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Showing 141 to 160 of 1328 Records

2012 (11) TMI 1198

Issues Involved:
The judgment involves the interpretation of Section 260-A of the Income Tax Act,1961 and addresses substantial questions of law arising from the order passed by the Income Tax Appellate Tribunal, Agra Bench Agra.

Issue I:
The first issue pertains to the correctness of the order upholding the finding that the gift received by the appellant was erroneous and prejudicial to the interest of revenue. The Commissioner of Income Tax initiated proceedings under Section 263 based on the failure to examine the gift of Rs. 1,50,000 received by the appellant from Shri Ram Avatar Agarwal. The Tribunal held that the gift was not genuine and the creditworthiness of the donor was not established.

Issue II:
The second issue questions whether the findings and observations made by the Tribunal regarding the genuineness of the gift of Rs. 1,50,000 were based on conjectures and surmises, and if they were irrelevant facts, rendering them perverse. The Tribunal found that the creditworthiness of the donor was not established, leading to the conclusion that the gift was not genuine.

Issue III:
The third issue concerns the jurisdiction of the Tribunal in recording findings and observations on the merits of the case regarding the genuineness of the gift of Rs. 1,50,000 while deciding the appeal against the order passed by the Commissioner of Income Tax under Section 263. The Tribunal found that the Assessing Officer had accepted the gift without examining the creditworthiness of the donor, leading to an erroneous and prejudicial order.

Issue IV:
The final issue questions whether the Tribunal exceeded its jurisdiction by allowing the Commissioner of Income Tax's order in part after holding the Assessment Order as not erroneous or prejudicial to the interest of revenue. The Tribunal found that the gift of Rs. 1,50,000 was not genuine due to the lack of established creditworthiness of the donor.

The judgment analyzed the facts of the case for the assessment year 2002-03, where the appellant, engaged in the business of manufacturing and sale of pulses, disclosed income discrepancies. The Commissioner of Income Tax initiated proceedings under Section 263 based on unexamined fresh loans, a gift of Rs. 1,50,000, and questionable purchases made by the assessee. The Tribunal found the purchases verifiable but deemed the gift not genuine due to the lack of established creditworthiness of the donor.

During the hearing, the appellant's counsel argued that the donor's statement on oath confirmed the gift, establishing creditworthiness. However, the Revenue's counsel contended that bank transactions alone did not prove creditworthiness and genuineness. The Tribunal's findings highlighted the lack of relationship between the donor and the assessee, casting doubt on the genuineness of the gift.

The Tribunal's decision was based on the donor's modest means, indicating an inability to gift a substantial amount. Citing precedent cases, including the Hon'ble Supreme Court's ruling in CIT v. P. Mohanakala, the Tribunal upheld the Commissioner's finding that the gift was erroneous and prejudicial to revenue. Following the legal principles established in previous cases, the High Court affirmed the Tribunal's decision, dismissing the appeal.
2012 (11) TMI 1197

Issues Involved:
1. Treatment of commission income from demand drafts/pay orders.
2. Assessment of undisclosed investments.
3. Reasonableness of the commission rate applied.

Summary:

Issue 1: Treatment of Commission Income
The assessee contested the CIT(A)'s decision to treat commission income as 5% of the amount of drafts/pay orders. The Tribunal noted that the CIT(A) found the assessee instrumental in facilitating cash deposits and issuance of instruments, thus rejecting the assessee's claim of no connection with the demand drafts/pay orders. The Tribunal, however, deemed the 5% commission rate excessive and reduced it to 1%, stating that this rate would meet the ends of justice.

Issue 2: Assessment of Undisclosed Investments
A survey u/s 133A revealed that the assessee had undisclosed transactions with M/s. Durga Finance. The AO concluded that these transactions represented undisclosed investments, leading to significant additions for the years under consideration. The CIT(A) upheld the AO's findings but treated the transactions as commission income rather than direct purchases by the assessee.

Issue 3: Reasonableness of the Commission Rate
The Tribunal evaluated the reasonableness of the 5% commission rate applied by the CIT(A). It concluded that a 1% commission rate was more appropriate for the nature of the transactions involved. Consequently, the Tribunal directed the AO to restrict the addition to 1% of the amount of demand drafts/pay orders for each of the four years under consideration.

Conclusion:
The Tribunal partly allowed the appeals, reducing the commission income rate from 5% to 1% for the assessment years 1999-2000, 2000-01, 2003-04, and 2004-05. The order was pronounced in the open court.
2012 (11) TMI 1196

Issues involved:
The judgment involves the disallowance of depreciation on assets given under 'sale and lease back basis' and on motor cars given on finance lease, treating the lease transactions as finance transactions.

Disallowed Depreciation on Assets Given Under 'Sale and Lease Back Basis':
The appellant filed appeals against orders of the CIT(A) upholding the disallowance of depreciation on assets given under 'sale and lease back basis.' The Tribunal noted that the issue was covered against the assessee by a previous order in the assessee's own case for assessment years 1995-96, 1996-97, and 1997-98. The Tribunal followed the decision in the case of M/s. IndusInd Bank Ltd vs. ACIT, where it was held that in finance lease transactions, depreciation is not admissible to the lessor. The Tribunal emphasized that the lessee, as the real owner of the asset in a finance lease, is entitled to depreciation, not the lessor. Consequently, the Tribunal rejected the ground of appeal taken by the assessee and upheld the orders of the CIT(A) for the relevant assessment years.

Disallowance of Depreciation on Motor Cars Given on Finance Lease:
The appellant also challenged the disallowance of depreciation on motor cars given on finance lease. The Tribunal, referring to the decision in the case of M/s. IndusInd Bank Ltd vs. ACIT, reiterated that in finance lease transactions, depreciation is not admissible to the lessor. It was clarified that the lessee, being the actual and real owner of the asset in a finance lease, is entitled to depreciation, not the lessor. The Tribunal, in line with its decision on the first issue, dismissed the appeals filed by the assessee for the relevant assessment years.

Conclusion:
Both appeals filed by the assessee were dismissed by the Tribunal based on the precedent set in a previous order and the principle that in finance lease transactions, the lessee is entitled to depreciation as the real owner of the asset. The Tribunal upheld the orders of the CIT(A) disallowing depreciation on assets given under 'sale and lease back basis' and on motor cars given on finance lease. The judgment was pronounced on 12th November 2012.
2012 (11) TMI 1195

Issues involved: Disallowance of director's remuneration under section 40A(2) of the Income Tax Act for the assessment year 2007-08.

Summary:

Issue 1: Disallowance of Director's Remuneration

The assessee, a company engaged in trading, filed its return for the assessment year 2007-08, declaring an income of Rs. 73,65,280. The Assessing Officer disallowed Rs. 18,50,000 under section 40A(2) as director's remuneration. The dispute arose as the Assessing Officer believed the increase in director's remuneration should be proportional to the increase in turnover. The CIT(A) upheld the disallowance, leading to the appeal.

Details:
- The company's turnover increased by 32% from the previous year, leading to the disallowance.
- The assessee argued that the increase in net profit was 129% and turnover increased by 43%, justifying the higher remuneration.
- The directors' qualifications and efforts were highlighted, with a significant increase in turnover attributed to their contributions.
- The authorities did not conduct a proper inquiry into the reasonableness of the remuneration.
- The Tribunal emphasized the need to establish the fair market value of services before disallowing under section 40A(2).
- The reduction in other employees' salaries was due to vacancies and not indicative of excessive director's remuneration.

Decision:
The Tribunal found the disallowance unjustified, reversing the CIT(A)'s decision. It directed the Assessing Officer to allow the entire director's remuneration, considering the facts presented.

This summary provides a detailed overview of the legal judgment regarding the disallowance of director's remuneration under section 40A(2) for the assessment year 2007-08, highlighting the arguments, findings, and final decision of the Tribunal.
2012 (11) TMI 1194

Issues Involved:
1. Jurisdiction of the High Court in granting benefits of amended provisions of the Land Acquisition Act, 1894.
2. Validity of the decree passed by the High Court on April 28, 1989.
3. Executability of the decree passed by the High Court on April 28, 1989.

Summary:

Issue 1: Jurisdiction of the High Court in granting benefits of amended provisions of the Land Acquisition Act, 1894.

The Supreme Court examined whether the High Court had jurisdiction to grant the benefits of the amended provisions of the Land Acquisition Act, 1894 (LA Act) through applications u/s 151 and 152 of the Code of Civil Procedure (CPC). The Court referred to its previous decisions in *State of Punjab v. Babu Singh*, *Union of India v. Swaran Singh*, and *Sarup Singh v. Union of India*, which established that the High Court does not have the jurisdiction to entertain applications under Sections 151 and 152, CPC, to award additional benefits under the amended provisions of the LA Act. The Court reiterated that the High Court acquires jurisdiction under Section 54 of the LA Act only while enhancing or declining to enhance the compensation and not independently of the proceedings.

Issue 2: Validity of the decree passed by the High Court on April 28, 1989.

The Supreme Court held that the decree passed by the High Court on April 28, 1989, granting the benefits of amended Sections 23(1-A) and 23(2) of the LA Act, was without jurisdiction and thus a nullity. The Court emphasized that an award and decree having become final under the LA Act cannot be amended or altered to seek enhancement of statutory benefits under the amended provisions by filing petitions under Sections 151 and 152 of the CPC. Consequently, the decree dated April 28, 1989, was declared null and void.

Issue 3: Executability of the decree passed by the High Court on April 28, 1989.

The Supreme Court concluded that since the decree dated April 28, 1989, was a nullity, it could be challenged at any stage, including in execution proceedings. The executing court's order dated April 6, 1999, which overruled the objection taken by the appellants and held that it was not open to the executing court to go behind the decree, was set aside. The Court ruled that a plea of nullity of a decree can always be set up before the executing court, and any judgment and order which is a nullity never acquires finality and is thus open to challenge in the executing proceedings.

Conclusion:

The Supreme Court allowed the Civil Appeal, setting aside the order of the High Court dated April 1, 2003, and the order of the Additional District Judge, Karnal dated April 6, 1999. The execution petition filed by the respondents seeking execution of the award and decree dated April 28, 1989, was dismissed. The parties were directed to bear their own costs. The judgment in Civil Appeal No. 5115 of 2005 was applied to Civil Appeal No. 5116 of 2005, and Civil Appeal Nos. 5096 of 2005 and 5097-5098 were disposed of accordingly.
2012 (11) TMI 1193

Issues involved: Appeal against penalty u/s 271(1)(c) of the Income Tax Act, 1961 for disallowance u/s 40(a)(ii) for the assessment year 2005-06.

Background of the case:
The assessee, engaged in the business of running a computer hardware training school, had its assessment finalized with a total income of &8377; 6,87,826/-, which was revised to &8377; 4,39,208/- after adjustments. A disallowance of &8377; 6,75,987/- u/s 40(a)(ii) led to the initiation and confirmation of penalty u/s 271(1)(c) for &8377; 46,107/-.

Arguments and Decisions:
During the hearing, the assessee's counsel cited a similar case where the penalty was deleted by the Hon'ble Co-ordinate Bench. The Bench, in the case of M/s. Lucky Star International, held that the penalty was not justified as there was no deliberate attempt to conceal income. The assessee relied on various decisions to support their case, emphasizing that the penalty was not warranted as there was no concealment or furnishing of inaccurate particulars of income.

Judgment:
After considering the submissions and legal precedents, the Tribunal found merit in the assessee's arguments. Citing the decision in the case of M/s. Lucky Star International, the Tribunal directed the Assessing Officer to delete the penalty. Consequently, the assessee's appeal against the penalty u/s 271(1)(c) was allowed.

Conclusion:
The Tribunal, following legal precedents and lack of evidence to the contrary, ruled in favor of the assessee and directed the deletion of the penalty imposed u/s 271(1)(c) for disallowance u/s 40(a)(ii) for the assessment year 2005-06.
2012 (11) TMI 1192

Issues involved:
1. Assumption of jurisdiction u/s 263 of the Income-tax Act, 1961.
2. Classification of expenditure as capital or revenue.
3. Allowability of prior period expenses in the assessment year 2005-06.

Summary:

Assumption of Jurisdiction u/s 263:
The first issue concerns the assumption of jurisdiction u/s 263 of the Income-tax Act, 1961. The CIT noticed discrepancies in the assessee's records, particularly the classification of a substantial renovation expenditure as current repairs and the inclusion of prior period expenses in the profit and loss account. The CIT directed the Assessing Officer (AO) to bring the renovation expenditure of Rs. 15,13,07,595 and prior period expenses of Rs. 19,03,712 to tax for the assessment year 2005-06. The assessee argued that all relevant information was provided during the original assessment u/s 143(3) and that the AO's decision was based on this information, making the assumption of jurisdiction u/s 263 legally unsound. However, the Tribunal held that the CIT was justified in invoking u/s 263 as the AO's order was erroneous and prejudicial to the interests of revenue due to lack of proper inquiry and application of mind.

Classification of Expenditure:
The second issue pertains to whether the expenditure incurred on repairs to a damaged plant and machinery due to a fire accident should be classified as capital or revenue expenditure. The assessee claimed it as revenue expenditure, arguing that the repairs were necessary to bring the assets back to their original condition without creating any new assets. The CIT, however, classified it as capital expenditure, as the repairs resulted in substantial renovation and future benefits. The Tribunal upheld the CIT's view, referencing the Supreme Court judgment in CIT v. Sarvana Spg. Mills Ltd. and CIT v. Sri Mangayarkarasi Rasi Mills (P.) Ltd., which stated that such substantial repairs leading to enduring benefits should be treated as capital expenditure.

Allowability of Prior Period Expenses:
The third issue concerns the allowability of prior period expenses amounting to Rs. 19,03,712, which included service tax, Modvat, sales tax, house tax, and compensation paid to the legal heirs of a deceased worker. The assessee contended that these expenses crystallized and were paid during the assessment year 2005-06, thus should be allowed. The CIT argued that these expenses related to earlier assessment years and should not be allowed in the current year. The Tribunal agreed with the CIT, stating that the assessee, following the mercantile system of accounting, cannot claim these expenses in the assessment year 2005-06.

Conclusion:
The Tribunal dismissed the appeal, holding that the CIT was justified in invoking jurisdiction u/s 263, classifying the substantial renovation expenditure as capital expenditure, and disallowing the prior period expenses for the assessment year 2005-06.
2012 (11) TMI 1190

Issues involved: Territorial jurisdiction for entertaining the appeal and time limitation for filing the appeal.

Territorial Jurisdiction: The appeal was filed under section 35 G of the Central Excise Act, 1944 against an order passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi. An objection was raised that the adjudicating order was passed by the Panchkula Commissionerate in Haryana, thus the jurisdiction for entertaining the appeal lies with the Punjab & Haryana High Court. The appellant argued that a part of the cause of action arose in Ghaziabad, Uttar Pradesh, giving jurisdiction to the present Court. However, the Court held that as per the decision in M/s. Ambica Industries case, the appropriate appellate authority should be in the State where the first court is located, which in this case is Panchkula, Haryana. Therefore, the Court concluded that it has no jurisdiction to entertain the appeal, and it lies with the Punjab & Haryana High Court.

Time Limitation: Another objection was raised regarding the appeal being time-barred, as the order under challenge was passed on 04.09.2009, and the appeal was presented on 06.11.2012, after more than 3 years. However, the Court did not delve into this issue as the preliminary objection regarding territorial jurisdiction was sustained. Consequently, the appeal was dismissed as not maintainable.
2012 (11) TMI 1189

Issues involved:
The judgment involves the issue of disallowance of interest expenses u/s. 14A in relation to income not includible in total income.

Details of the judgment:

1. The appellant, an Individual engaged in trading of shares, claimed a total loss in the return of income. The Assessing Officer (A.O.) disallowed interest expenses u/s. 14A on borrowed funds used for investing in mutual funds, adding it to the income. The appellant contended that as a trader, no disallowance should be made u/s. 14A. The CIT (A) upheld the disallowance.

2. The CIT (A) held that the provisions of section 14A are unambiguous, relating to expenditure incurred in relation to income not includible in total income. The appellant's argument that earning dividends was incidental to profit-making was not accepted. The CIT (A) confirmed the disallowance made by the A.O.

3. The appellant appealed before the ITAT, arguing that the interest incurred for purchasing shares and units of mutual funds was allowable as deduction u/s. 36(1)(iii). The ITAT considered previous court decisions and observed that the appellant's activities were business-related, and no disallowance of interest was warranted.

4. Referring to legal precedents, the ITAT emphasized that if borrowed funds were used for business purposes, interest paid should be considered for the purpose of business. It was held that interest paid for trading activities cannot be considered as incurred for earning dividend income. The ITAT directed the deletion of the disallowance made by the A.O., allowing the appellant's appeal.

5. The ITAT pronounced the order in Open Court on 30-11-2012, allowing the appeal of the assessee.
2012 (11) TMI 1188

Issues involved:
The issues involved in the judgment are the disallowance of interest expenses u/s 14A and the treatment of income from shares and units of mutual funds as business income.

Disallowance of interest expenses u/s 14A:
The appellant, engaged in trading of shares, claimed interest expenses on borrowed funds for investing in units of mutual funds as business expenses. However, the Assessing Officer (A.O.) disallowed the interest expenses u/s 14A, stating that they were not allowable deductions. The A.O. issued a show cause notice to the assessee, who argued that as the borrowed funds were used for business purposes, no disallowance should be made. The Commissioner of Income Tax (CIT) upheld the A.O.'s decision, emphasizing that the interest expenditure was directly linked to earning exempted income from dividends and hence covered by section 14A. The CIT dismissed the appeal, stating that the appellant's argument that dividend income was incidental to profit-making was not valid. The Tribunal, considering the appellant's trading activities and relevant case laws, concluded that no disallowance of interest was warranted. Consequently, the disallowance made by the A.O. was deleted, and the appeal of the assessee was allowed.

Treatment of income from shares and units of mutual funds as business income:
The appellant contended that the income from shares and units of mutual funds should be considered as business income, and the interest expenses incurred for their purchase were allowable deductions u/s 36(1)(iii). The Departmental Representative (D.R.) argued that the transactions were pre-ordained, and the interest expenses were incurred to earn exempted dividend income, necessitating disallowance u/s 14A. The Tribunal, citing relevant case laws, held that when borrowed funds were used for trading activities, the purpose of earning dividend income did not alter the nature of the expenditure. It was established that the primary objective of the appellant's trading activities was to earn profits, and any dividend income obtained incidentally did not affect the purpose of the expenditure. Therefore, the Tribunal directed the deletion of the disallowance of interest expenses made by the A.O., allowing the appeal of the assessee.
2012 (11) TMI 1187

Rejection of application for grant of registration u/s 12AA - rejection of application for grant of approval u/s 80G(5)(vi) - Held that - CIT did not act according to law and provisions of section 12AA & 80G of the Act. CIT Agra has not conducted any enquiry into the matter in order to satisfy himself about the genuineness of the activities of the assessee institution or fund;and the order was passed without giving opportunity of being heard to the assessee and the impugned order is passed beyond the period of 6 months from the date of filing of application which violated section 12AA of the Act.
The orders of CIT for refusal of registration under section 12AA of the Act and refusal of approval under section 80G of the Act was set aside. - CIT directed to grant registration under section 12AA and renewal of approval under section 80G(5)(vi) - Decided in favor of assessee.
2012 (11) TMI 1186

Issues involved: Request for permission to file revised returns under Section 25 of the KVAT Act, issuance of notices proposing assessment and penalty under Section 67 of the Act, admissibility of request for revision of returns, consideration of objections filed by petitioner.

Summary:
The petitioner requested permission to file revised returns for the years 2009-10 and 2010-11 through Exts.P1 and P2. Subsequently, notices Exts.P3 to P6 were issued proposing assessment under Section 25 of the KVAT Act and penalty under Section 67 for the mentioned years. Further, notices Exts.P7 and P8 were issued rejecting the request for revised returns and offering an opportunity for a hearing. In response, the petitioner filed objections Exts.P9 and P10, leading to the filing of a writ petition seeking direction to consider Exts.P1 and P2.

Upon review, the court noted that the respondent issued notices Exts.P7 and P8 upon receiving Exts.P1 and P2, to which the petitioner responded with objections Exts.P9 and P10. The court directed the respondent to decide on Exts.P7 and P8 in light of Exts.P9 and P10, providing the petitioner with a hearing opportunity. To expedite the process, the petitioner was instructed to appear before the respondent on a specified date for the hearing, with proceedings related to Exts.P3 to P6 put on hold.

The court ordered the petitioner to present a copy of the judgment and the writ petition to the respondent for compliance. The writ petition was disposed of accordingly.
2012 (11) TMI 1185

The Appellate Tribunal CESTAT Ahmedabad allowed the application for waiver of pre-deposit of balance amounts involved in a case where Service Tax liability was disputed. The appellant had already deposited the entire amount of Service Tax liability and interest, and the recovery was stayed until the appeal was disposed of.
2012 (11) TMI 1184

Issues involved: Application filed u/s. 254(2) for A.Y. 2004-05 and 2005-06 regarding declaration in Form No. 8 u/s. 158A(1) of the I.T. Act.

The judgment by the Appellate Tribunal ITAT Pune, delivered by Shri R.S. Padvekar, JM, addressed two Miscellaneous Applications filed by the assessee u/s. 254(2) for the A.Y. 2004-05 and 2005-06. The applications highlighted that the assessee had submitted a declaration in Form No. 8 u/s. 158A(1) of the I.T. Act, indicating a similar question of law pending before the Hon'ble High Court for the A.Ys. 2002-03 and 2003-04. Despite the disposal of the assessee's appeals on 30th April 2012, the Form No. 8 was not considered, leading to the need for a review of the orders. Upon examination, the Tribunal found the declaration on record, acknowledging an oversight in not considering it during the disposal of the appeals. The Tribunal, with the consent of the Ld. D.R., decided to recall the orders for both A.Ys. 2004-05 and 2005-06, i.e., ITA No.1087 and 1088/PN/2010, dated 30th April 2012. The appeals were rescheduled for a hearing on 07 December 2012, with no separate notice to be issued to the parties. Consequently, both Miscellaneous Applications were allowed, and the order was pronounced in the open Court on 09/11/2012.
2012 (11) TMI 1183

Issues Involved:
1. Non-payment of US$ 1.5 million as per the Scheme of Amalgamation.
2. Reciprocal obligations under the Scheme of Amalgamation.
3. Jurisdiction and appropriateness of contempt proceedings.

Summary:

Non-payment of US$ 1.5 million as per the Scheme of Amalgamation:
The appellants challenged an order directing them to deposit US$ 1.5 million in Indian Rupee equivalent within six weeks. The third appellant, RLB, was the transferee company in a Scheme of Amalgamation sanctioned on 29.03.2011. The respondent, Turner Asia Pacific Ventures Incorporated, claimed that the appellants willfully violated the Court's order by not paying the amount stipulated in Clause 11.1 of the scheme. The learned Single Judge noted the appellants' failure to comply with the payment obligation and directed the deposit of the amount in court.

Reciprocal obligations under the Scheme of Amalgamation:
The appellants argued that the payment obligation was contingent upon the fulfillment of reciprocal obligations by the respondent, including the supply of set-top boxes and transmission equipment. They contended that the respondent's non-compliance rendered the company useless for their purposes. The learned Single Judge dismissed these assertions, stating that the appellants should have sought appropriate legal remedies for the alleged non-compliance. The appellants had not taken any demonstrable steps to address their purported inability to pay.

Jurisdiction and appropriateness of contempt proceedings:
The appellants contended that the issue of non-payment required a full enquiry into the inter-se obligations of the parties, which could not be adjudicated in contempt jurisdiction. They had moved an application u/s 392 of the Companies Act before the Company Judge, alleging the respondent's non-compliance with the Scheme. The respondent's counsel argued that the appellants did not dispute their liability and the impugned order merely directed the deposit of the amount in court, subject to final orders in the contempt proceedings.

Court's Decision:
The Court observed that the contempt proceedings were initiated without hearing the appellants and the impugned order was made on the second date of hearing. The Court noted that the appellants had approached the Company Judge for directions u/s 392, alleging the respondent's non-compliance. It would be inappropriate for the Court to determine whether the respondent fulfilled its obligations, as the Company Judge was already seized of the matter. Consequently, the Court directed:

1. The operation of the impugned order dated 24.09.2012 shall be kept in abeyance pending the decision of the Company Judge in C.A. 2076/2012.
2. The Company Judge is requested to hear and dispose of the application expeditiously, preferably within three months.
3. The parties are directed to approach the learned Single Judge in the contempt proceeding immediately after the decision in C.A. 2076/2012.

The learned Single Judge shall then make appropriate orders based on the Company Judge's decision. All rights and contentions of the parties are reserved, and the appeal is disposed of accordingly.
2012 (11) TMI 1182

Issues involved: Appeal against CIT(A) order regarding exemption of interest receipt, set-off of losses, and principle of mutuality.

Exemption of Interest Receipt:
The appellant appealed against CIT(A)'s decision that interest receipt of Rs. 7,43,306/- is not exempt under the principle of mutuality. AO determined total income at Rs. 7,43,310/- u/s. 143(3) of the Income Tax Act, 1961. The AO found interest income from fixed deposits not exempt under mutuality principle. FAA upheld AO's decision, stating interest income was taxable under other sources. The AR argued for adjusting interest paid against received income, but the DR supported AO and FAA's orders. The ITAT found the matter should be sent back to AO for a reasoned decision, as the principle of mutuality application was not adequately explained by AO and FAA. Ground No. 1 was partly allowed in favor of the assessee.

Set-off of Losses:
AO disallowed setting off losses of Rs. 10,79,536/- against interest income of Rs. 7,43,306/-. FAA upheld AO's decision. The AR contended that the assessee was entitled to set off losses, but the DR supported the Revenue Authorities' orders. The ITAT held that the principle of mutuality and set-off of losses operate in different fields. Referring to a judgment by the Hon'ble Madras High Court, the ITAT decided against the assessee on the issue of setting off exempt income/loss against income from other sources. Ground No. 2 was decided against the assessee.

In conclusion, the appeal filed by the assessee was partly allowed, with the matter of exemption of interest receipt being sent back to the AO for a reasoned decision, and the issue of setting off losses being decided against the assessee based on legal precedent.
2012 (11) TMI 1181

Issues involved: Appeal against order allowing deduction u/s 80IB of the Income Tax Act for Banas-II plant.

Summary:
The appeal was filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-XV Ahmedabad, allowing a deduction of &8377; 7124640/- u/s 80IB for the Banas-II plant. The assessee's claim u/s 80IB was initially rejected during scrutiny assessment for the assessment year 2007-08. However, the CIT(A) allowed the claim based on the decision of a Co-ordinate Bench of the Tribunal in the assessee's own case. The Revenue challenged this decision before the ITAT Ahmedabad.

The Revenue argued that the assessment order should have been upheld, while the assessee contended that the issue was already decided in their favor by a Co-ordinate Bench in a previous case. The ITAT reviewed the submissions, the previous decision, and the material on record. The Co-ordinate Bench had previously allowed a deduction u/s 80IB for the assessee's Banas-II Dairy Expansion Plant, and the CIT(A) had followed this precedent for the current assessment year.

The ITAT found that the decision of the Co-ordinate Bench in the previous case was applicable to the current situation. The Revenue failed to provide reasons why the previous decision should not be followed. Therefore, the ITAT upheld the order of the CIT(A) and dismissed the appeal of the Revenue, concluding that there was no infirmity in the CIT(A)'s decision based on the precedent set by the Co-ordinate Bench.

In conclusion, the ITAT dismissed the Revenue's appeal, affirming the allowance of the deduction u/s 80IB for the Banas-II plant as per the decision of the Co-ordinate Bench in the assessee's own case for the assessment year 2006-2007.
2012 (11) TMI 1180

Issues involved: Appeal by revenue challenging CIT(A)'s order allowing deduction u/s 80 IB (1) to assessee without local authority approval for housing projects development.

Summary:
The Appellate Tribunal ITAT Ahmedabad heard the appeal by the revenue against the CIT(A)'s order for the assessment year 2005-06. The main ground of appeal was the allowance of deduction u/s 80 IB (1) to the assessee without the necessary approval from the local authority for developing housing projects. The assessee's counsel argued that previous decisions by ITAT Ahmedabad Benches favored the assessee on similar issues for earlier and subsequent assessment years. The revenue's appeal was based on the AO's order, which the DR could not counter. The Tribunal noted that previous decisions supported the assessee's position for the relevant assessment year, as the facts were similar to previous and subsequent years. Therefore, the Tribunal decided in favor of the assessee, dismissing the revenue's appeal.

In conclusion, the Tribunal dismissed the revenue's appeal, upholding the deduction u/s 80 IB (1) for the assessee despite the lack of local authority approval for housing projects development.
2012 (11) TMI 1179

Reference to arbitration of three technical persons who have made the award dated 30.03.2010 - Held that:- Interpretation put forth by the majority view of the arbitral tribunal, which has received the imprimatur of the learned Single Judge, is not a plausible view of the terms of the contract which are crystal clear and brook of no two views. Such a view, we feel would border on absurdity. We are conscious of the fact that it is an arbitral tribunal manned of three technical people. But then there is also a minority view of one technical person, apart from the fact that the DRB of three technical people also opined otherwise, apart from the engineer concerned.
Set aside the award insofar as it has granted Dispute No.4 in favour of the respondent while upholding the award in all other respects. No other issue is pressed before us. The appeal is allowed to the limited extent aforesaid, leaving the parties to bear their own costs.
2012 (11) TMI 1178

Issues Involved:
The issue involved in this case is whether the Income-tax Appellate Tribunal was right in law in rejecting the application for condonation of delay of 883 days in filing appeal before the Appellate Tribunal against the order of CIT(A) for A.Y. 2001-02.

Summary:

Issue 1: Condonation of Delay
The appellant filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner(Appeals) dated 27.11.2007, with a delay of 883 days. The appellant also filed an application for condonation of delay citing an error and oversight by an office boy named Sanjeev Manuhai Ramibhai as the main reason for the delay. The Tribunal dismissed the appeal solely on the grounds of delay, not accepting the appellant's explanation.

Issue 2: Affidavit and Discrepancy
The Tribunal's order noted that the appellant could not file the affidavit of the person concerned and there was a discrepancy in the name whether he was known as Sanjeev or Sanjay. The appellant's counsel argued that the delay was beyond the appellant's control, as the Chartered Accountant was instructed to present the appeal but it was delayed due to the office boy's oversight. The counsel also mentioned that the affidavit was filed before the Tribunal's decision.

Resolution:
The High Court, after considering the facts and circumstances of the case, requested the Tribunal to reconsider the issue after taking into account the affidavit of the office boy. The Court emphasized that unintentional delay is viewed liberally by the Courts, and if a plausible explanation is provided for the delay, the Courts prefer to decide the case on merits rather than technicalities. The Court opined that the minor discrepancy in the name should not be fatal to the main cause. Consequently, the question was answered in favor of the appellant, and the proceedings were remanded to the Tribunal for reconsideration after considering the affidavit.

Cost Implication:
Due to the extent of delay, the appellant was directed to deposit a cost of &8377; 5,000/- with the State Legal Service Authority. The appeal was disposed of accordingly.