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Showing 121 to 140 of 1327 Records
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2012 (11) TMI 1217
Issues involved: Request for recall of exparte order due to non-appearance by the assessee.
The Appellate Tribunal ITAT PUNE, in the case, dealt with a Miscellaneous Application filed by the assessee requesting the Tribunal to recall the exparte order passed dismissing the appeal for non-appearance. The assessee contended that the address provided was correct, and no notice of hearing was received, leading to non-appearance. The counsel argued that in the interest of justice, the exparte order should be recalled to allow the assessee to present their case. After considering the submissions, the Tribunal found a reasonable cause for the non-appearance and decided to recall the order, scheduling the appeal for a new hearing date of 01-01-2013, as announced in the open court. It was further decided that no separate notice of hearing would be sent, a decision agreed upon by both parties. The Miscellaneous Application filed by the assessee was allowed, and the order was pronounced during the hearing on November 23, 2012.
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2012 (11) TMI 1216
Issues involved: Appeal against addition of cash deposits u/s 143(3) of the Income Tax Act, 1961 for assessment year 2008-09.
Summary:
Issue 1: Addition of Cash Deposits
The appeal challenged the addition of Rs. 15 lacs on account of cash deposits made by the assessee. The assessee had withdrawn Rs. 23 lacs from a bank account and later deposited Rs. 15 lacs back into the same account after a few months. The Assessing Officer and CIT (Appeals) added the Rs. 15 lacs as income, questioning the reason for keeping such a large amount of cash at home. The assessee contended that the cash deposits were from the withdrawals made for investment in immovable property, with the balance used for household purposes. The Tribunal noted that the cash withdrawals and subsequent deposits were explained by the assessee, similar to a precedent set by the Punjab & Haryana High Court. The Tribunal found no merit in treating the redeposit of cash as income u/s 68 of the Act, and accordingly, the addition was deleted, allowing the appeal raised by the assessee.
Decision:
The Tribunal allowed the appeal of the assessee, deleting the addition of Rs. 15 lacs on account of cash deposits.
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2012 (11) TMI 1215
Issues involved: Appeal against order of CIT-IV, Hyderabad u/s 263 for AY 2005-06.
Professional receipts: CIT directed AO to tax professional receipts of Rs. 7,36,555. Assessee claimed amount belonged to next assessment year, supported by course details. CIT rejected explanation, ordered tax. Assessee argued CIT exceeded jurisdiction as issue not in original notice. Cited precedent, ITAT held CIT must confine to issues in notice. Order set aside.
Cash credit: CIT questioned Rs. 20 lakhs debit entry, asked for evidence of loan. Assessee failed to provide immediate proof, later produced letter. CIT found lack of evidence, directed AO to tax if unsatisfied. Assessee contended issue not in original notice, jurisdiction exceeded. Citing precedent, ITAT held proceedings must stick to notice. Order set aside.
Mumbai Training Institute receipts: CIT noted no receipts shown from Mumbai Training Centre, directed AO to tax if any found. Assessee appealed against CIT's order.
Conclusion: ITAT set aside CIT's order on cash credit and Mumbai Training Institute receipts issues. Regarding professional receipts, ITAT directed AO to examine if Rs. 7,36,555 accrued in AY 2005-06, following mercantile accounting system. Assessee's appeal partly allowed for statistical purposes.
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2012 (11) TMI 1214
Issues involved:
The issue involves the denial of deduction u/s 80IA(4)(iii) of the IT Act by the Assessing Officer (AO) based on the non-fulfillment of conditions prescribed in the Notification issued by the Central Government for claiming the deduction.
Summary:
Assessment Year 2008-09:
The appellant, a partnership firm, constructed an industrial park approved by the Ministry of Commerce, Govt. of India under the Industrial Park Scheme, 2002. The appellant claimed a deduction u/s 80IA(4)(iii) for an amount but the AO disallowed the claim as the area utilized for industrial activities did not meet the prescribed conditions. The CIT (A) allowed the deduction based on the ITAT's decision in the appellant's favor for the assessment year 2007-08.
Grounds for Disallowance:
1. The total constructed area was less than the approved area.
2. Sale of a portion of the industrial park area in violation of the Government approval.
3. Utilization of less than 90% of the allocable area for industrial activities.
Decision:
The ITAT upheld the CIT (A)'s decision, citing the appellant's entitlement to the deduction u/s 80IA(4)(iii) based on the previous year's decision and the non-withdrawal of approval by the Central Government. The facts remained unchanged, leading to the dismissal of the Revenue's appeal.
Significant Phrases:
- Deduction u/s 80IA(4)(iii) of the IT Act
- Industrial Park Scheme, 2002
- Ministry of Commerce, Govt. of India
- Central Government approval
- Conditions prescribed in the Notification
- Disallowance of claim by the AO
- CIT (A)'s decision
- ITAT's ruling
- Identical grounds for disallowance
- Non-fulfillment of prescribed conditions
- Upholding the appellant's entitlement
- Dismissal of the Revenue's appeal
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2012 (11) TMI 1213
Issues involved: Appeal against order disallowing salary and interest paid to partners u/s 40(b)(v) of IT Act, and disallowance of certain expenses.
Ground 1 - Disallowance of salary to partners u/s 40(b)(v) of IT Act:
The appellant, a partnership firm, contested the disallowance of salary to partners by the Assessing Officer (A.O.) under section 40(b)(v) of the Income Tax Act, 1961. The A.O. disallowed the remuneration as the partnership deed did not specify the amount of remuneration payable to each working partner. The A.O. relied on C.B.D.T. Circular No.739 dated 25.03.1996. The CIT(A) upheld the disallowance. The appellant argued citing judgments of Hon'ble High Court of Himachal Pradesh, emphasizing that remuneration paid was within permissible limits as per the Act. The Tribunal followed the Himachal Pradesh High Court judgment, allowing the claim of the assessee as the remuneration did not exceed the maximum amount provided under the Act.
Ground 2 - Disallowance of interest paid to partners:
This ground was not pressed by the assessee and hence dismissed as not pressed.
Ground 3 - Disallowance of certain expenses:
Similarly, ground 3 regarding the disallowance of expenses amounting to Rs. 2 lacs was not pressed by the assessee and dismissed as not pressed.
In conclusion, the Tribunal partially allowed the appeal of the assessee, emphasizing the importance of complying with the provisions of the Income Tax Act and relevant judicial precedents in determining the allowability of expenses and remuneration to partners in a partnership firm.
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2012 (11) TMI 1212
Issues involved: Appeal filed by Revenue regarding deletion of addition on account of cessation of liability u/s.41(1) and disallowance of excess claim of diesel expenses.
Cessation of liability u/s.41(1):
The AO noted outstanding liabilities in the books for more than three years, considering them ceased due to limitation. The ld.CIT(A) reversed this, citing lack of evidence of remission or waiver by creditors. The Tribunal held that without evidence of cessation, adding unpaid liability to income u/s 41(1) is unjustifiable. Referring to precedent, it stated that liabilities in books should subsist unless legally held otherwise. Upholding the ld.CIT(A)'s view, the Tribunal dismissed this ground of the Revenue.
Excess claim of diesel expenses:
AO disallowed 5% of claimed diesel expenses due to an increase from the previous year, adding an amount to taxable income. The ld.CIT(A) accepted the assessee's explanation of increased expenses due to a 7.19% rise in diesel prices and customer contributions. No specific defects were pointed out by the AO for the ad hoc disallowance. The Tribunal, after considering the factual aspect and comparative chart, upheld the ld.CIT(A)'s decision to delete the addition. It noted the reasons for increased diesel expenses provided by the assessee and dismissed this ground of the Revenue.
In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the ld.CIT(A)'s decisions regarding both the cessation of liability u/s.41(1) and the excess claim of diesel expenses.
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2012 (11) TMI 1211
Issues Involved:
1. Legality of the Tribunal's decision on the voluntary surrender of income and imposition of penalty u/s 271(1)(c) of the Income Tax Act.
2. Examination of the revised return and its acceptance.
3. Validity of the Assessing Officer's (AO) findings and the CIT (A)'s decision to cancel the penalty.
4. Tribunal's consideration of the case and the sufficiency of reasons provided.
Summary:
1. Legality of the Tribunal's Decision on Voluntary Surrender and Penalty u/s 271(1)(c):
The appellant challenged the Tribunal's order, which upheld the AO's decision to impose a penalty u/s 271(1)(c) of the Income Tax Act. The Tribunal found that the appellant had not voluntarily surrendered his income at the time of filing the revised return, justifying the imposition of the penalty.
2. Examination of the Revised Return and Its Acceptance:
The assessee initially declared income from long-term capital gains (LTCG) and claimed exemption u/s 54-F. Upon filing a revised return, the LTCG was surrendered as income from other sources. The AO observed that the assessee showed unaccounted money as LTCG to evade tax and was unable to establish the genuineness of the share transactions, leading to the conclusion that the assessee concealed income and was liable to pay a penalty.
3. Validity of the AO's Findings and the CIT (A)'s Decision to Cancel the Penalty:
The CIT (A) allowed the appeal against the penalty, noting that the AO did not issue any questionnaire before the surrender and did not collect evidence to prove the share transactions were sham. The CIT (A) found that the AO's findings were not supported by the record. However, the Tribunal disagreed, stating that the assessee's surrender of income after receiving notice u/s 148 indicated concealment of income, and the revised return did not absolve the assessee from the penalty.
4. Tribunal's Consideration of the Case and Sufficiency of Reasons Provided:
The Tribunal considered the entire case, including the reasons for reopening the assessment and the circumstances under which the revised return was filed. It concluded that the assessee's actions indicated concealment of income and furnishing inaccurate particulars, warranting the penalty. The Tribunal found the CIT (A)'s findings unsustainable and upheld the AO's decision to impose the penalty.
Conclusion:
The High Court dismissed the appeal, deciding the question of law against the assessee and in favor of the revenue, affirming the Tribunal's decision to impose the penalty u/s 271(1)(c) of the Income Tax Act.
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2012 (11) TMI 1210
Issues Involved:
1. Jurisdiction and validity of notice issued u/s 148.
2. Reason to believe that income had escaped assessment.
3. Allegation of notice issued for roving and fishing enquiries.
4. Validity of notice issued u/s 148 with proper sanction.
5. Admission of affidavit.
6. Confirmation of addition u/s 68.
7. Allowability of deduction u/s 10B.
8. Allowance of expenses incurred.
9. Consideration of ITAT order for assessment year 2004-2005.
10. Reliance on letter dated 04/08/2003 by CIT(A).
11. Opportunity to explain the document relied upon by CIT(A).
12. Certificate issued by STPI authorities.
Summary:
1. Jurisdiction and Validity of Notice Issued u/s 148:
The assessee argued that the notice issued u/s 148 was without jurisdiction and thus the proceedings were illegal and invalid. However, the Tribunal found that the reopening of assessments was based on findings from a survey conducted by the Investigation Wing, and thus the notice was valid.
2. Reason to Believe that Income Had Escaped Assessment:
The CIT(A) held that there was reason to believe that income had escaped assessment based on the survey findings which revealed discrepancies in the assessee's software export claims. The Tribunal upheld this view, noting the substantial evidence presented by the survey team.
3. Allegation of Notice Issued for Roving and Fishing Enquiries:
The Tribunal found that the notice u/s 148 was not issued for roving and fishing enquiries but was based on specific findings from the survey, which indicated potential income escapement.
4. Validity of Notice Issued u/s 148 with Proper Sanction:
The Tribunal confirmed that the notice issued u/s 148 was valid and had proper sanction, dismissing the assessee's contention to the contrary.
5. Admission of Affidavit:
The CIT(A) did not admit the affidavit of Mr. Rakesh P. Sindher, which the Tribunal found justified as the affidavit did not provide any new or compelling evidence to alter the findings of the survey.
6. Confirmation of Addition u/s 68:
The CIT(A) confirmed the addition of Rs. 6,69,35,376 u/s 68 of the I.T. Act, which was upheld by the Tribunal. The Tribunal noted that the assessee failed to prove the genuineness of the transactions and the export claims.
7. Allowability of Deduction u/s 10B:
The primary issue in all grounds was the allowability of deduction u/s 10B. The Tribunal found that the assessee did not comply with the guidelines issued by the STPI and failed to provide substantial evidence of genuine software exports. Consequently, the deduction u/s 10B was disallowed.
8. Allowance of Expenses Incurred:
The Tribunal noted that no software expenses were debited by the assessee despite claiming substantial software exports. Thus, the expenses claimed were disallowed.
9. Consideration of ITAT Order for Assessment Year 2004-2005:
The assessee argued that the ITAT order for the assessment year 2004-2005, which allowed the deduction u/s 10B, should be followed. However, the Tribunal found that the factual parameters for the years under consideration were different from those in 2004-2005.
10. Reliance on Letter Dated 04/08/2003 by CIT(A):
The CIT(A) relied on a letter dated 04/08/2003 written by the Director and Chief Executive of STPI to the Jt. Commissioner of Customs and Excise, which the assessee claimed was never furnished by them. The Tribunal found that this letter was part of the remand report and not independently submitted by the assessee.
11. Opportunity to Explain the Document Relied Upon by CIT(A):
The Tribunal found that the CIT(A) relied on the letter without giving the assessee proper opportunity to explain the document, which was a procedural lapse.
12. Certificate Issued by STPI Authorities:
The CIT(A) held that the certificate issued by STPI authorities in Softex Form was based on the appellant's own verification without specific verification. The Tribunal upheld this finding, noting that the assessee failed to provide substantial evidence to prove the genuineness of the software exports.
Conclusion:
The Tribunal dismissed the appeals for the assessment years 2001-2002 and 2002-2003, confirming the disallowance of deduction u/s 10B and the additions made u/s 68. However, for the assessment year 2003-2004, the Tribunal found the reassessment proceedings invalid due to lack of bonafide reasons and quashed the assessment order.
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2012 (11) TMI 1209
Issues Involved:
1. Petition filed u/s Articles 226/227 of the Constitution for release of imported goods.
2. Classification of imported goods under Customs Act, 1962.
3. Dispute over import restrictions and confiscation under Section 111(d) of the Act.
4. Appeal process under Section 128 of the Act.
The petitioner, a proprietorship concern dealing in import and trading of old and used multi-functional devices, filed a writ petition seeking the release of a consignment of goods imported from Hong Kong. The petitioner argued that the goods were freely importable as per the Foreign Trade Policy of the Customs Tariff Act, 1975. Despite multiple communications and requests for clearance, the goods were not released due to being categorized as restricted post-amendment. The petitioner claimed heavy demurrage charges due to the delay in clearance, emphasizing the need for provisional release based on previous court directions to clear goods within 3 days.
Respondent authorities filed a written statement stating that the imported goods were classified as old and used digital multi-function printing and copying machines, falling under a restricted category post-amendment to the Foreign Trade Policy. Consequently, the goods were deemed liable for confiscation u/s 111(d) of the Customs Act. An order was passed for redemption of goods upon payment of a substantial fine, giving the petitioner the option to challenge the confiscation order through an appeal u/s 128 of the Act before the Commissioner Appeals.
The petitioner contended that the goods were purchased before the import restrictions came into effect, highlighting the financial burden of demurrage charges incurred during the clearance delay. The counsel for Respondent Nos. 2 & 3 argued that the appeal process under Section 128 of the Act was available for challenging the confiscation order, indicating that the issue was yet to be fully adjudicated.
The Court observed that while the petitioner's appeal was pending, it was appropriate for the appellate authority to adjudicate on the matter. The Court directed the Commissioner Appeals to expedite the hearing of the appeal within 15 days from the receipt of the order, emphasizing the need for a swift resolution to address the petitioner's concerns regarding demurrage charges.
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2012 (11) TMI 1208
Issues involved: The judgment involves transfer pricing adjustment, corporate tax issues, initiation of penalty proceedings u/s 271(1)(C), and levy of interest u/s 234B and 234C of the Act.
Transfer Pricing Adjustment: The assessee appealed against the first appellate order on grounds related to transfer pricing adjustment. The assessee argued for analyzing international transactions on a transaction-by-transaction basis to adhere to the arm's length principle. The assessee provided evidence such as pricing policy documents, certificates, and bench marking analysis to support its pricing policy. Citing relevant tribunal decisions, the assessee requested consideration of additional evidence. The Tribunal set aside the matter to the Assessing Officer (AO) for fresh adjudication, emphasizing the need to verify the comparability of instances furnished by the assessee to determine adherence to the arm's length principle.
Corporate Tax Issues: The appeal also raised concerns regarding corporate tax issues. The assessee contested the disallowance of royalty expenses and the denial of deduction u/s 10A. The assessee argued that the disallowed royalty expenses were actually paid subsequently and should not be treated as a contingent liability. Regarding section 10A deduction, the assessee referred to a Tribunal decision upheld by the Karnataka High Court and revised its return of income to claim the deduction. The Tribunal directed fresh consideration by the AO on these issues, highlighting the need to verify the correctness of the claims made by the assessee.
Penalty Proceedings and Interest Levy: Grounds 9 and 10, related to the initiation of penalty proceedings u/s 271(1)(C) and levy of interest u/s 234B and 234C, were not pursued by the assessee and were rejected. The Tribunal allowed these grounds for statistical purposes.
Conclusion: The Tribunal allowed the appeal for statistical purposes, setting aside the issues related to transfer pricing adjustment and corporate tax for fresh consideration by the AO. The order was pronounced on 22/11/2012.
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2012 (11) TMI 1207
Issues involved: Contempt petition regarding interference with investigation by Enforcement Directorate in 2G scam case.
Summary:
The Supreme Court considered a contempt petition regarding interference with the investigation by the Enforcement Directorate in the 2G scam case. The petitioner sought various reliefs, including stay of proceedings in a writ petition before the High Court of Allahabad and impleadment of certain individuals. The Court noted efforts to harass the investigating officer and reviewed previous orders related to the case. It was observed that attempts were made to interfere with the investigation, leading to the Court taking suo motu cognizance and issuing notices. The Court directed respondents to file reply affidavits and scheduled further proceedings. The Court also stayed certain proceedings and investigations related to the case. The case was listed for further hearing on a specified date.
In a related matter, sealed envelopes containing progress reports in various cases were presented in Court. The reports were reviewed, and the case was scheduled for further consideration on a later date. The Court directed the reports to be placed in separate sealed envelopes for record.
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2012 (11) TMI 1206
Issues Involved:
1. Validity of reopening of assessment u/s 147.
2. Disallowance of amortization of payment made for leasehold land.
3. Deduction u/s 80HHC on the basis of entity as a whole.
4. Deduction u/s 80IA on interest received from IDBI, income from services, and interest received from bank deposits.
5. Deduction u/s 80IA and 80HHC on interest received from customers for delayed payments and excess recovery from debtors.
6. Allowability of deduction u/s 80-I before allowing deduction u/s 80HH.
7. Exclusion of excise duty and sales tax from the total turnover for the purpose of computing deduction u/s 80HHC.
8. Reduction of 90% of the net and not gross amount of interest from the services and interest from banks while calculating deduction u/s 80HHC.
9. Deduction u/s 80HHC on the interest income received from the customers for delayed payment of sale consideration and recovery from the debtors after allowing the netting of expenses.
10. Deletion in respect of the insurance claim u/s 41(1).
11. Non-inclusion of the processing charges from the profits of the business in Explanation (baa) to section 80HHC.
12. Deletion of disallowance in respect of foreign traveling expenses.
13. Deletion of disallowance u/s 43B in respect of the delayed payment of PF contribution.
14. Deletion of disallowance in respect of entertainment expenses.
15. Deletion of disallowance in respect of interest on amounts receivable from partnership firms.
Summary:
Validity of reopening of assessment u/s 147:
The assessee challenged the reopening of assessment u/s 147. The Tribunal upheld the validity of reopening based on the "reasons recorded" by the A.O., stating that the information received from the Deputy Commissioner, Central Circle -1, Jaipur, regarding the bogus share capital was sufficient to entertain a belief that income chargeable to tax had escaped assessment. The second part of the "reasons recorded" was deemed a "change of opinion," which is not permissible in law. However, since one part of the "reasons recorded" was sufficient to acquire jurisdiction for reopening, the Tribunal dismissed the assessee's ground.
Disallowance of amortization of payment made for leasehold land:
The assessee's claim for amortization of payment made for leasehold land was initially disallowed based on previous Tribunal orders. However, the Tribunal allowed the claim, citing the decision in DCIT v. SUN Pharmaceuticals Limited, where advance payment for acquiring land on lease was considered revenue expenditure.
Deduction u/s 80HHC on the basis of entity as a whole:
The Tribunal upheld the assessee's method of computing deduction u/s 80HHC on the basis of the entity as a whole, following the decision in the assessee's own case for the A.Y. 2000-01.
Deduction u/s 80IA on interest received from IDBI, income from services, and interest received from bank deposits:
The Tribunal dismissed the department's appeal, following the decision in the assessee's own case and the Hon'ble Supreme Court's ruling in ACG Associated Capsules Pvt. Ltd. Vs. CIT, which supported the netting of interest.
Deduction u/s 80IA and 80HHC on interest received from customers for delayed payments and excess recovery from debtors:
The Tribunal dismissed the department's appeal, following the decision in the assessee's own case and the Hon'ble Bombay High Court's ruling in CIT vs. Gridwell Norton Ltd.
Allowability of deduction u/s 80-I before allowing deduction u/s 80HH:
The Tribunal upheld the CIT(A)'s decision that deductions u/s 80HH and 80-I are independent and should be allowed on the gross total income, following the Hon'ble Supreme Court's ruling in JCIT vs. Mandideep Engg. & Packaging Industries (P) Ltd.
Exclusion of excise duty and sales tax from the total turnover for the purpose of computing deduction u/s 80HHC:
The Tribunal upheld the exclusion of excise duty and sales tax from the total turnover for computing deduction u/s 80HHC, following the Hon'ble Supreme Court's decision in CIT vs. Laxmi Machine Works.
Reduction of 90% of the net and not gross amount of interest from the services and interest from banks while calculating deduction u/s 80HHC:
The Tribunal upheld the CIT(A)'s direction to reduce 90% of the net amount of interest, following the Hon'ble Supreme Court's decision in ACG Associated Capsules Pvt. Ltd. Vs. CIT.
Deduction u/s 80HHC on the interest income received from the customers for delayed payment of sale consideration and recovery from the debtors after allowing the netting of expenses:
The Tribunal dismissed the department's appeal, following the decision in the assessee's own case and the Hon'ble High Court's ruling in ITA No.5718 of 2010.
Deletion in respect of the insurance claim u/s 41(1):
The Tribunal upheld the deletion of the addition in respect of the insurance claim u/s 41(1), following the decision in the assessee's own case and the Hon'ble Jurisdictional High Court's ruling in CIT vs. Pfizer Ltd.
Non-inclusion of the processing charges from the profits of the business in Explanation (baa) to section 80HHC:
The Tribunal allowed the department's appeal, following the Hon'ble Bombay High Court's decision in CIT vs. Bresser India Pvt. Ltd.
Deletion of disallowance in respect of foreign traveling expenses:
The Tribunal upheld the deletion of disallowance in respect of foreign traveling expenses, following the decision in the assessee's own case.
Deletion of disallowance u/s 43B in respect of the delayed payment of PF contribution:
The Tribunal upheld the deletion of disallowance u/s 43B, following the Hon'ble Supreme Court's decision in CIT vs. Alom Extrusions Ltd.
Deletion of disallowance in respect of entertainment expenses:
The Tribunal upheld the deletion of disallowance in respect of entertainment expenses, following the decision in the assessee's own case.
Deletion of disallowance in respect of interest on amounts receivable from partnership firms:
The Tribunal upheld the deletion of disallowance in respect of interest on amounts receivable from partnership firms, following the decision in the assessee's own case.
Result:
The appeals filed by the assessee and the department were partly allowed.
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2012 (11) TMI 1205
The Supreme Court dismissed the special leave petition after condoning the delay. The citation for the case is 2012 (11) TMI 1205 - SC Order, with a reference to the Delhi High Court case 2012 (5) TMI 89. Justices D.K. Jain and Madan B. Lokur were presiding over the case. Petitioner represented by Mr. Rajiv Dutta, Sr. Adv., Mr. Rupesh Kumar, Adv., Mr. Amarjeet Singh, Adv., Mrs Anil Katiyar, Adv., and Respondent represented by Ms. K
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2012 (11) TMI 1204
Issues involved: Appeal against order of Commissioner of Income-tax (Appeals) Aurangabad u/s 143(3) of the Income-tax Act, 1961 for assessment year 2006-07.
First Issue - Addition of Commission Expenditure:
The Assessing Officer disallowed &8377; 5,64,352/- out of commission expenditure paid to a sister concern, invoking sec. 40A(2)(b) of the Act. However, the CIT(A) deleted the addition based on business expediency and non-evasion of tax, citing relevant case laws. The Tribunal affirmed the CIT(A)'s decision, emphasizing substantial sales through the sister concern and absence of tax evasion, thus dismissing the Revenue's appeal on this ground.
Second Issue - Disallowance u/s 40(a)(ia) of the Act:
The Assessing Officer disallowed expenses under sec. 40(a)(ia) of the Act. The CIT(A) allowed the claim based on a retrospective amendment by Finance Act, 2010, which waived disallowance if TDS was paid before the due date of filing return. The Tribunal upheld this decision, following a similar precedent, and dismissed the Revenue's appeal on this ground as well.
In conclusion, the appeal of the Revenue was dismissed by the Appellate Tribunal ITAT Pune, with both issues favoring the assessee based on business justifications and retrospective amendments to tax laws.
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2012 (11) TMI 1203
Issues involved: Determination of liability to pay interest under Sec. 11AB of the Central Excise Act and imposition of penalty under Sec. 11AC.
Interest under Sec. 11AB:
The case involved the manufacture of motor vehicle parts clearing goods with a price revision clause. The respondents paid differential duty upon receiving additional amounts for goods already cleared. The issue was whether interest was payable on this differential duty. The Hon'ble Supreme Court clarified that interest under Sec. 11AB is leviable on delayed or deferred payment of duty for any reason. The payment of the differential duty upon issuance of supplementary invoices falls under sub-section (2B) of section 11A. The Tribunal disagreed with a previous High Court decision, stating that the payment of differential duty constituted short payment of duty, attracting interest under section 11AB.
Imposition of Penalty under Sec. 11AC:
Regarding the imposition of penalty under Sec. 11AC, the Tribunal noted that prior to the Supreme Court decision, there were favorable decisions for the assessee. Therefore, in this case, it was not deemed appropriate to impose a penalty under Sec. 11AC of the Central Excise Act.
The Tribunal set aside the Commissioner (Appeals) decision and held that interest was payable by the respondents under Sec. 11AB. However, considering the precedents and lack of intentional wrongdoing, the imposition of a penalty under Sec. 11AC was deemed unnecessary. The appeal filed by the Revenue was disposed of accordingly, with no costs awarded.
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2012 (11) TMI 1202
Issues:
The judgment involves the quashing of orders related to duty drawback availed by the petitioner, the imposition of penalties, and the jurisdiction of the revisional authority.
Quashing of Orders:
The petitioner sought the quashing of Order No.95-96/10-CUS dated 7.4.2010 and Order in Original No.34/ACE/JJ/2009 dated 6.4.2009, along with a show cause notice dated 20.8.2008. The orders were challenged as arbitrary, unconstitutional, and beyond jurisdiction. The orders created a liability of Rs. 67,42,724 for fraudulent duty drawback availment, leading to recovery orders and penalties under relevant sections of the Customs Act, 1962.
Jurisdiction of Revisional Authority:
The petitioner approached the revisional authority under Section 35EE of the Central Excise Act, 1944, contesting the orders. The revision petition was initially accepted but later rejected by the Government of India, stating that the order was appealable under Section 35B(1) of the Act. The petitioner contended that the revisional authority erred by not providing an opportunity for a hearing, challenging the legality of the decision.
Legal Analysis:
The Court examined Section 35EE of the Act, which grants revisional jurisdiction to the Central Government for orders under Section 35A passed by the Commissioner (Appeals). Section 35B allows appeals to the Appellate Tribunal against orders passed by the Commissioner of Central Excise. As the orders in question were issued by the Commissioner of Central Excise, the revisional authority's rejection of the petition was deemed appropriate. The Court found no error in the revisional authority's decision and dismissed the writ petitions, while allowing the petitioners to pursue further legal remedies as per the law.
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2012 (11) TMI 1201
Penalty - Classification of services - Business Auxiliary services or Computer network services or intellectual property rights services? - Held that: - it is clear that right from December 2007 onwards the appellant's activities were known to the department and the department was confused under which category the service tax is leviable on the services received by the appellant. It was changed from BAS to Computer network services and finally to intellectual property rights service. In view of this factual position, the question of suppression of any facts by the appellant does not arise at all.
Mere omission to furnish information does not amount to suppression of fact - extended period not invocable.
The matter has to go back to the adjudicating authority to consider afresh the classification of the intellectual property rights received by the appellant under a particular category of IPR and the law which is applicable to such intellectual property in India - appeal allowed by way of remand.
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2012 (11) TMI 1200
Issues involved: Delay in filing appeal, addition under section 40(a)(ia), disallowance under section 40A(2)(b), addition under section 28, cash credits under section 68, penalty under section 271(1)(c).
The appeal before the Appellate Tribunal ITAT Ahmedabad involved a delay of 61 days in filing the appeal, which was condoned by the Tribunal. The issues for the assessment year 2005-2006 included grounds related to additions and disallowances made by the Commissioner of Income-Tax (Appeals).
Addition under Section 40(a)(ia): The assessee contested the addition of Rs. 11,00,574 on account of disallowance under section 40(a)(ia) for non-deduction of tax. The assessee did not press this ground, leading to its dismissal.
Disallowance under Section 40A(2)(b): The assessee challenged the addition of Rs. 4,33,920 under section 40A(2)(b) for transactions with related parties. The Tribunal found that the addition was made without providing an opportunity for the assessee to be heard, thus directing the Assessing Officer to re-examine the issue considering the submissions made by the assessee.
Addition under Section 28: The assessee disputed the addition of Rs. 4,33,920 under section 28, alleging a contravention of section 251(2) of the IT Act. The Tribunal directed the Assessing Officer to reconsider the issue after providing a fair opportunity for the assessee to present evidence and arguments.
Cash Credits under Section 68: The assessee objected to the addition of Rs. 1,08,09,988 on account of cash credits under section 68. The Tribunal noted that the Assessing Officer failed to issue summons to the creditors despite a specific request from the assessee. Consequently, the Tribunal directed the AO to re-evaluate the issue, including summoning the creditors and allowing the assessee to cross-examine them.
Penalty under Section 271(1)(c): The penalty imposed under section 271(1)(c) was deemed invalid due to the decision to set aside the addition related to unproved creditors under section 68. The Tribunal canceled the penalty, with the option for the AO to re-initiate penalty proceedings if necessary.
In conclusion, the Tribunal partially allowed ITA No.405/Ahd/2009 for statistical purposes and allowed ITA No.3289/Ahd/2011, with directions for the Assessing Officer to re-examine certain issues in accordance with the law and provide opportunities for the assessee to present their case.
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2012 (11) TMI 1199
Issues Involved:
1. Assumption of jurisdiction by the CIT u/s 263 of the Income-tax Act, 1961.
2. Disallowance of Trade Scheme Expenditure.
3. Disallowance of commission payment.
Summary:
1. Assumption of jurisdiction by the CIT u/s 263 of the Income-tax Act, 1961:
The assessee challenged the CIT's assumption of jurisdiction u/s 263, arguing that there was no mistake by the Assessing Officer (AO) in allowing the claim. The Tribunal had previously allowed similar claims for A.Ys. 2003-04, 2004-05, and 2005-06. The AO had conducted a detailed inquiry and allowed the claim based on the books of account, bills, and vouchers. The Tribunal held that the CIT cannot reopen a settled issue and must follow the Tribunal's binding orders. The CIT's direction to disallow the expenditure was annulled.
2. Disallowance of Trade Scheme Expenditure:
The CIT directed the AO to disallow Trade Scheme Expenditure of Rs. 3,35,17,143 paid to M/s. Gayatri Marketing Agencies and M/s. ARK Marketing Agencies, alleging it was a spurious deduction. The Tribunal had previously allowed similar claims for earlier years, and the CIT was bound by these decisions. The Tribunal reiterated that the CIT cannot take a contrary view on a settled issue and annulled the CIT's order u/s 263.
3. Disallowance of commission payment:
For A.Y. 2007-08, the CIT(A) sustained a disallowance of Rs. 1,84,145 out of Rs. 6,84,145 incurred towards commission payment. The Tribunal had previously allowed a reasonable extent of commission payments due to their inevitability in the business. The Tribunal found the ad-hoc disallowance by the AO to be on the higher side but justified sustaining the disallowance at Rs. 1,84,145.
Conclusion:
- ITA No. 692/Hyd/2011 (A.Y. 2006-07) - Allowed.
- ITA No. 499/Hyd/2011 - Dismissed as infructuous.
- ITA No. 1420/Hyd/2011 (A.Y. 2007-08) - Partly allowed.
Order pronounced in the open court on 16th November, 2012.
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2012 (11) TMI 1198
Issues Involved:
The judgment involves the interpretation of Section 260-A of the Income Tax Act,1961 and addresses substantial questions of law arising from the order passed by the Income Tax Appellate Tribunal, Agra Bench Agra.
Issue I:
The first issue pertains to the correctness of the order upholding the finding that the gift received by the appellant was erroneous and prejudicial to the interest of revenue. The Commissioner of Income Tax initiated proceedings under Section 263 based on the failure to examine the gift of Rs. 1,50,000 received by the appellant from Shri Ram Avatar Agarwal. The Tribunal held that the gift was not genuine and the creditworthiness of the donor was not established.
Issue II:
The second issue questions whether the findings and observations made by the Tribunal regarding the genuineness of the gift of Rs. 1,50,000 were based on conjectures and surmises, and if they were irrelevant facts, rendering them perverse. The Tribunal found that the creditworthiness of the donor was not established, leading to the conclusion that the gift was not genuine.
Issue III:
The third issue concerns the jurisdiction of the Tribunal in recording findings and observations on the merits of the case regarding the genuineness of the gift of Rs. 1,50,000 while deciding the appeal against the order passed by the Commissioner of Income Tax under Section 263. The Tribunal found that the Assessing Officer had accepted the gift without examining the creditworthiness of the donor, leading to an erroneous and prejudicial order.
Issue IV:
The final issue questions whether the Tribunal exceeded its jurisdiction by allowing the Commissioner of Income Tax's order in part after holding the Assessment Order as not erroneous or prejudicial to the interest of revenue. The Tribunal found that the gift of Rs. 1,50,000 was not genuine due to the lack of established creditworthiness of the donor.
The judgment analyzed the facts of the case for the assessment year 2002-03, where the appellant, engaged in the business of manufacturing and sale of pulses, disclosed income discrepancies. The Commissioner of Income Tax initiated proceedings under Section 263 based on unexamined fresh loans, a gift of Rs. 1,50,000, and questionable purchases made by the assessee. The Tribunal found the purchases verifiable but deemed the gift not genuine due to the lack of established creditworthiness of the donor.
During the hearing, the appellant's counsel argued that the donor's statement on oath confirmed the gift, establishing creditworthiness. However, the Revenue's counsel contended that bank transactions alone did not prove creditworthiness and genuineness. The Tribunal's findings highlighted the lack of relationship between the donor and the assessee, casting doubt on the genuineness of the gift.
The Tribunal's decision was based on the donor's modest means, indicating an inability to gift a substantial amount. Citing precedent cases, including the Hon'ble Supreme Court's ruling in CIT v. P. Mohanakala, the Tribunal upheld the Commissioner's finding that the gift was erroneous and prejudicial to revenue. Following the legal principles established in previous cases, the High Court affirmed the Tribunal's decision, dismissing the appeal.
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