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Showing 121 to 140 of 1666 Records
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2017 (10) TMI 1550
Smuggling - Betel Nuts of Nepali Origin - non-notified item - burden of prove - Confiscation - redemption fine - penalty - HELD THAT:- The appellant produced the purchase invoice No. 754 dated 6-11-2014 in support of ownership of the goods. The Lower Authorities observed that the goods were identified as "Split Betel Nuts" and the invoice indicates "Dry Betel Nuts".
The Betel Nuts is a non-notified item under Section 123 of the Customs Act, 1962. It is well-settled that burden of proof lies with the department to establish smuggled nature of goods - In the present case, the goods were seized from the Chhapra Railway Station. The appellant produced the purchase documents. No investigation was conducted.
Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 1549
Interpretation of the provisions of the PPA dated 18.1.2010 - International competitive bidding for selection of developer - significant contention of the appellant is that the operation cost mentioned in clause 2.7.1.4(3) of the RFP only referred to the cost towards operating and maintenance of power plant, and cannot refer to any cost associated with the cost of coal, which is a part of the energy charges - HELD THAT:- The pricing of the coal is, if one may say, the crux of the problem. It is no doubt true, as contended by the first respondent, that while submitting the financial bid, clause 2.7.1.4(3) of the RFP required the tariff to be quoted in Format-1 of Annexure 4 to be an ‘all inclusive tariff’ and provided that no exclusion shall be allowed. This clause has already been extracted aforesaid. The bidder/appellant was, thus, required to take into account all costs, including capital and operational costs, statutory taxes, etc.. The same clause also provides that the availability of inputs necessary for generation of power should be ensured by the seller at the ‘Project Site’, which must be reflected in the quoted tariff. The significant aspect is that the working of the contract is on the basis of ‘Project Site’. It has to be, however, simultaneously kept in mind that the present project is in the nature of a Case-2 project which provides for a fuel specific procurement, having a pre-identified site.
The contract did not provide for a fixed energy charge, or a periodic revision of that charge, as the formula for energy charge was designed in such a manner that it would be influenced by the actual cost of coal. Thus, the basis is the actual cost incurred with regards to the coal. Of course, a major controversy has arisen as to whether the cost of coal has to be determined on the basis of the purchase price from SECL at the ‘mine-end’, when the property is supposed to pass to the appellant, or whether it is the cost of coal to be used for the plant as incurred by the appellant at site of the project, or the ‘project-end’.
The variable component of ‘FCOALn’ refers to the ‘actual’ cost to the seller/appellant of the three components, i.e., (a) purchasing; (b) transporting; and (c) unloading the coal. The first respondent is thus right that there may be different aspects before the coal is used in the plant which are not required to be reimbursed by the first respondent. The illustrations given by the first respondent are of sizing of coal, crushing of coal, sprinkling and moisturisation of coal for stacking and storage, etc. being activities required to be undertaken prior to generation - there is no hesitation in our concluding that in view of the specific formula provided, only three aspects relatable to coal would determine the particular co-efficient.
The definition of FCOALn is the weighted average actual cost incurred by the appellant of purchasing the coal and transporting it to the project site and thereafter unloading the coal at the project site. The fact that the property in coal passed on to the appellant vis-à-vis SECL, on delivery being taken at the mine-end would not change the definition of coal pricing as is required for the purposes of calculation of the tariff.
The fact that the clarification made it clear that the appellant had to “arrange” the washing of coal, did not imply that the cost of washing the coal had to be borne by the appellant, as the energy charge formula alone would have to be referred to for the purposes of calculation of the coal price. The operating cost in clause 2.7.1.4(3) of the RFP would refer to the activities mentioned therein and the operation and maintenance of the power plant which would not alter the formula of the energy charges which contains the cost of coal. The principle of ‘business efficacy’ would also require us to read the ‘Monthly Energy Charges’ formula in a manner as would be normally understood - The plea of the first respondent that the fuel supply agreement and the fuel transportation agreement are part of the ‘project documents’ which does not include the component of ‘washing’, does not hold much water for the reason that ‘washed’ coal is a necessity for the project as a quality requirement for the formula envisaging the requisite quality of coal to be obtained at the project site and, thus, including all the relevant costs up to that quality. The mere term ‘coal’, therefore, would have to mean ‘washed’ coal, as no other type of coal could be used in the matter at hand.
Transportation Cost - HELD THAT:- What is sought to be excluded is taking the coal for ‘washing’ as well as the last mile to the project, on account of the Railway siding not being located at the project site for a certain specified period of time. It is for that period of time that the actual transportation cost through road is sought to be recovered by the appellant.
There is no hesitation in concluding that the point at which the Calorific Value of the coal is to be measured is at the project-site. The plea of the first respondent that there is no such methodology of measuring the Calorific Value at the project-site is belied by the sample reports of different financial years filed by the appellant along with the synopsis, which itself referred to the joint sampling and testing of the coal received and is duly signed by both sides. It is surprising how such a bald denial was made despite the position existing at the site. These sample reports are for years 2014, 2015, 2016 and 2017.
Thus, the reading of the energy formula leads to only one conclusion that all costs of coal up to the point of the project site have to be included and the Calorific Value of the coal has to be taken as at the project-site.
The appellant is held entitled to the washing cost of coal, the transportation from the mine site via washing of coal to the project site inclusive of cost of road transportation for the period where it was necessary. The Calorific Value of the coal would have to be taken at the project site - appeal allowed in part.
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2017 (10) TMI 1548
Maintainability of application - initiation of CIRP - present application filed by Operational creditor on grounds of their recoverable debt - invocation of arbitration clause - HELD THAT:- This Bench is of the opinion that though the Operational Creditor has stated that there is no dispute with respect to the demand of the alleged outstanding balance, there exists a prior dispute primarily on account of dissatisfaction about proper implementation of the plant and the produce apart from non-execution of the tests under the GTR. It is however beyond the scope and jurisdiction of this Tribunal to appreciate the evidentiary value of the dispute. What is required to be assessed is that the dispute in the present proceedings is not patently false or a moonshine defence, raised only to resist initiation of any Insolvency Resolution Process against them.
In the case at hand, various objections were taken prior to initiation of the procedure under the Code, some of which may have been redressed and some still not to the satisfaction of the Corporate Debtor. A company that sets up a plant involving a huge expense as in the present case does so with the hope of achieving a faultless product. The existing disputes with respect to the alleged deficiencies in respect of services rendered in the implementation of the project can only be adjudicated in another form, which we are informed is vide initiation of arbitration proceedings.
This Bench is of the opinion that it is not to examine the merits of the dispute. Since the defence is not spurious or set up to resist the Resolution Process, and existed prior to the issuance of the notice to the Corporate Debtor, the petition is liable to be Rejected.
Petition dismissed.
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2017 (10) TMI 1547
Unaccounted investment and unaccounted profit out of unaccounted production - variation of consumption of electricity was more than 15% - Rejection of books of accounts - HELD THAT:- The issue is squarely covered by the above referred to decision of the Tribunal in the case of ‘ITO vs Shri Harpreet Singh’ [2017 (8) TMI 1621 - ITAT CHANDIGARH] wherein, while dismissing the identical appeals of the Revenue held CIT(A) has accepted the variation of 15% in consumption of electricity per metric ton of finished goods as per the report of the Committee. He has also observed that pursuant to the report of committee, the AO have also followed this norm while making assessment in similar type of cases and have accepted the book results shown by the assesses. No infirmity in the order of the CIT(A) while directing the Assessing officer to accept the books results shown by the assessee for this year also and to delete the additions made by the Assessing officer on account of unaccounted profits / unaccounted investment made on estimation basis - Decided in favour of assessee.
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2017 (10) TMI 1546
Challenge against Monitoring Committee - case of appellant is that the industrial wastes generated by it come within the general definition of radioactive wastes under the Atomic Energy Act. Such wastes have been specifically excluded from the purview of the HW Rules - HELD THAT:- The Monitoring Committee was constituted by the Apex Court with the object of ensuring that there was proper implementation of the terms regulating the handling and disposal of hazardous wastes by industrial units. The Monitoring Committee was constituted with the object of ensuring an effective implementation, having found that the statutory regulatory bodies had not been effective in achieving the said object. The consequence, as noticed by Ext.P2 order, has been an escalation in pollution at various parts of the country. It was taking note of the said alarming situation that the Monitoring Committee was directed to submit quarterly reports to the Apex Court itself, with a direction that no authority in the country shall entertain a challenge against any action of the Monitoring Committee. The Monitoring Committee was therefore not a mere fact finding body constituted by the Apex Court for ascertaining the factual scenario with respect to pollution. On the contrary, it was intended to effectuate and implement the control measures with the object of controlling the menace of pollution, effectively. Rehabilitation of the affected populace was also an aspect that was covered by Ext.P2 as well as Ext.R2(n) orders.
The contention that the Monitoring Committee had exceeded its authority in directing the Pollution Control Board to implement the project of supplying drinking water to the affected people, cannot be accepted. In view of Ext.R2(n) order of the Supreme Court extracted above, we are also not in a position to entertain the challenge against the action of the Monitoring Committee alleging that it had exceeded its authority. Such a complaint ought to be made before the Apex Court itself.
Any specified time limit could be stipulated, restricting such payments. This is for the reason that, going by the reports, the water sources in the area have been contaminated, the wells, ponds and the Periyar River have become polluted. The community has been deprived of all its natural water resources. They have been deprived of their water sources, as a result of the industrial activity in the area. The industries have been functioning for the past many decades. They are continuing to function to this date. The need of the community for potable drinking water is only legitimate. Therefore, it is necessary that they are supplied with potable drinking water, without any disruption. The industries are carrying on their activities. The appellant's unit has also been working throughout. Therefore, there is no justification for the contention that they shall not be directed to continue the payments - there are no infirmity in Ext.P12 or the judgment of the learned Single Judge, warranting an interference therewith.
Appeal dismissed.
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2017 (10) TMI 1545
Unaccounted investment and unaccounted profit out of unaccounted production - variation of consumption of electricity was more than 15% - Rejection of books of accounts - income estimation - HELD THAT:- As decided in M/s Dhiman Steel Rolling Mills[2017 (4) TMI 1310 - ITAT CHANDIGARH] CIT(A) has accepted the variation of 15% in consumption of electricity per metric ton of finished goods as per the report of the Committee. The same has already been followed by the Assessing officer in subsequent assessment year.
No infirmity in the order of the CIT(A) while directing the Assessing officer to accept the books results shown by the assessee and to delete the additions made by the Assessing officer on account of unaccounted profits / unaccounted investment made on estimation basis as discussed above. The order of the CIT(A) is, therefore, upheld. - Decided against revenue
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2017 (10) TMI 1544
Validity of assumption of jurisdiction u/s 148 - Assessment u/s 147 consequent to assessment u/s 153C - assessment framed u/s 153A in relation to undisclosed income - HELD THAT:- In the present case, original assessments were made u/s 143(3) r.w.s. 153A of the Act vide order dated 28/12/2010. Subsequently, consequent to search operations in the case of Smt. Adlene Kagoo, material disclosing alleged payment to appellant was found. The AO had proceeded to make assessment by issuing notice u/s 148.
Whether the AO was correct in law in assuming jurisdiction u/s 148 when the provisions of section 153C of the Act prescribe a separate scheme of assessment in the case of material found as a result of search in the case of third parties? - A similar issue had arisen in the context of block assessment prescribed under Chapter XIV-B of the Act and these provisions were subsequently substituted by inserting sections 153A, 153B, 153C and 153B in Chapter XIV. But the spirit of both old provisions and new provisions remained same. As relying on Cargo Clearing Agency (Gujarat) [2008 (8) TMI 86 - GUJARAT HIGH COURT] wherein held Once assessment has been framed u/s 158BA in relation to undisclosed income for the block period as a result of search there is no question of the Assessing Officer issuing notice u/s 148 for reopening such assessment as the said concept is abhorrent to the special scheme of assessment of undisclosed income for block period - no notice u/s 148 is required to be issued for the purpose of proceeding under Chapter XIV-B.
Consideration received on cancellation of any agreement to sell or JDA - Also from perusal of reasons recorded, it cannot be inferred that there is income in the hands of the appellant, even if there is payment to appellant, but there is nothing on record suggesting that it constitutes income in the hands of the appellant. Even assuming for a moment that the contention of the AO that payments were made towards consideration for cancellation of Joint Development Agreement (JDA) which the assessee had entered with in respect of property at survey Nos.3/3, 7, 8, 9/2A, 9/213, Mallasandra. In the absence of evidence that the appellant is the owner, had interest of any nature in the said property, it cannot be said that the payments constituted taxable income in the hands of the appellant. One cannot come to conclusion that the payments constituted taxable income in the hands of the assessee - even assuming that these payments were made towards consideration of cancellation of JDA, same does not represent taxable income for period under consideration. It is only after insertion of clause (ix) to section 56(2) by Finance (No.2) Act 2014 w.e.f. 01/04/2015 that provisions of the Act have been amended to tax any consideration received on cancellation of any agreement to sell or JDA. Therefore, viewed from any angle, we cannot uphold the validity of assumption of jurisdiction u/s 147 - Decided in favour of assessee.
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2017 (10) TMI 1543
Maintainability of appeal after withdrawal of application filed u/s. 264 - whether assessee has opted to select the route of filing petition before the CIT u/s 264, the assessee has waived its right to file the appeal and the same cannot come back and on this basis? - HELD THAT:- In view of the judgment of of M. Jayabalan Vs. CIT [2012 (12) TMI 697 - MADRAS HIGH COURT] wherein it is held that the appeal filed by the assessee before CIT (A) after withdrawal of the revision petition u/s. 264 is maintainable and it cannot be said that after filing the revision petition u/s. 264, the assessee cannot file the appeal before the CIT (A) even after withdrawal of the said revision petition. On this aspect, we decide the issue in favour of the assessee.
Condonation of delay of 331 days in filing appeal before the CIT (A) - HELD THAT:- Assessee was pursuing an alternative remedy available under the law and the delay for that reason should be condoned if it is found that such action of the assessee was bonafide.
In the present case, this is not the case of the revenue that the application filed before the CIT for revision was not bonafide action of the assessee and therefore, by respectfully following this judgment of K.S.P. Shanmugavel Nadar [1984 (4) TMI 24 - MADRAS HIGH COURT] we hold that the delay in filing appeal has been explained by the assessee and same has to be condoned.
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2017 (10) TMI 1542
Disallowance of deduction u/s 10A - deduction in the first year of the undertaking stands undisturbed or not withdrawn - no provision for withdrawal of special deduction for the subsequent years for breach of certain conditions - HELD THAT:- Once having accepted the claim of assessee, the Revenue cannot question assessee’s eligibility for claiming such deduction in subsequent assessment years.
In Paul Brothers [1992 (10) TMI 5 - BOMBAY HIGH COURT] has observed that there is no provision for withdrawal of special deduction for the subsequent years for breach of certain conditions. Unless the relief granted for the initial assessment year is withdrawn, the ITO could not have withheld the relief for the subsequent years.
Thus, in view of the fact that the assessee’s claim of deduction u/s. 10A was never questioned by the Revenue in initial assessment year, the Assessing Officer cannot raise question over assessee’s eligibility for claiming deduction in any of the subsequent assessment years. DR has also accepted the fact that in assessment year 2004-05, assessee’s claim of deduction u/s. 10A was allowed by Assessing Officer in scrutiny assessment proceedings. Thus, ground No. 1 raised in appeal by the assessee is allowed.
Disallowance of provision for bad debts - authorities below have disallowed assessee’s claim primarily for the reason that the assessee has failed to establish that the provision was created in respect of either of the units - HELD THAT:- Assessee referring to separate Profit and Loss accounts for STPI and non-STPI units has pointed that provision for bad debts has been separately created for STPI and non-STPI units - while computing total income in the computation of income, the assessee has added back provisions for bad debts in respect of both STPI and non-STPI units. A separate calculation has been given for STPI unit wherein provision for bad debts in respect of STPI unit ₹ 22,56,208/- has been added back. We do not find any reason to disallow the claim of assessee. The assessee has added back the provision in the computation of income which was created earlier. Thus, the assessee has not claimed the same while computing total taxable income - Decided in favour of assessee.
Allocation of expenditure amongst STPI and non-STPI units - HELD THAT:- It is an undisputed fact that in earlier assessment years the Department has not questioned the manner of allocation of expenditure between STPI and non-STPI units. Even in the subsequent assessment years the allocation of expenditure by assessee has not been disturbed, though the assessee is consistently following same method of allocation. Thus, in the light of facts of the case, we find no merit in the findings of CIT (A) in sustaining the addition. Accordingly, the same is deleted - Decided in favour of assessee.
Computing the manner of deduction u/s. 10A before setting off of losses of non-eligible unit - HELD THAT:- In view of law laid down in Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] it is unambiguously clear that deduction u/s. 10A has to be computed before allowing set off of losses of non-STPI unit. - Decided in favour of assessee.
Charging of interest u/s. 234B is consequential and mandatory,
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2017 (10) TMI 1541
Validity of the proceedings u/s 153A - Review / re-examine any issue in the proceeding u/s 153A - HELD THAT:- There is no finding to the effect that any incriminating material was found in search. As per the assessment order also, there is no reference to any incriminating material found in search.
CIT(A) should record a categorical finding as to whether any incriminating material was found in course of search or not. If it is found that no incriminating material was found in course of search then it should be held that the proceedings initiated by AO u/s. 153A are not valid by following the later judgement of of CIT Vs. Lancy Construction [2016 (2) TMI 797 - KARNATAKA HIGH COURT] and if it is found that any incriminating material was found in course of search, then these proceedings should be held valid and issue on merit should be decided afresh.
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2017 (10) TMI 1540
Interest on mobilisation advance received from the contractors during the construction/project period - Whether a capital receipt and is adjustable against pre-operative expenses? - assessee who is engaged in the civil construction works and management of railway linkage and has made payments of mobilisation advance to the contractors and has received interest on such mobilisation advances and claimed set of adjusted against pre-operative expenses - HELD THAT:- In the present case the interest on mobilisation advance is similar to the decision of the Tribunal in case of Angul Sukinda Railway Ltd. [2017 (4) TMI 515 - ITAT CUTTACK] and the mobilisation advance given to the contract were for the purpose of contract work of laying the railway line and intrinsically connected with the capital expenditure of the assessee prior to the commencement of its business. Accordingly, we delete the addition made by the AO and allow the grounds of appeal of assessee
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2017 (10) TMI 1539
Assessment u/s 153A - absence of any incriminating material in search - HELD THAT:- The questions of law sought to be urged by the Revenue in the present appeal against an order in ACIT v. Blubird Software (P.) Ltd. [2016 (10) TMI 1316 - ITAT DELHI] for the Assessment Year 2005- 06 stands covered against the Revenue and in favour of the Assessee by the decision of this Court in CIT v. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT].
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2017 (10) TMI 1538
Addition on account of grant to sports and recreations - allowable business expenditure or not - AO disallowed the same by observing that these expenses are not incidental to business of the assessee and added to the total income of the assessee - CIT-A allowed claim - HELD THAT:- Assessee was bound to provide as part of the conditions of service to its employees, sports and recreational facilities. The grant in question is in pursuance of the aforesaid agreement. Therefore it cannot be said that the grants given by the Assessee are not for the purpose of business of the Assessee. As an employer provision of grants to provide better conditions of service will be part of the labour cost of the Assessee and it has to be allowed as deduction.
Plea of the revenue that the evidence of area-wise expenses were not produced, the plea of the Assessee was that the coal area is scattered over a large area and that the Assessee being a Government of India undertaking, its accounts are subject to review by CAG and no adverse comments have been made by the CAG. This plea in our view, in the facts and circumstances of the present case was enough to disregard the findings of the AO
Since the issue is identical with the issue raised in AYs. 2003-04 to 2005-06 which is squarely covered in favour of the assessee and the Ld. DR could not controvert the facts and since there is no change in facts or law, we respectfully following the aforesaid order we confirm the order of ld CIT(A) and dismiss the ground of appeal of revenue.
Addition on account of Hire Charges of Bus & Ambulance - AO disallowed the same as the assessee was unable to produce any acceptable reason as to why the expenses should not be disallowed - CIT-A allowed claim - HELD THAT:- As in assessee’s own case for AYs 2003-04 to 2005-06 incurring of the expenses by the Assessee cannot be disputed and in fact has not been disputed by the revenue. There appears to be only a dispute with regard to the evidence of incurring of the expenses. The details to which our attention was drawn by the learned counsel for the Assessee, in our view, requires to be verified by the AO. We, therefore set aside the order of the CIT(A) on this issue and remand the question of incurring of these expenses to the AO for fresh consideration with liberty to the Assessee to let in evidence to substantiate its claim for deduction of the aforesaid expenditure. For statistical purposes the relevant grounds of appeal are treated as allowed. - Ground of appeal of revenue is allowed for statistical purposes.
Disallowance of Uniform and Stitching Charges - AO disallowed the same by observing that these expenses are not incidental to business of the assessee and added to the total income of the assessee - CIT-A deleted the addition observing that the expenses incurred were wholly and exclusively for business purposes and eligible for deduction u/s. 37(1) - HELD THAT:- We find that no such disallowances were made in any of the earlier years and these expenses were duly allowed. Before us, the Ld. DR could not produce any material to controvert the factual finding recorded by the ld CIT(A) in respect of the expenses to be non-incidental to business of the assessee. In view of the above, we find no infirmity in the order of the Ld. CIT(A) in deleting the disallowance as made by the AO and the same is hereby upheld. This ground of appeal of the revenue is dismissed.
Not admitting and adjudicating the additional ground raised before CIT-A albeit first - Disallowance u/s. 40A(3) of the Act read with Rule 6DD - HELD THAT:- If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected.” Further, we rely on the decision of the Hon’ble Supreme Court in CIT Vs. V. MR. P. Firm, Muar [1964 (10) TMI 13 - SUPREME COURT] and Circular No. 114XL 35 of 1955 issued by the CBDT on April 11, 1955 that an officer must not take advantage of ignorance of the assessee as to his rights. The judgment of Hon’ble Supreme Court in the case of Goetz (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] was limited to the power of the AO and did not impinge upon the power of the appellate authorities/Tribunal.
We are inclined to admit this claim of the assessee and restore this issue back to the file of AO to verify the claim made by the assessee. The assessee is directed to bring all the facts before the AO and in case the issue is already covered by the decision of this Tribunal as claimed by the assessee, then the AO after verification finds that the issue raised has already been settled by this Tribunal then the claim of the assessee should be allowed.
Disallowance u/s. 40A(9) - As according to the assessee, since the payments were made to the labourers working in farflung collieries where no banking facilities were available falls under the exemption given under Rule 6DD(i) of the Rules, therefore, the assessee’s mistake of inadvertently disallowing the said amount needs to revisited and claim needs to be allowed we admit this issue also and restore the issue back to the file of the AO to decide as to whether the claim made by the assessee is allowable as per Rule 6DD(i) of the Rules. Appeal of the assessee is allowed for statistical purposes.
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2017 (10) TMI 1537
Deemed dividend addition u/s 2(22)(e) - transaction between the assessee-partnership firm and M/s Abdul Wahid Tanneries Pvt. Ltd ( company) and one of the partners is holding 35% of shares in M/s Abdul Wahid Tanneries Pvt. Ltd - s per assessee its is commercial transaction between the assessee-firm and the company and assessee-firm is neither a beneficial shareholder nor a registered shareholder - whether the amounts shown as unsecured credit can be assessed as deemed dividend in the hands of the assessee-partnership firm? - HELD THAT:- Admittedly, one of the partners of the assessee-firm, namely, Shri Rafeeq Ahmed was the registered shareholder holding 35% of shares in M/s Abdul Wahid Tanneries Pvt. Ltd. It is not the case of the Revenue that the assessee-firm invested its own funds through Shri Rafeeq Ahmed in the shares of M/s Abdul Wahid Tanneries Pvt. Ltd. Moreover, no material is also available on record to suggest that assessee-partnership firm invested its own funds in the name of Shri Rafeeq Ahmed in the shares of M/s Abdul Wahid Tanneries Pvt. Ltd. - this Tribunal is of the considered opinion that the assessee-partnership firm cannot be construed either as registered shareholder or as beneficial shareholder. Therefore, the assessee cannot be assessed under Section 2(22)(e) - At the best, it may be considered in the hands of the individual partner who is the shareholder in the company - addition made by the AO under Section 2(22)(e) of the Act is deleted. - Decided in favour of assessee.
Disallowance of interest on the delayed payment of sales tax - HELD THAT:- Delayed payment of interest is compensatory in nature, therefore, this Tribunal is of the considered opinion that for delayed payment of sales tax, the interest paid by the assessee cannot be disallowed while computing the total income.
Interest on the TDS amount - assessee itself disallowed the interest on the TDS amount and AO without verifying the computation, disallowed the same once again - HELD THAT:- Since the assessee claims that the interest on TDS was already disallowed, this Tribunal is of the considered opinion that the Assessing Officer needs to verify the same. Accordingly, the orders of both the authorities below are set aside and the issue of disallowance towards interest on TDS amount is remitted back to the file of the AO to re-examine the matter and decide the issue in accordance with law, after giving a reasonable opportunity to the assessee.
Disallowance being the interest paid on credit card - assessee claims that interest paid on credit card is only for the purpose of business and the Department contends that the personal element cannot be ruled out - HELD THAT:- this Tribunal is of the considered opinion that the expenditure incurred by the assessee through credit card needs to be examined. If the payment was made only for business purpose, then there cannot be any disallowance of interest. In case, the credit card was used for meeting personal expenditure, then such expenditure cannot be allowed. Therefore, these aspects need to be verified. Accordingly, orders of both the authorities below are set aside and the issue is remitted back to the file of the AO to re-examine the matter afresh.
Disallowance of Customs duty - HELD THAT:- Since the assessee is ready to provide the evidence, this aspect can be verified by the Assessing Officer on the basis of the evidence that may be filed by the assessee for payment of Customs duty. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer.
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2017 (10) TMI 1536
Unexplained investment u/s 69C - whether the lands were sold at the lower price then the value stated in sale deed for the purpose of stamp duty? - AO made an assessment holding that the market value of the land is higher and stamp duty has been paid on the higher value which proves that the rate of land on the relevant period are higher - CIT(A) deleted the above addition - HELD THAT:- According to CIT-A nothing adverse was noticed from the reply of the parties from whom the enquiries were conducted by the AO and in fact they confirmed that the transaction of the sale of the properties is at the purchase price shown by the appellant.
Provision of section 50C for that relevant year applied in the hands of the seller and not the buyer. In the present case the assessee is a buyer. Hence, he stated that income cannot be added in the hands of the assessee by invoking provision of section 50C of the Act. He further examined that provision of section 56(1)(vii)(b) of the Act is not applicable as it applies w.e.f. 01.04.2014. DR also could not point out any infirmity in the order of the ld CIT(A). we are also of the considered view that there is no provision of difference between stamp duty value as well as the transacted value can be added in the hands of the buyer. In the result we confirm the finding of the ld CIT(A) and dismiss the appeal of the Revenue.
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2017 (10) TMI 1535
Levying fee u/s 234E - Late filing of TDS returns / statement - statement processed u/s 200A - HELD THAT:- Late fee is chargeable w.e.f. 1.6.2015. Therefore, the provisions of section 234E are not applicable in the financial years under consideration.
We delete the levy of late fee u/s. 234E for the 2nd quarter of financial year 2012-13, for the third quarter of financial year 2012-13, for the 4th quarter of financial year 2012-13, for the 1st quarter of financial year 2012-13 and for the 2nd quarter of financial year 20013-14 and allow the appeals of the assessee.
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2017 (10) TMI 1534
Interest on the statutory interest in case of delay in the payment u/s 244A - HELD THAT:- The facts as well as issue involved in these appeals are identical to that of the case of M/S AMBUJA DARLA KASHLOG MANGOO TRANSPORT COOPERAT IVE SOCIETY LTD. VERSUS THE DCIT, CIRCLE, PARWANOO [2017 (11) TMI 988 - ITAT CHANDIGARH], where it was held that the assessee is otherwise entitled for the compensation from the Revenue for inordinate delay in the payment of interest.
Therefore, following the decision rendered in the case, all these appeals of the assessees stands allowed on the same terms and the Revenue is directed to pay compensation in the shape of simple interest on the amount due at the rate at which the assessees herein otherwise would have been entitled to, on the delayed payment of excess tax paid.
Appeal allowed - decided in favor of assessee.
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2017 (10) TMI 1533
Extension of period of tariff order operation - whether the Gujarat Electricity Regulatory Commission (the Commission), in exercise of its inherent powers, could have extended the control period for the 1st respondent Company (Respondent no. 1)?
HELD THAT:- That question is no more res integra. There are recent judgments of this Court which are relevant in this context.
In GUJARAT URJA VIKAS NIGAM LIMITED VERSUS EMCO LIMITED & ANOTHER [2016 (2) TMI 1284 - SUPREME COURT], this Court has held that the control period could be extended - while addressing another grey area as to whether the Commission has the power to amend tariff despite the terms of the PPA, this Court in Gujarat Urja Vikas Nigam Limited v. Tarini Infrastructure Limited and others , after analyzing scheme of the Act, has answered the question in affirmative.
An amendment to tariff by the Regulatory Commission is permitted under Section 62(4) read with Section 64(6) of the Act. Section 86(1)(a) clothes the Commission with the power to determine the tariff and under Section 86(1)(b), it is for the Commission to regulate the price at which electricity is to be procured from the generating companies. Section 86 (1)(e) deals with promoting co-generation and generation of electricity from renewable sources of energy . Therefore, there cannot be any quarrel with regard to the power conferred on the Commission with regard to fixation of tariff for the electricity procured from the generating companies or amendment thereof in the given circumstances.
This Court should be specially careful in dealing with matters of exercise of inherent powers when the interest of consumers is at stake. The interest of consumers, as an objective, can be clearly ascertained from the Act. The Preamble of the Act mentions “protecting interest of consumers” and Section 61(d) requires that the interests of the consumers are to be safeguarded when the Appropriate Commission specifies the terms and conditions for determination of tariff. Under Section 64 read with Section 62, determination of tariff is to be made only after considering all suggestions and objections received from the public. Hence, the generic tariff once determined under the statute with notice to the public can be amended only by following the same procedure. Therefore, the approach of this Court ought to be cautious and guarded when the decision has its bearing on the consumers. - Extension of control period has been specifically held to be outside the purview of the power of the Commission as per EMCO (supra). This appeal is hence, allowed. The impugned orders are set aside. However, we make it clear that this judgment or orders of the Appellate Tribunal or Commission shall not stand in the way of the Respondent no.1 taking recourse to the liberty available to them for re-determining of tariff if otherwise permissible under law and in which case it will be open to the parties to take all available contentions before the Commission.
In the present case, the first respondent obtained the Chief Electrical Inspector Certificate, which is the statutory mandate as per Section 162 of the Act only on 13.03.2012, nearly two months after the expiry of the Tariff Order (2010).
Whether the state Commission has inherent powers to extend the control period of Tariff Order dated 29.01.2010 beyond the control period in respect of one PPA? - HELD THAT:- Section 181 of the Electricity Act, 2003 empowers the State Commission to make regulations consistent with the Act and the Rules to carry out the provisions of the said Act and, inter alia, provide for the matters indicated thereon. In exercise of the powers conferred under Section 181 of the Electricity Act, 2003 and under Section 127 of Gujarat Electricity Industry (Re-organization and Regulation) Act, 2003 and all powers enabling it in that behalf, the Gujarat Electricity Regulatory Commission framed the Conduct of Business Regulation - The State Commission and the Appellate Tribunal held that under the Conduct of Business Regulations, 2004 and Section 86 of the Electricity Act, 2003, the State Commission has inherent jurisdiction to extend the control period of the Tariff Order 2010 and the tariff rate thereon beyond 28.01.2012. The Appellate Tribunal further held that the control period of the Tariff Order was fixed by the State Commission itself and hence, the State Commission has inherent powers to extend the control period of the Tariff Order.
The inherent powers being very wide and incapable of definition, its limits should be carefully guarded. Inherent powers preserved under Regulation 80 (which is akin to Section 151 of the Code) are with respect to the procedure to be followed by the Commission in deciding the cause before it. The inherent powers under Section 151 CPC are procedural in nature and cannot affect the substantive right of the parties. The inherent powers are not substantive provision that confers the right upon the party to get any substantive relief. These inherent powers are not over substantive rights which a litigant possesses - The inherent power is not a provision of law to grant any substantive relief. But it is only a procedural provision to make orders to secure the ends of justice and to prevent abuse of process of the Court.
In the case at hand, rights and obligations of the parties flow from the terms and conditions of the Power Purchase Agreement (PPA). PPA is a contract entered between the GUVNL and the first respondent with clear understanding of the terms of the contract. A contract, being a creation of both the parties, is to be interpreted by having due regard to the actual terms settled between the parties. As per the terms and conditions of the PPA, to have the benefit of the tariff rate at ₹ 15/- per unit for twelve years, the first respondent should commission the Solar PV Power project before 31.12.2011. It is a complex fiscal decision consciously taken by the parties. In the contract involving rights of GUVNL and ultimately the rights of the consumers to whom the electricity is supplied, Commission cannot invoke its inherent jurisdiction to substantially alter the terms of the contract between the parties so as to prejudice the interest of GUVNL and ultimately the consumers - It is not within the powers of the Commission to exercise its inherent jurisdiction to extend the control period to the advantage of any party and to the disadvantage of the other would amount to varying the terms of the contract between the parties.
Sanctity of Power Purchase Agreement - HELD THAT:- The tariff rate of ₹ 3.29/- per KWH was subject to escalation and subject to periodic review. Evacuation was changed from a distance of 4 kms. to 23 kms. from its switch yard. On account of the same, respondent No.1 therein had incurred an additional cost of about ₹ 10 crores which was not envisaged in the Concession Agreement. In such facts and changed circumstances, this Court thought it apposite to take a lenient view and allow the State Commission to re-determine the tariff rate - the respondent No.1 is bound by the terms and conditions of PPA entered into between respondent No.1 and the appellant by mutual consent and that the State Commission was not right in exercising its inherent jurisdiction by extending the first control period beyond its due date and thereby substituting its view in the PPA, which is essentially a matter of contract between the parties.
When the 1st respondent commissioned its project beyond 13.03.2012, Commission cannot exercise its inherent jurisdiction and vary the terms to extend the control period of Tariff Order dated 29.01.2010 in so far as the 1st respondent of the contract-Power Purchase Agreement (PPA) between GUVNL and the first respondent - the earlier order passed by this Court in C.A. No.2315 of 2013 (dated 01.04.2013) has not conclusively decided the substantial question of law inter-se the parties−that is exercise of inherent jurisdiction by the Commission to vary the terms of PPA by extending the control period beyond the stipulated time.
Application disposed off.
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2017 (10) TMI 1532
Maintainability of application - initiation of CIRP - Application rejected on the ground that the Respondent-'Financial Creditor' failed to produce the record or evidence of default in terms of Clause (a) of sub-section (3) of Section 7 of the 'I&B Code' - HELD THAT:- In the present case, the Appellant-'Corporate Debtor' has enclosed the application preferred by the Respondent-'Financial Creditor' under Section 7 in Form 1 as Annexure-A- 13 (Colly.). Therein the Respondent'Financial Creditor' at Part V has given the details of the particulars of the 'Financial Debt' (Documents, Records and Evidence of default). In support of the details of security held by or created for the benefit of the 'Financial Creditor' 'mortgages', 'guarantees', 'share pledge' etc. has been shown.
The application preferred by the Respondent-Financial Creditor' under section 7 in Form 1 is complete and there are records of debt and records of default - the Adjudicating Authority rightly admitted the application and passed the order of moratorium and prohibitory orders in accordance with 'I&B Code' - Appeal dismissed.
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2017 (10) TMI 1531
Capital loss OR allowable business deduction - difference between purchase price of Stock Appreciation Right (“SAR‟) and the sale price of such SAR at the time of exercise by the employees - Whether above differential amount was in the nature of employee compensation allowable as deduction under section 37(1) ? - HELD THAT:- With respect to one of the group companies, Religare commodities Ltd. [2017 (1) TMI 783 - ITAT DELHI] identical issue arose before the coordinate bench, which decided this issue held that the issue is also squarely covered by the decision of the Hon‟ble Madras High Court [2012 (7) TMI 696 - MADRAS HIGH COURT] wherein it has been held that the above expenditure on account of employee stock option scheme is an ascertained liability for deduction and further also held that the expenses debited is cost of employee stock option plan in the profit and loss account is an allowable expenditure. The Ld. departmental representative also could not point out any other judicial precedent against the above judicial precedents cited by the Ld. authorized representative. - Decided in favour of assessee.
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