|
Advanced Search Options
Case Laws
Showing 161 to 180 of 558 Records
-
2012 (2) TMI 581
Issues involved: Interpretation of retention money u/s mercantile system of accounting for AYs 2002-03 & 2005-06.
Issue 1: Retention money accrual
The revenue contended that the retention money of Rs. 3,05,52,566 accrued to the assessee when the contract was completed as per the terms, thus should be recognized as income. However, the Tribunal referred to a similar case and held that retention money cannot be recognized until the guarantee period is over. The Hon'ble Jurisdictional High Court affirmed this decision, stating that retention money withheld pending completion of work does not accrue to the contractor in the year retained. The Tribunal also cited another case where it was held that retention money received against a bank guarantee cannot be considered income until the guarantee period expires. The Tribunal noted that the assessee consistently offered for taxation the part released of retention money against a bank guarantee in the assessment year when the right to receive it accrued unconditionally. The Tribunal upheld the CIT(A)'s decision based on previous judgments and the rule of consistency.
Decision:
The Tribunal dismissed the revenue's appeals based on the interpretation of retention money under the mercantile system of accounting, following previous decisions and maintaining consistency with the assessee's approach.
-
2012 (2) TMI 580
Issues Involved:
1. Status of the Assessee Institution
2. Disallowance of Telephone Expenses
3. Applicability of Section 13(1)(d)(i) and 13(1)(c)(ii)
4. Addition on Account of Interest Benefit
5. Eligibility for Deduction u/s 11(1)(a)
6. Deduction for Acquisition of Fixed Assets
7. Claim of Depreciation
Summary:
1. Status of the Assessee Institution:
The Revenue contended that the assessee institution should be assessed as an "association of persons" (AOP). However, the assessee argued that it is an "Artificial Juridical Person" as defined u/s 2(31)(vii) of the IT Act. The Tribunal upheld the assessee's status as an Artificial Juridical Person, citing past consistent assessments and judicial precedents, including the decision from the Hon'ble M.P. High Court in CIT v. Sobhagmal Mishrilal Semlavada (223 ITR 554).
2. Disallowance of Telephone Expenses:
The Revenue challenged the deletion of disallowance of telephone expenses, arguing personal benefit to the Chairperson. The Tribunal found that the expenses were incurred for the society's purposes and not for personal benefit, citing judicial precedents that reasonable compensation for services does not violate sections 11 and 12. The Tribunal affirmed the CIT(A)'s decision to delete the addition.
3. Applicability of Section 13(1)(d)(i) and 13(1)(c)(ii):
The Revenue argued that the assessee violated these sections by providing interest-free loans to another society. The Tribunal upheld the CIT(A)'s finding that both societies had similar educational objectives and no personal benefit was passed to the members. Thus, sections 13(1)(d)(i) and 13(1)(c)(ii) were not attracted, and the assessee was entitled to benefits u/s 11 and 12.
4. Addition on Account of Interest Benefit:
The Revenue's addition of notional interest on loans given to another society was contested. The Tribunal held that such notional income could not be taxed, especially when the loan was given for a charitable cause. The addition was deleted, affirming the CIT(A)'s decision.
5. Eligibility for Deduction u/s 11(1)(a):
The Tribunal found no violation of the provisions of the Act, noting an excess of expenditure over income. The CIT(A)'s decision to allow the deduction u/s 11(1)(a) was upheld.
6. Deduction for Acquisition of Fixed Assets:
The Revenue's denial of deduction for income applied towards the acquisition of fixed assets was challenged. The Tribunal cited its decision in Vichar Bharti Education Society, confirming that such investments should be treated as an application of income u/s 11. The CIT(A)'s decision to allow the deduction was affirmed.
7. Claim of Depreciation:
The Revenue argued that depreciation should not be allowed as the cost of assets was fully claimed as application of income. The Tribunal, referencing judicial decisions including CIT v. Gujrat Samaj, upheld the CIT(A)'s decision to allow the claim of depreciation.
Conclusion:
The appeals of the Revenue were dismissed, and the Cross Objections of the assessee were disposed of as infructuous. The Tribunal affirmed the CIT(A)'s decisions on all grounds, maintaining the assessee's eligibility for various deductions and confirming its status as an Artificial Juridical Person.
-
2012 (2) TMI 579
Registration under Section 12AA and approval under Section 80G - Held that:- By sub-clause(3) incorporated in section 12AA vide which if after granting registration it is found by the ld. CIT that the activities of the Trust are not carried out in furtherance of its charitable objects, he can cancel the registration granted to the Trust. So, when these provisions are read in conjunction, and a harmonious interpretation is given to them, we find that the view taken by the Coordinate Benches in numerous successive cases, some of which we have mentioned herein above, is very logical, and the same we are bound to follow.
Accordingly, we cannot sustain the order of ld. DIT(E) in refusing to grant registration and consequent refusal to grant approval u/s 80G of the Act. No fruitful purpose will be served by restoring the issue to the file of ld. DIT(E). Consequently, we set aside the finding of the DIT(E) and direct him to grant registration u/s 12AA and also to grant approval u/s 80G to the assessee-Trust. Appeal filed by the assessee stands allowed
-
2012 (2) TMI 578
Issues involved: The judgment involves the interpretation of sections 80-IA, 70(1) of the Income Tax Act, 1961 regarding set off of losses from an industrial undertaking and windmill business against other income.
Summary:
Issue 1: Set off of loss from industrial undertaking u/s 80-IA:
The appeal by the revenue was against the CIT(A)'s order regarding the set off of loss from the industrial undertaking. The CIT(A) held that the Assessing Officer was incorrect in not allowing the set off of the loss against other income, citing section 80-IA and 80-IA(5) of the Act. The revenue contended that the non-obstante clause in section 80-IA(5) should prevail over section 70(1) for computing income/loss from the windmill business separately. The Tribunal upheld the CIT(A)'s decision based on the judgment in a similar case, affirming that the loss from the industrial undertaking can be set off against other heads of income.
Issue 2: Treatment of unabsorbed depreciation from windmill business:
The AO disallowed the claim of loss from the windmill business, stating that the income from this source should be computed independently and any unabsorbed depreciation cannot be set off against other income. The CIT(A) directed the AO to allow set off of the entire loss from the windmill business against other heads of income. The Tribunal, following a similar precedent, affirmed the CIT(A)'s decision, emphasizing that the deeming provision of section 80-IA(5) cannot override section 70(1) for set off of losses from one source against income from another source under the same head.
Conclusion:
The Tribunal dismissed the appeal by the revenue, upholding the CIT(A)'s decision to allow the set off of loss from the windmill business against other heads of income. The judgment was based on the interpretation of relevant provisions of the Income Tax Act and previous judicial decisions, affirming the assessee's right to set off losses as per the applicable sections.
-
2012 (2) TMI 577
Issues involved: The issues involved in the judgment include the need for cross-examination of witnesses, the relevance of the log book in the investigation, delay in the proceedings, and the imposition of penalty for smuggling activities.
Cross-examination of Witnesses: The Tribunal observed that the appellant had contended that certain witnesses needed to be cross-examined to establish the charges against him. The Tribunal allowed the appeal and remanded the matter back to the adjudicating authority to permit the cross-examination of specific witnesses, including panchas and security guards, to address the defects in the case.
Relevance of Log Book: The adjudicating authority noted that the log book requested from Air India authorities was not a relied-upon document in the case. The authority stated that there was no obligation for the Department to provide the log book as it was not essential for the case. The advocate's reliance on the log book was deemed to have no evidentiary value, and the authority emphasized that the log book was not a statutory document.
Delay in Proceedings: The advocate for the appellant cited a Supreme Court decision regarding the right to a speedy investigation and trial. The Tribunal observed that despite opportunities for cross-examination, witnesses did not appear, including key individuals involved in the investigation. The Tribunal found no intentional delay from the Department's side and concluded that the delay caused by the appellant's insistence on the log book was unwarranted.
Imposition of Penalty: The appellant was found to be involved in smuggling activities, leading to the imposition of a penalty. The Tribunal reviewed the previous order and remand proceedings, highlighting the lack of interest from departmental officers in handling remanded matters. The Tribunal concluded that the impugned proceedings were in violation of its previous directions and ordered the matter to go back to the adjudicating authority for compliance within a specified timeframe.
Conclusion: The Tribunal set aside the impugned order and remanded the matter back to the adjudicating authority to ensure compliance with the Tribunal's directions within 90 days. The appellant was directed to appear before the adjudicating authority as required.
-
2012 (2) TMI 575
Issues involved: Whether CESTAT was justified in setting aside duty demand u/s 11A(2), penalty u/s 11AC, and interest determined u/s 11AB of the Central Excise Act, 1944.
Summary:
The respondent-assessee, engaged in manufacturing ACSR Moose Conductors, availed duty exemption u/s 108/95-C.E. for products sold to M/s. Transmission Corporation of Andhra Pradesh financed by Japan Bank. Excise Authorities later found Japan Bank not notified as an International Organization, rendering the exemption invalid.
Proceedings confirmed duty, penalty, and interest against the assessee. CESTAT held that benefit was extended based on a certificate from the State Government, absolving the assessee of fault. Even if liable to pay duty, the assessee could claim refund as per policy. As it was a revenue-neutral case, CESTAT's decision to delete duty, penalty, and interest was upheld, dismissing the appeal with no costs.
-
2012 (2) TMI 574
Issues Involved:
The judgment involves the following Issues:
1. Justification of making reference u/s. 142A to the DVO
2. Deletion of addition on account of difference in cost of investment
Issue 1: Justification of making reference u/s. 142A to the DVO
The Revenue filed an appeal challenging the decision of the ld. CIT(A) regarding the justification of making a reference u/s. 142A to the DVO. The Assessing Officer had made an addition on account of a difference in the cost of construction reported by the assessee and the Departmental Valuation Officer. The assessee contended that the reference to the DVO u/s. 142A was invalid as the books of account were audited and no defects were found. The ld. CIT(A) found that the reference to the DVO cannot be made in a routine manner and can only be done if the Assessing Officer is not satisfied with the correctness of the account books. Since the accounts of the assessee were not rejected and were maintained properly, the reference to the DVO was deemed unjustified. The ld. CIT(A) allowed the appeal of the assessee on this ground and also deleted the addition on merit after considering the material on record.
Issue 2: Deletion of addition on account of difference in cost of investment
The ld. CIT(A) found that the Assessing Officer had accepted the audited books of the assessee without pointing out any defects and had allowed the deduction u/s. 80IB(10) of the Income-tax Act. Therefore, the reference to the DVO for ascertaining the cost of construction was considered unjustified. The Tribunal upheld the decision of the ld. CIT(A) stating that the reference to the DVO was highly unjustified as the assessee had maintained proper books of account and had been granted the deduction u/s. 80IB(10). The Tribunal confirmed the finding that the reference to the DVO was unjustified and dismissed the departmental appeal.
In conclusion, the Tribunal dismissed the departmental appeal and the cross-objection of the assessee was dismissed as withdrawn.
-
2012 (2) TMI 573
Issues involved: Taxability of SIM card sale and services, liability under Finance Act, 1994, imposition of penalty.
In the judgment by the Appellate Tribunal CESTAT, New Delhi, the issues revolved around the taxability of SIM card sale and services, the confusion in the telecom sector regarding liability under the Finance Act, 1994, and the imposition of penalties. The matter had reached the Tribunal due to conflicting decisions from various forums before being resolved by the Apex Court in a previous judgment.
Appeal No. ST/41 of 2006:
In this appeal, the learned Counsel argued that a show cause notice was issued for the period 1997-1998 to 1999-2000. Acknowledging the settled law by the Apex Court, it was agreed that the service tax liability could be confirmed without imposing a penalty in this case. The Tribunal, considering the fair proposition and the journey of litigations, decided to allow the appeal partly, confirming the tax demand with applicable interest but waiving the penalty.
Appeal No. ST/292 of 2006:
This appeal covered two show cause notices dated 1/12/2005 and 29/12/2005. For the notice dated 1/12/05, the liability was acknowledged for the period from September 2004 to March 2005. It was decided that the appellant should discharge the service tax demand for this period with interest but without any penalty. Regarding the notice dated 29/12/05, covering the period from 1/4/05 to 30/09/05, the appellant was directed to deposit the service tax liability with interest as per the Apex Court decision, with the penalty being waived. Both appeals were allowed, granting relief as indicated against each appeal, with no penalties imposed in either case.
-
2012 (2) TMI 572
Issues involved: Appeal against deletion of addition u/s. 14A of the Income Tax Act, 1961.
Summary:
Issue 1: Deletion of addition u/s. 14A of the Act read with Rule 8D of the I. T. Rules, 1962
The appeal by revenue challenged the order of CIT(A) deleting the addition u/s. 14A of the Act. The assessee's total income was initially declared at &8377; 5,70,120/-, but the assessment increased it to &8377; 8,92,490/- by disallowing expenses u/s. 14A read with Rule 8D. The CIT(A) deleted the entire addition based on the decision of the Hon'ble Delhi High Court in a specific case. The revenue contended that the addition should have been restricted to a certain amount as per Rule 8D. The Tribunal referred to a decision by the Hon'ble Bombay High Court regarding the prospective applicability of Rule 8D from assessment year 2008-09. Following this, the Tribunal directed the Assessing Officer to restrict the disallowance u/s. 14A to 1% of total exempt income, in line with previous decisions on similar matters. Consequently, the appeal of the revenue was partly allowed.
-
2012 (2) TMI 571
Issues Involved:
1. Disallowance of sales tax collection u/s 43B.
2. Reduction in depreciation on new plant & machinery u/s 32.
3. Disallowance of travelling expenses u/s 37(3) r.w.r 6D.
4. Disallowance of guest house expenses u/s 37(4).
5. Disallowance of expenses on food and beverages u/s 37(2).
6. Disallowance of contributions u/s 35(1)(iii).
7. Disallowance of donations u/s 80G.
8. Taxability of time-barred liabilities written back u/s 41(1).
9. Deduction u/s 80HH and 80I.
10. Set-off of earlier years' losses for deduction u/s 80I.
11. Tax treatment of interest income for purposes of sec. 80HHC.
12. Deduction for provision of retirement pension payable to employees.
Summary:
1. Disallowance of sales tax collection u/s 43B:
The Tribunal upheld the disallowance of sales tax collection u/s 43B, emphasizing that the sales tax collected is a revenue receipt and must be included in the trading account. The object of sec. 43B is to ensure payment of tax, duty, cess, or fee before allowing any deduction.
2. Reduction in depreciation on new plant & machinery u/s 32:
The Tribunal decided in favor of the assessee, stating that the capital subsidy received from the Government of Jammu & Kashmir for setting up a unit should not reduce the cost of plant and machinery for depreciation purposes, following the Supreme Court's decision in Commissioner of Income-tax v. P.J. Chemicals Ltd.
3. Disallowance of travelling expenses u/s 37(3) r.w.r 6D:
The Tribunal upheld the disallowance of travelling expenses computed on a per-trip basis, following the decision of the Bombay High Court in Commissioner of Income-tax vs. Arrow India Ltd. However, it directed the Assessing Officer to examine and allow travelling expenses incurred by Research Scientists u/s 35(1)(i).
4. Disallowance of guest house expenses u/s 37(4):
The Tribunal upheld the disallowance of guest house expenses, including rent, repairs, rates, taxes, and depreciation, following the Supreme Court's decision in Britannia Industries Ltd. v. Commissioner of Income-tax.
5. Disallowance of expenses on food and beverages u/s 37(2):
The Tribunal allowed the expenditure on food and beverages provided to employees at get-together and conferences but disallowed the expenditure on food and beverages provided to business visitors, following earlier Tribunal decisions.
6. Disallowance of contributions u/s 35(1)(iii):
The Tribunal directed the Assessing Officer to verify the eligibility of contributions to the Indian Institute of Education and Consumer Education Society for deduction u/s 35(1)(iii), as the claim was raised for the first time before the Tribunal.
7. Disallowance of donations u/s 80G:
The Tribunal directed the Assessing Officer to verify the exemption certificates of the institutions to whom donations were made and decide the claim of the assessee for deduction u/s 80G accordingly.
8. Taxability of time-barred liabilities written back u/s 41(1):
The Tribunal upheld the addition of time-barred liabilities written back as income u/s 41(1), following the Tribunal's decision in the assessee's own case for earlier years.
9. Deduction u/s 80HH and 80I:
The Tribunal directed the Assessing Officer to exclude certain head office expenses from allocation while computing deductions u/s 80HH and 80I, following the Tribunal's earlier decisions.
10. Set-off of earlier years' losses for deduction u/s 80I:
The Tribunal upheld the set-off of earlier years' losses and unabsorbed depreciation before allowing deduction u/s 80I, following the Tribunal's decision in the assessee's own case for earlier years.
11. Tax treatment of interest income for purposes of sec. 80HHC:
The Tribunal upheld the treatment of interest income as "income from other sources" and not as business income, thereby excluding it from the computation of deduction u/s 80HHC.
12. Deduction for provision of retirement pension payable to employees:
The Tribunal set aside the issue of provision for retirement pension payable to employees to the Assessing Officer for fresh examination and verification of the Pension Scheme, following the Supreme Court's decision in Bharat Earth Movers v. Commissioner of Income-tax.
Miscellaneous Issues in Revenue's Appeal:
The Tribunal decided various issues in favor of the assessee, including foreign travel expenses of spouses, club subscription and entrance fees, refreshment to shareholders at AGM, and rural development expenses, following earlier Tribunal decisions. The issue of excluding excise duty, sales tax, and miscellaneous income from total turnover for computing deduction u/s 80HHC was directed to be re-computed in light of the Supreme Court's decisions.
-
2012 (2) TMI 570
Issues involved: Appeal against orders of CIT (A)-13 Mumbai, application of provisions of Section 14A r.w.rule 8D, computation of disallowance under rule 8D, deduction under section 36(va), disallowance of employees' contribution paid within grace period, disallowance of amount paid to Apparel Export Promotion Council, addition of display charges by Shoppers Stop, levy of interest under section 234B and 234D.
Issue 1 - Application of Section 14A r.w.rule 8D:
The appeal involved the application of provisions of Section 14A r.w.rule 8D. The decision was based on the Hon'ble Bombay High Court case of Godrej Boyce Mfg Co. The Assessing Officer invoked rule 8D which was not applicable in the impugned AY. The issue was restored to the file of the Assessing Officer for fresh examination to decide the disallowance under section 14A. The Assessing Officer was directed to examine whether there is any exempt income and determine a reasonable amount for disallowance under section 14A. The ground was considered as allowed.
Issue 2 - Computation of disallowance under rule 8D:
An alternate ground with reference to computation of disallowance under rule 8D was raised as a precautionary issue by the assessee. Since the first issue was restored to the file of the Assessing Officer, this ground became academic in nature and was accordingly dismissed.
Issue 3 - Deduction under section 36(va):
The issue pertained to allowing deduction under section 36(va) of `46,82,974/-. The Assessing Officer had passed an order under section 154 reducing said amount, which was not considered by CIT (A). As the assessee received relief by way of modification under section 154, there was no need to adjudicate the issue, and the ground was dismissed.
Issue 4 - Disallowance of employees' contribution paid within grace period:
The ground pertained to disallowance of `4,26,016/- towards employees' contribution paid within the grace period. The Assessing Officer confirmed the disallowance but did not allow the amount paid within the grace period. Following the decision of the jurisdictional High Court, the Assessing Officer was directed to allow the amount paid within the grace period, and thus, the ground was considered as allowed.
Issue 5 - Disallowance of amount paid to Apparel Export Promotion Council:
The issue involved the disallowance of `13,72,623/- being the amount paid to Apparel Export Promotion Council during the previous year. The Assessing Officer disallowed the amount as prior period expenditure, which was confirmed by CIT (A). However, considering the events leading to the forfeiture of the amount by AEPC during the financial year 2004-05, it was held that the amount is allowable in the year of forfeiture. The Assessing Officer was directed to allow the amount, and the ground was allowed.
Issue 6 - Addition of display charges by Shoppers Stop:
The issue concerned the addition of `1,56,664/- being display charges deducted by Shoppers Stop. The Assessing Officer made the addition due to discrepancies noticed and incomplete verification. The CIT (A) directed the Assessing Officer to complete the verification and give the assessee an opportunity. The Assessing Officer was directed to complete the verification expeditiously and delete the addition after giving the necessary opportunity to the assessee. The ground was considered allowed for statistical purposes.
Issue 7 - Levy of interest under section 234B and 234D:
The final issues pertained to the levy of interest under section 234B and 234D. The Assessing Officer was directed to examine the issue after giving an opportunity to the assessee before levying any interest under the mentioned sections. With these directions, these grounds were considered as allowed.
In conclusion, the assessee's appeal was partly allowed by the Appellate Tribunal ITAT Mumbai.
-
2012 (2) TMI 569
Issues involved: Appeal by Revenue against order of CIT(A)-Central-II, Kolkata for A.Yr. 2007-08 regarding inclusion of interest income in deduction u/s 80IB.
Summary:
The Revenue appealed against the CIT(A)'s decision to include interest income from a debtor in the calculation of deduction u/s 80IB. The appellant argued that interest income is not derived from the business of industrial operation. The Tribunal noted that a similar issue was decided in favor of the assessee in a previous case. The Tribunal found that the Assessing Officer had included miscellaneous receipts as business income eligible for deduction u/s 80IB, which was contested by the CIT(A). The Tribunal upheld the CIT(A)'s decision to include the interest income for deduction u/s 80IB, as it was derived from debtors on late payment. The appeal of the Revenue was dismissed, confirming the inclusion of the interest income for deduction u/s 80IB.
-
2012 (2) TMI 568
Whether the Government has the right to alienate, transfer or distribute natural resources/national assets otherwise than by following a fair and transparent method consistent with the fundamentals of the equality clause enshrined in the Constitution?
Whether the recommendations made by the Telecom Regulatory Authority of India (TRAI) on 28.8.2007 for grant of Unified Access Service Licence (for short `UAS Licence') with 2G spectrum in 800, 900 and 1800 MHz at the price fixed in 2001, which were approved by the Department of Telecommunications (DoT), were contrary to the decision taken by the Council of Ministers on 31.10.2003?
Whether the exercise undertaken by the DoT from September 2007 to March 2008 for grant of UAS Licences to the private respondents in terms of the recommendations made by TRAI is vitiated due to arbitrariness and malafides and is contrary to public interest?
Whether the policy of first-come-first-served followed by the DoT for grant of licences is ultra vires the provisions of Article 14 of the Constitution and whether the said principle was arbitrarily changed by the Minister of Communications and Information Technology (hereinafter referred to as `the Minister of C & IT’), without consulting TRAI, with a view to favour some of the applicants?
Whether the licences granted to ineligible applicants and those who failed to fulfil the terms and conditions of the licence are liable to be quashed?
-
2012 (2) TMI 567
Issues Involved:
1. Maintainability of pre-execution challenge against preventive detention order.
2. Inordinate delay in the execution of the detention order.
3. Whether the proposed detenu was absconding.
4. Validity of the detention order based on a solitary incident.
Summary:
1. Maintainability of Pre-execution Challenge:
The court considered whether an order of preventive detention could be challenged at the pre-execution stage. It referred to the decisions in *Alka Subhash Gadia* and *Deepak Bajaj*, concluding that pre-execution challenges are maintainable in exceptional cases. The court upheld the contention that a pre-execution challenge against a preventive detention order is maintainable in exceptional cases, rejecting the respondents' argument that the legality of the detention order could only be considered post-execution.
2. Inordinate Delay in Execution:
The court examined the delay in executing the detention order dated 27.8.2008, which remained unexecuted for more than three years. It noted that despite the proposed detenu's regular court appearances and the respondents' failure to provide a proper explanation for the delay, the detention order had not been executed. The court found that the delay indicated a lack of genuine satisfaction regarding the necessity of immediate detention, thereby snapping the live and proximate link between the grounds of detention and its purpose.
3. Whether the Proposed Detenu was Absconding:
The court evaluated the respondents' claim that the proposed detenu was absconding. It noted that the proposed detenu had been appearing before courts in Chandigarh and was arrested on 24.7.2011 in execution of a warrant issued by the Special Court, NDPS Act cases, Vadakara. The court concluded that the proposed detenu was not absconding and that the respondents' efforts to execute the detention order were feeble and insufficient.
4. Validity of the Detention Order Based on a Solitary Incident:
The court considered the petitioner's contention that the detention order was based on a solitary incident without previous prejudicial activities. The court noted that the respondents did not refute this contention. It concluded that the order of detention was issued either with a wrong purpose or on vague grounds, making it unsustainable.
Conclusion:
The court quashed the detention order dated 27.8.2008 u/s 3(1) of the PITNDPS Act, as the inordinate delay in its execution, lack of proper explanation, and absence of good reasons rendered it ineffective. The writ petition was allowed, and the detention order was quashed.
-
2012 (2) TMI 566
The Bombay High Court admitted the case based on substantial questions of law regarding the correctness of CESTAT's decision on penalty under the Central Excise Act, 1944. Key questions include the sustainability of penalty when differential duty was deposited and the applicability of Section 11AC without suppression of facts.
-
2012 (2) TMI 565
Issues involved: Validity of suspension of CHA license and renewal of license.
The judgment by the Appellate Tribunal CESTAT NEW DELHI, delivered by Shri D.N. Panda and Sh. Rakesh Kumar, addressed the issue of the suspension and renewal of a CHA license. The appellant's CHA license was suspended on 20/08/2008 but was renewed on 19/1/2009. The appellant faced charges under the Customs Act, 1962, which were adjudicated on 27/1/2010, resulting in exoneration. The appellant argued that once the CHA license is renewed, the suspension does not subsist as the suspended license is deemed to have been renewed. On the other hand, the Revenue representative argued that the suspension was warranted due to an employee's involvement in illicit activities. After hearing both sides and examining the record, the Tribunal found it illogical for a renewed license to be considered suspended. The Tribunal set aside the suspension order and allowed the appeal, emphasizing the need for Revenue to follow the law for any fresh cause of action and clarifying that the order does not obstruct any ongoing investigations against the CHA.
-
2012 (2) TMI 563
Addition on account of non-realization of provisions of surcharge - accrual of income - Held that:- The amount of sur-charge 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
TDS u/s 194J - payment made on account of SLDL & wheeling charges - non deduction of tds - Held that:- Tribunal has followed the decision in the case of Jaipur Vidyut Vitran Nigam Ltd. v. ITO [2009 (4) TMI 489 - ITAT JAIPUR-A] wherein also, the issue was exactly the same, i.e., correctness or otherwise of addition u/s 40(a)(ia) of the Act on account of payment made as Wheeling charges and SLDC charges, for non-deduction of TDS as per Section 194 J of the Act. In its detailed order reproduced as above, the Jaipur Tribunal has considered all the aspects touching the issue and has thereafter held the assessee not liable to deduct tax on the payments made, the provisions of Section 194 J of the Act being not attracted. The Jaipur Tribunal decision has been followed by the Delhi Tribunal in the assessee’s case for assessment years 2006-07 to 2008-09. The Revenue has not been able to make out as to why this decision is not applicable for the year under consideration before us. Therefore, following the Tribunal order in the assessee’s own case for assessment years 2006-07 to 2008-09, ground No.2 is also rejected, upholding the CIT(A)’s order for this issue also.
-
2012 (2) TMI 562
N.P.determination - Held that:- The application of net profit rate of 12% in all the cases of civil contractors is thus unwarranted as the Hon'ble Punjab & Haryana High Court itself in different set of facts had applied a net profit rate of 10%. In view thereof, we hold that in the present set of facts and circumstances where the assessee was engaged in petty civil construction work, where even cement and steel was supplied by the University of Kurukshetra, there is no merit in applying net profit rate of 12% to determine the income of the assessee for the year under appeal. The assessee had declared net profit rate of 4.5% for the year under appeal. We direct the Assessing Officer to apply the net profit rate of 6% to work out the income of the assessee. Accordingly, upholding the rejection of books of account, we direct the Assessing Officer to recompute the income in the hands of the assessee.
-
2012 (2) TMI 561
Issues Involved: Appeal against CIT(A) order for assessment year 2008-09, Department's grounds challenging exemption under section 10(10C) of IT Act, Compliance with Rule 2BA of IT Rules, 1962, Tax effect below prescribed limit for filing appeal.
Exemption under Section 10(10C) of IT Act:
The department raised concerns regarding the CIT(A) ignoring the e-circular on the "EXIT OPTION" Scheme by the State Bank of India, which clarified that no exemption of ex-gratia from income tax u/s. 10(10C) of the IT Act was intended in that scheme. Additionally, the CIT(A) was criticized for allowing the appeal despite instructions stating that employees availing of the Exit Option Schemes are not eligible for deduction under section 10(10C) of the Income Tax Act, 1961. However, it was noted that the tax effect in this appeal was below the prescribed limit for filing an appeal set by the CBDT, leading to the dismissal of the appeal by the department.
Compliance with Rule 2BA of IT Rules, 1962:
The CIT(A) was accused of presuming that the requirements of Rule 2BA of the IT Rules, 1962 had been met, without proper verification. This issue was raised by the department as a ground for appeal, indicating a lack of compliance with the specific rules governing the assessment process.
Tax Effect Below Prescribed Limit for Filing Appeal:
Despite the department's insistence on deciding the issue raised on its merits, it was highlighted that the tax effect in this departmental appeal was less than the prescribed limit set by the CBDT for not filing an appeal. The CBDT instructions emphasized that appeals below this threshold should not be pursued, as per the provisions of section 268A inserted by the Finance Act, 2008. The Board's instructions are binding on income-tax authorities, and in this case, the appeal was dismissed due to the tax effect being below the specified limit.
In conclusion, the appeal by the department against the CIT(A) order for the assessment year 2008-09 was dismissed based on the grounds related to exemption under section 10(10C) of the IT Act, compliance with Rule 2BA of IT Rules, 1962, and the tax effect falling below the prescribed limit for filing an appeal. The decision was in accordance with the provisions of section 268A and the CBDT instructions, emphasizing the importance of adhering to prescribed limits for filing appeals in income tax cases.
-
2012 (2) TMI 560
Issues Involved:
1. Reopening of assessment u/s 147.
2. Treatment of interest on FDR as income from other sources.
3. Eligibility of interest on FDR for deduction u/s 80HHC.
4. Treatment of premium on sale of quota and DEPB income under explanation (baa) to section 80HHC.
5. Deduction u/s 10B and disallowance u/s 40(a)(i).
Summary:
1. Reopening of Assessment u/s 147:
The assessee challenged the reopening of the assessment u/s 147, arguing it was without jurisdiction, void, and not based on evidence. The AO had issued notice u/s 148 within four years, claiming excess allowance of deduction u/s 80HHC due to non-consideration of premium on sale of quota. The CIT(A) upheld the reopening, stating it was within the permissible period and based on discrepancies in deductions claimed. The Tribunal, however, found no tangible material justifying the reopening and held it as bad in law, citing the Supreme Court's decision in "CIT v. Kelvinator of India Ltd." which requires tangible material for reopening.
2. Treatment of Interest on FDR as Income from Other Sources:
The CIT(A) and AO treated the interest on FDR amounting to Rs. 9,98,245/- as income from other sources, arguing that surplus funds parked in FDR had no nexus with the export business of the assessee. The Tribunal did not explicitly address this issue due to the cancellation of the reopening of the assessment.
3. Eligibility of Interest on FDR for Deduction u/s 80HHC:
The CIT(A) held that interest on FDR is not eligible for deduction u/s 80HHC. The Tribunal's decision on the reopening of the assessment rendered this issue moot, as the entire reassessment was cancelled.
4. Treatment of Premium on Sale of Quota and DEPB Income:
The Department's appeal challenged the CIT(A)'s direction to treat the premium on sale of quota and DEPB income as other receipts under explanation (baa) to section 80HHC. The Tribunal found that the issue had been previously decided in favor of the assessee in its own case for earlier years and upheld the assessee's treatment of these items, referencing CBDT Instruction No. 133/137/97-TCL dated 23.2.98 and relevant judicial precedents.
5. Deduction u/s 10B and Disallowance u/s 40(a)(i):
The Department contended that the assessee was not entitled to deduction u/s 10B due to non-filing of Form No. 56G and challenged the deletion of addition u/s 40(a)(i) for foreign agency commission. The assessee argued that the form was filed with the original return and that the provisions of section 195 were not applicable. The Tribunal did not address these issues due to the cancellation of the reassessment order, rendering these appeals infructuous.
Conclusion:
The Tribunal cancelled the reopening of the completed assessment as bad in law due to the absence of tangible material, rendering the remaining grounds and appeals moot or infructuous. The appeal of the assessee was partly allowed, and the Department's appeal was dismissed.
............
|
9911796707
