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Showing 141 to 160 of 1070 Records
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2013 (5) TMI 936
Issues involved: Appeal against deletion of addition of unexplained jewelry by AO, interpretation of CBDT Circular 1916, determination of ownership of gold jewelry found during search.
Summary:
Issue 1: Addition of unexplained jewelry by AO
The appeal was filed by the Revenue against the deletion of the addition of Rs. 13,36,977 made by the AO on account of unexplained jewelry found during the search operation. The Assessee, a partner in a construction firm, had gold and diamond jewelry valued at Rs. 98,50,550 found during the search. The Assessee surrendered some jewelry as undisclosed income, while explaining the ownership of the remaining jewelry. The AO added Rs. 13,36,977 to the Assessee's income, which was disputed in an appeal before the Ld. CIT(A).
Issue 2: Interpretation of CBDT Circular 1916
The Assessee argued before the Ld. CIT(A) that as per CBDT Circular 1916, certain quantities of jewelry need not be seized during a search. The Assessee claimed that the family could have possessed 1850 gms of jewelry based on family members' allowances as per the circular. The Ld. CIT(A) accepted the Assessee's explanation, citing the circular and a decision of the Gujarat High Court, and deleted the addition made by the AO.
Issue 3: Determination of ownership of gold jewelry
During the Tribunal hearing, the Revenue contended that the CBDT Circular should not be solely relied upon to treat the jewelry as explained without corroborating evidence. However, the Tribunal upheld the Ld. CIT(A)'s decision, citing the Gujarat High Court's ruling that the circular considers the general quantity of jewelry held by family members. The Tribunal upheld the deletion of the addition of Rs. 13,36,997 as explained jewelry, based on the CBDT Circular 1916.
In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the Ld. CIT(A)'s order treating the jewelry found during the search as explained, in line with the CBDT Circular 1916.
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2013 (5) TMI 935
The Appellate Tribunal ITAT Mumbai dismissed the Revenue's appeal against the CIT (A)-18, Mumbai's order regarding the assessment year 2007-2008. The Tribunal upheld the deletion of additions made by the Assessing Officer, citing a precedent in a similar case. The appeal of the Revenue was dismissed on May 10, 2013.
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2013 (5) TMI 934
Issues involved: Appeal against order allowing depreciation on fixed assets, accumulation of income, carry forward of deficit.
Depreciation on fixed assets:
The department appealed against the allowance of depreciation on fixed assets by the CIT(A) for assessment year 2007-08. The appellant trust claimed depreciation as application of income under section 11(1)(a) of the Income Tax Act to avail exemption. The AO disallowed the claim citing a previous judgment, but the CIT(A) allowed it based on commercial principles and judicial precedents. The Tribunal upheld the CIT(A)'s decision, noting that the department's reliance on a specific case was not applicable to the current scenario. The Tribunal found no reason to interfere with the CIT(A)'s order and rejected the department's appeal on this ground.
Accumulation of income:
Regarding the accumulation of income issue, the AO denied the accumulation as there was no surplus left after the entire income was spent by the trust. The trust argued that there is no legal bar to accumulating income even in case of a deficit. The CIT(A) agreed with the trust, citing relevant legal provisions and court judgments supporting the accumulation of income. The Tribunal upheld the CIT(A)'s decision, emphasizing that the trust was entitled to accumulate income as per the law, and rejected the department's appeal on this ground.
Carry forward of deficit:
The department contested the allowance of carry forward of deficit and set off against subsequent years' income, claiming it would result in double deduction. The CIT(A) allowed the claim based on commercial principles and the decision of the Bombay High Court. The Tribunal upheld the CIT(A)'s decision, stating that adjusting expenses against income in subsequent years is a valid application of income for charitable purposes. Consequently, the Tribunal rejected the department's appeal on this ground as well.
Separate Judgment:
The Tribunal also noted that the assessee had filed a cross objection, which was dismissed as not pressed during the hearing. Ultimately, both the appeal filed by the revenue and the cross objection filed by the assessee were dismissed, affirming the decisions of the CIT(A) on all the issues raised in the appeal.
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2013 (5) TMI 933
Claim of additional depreciation of wind electric generator allowed - As far as application of section 32(1)(iia) of the Act, is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31-3-2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed up to 31-3-2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a wind mill has nothing to do with the power industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in section 32(1)(iia) of the Act.
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2013 (5) TMI 932
Issues Involved:
1. Classification of lease rent as income from other sources or income from house property.
2. Disallowance of proportionate interest payments.
Issue 1: Classification of Lease Rent
The appellant, engaged in trading, declared income with lease rent treated as income from house property. AO classified it as income from other sources due to the property's condition. Ld.CIT(A) ruled in favor of the assessee, considering the land's nature. The Revenue challenged this decision.
The Chennai ITAT and Delhi ITAT decisions were cited, emphasizing land's vastness not determining income source. The Tribunal noted the land's details from the rent agreement, confirming the presence of structures. The lease income was deemed 'income from house property' as per section 22 conditions. The Ld.CIT(A)'s decision was upheld, dismissing Grounds No. 1 & 2.
Issue 2: Disallowance of Proportionate Interest Payments
The AO disallowed a portion of interest payments, citing lack of working capital need and funds usage. Ld.CIT(A) deleted this disallowance, highlighting the excess of interest-free loans over interest-bearing ones. The Revenue contested this decision.
The Tribunal observed the loan details and relied on the Bombay High Court's ruling regarding interest-free funds. It was noted that the AO and Ld.CIT(A) did not address the borrowed funds' utilization for business purposes. The issue was remanded to the AO for further examination. Ground No. 3 was allowed for statistical purposes.
In conclusion, the appeal by the Revenue was partly allowed, with the Tribunal providing detailed reasoning for each issue addressed in the judgment.
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2013 (5) TMI 931
Issues involved: Service Tax demand under Commercial & Industrial Services category, penalty under Section 11 of the Act, pre-deposit for appeal hearing, classification of construction services for Ordnance Factory.
Service Tax Demand and Penalty: The appellant, a service provider registered under Maintenance and Repair services, provided taxable services to Ordnance Factory, Nagpur. Despite being aware of the Departmental law, the appellant did not pay Service Tax on the amount received, leading to a show cause notice and confirmation of Service Tax demand of Rs. 96,191/- along with penalty under Section 78 of the Finance Act, 1994.
Appeal and Pre-deposit: The appellant did not file a reply to the show cause notice and offered to pay the proposed tax amount. The Assistant Commissioner confirmed the Service Tax demand and imposed a penalty. The appeal before the Commissioner (Appeals) required a pre-deposit of the disputed tax amount for hearing, which the appellant failed to deposit, resulting in dismissal of the appeal.
Classification of Construction Services: The construction activity carried out by the appellant for Ordnance Factory was deemed prima facie for industrial purpose and taxable. However, on further examination, it was found that the construction for a non-commercial organization manufacturing products for defense use did not qualify as taxable service under 'Commercial and Industrial Construction Services' u/s the Finance Act. The appellant's registration as a contractor for civil works with the Ordnance Factory and the purpose of the works executed for the Ministry of Defence supported this finding.
Judgment: The construction works by the appellant for Ordnance Factory were not classified as 'Commercial or Industrial Construction Services' under the Finance Act, 1994. Therefore, the demand of tax, penalty, and interest imposed were set aside, and the appeal was allowed along with stay application, granting consequential relief.
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2013 (5) TMI 930
Issues involved:
The appeal challenges the classification of services rendered by the appellant as "clearing and forwarding agency services" for the purpose of service tax.
Summary:
The appellant, M/s. Larsen & Toubro Ltd., Mumbai, was appointed as an agent/distributor by M/s. Larsen & Toubro Komatsu Ltd., Bangalore, to market and sell products manufactured by the latter. The dispute arose when the department classified the services as "clearing and forwarding agency services" and demanded service tax. The Deputy Commissioner confirmed the demands, leading to an appeal by the appellant. The lower appellate authority dismissed the appeal, relying on a previous Tribunal decision. The appellant argued that their activities did not fall under "clearing and forwarding agency services" but rather under Business Auxiliary Service, citing a Tribunal decision in their favor.
The appellant contended that their role was limited to marketing, sales promotion, and collecting payments, without handling the goods directly. The Revenue argued that as a distributor, the appellant would have handled goods, thus falling under "clearing and forwarding agency services." The agreement between the parties referred to the appellant as an exclusive agent for marketing equipment and providing product support, with provisions for agency commissions.
The Tribunal examined the agreement and found that the appellant was appointed as a marketing agent to promote sales, with no indication of clearing and forwarding functions. Relying on the appellant's own case where a Larger Bench overruled a previous decision, the Tribunal held that procuring purchase orders on a commission basis did not constitute "clearing and forwarding agency services" but rather fell under Business Auxiliary Service. Consequently, the impugned order was set aside, and the appeal was allowed.
Separate Judgement:
No separate judgment was delivered by the judges in this case.
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2013 (5) TMI 929
Issues Involved:
The issues involved in the judgment are the assessment of service tax under the heads of "Goods Transport Agency Service" and "Management, Maintenance or Repair."
Assessment under "Goods Transport Agency Service":
The petitioner, part of a group of companies involved in development and construction, appealed against the adjudication order assessing a service tax demand under the head of "Goods Transport Agency Service." The petitioner did not contest this liability during the interlocutory stage.
Assessment under "Management, Maintenance or Repair":
The adjudicating authority found that the provision of "Management, Maintenance or Repair" services by the petitioner before the execution of sale deeds did not constitute a taxable service. It was highlighted that for a service to be taxable, it must be provided by one person to another, and service to oneself is not considered a taxable service. Since the builder retained ownership of the property until the sale deed was executed, the provision of these services did not qualify as a taxable service. The judgment granted a waiver of pre-deposit and stayed further proceedings on the condition that the petitioner remits the assessed Service Tax for Goods Transport Agency Service within a specified time frame.
This summary provides a detailed breakdown of the issues involved in the judgment, along with the key points and decisions made regarding the assessment of service tax under different heads.
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2013 (5) TMI 928
Issues Involved:
The issues involved in the judgment are the liability of the assessee for service tax on Business Auxiliary Service (BAS) provided by an overseas company, the interpretation of the agreement between the parties, and the applicability of Section 66A of the Finance Act, 1994.
Liability for Service Tax on BAS:
The appeal was against an adjudication order confirming a demand of service tax, interest, and penalty u/s 78 of the Finance Act, 1994. The Revenue assumed that the assessee provided BAS to a foreign corporation under an agreement. The adjudicating authority held that the assessee was liable to remit service tax for the taxable service BAS under the reverse charge mechanism of Section 66A of the Act.
Interpretation of the Agreement:
The agreement between the parties involved the overseas company commissioning research and marketing strategies for diamond jewellery in India. The agreement detailed promotional campaigns, marketing activities, and contributions by both parties towards the marketing campaign. The Department submitted advertisements as evidence of BAS provided by the overseas company, focusing on promoting diamond jewellery rather than raw diamonds.
Applicability of Section 66A:
The Revenue and the adjudicating authority concluded that the assessee was the recipient of BAS as defined in the Act based on the agreement and advertisements. The counsel for the assessee argued that the activities could be classified as Intellectual Property Service or Advertising Agency Service, but not BAS. However, the Tribunal held that the service provided by the overseas company constituted BAS u/s 66A of the Act, obligating the assessee to remit service tax on the amounts paid to the foreign corporation.
Separate Judgement:
A separate judgment was not delivered by the judges in this case.
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2013 (5) TMI 927
Issues involved: Determination of liability to pay service tax under the category of "Banking and Financial Services" for leasing machinery and crossing the bar of unjust enrichment for refund claim.
Summary:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Pune, regarding the liability of the appellant, a manufacturer of excisable goods, for service tax on leasing machinery. The department alleged financial leasing of equipment, leading to a service tax demand. The appellant contended that the activity was merely renting out machinery and did not fall under banking and financial services. The refund claim was rejected based on unjust enrichment as the service tax paid was shown as expenses in the books of accounts.
The appellant argued that leasing machinery does not constitute banking and financial services, citing precedents. They also claimed not to have passed on the burden of service tax to the lessee, thus not contravening the provisions of Section 12B of the Central Excise Act, 1944. The appellant sought a stay on the decision.
The Revenue conceded that the activity did not fall under banking and financial services based on Tribunal decisions but contended that the appellant failed to prove non-enrichment as the service tax paid was treated as expenditure in the accounts, making them ineligible for a refund under Section 11B(2) proviso.
The Tribunal agreed that leasing machinery is not a banking and financial service, as supported by precedents. However, regarding unjust enrichment, the appellant's treatment of service tax as expenses in the accounts indicated passing on the tax burden. As per Section 11B and Finance Act, 1994, the burden of proof lies with the assessee to show non-passing of tax incidence. Consequently, the refund claim rejection was upheld, but since service tax was not applicable, the refund amount was directed to be credited to the Consumer Welfare Fund. The appeal was disposed of accordingly.
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2013 (5) TMI 926
Issues: Assessment of liability to Service Tax on works contract services u/s 65(105)(zzza) - Interpretation of legislative provisions and Board Circular dated 24-5-2010.
The judgment pertains to appeals filed by the assessee against adjudication orders assessing liability to Service Tax on works contract services. The petitioner had entered into an agreement with the State Govt. for embankment works along Nagavali river to prevent inundation. The adjudicating authority classified the service as a taxable works contract, leading to tax assessment, interest, and penalties. The petitioner contended that the services provided do not fall under the definition of works contract as per Section 65(105)(zzza), citing the Board's clarification dated 24-5-2010.
The definition of works contract includes contracts where property transfer in goods is taxable as sale of goods for executing turnkey projects, excluding EPC projects. The petitioner argued that their services should not be considered works contracts based on this definition and the Board Circular. They contended that turnkey projects should be interpreted as projects other than those excluded from other taxable services like commercial or industrial construction services, as per the Board Circular dated 24-5-2010.
The Board Circular was issued to address disputes on the applicability of Service Tax on various activities, clarifying the scope of taxable services. The Court noted that the Circular's purpose was to resolve disputes related to specific activities like shifting cables underground during road renovation, indicating that the Circular's context must be considered. It emphasized that Circulars should not be equated to statutes.
The petitioner further argued that services related to core governmental activities like agriculture, irrigation, and public works should be excluded from the works contract definition. They claimed that even though their activities did not fall under specific services, the legislative intent suggests that services related to such governmental works should be excluded from the works contract definition.
The Court acknowledged the need to consider whether exclusions from the works contract definition can be inferred from other taxable services definitions and whether the term "turnkey projects" should be narrowly interpreted. It granted a waiver of pre-deposit and stay of further proceedings, subject to the petitioner remitting 50% of the assessed Service Tax within a specified time frame. Failure to comply would result in the waiver being dissolved and the appeal rejected.
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2013 (5) TMI 925
Issues Involved:
1. Validity of Reassessment Proceedings u/s 147.
2. Entitlement to Deduction u/s 10B.
3. Computation of Deduction u/s 10B.
4. Allowability of Additional Depreciation on Windmills.
Summary:
1. Validity of Reassessment Proceedings u/s 147:
The revenue's initiation of reassessment proceedings was challenged on the grounds that no new information had come to the AO's possession. The Tribunal upheld the CIT(A)'s decision, stating that the fact that the assessee was extracting iron ore from its mine and purchasing iron ore was already available on record. The AO's action was deemed a mere change of opinion, not justifying reassessment proceedings u/s 147. Consequently, the initiation of reassessment proceedings was held invalid, and ground No.2 raised by the revenue was dismissed.
2. Entitlement to Deduction u/s 10B:
The AO's contention that the assessee was not entitled to deduction u/s 10B because the purchase of iron ore fines did not undergo any process was rejected. The Tribunal affirmed the CIT(A)'s findings that the assessee was engaged in the manufacture or production of iron ore, including the processing of purchased ROM into iron ore fines and lumps. The AO's presumption that the assessee purchased iron ore fines and not ROM was found to be without basis. The Tribunal upheld the CIT(A)'s decision to allow the deduction u/s 10B, dismissing grounds No.2 to 5 raised by the revenue.
3. Computation of Deduction u/s 10B:
The AO excluded travelling expenses and supervision charges incurred in foreign currency from the export turnover, thereby reducing the deduction u/s 10B. The CIT(A) held that whatever is excluded from export turnover should also be excluded from total turnover, relying on the decision of the Special Bench of the ITAT in Sak Soft 313 ITR 353 (AT). The Tribunal, referencing the Karnataka High Court's decision in Tata Elxsi Ltd. 349 ITR 98 (Kar), affirmed the CIT(A)'s approach, dismissing ground No.6 raised by the revenue.
4. Allowability of Additional Depreciation on Windmills:
The AO disallowed additional depreciation on windmills, arguing it was not admissible under Sec.32(1)(ii) of the Act. The CIT(A), relying on the Madras High Court decision in CIT v. VTM Ltd., 319 ITR 336 (Mad), directed the AO to allow the additional depreciation. The Tribunal upheld the CIT(A)'s decision, noting that the mere claim in the return was sufficient compliance with the requirements of law, and dismissed ground No.7 raised by the revenue.
Conclusion:
All the appeals by the revenue were dismissed, affirming the CIT(A)'s decisions on all issues. The judgment was pronounced in the open court on May 31, 2013.
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2013 (5) TMI 924
Issues:
The issues involved in this case are the interpretation of provisions of Section 124 of the Customs Act, 1962, and the requirement of magisterial permission for conducting an enquiry under the Customs Act.
Interpretation of Section 124 of the Customs Act:
The appellant, represented by Mr. Bharadwaj, challenged an order preventing them from taking steps under Section 124 of the Customs Act, which allows for the issuance of show cause notices before confiscation of goods. The respondent, represented by Mr. Biswas, argued that all offences under the Customs Act are non-cognizable, necessitating magisterial permission before initiating an enquiry. He cited the case of Om Prakash v. Union of India to support this contention. However, it was emphasized that the provisions of Section 155 of the Code of Criminal Procedure should not automatically apply, and the powers granted to Customs Officers under Chapter XIII of the Customs Act should not be curtailed.
Magisterial Permission for Enquiry under Customs Act:
Mr. Bharadwaj asserted that magisterial intervention is not required during the investigation stage, citing the case of Union of India v. Padam Narain Aggarwal. The judgment highlighted the powers of Customs Officers under Sections 107-109, specifically focusing on Section 108 which empowers officers to summon individuals, with the obligation to state the truth. It was clarified that magisterial intervention is not envisaged under this section, as the objective is for the officer to elicit the truth from the person being examined. The judgment emphasized that statements recorded under Section 108 are distinct from those recorded by Police Officers during investigations under the Code of Criminal Procedure.
Conclusion:
The High Court held that the trial Court erred in preventing the appellant/Revenue from utilizing the provisions of Section 124 of the Customs Act. Therefore, the order impeding the appellant was set aside, and the appeal was allowed, granting the appellant the right to proceed with enforcement under Section 124.
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2013 (5) TMI 923
Issues involved: Appeal against rejection of registration under section 12A of the Income Tax Act 1961.
Summary:
The appellant, a trust established for religious purposes, appealed against the rejection of its registration under section 12A of the Income Tax Act 1961 by the Commissioner of Income Tax, Coimbatore. The main ground for refusal of registration was that the trust's activity of interest-free lending to businessmen/women of the Bohra community was not considered a religious activity by the Commissioner. The appellant contended that such lending was in line with its religious objectives, specifically the concept of 'Qardan Hasana'. The Tribunal noted that similar registrations had been granted to trusts with similar activities in Kolkata and Mysore. The Tribunal found that the appellant's lending activities were indeed in conformity with its religious objectives and upheld the appellant's entitlement to registration under section 12AA of the Act.
In the case before the Tribunal, the appellant's trust deed outlined various religious objectives, including promoting the religion of Islam among the Dawoodi Bohras, supporting religious education, and facilitating religious activities and infrastructure development. The trust's application for registration under section 12A was initially rejected by the Commissioner of Income Tax, Coimbatore, on the grounds that the interest-free lending activities of the trust did not qualify as religious activities. The Tribunal, after considering the trust's activities and the precedents set by similar cases, concluded that the trust's lending practices were indeed religious in nature, aligning with the principles of 'Qardan Hasana' as per Islamic teachings followed by the Bohra community. The Tribunal highlighted that previous decisions and court rulings supported the registration of trusts engaging in similar activities, emphasizing the religious nature of the trust's objectives.
The appellant presented a comprehensive paper book containing relevant documents, including the trust deed, orders under section 12AA for trusts in Kolkata and Mysore, and judgments from previous cases. The Tribunal reviewed the documents and arguments presented by both parties, ultimately ruling in favor of the appellant. The Tribunal's decision, delivered on May 7, 2013, in Chennai, allowed the appeal and granted the appellant registration under section 12AA of the Income Tax Act 1961.
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2013 (5) TMI 922
Netting of Interest income and expenditure - Deduction u/s 10AA/10A- The assessee has raised grounds in regard to treating the FDs kept as margin money with Bank against credit facilities as income from other sources instead of income from business and not netting such interest against interest payment to Banks, for calculation of deduction under Section 10AA & 10A.
HELD THAT:- Interest income and expenditure income has to be netted of, if there is a nexus. Netting of interest is allowed and AO is directed to compute the net income of interest or expenditure. If after netting of interest it is found that interest income is more than the interest expenditure then the surplus income has to be treated as income from other sources, otherwise no deduction is to be made while calculating deduction under Section 10AA/10A.
Decision in the case of M/S ACG ASSOCIATED CAPSULES PVT. LTD. (FORMERLY M/S ASSOCIATED CAPSULES PVT. LTD.) & OTHERS VERSUS THE COMMISSIONER OF INCOME TAX, CENTRAL-IV, MUMBAI & OTHERS [2012 (2) TMI 101 - SUPREME COURT], relied upon.
"Services" under IT Act and SEZ Act - Deduction u/s 10AA - The AO disallowed the deduction under Section 10AA by observing that the exemption claimed u/s. 10AA is applicable only for manufacturing unit as per the Act, whereas the assessee was involved in trading activities in Surat SEZ areas. Income Tax Act defines "service' essentially as professional and technical services. The assessee has done simple trading and, therefore, on trading activity deduction under Section 10AA is not allowable. Assessee claimed that SEZ Act section 2(z) defines "services' to include tradable services. - HELD THAT: - According to Section 51 of the SEZ Act, it has been provided that the provision of SEZ Act will override the provision of Income Tax Act. Trading done by the assessee is a service and, therefore, deduction u/s 10AA is allowable.
Decision in the case of DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2 VERSUS GOENKA DIAMOND & JEWELLERS LTD. [2012 (3) TMI 258 - ITAT JAIPUR], relied upon.
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2013 (5) TMI 921
Penalty - Survey - It has been stated by the assessing officer that despite ample opportunities having been provided to the assessee, he could not produce the books of accounts and supporting material - Held that: - I am satisfied that the penalty has wrongly been deleted by the Tax Board for the reason that (i) no books of accounts, bills, builty and vouchers were found/produced during the course of survey ; (ii) despite adequate opportunity having been granted not only at the time of survey but thereafter neither bills, builty, vouchers and books of accounts and other supporting documents relating to excess goods were produced ; (iii) there is clear-cut confessional statement of partner of the respondent-firm admitting about the excess stock of the goods; (iv) two witnesses were also present at the time of survey and in their presence physical stock was taken and the value of excess goods was admitted by the respondent; and (v) even before the DC (A) neither the bills, builty, vouchers nor books of accounts were produced and there is a categorical finding of the DC (A) that there is no violation of rule 50.
It is very relevant here to observe that while order of imposing the penalty was passed on January 19, 2004, the appeal was decided on March 22, 2007 therefore, during the intervening period of almost about three years, no action whatsoever was taken by the respondent about pressurizing tactics/coercion by the assessing officer, during the course of survey and filing an affidavit is merely for the sake of filing of an affidavit - Decided against the assessee.
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2013 (5) TMI 920
Bail application - Held that:- Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.
Taking note of all these aspects, without expressing any opinion on the merits of the case and also with regard to the claim of the CBI and the defence, we are of the opinion that the appellant cannot be released at this stage, however, we direct the CBI to complete the investigation and file charge sheet(s) as early as possible preferably within a period of four months from today. Thereafter, the appellant is free to renew his prayer for bail before the trial Court and if any such petition is filed, the trial Court is free to consider the prayer for bail independently on its own merits without being influenced by dismissal of the present appeal.
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2013 (5) TMI 919
Issues involved:
The primary dispute in this case relates to the nature of interest income earned from bank FDs and the eligibility for deduction under Section 80P(2)(a)(vi) of the Income Tax Act, 1961.
Issue 1: Nature of interest income and eligibility for deduction under Section 80P(2)(a)(vi) of the Act
The appellant declared interest income from bank FDs as business income eligible for deduction under Section 80P(2)(a)(vi) of the Act. However, the Assessing Officer and CIT(A) treated the interest income as income from other sources, denying the deduction. The appellant argued that the FDs were made to obtain bank guarantees for securing contracts from Government bodies, citing relevant case law. The Tribunal referred to similar cases where interest income on security deposits for securing contracts was treated as business income. The Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to reevaluate whether the interest income should be assessed as business income or income from other sources based on the purpose of the FDs.
Issue 2: Penalty under Section 271(1)(c) of the Act
The Revenue appealed against the cancellation of penalty imposed under Section 271(1)(c) of the Act due to furnishing inaccurate particulars of income related to the interest income from FDs. The penalty was imposed based on the Assessing Officer's decision that the interest income was assessable as income from other sources. The CIT(A) deleted the penalty following a Tribunal decision in the assessee's favor. However, since the Tribunal recalled the previous order and remanded the issue back to the Assessing Officer, the penalty was deemed unsustainable. The Assessing Officer was given the discretion to initiate penalty proceedings if necessary after reevaluation of the interest income.
In conclusion, the appeal of the assessee regarding the nature of interest income and deduction eligibility was allowed for reconsideration by the Assessing Officer, while the Revenue's appeal against the penalty imposition was dismissed due to the remand of the underlying issue.
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2013 (5) TMI 918
Issues involved: Appeal against penalty u/s 271(1)(c) of the Income Tax Act, 1961 for assessment year 2005-06.
Facts: The appellant, a construction company, filed a return of income declaring &8377;49,150, later revised to &8377;26,19,192 after scrutiny assessment. The Assessing Officer added &8377;8,92,790 on account of sundry creditors, leading to penalty imposition u/s 271(1)(c) of &8377;3,26,695, upheld by CIT(A) and challenged in the appeal.
Assessee's Argument: The appellant submitted bills and work details of creditors to the Assessing Officer, disputing the penalty imposition. It was argued that lack of satisfaction with explanation doesn't warrant penalty. Reference was made to a case law suggesting no penalty for additions made under deeming Sections like Section 68 of the Act.
Revenue's Argument: The Revenue contended that penalty was rightly imposed as the income particulars were found incorrect u/s 271(1)(c) of the Act.
Judgment: The Assessing Officer deemed three creditors' balances as in-genuine due to unsatisfactory explanation by the assessee. For two creditors, lack of substantiation led to addition under Section 68, but no evidence of falsity was found. Thus, penalty on these balances was deemed untenable and directed to be deleted. However, for the third creditor, verification revealed false credit balance, justifying the penalty imposition under Section 271(1)(c) of the Act. The appeal was partly allowed, affirming the penalty on the third creditor while deleting it for the other two.
Conclusion: The appeal was partly allowed, with the penalty upheld for one creditor and deleted for the other two.
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2013 (5) TMI 917
Issues Involved:
The issue involves the penalty under Section 78(5) of the Rajasthan Sales Tax Act, 1994 for leaving a declaration form partly blank, leading to a dispute between the petitioner department and the respondent-assessee.
Summary:
The revision petition was filed by the petitioner department challenging the order of the Tax Board affirming the Deputy Commissioner (Appeals) decision to delete the penalty under Section 78(5) of the Act amounting to Rs. 2,08,257. The dispute arose when a declaration form ST/18/A was found partly blank during a vehicle check, leading to the imposition of the penalty by the assessing officer.
The respondent-assessee contended that the omission of the date column was inadvertent and all other material particulars were duly filled, making the form complete. The Deputy Commissioner (Appeals) and the Tax Board both upheld this argument, stating that the form was complete as all relevant documents were produced and only one column was left blank.
The petitioner department relied on a judgment of the Hon'ble Apex Court, arguing that all material particulars must be filled and the omission of even one column constitutes a violation. However, the Court analyzed the judgment and concluded that in this case, filling in columns like quality, weight, description of goods, and value was crucial, and the omission of the date column did not warrant a penalty.
Both the Tax Board and the Deputy Commissioner (Appeals) found the bills to be genuine and no evidence of forgery or fabrication was present. Therefore, the Court dismissed the revision petition, stating that no illegality or irregularity was committed in deleting the penalty.
In conclusion, the Court upheld the decision to delete the penalty under Section 78(5) of the Act, emphasizing that the omission of the date column did not render the declaration form incomplete in this particular case.
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9911796707
