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Showing 121 to 140 of 1235 Records
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2012 (8) TMI 1120
Issues Involved:
1. Constitutionality of the amended Rule 2(20) of the Surat City Municipal Corporation Octroi Rules, 1973.
2. Legislative competence of the Surat Municipal Corporation to collect octroi on the value of goods at the time of sale.
3. Discrimination in the application of the amended rule.
4. Double taxation due to the amended rule.
5. Violation of consent terms between the petitioners and the Surat Municipal Corporation.
Summary:
Constitutionality of the Amended Rule 2(20):
The petitioners challenged the legality and validity of the explanation to Rule 2(20) of the Surat City Municipal Corporation Octroi Rules, 1973, introduced by amendment on 28.6.1996. The amendment required octroi to be assessed at 100% on the sales value of yarn imported by manufacturers, which the petitioners contended was unconstitutional. The Court held that the rule-making authority had no power to frame such a rule since octroi is a cess on goods brought into city limits for consumption, use, or sale therein. The rule was deemed unconstitutional and ultra vires the parent Act and constitutional provisions.
Legislative Competence:
Counsel for the petitioners argued that the Corporation lacked legislative competence to collect octroi on the value of goods at the time of sale, as Entry 52 of List II to Schedule VII only permits collection of duty on the value of goods at the time of entry. The Court agreed, stating that after goods enter the Corporation limits, any expenditure related to such goods before they are sold cannot be subject to octroi. The amendment was held to be outside the legislative competence of the rule-making body.
Discrimination:
The petitioners argued that the rule was discriminatory as it only applied to yarn manufacturers, while other goods continued to attract octroi based on the value assessed at the time of entry. The Court found the rule to be discriminatory and thus invalid.
Double Taxation:
The petitioners contended that the amended rule amounted to double taxation, as octroi would be assessed on the sales value, which includes octroi itself. The Court acknowledged this issue, reinforcing the invalidity of the rule.
Violation of Consent Terms:
The petitioners argued that the amendment violated the consent terms agreed upon in a previous court order. However, the Court clarified that the consent terms were valid only as long as the original Municipal Octroi Rules remained in force. Since the rules were amended, the consent terms no longer applied.
Refund and Unjust Enrichment:
The Court directed the respondents to refund the excess octroi collected from the petitioners, subject to the petitioners establishing that the burden of excess octroi was not passed on to consumers. This exercise was to be completed within four months, with refunds carrying simple interest at 12% per annum from the date of collection till payment.
Conclusion:
The petitions were disposed of, and the rule was made absolute to the extent of the above findings, with no order as to costs.
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2012 (8) TMI 1119
Issues involved: Application for dispensation of meetings of Secured and Unsecured Creditors u/s 391(2) of the Companies Act, 1956 in the proposed amalgamation of a Transferee Company with its wholly owned subsidiary Company.
Summary:
The Judge's Summons were filed by the Transferee Company, seeking dispensation of meetings of the Secured and Unsecured Creditors under Section 391(2) of the Companies Act, 1956, for the proposed amalgamation with its wholly owned subsidiary Company. The Transferee Company, Jindal Agro Processing Private Limited, planned to amalgamate with Global Gourmet Private Limited, its wholly owned subsidiary, without any change in Share Capital or issuance of new shares. The Transferor Company's name would be struck off, and its shares held by the Transferee Company would be cancelled, ensuring no impact on existing shareholders' rights.
During the hearing, the applicant's advocate cited various judgments to support the contention that separate proceedings for amalgamation of a wholly owned subsidiary Company are not necessary for the Holding Company. After considering the arguments, the material on record, and the referenced judgments, it was held that the Holding Transferee Company is not required to initiate separate proceedings under Section 391(2) of the Companies Act, 1956, for the proposed Scheme of Amalgamation with its wholly owned subsidiary. Consequently, the requirement for proceedings under Section 391(2) of the Companies Act, 1956, was dispensed with, and the application was disposed of accordingly.
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2012 (8) TMI 1118
The High Court of Gujarat corrected a mistake in an order, directing the petitioner to deposit Rs. 25 Lacs instead of Rs. 55 Lacs with the department within 12 weeks. The correction was made upon submission by counsel for respondent Nos.1 & 2.
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2012 (8) TMI 1117
Issues involved: Revenue's appeal against deletion of addition of House Keeping charges without considering previous ITAT decision and ongoing High Court matter.
Summary:
The Revenue made an addition of Rs. 71,30,158 as income from other sources due to inadequate staff and infrastructure for providing housekeeping services. The Assessing Officer treated a portion as business income and the balance as income from other sources. Penalty proceedings were initiated u/s 271(1)(c) for inaccurate particulars of income. In appeal, the CIT(A) deleted the addition based on previous ITAT decisions in the assessee's favor, emphasizing consistency in treatment of income. The ITAT upheld the CIT(A)'s order, noting that the entire exercise was academic and unnecessary. The depreciation cannot be disallowed whether income is assessed under business or other sources. The order of the CIT(A) was upheld, and the Revenue's appeal was dismissed based on jurisdictional ITAT decisions.
In conclusion, the Revenue's appeal was dismissed, and the addition of Rs. 71,30,158 was deleted based on the ITAT's decision in the assessee's own case and the principle of consistency in income treatment.
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2012 (8) TMI 1116
Issues Involved:
The judgment involves the following Issues:
1. Confirmation of additions made by the Assessing Officer.
2. Treatment of evidences supporting the genuineness of cash credit.
3. Justification for additions based on unexplained cash deposits.
4. Permission to modify grounds of appeal.
Confirmation of Additions:
The appellant contested the additions of Rs. 7,90,000 made by the Assessing Officer, which were confirmed by the CIT(A) Faridabad. The appellant argued that the cash deposit in the bank was from legitimate sources related to trading activities. However, the Assessing Officer treated the cash deposit as unexplained income from undisclosed sources due to the absence of produced books of account during assessment proceedings.
Treatment of Evidences:
During the appellate proceedings, the appellant submitted books of account and a cash book up to the date of the cash deposit. The Assessing Officer raised concerns about the lack of proof for cash sales and a significant withdrawal from the bank. The appellant provided explanations and evidence to support the legitimacy of the cash balance and transactions, including cash memos, vouchers, and sales tax returns.
Justification for Additions:
The Assessing Officer's remand report highlighted discrepancies in the appellant's books of account and questioned the legitimacy of the cash deposit. The appellant refuted these claims by presenting detailed evidence of cash transactions, withdrawals, and deposits, demonstrating the availability of sufficient cash balance to support the deposit amount. The Tribunal found that the appellant had adequately explained the sources of income and cash transactions, leading to the deletion of the addition of Rs. 7,90,000 as undisclosed income.
Permission to Modify Grounds:
The appellant requested permission to modify the grounds of appeal at any time before the hearing. The Tribunal, after considering the arguments and evidence presented by both parties, allowed the appeal and ruled in favor of the appellant, concluding that the additions made by the Assessing Officer were unjustified based on the provided documentation.
*Decision:* The Tribunal allowed the appeal, pronouncing the decision in open court on 31st August 2012.
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2012 (8) TMI 1115
Issues involved: Winding up petition, acknowledgment of debt, limitation period.
Winding up petition: The petitioner sought winding up of the respondent company due to an outstanding amount of Rs. 45,78,900 for supplied goods, with an adhoc payment made in 2004. The petitioner claimed that a receipt of Form 3B by the respondent in 2006 extended the period of limitation for filing the petition within time.
Acknowledgment of debt: The respondent failed to produce the original sales tax form, leading to a dispute regarding the acknowledgment of the debt. The petitioner argued that the Form 3B and the receipt by the respondent constituted an acknowledgment under Section 18 of the Limitation Act.
Limitation period: The court examined whether the petition was within the limitation period as per Section 3 of the Limitation Act. The petitioner contended that the Form 3B and the receipt by the respondent amounted to an acknowledgment of the debt, but the court disagreed. It was held that the Form 3B did not meet the criteria for acknowledgment as it only acknowledged the goods received, not the debt itself. The court emphasized that the intention to admit a jural relationship as a debtor and creditor must be present for an acknowledgment to be valid under Section 18 of the Limitation Act.
Conclusion: The court dismissed the petition as time-barred, stating that the Form 3B receipt did not constitute an acknowledgment of the debt owed by the respondent. The court highlighted that the surrounding circumstances and communications did not establish an acknowledgment of the debt, leading to the dismissal of the petition filed in 2009 for a debt due since 2004.
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2012 (8) TMI 1114
Issues: Stay of disputed outstanding tax balance
Issue 1: Stay of disputed outstanding tax balance
The assessee filed three Stay Applications seeking a stay on the disputed outstanding tax balance totaling Rs. 52.52 lakhs. The learned AR argued for the stay of payment until the appeal's disposal, while the learned DR contended that the stay was unnecessary as the appeals were already being heard and disposed of. The Tribunal, after hearing both parties and examining the records, noted that the appeals had been disposed of earlier. Consequently, the Tribunal deemed the Stay Applications as infructuous and dismissed them. The order was pronounced on 3rd August 2012.
In conclusion, the Appellate Tribunal, ITAT Hyderabad, in the case discussed, addressed the issue of stay of disputed outstanding tax balance through three Stay Applications. The Tribunal considered the arguments presented by both parties, ultimately dismissing the Stay Applications as the appeals had already been disposed of, rendering the stay unnecessary.
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2012 (8) TMI 1113
The High Court of Delhi granted liberty to the applicant to withdraw the application and pursue independent legal proceedings. The application was dismissed as withdrawn. (Case citation: 2012 (8) TMI 1113 - DELHI HIGH COURT)
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2012 (8) TMI 1112
Issues Involved:
1. Stoppage of work and non-payment of bills.
2. Applicability of arbitration clause.
3. Jurisdiction of High Court under Article 226.
4. Admission of amounts by respondents.
Summary:
1. Stoppage of work and non-payment of bills:
The appellant was awarded the Somasila Drinking Water Supply Scheme by APIIC, with an agreement dated 24.9.2008. The appellant alleged that the respondents instructed them to stop work in December 2009 after completing over 34% of the work. Despite submitting running account bills, only two payments were released, and subsequent bills were neither certified nor paid. The appellant sought permission to resume work and release outstanding payments through multiple representations, leading to the writ petition.
2. Applicability of arbitration clause:
The Single Judge noted that Clause 61 of the agreement dealt with suspension of work by the contractor, and Clause 73 provided for arbitration in case of disputes. The Judge observed a serious dispute regarding the stoppage of work and the appellant's entitlement to payments, suggesting that the appellant should seek remedies provided in the agreement rather than a writ of mandamus.
3. Jurisdiction of High Court under Article 226:
The appellant contended that the stoppage of work was instructed by APIIC officers and that there was no dispute warranting arbitration. The appellant argued that APIIC, as a statutory corporation, should not act arbitrarily. The respondents countered that the appellant stopped work on its own and that the contract, being in the realm of private law, should be governed by the Contract Act, not constitutional provisions. The court reiterated that disputes under private contracts should be resolved through arbitration or civil courts, not writ petitions, citing precedents like State of U.P. v. Bridge & Roof Co. (India) Ltd. and Radhakrishna Agarwal v. State of Bihar.
4. Admission of amounts by respondents:
The appellant raised a point regarding the admission of amounts by the respondents. However, the court found no documents or material constituting such an admission. The court emphasized that admissions must be unequivocal and specifically stated under the law. Consequently, the court found no merit in this point and affirmed the Single Judge's order, dismissing the writ appeal.
Conclusion:
The court concluded that the contract between the parties was governed by private law and any disputes should be resolved through arbitration or civil courts as stipulated in the agreement. The writ petition was deemed inappropriate for enforcing contractual obligations, leading to the dismissal of the appeal.
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2012 (8) TMI 1111
Whether the learned Single Judge and the Division Bench of the High Court committed an error by dismissing the appellants’ application for impleadment as parties? - Held that:- Clandestine nature of the transactions entered into between respondent No.2 and the appellants on the one hand and the appellants and Bhagwati Developers on the other would give rise to strong presumption that if a receiver is not appointed, further attempts would be made to alienate the property in similar fashion. Therefore, we do not find any valid ground much less justification to interfere with the impugned order or the one passed by the learned Single Judge of the Delhi High Court.
We do not consider it necessary to advert to the documents filed by respondent No.1 before this Court for the first time and the additional affidavit filed by Smt. Bhanwari Devi Lodha on behalf of Bhagwati Developers.
In the result, the appeals are dismissed. For their contumacious conduct of suppressing facts from the Calcutta High Court and thereby prolonging the litigation, the appellants and Bhagwati Developers are saddled with cost of ₹ 5 lakhs each. The amount of cost shall be deposited by them with the Supreme Court Legal Services Committee within a period of three months.
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2012 (8) TMI 1110
Issues involved: Share transfer deeds, maintainability of petition, fraudulent transfer of shares, burden of proof, approval of share transfer by board of directors, compliance with provisions of law, entitlement to file petition under section 399 of the Act.
Share Transfer Deeds: The applicants contended that the petitioners had transferred their shares more than two years back, rendering the petition not maintainable. The petitioners denied making voluntary transfers and accused the applicants of misusing blank transfer deeds to falsely claim ownership. The petitioners argued that they did not receive any consideration for the alleged transfers and disputed the authenticity of the documents presented by the applicants.
Fraudulent Transfer of Shares: Respondents 6 and 7, as promoter-directors, refuted the claim of share transfer and alleged that any documents provided by the applicants could be fabricated. They stated that they were forced to withdraw the petition under the pretext of settlement talks, which never materialized. The respondents maintained that no genuine transfer of shares took place and accused the applicants of fraudulent acts.
Burden of Proof and Compliance: The main issue for consideration was whether the petitioners had indeed transferred their shares. The Board examined the share transfer forms and receipts, concluding that the petitioners had voluntarily transferred their shares based on the documents provided. The Board found that the provisions of law regarding share transfers had been complied with, leading to the petitioners no longer being shareholders of the company.
Approval by Board of Directors: The Board noted that the transfer of shares was approved during a board meeting, where other transfers were also sanctioned. The minutes of the meeting and the register of members supported the approval of share transfers, indicating that the board had authorized the transactions. The Board emphasized that the petitioners had signed the necessary documents for the transfer.
Entitlement to File Petition: Based on the evidence of share transfers and compliance with legal requirements, the Board held that the petitioners were no longer shareholders of the company. As a result, the petition filed under section 399 of the Act was deemed not maintainable, and the application by the applicants was allowed, leading to the dismissal of the petition.
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2012 (8) TMI 1109
Issues Involved:
1. Quashing of demands for demurrages, penalty, rent.
2. Direction for clearance of goods without payment of demurrages, rent, penalty, or interest.
3. Alternative relief for clearance of goods on payment of calculated rent.
4. Liability of Customs authorities for demurrages.
Summary:
1. Quashing of demands for demurrages, penalty, rent:
The petitioner sought to quash the demands of demurrages, penalty, and rent for the clearance of 582 MTs of stainless steel angles. The Court, referencing the Supreme Court decision in *International Airports Authority of India v. Grand Slam International*, held that the petitioner is liable to pay demurrages to the Kandla Port Trust. Consequently, the prayer for quashing the demand raised by the respondent did not merit acceptance.
2. Direction for clearance of goods without payment of demurrages, rent, penalty, or interest:
The petitioner sought a direction to clear the goods without payment of demurrages, rent, penalty, or interest. The Court found that the petitioner is liable to pay demurrages as per the law, and thus, no such direction could be granted.
3. Alternative relief for clearance of goods on payment of calculated rent:
The petitioner alternatively sought clearance of goods on payment of calculated rent. The Court noted that the petitioner failed to establish that the goods were warehoused on 11-10-1982. The veracity of the letter dated 23-5-2006 (Annexure P-8) was disputed by the respondent, who contended it was fabricated. Therefore, the prayer for clearance on payment of rent could not be granted.
4. Liability of Customs authorities for demurrages:
The petitioner argued that the Customs authorities should be liable for demurrages due to their default. The Court observed that there were no specific pleadings and prayers against the Customs authorities in the petition. Moreover, the Customs authorities could only be held liable until 9th August 1989 for the first consignment. For the second consignment, the delay was due to the petitioner prosecuting the matter before a wrong forum, which could not be attributed to the Customs authorities.
Conclusion:
The petition was dismissed, and the rule was discharged. The interim relief granted earlier was vacated but extended for eight weeks to enable the petitioner to approach a higher forum.
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2012 (8) TMI 1108
The Supreme Court condoned the delay and dismissed the special leave petitions citing the decision in Ranbaxy Laboratories Limited v. Union of India & Ors.
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2012 (8) TMI 1107
Issues involved: Admissibility of Cenvat Credit on capital goods, time-barred adjudication.
Admissibility of Cenvat Credit on capital goods: The majority of demand touching the question of admissibility of Cenvat Credit on capital goods was considered by the Tribunal. The learned Counsel argued that the demand should not sustain as the adjudication is time-barred, which applies to both major and minor demands. The case pertains to the claim of Cenvat Credit on various items such as M.S. Angles, M.S. Bars, Flats, M.S. Shapes, and Section and Rails. Referring to recent legal developments, the Tribunal noted that many appeals have been remanded to grant a fair opportunity to assessees to present their defense in light of specific judgments, including those of Vandana Global Ltd. vs. CCE, Raipur and CCE, Jaipur vs. Rajasthan Spg. & Wvg. Mills Ltd.
Remand for re-adjudication: Considering the above legal precedents, the Tribunal decided that the present assessee should also benefit from a re-adjudication in line with the decisions mentioned. The Revenue agreed to this proposal, and the matter was remanded for a fresh adjudication, ensuring a fair opportunity for hearing on both merit and the time-bar aspect based on the legal principles established in the aforementioned judgments.
Effect on Revenue's appeal: As the assessee's appeal was remanded, the Revenue's appeal was also sent back to the original authority for a fresh decision. This was deemed necessary since the basis of the original decision was affected by the order to re-adjudicate the assessee's case in light of the relevant legal rulings.
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2012 (8) TMI 1106
Issues involved: Tax appeal challenging the deletion of penalty u/s 271(1)(c) of the Income Tax Act for claiming excessive depreciation on plant & machinery, electrical installations, and hotel building.
Facts and Decision:
1. The assessee filed a return showing a loss, which was accepted. Scrutiny revealed excess depreciation claimed on electric installations, leading to penalty proceedings u/s 271(1)(c).
2. The Assessing Officer disallowed excess depreciation on electric installations and hotel building, initiating penalty proceedings.
3. The CIT(A) accepted the assessee's explanation regarding electrical fittings, reducing the disallowance amount.
4. Penalty of &8377; 11,73,470/- was imposed for excessive depreciation claims on plant & machinery and hotel building.
5. The CIT(A) found no intention to furnish incorrect information, as the assessee rectified the mistake regarding hotel building depreciation.
6. The Tribunal upheld the CIT(A)'s decision, citing precedents and lack of mens rea for penalty imposition.
7. The High Court dismissed the appeal, concluding that the issue was settled by the Tribunal's findings, and no substantial question of law was raised.
Conclusion: The penalty u/s 271(1)(c) was deleted based on the lack of intention to provide incorrect information and the rectification of the mistake by the assessee, as upheld by the Tribunal and the High Court.
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2012 (8) TMI 1105
Issues involved:
The issues involved in the judgment are the authority of the Debts Recovery Appellate Tribunal to remand a matter back to the Debts Recovery Tribunal, the right of a party to file an application under Section 17 of the SARFAESI Act, and the validity of declaring an agreement of sale as null and void under Section 13(13) of the Act.
Debts Recovery Appellate Tribunal's Authority to Remand:
The petitioner-Bank filed a writ petition seeking to quash the proceedings of RA(SA)No.62/2010 before the Debts Recovery Appellate Tribunal, Chennai, on the grounds of lack of maintainability and jurisdiction. The Acting Chief Justice and Justice Vilas V.Afzulpurkar considered Section 20(4) of the SARFAESI Act, 2002, which empowers the appellate Tribunal to pass orders as it deems fit, including remanding a matter. It was held that the remand order by the appellate Tribunal was not unlawful, as it falls within the scope of the Tribunal's authority under the Act. The submission challenging the remand order was deemed without merit, and the writ petition was disposed of accordingly.
Right to File Application under Section 17:
Another contention raised was regarding the right of the applicant to file an application under Section 17 of the Act before the Debts Recovery Tribunal, Hyderabad. The Court opined that any affected party, including one holding an agreement of sale from the borrower, has the liberty to apply under Section 17. It was clarified that the existence of an agreement of sale does not nullify the right to seek relief under the Act, and such applications are permissible for parties impacted by the Tribunal's orders.
Validity of Declaring Agreement of Sale Null and Void:
The validity of declaring an agreement of sale as null and void under Section 13(13) of the SARFAESI Act was also addressed. The Court emphasized that an agreement for sale does not contravene the Act and does not impede the rights of banks holding mortgages. Therefore, the argument to declare such agreements as null and void was deemed untenable. The appellate Tribunal's decision to remand the matter based on merits, particularly concerning Section 13(13) and Section 17 of the Act, was upheld as justified. The Court directed the Debts Recovery Tribunal, Hyderabad, to expedite the disposal of the case within two months from the date of the order.
This comprehensive summary highlights the key legal issues addressed in the judgment, including the authority of the appellate Tribunal, the right to file applications under specific sections of the SARFAESI Act, and the validity of agreements of sale under the Act.
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2012 (8) TMI 1104
Penalty levied u/s 18(1)(c)- monetary limits - maintainability of appeal - Held that:- When it is clearly mentioned in Instruction No.3/2011 that for matters relating to direct tax other than income-tax, relevant provisions of statute and rules will continue to apply, it would by implication means that earlier instructions insofar as it related to matters other than income-tax would continue to apply. By virtue of Instruction No.5/2007 dated 16.7.2007, the monetary limit for filing of appeals before this Tribunal was increased ₹ 1 lakh. By virtue of Instruction No.1979 dated 27.3.2000, the monetary limits mentioned applied also to wealth-tax, gift-tax and Estate Duty matters.
In our opinion, when these instructions are read together, despite the supersession effected by Instruction No.3/2011 dated 9.2.2011 of earlier Instruction No.5/2008 dated 15.5.2008 and supersession of instructions mentioned at para 5 above by us, through Instruction No.5/2008 dated 15.5.2008, the earlier instructions insofar as it applied to wealth-tax, gift-tax and Estate Duty matter would continue in force. For taking the view that the Instruction No.5/2008 as also Instruction No.3/2011 will apply to wealth-tax matter also.
In this view of the matter, we are of the opinion that the appeal filed by the Revenue is not maintainable due to low tax effect.
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2012 (8) TMI 1103
Issues Involved:
1. Estimation of Fair Market Value (FMV) of the property as on 01.04.1981 for calculating Long Term Capital Gain (LTCG).
2. Validity of the valuation methods and evidence used by the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)].
Summary:
1. Estimation of Fair Market Value (FMV):
The Revenue challenged the CIT(A)'s estimation of the FMV of the sold property at Rs. 6000/- per marla, arguing that the AO's valuation of Rs. 1000/- per marla should be upheld. Conversely, the assessee contested the CIT(A)'s valuation of Rs. 4000/- per marla, asserting that the valuation should be Rs. 8000/- per marla based on the report of an approved valuer.
2. Validity of Valuation Methods and Evidence:
The AO processed the returns u/s 143(1) and later scrutinized the cases, questioning the basis of the FMV adopted by the assessees. The AO relied on the Inspector's report and the Tehsildar's report, which suggested much lower values. The assessees argued that their property, being commercial and located on a main road, had a higher value compared to the agricultural land cited by the AO.
The CIT(A) partly allowed the appeals, directing the AO to recompute the capital gain using an estimated FMV of Rs. 6000/- per marla for Sh. Ravi Kant Jain and Rs. 4000/- per marla for M/s. Basant Metal Works. Both parties were dissatisfied and appealed to the ITAT.
ITAT's Decision:
The ITAT noted that the AO did not refer the matter to a Valuation Officer, which is a procedural lapse. Despite this, the CIT(A) provided a reasonable determination based on the available evidence. The ITAT upheld the CIT(A)'s order, finding no need for further interference.
Conclusion:
Both appeals by the Revenue and the assessee were dismissed, and the CIT(A)'s order was upheld, maintaining the FMV at Rs. 6000/- per marla for Sh. Ravi Kant Jain and Rs. 4000/- per marla for M/s. Basant Metal Works.
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2012 (8) TMI 1102
Disallowance u/s 40(a)(ia) - non deduction of tax on a payment of rent made to one Sh. Irfan Ahged Narwaroo - Held that:- Section 40(a)(ia) is applicable only to expenditure which is payable as on 31st March of every year and cannot be invoked to disallow the amounts which have already been paid during the year previous year without deducting tax at source. AO is not justified in disallowing the expenditure. Accordingly, the order of the Ld. CIT(A) is reversed. Thus, all the grounds of the assessee are allowed.
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2012 (8) TMI 1101
Issues Involved:
1. Legality of the order passed by CIT(A).
2. Justification of sustaining the addition of Rs. 5,10,000.
3. Disallowance of Rs. 5,000 each under the heads of telephone and miscellaneous expenses.
Summary:
1. Legality of the order passed by CIT(A):
The assessee challenged the order dated 17.01.2011 passed by the CIT(A)-II, Agra for A.Y. 2006-07, claiming it was "bad in law and on facts." The Tribunal upheld the CIT(A)'s decision, finding no merit in the appellant's arguments.
2. Justification of sustaining the addition of Rs. 5,10,000:
A survey operation u/s 133A of the Income Tax Act, 1961, was conducted on 30.01.2008, during which the Director of the Company surrendered Rs. 5,00,000 as undisclosed income on account of commission. The assessee did not include this amount in the return of income. The CIT(A) confirmed the addition, noting that the retraction of the statement was made after four months without any cogent reasons. The Tribunal found that the surrender was based on discrepancies found in the books of accounts during the survey and was not merely due to coercion. The Tribunal cited the judgment of the Allahabad High Court in Dr. S.C. Gupta vs. CIT, 248 ITR 782 (All), emphasizing that an admission made during the survey is a significant piece of evidence unless successfully retracted with substantial proof. The Tribunal concluded that the assessee failed to discharge the burden of proving the retraction and upheld the addition of Rs. 5,00,000.
3. Disallowance of Rs. 5,000 each under the heads of telephone and miscellaneous expenses:
The A.O. disallowed Rs. 5,000 each out of telephone and miscellaneous expenses due to the personal element and non-maintenance of a logbook. The CIT(A) upheld these disallowances, reasoning that the expenses were not fully vouched and audited. The Tribunal agreed with the CIT(A), noting that the assessee failed to establish that the expenses were incurred wholly and exclusively for business purposes. Given the totality of the facts, including the income declared and the expenses claimed, the Tribunal found the disallowances reasonable and upheld the addition of Rs. 5,000 each under telephone and miscellaneous expenses.
Conclusion:
The appeal of the assessee was dismissed, and the order of the CIT(A) was confirmed in its entirety.
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