason for which the amendment application should have been rejected.
The amendment application made by the plaintiff should have been granted, especially in view of the fact that it was admitted by the plaintiff that the suit property was initially undervalued in the plaint and by virtue of the amendment application, the plaintiff wanted to correct the error and wanted to place correct market value of the suit property in the plaint - the amendment application should not have been rejected by the trial court and the High Court should not have confirmed the order of rejection - Appeal allowed.
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2015 (1) TMI 1397
Reassessment u/s 147 - stay petition - recovery proceedings - Held that:- As the appeal preferred by this petitioner is pending before Commissioner (Appeals), we are not inclined to decide the issue raised by this petitioner in the petition because the petitioner has already availed the efficacious alternative remedy. Thus, the petitioner is not remediless against the actions of the respondents.
So far as the stay against the recovery procedure initiated by the respondents is concerned, as the petitioner has not preferred any stay application before the appellate authority, it is but obvious that the respondent will start the recovery procedure initially by issuing letters and thereafter by coercive methods. Nothing is unusual or illegal in this unless the stay application is preferred and stay is obtained by this petitioner in its appeal which is pending before the appellate authority.
As no stay application has been preferred by this petitioner before the Commissioner (Appeals), no illegality has been committed by the respondents in starting different procedures for recovery of income tax which is to be legally payable by the petitioner because of reassessment order passed by the respondents on 25th March, 2014.
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2015 (1) TMI 1396
Disallowance of depreciation on Sivaganga Beverage Division - Depreciation has been disallowed in the assessment years under consideration on the ground that the facts in the assessment years 2005-06 and 2006-07 were quite different from the assessment year under appeal - Held that:- A perusal of the records show that the facts in the present case are in no way different from the facts in the earlier assessment years. After trial run, plant is ready for commercial production. The assessee is waiting consent from the Pollution Control Board, to operate the beverage plant commercially. As decided in assessee's own case in order to get depreciation u/s.32, it is not necessary that the machinery in question should have been actually used in the relevant previous year for the purpose of business and it is sufficient if the same is kept ready for use during the relevant previous year, though not actually used due to circumstances beyond the assessee’s control.
Allowing of depreciation on Modakurichi Sugar Project, Modakaurichi Cogen Project and Sivaganga Cogen Project on the ground that the assets were used for trial run - Held that:- The assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for the very short duration for the trial run. It has not been disputed by the Revenue that trial run production was immediately followed by the commercial production. The Hon’ble Punjab & Haryana High Court in the case of CIT v. Piccadily Agro Industries Ltd. [2007 (8) TMI 327 - PUNJAB AND HARYANA HIGH COURT] has held that machinery used in trial run production would be entitled to depreciation.
Rental receipts being treated as ‘business income’ - Held that:- A perusal of the records show that the assessee has been receiving rental income from letting out of commercial/business assets. Substantial part of rental income ₹ 33,11,438/- is received from letting out of staff quarters and the remaining rental income is from commercial buildings like industrial shed, corporate office etc. It is a trite law, that any income from exploiting commercial/business asset is a business income. This view is fortified by the judgments rendered in the case of CIT vs. VST Motors P. Ltd. [1996 (7) TMI 96 - MADRAS HIGH COURT].
Board Circular No.10/14/66-IT(AI) dated 12/12/1966 makes copiously clear that the staff quarters are business assets. This takes use to irrefutable conclusion that income arising from letting out of staff quarters is a ‘business income’. - decided against revenue
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2015 (1) TMI 1395
Penalty u/s. 271D/271E - assessee accepted loan or deposit in cash which is ₹ 20,000 or above - reasonable cause for getting the benefit of Section 273B - Held that:- For levy of penalty u/s. 271D as well as 271E, it is required for the AO to establish that assessee had accepted or repaid a loan or deposit in contravention of section 269SS/269T, as the case may be.
This, in turn, requires to be shown that assessee had accepted loan or deposit in cash which is ₹ 20,000 or above, or repaid similar amount in cash. Without the details regarding receipts & payment, in our opinion, AO could not have proceeded simply based on the figures given in the original financial statements filed by the assessee. Not even a single instance has been shown by the AO from the records that any amount was accepted by the assessee as loan or repaid by the assessee in cash, in excess of the limits laid down u/s. 269SS/269T of the Act. CIT(Appeals) was justified in deleting the penalties levied on the assessee - Decided in favour of assessee
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2015 (1) TMI 1394
Validity of order passed by AO u/s 143(3) in pursuance of the order passed by CIT-A under S.263 - Held that:- The order passed by the learned Commissioner of Income-tax u/s. 263 has already been set aside by the Tribunal vide its order [2015 (1) TMI 1008 - ITAT HYDERABAD]. Consequently, the subsequent proceedings originated from the order passed by the learned Commissioner of Income-tax under S.263 including assessment order made by the Assessing Officer u/s. 143(3) read with S.263, as well as the impugned order of the learned CIT(A) have become non-est in the eye of law. We, therefore, set aside the said orders and allow this appeal of the assessee.
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2015 (1) TMI 1393
Estimation of Gross Profit (GP Rate) - rejection of books of accounts - bogus sale and purchase transactions with the sister concerns - Held that:- We agree with the finding of the Ld. CIT(A) that the way the transactions are entered, i.e. sale and purchase of the bullion and ornaments within the group concerns are only paper transactions without involving any real transfer of bullion/ornaments. The assessee has entered into fictitious transactions within the group to inflate the purchases and sales of all the group concerns - the books of account of the assessee, in our opinion, do not give the correct picture and therefore are liable to be rejected.
Additions u/s 40A(2)(b) - even if the books of account are rejected by the AO but ultimately the assessment is framed u/s. 143(3) of the Act by making addition u/s. 40A(2)(b) and the addition towards siphoning of the alleged profit.
Both the authorities below have not correctly understood the trading in the gold. According to him gold is a commodity having high liquidity and there are fluctuations of prices in the open market. In our opinion, the above submission cannot be simply discarded.
AO has adopted the short cut method without understanding the trading in the bullion and fluctuations in the market in the prices and worked out the average rate by comparing the same transaction on same dates and accordingly worked out the alleged difference. In our opinion, the approach of the AO is totally erroneous as he has totally discarded the trading in the bullion that takes place. He has also not considered the statement of the assessee that there are variations and fluctuations in the bullion market and even in the intra day transactions rate can be changed and sometimes rates may be stable and rates may swing like a wind.
When the average price method is adopted, then where ever there is a lesser price paid that is also to be considered and not the excess price only. In our opinion, the average price method adopted by both the authorities is totally erroneous considering the market conditions of the bullion.
Approach of both the authorities below is not correct for making high pitch additions in the hands of the assessee by invoking provisions of section 40A(2)(b) and for alleged selling of the ornaments to the related entities at a lower price. As per the financial accounts of the assessee, the GP worked out at 1.13%.
After reducing the GP declared by the assessee at ₹ 10,79,15,449/-, the balance GP is to be added to the total income of the assessee. This covers the grounds on the addition made by invoking provisions of section 40A(2)(b), i.e. purchase of bullion from the sister concerns/related entities by paying higher price as well as sale of the ornaments at lower price. - Decided partly in favor of assessee.
Additions u/s 38(2) - addition made on account of Driver's Salary - Use of vehicle partly for personal purpose - Held that:- salary to driver being fixed such expenditure remains same whether the vehicle is used for personal purpose or not. - CIT(A) is correct in deleting the additions - Decided in favor of assessee.
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2015 (1) TMI 1392
Rectification of mistakes - Exemption u/s 10(10) - Voluntary Retirement Scheme (VRS) - Error apparent on record - Held that:- These matters are squarely covered by an order in case of Asstt. Commissioner of Income Tax-I, Madur v. K.R. Alagappan [2014 (10) TMI 979 - SUPREME COURT OF INDIA] filed by the Revenue Authority and dismissed by a coordinate Bench of this Court.
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2015 (1) TMI 1390
Disallowance to be made under section 14A and then computing the deduction under section 80 P(2)(d) - Held that:- It is clear that the court has passed an order in lemine and dismissed the SLP which cannot lead to the conclusion that this order has merged with the order of Delhi High Court. Therefore, when an order of the Jurisdictional High Court is available in the case of assessee we have no option but to follow the same. Therefore following the order of the Hon’ble High Court in COMMISSIONER OF INCOME-TAX VERSUS KRIBHCO [2012 (7) TMI 591 - DELHI HIGH COURT] and we decide this issue against the assessee. It was also contended that in any case Rule 8D has become applicable from assessment year 2008-09 and therefore for computing the disallowance under Rule 8D read with section 14-A, disallowance should be calculated as per this Rule.
We find merit in this contention and therefore set aside the order of Ld. CIT(A) and remit the matter back to the file of AO for re-computing the disallowance U/s 14-A read with Rule 8P(2)(d).
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2015 (1) TMI 1389
Existence of a legally enforceable debt or liability - cheque issued earlier were dishonored due to insufficiency of funds - now, the accused claimed that there was no liability on him and the cheque was given to Chit Fund Company as a security, of which the accused was a member - Section 138 of N.I. Act - Held that:- Since offence under Section 138 of N.I. Act is a document based technical offence, deemed to have been committed because of dishonour of cheque issued by the accused or his company or his firm, the accused must disclose to the Court as to what is his defence on the very first hearing when the accused appears before the Court. The accused, however, did not disclose their defence at that stage. Thereafter when all the incriminating evidence was put to the accused while recording their statement under Section 313 Cr.P.C. at that time, there was no denial that the cheque in question was signed by them. However, it was alleged that the cheque was not issued against any debt or liability and that the cheque was not issued to the complainant. Service of legal notice was also denied.
Accused claimed that he was a member of Chit Fund Company and the cheque in question was given to Chit Fund Company as a security. In order to substantiate this plea, DW1 Rajesh Kumar, employee of Sevarath Chit Fund Pvt. Ltd. was examined and this witness denied that any cheque or payment was received by the Chit Fund from the accused. Since the witness did not support the case of accused, he was cross-examined by the counsel for the accused and in cross-examination, the witness categorically deposed that the company did not take any cheque amounting to ₹ 3 lacs from the accused. He also deposed that cheque Ex.CW1/1 was never taken from the accused - the defence of issuing of the blank signed cheque to the Chit Fund taken by the accused falls to the ground.
Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation - the accused has failed to raise a probable defence which may create doubts about the existence of a legally enforceable debt or liability.
Further prior to the filing of the complaint, after the dishonour of the cheque, statutory notice was served upon the accused persons calling upon them to pay the cheque amount. Service of this legal notice has been denied by the accused in their Statement u/s 313 Cr.P.C. - Although this presumption is rebuttable but mere denial to receive the notice is not sufficient to rebut the presumption. It is for the accused to show that common course of business was interrupted by some supervening circumstances. It is not the case of the accused that the notice was not sent on a correct address or some supervening circumstances existed which prevented ordinary course of business in delivering the notice to the addressee. Moreover, even no suggestion was given to the complainant that legal notice was not served upon the accused. Under the circumstances, it was duly proved by the complainant that on dishonour of cheque, statutory notice was served upon the accused. The accused failed to reply to the statutory notice which leads to the inference that there was merit in the complainant‟s version.
The accused did not raise a probable defence. The defence of giving signed cheque to the Chit Fund Company was demolished by the accused‟s own witness DW1- Rajesh - this Court finds that the judgment of acquittal passed by the learned Trial Court is erroneous and perverse and is not sustainable both on facts and in law.
Appeal allowed.
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2015 (1) TMI 1388
Revision u/s 263 - Deduction u/s 80-IC denied - Whether earning of interest is directly linked to the business income? - Held that:- the conclusion arrived at by the CIT, Dehradun cannot be faulted with. It is evident from the record that the claim allowed by the AO was not allowable in law. The issue on facts is well settled by a plethora of decisions right from the decision of the Apex Court in the Cambay Electric Supply Indstl. Co. Ltd. vs CIT [
1978 (4) TMI 1 - SUPREME COURT] wherein their Lordships have brought out in detail the differences in the meaning of “attributable to” and “derived from”
Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded. However it is equally well settled that the order cannot be termed as “erroneous” unless it is not in accordance with law. The section does not visualize a case of substituting the judgement of the Commissioner for that and the Assessing Officer who passes the order unless the decision is held to be erroneous.
The Jurisdictional pre-condition stipulate that the Commissioner of Income Tax must come to the conclusion that the order is erroneous and is unsustainable in law. It is well settled that the order u/s 263 can be termed erroneous only if the Commissioner holds and decides that it is contrary to law. In the facts of the present case the Commissioner in the exercise his powers u/s 263 has come to the conclusion that the assessment order dt. 16.11.2010 is erroneous and prejudicial to the interests of the Revenue based on the legal position as set out in his order which has not been distinguished on facts by the Ld. AR. - Decided against assessee
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2015 (1) TMI 1387
Validity of notice - legality of notice - legality of AO wants us to treat us the assessment completed u/s.148 as assessment finalized u/s.153A - mistake/defect or omission - Held that:- Both the sections deal with different situations and notice issued under one section cannot be treated notice under another section nor can be assessment made under a particular section can be treated as finalised under another section. Section 147-148 deal with re-assessing of income for a particular AY. that escapes taxation because of the failure of the assessee or othrerwise. Section 153A deals with the matters where action has been taken u/s.132 or 132A of the Act.
Each and every section of the Act has been included in the statue with a specific intention and purpose. Legislature in its wisdom has introduced various section to regulate the tax collection. So, to assume that one section is re-placable by another is not a logical or legal conclusion. Each section, each phrase and each word of the Act has its own place and importance. If an AO commits a mistake while passing assessment orders, it cannot be cured by relying upon any other section, because such a mistake is not a clerical mistake-it relates to jurisdiction. The ‘mistake/defect or omission’ in notices issued by the AO u/s.148 instead of section 153A is not ‘in conformity with /according’ to the intent and purpose of the Act. Jurisdictional issues cannot fall in the category of clerical mistakes-they go the roots of the assessment. Orders passed by the AO for the AY.1999-2000,2001-01,2001-02 are not valid.
As far as the assessment of AY.2004-05 it is found that the AO had issued notice u/s.143(2) and before completing the original assessment had issue a notice u/s.148 of the Act. We cannot comprehend as how can an AO issue a notice for reassessing escaped income during the pendency of the assessment itself. The chronological events discussed in earlier clearly show that the AO had issued notice u/s.148 for that year on 20.02.2006 and the assessment was completed on 29.12.2006.Besides he has issued notice u/s.143(2)on 17.2.2005. The assessment order for the AY.2004-05 was invalid.
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2015 (1) TMI 1386
Release of seized goods - case of petitioner is that raw un-garbled betel nuts imported by the petitioner does not attract the provisions of Food Safety and Standards Act 2008 and Rules and Regulations thereunder - Held that: - the applicant cannot be refused with the release of goods without forming an opinion that the consignment, even after undergoing some other processes cannot be made fit for human consumption - there will be a direction to the third respondent to release the consignments under Exts. P1 to P4 bill of entries, on the basis of Ext. P9 to Ext. P12 test results, within a period of three days - petition disposed off.
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2015 (1) TMI 1385
Rate of interest on delayed refund - rate of interest u/s 11BB of the CEA 1944 - 6% or 9%? - Held that: - The interest payable in terms of Section 11BB of the Act, which in turn is with reference to the notification referred above. This aspect has not been considered by the learned Single Judge - the rate of interest is to be reduced to 6% from 9% - appeal allowed in part.
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2015 (1) TMI 1384
Rape - Prosecution case is based entirely on circumstantial evidence as no ocular account of the incident has been presented to the Court - whether the appellant was a juvnile on the date of commitment of offence? - entitlement for juvenile justice - non-availability of officially maintained record regarding his date of birth - estimation of age of appellant on the basis of medical opinion - Held that: - the appellant was responsible for the offence of rape and murder of the hapless baby-Kamala who appears to have been picked up from the place where she was sleeping with other children and taken at a distance only to be raped and eventually killed. The trial Court, in the light of the evidence on record and careful analysis undertaken by it, correctly came to the conclusion that the appellant was guilty of murder of the deceased. There is no reason whatsoever for us to interfere with that finding.
Juvenile Justice - case of appellant is also that the appellant was a juvenile on the date of the commission of offence hence entitled to the benefit of Juvenile Justice (Care and Protection of Children) Act, 2000 - Held that: - Since the appellant did not have any documentary evidence like a school or other certificate referred to under the Act mentioned above, this Court had directed the Principal, Government Medical College, Jodhpur, to constitute a Board of Doctors for medical examination including radiological examination of the appellant to determine the age of the appellant as in April, 1998 when the offence in question was committed.
The appellant is reported to be a deaf and dumb. He was never admitted to any school. There is, therefore, no officially maintained record regarding his date of birth. Determination of his age on the date of the commission of the offence is, therefore, possible only by reference to the medical opinion obtained from the duly constituted Medical Board in terms of Rule 12(3) (b) of the Juvenile Justice (Care and Protection of Children) Rules, 2007 - The medical opinion given by the duly constituted Board comprising Professors of Anatomy, Radiodiagnosis and Forensic Medicine has determined his age to be "about" 33 years on the date of the examination. The Board has not been able to give the exact age of the appellant on medical examination no matter advances made in that field. That being so in terms of Rule 12 (3) (b) the appellant may even be entitled to benefit of fixing his age on the lower side within a margin of one year in case the Court considers it necessary to do so in the facts and circumstances of the case.
Taking his age as 34 years on the date of the examination he would have been 18 years, 2 months and 7 days on the date of the occurrence but such an estimate would be only an estimate and the appellant may be entitled to additional benefit of one year in terms of lowering his age by one year in terms of Rule 12 (3)(b), which would then bring him to be 17 years and 2 months old, therefore, a juvenile.
No matter the offence committed by him is heinous and but for the protection available to him under the Act the appellant may have deserved the severest punishment permissible under law - The fact that the appellant has been in jail for nearly 14 years is the only cold comfort for us to let out of jail one who has been found guilty of rape and murder of an innocent young child.
This appeal succeeds but only in part and to the extent that while the conviction of the appellant for offences under Section 302 and 376 of IPC is affirmed the sentence awarded to him shall stand set aside with a direction that the appellant shall be set free from prison unless required in connection with any other case - appeal allowed in part.
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2015 (1) TMI 1383
Finalization of assessment under section 143(3) denied - AO empowered to refund any amount due to the assessee as a consequence of assessment - Held that:- As section 143(3) of the Act stood for the assessment year 1989-90, there was no provision for refund after the regular assessment. In the present case, the assessment years involved are 2006-07 onwards, which pertain to period after section 143(3) of the Act was amended by the Finance Act (No.2) 1998 w.e.f. 01.10.1998. As per the amendment, the assessment under section 143(3) of the Act, inter-alia, envisages the Assessing Officer to grant refund of any amount due to the assessee consequent to the assessment and therefore, the Assessing Officer is statutorily empowered to determine the revised income which can be lower than the returned income. Therefore, the objection raised by the Revenue to the impugned order of CIT(A) is untenable in the eyes of the law, as it stood for the period under consideration. - Decided against revenue
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2015 (1) TMI 1382
Treating the profit on sale of land as business income - nature of income - Held that:- In the earlier years when parts of land were sold the AO had accepted that profit arising out of the transaction had to be assessed under the head LTCG.
It is not that the earlier AO.s. had not applied their minds to arrive at the conclusion of taxing the income under as LTCG.
AO.s. had for three AY.s. had reached to the conclusion that income accrued to the assessee was not income from business. While deciding the issue for the year under consideration the AO has not mentioned that there was material change in the facts or legal position as far as selling of portion of plot of land is concerned. In absence of such categorical finding, he should not have disturbed the finding given by his predecessors.
Where a fundamental aspect continuing during the different assessment years has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not at all be appropriate to allow the position to be changed in the subsequent years. FAA was not justified in confirming the order of the AO and holding that the incoming arising out of sale of plot of land was to not be assessed as LTCG - Decided in favour of assessee
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2015 (1) TMI 1381
Section 2(15) applicability - proof of charitable activities - Held that:- The advancement of any other object of general public utility shall not be a charitable purpose if it involves carrying on activity in the nature of trade, commerce or business or any activity of rendering services in relation to any trade, commerce or business. In the present case, the assessee is committed for relief to the poor, education, medical help, etc.
The newly inserted proviso to section 2(15) will not apply in respect of the first three limbs i.e. relief of the poor, education or medical relief.
So far as running the Kalyana Mandapams are concerned, it is only to achieve the objects of the assessee trust, the funds received from the Kalyana Mandapam are utilized. Thus, the proviso to section 2(15) has no application to assessee’s case. Similar issue in assessee’s own case [(
2008 (9) TMI 528 - MADRAS HIGH COURT] for earlier assessment year and dismissed the appeal filed by the Revenue - Decided in favour of assessee.
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2015 (1) TMI 1380
Disallowance invoking section 36(1)(iii) - disallowing interest expenditure - Held that:- Relying on the decision of the Bombay High Court in the ca e of IT vs. Reliance Utilities & Powers Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT), wherein it was held that if there were funds available both interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments.
In the present case the investment in office premises is only 1.18% of the own funds of the assessee company in the year under consideration and therefore the presumption would arise that the assessee company has invested its own funds in purchasing the office premises and not used the borrowed funds and therefore, no portion of interest paid on borrowings can be disallowed invoking section 36(1)(iii) of the Act. No justification in the disallowance made u/s.36(1)(iii). - Decided in favour of assessee.
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