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2012 (8) TMI 1100
Issues involved: The judgment deals with the assessment of capital gains and the entitlement to exemption under Section 54F of the Income Tax Act.
Assessment of Capital Gains:
The assessee sold a residential house in the assessing year 1996-1997, resulting in a net capital gain of Rs. 1,38,17,596. Following the sale, the assessee entered into an agreement for the purchase of another property but the transaction fell through. After litigation, the assessee obtained a refund of Rs. 20,00,000 from the failed transaction. Out of this amount, Rs. 17,40,000 was reinvested in a capital gain account. Subsequently, the assessee purchased a residential flat for Rs. 66,08,630 and sought a deduction of Rs. 51,63,464 under Section 54F, which was initially allowed by the Assessing Officer.
Entitlement to Exemption under Section 54F:
The Assessing Officer later issued a notice under Section 154, contending that the assessee was only entitled to exemption under Section 54, not Section 54F. This led to a dispute regarding the correct computation of the exemption. The CIT appeals and the Appellate Tribunal upheld the disallowance of exemption for Rs. 20,00,000, but granted partial relief under Section 54F for Rs. 6,67,493.
Rectification and Appeal:
The assessee filed a Misc. Petition under Section 254(2) seeking rectification to claim exemption for the full amount of Rs. 77,50,000 instead of the initially allowed Rs. 51,63,464. The petition was dismissed, prompting the assessee to appeal to the High Court.
Substantial Question of Law:
The main issue before the Court was whether the Assessing Officer, in a rectification order under Section 154, should grant benefits under Section 54 even if the assessee did not specifically claim it. The Court framed this question for consideration.
Court Decision:
The Court found that there were errors in the computation of benefits under Section 54F and directed a fresh consideration by the Assessing Officer. The matter was remanded for further investigation into whether the assessee met all requirements under Section 54. The Assessing Officer was instructed to consider the claim for deductions under Section 54 as per the law. Ultimately, the appeal was allowed in favor of the assessee.
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2012 (8) TMI 1099
Issues Involved:
1. Genuineness of the will dated 03.12.1986.
2. Legal propriety of the probate granted.
3. Allegations of property alienation during the pendency of the appeal.
4. Jurisdiction of the Court to issue orders for protection of the estate.
Summary:
Issue 1: Genuineness of the will dated 03.12.1986
The primal issue for determination is the genuineness of the will dated 03.12.1986 executed by Late Bishun Prakash Narayan Singh in favor of the Nati (maternal grandson) of his separated brother Late Fateh Bahadur Singh.
Issue 2: Legal propriety of the probate granted
The sole heir and daughter of Late Bishun Prakash Narayan Singh filed objections against the probate, claiming inheritance rights. The lower court overruled her objections and granted probate to the will. The appellants, substituted heirs of the objector Kalyani Devi, contested the probate's legality.
Issue 3: Allegations of property alienation during the pendency of the appeal
The appellants alleged that the respondent no.1 started alienating the property post-probate, executing registered lease deeds during the appeal's pendency. They claimed possession over the property inherited from Kalyani Devi and feared irreparable loss if dispossessed. The respondent no.1 countered, asserting the will's genuineness and pointing out that the appellants also alienated part of the property during the appeal.
Issue 4: Jurisdiction of the Court to issue orders for protection of the estate
The Court examined whether it had jurisdiction to issue orders for the protection of the estate during the probate proceedings. It referred to Sections 247, 266, and 268 of the Indian Succession Act, which allow the Court to appoint an administrator pendente lite and regulate proceedings by the Code of Civil Procedure. The Court concluded that it has the power to issue interim orders to protect the estate from being wasted or dissipated, even if Order 39 Rule 1 & 2 C.P.C. may not strictly apply.
Conclusion:
The Court recognized its jurisdiction to pass necessary orders for the protection of the estate. Given the imminent threat of material change in the property's condition, it directed both appellants and respondents to maintain the status quo regarding the property of the deceased testator Late Bishun Prakash Narayan Singh during the pendency of the appeal. The interlocutory application was disposed of accordingly.
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2012 (8) TMI 1098
Action sale - Invalid Sale - provisions of the SARFAESI Act - Held that:- In the case on hand, the Authorised Officer conducted the auction proceedings and later issued an order of confirmation, in total violation of the order passed by this Court. As observed by the Supreme Court in All Bengal Excise Licensees' Association [2007 (3) TMI 799 - SUPREME COURT OF INDIA] it is the duty of the Court to set the wrong right and not allow the perpetration of the wrong doing. We, therefore, by following the Full Bench judgment of this Court in Century Flour Mills v. S. Suppiah [1975 (3) TMI 60 - HIGH COURT OF MADRAS]) cancel the auction held on 7 January 2011.
Since the Authorised Officer of the Bank violated the mandatory provisions of the SARFAESI Act and the Rules made thereunder and suppressed material particulars and made false statements to take possession of property stating that it was sold to Mr.S.Manisekaran not withstanding the fact that he was not a bidder and obtained an order against a dead person, the impugned order passed by the learned Chief Metropolitan Magistrate on such factual background also must be set aside.
Order on the file of the learned Chief Metropolitan Magistrate, Egmore, Chennai is set aside. The learned Chief Metropolitan Magistrate is directed to put the petitioner in vacant possession of the property by deputing the very same Commissioner or another Advocate Commissioner within two weeks from the date of receipt or production of a copy of this order. It is open to the learned Chief Metropolitan Magistrate to take police assistance. The Authorised Officer of the Bank is directed to assist the learned Chief Metropolitan Magistrate and/or the Advocate Commissioner to effect re-delivery to the petitioner or her authorised agent.
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2012 (8) TMI 1097
The averments made in the Note for Speaking to minutes, same stands ALLOWED. Office is directed to carry out necessary amendments, FORTHWITH and to issue certified copies, as prayed for by the learned Advocate for the appellant, accordingly. The note for speaking to minutes stands DISPOSED OF, accordingly.
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2012 (8) TMI 1096
Winding up petition - breach of contract - Held that:- What is important in a case of winding up of a company is not the interest of the applicant but the interest of the stakeholders of the company as a whole - Winding up is the last thing the Court would do and not the first thing to do having regard to its impact and consequences
In the light of the order of the CLB, and M/s IL & FS being inducted into the management of the respondent company and, as they are said to have 80% of the share capital and are said to have invested more than ₹ 150 in the respondent company, it might be inappropriate to exercise discretion at this stage to admit the company petitions filed for winding up of the respondent company. On the other hand this Court cannot also ignore the fact that the net worth of the respondent company has completely eroded, and its exercise of discretion not to entertain the company petitions may well result in further increase of the total debt due to banks and financial institutions, and their inability later to recover the debt, even in part.
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2012 (8) TMI 1095
Issues Involved:
1. Disallowance of irrecoverable advances written off.
2. Addition of amounts written back without examining the nature of credits.
Summary:
Issue 1: Disallowance of irrecoverable advances written off
The learned CIT (A) erred in sustaining the disallowance of Rs. 14,76,89,384/- being the amounts written off representing irrecoverable advances made during the ordinary course of business of film financing. The assessee, late Shri Jhamu Sughand, was engaged in the business of production, distribution, and financing of films. The AO issued a notice u/s.148, and the legal heirs filed the return accompanied by an audit report. The AO observed that the return was not filed as per the provisions of section 139 and concluded that the debts were not written off in the books of the assessee in the previous year ended on 31.03.2006. The AO disallowed the write-off of loans and advances as the assessee was not in the money lending business and no efforts were made to recover the financial debt. The CIT (A) confirmed the disallowance.
The Tribunal noted that the assessee was in the business of distribution, production, and finance of films production, and the advances/loans were given in the ordinary course of business. The Tribunal held that the decision taken by the legal heirs to write off the advances was an honest decision as the business was closed and there was no chance of recovery. The Tribunal emphasized that the advances were part of the working capital and not in the capital field. The Tribunal relied on the decision of the Hon'ble Madras High Court in the case of CIT vs. Crescent Films (P.) Ltd. 248 ITR 670, which held that money lent during the business, if found to be irrecoverable, is a trading loss. The Tribunal concluded that the write-off should be accepted as a trading loss.
Issue 2: Addition of amounts written back without examining the nature of credits
The learned CIT (A) also erred in sustaining the addition of Rs. 15,07,59,412/- being amounts written back in respect of loans, sundry creditors, and others, without even examining the nature of credits. The Tribunal observed that the AO should have adopted the same principle while dealing with the identical nature of write-off and write-back amounts. The Tribunal held that both the writing off and written back amounts should be accepted, but since there was no business, the loss returned by the assessee shall be ignored, and the income should be treated as 'nil'.
Conclusion:
The Tribunal allowed the claim of write-off but disallowed the loss returned by the assessee, treating the income as 'nil'. Both appeals were partly allowed.
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2012 (8) TMI 1094
Issues Involved:
1. Audi Alteram Partem
2. Possession and Liquidation
3. Validity of Tenancy and Sub-Tenancy
4. Applicability of Section 446(2) and Section 536(2)
Summary:
1. Audi Alteram Partem:
The doctrine of "audi alteram partem" obligates the court to hear all concerned parties unless there is a strong reason not to. The learned judge could have passed the same order after hearing the appellants, considering and discarding their version with logic. Passing the order ex parte, however strong, would defeat the principle of justice being seen to be done.
2. Possession and Liquidation:
The company, A. Talukdar and Co. (Fertilizers) P. Ltd., was wound up by order dated November 9, 1998, due to its inability to pay debts. The official liquidator took possession of the company's assets but faced obstructions from M/s. Hindustan Bone Mills and other occupants. The official liquidator proceeded to sell the land, finding multiple unauthorized occupants. The learned judge allowed the sale on an "as is where is" basis and did not issue specific directions for the removal of occupants.
3. Validity of Tenancy and Sub-Tenancy:
The occupants claimed tenancy through M/s. Hindustan Bone Mills, which was a partnership firm of the Talukdars. The official liquidator initially accepted rent but later objected to the occupants' right to occupy the premises. The court found that the tenancy was created after the commencement of winding up proceedings, making it void under section 536(2) unless otherwise ordered by the court. The court noted that the occupants' possession was coterminous with the official liquidator's possession.
4. Applicability of Section 446(2) and Section 536(2):
Section 446(2) vests the company judge with summary power to decide controversies arising in the course of beneficial winding up, including the title of occupants. The court must restore the status quo ante as on the date of the winding-up order. The official liquidator was responsible for handing over vacant possession to the company. The court held that the order of winding up being stayed does not affect the applicability of section 446(2).
Judgment:
The appeals were allowed on the ground that the appellants were not heard by the learned judge. The order dated September 20, 2010, merged in the order dated July 8, 2011, was set aside. The court directed the official liquidator to remove Chatterjee Brothers and Pack Tech from possession and hand over vacant possession to the company's authorized representative. The appeal against the order dated September 6, 2010, succeeded in part, affirming the discretionary power of the company court under section 446(2). The operation of the judgment was stayed for eight weeks on the condition that Chatterjee Brothers and Pack Tech continue to pay occupation charges.
Conclusion:
The judgment emphasizes the importance of hearing all concerned parties, the responsibilities of the official liquidator in handing over possession, and the applicability of sections 446(2) and 536(2) in winding-up proceedings. The court directed specific actions to ensure compliance with legal and ethical standards in the liquidation process.
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2012 (8) TMI 1093
Issues involved: Appeal against modification of sentence u/s 324 IPC compounding of offence prior to amendment in 2006.
Judgment Summary:
Issue 1: Modification of Sentence
The appeal was against the modification of the sentence imposed by the Trial Court from three years to 1½ years by the Punjab and Haryana High Court. The Supreme Court allowed the appeal and set aside the orders passed by the Trial Court as modified by the High Court, ultimately acquitting the accused from the charges alleged against him.
Issue 2: Compounding of Offence
The incident in question took place on 27.12.1997, before the amendment in 2006. The parties had compounded the offence during the pendency of the appeal. The Court noted that the conviction and sentence u/s 324 IPC, as of now, cannot be compounded, but since the offence occurred before the amendment, and both the complainant and accused intended to compound the offence, the Court granted the request for compounding. This decision was in line with the precedent set in the case of Mohd. Abdul Sufan Laskar and Others Vs. State of Assam, (2008) 9 SCC 333, where it was held that offences compoundable under the law at the time of occurrence can be compounded even if subsequent amendments make them non-compoundable.
Conclusion
The Supreme Court allowed the appeal, setting aside the modified sentence and acquitting the accused due to the compounding of the offence, which was permissible based on the law applicable at the time of the incident.
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2012 (8) TMI 1092
Issues involved:
The correctness of the Tribunal's order rejecting the revenue's contention for a remand to work out a disallowance under Section 14A of the Income Tax Act.
Summary:
1. The revenue challenged an order of the Income Tax Appellate Tribunal (ITAT) regarding the disallowance under Section 14A of the Income Tax Act, concerning tax exempt income earned by the assessee during the relevant assessment year.
2. The assessee did not provide separate expenses details related to the tax exempt income, leading to a disallowance by the Assessing Officer (AO) under Section 14A. The CIT (A) partially allowed the assessee's appeal, reducing the disallowance amount. The Tribunal upheld the CIT (A)'s decision, dismissing the revenue's appeal based on the adequacy of the assessee's resources for investments.
3. The revenue contended that the Tribunal's findings contradicted a Division Bench decision of the High Court and argued for a disallowance under Section 14A despite Rule 8D being inapplicable. The Tribunal's reliance on the assessee's financial capacity for investments was challenged.
4. The Court noted the uniform application of Rule 8D by Tax Administrators before relevant court rulings clarified the necessity to determine disallowances under Section 14A even without Rule 8D. The principle of consistency was discussed in light of previous rejections of disallowance claims by the assessee.
5. Considering the precedents and the need to adhere to Section 14A, the Court remitted the matter to the Assessing Officer to determine the disallowance under Section 14A in accordance with the Division Bench decision of the High Court.
This summary encapsulates the key issues, arguments, and the final decision of the High Court regarding the dispute over the disallowance under Section 14A of the Income Tax Act.
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2012 (8) TMI 1091
Exclusive jurisdiction of the Company Court - Held that:- Having regard to the allegations made in the plaint, the plaintiffs are seeking the relief on the basis of the Memorandum of Understanding entered into between the parties and that cannot be brought within the exclusive jurisdiction of the Company Court and the rights under the Memorandum of Understanding are common law rights and therefore, such rights can be enforced in the ordinary civil courts.
Though in the plaint the main prayer is to declare that the notice dated 19.4.20.2011 calling for the Board Meeting as illegal, that is also based on the Memorandum of Understanding and in short, the plaintiffs want to enforce the Memorandum of Understanding and filed the suits restraining the defendants and their men from acting contrary to the Memorandum of Understanding and therefore, the reliefs sought for do not come within the exclusive jurisdiction of the Company Court and the plaintiffs want to enforce their civil rights on the basis of the Memorandum of Understanding and hence, the ordinary civil courts have got jurisdiction.
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2012 (8) TMI 1090
Refund of amount of duty paid which was not liable to be paid - rejection on the ground of Time Limitation - Section 11B of the Central Excise Act, 1944 - Held that:- It is not in dispute that three refund claims with which we are concerned, were filed beyond the period prescribed under Section 11B of the Act. That being the position, in our opinion, the Departmental Authorities committed no error in rejecting such refund claims.
Merely, because the incidence of duty was not passed on to the consumer, cannot be the sole ground on which Refund Applications must be allowed.
Petition dismissed - decided against petitioner.
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2012 (8) TMI 1089
The Supreme Court allowed writ petitions for an order permitting interrogation by custom authorities in the presence of an advocate at a visible distance. The advocate must be present but sit beyond hearing range. Petitioner must cooperate with the Directorate of Revenue Intelligence for interrogation when called upon.
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2012 (8) TMI 1088
Issues Involved:
1. Legality of excise duty collection and retention at a higher rate.
2. Delay in filing refund application.
3. Principles of unjust enrichment.
4. Requirement of personal hearing by the deciding authority.
Summary:
1. Legality of Excise Duty Collection and Retention:
The petitioner, a partnership firm, challenged the rejection of their refund requests for duty paid u/s the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956. The petitioner argued that their product, "Mixture Carminative Prop.", should be charged at a reduced duty rate under Item No. 1(ii)(a) instead of the higher rate under Item No. 1(ii)(b). The High Court had previously ruled that without categorizing the preparations, the government could not collect higher duty. The Supreme Court dismissed the Government's Special Leave Petition, affirming the need for categorization before collecting higher duty. Despite this, the petitioner continued to deposit duty at a higher rate and delayed providing samples for categorization, which was finally done in 1990, classifying the product under Item No. 1(ii)(b).
2. Delay in Filing Refund Application:
The petitioner filed for a refund in July 1994 for the period between 1987 to 1990. The application was dismissed due to the delay and the final classification of the product under Item No. 1(ii)(b). The petitioner's continued payment of higher duty despite the court's judgment and the delayed provision of samples contributed to the rejection of the refund claim.
3. Principles of Unjust Enrichment:
The Commissioner indicated that the burden of excise duty was passed on to the consumer, invoking the principle of unjust enrichment. The petitioner failed to provide satisfactory evidence to counter this claim. The court emphasized that refund claims for indirect taxes like excise duty require proof that the burden was not passed on to consumers, aligning with the Supreme Court's stance in Mafatlal Industries Ltd. v. Union of India.
4. Requirement of Personal Hearing by the Deciding Authority:
The petitioner contended that the Commissioner who decided the refund application was not the one who heard it, violating the principle that "one who hears must decide." The court referenced multiple judgments, including General Manager, Eastern Railway v. Jawala Prosad Singh, indicating that a change in personnel does not necessarily violate natural justice principles, especially when the decision is based on written records.
Conclusion:
The petitions were dismissed on grounds of delay, lack of evidence against unjust enrichment, and procedural compliance by the authorities. The court found no merit in the petitioner's claims and upheld the decisions of the lower authorities.
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2012 (8) TMI 1087
Issues involved: Locus standi of the applicant to intervene in Co. Petition u/s 101 of Companies Act, rights of the applicant as a shareholder, validity of the applicant's purchase of redeemable preference shares, impact of Corporate Debt Restructuring (CDR) on the shares.
The judgment by Hrishikesh Roy, J. of the Gauhati High Court pertains to a case where M/s. 3A Capital Services Ltd. sought to be included in a Company proceeding through Misc. Case No.963/2012.
Locus standi of the applicant: Mr. Choudhury, representing the opposite party, challenged the applicant's right to intervene in the Co. Petition u/s 101 of the Companies Act, arguing that the applicant must demonstrate their status as shareholders or creditors of the opposite party. He raised concerns about the applicant's bona fide, highlighting that the applicant failed to disclose their application u/s 111 of the Companies Act before the Company Law Board (CLB) Kolkata. Without a positive order from the CLB, Mr. Choudhury contended that the applicant lacked a reasonable basis to participate in the proceeding.
Rights of the applicant as a shareholder: The applicant's counsel, Mr. Barpujari, acknowledged that an application was indeed filed u/s 111 of the Companies Act to establish the applicant's legal rights as a shareholder. However, the CLB had not issued a final order on the matter, leaving the status of the applicant's claim unresolved.
Validity of the applicant's purchase of redeemable preference shares: The Court noted that the shares in question, purchased from ICICI Bank and later acquired by Standard Chartered Bank, were subject to potential cancellation under the CDR Scheme due to ICICI Ltd.'s involvement in debt restructuring. Given the uncertain status of the shares and the absence of a definitive ruling from the CLB, the Court expressed reluctance to recognize the applicant as a shareholder or creditor of the petitioner Company.
Impact of Corporate Debt Restructuring (CDR) on the shares: Considering the circumstances surrounding the CDR process and the risk associated with purchasing the shares, the Court emphasized the need for a clear declaration of the applicant's rights before allowing their intervention in the proceeding. Notably, the shares were acquired at a nominal price without involvement in any public issue or rights offering by the Company.
In conclusion, the Court found no merit in the applicant's impleading application, leading to its dismissal based on the lack of crystallized rights over the shares and the ongoing uncertainties regarding the validity of the purchase in the context of the CDR process.
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2012 (8) TMI 1086
The Supreme Court dismissed review petitions against an order dated 13th April, 2012, after condoning the delay. The court found no grounds for review and dismissed the petitions. (Case citation: 2012 (8) TMI 1086 - SC)
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2012 (8) TMI 1085
Issues involved: Appeal against order u/s 143(3) for assessment year 2005-2006 - Deduction u/s 80IB(10) - Existence of commercial area in housing project - Eligibility of project for deduction - Claiming deduction on commercial component.
Summary:
Issue 1: Existence of commercial area in housing project
The appellant department challenged the CIT(A)'s decision regarding the existence of a commercial area in the housing project approved before 01/04/2005 affecting the deduction u/s 80IB(10) of the Income Tax Act, 1961. The appellant contended that the commercial units were constructed and sold along with the residential units, leading to the rejection of the deduction claim. However, the CIT(A) allowed the claim based on the separate maintenance of accounts for commercial and residential projects, non-inclusion of commercial area for deduction purposes, and compliance with Section 80IB(10) conditions. The decision was supported by the High Court ruling in CIT Vs. Brahma Associates, upholding that the existence of commercial units in a project completed before 01-04-2005 does not impact the deduction claim.
Issue 2: Eligibility of project for deduction
The appellant department also disputed the eligibility of the project "Pride Park" for deduction u/s 80IB(10) on a 'stand alone' basis. The CIT(A) considered the separate maintenance of accounts, non-inclusion of commercial area for deduction, and compliance with Section 80IB(10) conditions to allow the deduction claim. The decision was further supported by the High Court ruling in CIT Vs. Brahma Associates, emphasizing that the project's commencement and completion before 01-04-2005 did not affect the deduction claim.
Issue 3: Claiming deduction on commercial component
The appellant department raised concerns about the assessee not claiming deduction on the commercial component of the project, questioning the allowance of deduction u/s 80IB(10). The CIT(A) justified the allowance based on the project's compliance with Section 80IB(10) conditions, separate maintenance of accounts, and non-inclusion of commercial area for deduction purposes. The decision was in line with the High Court ruling in CIT Vs. Brahma Associates, affirming that the existence of commercial units in a project completed before 01-04-2005 does not hinder the deduction claim.
In conclusion, the appeal of the department was dismissed based on the separate maintenance of accounts for commercial and residential projects, non-inclusion of commercial area for deduction purposes, and compliance with Section 80IB(10) conditions, as supported by the High Court ruling in CIT Vs. Brahma Associates.
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2012 (8) TMI 1084
Issues involved: Appeal against order of ld. CIT(A) on various grounds including jurisdiction of ld. CIT(A) to direct Assessing Officer to reinitiate proceedings u/s 148, validity of direction under section 150, and powers of ld. CIT(A) under section 251 of the Income-tax Act, 1961.
Jurisdiction of ld. CIT(A) to direct Assessing Officer to reinitiate proceedings u/s 148:
The appeal was filed against the order of ld. CIT(A) directing the Assessing Officer to reinitiate proceedings under section 148 by recording proper reasons and seeking approval of superior authorities. The appellant contended that no income chargeable to tax had escaped assessment and the direction given by the ld. CIT(A) was illegal. The ld. CIT(A) was found to have no jurisdiction to issue such a direction as it was beyond the scope of his powers under section 251 of the Act. The direction was considered uncalled for and was set aside, ultimately leading to the allowance of the appeal.
Validity of direction under section 150:
The appellant challenged the direction given under section 150 by the ld. CIT(A) as being in excess and amounting to an improper exercise of jurisdiction. It was argued that the reasons recorded by the Assessing Officer were not relevant for initiating proceedings under section 147, making the direction improper. The direction for reinitiation of proceedings under section 147 based on a revised return was deemed to be a fresh exercise of jurisdiction reserved for the Assessing Officer alone. The direction was further contended to be barred by limitation and beyond the jurisdiction of the ld. CIT(A) under section 150 of the Act. The order appealed against was considered contrary to facts, law, and principles of natural justice.
Powers of ld. CIT(A) under section 251 of the Income-tax Act, 1961:
The ld. CIT(A) was analyzed in terms of his powers under section 251 of the Act, which allow him to confirm, reduce, enhance, or annul the assessment. The appellant argued that the ld. CIT(A) had no authority to direct the Assessing Officer to frame an assessment in a specific manner. The Tribunal found that the ld. CIT(A) lacked the power to issue such a direction after annulling the assessment, as it was not within his jurisdiction. The direction given by the ld. CIT(A) to the Assessing Officer was deemed beyond the scope of his powers under section 251, leading to the setting aside of the order passed in this regard and the allowance of the appeal.
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2012 (8) TMI 1083
Issues Involved:1. Addition of Rs. 14,77,000/- as unexplained investment. 2. Addition of Rs. 7,20,000/- as income from resort business. 3. Addition of Rs. 8,98,528/- on account of unsecured loans. Summary:Issue 1: Addition of Rs. 14,77,000/- as unexplained investmentThe appellant contended that the CIT(A) erred in upholding the addition of Rs. 14,77,000/-. The AO found that the assessee had not declared any agricultural income and claimed receipt of Rs. 14.70 lacs from his father, which was not reflected in the balance-sheet. The AO treated the investment in the purchase of land as unexplained investment. The CIT(A) upheld this addition, stating that the assessee failed to prove the source of funds and the explanation appeared to be an afterthought. The Tribunal upheld the findings of the CIT(A), emphasizing the necessity of cogent and corroborative evidence to support the explanation. Issue 2: Addition of Rs. 7,20,000/- as income from resort businessThe appellant argued that the CIT(A) erred in confirming the addition of Rs. 7,20,000/-, which related to agricultural income belonging to Jagdev Singh Grewal HUF. The AO observed that the assessee did not show any agricultural income in his return and treated the credit entries as income from the resort business. The CIT(A) upheld the AO's findings, noting that the agricultural income should have been received in the HUF's account, not the assessee's. The Tribunal found no infirmity in the lower authorities' findings and upheld the addition. Issue 3: Addition of Rs. 8,98,528/- on account of unsecured loansThe appellant contended that the CIT(A) erred in confirming the addition of Rs. 8,98,528/- received from close friends and relatives. The AO noted that the entries came from Western Union money transfers, which were personal in nature and not for commercial transactions or property purchase. The CIT(A) upheld the addition, stating that the remittance was for family maintenance and not a loan. The Tribunal agreed with the lower authorities, noting the failure to explain the nature and source of the amount, and upheld the addition. General Grounds:Ground Nos. 6 & 7 were general in nature and dismissed without separate adjudication. Conclusion:The appeal of the assessee was dismissed. Order pronounced in the Open Court on 24th Aug., 2012.
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2012 (8) TMI 1082
Issues involved: Appeal against order of CIT(A) sustaining addition of expenses, Disallowance of expenses by AO, Admissibility of self-supported vouchers as evidence.
The appeal before the Appellate Tribunal ITAT Pune was directed against the order of the CIT(A)-II, Pune for Assessment Year 2006-07, where the assessee challenged the addition of Rs. 7,25,645 out of the disallowance of Rs. 14,51,290 made by the AO on various expenses.
Facts of the case: The assessee, engaged in executing Civil contracts, faced disallowance of expenses by the AO based on the auditor's mention in Form No. 3CD that certain expenses lacked external supporting evidence beyond self-supported vouchers. The AO disallowed 20% of the expenses, which was later restricted to 10% by the CIT(A), resulting in the sustained amount of Rs. 7,25,645.
Arguments: The counsel for the assessee argued that due to the nature of work in remote areas, obtaining printed vouchers from laborers was impractical. Citing precedents, it was contended that no disallowance was warranted since the books of accounts were not rejected. The Department, however, supported the AO's decision and the relief granted by the CIT(A).
Decision: After reviewing arguments and precedents, the Tribunal noted that complete vouchers for labor payments were challenging to maintain in remote areas where the assessee operated. Referring to similar cases, the Tribunal held that adhoc disallowance based on self-made vouchers was unjustified when full details were provided. As the AO did not dispute the details of labor charges recipients and considering the remote location of work, the Tribunal concluded that no disallowance was necessary. Consequently, the order of the CIT(A) was set aside, and the grounds raised by the assessee were allowed. The appeal was thus allowed by the Tribunal.
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2012 (8) TMI 1081
Rejection of application of the appellant for registration u/s 12A of the Act - Held that:- Merely because the trustees are members of one family, it cannot be said that the trust is not a public trust. In that case there was also no finding or allegation in the impugned order that the activities carried out by the trust were not in accordance with its objects, the Tribunal held that there was no case for cancellation of registration u/s 12AA. The claim of the appellant also remained that the defects as pointed out by the Ld. CIT in the trust deed were also removed by rectification/amendment to the trust deed which has not been considered by the Ld. CIT while disposing off the application for the registration. Under these circumstances and without going into the dispute as to whether original instrument was furnished before the CIT or not, we in the interest of justice set aside the matter to the file of the Ld. CIT for fresh consideration of the request of registration made by the appellant in the application dated 30.3.2011 after affording opportunity of being heard to the appellant.
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9911796707
