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Showing 141 to 160 of 920 Records
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2020 (4) TMI 780
Entitlement for deduction of interest expenditure - deduction of the interest expenditure in respect of the amounts advanced by to 5 parties - HELD THAT:- As the amount that was recoverable by the assessee during the year under consideration from the party Aristo Shelters Pvt. Ltd.had no nexus with the interest bearing funds which were borrowed by the assessee from the banks, therefore, on the said count itself no disallowance of any interest expenditure pertaining to the said amount was called for under Sec. 36(1)(iii). Appeal of the assessee is allowed for statistical purposes.
As the assessee had advanced the loan to M/s Aristo Shelters Pvt. Ltd. on interest, therefore, no disallowance of any part of the interest expenditure in respect of the said interest bearing advance could have been validly made in the hands of the assessee. As such, we direct the A.O to vacate the disallowance of the interest expenditure.
Additional ground before the appellate authorities - Amounts advanced by the assessee to the remaining 4 parties - CIT(A) being of the view that the assessee had in its return of income as well as in the course of the the assessment proceedings claimed deduction of the interest expenditure under Sec.57 (iii) therefore, it was disentitled from raising the claim for deduction of the aforesaid amount under Sec. 36(1)(iii) - HELD THAT:- We are unable to persuade ourselves to subscribe to the same - assessee had raised a claim for deduction under Sec. 36(1)(iii), based on the facts which were already available on record, therefore, the CIT(A) was well within his jurisdiction to have adjudicated upon the same. CIT(A) had summarily scrapped the aforesaid claim of the assessee, for the reason, that the same was raised for the very first time before him. See Pruthvi Brokers and Shareholders Pvt. ltd [2012 (7) TMI 158 - BOMBAY HIGH COURT]observed that assesses is entitled to raise an additional ground before the appellate authorities not merely in terms of legal submissions, but also additional claims to wit claims which were not made in the return of income filed by it. Accordingly, we are of the considered view that the CIT(A) ought to have considered the assesse‟s claim for deduction of the interest expenditure under Sec.36(1)(iii) of the Act, specifically, when the same was being raised on the basis of the facts which were already available on record - No declining on the part of the CIT(A) to consider the assesse‟s claim for deduction under Sec. 36(1)(iii).
Entitlement for deduction of the interest expenditure under Sec. 36(1)(iii) - CIT(A) had summarily rejected the assesse‟s entitlement for claim of deduction under Sec.36(1)(iii), therefore, there was no occasion for him to adjudicate upon the maintainability of such claim on merits. Accordingly, we are of the considered view that in all fairness the matter requires to be restored to the CIT(A), with a direction to verify the assesses entitlement for claim of deduction under Sec. 36(1)(iii) for remaining 4 parties. Appeal of the assessee is allowed for statistical purposes.
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2020 (4) TMI 779
Capital gains on sale of rights to a flat - STCG or LTCG - period of holding - Transfer u/s 2(47) - letter issued by the builder which recognizes the right of the assessee in the said property and the builder agree to reserve the property for allotment subject to certain stipulations and conditions including payment terms - HELD THAT:- Upon perusal of the terms, we find that the said letter create right in favor of the assessee to get the allotment of the property in his name subject to certain terms and conditions as agreed upon between the assessee and the builder.
The assessee has acquired certain rights of allotment in a specific property. These rights were created in assessee’s favor, by the letter of builder issued on 14/10/2006. The subsequent letter dated 25/11/2006 as well as premises ownership agreement was nothing but improvement in the said rights of the assessee which were already created vide letter dated 14/10/2006. The assessee has sold these rights vide agreement dated 18/09/2010. Therefore, what was acquired by the assessee and what has ultimately been sold by the assessee is pari-materia the same.
This being the case, there would be no occasion to consider the date of acquisition of the said right as 22/06/2010. The assessee, in our opinion, acquired the right on 14/10/2006 which was ultimately sold on 18/09/2010. Therefore, since the holding period of the same is more than 36 months, the resultant gains would be long-term capital gains in nature.
Benefits of indexation would be available since financial year 2006-07.
Alternative claim as made by the assessee u/s 54F - AR submitted that the assessee’s deduction claim would fall u/s 54F and not u/s 54 since what has been sold is merely a certain right in the property. We find that the said facts were brought to the notice of Ld. CIT(A) also. Therefore, the alternative claim as made by the assessee u/s 54F would be admissible. The Ld. AO is directed to verify assessee’s claim u/s 54F and recompute the income in terms of this order.
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2020 (4) TMI 778
Reopening of assessment - assessment after 04 years - whether any new material or information so as to hold that the assessee has failed to disclose fully and truly all the facts necessary for assessment ? - audit objections - Transfer as per Section 2(47) of the Act while making treatment of its capital asset i.e. land of Cinema Hall into stock in trade of the business of selling of shops u/s 45(2) - HELD THAT:- Bare reading of the assessment order dated 3-12-2010 does not reveal that any enquiry was conducted by the AO on the issue of nature of income arising from the arrangement of development of commercial complex after demolition of Cinema Hall Building on the land in question.
CIT(A) has decided this issue by presuming the fact that reassessment proceedings were initiated on the basis of re-appreciation of the same set of facts available on record and is nothing but merely change of opinion whereas the facts regarding the audit objections pointing out certain facts based on the enquiry as well as the enquiry conducted by the AO by issuing notices u/s 133(6) of the Act were not considered by the ld. CIT(A). Therefore, ignoring the relevant facts which are necessary to arrive to the conclusion whether subsequent enquiry and audit objection would constitute a tangible material to form the belief that income assessable to tax has escaped assessment, would render the impugned order of the ld. CIT(A) as not sustainable. Accordingly we set aside this issue to the record of the ld. CIT(A) to re-adjudicate the same after considering the audit objection as well as enquiry conducted by the AO by issuing notices u/s 133(6) of the Act. Ground No. 1 and 2 of the Revenue are allowed for Statistical purposes.
Addition u/s 45(2) - conversion of capital asset into stock in trade - assessee was having the business assets in the form of Cinema Hall and was engaged in exhibiting the films then the decision taken by the assessee to discontinue the earlier business by dismantling the cinema hall building and converting the land use for development of commercial complex amounts to conversion of capital asset into stock in trade - Addition deleted by the ld. CIT(A) - HELD THAT:- It was a case of conversion of business asset into stock in trade and thereby the profit on sale of the said land and shops / offices contains two components of income i.e. one is capital gain on account of conversion of capital asset into stock in trade u/s 45(2) of the Act and another is business income on account of sale of stock in trade. The computation of capital account would be based on the consideration being fair market price as on the date of conversion being in the year 2001 though the same will be assessed to tax in the year under consideration when the assessee has finally sold the stock in trade. Therefore, the said finding of the ld. CIT(A) is contrary to the undisputed material facts of discontinue the existing business of exhibiting films in the cinema hall, demolition of cinema hall building and conversion of land use to commercial complex for sale constitute a positive act on the part of the assessee to establish the conversion of capital asset into stock in trade.
We find that even if it is presumed for the sake of argument that the assessee company has acquired the land on dissolution of the partnership firm, the same does not fall in the modes of acquisition as specified u/s 49(1) so as to deem the cost of acquisition of the asset in the hands of the previous owner of the property. However, without going into the merit of the issue, we note that this fact was not at all brought into the notice of the authorities below and therefore, for the purpose of computing the capital gain the actual date of acquisition is required to be determined by considering all these facts as well as claim of the assessee.
Indexed cost of acquisition - AO has not disturbed the indexed cost of acquisition as claimed by the assessee, however, it is a matter of fact that as per Development Agreement the assessee has claimed to have acquired the land in the year 1995. When this is part and parcel of subject matter of assessment of capital gains which is the subject matter of the appeal filed by the Revenue then the issue of computation of capital gains is required to be decided based on true and correct facts. Since we have already set aside the issue of reopening to the record of the ld. CIT(A), therefore, this issue is also set aside to the record of the ld. CIT(A) and consequently the ld. CIT(A) is directed to compute the capital gains by taking the correct indexed cost of acquisition. Ground No. 3 of the Revenue is partly allowed for Statistical purposes.
Non Service of notice issued u/s 148 - HELD THAT:- As far as the issuance of notice is concerned, the same is not in dispute when the AO has issued the said notice and sent the same through Regd.Post on 31-03-2015. Only dispute is regarding service of notice. Parties have taken their respective stands on this issue. However, there is no dispute that the assessee in response to said notice has filed the return of income and also participated in the reassessment proceedings, therefore, the issue has to be decided after considering the provisions of Section 292BB of the Act. Since the ld. CIT(A) has not adjudicated upon both these issues, therefore, the grounds raised by the assessee in the C.O. are set aside to the record of the ld. CIT(A) for adjudication after providing adequate opportunity of hearing to the assessee
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2020 (4) TMI 777
Condonation of delay - contention of the assessee is that the delay occurred due to negligence of the advocate - HELD THAT:- Delay deserves to be condoned as for the mistake of advocate, the justice should not be deprived of. Accordingly, we condone the delay subject of cost of ₹ 10,000/- to be deposited in the account of Central Government.
CIT-A not affording reasonable opportunity of being heard while adjudicating the appeal in an exparte manner - pendency of application for transfer of case records to Mumbai being reasonable and sufficient cause for nonattendance - HELD THAT:- Commissioner of Income tax(A) did not afford reasonable opportunity and pass the order in an ex-parte manner. CIT(A) did not consider the facts and circumstances of the case viz. closure of Bhopal office and pendency of application for transfer of case records to Mumbai being reasonable and sufficient cause for nonattendance.
CIT(A) did not consider the fact that business was closed due to losses and audited balance sheet and profit & loss account were placed on record along with certain details and relevant records such as purchase bills, stock registers showing quantitative details, bills and vouchers etc. could not be produced because they were shifted to Mumbai due to closure of office at Bhopal as there being no proper communication from the counsel of the assessee, such records could not be produced. In view of these facts and in the interest of justice, the present matter deserves to be reconsidered at the level of the Ld.
CIT(A) who will afford reasonable opportunity of being heard to the assessee and the assessee is also directed to cooperate with the Ld. CIT(A) by filing the relevant evidences and written submissions in support of the claim. Accordingly, we set aside the order of the Ld. CIT(A) and the grounds raised in the assessee’s appeal are allowed for statistical purposes only.
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2020 (4) TMI 776
TP Adjustment - selection of comparable - HELD THAT:- Assessee is into providing software development services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Operating profit estimation - HELD THAT:- Directions of the DRP directing considering foreign exchange fluctuation gain as part of the operating profit of the Assessee is without merit as the law by now is well settled that foreign exchange gain has to be regarded as part of operating profit as held in the case of Electronics for imaging India Pvt.Ltd. Vs. DCIT [2017 (7) TMI 1335 - ITAT BANGALORE].
Deduction u/s.10A on the profits derived from its Software Technology Parks of India (STPI) - HELD THAT:- Taking into consideration the decision rendered by the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that the CIT(A) was justified in excluding expenses both from export turnover and total turnover. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us. Moreover, the order of the Hon’ble Karnataka High Court has been upheld by the Hon’ble Supreme Court in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT]. The grounds are decided accordingly.
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2020 (4) TMI 775
Addition on account of payment of undisclosed commission - onus of explaining the seized document - addition based on some computer generated loose sheets which was seized and found from the computer - HELD THAT:- It is also an admitted fact that name of the assessee nowhere appeared in the said document albeit the name of Smt. Vineeta Chaurasia that she has entered into an agreement for sale of commercial property in Vasant Square Mall has been mentioned. Apart from that, the aforesaid finding of the Ld. CIT(A) that this addition cannot be made in the hands of the assessee for the reason that, firstly, the name of the assessee is not mentioned in the seized document; secondly, there is no corroborative evidence or any statement that the payment has been received by the assessee other than cheque amount as entered in the sale agreement; and lastly, on the bare perusal of the document it cannot be inferred or concluded that seized document belongs to or has any nexus with the assessee.
Once on exactly same seized document the Hon’ble High Court VINITA CHAURASIA [2017 (5) TMI 992 - DELHI HIGH COURT] has decided this issue that this document does not belong to Mrs. Vineet Chaurasia nor any adverse inference can be drawn, therefore, in the case of the assessee whose name is not even was mentioned in the seized documents, no addition can be made. Accordingly, the said addition is deleted and the order of the Ld. CIT(A) is confirmed. - Decided in favour of assessee.
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2020 (4) TMI 774
Valuation of certain items imported under two contracts - inclusion of the price of drawings, design etc. - imports were made in connection with modernisation, expansion and modification for their plant at Durgapur in West Bengal - main case of the appellant is that these two cases involved importation of turnkey projects and the entire contract value have to be treated as the transaction value for the purpose of charging customs duty - appellant’s case in substance is that on a composite reading of Section 14 of the Act, Rules 4 and 9(1)(e) of the 1988 Rules, the price of drawings, design etc., should be added to the invoice value of the imported equipments, as those intangible items formed an integral part of the arrangement agreed upon between the two consortia and SAIL - Stand of the respondent, on the other hand is that those items related to post importation activities of SAIL in India for implementation of their project.
HELD THAT:- The provisions of Rule 9 (1) (e) cannot be automatically applied to every import which has surface features of a turnkey contract. Just because different components of a contract or multiple contracts give the shape of turnkey project to the imported items, without specific finding on existence of “condition” as contemplated in clause 9 (1) (e), value of all these components could not be added to arrive at the assessable value. Such an exercise would go against the provisions of Interpretative Note to Rule 4, which is part of the Valuation Rules in view of the provisions of Rule 12 thereof.
In the present appeal, involving two import consignments, the authorities of First Instance and the Appellate Authority proceeded on the basis that since all the scheduled items formed part of the same contract and were linked with activities at post-import stage with the imported equipments, the provisions of Section 9 (1) (e) could be invoked. Such reasoning infers subsistence of conditions for awarding post-importation work to the overseas consortia or makes import of both sets of items otherwise interdependent - the stand of SAIL was consistent that the subject drawings and specifications did not relate to the equipments imported and was meant for post importation activities and there was no condition laid down that the import of the equipments were to be supplemented by post-importation work.
Appeal dismissed - decided against appellant.
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2020 (4) TMI 773
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - scope of the term NBFC - existence of debt and dispute or not - time limitation - HELD THAT:- The RBI, i.e. financial service regulator has granted the certificate of registration to carry on the business of Non-Banking Financial Institution in 1998 - the respondent has intentionally deceived the applicant while executing the KYC Form. Now he cannot escape from his liability by raising an objection of NBFC. It can be said that though the respondent is an NBFC, however, without ignoring the fact that the respondent himself entered into the transaction with the Applicant in the capacity of a Private Limited Company. Thus, in regard to the transaction under consideration the respondent falls under the definition of Corporate Debtor and cannot fall under the shell of the term 'NBFC.
Pre-existing dipsute or not - HELD THAT:- It is seen in the delivery report filed by the Applicant that the Demand notice under section 8 of IBC, 2016 was delivered on 16-3-2018 and the respondent has replied on 5-4-2018. Giving a notice of pendency of application under section 9 of the Arbitration and Conciliation Act, 1996 by the respondent after 10 days from receipt of demand notice, does not hit section 8(2) of IBC, 2016. Thus, the dispute raised by the respondent is patently feeble legal argument unsupported by evidence on the basis of pending application under section 9 of the Arbitration and Conciliation Act, 1996, for an interim measure without establishing that an amount of ₹ 63,31,706.09/- is due to the respondent.
Time limitation - HELD THAT:- In accordance with section 238 of the IBC, 2016, the provisions of the Code have overriding effect on the Arbitration and Conciliation Act, 1996. The Registered Office of the Corporate Debtor is situated in Jaipur and therefore this Tribunal has jurisdiction to entertain and try this Application. The matter is within the purview of Law of Limitation.
Application admitted - moratorium declared.
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2020 (4) TMI 772
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- In the instant case, there was no final, clear or crystallised debt or demand till the time of the notice and the same was disputed and subject to reconciliation/adjustment, as per the Agreement itself - In the instant case the Respondent has not only opposed the Demand Notice but raised a bona fide dispute which arises from the Agreement between the two parties and which requires to be adjudicated, which is in progress in an Italian Court, and for which this Tribunal is not the forum, apart from the fact that the amounts in question themselves remain to be reconciled.
Hence, since an undisputed clear debt at the time of sending the Demand Notice under the Code or alleging a default by the Petitioner is a sine qua non for initiating proceedings under section 9 of the Code, and whereas there was also a pre-existing dispute over the final amount payable, and also with part payment being made, which makes this a mere recovery proceeding, the Petition is liable to be dismissed on all these scores as well.
Petition dismissed.
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2020 (4) TMI 771
Territorial Jurisdiction - transfer of subordinate officers from Shillong to Itanagar - power of judicial review - case of respondent is that the impugned order of transfer has been issued in clear breach of the declared Transfer Policy and is mala fide - HELD THAT:- Transfer or posting of an employee is an incident of service. He cannot insist on his transfer at a place of his choice by raising the argument of discrimination by citing the example of others. Moreover, in the present case, the respondent has throughout his service career of 30 years remained in Shillong or nearby areas. Therefore, such argument of discrimination, even otherwise has no force. The Tribunal has quashed the order of transfer singularly on consideration of the fact that the petitioner was due to retire after a period of about 2 years. However, as per record, date of birth of the petitioner being 30.05.1962, he was due to retire on 30.05.2022. Counting from the date of the order of transfer dated 14.08.2019, the respondent was left with over 2 years and 9 months before retirement. The stipulation of the policy that employees who were left with 2 years or less service should normally be considered for being given a choice posting, would therefore not be attracted to the case of the respondent.
In view of the law enunciated by the Supreme Court by catena of judicial pronouncements, the power of judicial review even in the matter of transfer, can be exercised by the High Court or the Tribunal within the defined parameters. We may in this connection cite the decided case law of the Supreme Court as to what are the limitations on the scope of interference of the Supreme Court in the matters of transfer of a Government employee.
The Central Administrative Tribunal, while interfering with the order of transfer in the present case, has exceeded its jurisdiction, and erred in law in quashing the order of transfer - Petition allowed.
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2020 (4) TMI 770
Condonation of delay for more than seven years - HELD THAT:- As the impugned order has been passed by the learned Commissioner (Appeals) in 2011 and received by the appellant in 2011 itself and the same has not been brought in the knowledge of the Hon’ble High Court - As no appeal was pending against the impugned order, therefore, we are unable to entertain the applications for condonation of delay filed by the appellant which are highly time barred, therefore, the applications for condonation of delay are dismissed.
Application for condonation of delay is dismissed - appeal dismissed.
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2020 (4) TMI 769
Time limitation for delivery of goods in case of inter-state sale - benefit of Section 6(2) of CST Act, 1956 - delivery of the respective goods from a carrier when the goods are delivered to a carrier for transmission in course of inter-state sale - validity of two circulars bearing S.No.115B dated 16th September, 1997 and S.No.1132A dated 15th April, 1998, which sought to impose a time limit on retention of goods in the carrier’s godown, beyond which time the revenue was to treat obtaining of constructive delivery of the goods involved - High Court quashed these Circulars.
HELD THAT:- The respondent in this case had taken benefit of sub-section (2) on the ground that this was a case involving inter-state sale and the sale took place by way of transfer of documents of title of such goods during their movement from one State to another. It is also the respondents’ case that the requisite forms and certificates were duly furnished pertaining to such sales. On the part of the State, barring retention of the goods in the transporters’ godown at the destination point for a long period of time, default on no other count by the assesses has been asserted - In the two appeals in which the respondent is Bombay Machinery Stores, sales pertained to financial years before the circulars came into subsistence. In these instances of sales, the Commercial Tax officer in the respective orders treated retention of goods beyond 30 days in the transporters’ godown as the cut-off period. After that date, the assessee was deemed to have had taken constructive delivery of goods and sale beyond that period within the State of Rajasthan was held to be local sales and subjected to sales tax under the State Law.
As per the aforesaid circulars, retention of goods by the transporter beyond the time stipulated therein (being 30 days as per the later circular) would imply that constructive delivery of the goods has been made by the transporter to the consignee. In such a situation, the transit status of the goods would stand terminated and the deeming provision in first explanation to Section 3 of the 1956 Act conceiving the time-point of delivery as termination of movement shall cease to operate.
Sub-clause (1) of the said provision specifies when the goods shall be deemed to be in course of transit and sub-clause (3) thereof lays down the conditions for termination of transit. That condition is an acknowledgment to the buyer or his agent by the carrier that he holds the goods on his behalf. There is no material to suggest such an acknowledgment was made by the independent transporter in these appeals. In such circumstances we do not think the decision of the High Court requires any interference.
In the case of Arjan Dass Gupta [1979 (8) TMI 194 - DELHI HIGH COURT] principle akin to constructive delivery was expounded and we have quoted the relevant passage from that decision earlier in this judgment. In our opinion, however, such construction would not be proper to interpret the provisions of Section 3 of the 1956 Act. A legal fiction is created in first explanation to that Section. That fiction is that the movement of goods, from one State to another shall terminate, where the good have been delivered to a carrier for transmission, at the time of when delivery is taken from such carrier. There is no concept of constructive delivery either express or implied in the said provision - the interpretation of the Division Bench of the Delhi High Court given in the case of Arjan Dass Gupta does not lays down correct position of law.
In the event, the authorities felt any assessee or dealer was taking unintended benefit under the aforesaid provisions of the 1956 Act, then the proper course would be legislative amendment. The Tax Administration Authorities cannot give their own interpretation to legislative provisions on the basis of their own perception of trade practise. This administrative exercise, in effect, would result in supplying words to legislative provisions, as if to cure omissions of the legislature.
The judgements of High Court upheld - appeals dismissed.
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2020 (4) TMI 768
Maintainability of petition - efficacious remedy of filing an appeal - Validity of reassessment order - validity of rectification order passed by the prescribed authority - KVAT Act - HELD THAT:- When an alternative and efficacious remedy is provided under the Act, such a remedy requires to be exercised by the party first. However, that does not mean that the jurisdiction of the Writ Court is unavailable but while exercising the jurisdiction, the Writ Court would necessarily have to indicate as to why it is entertaining a writ petition, not withstanding, the availability of an alternative or efficacious remedy to a party. Unfortunately, even after having noticed the preliminary objection regarding maintainability of the writ petition, the court has proceeded to frame the question on merits. This aspect of the matter in the impugned order passed by the learned Single Judge, we find as being erroneous.
In order to enable the writ Court to exercise its jurisdiction, it would first have to answer the availability of an alternative and efficacious remedy and as to why it intends to exercise the writ jurisdiction - In the absence of the same, consideration of the matter on any other ground, would not be sustainable, since the preliminary objection of the State has not been answered. There are no hesitation to hold that the writ Court could not have entertained the matter in view of an alternative remedy available under Section 62 of the Karnataka Value Added Tax Act, 2003.
There are no good ground to interfere - appeal dismissed.
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2020 (4) TMI 767
Validity of proceedings - duplication of entire proceedings - KVAT Act, 2003 - HELD THAT:- The re-assessments have already been concluded for the period April to July 2009, it is only with respect to that time period, the proceedings are required to be quashed and not the remaining period also.
The order of the learned Single Judge is partly set aside. The proceedings are set aside only for the period between April to July 2009. The proceedings shall go on so far as the remaining period is concerned - appeal allowed.
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2020 (4) TMI 766
Breach of trust - accusations against petitioners are that petitioners have floated a Company and have acted in violation of the terms of the employment - HELD THAT:- There is no dispute with regard to the fact that petitioners were employed by respondent No.2 and as on the date of tendering their resignation, accused No.1 was holding the position of Director – Solution and accused No.2 was holding the position of Director – Sales and Marketing. There is also no dispute that petitioners were bound by the undertaking given by them to respondent No.2 - The accusation against petitioners is that in violation of the aforesaid terms and conditions, they floated a Company by name M/s. Sun Telematics Private Limited and thereby committed breach of trust. The records produced along with charge-sheet indicate that the said Company was incorporated on 28.5.2013. But there is no material to show that during their service under respondent No.2, petitioners had commenced any operations in the name of the Company floated by them. The documents produced before this Court indicate that Form ‘C’ – Registration Certificate of Establishment was obtained on 26.2.2014 and Value Added Tax Registration Certificate was issued on 19.9.2013 indicating that the actual operations had commenced only after the resignation of petitioners from respondent No.2–Company.
It is only when a property entrusted to accused has been dishonestly misappropriated or converted to his own use, the accused can be held culpable for the offence under Section 405 of IPC. In the instant case, there are no allegations whatsoever that either at the time of employment or at the time of resignation, any property was entrusted to petitioners. Though in the complaint it was alleged that the software belonging to respondent No.2 was stolen and the same was made use of to procure rival business, but the material referred above clearly indicates that even the title or right to the said software vested with the Smart comm and not with respondent No.2. That apart, there is no allegation whatsoever in the charge-sheet that petitioners herein have committed any theft of such a software - in the absence of any material to show that either during the employment or any time subsequent thereto, any properties which has been entrusted to petitioners have been converted to their own use, provisions of Section 405 of IPC do not get attracted to the facts of this case.
Since the facts of the case do not make out the ingredients of the offences under Sections 406 and 408 of IPC, the prosecution of petitioners for the alleged offence is illegal and cannot be sustained. For the said reasons, the petition is allowed.
Petition allowed - decided in favor of petitioner.
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2020 (4) TMI 765
Addition u/s 68 - unexplained cash credit - onus to prove - HELD THAT:- Under Section 68, the onus is on the assessee to offer explanation where any sum is found credited in the books of account and where the assessee fails to prove to the satisfaction of the Assessing Officer, the source and nature of the amount of cash credits an inference may be drawn that the credit entries represent income taxable in the hands of the assessee. This does not however absolve the responsibility of the Assessing Officer to prove that the cash credits constitute the income of the assessee. The onus on the assessee has to be understood with reference to the facts of each case and if the prima facie inference on the basis of facts is that the assessee's explanation is probable, the onus shifts to the Revenue.
Once the assessee has proved the identity of its creditors, the genuineness of the transactions and the creditworthiness of the creditors vis-a-vis the transactions which it had with the creditors, the burden stands discharged and the burden then shifts to the Revenue to show that the amount in question actually belong to, or was owned by the assessee himself.
In a case where the integrity of the creditors is established and the entries are shown to be not fictitious, the burden would shift on the Revenue.
In the case at hand, the partners have shown the agricultural income in their personal returns of the past years which had been accepted by the department as such.
The partners are all identifiable and separately assessed to tax. The source of investment having been explained, in the event the Assessing Officer was not satisfied the addition could have been considered in the hands of the partners and not in the hands of the firm. The burden of proving the source of the credits having been sufficiently explained the addition could not have been made in the hands of the firm in the facts of the present case. - Decided in favour of assessee.
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2020 (4) TMI 764
Stay petition - given the present COVID-19 pandemic in the country, the Hon’ble Supreme Court directed that, no recovery measures to be taken by revenue authorities including Income Tax authorities - petitioner submits that, the petitioner should be allowed to operate bank accounts as, the recovery notice issued by the Income Tax authorities directs blanket stay operation of such bank accounts - HELD THAT:- The petitioners suffered an order of assessment in the year 2019. The petitioners preferred an appeal against such order of assessment. There is a stay petition pending also. The revenue authorities issued recovery notice on March 5, 2020 - revenue authorities received the recovery amount from the concerned banks. All these measures took place prior to the order dated March 20, 2020 passed by the Hon’ble Supreme Court. Therefore, the order of attachment on the bank account of the petitioners therein are lifted as the revenue received the demanded amount.
It is clarified that this order is an interim measure given the COVID-19 pandemic situation in the country. The appellate authority is at liberty to dispose of the appeal of the petitioner in accordance with law, as expeditiously as possible. None of the observations made herein will prejudice any of the parties in the pending appeal.
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2020 (4) TMI 763
Stay petition - recovery proceedings - petitioners submits that, since the petitioners are retired, they are facing undue hardship by reason of the notice of recovery issued by the revenue authorities - revenue authorities have received a sum in excess of ₹ 2 lakhs already from the bank account of the petitioner while the amount of demand is ₹ 10 lakhs - HELD THAT:- The amount of demand of the revenue authorities therein is a sum in excess of ₹ 12 lakhs.
There subsists an order dated March 20, 2020 passed by the Hon’ble Supreme Court directing the revenue authorities not to initiate any recovery proceedings during the subsistence of the COVID-19 pandemic - interest of justice would be subserved by directing the banks of the petitioners to allow the petitioners to operate the bank accounts subject to the bankers’ of the petitioner setting apart a sum of ₹ 5 lakhs.
Such sum of ₹ 5 lakhs, the Court is informed, is lying in one of the bank accounts of such petitioner. Such banker will keep a sum of ₹ 5 lakhs in a separate interest bearing fixed deposit account with it. Such deposit will abide by the result of the appeal of such petitioner. The bankers of the petitioner of such petition thereafter will permit the petitioner to operate his bank accounts in accordance with law. There will be stay of the order of attachment of the bank accounts subject to compliance of the aforementioned conditions.
So far as the other writ petitioner a sum of ₹ 2 lakhs has already been paid by the banker of such petitioner to the revenue authorities, it would be appropriate to permit such petitioner to operate his bank account. The order of attachment issued by the revenue authorities against such bank account of the petitioner is stayed.
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2020 (4) TMI 762
Recovery proceedings - stay applications - Addition u/s 68 - genuineness of the transaction and creditworthiness of the investors/loan depositors - HELD THAT:- The present matter is not a case of mechanical reliance on circulars/office memorandums. It is a case where proof of identity of the loan depositors, capacity of the creditors to advance loans and genuineness of transaction is in serious dispute. Further, this Court finds that the stay application has been decided on merits and all the submissions made hereinabove by the petitioner have been considered by the statutory authorities below.
Undoubtedly, as held by the Supreme Court in LG Electronics (India) Pvt. Ltd. [2018 (7) TMI 1905 - SC ORDER] it is open to the statutory authorities to grant relief to deposit an amount lesser than twenty per cent if the facts of the case so warrant. However, on the facts of the present case, as determined by the Assessing Officer, a prima facie case is not made out and such a relief is not warranted.
Consequently, the present writ petition and application being bereft of merits are dismissed. However, respondent No. 3 is directed to decide the appeal filed by the petitioner within thirty days from the date the Lockdown ends.
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2020 (4) TMI 761
Correct head of income - gain on sale of building - ‘long term capital gains’ or ‘business income’ - HELD THAT:- Except last nine years, the property which comprises land and building was let out by the assessee for a long period. The assessee had earned income by way of rent and rental income so received by the assessee was offered for taxation as income from the house property. The assessee has shown the property in question as capital asset in its balance sheet - there is no material on record to hold that the aforesaid property was converted by the assessee as an item of stock in trade. On the other hand, the said property was treated as capital asset. It has further been held that merely because the assessee is engaged in the construction business is not a ground that land and building should be treated as part of stock in trade.
It is also pertinent to note that the assessee has not claimed any depreciation in any of the Assessment Years while offering rental income as house property income.
Thus, the income from the sale of property has been treated as long term capital gain. The aforesaid finding of fact is based on meticulous appreciation of evidence on record and in substance is a finding of fact. - Decided in favour of assessee.
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