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Showing 161 to 180 of 698 Records
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2011 (11) TMI 727
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... ... ..... Krishnan,Adv. Mr. B.V. Balaram Das,Adv. O R D E R Heard learned counsel for the petitioner. Delay condoned. The special leave petition is dismissed.
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2011 (11) TMI 726
The Delhi High Court allowed the exemption subject to exceptions in the case of ITA 1235/2011. The court framed a substantial question of law regarding a receipt of Rs. 48,64,490 by the appellant from M/s. Newell Rubbermaid Inc., questioning if it was a revenue or capital receipt. The filing of a printed paper book was dispensed with, allowing parties to file documents within 12 weeks. The case was listed along with other connected ITAs in the category of 'Regular Matters'.
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2011 (11) TMI 725
Issues Involved:
The judgment involves issues related to depreciation allowance on foundation and civil works for a windmill, as well as the levy of interest under sections 234D and 244A of the Income Tax Act.
Depreciation Allowance on Foundation and Civil Works:
The appellant challenged the decision of the ld.CIT(A) regarding the depreciation allowance on the foundation and civil works for a windmill. The ITAT Jodhpur Bench and ITAT Jaipur Bench rulings were considered. The ITAT Jodhpur Bench held that the foundation of a windmill qualifies for higher depreciation, citing precedents where foundation work for machinery was treated as part of the machinery. The Jaipur bench also ruled in favor of allowing depreciation on the construction of a room specially designed for the windmill. Ultimately, the judgment allowed depreciation on the windmill's foundation and the construction of the room, while other civil works were subject to normal depreciation rates.
Levy of Interest under Sections 234D and 244A:
The third ground of appeal pertained to the levy of interest under section 234D and the withdrawal of interest under section 244A of the Income Tax Act. The appellant contested the ld.CIT(A)'s decision on this matter. The judgment noted that the charging of interest is mandatory and consequential in nature. Consequently, the appeal of the assessee was partly allowed in this regard.
In conclusion, the judgment addressed the issues of depreciation allowance on specific components of a windmill and the levy of interest under relevant sections of the Income Tax Act. The decision provided clarity on the eligibility for higher depreciation on the windmill's foundation and specially designed constructions, while also affirming the mandatory nature of interest charges as per the law.
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2011 (11) TMI 723
Issues Involved:
1. Whether the sale made by respondent Nos. 1 and 2 in favour of respondent No.3 is in conformity with Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002?
2. Whether the writ petition was maintainable without filing the appeal to the appellate authority as provided u/s 18 of the Act?
3. Whether the learned Single Judge committed an error in order to interfere with his order?
Summary:
Issue 1: Conformity with Rule 8 and 9 of the Security Interest (Enforcement) Rules, 2002
The appellant contended that the sale of the property was not in conformity with Sub Rule 6 of Rule 8 and Rule 9 of the SERFAESI Act, 2002. The court noted that the respondent-bank failed to serve a 30-day notice for the sale of the immovable property as required. The bank's publication in Indian Express and Tarun Bharat did not meet the mandatory requirements, particularly since the latter was not in the vernacular language (Kannada) of Belgaum. Additionally, the bank did not obtain a fresh valuation of the property from an approved valuer before the sale. The court found that the sale was conducted without following the mandatory provisions, rendering it invalid.
Issue 2: Maintainability of the Writ Petition
The respondents argued that the appellant should have filed an appeal u/s 18 of the SERFAESI Act, 2002, which requires depositing 50% of the debt amount. The court acknowledged the difficulty for the appellant to deposit such a significant amount, especially after losing the property. Given the special circumstances and the procedural lapses in the sale, the court held that the writ petition was maintainable. The learned Single Judge had not dismissed the writ petition on the ground of maintainability but on the ground that an earlier writ petition challenging the sale notice had been dismissed.
Issue 3: Error by the Learned Single Judge
The court found that the learned Single Judge erred by not considering the grounds urged by the appellant regarding the legality and correctness of the sale. The failure to follow Rules 8 and 9 of the Security Interest (Enforcement) Rules, 2002, was a significant oversight. Consequently, the order of the learned Single Judge was set aside.
Conclusion:
The appeal was allowed, and the sale conducted by respondent Nos. 1 and 2 on 08.05.2006 was set aside. The court directed respondent Nos. 1 and 2 to re-auction the property by following the provisions of the SERFAESI Act, 2002, and the relevant rules. Respondent Nos. 1 and 2 were ordered to refund the amount paid by respondent No.3 along with the costs incurred. Respondent No.3 was granted four weeks to hand over possession of the property. The bank was directed to bear the litigation costs, quantified at Rs. 50,000, payable to the appellant.
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2011 (11) TMI 722
Issues involved: Appeal by Revenue against CIT(A) order for assessment years 2002-03 to 2004-05 regarding deletion of additions u/s 145 of the Income-tax Act.
Issue 1 - Deletion of additions u/s 145 of the Income-tax Act:
The Revenue contended that 2% of payments to individual members assessed in the hands of AOP should be treated as estimated income u/s 145 of the Act. The CIT-DR argued that the provisions of S.145 were correctly invoked as the assessee did not maintain books of account. The counsel for the assessee argued that there was no basis for estimating the net income at 2% and cited a Supreme Court decision in support. The Tribunal found that the assessing officer did not provide a basis for the estimate and made the addition without comparing payments to fair market value. It was noted that the rate of tax applicable to the foreign concerns (members of the Joint Venture) was higher, indicating no tax evasion by the assessee. The CIT(A) had found that the assessee maintained proper books of account, and the assessing officer's objections were not substantial. The Tribunal upheld the CIT(A)'s decision, stating that no case for disallowance/addition u/s 40A(2) was made out by the Revenue.
Issue 2 - Commission received on sub-contract by Joint Venture:
The Revenue argued that the Joint Venture received commission on sub-contract without executing the contract work, implying an error in deleting the additions. The Tribunal found that the assessing officer did not provide evidence for the excessive and unreasonable payments made by the assessee-AOP. The CIT(A) had observed that the assessee did not derive any income during the year in question, and the additions made by the assessing officer were not sustainable. The Tribunal concluded that no case for disallowance/addition could be made under S.40A(2) by the Revenue, leading to the dismissal of all three appeals by the Revenue.
Conclusion:
The Tribunal dismissed all three appeals by the Revenue, upholding the CIT(A)'s decision to delete the additions made u/s 145 of the Income-tax Act for the assessment years 2002-03 to 2004-05.
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2011 (11) TMI 721
Non-realization of provision of surcharge - accrual of income - accounting policies - Held that:- Looking at the intricacies the facts may vary, therefore, basic principles of accrual or mercantile system as laid down by various authorities are to be applied in a careful manner. The assessee being a state PSU; the sur-charge on delayed payment being disputable item; was not mandatorily payable at the time of payment of electricity consumption bill; was not an accrued receipt in view of the accounting policy accepted by the revenue. Therefore, such amount of surcharge cannot be held to be taxable as it is not the real income of the assessee and is hypothetical by nature in given facts and circumstances.
We are of the view that the amount of surcharge not realized by the assessee, does not amount to accrued of receipt taxable as income. CIT(A) has rightly deleted the addition, which we uphold.
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2011 (11) TMI 720
The Appellate Tribunal CESTAT Ahmedabad allowed an out-of-turn hearing for a stay petition due to the substantial amount involved. The stay petition was directed to be listed for disposal on 30.11.2011 with notices to be issued. The order was dictated and pronounced in the Court.
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2011 (11) TMI 719
Deduction u/s 80-IB - allocation of interest expenditure of ₹ 12.64 lacs to the Daman unit - allocation of general expenses and administrative expenses for computation of deduction u/s 80-IB - allocation of loss of Daman unit to other units for computation of deduction u/s 80-IA and 80-IB - disallowance u/s 14A - allocation of interest expenses on the basis of investment ratio - allocated salary expenses - allocation of salary expenses for the Daman and Baddi units.
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2011 (11) TMI 718
Issues involved:
Challenge to notice of reassessment u/s 148 of the Income Tax Act, 1961 for Assessment Year 2004-05 based on denial of deduction u/s 80IB.
Summary:
Issue 1: Reopening of assessment under Section 148:
The petitioner challenged the notice of reassessment issued under Section 148 of the Income Tax Act, 1961, along with a proceeding notice dated 3rd October 2011 for completing reassessment proceedings.
Details:
The respondent Assessing Officer sought to reopen the assessment for AY 2004-05 under Section 147 of the Act, citing the insertion of an explanation under Section 80IB by the Finance Act of 2009. The reason for reopening was that the petitioner, a works contractor, was not entitled to the deduction under Section 80IB as claimed, as the income had escaped assessment. The petitioner objected to the notice, arguing it was a mere change of opinion by the Assessing Officer.
Issue 2: Validity of reassessment notice:
The petitioner contended that the notice of reassessment was invalid as it was based on a change of opinion and there was no failure to disclose material facts.
Details:
The petitioner had fully disclosed all material facts regarding the claim for deduction under Section 80IB during the original assessment. The assessment order had allowed the deduction after thorough scrutiny of documents and details provided by the petitioner. The reassessment was sought beyond the four-year period from the end of the relevant assessment year, solely based on a later amendment to the statute. The court held that there was no valid reason for assuming jurisdiction under Section 147, as there was no concealment on the part of the petitioner.
Conclusion:
The court allowed the petition, quashing the notices for reassessment as they were issued without a valid basis and contrary to the law. The judgment highlighted the importance of full disclosure of material facts and the invalidity of reopening assessments beyond the prescribed time limit without proper justification.
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2011 (11) TMI 717
Issues involved: Applicability of notification No. 4/2006 granting partial exemption to goods of heading 2523 29, dispute regarding whether goods cleared for export purposes are in packaged form or not, interpretation of the 3rd proviso to Serial No. 1C of the notification.
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Ms. Archana Wadhwa and Mr. Rakesh Kumar, addressed the application seeking dispensation with the pre-deposit of duty and penalty amounting to Rs. 68,71,803. The dispute centered around the applicability of notification No. 4/2006, which provides partial exemption to goods falling under heading 2523 29, whether manufactured in a mini cement plant or not.
The Tribunal examined the 3rd proviso to Serial No. 1C of the notification, which pertains to goods other than those declared in packaging form. It was noted that the goods cleared by the appellants for export were in packaged form. However, as per the proviso, if the retail sale price of the goods is not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, the duty should be determined as for goods cleared in other than packaged form.
The dispute revolved around whether the goods cleared for export, which did not have a fixed MRP, should be considered as other than packaged form. The appellant argued that as per previous Tribunal decisions, exports are excluded from the Standards of Weights and Measures Act, 1976. Therefore, since the goods did not require an MRP as per the Act, they should be treated as other than packed form, attracting the concessional rate of duty under Serial No. 1C.
Given that the export goods did not bear an MRP and were not required to do so under the Standards of Weights and Measures Act, 1976, the Tribunal was inclined in favor of the appellant. Consequently, the condition of pre-deposit of duty and penalty was dispensed with, and the stay petition was allowed.
*(Pronounced in the open court)*
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2011 (11) TMI 716
Issues Involved:1. Exclusion of telecommunication and travel expenses from total turnover for deduction u/s 10A. 2. Set-off of brought forward business losses and unabsorbed depreciation before computing deduction u/s 10A. Summary:Issue 1: Exclusion of Telecommunication and Travel Expenses from Total Turnover for Deduction u/s 10AThe CIT(A) directed the AO to exclude telecommunication expenses and travel expenses from total turnover while computing deduction u/s 10A of the IT Act, 1961. The revenue appealed against this decision. The Hon'ble Karnataka High Court in the case of CIT v M/s Tata Elxsi Ltd. and Others held that if export turnover is to be arrived at after excluding certain expenses, the same should also be excluded from total turnover. This principle was supported by the Hon'ble Mumbai High Court in the case of Gem Plus Jewellery India Ltd. and the Special Bench decision in the case of Sak Soft Ltd. The Tribunal upheld the CIT(A)'s order, directing the AO to exclude the mentioned expenses from both export turnover and total turnover while calculating deduction u/s 10A. Consequently, the revenue's appeals were dismissed. Issue 2: Set-off of Brought Forward Business Losses and Unabsorbed Depreciation Before Computing Deduction u/s 10AThe assessee contended that deduction u/s 10A should be computed before setting off carried forward business loss and unabsorbed depreciation. The CIT(A) dismissed the appeal, relying on the Tribunal's order in Intellinet Technologies India (P) Ltd. and the jurisdictional High Court's decision in Himatsingika Seide Ltd. However, the Hon'ble jurisdictional High Court in CIT v M/s Axa Business Services Pvt. Ltd. held that deduction u/s 10A is allowable without setting off brought forward loss and unabsorbed depreciation of other units. The Tribunal, following this dictum, directed the AO to calculate deduction u/s 10A without setting off carried forward business loss and depreciation. Thus, grounds no. 2 to 4 were allowed. Ground Nos. 5 to 7 were dismissed as the alternative plea of the assessee was accepted by the CIT(A) and affirmed by the Tribunal in ITA Nos. 84 and 85/Bang/2011. The issue of whether telecommunication expenses attributable to the delivery of computer software outside India should be reduced from export turnover while computing eligible deduction u/s 10A was not adjudicated by the first appellate authority. Conclusion:In the result, the appeals filed by the revenue were dismissed, and the appeals filed by the assessee were partly allowed as indicated above.
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2011 (11) TMI 715
Issues involved: Dispute over the allowability of exemption u/s 11 of the Income Tax Act for the assessment year 2007-08.
Summary:
Issue 1: Allowability of exemption u/s 11
The appeal by the revenue challenged the CIT(A) order regarding the allowability of exemption u/s 11 for the assessment year 2007-08. The assessee, a local authority created by the Govt. of Maharashtra, applied for exemption under section 10(23C) by filing for registration under section 12AA. The AO disallowed the claim based on a previous decision that the assessee was not a valid trust. However, the CIT(A) allowed the claim, citing previous approvals by the CIT(A) and Tribunal. The Tribunal upheld the CIT(A)'s decision, noting that the assessee's charitable character was not in dispute as it was registered under section 12AA, and similar cases had been decided in favor of exemption under section 11. Therefore, the Tribunal upheld the CIT(A)'s order allowing the exemption under section 11 for the assessee.
Decision:
The Tribunal dismissed the appeal of the revenue, upholding the CIT(A)'s decision to allow the exemption u/s 11 for the assessee.
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2011 (11) TMI 713
Issues:
Computation of deduction under section 80HHC of the Income Tax Act on DEPB income.
Analysis:
The appeals involved a common issue of computation of deduction under section 80HHC of the Income Tax Act on income from Duty Entitlement Pass Book (DEPB). The Assessing Officer disallowed the deduction claimed by the assessee, considering the profit on transfer of DEPB as covered under section 28 of the Income Tax Act. The CIT(A) upheld the disallowance, leading to the appeals before the Tribunal.
The Tribunal referred to the decision of a Special Bench of the Mumbai Tribunal in M/s Topman Exports v ITO and remanded the matter back to the Assessing Officer. However, the Hon'ble Punjab & Haryana High Court, in another case, observed that income from DEPB should be treated as business income for deduction under section 80HHC. The Tribunal found that the issue was in favor of the assessee based on previous judgments and directions from higher courts.
The Tribunal highlighted the judgment of the Hon'ble Bombay High Court in CIT v Kalpataru Colours and Chemicals, where it was held that the entirety of the amount received on the transfer of DEPB should be considered as business profit under section 28(iiid). The Tribunal rejected the contention that only the profits on the transfer of DEPB should be excluded from deduction under section 80HHC.
The Tribunal dismissed the appeals, stating that the Assessing Officer had correctly applied the law existing at the time of assessment. The decision to follow the law was upheld, considering the reversal of previous directions by higher courts. The appeals were thus dismissed based on the legal principles and judgments discussed in the case.
In conclusion, the Tribunal upheld the Assessing Officer's decision regarding the computation of deduction under section 80HHC on DEPB income, following the legal interpretations provided by higher courts and previous judgments. The appeals were dismissed based on the application of relevant legal principles and the existing law at the time of assessment.
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2011 (11) TMI 712
Deductions u/s 80-IB - Capital or revenue receipt - Notification No. 1(11)/2002-NER dated October 22, 2002 - HC ref case [ 2011 (1) TMI 394 - Jammu and Kashmir High Court] - Held that:- Mr. Ajay Vohra, learned counsel appears for the respondent. Liberty is granted to the learned counsel for the respondent to file counter affidavit within four weeks.
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2011 (11) TMI 711
Issues involved: Delay in filing Cross Objections challenging initiation of proceedings u/s 153C of the IT Act.
The judgment by the Appellate Tribunal ITAT AHMEDABAD dealt with the issue of delay in filing Cross Objections challenging the initiation of proceedings u/s 153C of the IT Act. The Cross Objections were found to be time-barred by a significant number of days, as highlighted in the case. The assessee admitted the delay in filing the Cross Objections in an affidavit submitted by Shri Mahendra A. Patel.
The assessee in all the Cross Objections challenged the initiation of proceedings u/s 153C of the IT Act. The learned Counsel for the assessee argued that the delay in filing the Cross Objections was due to a bona fide belief that the order passed by the learned CIT(A) could be supported without filing the Cross Objections, citing Rule 27 of the Appellate Tribunal Rules. However, the learned DR contended that the grounds raised in the Cross Objections had already been decided against the assessee by the learned CIT(A), and thus, there was no sufficient cause for the delay. The learned Counsel for the assessee requested to withdraw the Cross Objections with liberty to argue the validity of the assessment in the departmental appeal.
After considering the facts presented, the Tribunal permitted the assessee to withdraw the Cross Objections. It was noted that Rule 27 of the Appellate Tribunal Rules allows the Respondent (assessee) to support the order appealed against on any grounds decided against him, even if no appeal has been filed. Since the points raised in the Cross Objections had already been decided against the assessee by the learned CIT(A), the Tribunal found no sufficient cause for the delay in filing the Cross Objections. Consequently, the Cross Objections were dismissed as withdrawn, with the assessee retaining the liberty to argue the same points during the disposal of the departmental appeals.
In conclusion, all the Cross Objections of the assessee were dismissed as withdrawn by the Tribunal, in accordance with the provisions of Rule 27 of the Appellate Tribunal Rules.
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2011 (11) TMI 710
Issues Involved: Dispute over expenses incurred for completing a flat for benefit u/s 54F of the Income Tax Act.
Summary:
Issue 1: Consideration of Expenses for Benefit u/s 54F
The assessee sold a residential flat and invested the proceeds in a new property. Dispute arose over the expenses incurred before completion of the new flat for claiming deduction u/s 54F. The AO did not consider the additional expenditure of &8377; 43.00 lacs as part of the cost of the new flat, stating it was for improvement. The CIT(A) upheld this decision, stating the supplementary agreements were not part of the cost of acquisition. The Tribunal, however, found the claim justified as the expenses were necessary for making the flat habitable. The matter was remanded to the AO for verification.
Issue 2: Verification of Expenditure
The Tribunal noted that all expenditure incurred for acquisition of the new flat before taking possession should be considered as part of the cost. The claim of engaging other contractors for finishing work was found reasonable, as suggested by the builder. The Tribunal emphasized the need to verify the genuineness of the expenditure to prevent any inflation of costs. The order of the CIT(A) was set aside, and the matter was remanded to the AO for a fresh order after necessary examination.
Conclusion
The Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the need for verification of expenses before considering them for deduction u/s 54F.
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2011 (11) TMI 709
Reasseement Proceedings u/s 147 - Assessee contended A.O. has not validly initiated reassessment proceedings u/s 147 for A.Y. 2004-05 and A.Y. 2005-06. CIT upheld such proceedings - HELD THAT:- Carefully gone through the orders of the authorities below and find from record and find that the original return of the assessee for assessment year 2005-06 was processed u/s 143(1) and thereafter on the basis of reasons recorded the AO reached the conclusion that there was escapement of income. Accordingly, he reopened the assessment. As per the verdict of the Hon’ble Supreme Court in the case of ASSISTANT COMMISSIONER OF INCOME-TAX VERSUS RAJESH JHAVERI STOCK BROKERS P. LIMITED [2007 (5) TMI 197 - SUPREME COURT], processing of return us/ 143(1)(a) is not an assessment and it cannot be said that the Assessing Officer has applied his mind to the facts of the case. In view of the detailed findings recorded by the learned Commissioner of Income tax (Appeals), we do not find any infirmity in his order for holding the reopening of assessment valid.
Reopening of assessment in the assessment year 2004-05 was within four years of relevant assessment year, therefore, proviso to section 147 was not applicable and the learned CIT (A) was justified in upholding the reassessment u/s 147.
Disallowance of claim of deduction u/s 80IB(10) - Retrospective Application of Amendment - Ld. CIT observed that the assessee has not obtained completion certificate in respect of the housing project from the local authority till 31st March, 2008, therefore, not fulfilled the conditions laid down u/s 80IB(10). Accordingly, confirmed the action of AO for declining the claim of deduction for the assessment years 2004-05 and 2005-06 on the basis of amended provisions which came on the statute at a later date i.e. 1.4.2005.
HELD THAT:- It is established law that substantive law unless made specifically retrospective has only to be understood as having prospective operation from the date on which it becomes law or any other date specified in the statute.
With regard to the retrospective application of the amendment, it was held by the Hon’ble Supreme Court in STATE OF KERALA VERSUS ALEX GEORGE AND ANOTHER [2004 (11) TMI 104 - SUPREME COURT],that where schedule of rates was modified reducing inter alia exemption limit, the effect could be given in the next succeeding year.
Applying the relevant provisions of the law with respect to the date of approval of the project by the local authority as on 4.12.2002, we can safely conclude that the provisions applicable for the assessment year 2004-05 do not require any completion certificate of the local authority in so far as amendment was brought with effect from 1.4.2005 i.e. assessment year 2005-06. Accordingly, we direct the AO to allow the assessee’s claim for deduction u/s 80IB(10) for the assessment year 2004-05.
In respect of the assessment year 2005-06 since the amended provisions came into force, the assessee was required to obtain certificate from the local authority for completion of the project as a pre-condition for deduction u/s 80IB(10) of the Act. As the assessee has not obtained such certificate, we confirm the action of the lower authorities for declining the claim of deduction u/s 80IB(10) to the assessee for the assessment year 2005-06.
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2011 (11) TMI 708
Issues Involved:
1. Quantum proceedings for A.Y. 2000-2001 and A.Y. 2001-2002.
2. Penalty proceedings for A.Y. 2000-2001 and A.Y. 2001-2002.
3. Additions made under Section 68 for unexplained cash credits and unsecured loans.
4. Disallowance of expenses including bank interest and labor charges.
5. Acceptance of sales and opening stock.
Detailed Analysis:
Issue 1: Quantum Proceedings for A.Y. 2000-2001
The assessee filed a return showing a net loss of Rs. 1,22,100/- based on sales of Rs. 39,45,105/-. The AO accepted only Rs. 5,04,400/- of the sales, estimating the income at Rs. 36,506/- based on an 8% profit on labor contract receipts and rent receipts. Additionally, the AO added Rs. 10,09,000/- under Section 68 for unsecured loans, resulting in a total income of Rs. 10,45,500/-. The CIT(A) upheld this decision. The Tribunal, however, accepted the sale to the Department of Mines & Geology as genuine and allowed 50% of the remaining sales, revising the accepted sales to Rs. 30,33,795/-. The Tribunal also noted that the AO's rejection of the opening stock was without basis since the closing stock of the previous year was not disturbed. The Tribunal drew a revised profit and loss account and balance sheet, concluding that the cash in hand should be Rs. 30,90,273.24 as opposed to the AO's assessment. Consequently, the assessed income was confirmed at Rs. 36,506/-.
Issue 2: Penalty Proceedings for A.Y. 2000-2001
The AO imposed a penalty of Rs. 3,16,415/- under Section 271(1)(c) for the addition of Rs. 10,09,000/- under Section 68. Since the Tribunal deleted the entire addition of Rs. 10,09,000/-, the penalty was also deleted.
Issue 3: Quantum Proceedings for A.Y. 2001-2002
The assessee declared a loss of Rs. 2,62,705/- with sales of Rs. 39,55,810/-. The AO estimated the sales at Rs. 40,00,000/- and the GP at Rs. 8,00,000/-, adding Rs. 2,92,249/-. The AO also disallowed bank interest expenses of Rs. 5,74,411/- and labor expenses of Rs. 1,00,000/-, among others, and added Rs. 31,59,000/- for unsecured loans and Rs. 81 lakhs for unexplained cash deposits under Section 68. The CIT(A) provided partial relief. The Tribunal accepted the sales as estimated by the AO and confirmed the GP addition of Rs. 2,92,249/-. Regarding the source of payment to the bank under OTS, the Tribunal noted that Rs. 20 lakhs was accepted by the AO, leaving Rs. 61 lakhs unexplained. The Tribunal prepared a revised profit and loss account and balance sheet, concluding that Rs. 9.16 lakhs remained unexplained and confirmed the addition to this extent.
Issue 4: Penalty Proceedings for A.Y. 2001-2002
The AO imposed a penalty of Rs. 14,50,472/- for additions of Rs. 1,50,000/- and Rs. 39,82,400/-. The Tribunal confirmed the addition of Rs. 9.16 lakhs and directed the penalty to be reworked based on this amount.
Issue 5: Additions under Section 68 and Disallowance of Expenses
The Tribunal found that out of Rs. 10,09,000/- added under Section 68 for A.Y. 2000-2001, only Rs. 50,000/- was received in the current year, which was also deleted due to telescoping benefits. For A.Y. 2001-2002, the Tribunal noted that Rs. 20 lakhs was already accepted by the AO, and the remaining Rs. 1.50 lakhs was explained satisfactorily. The Tribunal upheld the deletion of bank interest and labor charges disallowed by the AO, finding no error in the CIT(A)'s order.
Conclusion:
The Tribunal's detailed analysis resulted in partial relief to the assessee for both assessment years, with specific directions for reworking penalties based on confirmed additions. The Tribunal's approach emphasized the need for logical conclusions based on available evidence and adherence to established legal principles.
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2011 (11) TMI 707
Issues Involved:1. Confirmation of addition made by Assessing Officer to capitalize expenditure of Rs. 5,81,435/-. Summary:Issue 1: Confirmation of Addition Made by Assessing Officer to Capitalize Expenditure of Rs. 5,81,435/-The only issue involved in the appeal is confirming the addition made by Assessing Officer to capitalize expenditure to the tune of Rs. 5,81,435/-. The appellant, a registered partnership firm engaged in the manufacture and sale of Footwear, claimed total expenditure for repairs of Rs. 7,35,249/-. The Assessing Officer treated Rs. 70,000/- towards temporary structure where 100% depreciation was allowed and Rs. 1,20,000/- as revenue expenditure. The balance expenditure of Rs. 5,81,435/- was treated as capital in nature and disallowed. The CIT (A) initially deleted this addition relying on the decision of Hon'ble Madras High Court in the case of CIT vs. Haridas Bhagath & Co. Pvt. Ltd. reported in 240 ITR 169. However, the ITAT restored the issue to the file of CIT (A) with directions to evaluate the complete facts before arriving at a decision in accordance with law, providing reasonable opportunity of being heard to the assessee. Upon re-evaluation, the CIT (A) upheld the Assessing Officer's decision, referencing several case laws including the Supreme Court decision in CIT Vs. Saravana Spinning P. Ltd., 293 ITR 201 (SC), which held that expenditure must be incurred to "preserve and maintain" an already existing asset to qualify as "current repairs". The CIT (A) noted that the expenditure incurred by the appellant included significant amounts on materials like cement, iron sheets, aluminum sections, and teak/plywood, indicating new construction rather than mere repairs. Consequently, the expenditure was deemed capital in nature. The ITAT, after hearing both sides, concurred with the CIT (A)'s findings, emphasizing that expenditure bringing a new asset into existence or obtaining a new advantage is capital in nature. The reliance on the Madras High Court decision was found unhelpful as Explanation I to Section 32 of the Income-tax Act was not considered in that case. The ITAT upheld the CIT (A)'s decision, confirming the addition made by the Assessing Officer. In conclusion, the appeal of the assessee was dismissed. Order pronounced in open court on this 9th day of November, 2011.
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2011 (11) TMI 706
Issues involved:
The judgment involves the rejection of writ petitions for Habeas Corpus challenging detention orders under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 due to delay in disposing of representations by the Central Government.
Details of the Judgment:
Issue 1: Delay in Disposal of Representations
The detenus' representations were rejected by the State Government on 8th April, 2011, but the Central Government delayed until 6th June, 2011, to reject them. The delay was explained in detail in an affidavit filed by an Under Secretary to the Government of India. The Court examined the timeline of events leading to the rejection and questioned whether the delay was in line with constitutional principles.
Issue 2: Legal Precedents and Constitutional Provisions
The Court referred to previous judgments emphasizing the importance of promptly considering and disposing of detenus' representations. The Constitution Bench highlighted the need for expeditious consideration without supine indifference. Subsequent judgments reiterated the necessity of timely action, emphasizing that unexplained delays render continued detention impermissible and illegal.
Issue 3: Procedural Safeguards and Personal Liberty
The Court stressed the strict adherence to procedural safeguards for protecting personal liberty. Citing historical insistence on procedural safeguards for personal liberty, the Court emphasized that delays without adequate explanations could lead to quashing of detention orders.
Issue 4: Technical Objections in Habeas Corpus Petitions
The Court addressed the argument that technical objections regarding the prayer in the Habeas Corpus petition should not be entertained. It highlighted the importance of the writ of Habeas Corpus in safeguarding individual liberties against unlawful restraints, emphasizing the liberal interpretation of regulations to promote the effectiveness of the proceeding.
Conclusion:
The Court overruled technical objections, emphasizing the importance of safeguarding individual liberties through the writ of Habeas Corpus. It allowed the appeals, directing the immediate release of the detenus unless required in connection with another case.
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