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Showing 121 to 140 of 1610 Records
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2016 (8) TMI 1495
Interpretation of statute - Failure to declare availability of power in the proportion of 300:215 MW for the period from 14th September, 2002 onwards - Whether the Tribunal has correctly interpreted the terms of Power Purchase Agreement dated 30th May, 1996 (PPA) and is justified in reversing the finding of the Commission based on interpretation of the said PPA and other documents on record.?
True interpretation of PPA to determine whether there is any obligation to declare availability of power in the ratio of 300:215 - HELD THAT:- The EPL was under obligation as per Schedule VI to declare weekly Schedule of the capacity available and the dispatch instructions were to be issued on the basis of the said declaration. It could not thus be said that the EPL had no obligation to declare the capacity and the obligation of GUVNL to issue dispatch instructions was not dependent on declaration of the available capacity by the EPL. Contrary view of the Tribunal is clearly erroneous. In paras 45 and 46 and elsewhere in its judgment, the Tribunal erred in holding that there was no obligation to declare available capacity on proportionate basis. The finding of the Commission in paras 9.5 to 9.12 of its order quoted above is the correct interpretation of the Agreement.
Effect of letters dated 17th February, 2000, 4th March, 2000 and 4th October, 2001 on the rights of the parties - HELD THAT:- The letters of the Respondent acknowledged its liability to allocate the generated power to the Appellant and to the ESL in the ratio of 58: 42. The Tribunal in para 54 quoted above, held that the said letters could not be relied upon in support of the claim that the Appellant was entitled to be allocated generated power in proportion of 58: 42. This finding is clearly erroneous and is without any basis and is liable to be set aside. The finding of the Commission is based on record.
Interpretation of Schedule VI to determine whether the obligation to issue dispatch instructions arose before declaration of availability - HELD THAT:- In interpreting Schedule VI, the Commission held that the EPL was liable to declare weekly capacity available and on that basis dispatch instructions were required to be issued (para 9.6). The contrary view taken by the Tribunal in para 45 and elsewhere is clearly contrary to the agreement between the parties as reflected in Schedule VI.
The order of the Tribunal is erroneous. The said order has given rise to the substantial question of law which has been discussed above, i.e., the interpretation of the Agreement between the parties and the obligation of the Respondent to declare availability of generated power in the ratio of 58: 42 and consequence of default therein. The Tribunal erroneously held that there was no pleading for making the claim. Thus, the Tribunal has committed error of law as well as of record in recording its finding as demonstrated above. It may also be noted that the Commission has left actual working out of the loss to be worked out separately and on that basis the Appellant has already filed its claim which was pending consideration before the Commission. The said proceeding can now be revived in the light of our finding.
Appeal allowed.
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2016 (8) TMI 1494
Alternate claim of the assessee for granting the benefit of section 10A - CIT-A not allowing the alternate claim of deduction under section 10A when he was of the view that the assessee is not eligible for deduction under section 10B - HELD THAT:- We find merit in the contention of the learned Authorized Representative. On the earlier occasion, this Bench of the Tribunal had upheld the order of the learned Commissioner of Income Tax (Appeals) who had allowed the alternate claim of the assessee for granting deduction under section 10A of the Act when it was found that the assessee is not eligible for the benefit of deduction under section 10B of the Act.
As relying on VALIANT COMMUNICATIONS LTD. [2013 (1) TMI 734 - DELHI HIGH COURT] and M/S. DATA SOFTWARE RESEARCH COMPANY (P) LTD. [2015 (9) TMI 1282 - ITAT CHENNAI] we hereby remit the matter back to the file of the learned Assessing Officer for considering the alternate claim of the assessee for granting the benefit of section 10A of the Act, if the assessee is found to be eligible for such claim under section 10A of the Act. - Decided in favour of assessee for statistical purposes
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2016 (8) TMI 1493
Disallowance genuine business expenditure in the form of director’s salary - allowability of salary paid to the Director - HELD THAT:- Since we have already concluded that the expenditure incurred by way of salary payments is allowable expenditure u/s 37(1) of the Act, we do not find any necessity to adjudicate the said additional Ground.
Conclude by holding that the material and evidence on record clearly suggests that services were rendered by Shri Faraz G. Joshi as Director of the assessee-company and that the salary paid to him cannot be disallowed. Therefore, we set-aside the order of CIT(A) and direct the Assessing Officer to delete the addition. Thus, the assessee succeeds on this aspect.
Assessment u/s 153A - HELD THAT:- A perusal of the assessment order as well as the order of CIT(A) reveals that the pleas of assessee have not been appreciated in its proper perspective. Notably, CIT(A) in para 4.3 of his order has reproduced the submission of the assessee which was to the effect that such action of Assessing Officer was untenable in the impugned proceedings carried out u/s 143(3) r.w.s. 153A of the Act. The assessee has supported the said plea on the strength of an order passed by the Commissioner u/s 263 of the Act, which was required to be given effect to by the Assessing Officer by amending the original assessment framed u/s 143(3) of the Act. We find that the aforesaid plea of assessee has been completely disregarded and action of the Assessing Officer has been upheld. After considering the factual matrix brought out by the assessee, we find that the impugned action of Assessing Officer is unsustainable in the eyes of law and is hereby set-aside. Thus, assessee succeeds in this Ground.
Mis-declaration of PFAD as Acid Oil which has resulted in inflation of purchases - HELD THAT:- The relevant discussion in the order of Assessing Officer as well as the CIT(A) clearly shows that the only basis for the impugned addition is the findings of DRI. There is no independent finding of the Assessing Officer on the basis of any material to say that assessee has inflated its purchases by declaring the import of PFAD as that of Acid Oil. In fact, the order of CESTAT dated 4.12.2014 (supra), whose copy has been placed on record, upholds the contention of assessee that it has imported Acid Oil and not PFAD. Quite clearly, since the basis on which the addition made by the Assessing Officer itself does not remain, the addition is directed to be deleted. Therefore, on this aspect also assessee succeeds.
Levy of penalty u/s 271(1)(c) - HELD THAT:- Levy of penalty is unjustified. It would also not be out of place to mention here that once on the same issue the Assessing Officer did not initiate penalty at the time of making the disallowance in the course of original assessment proceedings u/s 143(3) of the Act, then without there being any material found in the course of search, repetition of the same disallowance in the proceedings u/s 143(3) r.w.s. 153A of the Act would not justify levy of penalty u/s 271(1)(c) - Thus, on this aspect also we find no reason to uphold the penalty levied u/s 271(1)(c) - we set-aside the order of CIT(A) and direct the AO to delete the penalty imposed u/s 271(1)(c) of the Act. Accordingly, appeal of the assessee is allowed.
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2016 (8) TMI 1492
Penalty levied u/s. 271(1)(c) - Addition of unsecured loan which was not disclosed in the original return - HELD THAT:- The notice in the present case, does not reflect as to whether the present notice for initiation of penalty has been issued for concealment of income or furnishing of inaccurate particulars of income and hence the very basis for levy of penalty u/s 271(1)(c) of the Act is held to be invalid. We, therefore, respectfully following the decision of the Hon'ble Karnataka High Court in the case of M/s. Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] to hold that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act dated 30.12.2009 for A.Y 2004-05 initiating the penalty proceedings u/s 271(1)(c) of the Act in the case in hand is invalid and consequently, the penalty proceedings are also invalid - Decided in favour of assessee.
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2016 (8) TMI 1491
Transfer of the proceedings from Mumbai to Hyderabad - Validity of order u/s 127 - transfer of case - HELD THAT:- If we feel that the reasons for transfer of the case have been informed to the petitioner in more detail at the time of the present proceedings and therefore, looking at the peculiar facts of the case, it would be open to the petitioner to make a representation against the transfer of the proceedings from Mumbai to Hyderabad.
If such a representation is made to the Commissioner of Income Tax, Mumbai, within two weeks from today, it shall be considered objectively and shall be decided within two weeks from the date of receipt of such a representation.
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2016 (8) TMI 1490
Grant of exemption u/s. 11 denied - assessee runs a pharmacy store in the hospital for profit and earned profit from pharmacy store and not covered in the charitable activity - CIT(A) reversed the addition by the AO holding that the running of pharmacy was not a business activity of the assessee as the same was as per the objectives of the trust - HELD THAT:- The pharmacy store is an integral part of any hospital and can not be treated as business activity. Had the assessee operated a pharmacy store without running a hospital , then the activity would have been classified differently.
Issue decided in favour of assessee in HIRANANDANI FOUNDATION VERSUS ASST. DIRECTOR OF INCOME TAX, EXEMPTION 2 (1) , MUMBAI. [2016 (7) TMI 260 - ITAT MUMBAI] as held pharmacy shop is an integral part of the hospital business and the same is not hit adversely by the conditions specified in the provisions of section 11(4A) of the Act. Therefore, so long as the transactions of such pharmacy which ancillary/ incidental for the business of a hospital and objects of the trust, the conditions relating to maintenance of separate books of accounts are met within the meaning of section 11(4A) of the Act. Accordingly, grounds raised by the assessee are allowed
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2016 (8) TMI 1489
Release of salaries and retiral benefits - monetary claim - writ petitioners approached the Learned Single Judge alleging that the appellant company has not been making payment of their salaries and other allowances after attaining the age of 58 years though they continued or are continuing in service till the age of 60 years - HELD THAT:- The writ petitioners insist that they are entitled to salary and other benefits for service rendered between 58 years and 60 years of age while the company maintains that retirement age at all material times was 58 years and in any event, the employees, in fact, did not render any service beyond the age of 58 years. These are disputed questions of fact which, in our opinion, cannot be conveniently gone into in the exercise of writ jurisdiction. There is an alternative and much more efficacious statutory remedy available to the writ petitioners - Sec. 33C(2) of the Industrial Disputes Act provides for a mechanism for resolution of disputes relating to a workman's claim for money or any benefit which can be computed in terms of money.
The documents relied upon by the writ petitioners/respondents in respect of their contention that they served the company till the age of 60 years, are not conclusive. If the company is able to establish its case that since 2003 the Rupnarainpur Unit of the company was virtually lying closed and the writ petitioners showed attendance only on papers which were also prepared by them and their colleagues, it would be unfair to foist liability on the company for paying the wages and other benefits of the writ petitioners beyond the age of 58 years. That would also result in unjust enrichment of the writ petitioners. These are questions of fact, determination whereof requires a full-fledged trial with witness action, for which the writ court is not the forum. Labour Courts have been set up to entertain and adjudicate upon precisely the kind of dispute that is involved in the present writ proceeding.
The claim of the writ petitioners projected in the present proceeding can be adjudicated properly, more conveniently and much more efficaciously by the Labour Court. It is the Labour Court which the writ petitioners should have approached instead of invoking the writ jurisdiction of this court.
Appeal allowed - This will, however, not prevent the writ petitioners/respondents from approaching the appropriate forum to enforce their claim in accordance with law and the procedure contemplated.
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2016 (8) TMI 1488
Addition on account of suppressed income due to client code modifications - HELD THAT:- Issue decided in favour of assessee as relying on in the case of Kunvarji Finance Pvt.Ltd [2015 (4) TMI 539 - ITAT AHMEDABAD] transactions at the Commodities Exchanges have been duly accounted in the books of account maintained by the concerned parties. Such profits/loss has been duly accounted whenever the transactions have been closed. Thus, whatever profits have been generated or accounting of actual trade, have been offered and brought to the charge of tax in the cases of concerned assessees." These findings of fact recorded by the ld. CIT(A) has not been controverted by the Revenue at the time of hearing before us. When the transaction has been duly accounted for and the profit/loss has accrued to the concerned parties in whose names transactions have been closed, there cannot be any basis or justification for considering those profit/loss in the case of the assessee on the basis of mere presumption or suspicion. It is not the case of the Revenue that such alleged profit has actually been received by the assessee. In view of the totality of the above facts, we do not find any justification to interfere with the order of the CIT(A) in this regard and the same is sustained - Decided against revenue.
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2016 (8) TMI 1487
Grant of anticipatory bail - Sections 419, 420, 464, 465, 467, 468, 471 and 120-B IPC - HELD THAT:- Without expressing any opinion on the merits of the case, the interim bail granted by this Court vide order dated 16.11.2015, is made absolute, subject to the conditions contained in Section 438(2) Cr.P.C. - Petition allowed.
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2016 (8) TMI 1486
Penalty u/s 271(1)(c) - professional fee paid to Shri S.K. Gupta - HELD THAT:- As decided by Tribunal that the Assessing Officer was not justified in making the disallowance of profession fee paid to Shri S.K. Gupta and the Ld. Commissioner of Income Tax (Appeal) in confirming the same. In view of this factual matrix, since the addition on the basis of which penalty was levied is no more surviving, therefore, penalty has to be deleted. Our view find support from the decision in K.C. Builders vs ACIT (2004 (1) TMI 7 - SUPREME COURT) and CIT vs S.P. Viz, (1988 (10) TMI 24 - PATNA HIGH COURT). Even otherwise, when the quantum addition is deleted, there remains no basis at all for levying the penalty for concealment or furnishing inaccurate particulars. The penalty cannot stand on its legs, thus, the appeal of the Revenue is dismissed. The stand of the Ld. Commissioner of Income Tax (Appeal) is affirmed. Appeal of the Revenue is dismissed.
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2016 (8) TMI 1485
Reversal of input credit taken on capital goods beyond 4% - TNVAT Act - HELD THAT:- Reliance can be placed in the case of SARA LEATHERS VERSUS COMMERCIAL TAX OFFICER, TAMBARAM I ASSESSMENT CIRCLE, CHENNAI [2009 (10) TMI 848 - MADRAS HIGH COURT] where it was held that We do not accept the submission of the learned Additional Government Pleader that the petitioner, who is a purchaser of the capital goods, is not entitled to have the benefit of total refund of the amount.
Following the decision in the case of Sara Leathers, the Writ Petition is allowed - decided in favor of petitioner.
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2016 (8) TMI 1484
Addition u/s 68 - assessee failure to discharge its onus to establish identity, genuineness and creditworthiness of companies - HELD THAT:- After receiving report from the Investigation Wing, Kolkata dated 18.03.2013, Assessing Officer has drawn his own conclusion which was not based on any facts and figures as Assessing Officer has not mentioned anything in the order on what basis the conclusion was arrived on and what were the facts and materials available with him. Therefore, the addition made by him u/s.68 of the Act on account of share application money received without considering the various facts brought to the knowledge of Assessing Officer, which is not justified.
Assessee has already proved the identity of the share applicant by furnishing their PAN, copy of IT return filed for asst. year 2010-11.Regarding the genuineness of the transaction, assessee has already filed the copy of the bank account of these three share applicants from which the share application money was paid and the copy of account of the assessee in which the said amount was deposited, which was received by RTGS.
Regarding credit-worthiness of the party, it has been proved from the bank account of these three companies that they had the funds to make payment for share application money and copy of resolution passed in the meeting of their Board of Directors.
Regarding source of the source, Assessing Officer has already made enquiries through the DDI (Investigation), Kolkata and collected all the materials required which proved the source of the source, though as per settled legal position on this issue, assessee need not to prove the source of the source.
Assessing Officer has not brought any cogent material or evidence on record to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represent company’s own income from undisclosed sources. Accordingly, no addition can be made u/s.68 of the Act. In view of above reasoned factual finding of CIT(A) needs no interference from our side - Decided in favour of assessee.
Disallowance of 80% of the expenses claimed as interest repayment by treating same as pre-operative expenses of capital nature - HELD THAT:- These expenses were neither of personal nature, nor of capital nature or of pre-operative nature. These were all of revenue nature which were incurred for the purpose of carrying on the business and therefore, same are obviously allowable as revenue expenses during the year. Assessing Officer has neither given any finding as to why any part of these expenses were to be disallowed, nor he has issued any show cause notice why he intends to disallow part of these expenses.
In view of above, CIT(A) was justified in granting relief to the assessee as discussed above. We are not inclined to interfere with the finding of CIT(A) on this issue. Same is upheld.
Addition u/s 14A r.w.Rule 8D - HELD THAT:- As decided in M/s. Daga Global Chemicals Pvt. Ltd [ 2015 (1) TMI 1204 - ITAT MUMBAI] any disallowance can be made that can be restricted to the exempt income claimed by assessee, so, disallowance u/s.14A r.w. Rule 8D is restricted to that extent. Assessing Officer is directed accordingly.
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2016 (8) TMI 1483
Suppressed sale consideration in respect of flat sold by the assessee at a lower rate that the other flats in the same building - addition as assessee failed to justify before the Assessing Officer as to why the aforesaid flats were sold at a lower price - sale price was below the price declared by the State Government of Maharashtra or below the market price. HELD THAT:- It is not a case of transaction between related parties. Assessee also informed the Assessing Officer that unit no. 302 sold at a value which was substantially higher than the market rate computed by the state Government of Maharashtra, hence, only reason why flat no. 101 commanded higher price compared to other flats was that the said unit had locational advantage of entire floor suitable for a car show room compared to unit no. 302. In the light of the above facts, CIT(A) observed that there was no case made out by Assessing Officer that the sale price was below the price declared by the State Government of Maharashtra or below the market price.
Assessing Officer had simply applied the differential in rates for booking of unit no. 101 and 302A for arriving at the actual booking rate for unit no.302. The addition made by Assessing Officer was therefore simply on the basis of difference in the rate in booking of unit no.101. CIT(A) relied on the decision of Mumbai ITAT in case of Nelkamal Realtors & erectors India (P) Ltd. (2013 (8) TMI 557 - ITAT MUMBAI) and held that Assessing Officer has not controverted the explanation furnished by assessee during course of assessment proceedings to explain the reasons for charging lower price in respect of unit no.302 sold vis-à-vis rate/price for unit no.101. In view of above, CIT(A) rightly deleted the addition - Decided against revenue.
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2016 (8) TMI 1482
Reopening of assessment u/s 147 - reason to believe - reopening after four years - HELD THAT:- Facts show that the assessee has disclosed all material facts at relevant places during original assessment proceedings u/s 143(3) of the Act. The AO himself asked for specific questions and full details were supplied by the assessee. AO examined these documents and framed the assessment only after proper application of mind. There was no failure on the part of the assessee to fully and truly disclose all the material facts. Thus, reassessment is being sought by the AO on mere change of opinion and apparently on the basis of Audit Memo, which is not permissible. No new tangible material has come to the knowledge of the AO so as to justify the reopening. See M/S. KELVINATOR OF INDIA LIMITED [2010 (1) TMI 11 - SUPREME COURT]
Hon’ble apex Court in the case of CIT vs. Foramer France [2003 (1) TMI 101 - SC ORDER] has clearly laid down the principle that where there is no failure on the part of the assessee to disclose material facts, the reassessment proceedings after the expiry of four years is not possible in view of the provisions of Sec. 147 - Decided in favour of assessee.
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2016 (8) TMI 1481
Levy of penalty u/s 271(1)(c) - Higher rate of depreciation on truck - @ 30% or 50% - assessee filed a revised chart of depreciation in which he calculated depreciation @ 30% on old trucks purchased from NBI Finance - assessee had finally claimed total depreciation of ₹ 7,03,22,480/- after rectifying the mistake and unabsorbed depreciation was carried forward to the tune of ₹ 3,20,81,299/- only - HELD THAT:- It emerges from the records that the assessee claimed depreciation on the newly acquired trucks @ 50% as there was a provision in the Schedule that new commercial vehicle acquired between the periods 01-01-2009 till 30-09-2009, depreciation shall be available @ 50%. However, these trucks were newly acquired by the assessee but they were not new. Therefore, the claim of depreciation was revised by the assessee during the assessment proceedings.
After adjustment there was carry forward unabsorbed depreciation of ₹ 3,20,81,299/-. Similar claim of depreciation was disallowed in the assessment years 2011-12 but no penalty u/s 271(1)© of the Act was initiated. As per assessment order dated 6-11-2015 relating to assessment year 2013-14, the carry forward unabsorbed depreciation was more than ₹ 14.00 crores. The assessee has declared Short term capital gain on the sale of these trucks in the assessment year 2013-14 and capital gain has been calculated by taking depreciation @ 30%. All these facts suggest that there was an inadvertent mistake on the part of the assessee for claiming depreciation and same was rectified as soon as it was noticed. Direct to delete the penalty levied u/s 271(1)(C) - Decided in favour of assessee.
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2016 (8) TMI 1480
Winding up of appellant company - Extension of Time (EOT) under Clause 44 of the General Conditions of Contract (GCC) - admittance of outstanding payments - existence of debt and dispute - HELD THAT:- The deliberations of the Board of Directors in its various meetings were only proposals which definitely were required to be looked into and final decision thereupon came to be taken only on 30.07.2015 when the minutes of 205th meeting stood superseded. Therefore, no benefit whatsoever can be claimed by the respondent on the basis of 205th meeting, particularly, when the final settlement thereupon was arrived at much later.
As regards the contention of the respondent that the appellant had in the aforesaid meeting admitted and acknowledged the debt due in favour of the respondent, we find the submission to be far-fetched. An acknowledgement of liability has to be clear, unambiguous, unequivocal and unconditional which is not the fact situation obtaining in the instant case. A company may deliberate on a number of issues and unless and until some decision is taken and thereafter conveyed to the opposite party (respondent herein), these would only remain and can only be considered as proposals or at best the internal matters of the company and can by no legitimate or even legal standards be termed to be "admissions" or "acknowledgments" of debt.
It is more than settled that the presumptions are always rebuttable and, therefore, the question is whether the appellant company has been able to rebut the presumption.
It would be evident from a perusal of the aforesaid letter that nowhere is it the case of the respondent that the appellant had acknowledged or even admitted any specific amount due, rather, the respondent itself asked the appellant to treat the letter as a notice of arbitration under Clause 67 of the GCC and initiate the process of constituting Arbitral Tribunal in accordance with the provisions of the contract. Not only this, the request was thereafter again reiterated by the respondent in its letter dated 31.08.2012. In such circumstances, it is not only difficult but impossible to hold that the appellant had infact admitted or acknowledged the debt much less a specific debt.
Thus, the so-called debts were never infact acknowledged or admitted, but were rather disputed by the appellant and that is why the respondent itself chose to invoke the modified Clause 67 of the GCC to have the matter referred to the Arbitral Tribunal - It is beyond dispute that the machinery for winding up will not be allowed to be utilized merely as a means to realizing its debt due from a company. In case, there exists a bona fide dispute and the dues are not admitted, the winding up petition is required to be dismissed.
The debt is not admitted debt and the dispute raised by the appellant is not only a substantial but a bona fide one and it cannot be held that the appellant has neglected to pay. Therefore, the case would not fall under Sections 433(e), 433(1)(a) and 439 of the Act - no case for winding up of the appellant company is made out - Appeal allowed.
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2016 (8) TMI 1479
Eligibility to be considered for appointment to the post of Computer - appellant was initially declared entitled for counselling but later on she was declared disqualified being lacking requisite qualificational eligibility - HELD THAT:- The petitioner has placed on record a letter dated 30.5.2013 issued by the competent authority of the Government of Rajasthan declaring the certificate of RS-CIT equivalent to the qualification of the degree/diploma issued by a university established by law or an institution recognised by the Government of Rajasthan in the subjects of Computer Science/Computer Application/Information Technology. Though a sur-rejoinder was filed on behalf of the State of Rajasthan, but nothing has been said about equivalence given under the letter dated 30.5.2013 - In light of the letter dated 30.5.2013, we are of the view that the petitioner is eligible to be considered for appointment to the post of Computer as per the Rules of 1971 being having a degree in Computer Science from a university established by law.
The petitioner is declared entitled to be considered for appointment to the post of Computer under the Rajasthan Statistical Subordinate Service Rules, 1971 - petition allowed.
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2016 (8) TMI 1478
Disallowance of expenditure incurred for Pooja function expenses - HELD THAT:- As decided in own case Tribunal allowed the temple inauguration expenses except disallowance of ₹ 3.00 lac out of lavish traveling expenses of ₹ 3.8 lacs on travelling and food. The present year expenditure seems to be normal day to day expenses on pooja for running the temple in the vicinity of the plant. Accordingly, after considering the rival submissions, facts of the issue as stated above, and Tribunal’s decision referred above, this ground is allowed in favour of the assessee. The addition so sustained by CIT(A) is deleted
Disallowance of Consultancy Charges for services - HELD THAT:- Similar ground was allowed by Hon’ble ITAT in assessee’s own case for AY 1995-96, 1996-97, 1997-98
Disallowances of expenses on account of non-complete fees as business expenditure - HELD THAT:- Under the similar facts the Hon’ble Madras High Court in case of Carborandum vs. JCIT [2012 (10) TMI 178 - MADRAS HIGH COURT] as held that the “payment of non compete fees for fruitful exercise of business is a commercial decision and hence should be treated as a revenue expenditure”. Further in the case of CIT vs. Eicher Ltd. [2008 (3) TMI 15 - HIGH COURT OF DELHI] it has been held “payment of non compete fees has not resulted in acquisition of capital asset. But merely eliminated competition for a while and restrictive covenant was neither permanent nor ephemeral. Hence, the advantage was not of an enduring nature.” - Decided in favour of assessee
Non-exclusion of Interest u/s 244A received during the year - HELD THAT:- In terest received on the revenue issued by the department is taxable in the year of receipt an in the present case the assessee has received the interest income during the previous year relevant to assessment year 1998-99 and even of taxable of interest cannot be postponed in the dies of finality of the proceedings. It was rightly held by AO as well as CIT(A) that interest received on the refund u/s 244(A) is treated as income received during the year and taxed accordingly. Hence, we see no reasons to interfere or deviate from the findings recorded and orders passed by the CIT(A) and hence this ground of appeal raised by assessee stands dismissed and the orders passed by CIT(A) are upheld. Therefore, we dismiss the appeal of the assessee
Disallowance of proportionate amount of premium on leasehold land - HELD THAT:- We have noticed that the assessee has acquired various lands on lease and had paid lease premium in advance for acquiring such land on lease. AO held that the expenditure incurred on leasehold right in the land has resulted in advantage having enduring benefit. Therefore, the same was treated as Capital Expenditure. After considering the case we are also of the considered view that the premium paid for acquiring leasehold rights as capital expenditure and in this respect this view is verified by the decision of the Special Bench of Hon’ble Mumbai ITAT in the case of JCIT Vs. Mukund Ltd. [2007 (2) TMI 358 - ITAT MUMBAI] . Therefore, considering the afore mentioned facts, this ground raised by assessee is dismissed.
Assessing interest income, income from Bill Discounting & Truck Hire Charges under the head “Income from Other Sources” - HELD THAT:- AR argued that CIT(A) has also erroneously upheld the order passed by AO. Ld. AR argued that the Hon’ble ITAT Mumbai Bench in assesse’s own case for A.Y. 1995- 96, 1996-97, 1997-98 as set aside the issue to the file of the AO for fresh decision and to verify the nexus between the earnings.
Therefore the issue with regard to truck hire charges are set aside to the file of the AO for fresh decision and the issue of interest income and bill discounting are also set aside to the file of the AO to verify the nexus between the earnings from money deployed our of unutilized funds and interest on borrowed funds. Further the AO is also directed to reduce the actual expenditure incurred and tax only the net income under the head of ‘Income from Other Sources’.
Non allowance of exclusion of the profits of Himachal unit as per the books in computing the Book Profit u/s 115JA - HELD THAT:- This issue is covered in favour of the assessee by the decision of the Tribunal in case of Tushako Pump Ltd. [2005 (1) TMI 586 - ITAT MUMBAI] in which it has been held that for the purpose of computing book profit under section 115JA, the profit of industrial undertaking eligible for deduction under section 80IA must be computed as per the books of accounts and not as per the provision of the Act. Respectfully following the said decision we held that the profit of the Himachal unit computed as per the books and after making adjustments as permissible under section 115JA will only be excluded while computing the book profit
Non-exclusion of profit on sale of investment in computing Book Profit u/s 115JA - HELD THAT:- Provision of Sec.115JA specifies the items to be added back and to be deducted. In the said section there is no provision of deduction of capital profit in computing book profit. Thus, following the provisions of the act, the ground is decided against the appellant.
Interest u/s 234C - HELD THAT:- After perusal of all the facts of the case laws we are of the considering view that the interest is u/s 234C to be levied as interest income therefore we direct the AO to recalculate the interest as per the return income. This ground of appeal is allowed in terms of above direction.
Withdrawal of claim of deduction u/s 80-IA in respect of unit engaged in the business of generation of power under the normal computation - HELD THAT:- The assessee could not be denied the benefit of amended provision once it fulfill the conditions stipulated in the relevant provision and therefore in view of section 80IA (2) the assesse is entitled to view the option of claiming deduction u/s 80IA on generation of power for assessment year 1999-2000 onwards. However the issue on merits needs to be considered by the AO, accordingly we set aside this issue to the file of the AO.
Disallowances of Foreign Exchange Loss - HELD THAT:- Since the assessee has submitted that the additional grounds raised in view of amendment in Finance Act, 1999 and as per amended provisions of section 80IA, the assessee has the option of claiming deduction for a period of ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking begins to generate power in respect of the units set up on or after 01.04.1993.
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2016 (8) TMI 1477
Addition u/s 68 - accommodation entries receipt - HELD THAT:- CIT(Appeals) has passed an elaborate and well reasoned order. The AO has clearly brought on record the assessee’s transactions which are nothing but accommodation entries through Hawala operators. This has been done with a motive to convert the unaccounted money into white funds.
The assessee has not at all been able to adduce cogent evidences in this regard. There is no economic or financial justification for the sale price of these shares. The so called purchaser of these shares has not been identified despite efforts of the AO. The broker company through which shares were sold did not respond to queries in this regard. Hence the fantastic sale price realisation is not at all humanly probably, as there is no economic or financial basis, that a share of little known company would jump from ₹ 5/- to 485/-, In these circumstances, no infirmity in the orders of the authorities below. Accordingly affirm the same and decide the issue against the assessee.
Deduction u/s 54F - HELD THAT:- AO observed that on perusal of the sale deed it was found that the assessee has made payment of ₹ 4,30,001/- on the date of Agreement i.e. 22.05.2002 which is before the sale of the shares and the final payment is made on 25.10.2002, which is after 2 ½ months of sale proceeds received. The assessee deposited the alleged sale price of the shares in his regular account for earning income therefrom and not deposited the same in the Specific Account for the Capital Gains and utilised the same for other purposes. Thus there is no proof with the assessee to show that the same amount of sale proceeds were utilised for the purchase of house property. On this ground also, the assessee’s claim cannot be allowed.
The appellant has grossly failed to substantiate his claim for grant of deduction u/s 54F of the Act. The appellant has not filed any sort of document in support of his claim for investment in a residential house. The appellant has also failed to substantiate the transaction of purchase and sale of the shares without any documentary evidences. therefore, decline to interfere with the order of the AO. This ground is dismissed accordingly, both on merits and legality.
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2016 (8) TMI 1476
Bogus purchases - addition u/s 69C - Tribunal deleted the addition - HELD THAT:- Tribunal recorded a finding of fact that though the two suppliers, viz. M/s. P. Jitendra & Co. and M/s. P.R. Diamonds, from whom the assessee had purchased polished diamonds, had stated that they had issued bogus bills to the assessee, no evidence was brought on record to prove that the assessee had received cash back from the said parties. The assessee maintained books of accounts, which have been audited. The purchases made from these two parties have been duly entered in the stock record.
The books of the said two suppliers have also been audited and the sales made to the assessee find place in their books of accounts as well. Further, the sales made by the assessee have not been rejected by the Assessing Officer and payment towards the exports have been received by the assessee through banking channel.
AO has made disallowance u/s.69C of the Act. However, in our opinion, the same is erroneous since Section 69C is applicable to cases where the source of expenditure has not been explained by assessee. Even if we take the plea that assessee has incurred the expenditure, it is a case where the source of expenditure is duly explained as the payment for the purchases has been made by the assessee out of its bank account. Therefore, the Tribunal rightly concluded that provisions of Section 69C of the Act will not apply to the case on hand. - Decided against revenue.
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