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Showing 141 to 160 of 1595 Records
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2016 (8) TMI 1460 - PUNJAB AND HARYANA HIGH COURT
Demand of Advertisement tax - petitioner was granted concession to design, build and maintain bus shelters at different places, which were to be transferred to the Company free of charge after expiry of the concession period - Section 90(1)(d) of the Punjab Municipal Corporation Act, 1976.
HELD THAT:- In the case in hand, the Company which entered into the concession agreement with the petitioner is a company in which the Corporation itself holds majority shares. It had granted permission for display of advertisements. Initially, the letter was sent to the petitioner requiring it to pay the advertisement tax from the date of agreement within 7 working days and also furnish the details of advertisements displayed and the location thereof. The aforesaid letter is stated to be 5.1.2015. As the document has been placed on record, it was not signed by any one. It was replied to by the petitioner vide letter dated 13.1.2015, to which the Assistant Commissioner(s), Municipal Corporation, Ludhiana, vide letter dated 22.1.2015 responded by stating that it was the duty of the petitioner to pay advertisement tax as per the agreement and in case of failure, proceedings for removal of the advertisements and also for terminating the contract shall be initiated.
In the case in hand, the Municipal Corporation issued notice for deposit of tax on advertisement. Such a notice cannot be said to be authorised, if read in consonance with the provisions of Sections, 123, 126 and 135 of the Act. As has already been noticed, in case there is violation by any person in erecting or displaying any advertisement, the only power conferred on the Commissioner is either to get it removed or remove the same. Even though Section 135 of the Act envisages issuance of a demand notice for recovery of the advertisement tax due on a prescribed form, however, no form, as such, was referred to. There is no procedure prescribed in the Act or the Rules regarding filing of returns, assessment of tax and consequently recovery thereof.
The order, which has been impugned in the present petition, has not been passed in exercise of powers conferred under any of the provisions of the Act, Rules or by-laws framed thereunder, but it was in pursuance to the directions issued by this court for disposal of the legal notice got issued by the petitioner.
Thus, the manner in which the demand of tax on advertisement has been raised from the petitioner cannot be legally sustained, hence, the same is set aside - petition allowed.
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2016 (8) TMI 1459 - ITAT MUMBAI
Condonation of delay - Disallowance of deduction u/s.80HHC - export profit including DEPB incentive, excise duty refund and duty drawback - HELD THAT:- Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar Pahilajrai Jaikishin v/s. JCIT Mumbai [2013 (8) TMI 1049 - ITAT MUMBAI], following same reasoning, we are of the view that there is a reasonable cause for delay in filing the appeal, so in the interest of natural justice we condone the delay in filing the appeal and admit the appeal for adjudication.
Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we therefore set aside the order of the CIT(A) and direct the Assessing Officer to recomputed the deduction u/s.80HHC in respect of DEPB income in the light of the judgment of Hon’ble Supreme Court in the case of Topman Exports Ltd [2012 (2) TMI 100 - SUPREME COURT]
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2016 (8) TMI 1458 - ITAT NAGPUR
Character of land - gain on sale of land - agricultural land or capital asset - land was compulsorily acquired by NHAI - HELD THAT:- The plot of land was situated in Dongargaon that the assessee had filed copies of registered sale deed along with copy of 7/12 extract, that the land in question was categoriesed as agricultural land in the revenue record. In these circumstances, in our opinion, the FAA was justified in holding that the land in question was agricultural land. It is also a fact that the plot of land was compulsorily acquired by the Government and was purchased as agricultural land. The certificate dated 23-08-2013 of Gram Adhikari Dongargaon states that plot of land was an agricultural land since it was purchased till the date of compulsory acquisition.
AO himself has admitted referring to the 7/12 extracts. that land in question was agricultural land in the earlier assessment years. In our opinion, the character of land would not change automatically in subsequent years until and unless the same is used for some other purposes
There is nothing on record to show that the land was not used for agricultural purposes. The AO has not brought on record to prove the fact that agricultural land was converted into non agricultural land or that the assessee had applied for such conversion. The AO had referred to the aerial distance to determine the distance of plot of land from the Municipal limits. The Circular No. 7/215 (supra)clearly stipulates that distance between the Municipal limits and agricultural land had to be measured having regard to the shortest road distance.
Sale of agricultural land cannot be treated as an advenctur as the land was compulsorily acquired by NHAI. The plot of land, acquired by the assessee was an agricultural land and, therefore, was out of ambit of taxability. It was not liable for charging under the capital gains/business profit. - Decided in favour of assessee
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2016 (8) TMI 1457 - NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI
Whether the complainants are entitled to any compensation for the delay on the part of the opposite party in offering possession to them and if so, what should be the quantum of compensation which the opposite party needs to pay to them?
HELD THAT:- It is an undisputed proposition of law that ordinarily the parties are bound by the terms and conditions of the contract voluntarily agreed by them and it is not for a Consumer Forum or even a Court to revise the said terms.
Though in SHRI SATISH KUMAR PANDEY & ANR. VERSUS M/S UNITECH LTD. AND OTHERS [2015 (6) TMI 330 - NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI], this Commission had awarded compensation in the form of interest @ 12% per annum, considering the recent decline in the cost of borrowing and return on the investments made with the banks, I am of the considered view that payment of an all inclusive compensation in the form of interest @ 10% per annum will meet the interest of justice.
The opposite party shall complete the construction in all respects unless already complete, obtain all the requisite approvals including the occupancy certificate, at its own cost and responsibility and offer possession of the flat booked by the complainants, to them on or before 31.01.2017 - The opposite party shall pay, to the complainants, compensation in the form of simple interest @ 10% per annum w.e.f. from the committed date of possession as per the Buyers Agreement till the date possession is offered to them in terms of this order. The balance amount, if any, payable by the complainants, shall be adjusted while paying compensation in terms of this order. The compensation shall be paid on or before the date on which the possession in terms of this order is offered to the complainants.
If the opposite party fails to deliver possession and pay compensation in terms of this order, the complainants shall be entitled to seek execution of this order under Section 25 & 27 of the Consumer Protection Act - The opposite party shall pay ₹ 10,000/- as cost of litigation to the complainants.
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2016 (8) TMI 1456 - ITAT HYDERABAD
Disallowance u/s 43B - HELD THAT:- As observed that the assessee is following the method of accounting consistently that statutory dues are collected from the customers and the collection of statutory dues are treated as statutory liability and shown as liability in the balance sheet without charging into P&L A/c. This method is being followed consistently and acceptable method of accounting. Provisions of section 43B will be applicable only when the assessee claimed those payments of statutory dues as expenditure.
We are not in agreement with the CIT(A) as the assessee has not claimed statutory liability as business expenditure as laid down in the above decisions that the business expenditure are not claimed in the P&L account, provisions of section 43B will not be applicable. Accordingly, we set aside the order of the CIT(A) and direct the AO to delete the disallowance made u/s 43B - Appeal of the assessee is allowed.
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2016 (8) TMI 1455 - ITAT PUNE
Capital gain computation - reference to DVO - scope of amendment in section 55A - rectification u/s 154 - HELD THAT:- Such amendment to provisions of section 55A(a) is not retrospective and prospective, therefore, merely because the AO has made a reference to the DVO after the date of such amendment for an assessment year prior to the amendment is a highly debatable issue. The Hon’ble Supreme Court in the case of T.S. Balaram, ITO Vs. Volkart Brothers and Others [1971 (8) TMI 3 - SUPREME COURT] has held that a mistake apparent on the record must be an obvious patent mistake and not something which can be established by a long run process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record.
Since in the instant case the issue as to whether the AO can make a reference to the DVO u/s.55A(a) of the I.T. Act after the amendment brought in the statute book w.e.f. 01-07-2012 but for an assessment year prior to that date where the fair market value adopted by the assessee as on 01-04-1981 is more than the fair market value determined by the AO is a highly debatable issue, therefore, following the decision of Hon’ble Supreme Court in the case of T.S. Baralam, ITO Vs. Volkart Brothers and Others (Supra) I hold that the CIT(A) was not justified in passing the order u/s.154 of the I.T. Act in the instant case which in my opinion is a highly debatable issue. Accordingly, set aside the order of the CIT(A) passed the order u/s.154 of the I.T. Act. Grounds raised by the assessee are accordingly allowed.
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2016 (8) TMI 1454 - ITAT NAGPUR
Characterization of gain on land sold - nature of land sold - agricultural land or capital asset - HELD THAT:- Said property was purchased by the assessee on 25-03-2008 for a consideration of ₹ 31,50,000/-. Prior to this date on 10-03-2008 the assessee has received an advance payment of ₹ 5,00,000/- against the sale consideration of ₹ 60,00,000/- for the said property. This fact emerges from the sale deed itself. Assessee had entered into the transaction of sale even before execution of the purchase deed. This amply supports the Revenue’s contention that business intention of the assessee was very evident.
As rightly noted by the CIT(Appeals) in this context it is important to note that eventually the sale consideration of ₹ 30 lacs was received by the assessee directly from the builders to whom the said land was eventually sold and who plotted the land and sold it in pieces. The assessee was one of the ‘witnesses’ who signed the sale deed when the land was sold to Rajendra Ramdas Dhore who had later sold 14 plots to one M/s United Builders and Developers for ₹ 15 lacs and 14 plots to Shri Sahebrao Wadekar for ₹ 15 lacs and the sale proceeds totalling ₹ 30 lacs were directly paid to the assessee by these two purchase parties. Further more the assessee has also made application for conversion of the said land for non agricultural land for residential purpose. Thus the assessee was aware of the purpose for which the entire transaction was being entered at the threshold.
There is no evidence of any cultivation activity on the said land.
The assessee has not disclosed any agricultural activity/income/expenditure on the said land. Rather the facts of the case clearly indicate that the assessee was in the process of converting the land into non agricultural land and he eventually sold for non agricultural activities.
Hence agree with the conclusion of the learned CIT(Appeals) that the facts of the case that no agricultural operation being carried out in the said property, the efforts to convert the said land into non agricultural land, taking advance from the eventual purchaser even before the said property had been purchased and being aware all along that the said land will be used for plotting by builders clearly reflects the commercial and profit element in the purchase and sale of the said property. - Decided against assessee.
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2016 (8) TMI 1453 - DELHI HIGH COURT
Payment of refund of VAT amount - HELD THAT:- The respondent shall be directed to take appropriate actions towards the refund claim and ensure that the same is disbursed to the petitioner before the next date of hearing.
List on 19.09.2016.
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2016 (8) TMI 1452 - ITAT CHENNAI
Deduction u/s 80-IA denied - assessee established “Olympia Tech Park” for providing infrastructure facilities to software development companies. It is in STPI notified area - only contention of the Revenue is that the income from building has to be classified as income from house property, therefore, the assessee is not eligible for deduction under Section 80-IA - HELD THAT:- The building of the assessee is not a mere building. It has infrastructure facilities for the purpose of development of software. The assessee is systematically providing services besides letting out the property. Therefore, the judgment of Apex Court in Chennai Properties and Investments Ltd. v. CIT [2015 (5) TMI 46 - SUPREME COURT] would squarely applicable to the present case.
Hence, this Tribunal is of the considered opinion that the income from letting out of the property has to be classified as “income from business” and the assessee is eligible for deduction under Section 80-IA of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against revenue.
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2016 (8) TMI 1451 - ITAT BANGALORE
Declaration under VDIS - bullion converted from the jewellery was sold by the assessee AND diamonds sold - whether what was sold and declared in the return of income is nothing but the gold and diamond declared in the VDIS, 1997? - HELD THAT:- Since the declaration under VDIS was accepted by the department and therefore there is no dispute on the fact of declaration of the jewellery items valued at ₹ 4,84,100. The assessee produced the bill dt.17.12.1997 issued by Sri Balaji Refinery, Hubli whereby the gold jewellery was converted into bullion. As per the said bill the gross weight of jewellery is shown as 1406.55 gms and net weight is shown as 1249.500 gms which was converted into 1245.200 gms.
The items shown in the conversion bill and VDIS declaration do match without any discrepancy. The bullion converted from the jewellery was sold by the assessee vide billdt.18.12.1997. Subsequently, the assessee has also sold the diamonds vide bill dt.16.2.2008. All these records were produced by the assessee before the Assessing Officer. It is manifest from the documents produced by the assessee that the gold jewellery items which were converted into bullion are identical as jewellery shown in the VDIS, 1997. The diamond items are also matching in the weight in carats a shown in the declaration of VDIS, 1997 and purchase bill. Therefore as far as the quantity and items which are declared in the VDIS, 1997 and which are subject matter of conversion and subsequent sale, there is no discrepancy.
Thus assessee has established the facts by producing the relevant record that what was sold and declared in the return of income is nothing but the gold and diamond declared in the VDIS, 1997. Accordingly the addition made by the Assessing Officer is deleted and the appeal of the assessee is allowed. - Decided in favour of assessee.
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2016 (8) TMI 1450 - ITAT MUMBAI
Disallowance of interest on borrowings - addition on prorata basis on the ground that borrowed funds are utilized for making investment in tax-free securities - HELD THAT:- Assessee submitted before us that the said issue has been decided against the assessee and in favour of the Revenue by the Tribunal in assessee’s own case by upholding the orders of the authorities below and thereby restricting the disallowance. The learned DR while supporting the orders of the authorities below conceded to the submissions made by the learned AR.
However, in respect of Ground I (4), during the year under consideration, as per the arguments of the learned AR exemption u/s 10 (33) of the Act was not available in respect of income earned from dividend for accounting year 2003-04 only and later on, from 2004-05, the said exemption was available. But, for this particular year under consideration exemption u/s 10(33) of the Act was not available. Since, the entire income was taxable, therefore no question of disallowance accrued. Therefore, keeping in view the said legal proposition we agree with the contention of the learned AR and delete the entire addition made by the AO. Resultantly, ground No. I of the assesee’s appeal stands allowed.
Disallowance of non-compete Fees paid to ex-directors - HELD THAT:- Issue decided against assessee as relying on its own case. While at the time of hearing of the present appeal of the assessee for assessment year 2003-04, both the sides conceded to the aforementioned fact, we respectfully following the above mentioned order of the Co-ordinate Bench and with a view of maintenance of judicial consistency, uphold the orders of the authorities below. As a result, this ground of assessee’s appeal stands dismissed.
Setting off of losses while computing deduction u/s 80HHC - AO rejected the assessee’s claim by observing that the assessee while filing return of income had claimed deduction u/s 80HHC before taking into account the unabsorbed brought forward loss and depreciation and the same claim had also been claimed against the income determined u/s 115JB - CIT (A) rejected the claim of the assessee relying on the decision of J. K. Industries Ltd. Vs ACIT [2013 (5) TMI 152 - KARNATAKA HIGH COURT] as well as CIT Vs Shrike Construction Equipments Ltd. [2007 (5) TMI 194 - SUPREME COURT] by holding that as per the aforesaid case laws, it is now settled that for the purpose of deduction u/s 80 HHC profits will have to be computed after giving full effect to other provisions of the Act, including the provisions relating to carry forward and set off - HELD THAT:- AR during the time of argument has not pointed out or placed on record any material to controvert the decision of the learned CIT (A). On the other hand, the learned DR supported the orders of the learned CIT (A). In view of the above, we find no reason to interfere with the findings of the learned CIT (A) and uphold the same. Accordingly, Ground No. V of the assessee’s appeal stands dismissed.
Deduction of Miscellaneous Income and other items from the profits while computing the deduction u/s 80HHC - HELD THAT:- AO has not has not examined the issue in detail before making the disallowance. The learned CIT (A) also rejected the claim of the assessee by confirming the order of the AO holding that there was no direct nexus between the nature of income clubbed under the heading miscellaneous income and the export activity of the appellant without considering the detailed break-up of the aforesaid income as have been placed on record by the assessee. Therefore, we restore this ground back to the file of the AO in order to examine the details of the documents filed by the assessee and then to decide the same regarding applicability of the claim of deduction as raised by the assessee u/s 80HHC of the Act after affording adequate opportunity of being heard to the assessee. Consequently, this ground of appeal is allowed for statistically purpose.
Not allowing set off of incentives against profits - assessee claimed set off of miscellaneous income - HELD THAT:- As noticed that the assessee’s claim of deduction u/s 80HHC relates to assessment year 2003-04 i.e. prior to the date of amendment of the provisions with effect from 1st April, 2005. In view of the above, we respectfully following the decision of the Hon’ble Apex Court in the case of CIT Vs Avani Exports cited [2015 (4) TMI 193 - SUPREME COURT] hold that the order of the learned CIT (A) is not sustainable and accordingly we reverse the same. Resultantly, this ground of appeal of the assessee stands allowed.
Deduction of income from service while computing profits u/s 80HHC - claim rejected by the AO on the ground that the assessee had not filed any break-up of the income from services - HELD THAT:- We find that the order of the learned CIT (A) on this ground is not sustainable since the detailed break up has not been examined by the authorities below. We, therefore, set aside the order of ld. CIT(A) and restore back the issue to the file of the AO for deciding the same afresh in accordance with law after examining the details of service income provided by the assessee after granting the assessee adequate opportunity of being heard in order to substantiate its claim. Resultantly, this ground of appeal of the assessee stands partly allowed for statistical purpose.
Computation of book profits u/s 115JB / disallowance u/s 14A - HELD THAT:- The issue has already been decided in assessee’s own case for assessment year 2002-03 issue of disallowance of interest on the borrowings for both the AYs we have remitted back the matter to the file of the AO. Computation of income as per the provisions of the section 115JB of the Act would depend on the decision taken by the AO
Disallowance being 2% of gross dividend on estimate basis out of general and administrative expenses has already been decided against the revenue by the coordinate Bench of the Tribunal while adjudicating the assessee’s own case for assessment year 2002-03
Re-computation of book profits without making adjustment in respective provisions - HELD THAT:- CIT (A) considering the facts of the case and the submissions of the assessee directed the AO to recomputed the book profits without making adjustment in the respective provisions which are on assets of the assessee including provisions for doubtful and advances and provisions for diminution in the value of investments. In view of the amendment of the provisions of section 115JB of the Act being retrospective, we find no reason to sustain the findings of the learned CIT (A). Hence, we uphold the order of AO and while setting aside the order of CIT this ground of appeal of the Revenue is allowed.
Reduction of book profits by the quantum of notionally computed deduction u/s 80HHC - HELD THAT:- Issue decided in favour of the assessee and against the Revenue while adjudicating the assessee’s appeal for assessment year 2002-03 held that Special Bench of Mumbai Tribunal, in the case of Syncome Formulations [2007 (3) TMI 288 - ITAT BOMBAY-H] has held that notional computation of deduction u/s 80HHC on the book profit would have to be made and reduced from the book profit for computing tax payable under section 115JB of the Act.
Interest u/s 234D - CIT while holding that the amendment is not retrospective in nature, therefore, it was held that interest u/s 234D cannot be charged - HELD THAT:- As perused the judgment CIT vs. IOCL [2014 (10) TMI 262 - BOMBAY HIGH COURT] and after hearing both the parties, we respectfully following the orders of Hon’ble High Court in the case CIT vs. IOCL (supra) where it was held that amendment to section 234D is from 01.06.2003 and is applicable even to period prior to assessment year 2004-05, therefore we order accordingly and AO is directed to recompute the interest in view of our decision. Accordingly this ground of appeal of revenue is allowed.
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2016 (8) TMI 1449 - ITAT PUNE
Accrual of income - lease rental income - mercantile system of accounting followed by the appellant - year of assessment - whether the lease rental income not received by the assessee is liable to be taxed in the assessment year 2000-01 or the same should be excluded from total income of the assessee on the basis of real income theory ? - HELD THAT:- Issue needs a revisit to the file of Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) while dealing with the issue in assessment year 2000-01 partly deleted the addition in respect of Parasrampuria Industries Ltd. and Parasrampuria International Ltd. by following the concept of real income and upheld the addition in respect of Modi Alkalies Ltd. and Inertia Industries Ltd. whereas, all the four companies are similarly placed.
Accordingly, we deem it appropriate to remit this issue back to the file of Commissioner of Income Tax (Appeals) for deciding the issue afresh, in the light of decision rendered in the case of Commissioner of Income Tax Vs. M/s. Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT] . The findings of Commissioner of Income Tax (Appeals) on this issue are set aside and the ground No. 7 in the appeal of the assessee and ground No. 4.1 to 4.5 in the appeal of the Revenue for assessment year 2000-01 are allowed for statistical purpose.
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2016 (8) TMI 1448 - SC ORDER
Accrual of income to the AOP - No income accrued to the assessee - Tribunal has relied upon its earlier orders and to the effect that when no income accrues to the AOP but to the respective constituents of the AOP, who were to do specified portion of a contract at their own risks and in their individual capacities, then the AOP is not liable to be taxed also confirmed by HC - HELD THAT:- SLP dismissed.
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2016 (8) TMI 1447 - SUPREME COURT
Termination of lease / rent agreement - validity of notice of termination - deemed monthly tenancy - Whether the agreement dated 07.08.2006 can be read in evidence, and whether it is a contract to contrary in terms of Section 106 of the Act? - it is the case of the appellant that in terms of the lease, the same could not be terminated unless there was a breach of its provisions.
HELD THAT:- A perusal of Section 106 of the Act makes it clear that it creates a deemed monthly tenancy in those cases where there is no express contract to the contrary, which is terminable at a notice period of 15 days. The section also lays down the requirements of a valid notice to terminate the tenancy, such as that it must be in writing, signed by the person sending it and be duly delivered. Admittedly, the validity of the notice itself is not under challenge.
In terms of clause 6 of the agreement, the landlord was entitled to terminate the tenancy in case there was a breach of the terms of the agreement or in case of non-payment of rent for three consecutive months and the tenants failed to remedy the same within a period of thirty days of the receipt of the notice. The above said clause of the agreement is clearly contrary to the provisions of Section 106 of the Act. While Section 106 of the Act does contain the phrase ‘in the absence of a contract to the contrary’, it is a well settled position of law, as pointed out by the learned senior counsel appearing on behalf of the appellant that the same must be a valid contract.
It is also a well settled position of law that in the absence of a registered instrument, the courts are not precluded from determining the factum of tenancy from the other evidence on record as well as the conduct of the parties - in the absence of registration of a document, what is deemed to be created is a month to month tenancy, the termination of which is governed by Section 106 of the Act.
The question of remanding the matter back to the Trial Court to consider it afresh in view of the fact that the same has been admitted in evidence, as the High Court has done in the impugned judgment and order, does not arise at all. While the agreement dated 07.08.2006 can be admitted in evidence and even relied upon by the parties to prove the factum of the tenancy, the terms of the same cannot be used to derogate from the statutory provision of Section 106 of the Act, which creates a fiction of tenancy in absence of a registered instrument creating the same.
The impugned judgment and order passed by the High Court is set aside - The judgment and order passed by the Trial Court is restored - Appeal allowed.
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2016 (8) TMI 1445 - ITAT CHENNAI
Exemption u/s 11 - charitable activity u/s 2(15) - CIT(Appeals) held that the activities undertaken by the assessee trust are for the fulfillment of the charitable objects on non-commercial lines and are not hit by the provisions of section 2(15) - HELD THAT:- Assessee is procuring raw material from African countries and distributing the same to its members as well as other concerns which has similar nature of business as those of the members of the assessee society. Further from the objects of the assessee society, it is evident that such trading activity indulged by the assessee society is not mentioned in the objects of the assessee society - the activity of the assessee society viz., procuring raw materials from abroad and distributing the same will amount to pure commercial transaction because it is purely a trading activity generating substantial profits. There is no element of charity in this kind of activity indulged by the assessee society.
It is not a case where the assessee had imported raw materials and distributed the same amongst its members and other commercial entities having same kind of business on cost to cost basis. The activity carried out by the assessee at the most benefit the members of the assessee society and certain commercial entities having same kind of business as that of the members of the assessee society and the public who purchases the produce of these entities.
Hence this venture of the assessee society cannot be inferred beyond the scope of “Advancement of any other object of general public utility”. Therefore, relying in the decision cited by the learned assessing officer we are of the considered view that the proviso to section 2(15) of the Act would be applicable in the case of the assessee and accordingly, the surplus earned by the assessee deserves to be brought under the ambit of tax. - Decided in favour of revenue
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2016 (8) TMI 1444 - BOMBAY HIGH COURT
Revision Application u/s 264 - application time bared - application for condonation of delay - HELD THAT:- It is clear that the above application for condonation of delay merely states that the petitioner inadvertently failed to claim the deduction u/s 80IA(4) during the assessment proceedings leading to the order dated 22nd March, 2013 of the AO. The impugned order holds that there is no explanation provided in the application as to why the delay took place in filing the Revision Application within the time prescribed under Section 264 of the Act. Therefore, rejected the revision application, as time barred.
View taken by the CIT cannot be faulted with. This is so as the application for condonation of delay does not even attempt to explain the reason for delay in filing the revision application. It merely sets out the reasons for not claiming relief under Section 80IA of the Act in the assessment proceedings. Petition dismissed.
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2016 (8) TMI 1443 - ITAT MUMBAI
Disallowance on account of earlier termination of lease - crystallized liability treated as contingent in nature being the outcome of the order passed by the Queen’s Bench Division, in the High Court of U. K. against suit filed for compensation of damage & loss of profit by the U. K. Company - HELD THAT:- AO as well as CIT (A) has fallen in certain errors while coming to the conclusion that the appellant assessee could not bring anything on record to show as to whether it has further challenged the decision passed by the High Court of Justice, UK. It was also wrongly held by CIT (A) that since elements of facts have not been discussed by the assessee, it could not be said that with certainty that liability was crystallized.
CIT (A) has wrongly upheld the order of the AO wherein the AO held the liability of ₹ 20,50,00,000/- as contingent liability. In this respect, we are of the considered view that once assessee’s claim for expenses of ₹ 20,50,00,000/- on account of compensation payable by the assessee has been crystallized in view of the order dated 14-5-2010 of the Queen’s Bench Division of the High Court of Justice, UK. Based on the above Court Order, the assessee has provided further a sum of ₹ 6,00,00,000/- debited to the profit & loss account as an exception item.
Once as per the decision of the Queen’s Bench Division of the High Court of Justice, UK the matter has been finally settled and in this respect AR pointed out that the entire amount has already been paid by the assessee to the Lessor and in this respect a compromise was entered into between the parties before the Indian Court and the entire decree passed by the UK Court was satisfied.
It is important to mention here that it was the decree of the Queen’s Bench Division of the High Court of Justice, UK which was fully satisfied from which it can be gathered that the liability of the assessee was crystallized in view of the order dated 14-05-2010 of the High Court of Justice, UK which was ultimately satisfied by the assessee by making payment to the lessor. Therefore, once the liability for making payment was crystallized by the High Court Order, then question of contingent liability does not arise. Therefore, both the AO and the learned CIT (A) was wrong in treating the liability as contingent liability of the assessee. - Decided in favour of assessee.
Addition on account of provisions for Gratuity and Leave Encashment - the said issues raised before us by the assessee need verification. CIT (A) has already dealt with the grounds of PF contribution and ESIC as income u/s 2 (24) (x) read with section 36(1) (va) and it has been held by the learned CIT (A) as per the decision of CIT Vs. Jaipur Vidyut Vitran Nigam Ltd. [2014 (5) TMI 222 - RAJASTHAN HIGH COURT] wherein it has been held that employees contribution towards PF, CPF and ESIC is allowable deduction u/s 36(1 (va) is paid on or before the due date i.e. before the date of filing of return of income. We following the aforesaid decision direct the AO to delete these additions.
Since, the ground of Gratuity and Leave Encashment were not raised before CIT (A), therefore, in principle we agree with the decision of the Hon’ble Rajasthan High Court dated 17-01-2014 and in our considered opinion, in view of the legal position as well as the facts of the case, we remit these issues back to the file of the AO to verify the claim of the assessee in this regard in view of the above decisions of the Hon’ble Rajasthan High Court. Additional ground raised by the assessee is partly allowed for statistical purposes.
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2016 (8) TMI 1442 - ITAT MUMBAI
Addition u/s.14A r.w.r. 8 - not claiming any expenditure against the non-shipping business income by the assessee and opting for TTS for shipping business - HELD THAT:- Assessee had not claimed any expenditure against the income arising out of non-shipping business that it had opted for TTS for the shipping business that it had sufficient own funds to make investments. Disallowance made by the AO was not justifiable. If no expenditure was claimed against the exempt income arising out of non-shipping business the basic ingredient for invoking the provisions of section 14A was absent.
Tonnage Tax Scheme(TTS) - Section 115VA is unique in the sense that it deals with the computation of income from the business of operating qualifying ships which opt for Tonnage Tax Scheme(TTS).The method of computation of income under the scheme as provided by the section stipulates that income has to be assessed in a particular manner. In other words no expenditure can be allowed or disallowance can be made while computing the income under TTS. The income of the assessee is computed at a fixed rate and all other provisions of the Act are not to be applied once an assessee opts for the scheme. In short if the assessee cannot claim any expenditure after opting out of the scheme then the AO is also barred by making any disallowance for incurring of expenditure. Legislature in its wisdom has allowed the assessees for opting for the said scheme and with a specific purpose. Therefore while comupting the income of the assessee u/s. 115VP the AO has to put on blinkers and assess the income as suggested by the Parliament.
There is no scope for tinkering with the provisions of section 115 VP of the Act. He has to follow the simple rule that no deduction is to be allowed or no disallowance is to be made under any of the normal provisions of the Act, once it is found that an assessee is to be assessed as per the provisions of chapter XIIG of the Act. Section 14A is not an exception to the TTS. Rather the scheme is an exception to the normal computation provisions including the section 14A.Therefore,it cannot be said that when the income of the assessee from the business of operating ships was computed under the special provisions of Chapter XII-G expenditure other than the expenditure incurred for the purpose of the business had been allowed. Considering the twin factors i.e. not claiming any expenditure against the non-shipping business income by the assessee and opting for TTS for shipping business, we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. - Decided in favour of assessee.
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2016 (8) TMI 1441 - BOMBAY HIGH COURT
Computation of income - Whether the Tribunal erred in holding that interest paid by the appellant u/s 234B, 220(2) and 215 cannot be allowed as deduction in computing its total income? - HELD THAT:-The issue raised herein stands concluded against the applicant assessee and in favour of the Revenue by the decision of the Apex Court in Bharat Commerce and Industries Ltd. Vs. Commissioner of Income Tax [1998 (3) TMI 2 - SUPREME COURT] . The Apex Court has held that interest payable for delayed payment of Income Tax cannot be allowed as deduction in computing the total income.
Depreciation on matured investments - real income theory - appellant assessee treated these securities as non performing assets and sought depreciation in their value by making provision in its accounts in terms of Reserve Bank of India guidelines - AO held that securities were due for redemption and the amount payable is already determined also confirmed by CIT-A and ITAT - HELD THAT:- Tribunal has approved the observations of the CIT(A) that the real income theory cannot be so extended so as to negate accrual of an amount which is receivable by the appellant assessee. In support, reliance is placed upon the decision of this Court in Navin R Kamani Vs. Commissioner of Income Tax [1990 (3) TMI 40 - BOMBAY HIGH COURT]. The concept of real income theory cannot be read so as to defeat the provisions of the Act. Further, the fall in value of security is not an ascertained liability and such adhoc deduction cannot be allowed. The impugned order places reliance upon the decisions of the Apex Court in Indian Molasis Company Pvt. Ltd. Vs. Commissioner of Income Tax [1959 (5) TMI 5 - SUPREME COURT] and of this Court in Standard Mills Company Vs. Commissioner of Income Tax [1997 (3) TMI 64 - BOMBAY HIGH COURT] - no substantial question of law arises
The appeal is Admitted on question nos. (b) and (c).
(b) Whether the Tribunal ought to have held that interest of ₹ 425,42,37,785 paid by the appellant under Sections 234B, 220(2) and 215 of the Act should be set off against the interest received by it on income tax refund and only the interest paid in excess of the interest received could be disallowed?
(c) Whether the Tribunal erred in holding that the appellant is not entitled to depreciation of ₹ 312,50,000 on assets purchased by it from KRCL ?
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2016 (8) TMI 1440 - DELHI HIGH COURT
Cancellation of Form-C - bonafide transactions - Form-C were cancelled on the ground that the dealers were found to be bogus entities at a particular point of time - HELD THAT:- On this issue in identical circumstances, this Court in JAIN MANUFACTURING (INDIA) PVT. LTD. VERSUS THE COMMISSIONER VALUE ADDED TAX & ANR. [2016 (6) TMI 304 - DELHI HIGH COURT] has held that retrospective cancellation of Form-C issued to the dealers covering periods where genuine transactions were covered by such Form-C as well as suspect period cannot be sustained. The Court had, therefore, set aside the cancellation of Form-C - with retrospective effect - in respect of the transactions when the dealers actually operated with valid registrations.
Petition allowed - decided in favor of petitioner.
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