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2012 (10) TMI 1139
Order in the case of another judgment copy & paste to present case - Application for Rectification of Mistake (ROM) - HELD THAT:- In the entire scenario, court noted that admittedly, a wrong order got issued (as the mistake happened in the hands of Steno) without noticing the facts of the present case, the replacement of said order can not be considered to be a review of the same. The entire order, which got issued was a mistake inasmuch as the same does not relate to the facts of the present case except that the reference of Appeal No. and impugned order-in-appeal match in the preamble to those in case under consideration making it look as if the present order relates to the appeal of M/s. Paramount Communication.
As such, it has to be concluded that the entire order is a mistake, requiring rectification of same. The point made out by learned AR that such rectification can be done only to small clerical mistake in the order, cannot be appreciated inasmuch as in the present case the entire order is a clerical mistake. The mistakes required to be rectified does not depend upon the length of said mistake or does not relate to one or two words in the order. When the entire order which got issued was not relatable to the matter under dispute, notwithstanding the reference numbers in the preamble of the same, it has to be held as if the entire order was a mistake. Therefore, it is very obviously a mistake apparent on record and needs correction at any rate and therefore, we decided to dictate the appropriate order afresh.
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2012 (10) TMI 1138
Issues involved:
The judgment involves issues related to addition of cash received u/s 68 of the Act, deletion of addition of bogus purchases u/s 41(1) of the Act, and deletion of addition of labor wages u/s 37 of the Act.
Addition of Cash Received u/s 68 of the Act:
The Revenue challenged the deletion of addition of Rs. 75,000 made by the Assessing Officer in respect of cash received u/s 68 of the Act. The Ld. CIT(A) deleted the disallowance stating that the payment was reflected in an earlier year and was received out of business expediency. The Tribunal upheld the decision, noting that the explanation offered by the assessee was satisfactory and accepted under the commercial expediency, confirming the order of Ld. CIT(A).
Deletion of Addition of Bogus Purchases u/s 41(1) of the Act:
The Revenue contested the deletion of addition of Rs. 29,19,323 on account of bogus purchases u/s 41(1) of the Act. The Ld. CIT(A) found that the assessee had bills and evidence of purchases, payments were made by cheques, and TDS was deducted. The Tribunal agreed that the AO's assumption of bogus purchases lacked basis, and cessation of liability and bogus purchases should not be clubbed together. The Tribunal confirmed the order of Ld. CIT(A) as the assessee had substantiated the genuineness of the creditors.
Deletion of Addition of Labor Wages u/s 37 of the Act:
The Revenue appealed against the deletion of Rs. 16,55,246 in labor wages u/s 37 of the Act. The Ld. CIT(A) observed that the Assessing Officer disallowed 20% of labor wages as non-business expenditure without sufficient basis. The Tribunal noted that the AO's estimation lacked justification and that the books of account were not rejected. Therefore, the Tribunal confirmed the order of Ld. CIT(A) in reducing the disallowance from 20% to 5% and dismissed the Revenue's appeal.
Separate Judgment by Judges:
The CO by the assessee was dismissed for want of prosecution as no one appeared on behalf of the assessee, following the decision of a co-ordinate Bench. The appeal of the Revenue was dismissed, and the CO of the assessee was also dismissed for lack of prosecution.
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2012 (10) TMI 1137
Levying a penalty u/s 271 - deduction under Section 10B - Held that:- There is no dispute that the appellant disclosed all the facts. The appellant did not conceal any facts. Based on the disclosed material, the appellant sought the deduction which was denied on the ground that it was not entitled to the same as a matter of law. The Tribunal was in error in holding that merely because the claim for deduction was denied the appellant is liable to pay a penalty.
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2012 (10) TMI 1136
Issues involved: Rectification petition u/s 154 of the Income Tax Act, 1961 regarding applicability of sec.195 on charter hire charges paid to foreign shipping companies.
Summary:
The Revenue filed a Miscellaneous Petition seeking rectification of the Tribunal's order related to the assessment year 2005-06. The Revenue contended that the charter hire charges paid by the assessee to foreign shipping companies should be considered as "royalty" and thus, sec.195 provisions are applicable. The Revenue argued that the Tribunal should have followed a previous decision of the Chennai Bench, ITAT in a similar case. However, the Tribunal had focused on whether a disallowance under sec.40(a)(i) was necessary due to non-compliance of sec.195, even though the non-resident charterer had already paid the tax under sec.172. The Tribunal held that sec.195 did not apply in this case as the tax liability had been satisfied under sec.172, which deals with the levy and recovery of tax in shipping business of non-residents.
Additionally, the issues raised by the Commissioner had already been decided in favor of the assessee by ITAT, Chennai 'D' Bench for the assessment year 2007-08. The Tribunal found no error in its order, neither on facts nor in law, and dismissed the Miscellaneous Petition.
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2012 (10) TMI 1135
Issues involved:
1. Justification of setting aside mandatory penalty under Section 11AC of the Central Excise Act by appellate Authorities.
2. Justification of setting aside interest levied under Section 11AB of the Central Excise Act by appellate Authorities.
Issue 1 - Penalty under Section 11AC:
The CESTAT, based on the judgment in Commissioner of Central Excise v. Machino Montal (I) Ltd., ruled that penalty under Section 11AC cannot be imposed if duty was paid before the show cause notice. However, the Apex Court in Union of India v. Rajasthan Spinning & Weaving Mills clarified that once Section 11AC applies, the penalty is mandatory regardless of when the duty was paid. Consequently, the CESTAT's order was quashed, and the matter was remanded for fresh decision.
Issue 2 - Interest under Section 11AB:
The judgment primarily focused on the penalty under Section 11AC, and there was no specific mention of the interest levied under Section 11AB in the summary provided. Therefore, it can be inferred that the interest aspect was not the main subject of contention in this particular case.
Conclusion:
The appeal was admitted to address the questions of law regarding the imposition of penalty under Section 11AC and interest under Section 11AB. The CESTAT's decision was overturned based on the Apex Court's interpretation of the mandatory nature of penalties under Section 11AC. The case was remanded for further consideration in line with the legal principles outlined in the judgment.
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2012 (10) TMI 1134
Issues Involved:
1. Rejection of application for Customs House Agents Licence.
2. Validity of examination passed under CHALR, 1984 for licence under CHALR, 2004.
3. Principles of natural justice.
Summary:
Rejection of Application for Customs House Agents Licence:
The petitioners challenged the order dated 12/16th May, 2011, rejecting their application for a Customs House Agents Licence (CHA Licence) in response to Public Notice No. 81/2010. The rejection was based on the fact that the petitioners were qualified u/s 9 of the Customs House Agents Licensing Regulations, 1984 (CHALR, 1984) from the Mumbai Commissionerate and not from the Calcutta Commissionerate.
Validity of Examination Passed under CHALR, 1984 for Licence under CHALR, 2004:
The primary issue was whether an applicant who passed the examination under Regulation 9 of CHALR, 1984, could be deemed to have passed the examination under Regulation 8 of CHALR, 2004. The Court referred to a previous judgment which held that a temporary licence holder who passed the examination under Regulation 9 of CHALR, 1984, was not required to clear an examination under Regulation 8 of CHALR, 2004 for a permanent licence. The Supreme Court affirmed this view in Union of India & Anr. v. Sunil Kohli & Ors., stating that the 2004 regulations expressly save things done before their framing.
Principles of Natural Justice:
The petitioners contended that the rejection of Shukla's application was in violation of the principles of natural justice as they were not given an opportunity to be heard. The Court found that the distinction in the Commissionerate from which the examination was cleared had no bearing on the legal proposition that a person who passed under Regulation 9 of CHALR, 1984, is deemed to have passed under Regulation 8 of CHALR, 2004.
Conclusion:
The Court held that the impugned orders could not be sustained and were set aside. It was clarified that the petitioner, having passed the examination under Regulation 9 of CHALR, 1984, should be deemed to have passed under Regulation 8 of CHALR, 2004, irrespective of the Commissionerate. The application for the licence was to be disposed of within 60 days, and the petitioner was to be granted a licence if otherwise entitled.
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2012 (10) TMI 1133
Disallowance of expenses computing the income from Hawala business - Held that:- CIT(A) is not correct in stating that the A.O. had not disallowed the interest expenses. There is also no finding by the A.O. that the interest expenses were not genuine. Therefore, in our view, the order of the CIT(A) which is based on wrong facts cannot be sustained. Therefore, set aside the order of the CIT(A) and allow the claim of interest of ₹ 1,04,703/-.
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2012 (10) TMI 1132
Issues involved:
The issues involved in this case are:
1. Interpretation of the judgment of the Hon'ble Apex Court in the case of Goetze (India) vs. CIT regarding filing of revised returns.
2. Validity of deduction claimed in a revised return of income.
3. Treatment of loans waived by banks in a one-time settlement.
4. Application of judgments of the Hon'ble Apex Court and the Hon'ble Bombay High Court in specific cases.
5. Taxability of principal amounts of loans retained by the assessee.
Issue 1:
The appellant appealed against the order of the CIT(A) based on the interpretation of the judgment of the Hon'ble Apex Court in the case of Goetze (India) vs. CIT regarding the filing of revised returns. The appellant claimed that a fresh claim before the Assessing Officer can only be made by filing a revised return, not otherwise.
Issue 2:
The appellant contested the direction of the CIT(A) to allow the deduction claimed in the revised return of income, which was considered barred by limitation and hence not a valid return.
Issue 3:
The appellant challenged the deletion of the addition made on account of loans waived by banks in a one-time settlement amounting to Rs. 4,40,22,653 by the CIT(A).
Issue 4:
The appellant disputed the CIT(A)'s failure to appreciate the judgments of the Hon'ble Apex Court and the Hon'ble Bombay High Court in specific cases, regarding the treatment of certain claims made by the appellant.
Issue 5:
The appellant raised concerns about the tax treatment of the principal amounts of loans retained by the assessee, arguing that they constituted income as per Section 28(iv) of the Income Tax Act, 1961, though not u/s.41(1) of the Act.
The Appellate Tribunal, after considering the arguments presented, found that the original return of income declared a loss, while the revised return disclosed income from other sources due to a one-time settlement with two banks. The Tribunal noted that the principal amount of the loans waived by the banks was claimed to not form part of the income as it was never deducted in earlier years.
Upon reviewing the loan agreements, it was determined that the loan from ICICI Bank was for purchasing machinery, making it non-taxable, while the loan from ADCB was against hypothecation of stock, rendering it taxable. The waiver granted by ADCB was deemed taxable income, while the waived amount by ICICI Bank was excluded from taxable income.
The Tribunal clarified that the judgments of Goetze (India) Limited and Pruthvi Brokers & Shareholders P. Ltd. were not contradictory but supplementary. It was established that appellate authorities could admit legal claims if facts were available on record, as per the Hon'ble High Court of Bombay and the Hon'ble Supreme Court.
Considering the circumstances, including the status of the company as a BIFR company and the waiver of loans by banks, the Tribunal upheld the order of the CIT(A) as rational and in accordance with the provisions of the Act. The appeal filed by the AO was dismissed, and the order of the CIT(A) was upheld.
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2012 (10) TMI 1131
Issues involved: Cross appeals challenging CIT(A)'s order u/s.143(3) for assessment year 2005-06.
Issue 1: Application of Section 14A of IT Act
The assessee, a non-banking financial company, earned tax-exempt dividend income but did not offer any disallowance of expenses u/s.14A. The Assessing Officer disallowed fifty percent of the expenses incurred. CIT(A) remanded the matter for proper working of disallowances. ITAT held that expenses had no nexus with earning dividend income, and disallowance was uncalled for. The impugned disallowance was deleted, providing relief to the assessee.
Issue 2: Enhancement of Book Profit u/s.115JB
The Assessing Officer enhanced the book profit u/s.115JB due to disallowance u/s.14A. ITAT noted that the issue was covered in favor of the assessee by a previous decision. As the disallowance u/s.14A was deleted on merits, the adjustment of disallowance from book profit computation was directed to be deleted. The appeal of the assessee was allowed accordingly.
Issue 3: Treatment of Derivative Transaction Loss
The Assessing Officer treated the loss from derivative transactions as speculation losses due to a notification u/s 43(5). CIT(A) held the notification effective for the entire assessment year, granting relief to the assessee. ITAT confirmed the CIT(A)'s stand, citing consistent decisions of Coordinate benches. The appeal of the Assessing Officer was dismissed, while the appeal of the assessee was allowed.
Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.
This judgment by the Appellate Tribunal ITAT Kolkata addressed issues related to the application of Section 14A of the IT Act, enhancement of book profit u/s.115JB, and treatment of derivative transaction losses. The ITAT provided detailed reasoning for each issue and granted relief to the assessee in the respective matters.
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2012 (10) TMI 1130
Issues involved:
The issues involved in this case are:
1. Deletion of additions u/s 68 on account of unexplained increase in share capital.
2. Deletion of additions u/s 68 on account of unexplained receipts of unsecured loans.
3. Admission of additional evidence in contravention of Rule 46A.
4. Failure to decide the case on merits by the Ld CIT(A).
5. Failure to call for comments of the Assessing Officer on additional submissions of the assessee.
6. Failure to prove the genuineness of the source of the increase in share capital and unsecured loan receipts.
Deletion of additions u/s 68 on account of unexplained increase in share capital:
The revenue filed an appeal against the Ld CIT(A)'s order deleting additions of Rs. 5 lakhs made u/s 68 on account of unexplained increase in share capital. The Ld CIT(A) had not given any reasons for deleting the addition, which was found to be against the requirement of the Income Tax Act. The Assessing Officer had passed a non-speaking order under section 144 of the IT Act. The Tribunal held that the case should be re-adjudicated by the Assessing Officer to provide a reasonable opportunity of being heard to the assessee.
Deletion of additions u/s 68 on account of unexplained receipts of unsecured loans:
The revenue also challenged the deletion of additions of Rs. 19.63 crores out of Rs. 19.76 crores made u/s 68 on account of unexplained receipts of unsecured loans. The Ld CIT(A) had admitted additional evidence in contravention of Rule 46A and had not given any reasons for deleting the addition. The Tribunal found that the Ld CIT(A)'s action was not in conformity with the Income Tax Act requirements. The case was directed to be re-adjudicated by the Assessing Officer to ensure a fair procedure and justice.
Admission of additional evidence in contravention of Rule 46A:
The revenue contended that the Ld CIT(A) erred in admitting additional evidence in contravention of Rule 46A. The Assessing Officer objected to the acceptance of additional evidence, but the Ld CIT(A) admitted it and deleted the additions without proper reasoning. The Tribunal found that the Ld CIT(A)'s action was not in line with the statutory requirements, and the case was ordered to be re-adjudicated by the Assessing Officer.
Failure to decide the case on merits by the Ld CIT(A):
The revenue argued that the Ld CIT(A) failed to decide the case on merits and deleted additions without proper reasoning. The Ld CIT(A) did not provide any findings for deleting the additions made by the Assessing Officer. The Tribunal emphasized that reasons are essential for a fair procedure and justice, as per the Income Tax Act requirements. The case was directed to be re-adjudicated by the Assessing Officer to ensure a proper decision-making process.
Failure to call for comments of the Assessing Officer on additional submissions:
The revenue raised an issue regarding the Ld CIT(A)'s failure to call for comments of the Assessing Officer on additional submissions made by the assessee. The Tribunal noted that important submissions were not considered during the assessment proceedings or the initial stages of assessment proceedings. The case was directed to be re-adjudicated by the Assessing Officer for a comprehensive review.
Failure to prove the genuineness of the source of the increase in share capital and unsecured loan receipts:
The revenue contended that the genuineness of the source of the increase in share capital and unsecured loan receipts was not proved by the assessee. The Ld CIT(A) did not satisfactorily explain the observations made in the remand report, leading to the deletion of additions without proper justification. The Tribunal emphasized the importance of proving the genuineness of transactions and directed the case to be re-adjudicated by the Assessing Officer for a thorough examination.
Separate Judgement:
No separate judgment was delivered by the judges in this case.
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2012 (10) TMI 1129
Issues involved: Appeal against order regarding deemed dividend u/s 2(22)(e) for assessment year 2007-08.
Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal filed by the department against the order of the ld CIT(A) for the assessment year 2007-08. The main issue was whether a sum of Rs. 60,64,205 received by the assessee from M/s. Karodia Construction Pvt Ltd., where the karta of the assessee is a shareholder, should be considered as deemed dividend u/s 2(22)(e) of the Act.
The AO treated the amount received as deemed dividend, but the ld CIT(A) held that the assessee HUF is not a shareholder or a beneficial shareholder of M/s. Karodia Constructions P. Ltd. The ITAT observed that as per the decision of ITAT Special Bench and the Hon'ble Rajasthan High Court, for the provisions of section 2(22)(e) to apply, the recipient of the loan should be a registered shareholder as well as a beneficial shareholder in the lender company. In this case, the assessee did not meet these conditions, as confirmed by the ld CIT(A) and not disputed by the ld D.R.
The ITAT upheld the order of the ld CIT(A) based on the legal precedents and rejected the department's appeal. The decision was in line with the strict interpretation of section 2(22)(e) as established by previous judgments. The appeal filed by the department was dismissed, and the order was pronounced on 10th October 2012.
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2012 (10) TMI 1128
Disallowance of interest paid to related parties u/s 4OA(2)(b)- disallowance of foreign travel expenses - disallowance of motor car expenses to 10% - Claim of deduction u/s 80G first time before CIT(A) in appellate proceedings - Held that:- If assessee is able to establish that the recipient of interest are paying tax at the highest rate on the income then no disallowance is called for u/s 40A(2) - AO is directed to verify the rate of tax at which the recipient of interest have paid tax and if it is equivalent to the rate of tax paid by the assessee then interest is allowed
Held that:- The visits of the entire family of the partners of the assessee firm cannot be treated as business visit - expenses on family members who are not partners of the assessee firm, cannot be allowed as business expenditure - AO to disallow the actual expenditure incurred on the foreign travel with respect to the non-partner - Decided against the assessee
Held that:- Fringe benefit tax is levied on the expenses incurred by the employer irrespective of whether the same are incurred for official or personal purposes - the expense have to be appropriately allowed as expenses incurred wholly and exclusively for the purpose of business - Decided in favor of assessee
Claim of deduction u/s 80G first time before CIT(A) in appellate proceedings - Held that:- Assessee is entitled for deduction under Section 80G @50% - The CIT(A) did not entertain the claim of the assessee since assessee has not claimed it before the AO in the statement of income - AO to consider and decide the claim of the assessee after verification of the relevant facts and records
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2012 (10) TMI 1127
Issues involved:
The judgment involves the following Issues:
1. Disallowance of ineligible contractual expenses claim.
2. Dismissal of relevant facts regarding contingent and uncertain nature of claimed liabilities.
3. Reliance on theoretical premises, surmises, irrelevant material, and conjectures regarding the contractual obligation of the assessee.
4. Erroneous interpretation of relevant facts and improper rejection of facts and evidence.
Issue 1: Disallowance of ineligible contractual expenses claim:
The assessee claimed a deduction of Rs. 61,08,500 towards expenditure for development charges paid to Surat Municipal Corporation for water connection charges. The Assessing Officer disallowed the claim stating that the liability had not crystallized during the relevant year. Additionally, section 43B of the Act was invoked to conclude that the expenditure was not allowable under sections 37 or 43B.
Issue 2: Dismissal of contingent and uncertain nature of claimed liabilities:
The Commissioner (Appeals) allowed the appeal, noting that the liability crystallized on 1.03.2005 when the Surat Municipal Corporation raised the demand on the contractee. The Commissioner observed that the liability was ascertained and not contingent, and therefore, not liable under section 43B of the IT Act.
Issue 3: Reliance on theoretical premises for contractual obligation:
The Tribunal dismissed the appeal by the Revenue, upholding the Commissioner's decision. The Tribunal found that the development expenses exceeding Rs. 100 per sq. yd. were to be borne by the assessee-firm as per the agreement. The Tribunal concluded that the Assessing Officer's addition was based on doubt and suspicion, while the Commissioner had valid reasons for deleting the addition.
Issue 4: Erroneous interpretation of relevant facts:
The Tribunal and the Commissioner both found that the expenditure was actually incurred by the assessee, making disallowance under section 43B impermissible. The liability was deemed to have crystallized on 1.3.2005, and since the assessee bore the expenditure without reimbursement, the Tribunal's decision was upheld, and no question of law arose. Consequently, the Tax Appeal was dismissed.
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2012 (10) TMI 1126
Application of provisions of section 40a(ia) - eligibility to exemption u/s 10(24) - Interest income was added under the head ‘income from other sources’ on the basis of its accrual - Held that:- As we have already held that the interest income earned by the assessee is also liable for exemption u/s 10(24) of the Act, we are not going in deep with regard to interest income earned by the assessee from Kachnar Builders which has been partly brought to tax by the CIT(A) to certain extent.
From the record we find that 15% of incentive bonus payable to workers was contributed by them to the association. This amount was deposited with the association to meet all sorts of expenditure including lawyers’ fee, TA/DA, typing, stenographic charges, court fee and all other incidental expenses. The balance out of such contribution was to be refunded to the deserving employees. From record we find that substantial amount received from the employees was refunded to them in the years 1999 and 2000 after meeting the expenditure. Thus, the amount received from the workers for meeting such expenditure was not in the nature of income in the hands of the assessee being a coordination committee but was merely in the nature of deposit which was meant for meeting expenditure for defending/prosecuting various cases of employees. There was a clear concept of mutuality. No-one can make profit out of himself. When a member agrees to contribute funds for a common purpose, the amount of funds not so required for common purpose and refunded to such individual, cannot be treated as income in their hands liable to tax. Thus, the general principle applicable to the mutual concern is that the surplus accruing to it cannot be regarded as income, profits or gains for the purpose of income tax.
As discussed hereinabove, the amount received by the assessee was not in the nature of income and the assessee was not doing any business activity and as such the application of provisions of section 40a(ia) was not justified
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2012 (10) TMI 1125
Deduction u/s 80-IA - whether initial assessment year in section 80-IA(5) would only mean the year of commencement and not the year of claim ? - Unabsorbed depreciation - Held that:- Issue notice on application seeking condonation of delay as well as in the Special Leave Petition.
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2012 (10) TMI 1124
The Supreme Court dismissed the special leave petitions as the matter is pending before the High Court. The Department can proceed to recover amounts due from the petitioner unless an interim order is passed by the High Court.
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2012 (10) TMI 1123
Issues involved: Determination of fair market value of property for computing long term capital gains u/s 50C of the Income Tax Act.
Summary:
The case involved cross appeals against orders passed by the CIT(A) regarding the fair market value of a property sold by joint owners to a developer. The property was sold for a lump sum consideration of Rs. 15,13,50,000/-, but the Stamp Duty Authority valued it at a higher amount. The AO invoked section 50C of the Act to determine the fair market value based on the Stamp Duty Authority's valuation, leading to a dispute.
The assessees argued that as senior citizens, they were unable to negotiate with tenants and the property was in a dilapidated state, justifying the lower sale price. They contended that the AO should have referred the matter to the Departmental Valuation Authority or accepted the registered valuer's report. The CIT(A) partially agreed, stating that the AO should have referred the valuation to the Valuation Officer when valid objections were raised by the assessee.
The Revenue appealed, arguing that the AO had discretion in referring cases to the DVO under section 50C. The assessees, on the other hand, contended that it was mandatory for the AO to refer the matter to the DVO when objections were raised. The ITAT, after considering relevant precedents, upheld the CIT(A)'s decision to remit the matter to the AO for valuation by the DVO.
In conclusion, the ITAT affirmed the CIT(A)'s orders and dismissed the appeals by the Revenue and the cross objections by the assessees, emphasizing the importance of following proper valuation procedures u/s 50C of the Income Tax Act.
Order pronounced on 3rd October, 2012.
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2012 (10) TMI 1122
Issues involved:
The judgment involves the deletion of addition made by the Assessing Officer (AO) on account of difference in actual stock and stock as per books for assessment year 2005-06.
Details of the judgment:
1. The AO observed a discrepancy in the stock of white butter during a search, where physical stock was found to be NIL while the book stock was 1,48,813 kgs. The AO treated this difference as unaccounted sales and made an addition of Rs. 1.64 Crores.
2. The assessee explained that the stock was kept in a specific cold storage chamber with a required temperature level, but the authorized officer failed to properly inventory the stock during the search.
3. The assessee argued that the addition made by the AO was based on presumption as no evidence of unaccounted sales was found during the search.
4. The CIT(A) deleted the addition after considering the explanation of the assessee and referring to a decision of ITAT Ahmedabad Bench in a similar case.
5. The CIT(A) noted that the AO did not dispute the quantity shown in the financial statements for the year-end, indicating no difference in quantity by the end of the financial year.
6. The Tribunal upheld the CIT(A)'s decision, stating that no unaccounted sales were found, and the AO did not dispute the sales recorded in the books after the search.
7. The Tribunal found no merit in the revenue's appeal as the explanation provided by the assessee was deemed correct, and there was no evidence to support unaccounted sales.
8. The departmental appeal was dismissed, affirming the deletion of the addition made by the AO.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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2012 (10) TMI 1121
Issues involved: Appeal against imposition of penalty u/s 221(1) of the Income Tax Act for non-payment of tax demanded u/s 201(1)/201(IA) due to failure to deduct tax at source u/s 194A.
Summary:
1. The assessee failed to deduct tax at source u/s 194A during an inspection u/s 133A, leading to demands u/s 201(1)/201(IA) for non-payment of tax. The AO imposed a penalty u/s 221(1) for non-payment of the demanded tax, despite the assessee's claim that the tax had been paid by the deductees. The CIT(A) upheld the penalty.
2. The assessee contended that the penalty u/s 221(1) was not justified as the tax had been paid by the deductees, citing the decision in Hindustan Coca-Cola Beverages Ltd. case. However, the AO found no evidence to support this claim and imposed the penalty. The CIT(A) affirmed the AO's decision, emphasizing that interest under section 201(IA) was also payable due to delayed tax deposits by the deductees.
3. The ITAT concurred with the CIT(A) that the assessee had indeed failed to deduct tax at source, leading to the imposition of penalty u/s 221(1). The ITAT noted that the assessee did not provide evidence of the tax being paid by the deductees, and upheld the penalty and interest payments as per the Supreme Court's decision in Hindustan Coca-Cola Beverages Ltd. case.
4. Consequently, all grounds of appeal by the assessee were dismissed, and the appeals against the penalty imposition were rejected.
Judges: H. S. Sidhu (Judicial Member) and B. P. Jain (Accountant Member)
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2012 (10) TMI 1120
Issues involved: Eligibility to claim deduction u/s 10AA of the Income-tax Act, 1961.
Summary:
The case involved a dispute regarding the eligibility to claim deduction u/s 10AA of the Income-tax Act, 1961. The assessee company, engaged in trading in tobacco, cigarettes, and alcoholic beverages, claimed a deduction u/s 10AA for profit from a unit in a Special Economic Zone (SEZ) in Cochin. The Assessing Officer (A.O.) disallowed the claim, stating that the activity of import and export by the assessee cannot be treated as "Services" for the purpose of section 10AA of the Act.
On appeal, the Ld. CIT(A) held that the activity of importing and re-exporting goods by the appellant amounted to rendering services as defined under SEZ Rules, 2006, making the assessee eligible for exemption u/s 10AA. The Ld. CIT(A) noted that the activity had been accepted in earlier assessment years, and without any deviation in facts and circumstances, no basis existed for disallowing the claim in the current year.
The Appellate Tribunal, after considering the SEZ rules and relevant legal provisions, upheld the Ld. CIT(A)'s decision. The Tribunal emphasized the principle of consistency and the burden on the A.O. to show that the view taken was the only possible interpretation of the law. As the Ld. CIT(A) provided cogent reasons for allowing the deduction u/s 10AA based on legal provisions and past acceptance by the assessing officer, the appeal by the revenue was dismissed.
Therefore, the Tribunal affirmed the eligibility of the assessee for exemption u/s 10AA of the Act, concluding that the order passed by the Ld. CIT(A) was legally sound and consistent with previous decisions.
Judges: Shri D. Manmohan, Vice President and Shri BR Baskaran, Accountant Member.
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9911796707
