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Showing 141 to 160 of 902 Records
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2009 (8) TMI 1165
The Bombay High Court upheld the Tribunal's decision that profit from Transferable Development Rights (TDR) should be treated as capital gain and not assessable to tax. The appeal was dismissed as no substantial question of law was found.
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2009 (8) TMI 1164
Issues involved: Determination of annual rateable value for property tax, computation of income from house property under different sections of the Act.
Issue 1: Determination of annual rateable value for property tax
The Tribunal remanded the matter to the assessing officer to decide the annual rateable value based on municipal authorities' assessment and actual rent received by the assessee. However, the assessing officer maintained the same view, leading to an appeal to the Tribunal. The Tribunal upheld the assessing officer's decision, which was deemed to exceed the scope of the initial remand order.
Issue 2: Computation of income from house property under different sections of the Act
The Tribunal failed to consider relevant judgments, including those of M.V. Sonawala v/s. CIT and CIT v/s. J.K. Investors (Bombay) Ltd. The Tribunal was also not apprised of the order in CIT v/s. Akshay Textiles Trading & Agencies P. Ltd. Due to inconsistencies in the orders, the impugned order was set aside, and the matter was remanded to the assessing officer for reconsideration in light of the aforementioned judgments. The calculation of annual rateable value was to be based on the value determined by the municipal authorities, with other legal interpretations left open.
Separate Judgement:
In Income Tax Appeal Nos.759 of 2008 and 866 of 2008, the impugned order was set aside based on the reasons outlined in Income Tax Appeal No.758 of 2008, and the matter was remanded to the assessing officer for further action.
All the petitions were disposed of accordingly, with no order as to costs.
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2009 (8) TMI 1163
Constitutional validity of certain provisions of the Kerala Stamp Act, 1959, which were introduced by way of an amendment by the Finance Act, 2007 - scope of works contract.
Held that: - there is no reason for the third petitioner to include those conditions, if he is only a works contractor. Those conditions would show that the third petitioner is more than a works contractor. A close reading of Ext.P2 would show that the third petitioner is not at all a works contractor. Yet another relevant fact is that it was the third petitioner who obtained the building permit from Kakkanad Panchayat, under the Kerala Municipality Building Rules, 1999, which were extended by the Government to the said Panchayat's area also. So, it is the responsibility of the third petitioner under the said Rules to build the apartments in accordance with the conditions of the building permit and also in compliance with the relevant Rules. Therefore, the third petitioner is not a works contractor.
If the veil is lifted, it is clear that the builder is building and selling flats to prospective buyers and the sale consideration is received in instalments. But, agreements are made to appear the transaction to be one of works contract. If it is a works contract and the owner is constructing a building in his property, no duty can be levied on the building constructed because no transfer takes place.
A legislation cannot be invalidated by simply saying that its provisions are arbitrary, unless the challenge is referable to specific violation of any constitutional provision. The payment or the liability to pay stamp duty will not, in any way, affect the rights of the first petitioner or its members to carry on the business of development of lands or building flats.
Petition dismissed - decided against petitioner.
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2009 (8) TMI 1162
The High Court of Allahabad dismissed an appeal under section 260A of the IT Act regarding deduction of interest on additional levy sugar price under the Levy Sugar Price Equalization Fund Act, 1976, as it did not raise any substantial question of law. The decision was based on a previous judgment in I.T.R.176 of 1988 - Commissioner of Income tax Lucknow Vs. M/s Dhampur Sugar Mills Limited, Bijnor.
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2009 (8) TMI 1161
The Appellate Tribunal CESTAT Chennai ruled that the petitioner had paid a significant portion of the service tax demand and cenvat credit disallowed. The tribunal accepted this payment as sufficient for compliance with Section 35F of the Central Excise Act, 1944, and waived the predeposit of the remaining balance, including interest and penalties, during the appeal process.
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2009 (8) TMI 1160
Issues involved: Stay of demand collection, claim of exemption u/s 10(26AAB) of the Act.
Stay of demand collection: The appeals were filed against the order of the Commissioner of Income Tax (Appeals) for the assessment years 2005-06 and 2006-07. The assessee sought a stay of demand collection, citing that the issue raised was covered by a previous order of the bench. The Departmental Representative had no objection to the cases being taken up on a priority basis instead of granting the stay.
Claim of exemption u/s 10(26AAB) of the Act: The core issue raised by the assessee was regarding the claim of exemption under Section 10(26AAB) of the Act. It was argued that the amendment to this section is clarificatory and retroactive in nature based on the Finance Minister's statements during the parliamentary debate. The bench had previously held that the income of Agricultural Market Committees is exempt under Section 10(26AAB) of the Act, and this decision was cited to support the assessee's claim. The bench reversed the tax authorities' orders and ruled that the income of the assessees is exempt from tax due to the retroactive operation of Section 10(26AAB) of the Act.
Conclusion: The appeals were partly allowed, and the stay applications were rejected based on the decision regarding the exemption u/s 10(26AAB). Other issues raised by the assessee were not considered in light of the decision on the legal issue. The orders passed by the tax authorities were reversed, and the Assessing Officer was directed accordingly.
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2009 (8) TMI 1159
The High Court of Bombay upheld the deletion of penalty under Section 271(1)(c) of the Income Tax Act. The Tribunal and Commissioner of Income Tax (A) found that no penalty should be imposed when facts are consistent with both concealed and non-concealed income. The appeal was dismissed with no costs.
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2009 (8) TMI 1158
Issues involved: Appeal against CIT(A) orders on exemption u/s 10(23)(iiiab) of IT Act on government grants received by assessee society.
Summary:
Issue 1: Interpretation of "wholly and substantially financed by the Government" u/s 10(23C)(iiiab)
The Tribunal considered whether the word "substantial" in section 10(23C)(iiiab) means financing to the extent of 90% as contended by the revenue or if 2/3rd of the expenditure financed by the Government would be considered substantial as held by CIT(A). The Tribunal noted that the term "substantial" is not defined in the Income-tax Act, but based on dictionary meaning, it signifies being considerable or mainly financed by the Government. Referring to the Supreme Court's interpretation in Santosh Hazari Vs Purushotham Tiwari, the Tribunal emphasized that a substantial question of law arises where there is room for difference of opinion, indicating that a considerable amount of financing by the Government would meet the criteria of section 10(23C)(iiiab).
Issue 2: Application of "substantial interest" in other legal provisions
The Tribunal drew parallels with other legal provisions like Banking Regulation Act, 1949 and explanation to section 40A(2)(a) of the IT Act, where "substantial interest" is defined based on specific thresholds such as beneficial interest exceeding 10% or voting power not less than 20%. Applying this analogy, the Tribunal found that in the case at hand, the Government's financing substantially covered the revenue deficit of the educational institution, justifying the CIT(A)'s decision that the institution was substantially financed by the Government. The Tribunal also noted that the High Court had previously upheld a similar decision by the ITAT, further supporting the conclusion that the institution qualified for exemption u/s 10(23C)(iiiab).
Conclusion:
Given the similarity of facts and issues, the Tribunal upheld the CIT(A)'s decision that the assessee was entitled to exemption u/s 10(23C)(iiiab) of the IT Act, dismissing the appeals filed by the revenue.
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2009 (8) TMI 1157
Depreciation on goodwill - consequential claim on WDV - exchange ratio for amalgamation - Claim denied as value of the asset is not a depreciable one - HELD THAT:- We are of the view that the assessee has not established that it has acquired any rights of either commercial or business nature while valuing the goodwill. It is a balancing figure at the time of amalgamation and the focus of the entire valuation report is on fair exchange ratio for merger and allotment of shares of the amalgamated company to the shareholders of the amalgamating companies. Since there are no business or commercial rights involved in paying the amount and the goodwill is being a balancing amount in the scheme of amalgamation after the fair value arrived at for merger of the companies, the facts of the case do fall within the propositions laid by the Hon'ble Tribunal in the case of Bharatbhai J. Vyas v. ITO [2005 (8) TMI 279 - ITAT AHMEDABAD-C].
In the present case the goodwill simpliciter is valued at ₹ 3,05,91,000 and there were no business or commercial rights involved in that goodwill accounted by the assessee. In view of this while agreeing with the principle laid down in the abovesaid case that goodwill simpliciter is not eligible for depreciation we are not in agreement with the proposition laid down by the learned counsel that the amount accounted for by the assessee can be bifurcated into goodwill simpliciter at ₹ 50 lakhs and the balance for other commercial rights. Since no commercial rights are said to have been acquired by the assessee company under the scheme of amalgamation, we are not persuaded by the submissions of the learned counsel.
Moreover in the provisions of s. 32(1)(ii) while mentioning the various intangible assets specifically and also mentioning business or commercial rights of similar nature, the legislature has specifically excluded the word 'goodwill' because it cannot be considered as a commercial or business right. Moreover, as rightly considered by the AO this goodwill is not purchased from any other person but has been acquired in the course of amalgamation in assessee's own books of account as a balancing figure for the assets acquired and the price paid. In view of these provisions, it is very clear that goodwill simpliciter cannot be considered for allowance of depreciation.
In view of this we are in agreement with the orders of the AO and the CIT(A) on this issue and hold that assessee's claim of depreciation on goodwill cannot be allowed on the facts of the case. Accordingly ground No. 1 in all the years is rejected.
Deduction u/s 80IA - Set off of losses and unabsorbed depreciation of the units carried forward - assessee claimed deduction under s. 80-IA on profits from Unit 3 and Unit 4 without setting off unabsorbed depreciation/losses whereas the other two units were under losses - HELD THAT:- This issue is crystallised by the decision of the Hon'ble Supreme Court in the case of IPCA Laboratory Ltd. [2004 (3) TMI 9 - SUPREME COURT] wherein it was held that s. 80-IB has an overriding effect on all other sections in Chapter VI-A. It is now settled law that while computing gross total income necessary set off has to be given to the unabsorbed depreciation while computing income under the head the business or profession and the brought forward losses while arriving at the gross total income. In view of this, the contentions of the assessee cannot be accepted and the orders of the AO and the CIT(A) on this issue arc upheld. Accordingly ground No. 2 in all the appeals is rejected.
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2009 (8) TMI 1156
Issues involved: Interpretation of the term "Motor Lorries" for the purpose of depreciation under the Income-tax Rules.
Summary:
The Department appealed against the Tribunal's decision to allow the assessee's claim for depreciation of earth moving equipment, specifically a JCB, at a rate of 40%. The Assessing Officer had granted depreciation at 25%, arguing that a JCB does not fall under the category of "Motor Buses, Motor Lorries, Motor Taxis" eligible for the higher rate. The Tribunal, citing relevant case laws, held that JCB, being a registered motor vehicle used for excavation and transport of goods, qualifies as a "motor lorry" under the Income-tax Rules. The Tribunal's decision was based on the broad interpretation of the term "motor lorry" to include vehicles used for both transport and excavation purposes. The Court agreed with the Tribunal's reasoning, emphasizing that as long as a vehicle is registered under the Motor Vehicles Act, it qualifies as a motor vehicle for depreciation purposes. The Court found that the principle applied by the Gujarat High Court in a similar case was applicable here, as the JCB was functionally used as a motor vehicle for transporting goods over limited distances. Consequently, the Court upheld the Tribunal's decision, dismissing the appeal filed by the Department.
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2009 (8) TMI 1155
Issues involved: Appeal against levy of penalty u/s 271(1)(c) for alleged concealment of income.
Summary:
1. The assessee filed a return declaring income with agriculture income. Assessment treated part of agriculture income as income from other sources. Penalty u/s 271(1)(c) was levied and confirmed by CIT(A) based on Supreme Court decision.
2. Assessee argued that no willful act to conceal income was shown, provided evidence of agriculture income. Tribunal cited similar cases where willful act is essential for penalty u/s 271(1)(c).
3. Tribunal noted CIT(A) decision in a similar case where penalty was canceled due to lack of willful concealment. Tribunal found no concealment or inaccurate particulars, canceled penalty, and allowed the appeal.
4. Tribunal observed that the addition to income was based on estimation, with no evidence of willful concealment. Penalty under section 271(1)(c) cannot be levied solely on estimation differences. Penalty was deleted, and the appeal was allowed.
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2009 (8) TMI 1154
Penalty u/s 271(1)(c) - Addition of Short term capital gain under the head “Professional Development Expenses - Disallowance of expenses and under the head “Professional Development Expenses” and under the head Advertisement - Tribunal has set aside the penalty order stating that there was no concealment of income or furnishing of inaccurate particulars - HELD THAT:- Where the assessee has disclosed all material facts in regard to the claim made, the onus placed upon the assessee stood discharged. In the instant case, the assessee had disclosed all the particulars of income. AO disallowed the expenses claimed on the ground that they were not incurred for the business purpose of the assessee and that they have been claimed against exempted income.
Thus, it cannot be held that the assessee has filed inaccurate particulars of income or had concealed its income. Thus, the penalty cannot be levied for this reason also. We also observe that the expenses claimed by the assessee have not been found by the AO as bogus or false.
Thus, the genuineness of the expenses incurred by the assessee has not been doubted by the AO and, therefore, the penalty cannot be levied on the assessee still further, the assessee explained that it was due to genuine mistake that it omitted to show the capital gain on the sale of six cars and that as soon as it was pointed out, the same was accepted by the assessee.
In this context, assessee, by referring to the order of Suresh Chand Mittal, [2001 (6) TMI 63 - SC ORDER] submitted that it has been held that where the department has not discharged its burden of proving concealment and has simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith, the penalty could not be imposed. Hence, for the reasons given in the foregoing, we set aside the order of the CIT (A) and the Assessing Officer and delete the penalty - Decided in favour of assesee.
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2009 (8) TMI 1152
The Appellate Tribunal CESTAT Ahmedabad decided the stay petitions. M/s. Aisatic Gases Limited deposited Rs. 13,43,745 out of confirmed duty of Rs. 19,68,302. Other appellants also made deposits. The Tribunal considered these deposits sufficient under Section 35F and waived the pre-deposit of the balance amount. All three stay petitions were disposed of accordingly.
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2009 (8) TMI 1151
Issues Involved:
1. Disallowance of expenditure and salary/interest paid to partners.
2. Legality of assessment u/s 144 instead of u/s 143(3).
3. Addition u/s 69A.
4. Enhancement of income by CIT(A).
Summary:
1. Disallowance of Expenditure and Salary/Interest to Partners:
The assessee contested the disallowance of Rs. 5,64,626 out of expenditure and the disallowance of salary and interest paid to partners. The Tribunal upheld the disallowance of salary and interest to partners under s. 184(5) of the IT Act, noting that the assessee failed to rebut the non-compliances listed in the assessment order. However, it clarified that the partners could seek deletion of the disallowed amounts from their taxable incomes under s. 184(5) r/w s. 28(v).
2. Legality of Assessment u/s 144:
The assessee argued that the assessment should have been completed under s. 143(3) instead of s. 144. The Tribunal found no merit in this ground, noting that the assessment under s. 144 was justified due to the assessee's non-compliance with notices. The Tribunal emphasized that s. 144 does not grant unbridled powers to the AO, who must act objectively.
3. Addition u/s 69A:
The assessee challenged the addition of Rs. 8,22,724 under s. 69A, arguing that no separate addition could be made following the rejection of accounts under s. 145(3). The Tribunal rejected this argument, stating that the deeming provisions of s. 68 or s. 69A could still apply. The Tribunal confirmed the addition, noting that the assessee failed to provide any cogent explanation or evidence.
4. Enhancement of Income by CIT(A):
The CIT(A) enhanced the income by Rs. 28,26,484 under s. 40A(3) due to unproved purchases from three suppliers. The Tribunal examined the facts and found that the purchases were either not made or made in cash, leading to the presumption of cash payments. However, the Tribunal noted that the Revenue failed to prove that the payments exceeded Rs. 20,000 each, a necessary condition for invoking s. 40A(3). Consequently, the Tribunal held that the provision could not be invoked and the enhancement was not justified.
Conclusion:
The Tribunal partly allowed the assessee's appeal, confirming some disallowances and additions while rejecting others due to lack of sufficient evidence or failure to meet statutory conditions.
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2009 (8) TMI 1150
Withdrawal of registration granted u/s 12AA(1)(b)(ii) - nature of the constitution of the trust is purely a family affair and not a public charitable trust - HELD THAT:- Ld counsel of the assessee has filed the copy of acknowledgement of return of income for the AY's 2005-06 and 2006-07 along with audit report for the year ending 31st March, 2005 and 31st March, 2006. It is pointed out that from the perusal of the same, no activities are carried out by the trust. Merely, all the trustees are family members, it does not mean that trust is not a public trust. This proposition finds support from the decision of Hon'ble Supreme Court in the case of Deoki Nandan v. Murlidhar & Ors.[1956 (10) TMI 35 - SUPREME COURT].As a matter of fact the trust is genuine and because of this, the ld Director of IT (Exemption) granted the exemption u/s 12AA. There is no finding or allegation in the impugned order that activities carried out by the trust are not in accordance with the objects of the trust or institution. Merely because the assessee has not carried out any activities, that does not mean that the trust has totally stopped the activity forever.
In our considered opinion, the ld Director of IT (Exemption) has not made out a case justifying cancellation of the registration granted u/s 12AA. We, therefore, set aside the impugned order of the Director of IT (Exemption). we allow the appeal of the assessee.
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2009 (8) TMI 1149
Whether the appellant entitled to continue in possession over the government land under his unauthorised occupation on payment of ₹ 15,50,000/- (being the market value of the land, determined by the Court, as on the date of the order), as compensation, within 2 months from the date of its order?
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2009 (8) TMI 1148
Issues involved: The judgment involves a revision under Section 11 of the U.P. Trade Tax Act against the penalty imposed under Section 15-A(1)(o) of the Act for the assessment year 1998-99.
Details of the Judgment:
1. Background and Inspection: The applicant, a registered dealer engaged in the manufacture and sale of exempted cloths, faced a penalty under Section 15-A(1)(o) of the Act due to an inspection at a check post where certain documents were found to be missing. The applicant claimed to be a 100% export-oriented unit and explained the procurement of Glacial Acetic Acid, a raw material, from M/s. Dhampur Alco Chem. Ltd., New Delhi. Despite producing some documents, the goods were detained, leading to the penalty proceedings.
2. Contentions and Proceedings: The applicant argued that there was no intent to evade tax as evidenced by the advance payment made for the acid, the nature of their manufacturing business, and the submission of necessary documents post the show cause notice. The Tribunal had accepted the books of account and disclosed turnover, indicating compliance. However, the assessing authority and the Tribunal upheld the penalty.
3. Court's Analysis and Decision: The Court noted the pre-payment made by the applicant, submission of relevant documents, and the acceptance of books of account by the Tribunal. It emphasized that no attempt to evade tax was evident, as the goods were raw materials for exempted goods and proper documentation was provided. Citing precedent, the Court held that penalty under Section 15-A(1)(o) cannot be levied without proving an attempt to evade tax. Consequently, the Court set aside the Tribunal's order and quashed the penalty under Section 15-A(1)(o) of the Act.
4. Conclusion: The Court allowed the revision, emphasizing that no case of tax evasion was established, leading to the annulment of the penalty imposed under Section 15-A(1)(o) of the U.P. Trade Tax Act for the assessment year 1998-99.
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2009 (8) TMI 1147
Issues involved: Appeal against appellate Commissioner's order, jurisdiction under Section 128 of the Customs Act, remand to original authority, unjust enrichment, application of mind by appellate Commissioner.
Jurisdiction under Section 128 of the Customs Act:
The appeal before the Appellate Tribunal CESTAT MUMBAI was against the appellate Commissioner's order-in-appeal. It was noted that the appellate Commissioner had exceeded his jurisdiction under Section 128 of the Customs Act by remanding the case to the original authority. Both the Revenue's learned DR and the assessee's counsel agreed that the Commissioner should have decided the appeals on merits instead of remanding the case.
Unjust Enrichment Issue:
The Commissioner (Appeals) had passed an open remand order directing the lower authority to decide on grounds of unjust enrichment. The order highlighted that the amount claimed as refund had not been charged to any revenue expenses or reflected as depreciation in the Company's Profit and Loss account. It was also mentioned that the bar of unjust enrichment did not apply to the appellant, and the burden of duty was not passed on to their customers. However, the Tribunal found contradictions and inconsistencies in the Commissioner's order, leading to a remand for a fresh decision on all issues with better application of mind.
Application of Mind by Appellate Commissioner:
The Tribunal observed that the appellate Commissioner's order contained contradictions and inconsistencies, necessitating a remand for a fresh decision with better application of mind. The impugned order was set aside, and the appeals were allowed by way of remand, ensuring that the appellants would be given a reasonable opportunity to be heard.
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2009 (8) TMI 1146
Issues Involved:
Multiple writ petitions filed for quashing orders and reassessment proceedings u/s 21(2) of U.P. Trade Tax Act for various Assessment Years.
Writ Petition No. 493 (Tax)/06 and 494 of 2006:
Petitioner, a commission agent, purchased paddy on behalf of Ex U.P. Principals. Admitted tax liability on some purchases but claimed exemption on others. Additional Commissioner granted permission for reassessment without providing reasons. Court held lack of reasoning renders the order unsustainable. Citing precedent, the order was set aside, along with consequential reassessment notices.
Writ Petition No. 613 (Tax) of 2006:
Similar to above, sought quashing of order and reassessment proceedings for the Assessment Year 1999-2000 (U.P.). Order lacked reasons, leading to its setting aside by the Court.
Writ Petition No. 328 (Tax) of 2007 and Writ Petition No. 318 (Tax) of 2007:
Initially filed to challenge orders and reassessment for the Assessment Year 2000-01. Subsequently, reassessment orders dated 14.3.2007 were challenged. Court set aside these reassessment orders as well.
Writ Petition No. 394 (Tax) of 2007:
Filed to quash order and reassessment proceedings for the Assessment Year 1999-2000. Lack of reasons in the order led to its setting aside by the Court.
Writ Petition No. 395 (Tax) of 2007:
Challenged order and reassessment proceedings for multiple Assessment Years. Court set aside the order due to absence of reasons provided by the Additional Commissioner.
Conclusion:
Court set aside all impugned orders and reassessment notices due to lack of reasons provided by the Additional Commissioner, emphasizing the necessity of recording reasons for granting permission under Section 21 of the Act. The Additional Commissioner was directed to pass a fresh order within three months, ensuring compliance with the law and providing opportunity to the petitioners.
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2009 (8) TMI 1145
The Supreme Court dismissed the case with condonation of delay. The High Court reference is Karnataka High Court, and the judges were Mr. S.H. Kapadia and Mr. Aftab Alam JJ. Petitioners were represented by Mr. K. Radhakrishnan, Sr. Adv., Mr. Varun Sarin, Adv., and Mr. B.V. Balaram Das, Adv.
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