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Showing 141 to 160 of 782 Records
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2012 (4) TMI 703
The Appellate Tribunal CESTAT CHENNAI decided that goods arrived before 25-10-2004 without Pre-shipment Inspection Certificate but subject to 100% physical examination do not warrant confiscation or penal action. Both Revenue appeals and Respondents' cross objections were dismissed.
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2012 (4) TMI 702
Issues involved: Application for waiver of pre-deposit of duty, interest, and penalty u/s Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998.
Waiver of pre-deposit of duty:
The applicants filed an application for waiver of pre-deposit of duty amounting to Rs. 12 lakhs, interest, and penalty, as demanded under the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998. The demand was based on the Commissioner of Central Excise's determination that the duty had not been paid in relation to the Hot Air Stenter.
Validity of the Rules:
The applicants contended that the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 were ultra vires, citing the decision of the Hon'ble Madras High Court in the case of Beauty Dyers v. UOI. However, the Madras High Court clarified that manufacturers are still liable to pay excise duty under Section 3 of the Act or other relevant provisions.
Precedent and Tribunal Decision:
Relying on the Tribunal's decision in Shanti Synthetics & Processors Pvt. Ltd. v. CCE, Thane.-I, where a similar demand was set aside following the Madras High Court's ruling, the applicants sought relief. The issue was considered settled by the Madras High Court's decision in the Beauty Dyers case, leading to the waiver of pre-deposit for the appeal hearing.
Decision and Remand:
Given that the Hot Air Stenter Independent Textile Processors Annual Capacity Determination Rules, 1998 were deemed ultra vires by the Madras High Court in the Beauty Dyers case, the demand in the impugned order was set aside. The appellants were directed to pay excise duty u/s Sec. 3 of the Act or other applicable provisions as per the Madras High Court's decision. The matter was remanded to the adjudicating authority for a fresh decision, with the appellants granted a personal hearing opportunity.
Disposition:
The appeal was disposed of in accordance with the above terms, reflecting the reliance on legal precedents and the specific ruling of the Madras High Court in the Beauty Dyers case.
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2012 (4) TMI 701
Issues Involved:
1. Genuineness of Gifts
2. Burden of Proof
3. Assessment of Evidence
4. Legal Precedents
Summary:
1. Genuineness of Gifts:
The primary issue was whether the gifts declared by the appellants, totaling Rs. 2,25,000/- and Rs. 2,10,000/-, were genuine. The assessing officer found the gifts to be non-genuine, concluding that the appellants had introduced their own funds disguised as gifts. The officer noted that the gifts were received from younger individuals to elders without any significant occasion, which is contrary to societal norms.
2. Burden of Proof:
The appellants argued that they had substantially proved the identity of the donors, the payment through cheque transactions, and other relevant details, thereby shifting the burden of proof to the department. However, the department contended that the appellants failed to produce the donors despite repeated opportunities, justifying the adverse inference drawn by the assessing officer.
3. Assessment of Evidence:
The assessing officer examined the details of each transaction and found inconsistencies, such as the lack of sufficient funds in the donors' accounts at the time of the gifts and discrepancies in signatures on bank documents and affidavits. The officer also noted that the gifts were made without any significant occasion and that the donors did not have the financial capacity to make such gifts. The appellate authority and the tribunal confirmed these findings, emphasizing the appellants' failure to produce the donors for cross-examination.
4. Legal Precedents:
The appellants relied on various judgments, including CIT v. Divine Leasing and Finance Ltd. and Deputy Commissioner of Income Tax v. Rohini Builders, to argue that the identity of the donors and the genuineness of the transactions were sufficiently proved. However, the court distinguished these cases based on the facts, noting that the assessing officer had conducted a thorough examination of the evidence. The court also referred to Commissioner of Income Tax v. P. Mohanakala, which supported the department's stance that mere banking transactions do not establish the genuineness of gifts if the transactions are not real.
Conclusion:
The High Court upheld the findings of the Income Tax Authorities and the Tribunal, concluding that the gifts were not genuine and the appellants had introduced their own funds disguised as gifts. The appeals were dismissed as they were concluded by findings of fact, and no substantial question of law arose for consideration.
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2012 (4) TMI 700
Issues involved:
The judgment involves the consideration of substantial questions of law u/s 260A of the Income Tax Act, 1961 regarding the addition of Rs. 50 lakhs u/s 68 of the Act, and the burden of proof on the appellant to establish the identity of the party and the genuineness of the transaction.
Issue 1: Addition of Rs. 50 lakhs under Section 68 of the Income Tax Act, 1961
The appellant, a company engaged in the manufacture and sale of cement, filed a return of income for the assessment year 1996-97. The Assessing Officer added Rs. 3,19,50,000 as an increase in share capital, out of which Rs. 50,00,000 was treated as cash credit from Gold Crest Finance (India) Limited. Despite furnishing details about the investment through Demand Drafts, the whereabouts and identity of Gold Crest Finance (India) Limited could not be established. The Commissioner of Income Tax (Appeals) held that the appellant failed to prove the genuineness of the transaction and dismissed the appeal, upholding the addition of Rs. 50 lakhs as unexplained credit u/s 68 of the Act.
Issue 2: Burden of proof on the appellant under Section 68 of the Act
The appellant failed to establish the identity and creditworthiness of Gold Crest Finance (India) Limited, the alleged creditor of the Rs. 50 lakhs. The Commissioner noted the lack of evidence regarding the creditor's financial standing, such as P & L Account or balance sheet. The appellant's claim that the amount was received through Demand Drafts via banking channels was not sufficient to prove the genuineness of the transaction. The Tribunal upheld the dismissal of the appeal, stating that the appellant did not discharge the burden of explaining the nature and source of the cash credit. The onus was on the appellant to establish the identity of the creditor, and the Tribunal rightly rejected the contention that further inquiry was necessary when the primary burden was not met.
Conclusion:
The High Court dismissed the appeal, emphasizing that the appellant failed to prove the identity of the party and the genuineness of the transaction regarding the Rs. 50 lakhs addition under Section 68 of the Income Tax Act. The Court held that the appellant did not discharge the primary burden under Section 68, and therefore, no substantial questions of law arose for consideration.
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2012 (4) TMI 699
Issues involved:
The judgment involves appeals by two different assessees against orders of CIT(A) regarding estimation of gross profit for the assessment year 2004-05.
Issue 1 - Shri Ashok B Modi's appeal (I.T.A.No. 1060/Ahd/2008):
The AO estimated gross profit at 13.38% for the full year, rejecting the loss shown for the pre-survey period. The assessee contested this decision.
The AO observed discrepancies in the trading account, unreliable production of grey cloth, and rejected the book results u/s 145(3) of the Income Tax Act, 1961. The AO applied a GP rate of 13.38% on the turnover for both periods, resulting in an addition to the assessee's income. The CIT(A) upheld the AO's decision, leading to the appeal before the ITAT.
The AR argued that the disclosed amount during the survey should not be added again, as it pertained to deficiencies in the pre-survey period. The DR contended that the loss shown in the books was unsubstantiated. The ITAT held that the book results for the pre-survey period should be accepted, while approving the GP rate application for the post-survey period.
Issue 2 - Ashish B Modi (HUF) appeal (I.T.A.No.1061/Ahd/2008):
Similar to the first case, the AO estimated gross profit at 13.62% for the full year, not accepting the loss shown for the pre-survey period. The assessee challenged this decision.
The ITAT decided that book results for the pre-survey period should be accepted, while applying the GP rate for the post-survey period. No separate addition was deemed necessary for the post-survey period in this case.
In conclusion, both appeals were partly allowed by the ITAT, with directions given to the AO based on the findings for each case.
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2012 (4) TMI 698
Issues involved: Appeal against disallowance of interest expenses u/s 57(111) for assessment years 2001-02 and 2002-03.
For AY 2001-02:
The assessee appealed against the disallowance of interest amounting to Rs. 32,30,685. The Tribunal dismissed the appeal initially, but the Hon'ble Bombay High Court remanded the issue for fresh consideration. The High Court observed that the investments were made for earning dividends, distinguishing the case from previous judgments. Following various case laws, including Moodi Pvt Ltd and Ormerods (India) P. Ltd, the Tribunal allowed the claim of the Assessee, stating that the interest paid on borrowings for the purchase of shares was allowable as a deduction under relevant sections of the Income Tax Act. The Tribunal held that the provisions of the Act would be more beneficial to the assessee, leading to the deletion of the disallowance of interest sustained by the CIT(A).
For AY 2002-03:
The issue of disallowance of interest expenses was considered in line with the decision for AY 2001-02. The Tribunal, following the previous decision, allowed the claim of the Assessee for AY 2002-03 as well. The Tribunal held that the disallowance of interest sustained by the CIT(A) deserved to be deleted, as the facts and circumstances were identical to those of AY 2001-02. Consequently, the appeal for AY 2002-03 was allowed in favor of the assessee.
Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.
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2012 (4) TMI 697
Issues involved:
The issues involved in the judgment are the recall of ground No.3 for adjudication and the deletion of adhoc disallowance made by the Assessing Officer out of housekeeping charges.
Recall of Ground No.3 for Adjudication:
The Revenue's appeal was posted for hearing due to the previous order of the Co-ordinate Bench, which found that ground No.3 could not be decided. The Tribunal recalled the order to adjudicate ground No.3 raised by the Revenue regarding the deletion of adhoc disallowance made by the Assessing Officer out of housekeeping charges. The case was directed to be posted for hearing to decide on this ground.
Consistent View on the Issue:
The Appellant informed that in the past, the Tribunal had consistently taken a view on similar issues. Referring to previous orders, the Tribunal affirmed that for the current assessment year, the view taken by the first appellate authority in the assessee's case should be upheld. The Tribunal cited relevant paragraphs from previous orders to support the decision and rejected the Revenue's ground based on the consistent view taken in the past.
Final Result of the Appeal:
The final result of the appeal remained unchanged, with the appeal of the Revenue being partly allowed for statistical purposes.
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2012 (4) TMI 696
Issues involved:
The issue involves the non-receipt of Export Obligation Discharge Certificate (EODC) for licenses issued during 2002-05, leading to a show cause notice for invoking the terms of the bond executed by the appellant.
Summary:
The appellant held advance authorization licenses and imported raw materials after executing a bond with customs authorities regarding duty liability. The department did not receive EODCs for 5 licenses issued during 2002-05, prompting a show cause notice for bond enforcement. The Commissioner (Appeals) ordered recovery of a significant amount. The appellant, aggrieved by this order, filed an appeal.
The appellant's counsel argued that they did not receive proper notices and were not informed about a personal hearing opportunity. They mentioned that for one license, they have received the EODC, while for the remaining 5 licenses, they are in the process due to policy relaxation issues. They sought relief on grounds of natural justice non-compliance and pending EODC issuance by DGFT.
The department's representative contended that EODCs were to be produced within specific timeframes, and for licenses issued during 2002-05, delays were observed until 2010, justifying bond enforcement actions.
The Tribunal noted the delay in EODC production but questioned the failure to serve the show cause notice to the appellant, who had been actively exporting goods through the same customs station. They found the order lacking in natural justice compliance and awareness of the ongoing EODC consideration by DGFT.
Considering the procedural lapses, the Tribunal waived the dues from the impugned order for appeal admission and proceeded with the appeal hearing, emphasizing the futility of delaying the process. They set aside the order and remanded the matter for proper show cause notice service, personal hearing, and adherence to natural justice principles in the fresh adjudication order.
The stay petition and appeal were disposed of accordingly.
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2012 (4) TMI 695
Issues involved: Appeal by revenue against CIT(A) order deleting addition of credit entries in undisclosed bank account.
Summary:
1. The appeal by revenue challenged the CIT(A) order deleting the addition of Rs. 16,26,468 as unexplained cash deposit in an undisclosed bank account.
2. The Assessing Officer made the addition due to lack of explanation from the assessee regarding the cash deposit with ABN Amro Bank.
3. The CIT(A) restricted the peak addition to Rs. 1,95,597 after considering documents submitted by the assessee and the remand report from the Assessing Officer.
4. The CIT(A) found that the assessee failed to explain the sources of cash deposits in the bank account, leading to the peak credit balance being treated as unexplained income.
5. The revenue could not prove that the peak credit assessed by the CIT(A) was incorrect, and the CIT(A) decision was upheld by the Tribunal.
6. The Tribunal confirmed the CIT(A) order, dismissing the revenue's appeal.
This judgment highlights the importance of providing explanations for cash deposits in bank accounts and the application of the peak credit theory in determining unexplained income.
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2012 (4) TMI 694
Issues involved: Interpretation of circular dated 20th January, 2012 in relation to import of goods under section 25 of the Food Safety and Standards Act, 2006.
The High Court of Calcutta, in a case where the petitioner sought to improve the quality of imported goods by removing foreign matter, considered the opposing views presented by the Senior Advocates for the petitioner and the Commissioner of Customs. The petitioner's request was based on a circular dated 20th January, 2012, which allowed for such improvements, while the Commissioner argued that import of such goods was prohibited under section 25 of the Food Safety and Standards Act, 2006. The Advocate for the Authorized Officer of the Food Safety and Standards Authority of India supported the circular, stating it was issued under section 16(5) of the 2006 Act, permitting the removal of foreign matters to enhance the quality of food grains. The Court, relying on the submission of the statutory body, allowed the petitioner to remove the foreign matters within five days, subject to testing by a recognized laboratory and clearance by the Commissioner of Customs within a specified timeframe.
The Court's order granted the petitioner the liberty to improve the quality of the goods by removing foreign matters within a specified timeframe, as supported by the circular and the statutory provisions cited. The order emphasized compliance with testing standards and legal requirements for clearance of the goods by the Commissioner of Customs. The decision was made without prejudice to the rights and contentions of the parties involved, with the provision for further orders if necessary. The advocates were permitted to communicate the gist of the order to the parties, who were directed to act accordingly. Additionally, the Court allowed for the issuance of urgent certified copies of the order to the appearing parties upon request.
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2012 (4) TMI 693
Revision u/s 263 - Held that:- For the purpose of section 263, it is not necessary for the Commissioner of Income-tax to make a final adjudication of the issues. If he finds prima facie that certain relevant aspects of the assessment have not been examined by the assessing authority, which has made the assessment order erroneous and prejudicial to the interests of the Revenue, the Commissioner of Income-tax is within his competence to invoke section 263.
As far as the present case is concerned, the assessment order passed by the assessing authority is a very cryptic order where there is no discussion regarding certain vital issues arising from the assessment.
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2012 (4) TMI 692
The petitioner challenged an order directing payment of balance tax in monthly installments while an appeal was pending. The court directed the appellate authority to expedite the consideration of the stay petition and ordered that coercive recovery proceedings be suspended until a decision is made within one month.
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2012 (4) TMI 691
Issues Involved:
The issues involved in the judgment are related to challenging an order of assessment under the Income Tax Act, specifically regarding the payment of the balance amount due in monthly installments while the matter is pending in appeal before the appellate authority.
Issue 1: Challenge to Ext.P4 Order
The petitioner filed an appeal along with a stay petition against the assessment order under the Income Tax Act. The assessing authority directed the petitioner to pay the balance amount due in monthly installments of `3 crores each. The petitioner contended that it is unjust to pay the balance amount while the matter is pending in appeal.
Details:
- The petitioner argued that they have already paid more than 50% of the tax assessed.
- The petitioner found it arbitrary to be directed to pay the balance amount in installments while the appeal is pending.
- The petitioner challenged the Ext.P4 order, seeking relief from the obligation to pay the balance amount during the pendency of the appeal.
Issue 2: Directions of the Court
The court heard arguments from both parties, including the Standing Counsel representing the Income Tax Department. The court acknowledged the filing of a stay petition by the petitioner before the appellate authority and deemed it appropriate for the appellate authority to expedite the decision on the stay petition.
Details:
- The court directed the appellate authority to consider and pass orders on the stay petition (Ext.P3) expeditiously.
- The appellate authority was instructed to make a decision within one month from the date of receipt of the judgment.
- Until a decision is made on the stay petition, coercive recovery proceedings for the balance amount from the petitioner were ordered to be put on hold.
This judgment highlights the importance of procedural fairness and timely resolution in matters of tax assessment disputes. The court's direction for expeditious consideration of the stay petition reflects a commitment to ensuring justice and preventing undue hardship on the petitioner during the appeal process.
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2012 (4) TMI 690
Provisions of sec.40(a)(ia) - all payments made during the course of the year or it would apply only to the expenditure which remain payable as at the end of relevant year - Held that:- Accordingly, by following the decision rendered by the Special bench referred Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) we hold that the provisions of sec.40(a)(ia) would apply only to the expenditure which remain payable as at the end of the relevant financial year. In the instant case, the entire expenditure has been paid during the course of the previous year and no amount remains payable as at the year end. Accordingly, we set aside the order of CIT(A) on this issue and direct the Assessing Officer to delete both the additions referred.
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2012 (4) TMI 689
Issues involved: Appeal against disallowance u/s 14A read with Rule 8D of IT Rules, 1962 and leviability of interest u/s 234B in respect of assessment u/s 115JB.
Disallowance u/s 14A:
The appeal was regarding disallowance made u/s 14A read with Rule 8D of IT Rules, 1962. The Assessing Officer disallowed an amount with reference to Rule 8D, which was upheld by the CIT (A). The appellant argued for a re-determination of the disallowance based on a decision of the Hon'ble Delhi High Court stating that Rule 8D has no retrospective effect and should not be applicable for the assessment year in question. The Tribunal agreed with the appellant, citing the decision of the Hon'ble Delhi High Court in the case of Maxopp Investment Limited vs. CIT, and directed the matter to be reconsidered by the Assessing Officer in light of this decision. The issue of disallowance u/s 14A was considered allowed for statistical purposes in the specified manner.
Leviability of interest u/s 234B:
The issue of interest u/s 234B in relation to assessment u/s 115JB was also raised. The appellant contended that interest under Section 234B should not be chargeable when subjected to Minimum Alternate Tax (MAT) u/s 115JB, citing a decision of the Hon'ble Supreme Court. However, the Tribunal referred to a different decision of the Hon'ble Supreme Court in the case of JCIT vs. Rolta India Ltd., which held that interest u/s 234B and 234C is payable for failure to pay advance tax in relation to tax payable u/s 115JA/115JB. Consequently, the Tribunal upheld the decision of the CIT (A) regarding the leviability of interest u/s 234B, but directed the Assessing Officer to re-compute the interest on the income after considering the Tribunal's order.
In conclusion, the appeal filed by the assessee was partly allowed for statistical purposes as per the directions provided in the judgment.
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2012 (4) TMI 688
Issues involved: Appeals against orders of Commissioner of Income Tax (Appeals)-I, Surat for assessment year 2005-2006.
ITA No.504/Ahd/2011 (Assessee's appeal):
The only ground of appeal was the confirmation of penalty u/s.271(1)(c) of the Act. The penalty was imposed on the disallowed amount of bad debts. The assessee contended that the disallowed amount represented "late payment charges" incurred in a prior period, and thus, not allowable in the relevant year. The Tribunal noted that all material facts were disclosed by the assessee during assessment, and there was an honest difference of opinion between the assessee and the Revenue. It was held that there was no concealment of income or filing of inaccurate particulars, and thus, the penalty was cancelled.
ITA No.505/Ahd/2011 (Assessee's appeal):
The sole ground of appeal was the confirmation of penalty u/s.271(1)(c) of the Act. The penalty was imposed due to the under-valuation of closing stock of raw material. The assessee argued that the difference in valuation arose from the non-consideration of transportation and octroi expenses. The Tribunal found that the assessee had provided details of the valuation, and the explanation for the difference was bona fide. It was held that the penalty provision did not apply in this case, and thus, the penalty was cancelled.
ITA No.493/Ahd/2010 (Revenue's appeal):
The Revenue's appeal challenged the deletion of penalty u/s.271(1)(c) of the Act for non-deduction of TDS and non-disallowance of an amount u/s.40(a)(ia) of the Act. The disallowance made under Section 40(a)(ia) had become final. The Tribunal noted that necessary particulars were filed by the assessee, including the fact of non-TDS on the disputed amount. It was observed that the disallowance was technical, and there was no mala fide intent on the part of the assessee. The Tribunal upheld the CIT(A)'s decision to cancel the penalty, considering the technical nature of the disallowance and the bona fide explanation provided by the assessee.
In conclusion, the Tribunal allowed the assessee's appeals in ITA No.504/Ahd/2010 and 505/Ahd/2010, while dismissing the Revenue's appeal in ITA No.493/Ahd/2010.
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2012 (4) TMI 687
Issues Involved:
1. Eligibility for claiming exemption u/s 11 of the Income-tax Act, 1961.
2. Confirmation of additions for various Assessment Years.
3. Improper maintenance of books of account.
4. Control and management of the society.
5. Siphoning of excess funds.
6. Receipt of capitation fees.
Summary:
1. Eligibility for claiming exemption u/s 11:
The appeals by the Revenue challenge the orders of the CIT(A) allowing the assessee's claim for exemption u/s 11 of the Income-tax Act, 1961. The CIT(A) had found the capitation fees brought to tax on estimation by the AO fit for deletion based on the facts and circumstances on record. The Revenue argued that the search proceedings clarified that the assessee was not entitled to exemption u/s 11, as the purported cancellation of registration u/s 12AA was subsequent to the date of search and appealed before the Tribunal. The Tribunal had adjudicated allowing the assessee to continue with the registration, which was further challenged by the Revenue before the Hon'ble High Court u/s 260A.
2. Confirmation of additions for various Assessment Years:
The assessee appealed against part confirmation of additions for AYs 2000-01 to 2004-05. The CIT(A) had confirmed unsecured loans of Rs. 30.77 lakhs for AY 2001-02 and Rs. 6 lakhs for AY 2002-03, and purchases of laboratory equipment amounting to Rs. 3,85,865 for AY 2004-05 as bogus. The Tribunal upheld the CIT(A)'s order on these issues, noting the lack of supportive material from the assessee to demolish the stand taken by the AO and CIT(A).
3. Improper maintenance of books of account:
The AO found discrepancies in the maintenance of books of account, such as non-tallying computerized day books and manual cash books, incomplete ledgers, and unrecorded excess money received from students. The Tribunal noted these discrepancies but upheld the CIT(A)'s order allowing exemption u/s 11, as the AO's estimation of capitation fees was based on assumptions and not on specific evidence from the search documents.
4. Control and management of the society:
The society was controlled and managed by the founder and his family members, who were found to have amassed significant wealth through unaccounted money and capitation fees. The Tribunal noted these findings but upheld the CIT(A)'s order allowing exemption u/s 11, as the AO's estimation of capitation fees was not substantiated by specific evidence from the search documents.
5. Siphoning of excess funds:
The search revealed that excess funds collected from students were handed over to the chairman and not deposited in the society's bank account. The Tribunal noted these findings but upheld the CIT(A)'s order allowing exemption u/s 11, as the AO's estimation of capitation fees was based on assumptions and not on specific evidence from the search documents.
6. Receipt of capitation fees:
The AO found evidence of the society collecting capitation fees in excess of the admission fees fixed by the Industries Department, Govt. of Odisha. The Tribunal noted these findings but upheld the CIT(A)'s order allowing exemption u/s 11, as the AO's estimation of capitation fees was based on assumptions and not on specific evidence from the search documents.
Conclusion:
The Tribunal upheld the CIT(A)'s order allowing the assessee's claim for exemption u/s 11, dismissing the Revenue's appeals and allowing the assessee's cross objections. The Tribunal also partly allowed the assessee's appeals for AY 2004-05 by deleting the addition of Rs. 3.86 lakhs for laboratory equipment purchases, while dismissing the appeals for AYs 2001-02 and 2002-03 due to lack of supportive material from the assessee.
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2012 (4) TMI 686
Issues involved:
The case involves a penalty levied u/s 271(1)(c) of the Income-tax Act, 1961 for Assessment Year 2000-01 based on the claim of receiving gifts amounting to Rs. 1,55,000 from various donors.
Assessment Proceedings and Penalty Imposition:
The assessee filed the return of income for AY 2000-01 showing total income of Rs. 1,46,860. Subsequently, it was found that the assessee had received gifts totaling Rs. 1,55,000 from different donors. The Assessing Officer issued a notice u/s 142 to explain the gifts, questioning their genuineness based on previous findings of gifts being treated as bogus in AY 2002-03. The assessee's explanations were considered, but the AO disallowed the gifts, adding the amount to the total income and levying a penalty u/s 271(1)(c) for inaccurate particulars of income.
Confirmation of Penalty by CIT(A) and Tribunal's Decision:
The CIT(A) confirmed the penalty, leading the assessee to appeal before the ITAT. The ITAT referred to a previous case where a similar penalty was deleted based on the gifts being from close relatives and the lack of creditworthiness not justifying penalty imposition. Relying on this precedent, the ITAT deleted the penalty in the current case as well, stating that the gifts, though taxable, did not warrant a penalty u/s 271(1)(c).
Conclusion:
Following the precedent set in a previous case, the ITAT allowed the appeal and deleted the penalty imposed u/s 271(1)(c) for the inaccurate particulars of income related to the gifts received by the assessee.
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2012 (4) TMI 685
Issues Involved:
The judgment involves issues related to disallowance u/s 43B for excise duty and sales tax, disallowance of depreciation, and disallowance u/s 14A.
Disallowance u/s 43B - Excise Duty and Sales Tax:
The appellant contested the disallowance made u/s 43B for excise duty and sales tax. The AO added amounts totaling to &8377; 6650482.00 under this section. The CIT[A] upheld the disallowance, stating that the appellant failed to provide evidence of payment. However, the appellant argued that the liability for excise duty had not arisen as the goods were still in the factory premises. Citing a High Court decision, it was held that provisions of sec 43B did not apply in this case, as the excise duty liability crystallizes only when goods are cleared from the factory premises. The appeal on this ground was allowed, reversing the CIT[A]'s findings.
Disallowance of Depreciation:
Regarding the disallowance of depreciation, the AO added &8377; 3012926.00 as excess depreciation claimed. The CIT[A] upheld this disallowance, stating that the claim of depreciation on intangible assets was contrary to law. However, the appellant argued that the depreciation had been allowed in the initial year and should not be disturbed in subsequent years. Citing a High Court decision, it was held that the depreciation should be allowed as claimed by the appellant. The appeal on this ground was allowed.
Disallowance u/s 14A - Interest Claimed:
The disallowance u/s 14A of &8377; 394537.00 for interest claimed was contested by the appellant. The CIT[A] applied rule 8D, which the appellant argued was prospective and not applicable in this case. It was directed that the AO should decide this issue without applying rule 8D and after giving the assessee an opportunity to explain the source of investments. The appeal on this ground was allowed for statistical purposes.
This judgment highlights the importance of providing evidence for disallowances, the application of relevant legal provisions, and the need for proper assessment of depreciation claims.
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2012 (4) TMI 684
Issues involved: Appeal against deletion of additions on account of deemed dividend u/s 2(22)(e) of the Income Tax Act for Assessment Year 2007-08.
Summary:
1. The revenue filed an appeal against the deletion of additions on account of deemed dividend u/s 2(22)(e) of the Income Tax Act for Assessment Year 2007-08. The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) which deleted the additions of Rs. 1,12,44,952 made by the Assessing Officer.
2. The Commissioner of Income Tax (Appeals) held that only the shareholder can be assessed for deemed dividend u/s 2(22)(e) and not the company. The CIT (A) relied on judgments of the Bombay High Court and Rajasthan High Court to support this view. It was further held that different shareholders cannot be clubbed to fulfill the conditions of Section 2(22)(e).
3. The CIT (A) concluded that the conditions of Section 2(22)(e) were not fulfilled as none of the shareholders held substantial interest in the company. Shareholding of different individuals could not be combined to meet the requirements of the section. The appeal of the assessee was allowed based on this analysis.
4. The Tribunal upheld the order of the CIT (A) stating that the basic conditions of Section 2(22)(e) were not met regarding minimum shareholding by the shareholders. It was reiterated that only the shareholder can be assessed for deemed dividend, not the company.
5. The High Court found no merit in the revenue's appeal as the judgments of the Bombay High Court and Rajasthan High Court were not challenged. The revenue failed to show that the assessee fulfilled the requirements of Section 2(22)(e) for the addition of deemed dividend. The appeal was dismissed as without merit.
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9911796707
