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Showing 161 to 180 of 1235 Records
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2012 (8) TMI 1080
Issues involved: Application for waiver of dues for clearance of bio-compost without payment of duty due to mixing waste products generated during sugar manufacture.
Summary:
Issue 1: Waiver of dues for clearance of bio-compost without payment of duty
The applicant, engaged in sugar and molasses manufacture, converted waste products into bio-compost cleared without duty payment. Revenue raised demand due to availing credit for input used in dutiable and exempted goods. Tribunal referred to settled case law and held that the demand for bio-compost clearance without duty payment is not sustainable. Show cause notice was deemed defective for not specifying inputs leading to bio-compost generation. Impugned orders were set aside, and appeal was allowed after waiving pre-deposit of dues.
Conclusion:
The Tribunal ruled in favor of the applicant, setting aside the demand for duty payment on bio-compost clearance and allowing the appeal after waiving the pre-deposit of dues.
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2012 (8) TMI 1079
Issues involved: Interpretation of Rule 6 of CENVAT Credit Rules, 2004 regarding payment of duty on clearance of Bagasse generated during sugarcane crushing.
Summary:
Issue 1: Interpretation of Rule 6 of CENVAT Credit Rules, 2004
The appellants, engaged in sugar manufacturing, cleared Bagasse without payment of duty. The demand was made u/s Rule 6 of CENVAT Credit Rules, 2004, alleging credit taken on common inputs. The issue was settled by the Hon'ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. vs. Union of India, where it was held that Bagasse is a residue/waste, not a manufactured product. The Tribunal in the case of Indian Potash Ltd. also supported this view, stating that Bagasse emerges as waste after sugarcane crushing, making it impossible to maintain separate accounts for inputs. The impugned orders were set aside, and appeals allowed, as the issue had already been decided in previous judgments.
Conclusion:
The judgment clarified that Bagasse, being a residue of sugarcane crushing, does not attract duty under Rule 6 of CENVAT Credit Rules, 2004. The decisions of the High Court and Tribunal supported this interpretation, emphasizing the nature of Bagasse as waste and the impracticality of segregating inputs at the crushing stage. The impugned orders were overturned, and the appeals were allowed based on the settled legal position.
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2012 (8) TMI 1078
Disallowance of discount expenditure - Held that:- The vouchers were signed evidencing the receipt of the discount by them. Similarly, with regard to cash credit amount, the six depositors furnished requisite details to prove their identity, and showed the place of their residence. The loan was received through account payee cheques. Copies of bank statement was given and the details of Permanent Account Numbers were available. All these materials duly proved the genuineness of the transaction of loan as well as the creditworthiness of the depositors. Therefore, the Tribunal did not commit any error in confirming the findings of CIT(A).
Addition under section 40(a)(ia) the Tribunal noted that under the Finance Act, 2010, the section was retrospectively amended with effect from 01-04-2005. As provided that the tax to be deducted at source in respect of any interest, commission, etc. was required to be paid before the date specified in sub-section (1) of section 139. As the assessee had deducted the tax during the last month of previous years and the same was deposited to the credit of the Government in the month of May, 2005, i.e. before the due date specified in sub-section (1) of section 139 of the Act, the expenses relating to the commission paid were allowable.
Tribunal recorded its confirming findings on the basis of relevant material, which were proper and reasonable. No substantial question of law to be considered by this Court.
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2012 (8) TMI 1077
Issues Involved:
1. Assessee's claim for deduction u/s 80IB(10) of the Act.
2. Compliance with the condition prescribed in clause (c) of section 80IB(10) regarding the built-up area of residential units.
Summary:
Issue 1: Assessee's claim for deduction u/s 80IB(10) of the Act
The assessee, a partnership firm engaged in developing land and constructing housing projects, claimed deductions u/s 80IB(10) for profits derived from the 'Kumar Residency - Phase-I' project for A.Ys. 2003-04, 2004-05, and 2007-08. The assessments for A.Ys. 2003-04 and 2004-05 were passed u/s 143(3) r.w.s. 263, and for A.Y. 2007-08 u/s 143(3). The Assessing Officer denied the deduction claim, asserting non-compliance with clause (c) of section 80IB(10) regarding the built-up area of residential units.
Issue 2: Compliance with the condition prescribed in clause (c) of section 80IB(10) regarding the built-up area of residential units
The dispute centered on whether the built-up area of certain residential units exceeded the 1500 sq. ft. limit prescribed in clause (c) of section 80IB(10). The Assessing Officer found that four units were combined into two larger units, exceeding the limit. The assessee argued that the units were sold as independent units and combined by purchasers post-possession. The CIT(A) supported the assessee, noting that the units were sold separately, had individual completion certificates, and separate electricity connections. The CIT(A) concluded that the merger occurred post-sale, thus not violating section 80IB(10).
The Tribunal upheld the CIT(A)'s decision, emphasizing that the merger of units by purchasers post-possession did not disqualify the assessee from the deduction. The Tribunal referenced the Mumbai Bench decision in G.V. Corporation, which supported the assessee's position. Consequently, the Revenue's appeals were dismissed, and the assessee's cross objections were deemed academic and dismissed as infructuous.
Conclusion:
The Tribunal confirmed the CIT(A)'s conclusion that the assessee did not violate section 80IB(10)(c) and was entitled to the deduction. The appeals of the Revenue were dismissed, and the cross objections by the assessee were rendered academic and dismissed.
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2012 (8) TMI 1076
Issues Involved:
1. Validity of penalties levied u/s 271(1)(c) for A.Y. 2002-03 and A.Y. 2003-04.
2. Application of Explanation-3 and Explanation-5 to Sec. 271(1)(c).
3. Justification of penalty on income declared in response to notice u/s 153A.
Summary:
Issue 1: Validity of Penalties Levied u/s 271(1)(c) for A.Y. 2002-03 and A.Y. 2003-04
The appeals arise from penalty orders passed u/s 271(1)(c) for A.Y. 2002-03 and A.Y. 2003-04. The assessee challenged the penalties levied by the A.O. and partly sustained by Ld. CIT(A). For A.Y. 2002-03, the A.O. levied a penalty of Rs. 4,50,000/- on the basis of additional income declared post-search, which included unexplained credits and fictitious gifts. The Ld. CIT(A) confirmed the penalty on several items of income, including unexplained credit of Rs. 9,80,000/-, undisclosed entry of Rs. 10,676/-, income from share trading of Rs. 4,566/-, capital gains of Rs. 1,36,252/-, and dividend of Rs. 977/-. For A.Y. 2003-04, the A.O. levied a penalty of Rs. 12,00,000/- on additional income of Rs. 32,55,000/- declared by the assessee, which was confirmed by the Ld. CIT(A).
Issue 2: Application of Explanation-3 and Explanation-5 to Sec. 271(1)(c)
The Tribunal noted that Explanation-3 to Sec. 271(1)(c) presumes concealment if the return is filed in response to notice u/s 148 after the specified period. However, this explanation does not apply when the return is filed in response to notice u/s 153A. Explanation-5, which deals with income based on money, bullion, etc., found during the search, was also found inapplicable as no such additions were made for A.Y. 2002-03. Explanation-5A, applicable from 1st June 2007, was not relevant as the search occurred on 15th June 2004.
Issue 3: Justification of Penalty on Income Declared in Response to Notice u/s 153A
For A.Y. 2002-03, the Tribunal observed that the penalty levied on income declared in response to notice u/s 153A was not justified as the income was not based on any money, bullion, or other valuable articles found during the search. The Tribunal deleted the penalty sustained by Ld. CIT(A). For A.Y. 2003-04, the Tribunal noted that the income declared by the assessee in response to notice u/s 153A was accepted by the A.O., except for an adhoc addition of Rs. 50,000/-. The Tribunal held that the penalty on the income declared in response to notice u/s 153A was not sustainable as there was no specific provision for such penalties, and deleted the entire penalty levied by the A.O.
Conclusion:
Both appeals of the assessee were allowed, and the penalties levied for A.Y. 2002-03 and A.Y. 2003-04 were deleted. The order was pronounced in the open Court on 29th August 2012.
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2012 (8) TMI 1075
Issues involved: Appeal against dropping of demand of Service Tax for commercial coaching and training services based on longer period of limitation.
Summary:
The Appellate Tribunal CESTAT NEW DELHI heard an appeal filed by the Revenue against the dropping of demand of Service Tax for commercial coaching and training services by the Commissioner invoking the longer period of limitation. The Commissioner had dropped the demand citing lack of mala fide intention to evade payment of Service Tax, especially considering the confusion and favorable judicial rulings during the relevant period. The retrospective amendment clarifying the commercial nature of training or coaching services was also taken into account. The Tribunal upheld the Commissioner's decision, emphasizing that the extended period of limitation cannot be invoked without evidence of wilful misstatement or suppression of facts. The Revenue failed to provide reasons to challenge the adjudicating authority's findings on the limitation issue, and the Tribunal found no grounds to interfere with the Commissioner's order, ultimately rejecting the Revenue's appeal.
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2012 (8) TMI 1074
Issues Involved:
1. Jurisdiction and authority of the Commissioner of Central Excise.
2. Principles of natural justice in quasi-judicial proceedings.
3. Classification of goods under the Central Excise Tariff Act.
4. Issuance of Concession Certificate for imported raw materials.
Summary:
Issue 1: Jurisdiction and Authority of the Commissioner of Central Excise
The Commissioner of Central Excise passed an order on 31-3-2008 confirming the duty demand and penalties on the petitioner company. The petitioners argued that the Commissioner decided the classification of goods, which was not part of the show cause notice, thus acting beyond his jurisdiction. The Court found that the Commissioner's decision on classification was inappropriate as it was pending before the Deputy Commissioner, who was statutorily authorized to decide such issues. The Court quashed the Commissioner's order, noting it was contrary to the principles of natural justice and statutory provisions.
Issue 2: Principles of Natural Justice in Quasi-Judicial Proceedings
The Deputy Commissioner's order dated 17-6-2008 was challenged on the grounds of violating natural justice principles, including denying cross-examination of experts and being influenced by the Commissioner's earlier order. The Court observed that the Deputy Commissioner's order was a verbatim reproduction of the Commissioner's order, indicating a lack of independent application of mind. The Court emphasized that quasi-judicial authorities must act independently and not be influenced by higher authorities. Consequently, the Deputy Commissioner's order was set aside, and a fresh decision was ordered.
Issue 3: Classification of Goods under the Central Excise Tariff Act
The dispute centered on whether the petitioner's product should be classified under Sub-Heading No. 8544.70 or 9001.1000. The Court noted that the classification issue was still pending before the Deputy Commissioner, who was directed to decide it independently and without influence from the Commissioner's annulled order. The Court highlighted that the Commissioner's attempt to guide the Deputy Commissioner was illegal and undermined the latter's quasi-judicial authority.
Issue 4: Issuance of Concession Certificate for Imported Raw Materials
Regarding the import of raw materials at a concessional rate of duty, the petitioners contended that the Customs authorities could not deny the benefits of the exemption notification without finalizing the classification of goods. The Court directed the release of deposited amounts towards the final duty liability and ordered the respondents to issue the necessary Concession Certificates as per Notification No. 24/2005.
Conclusion:
The Court quashed the Commissioner's order dated 31-3-2008 and the Deputy Commissioner's order dated 17-6-2008, directing a fresh decision on the classification issue. The petitions were disposed of with specific directions regarding the issuance of Concession Certificates and the release of deposited amounts. The Court emphasized the importance of adhering to principles of natural justice and maintaining the independence of quasi-judicial authorities.
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2012 (8) TMI 1073
Rejecting assessee’s claim of bad debt - Held that:- AO and stated that if the claim of bad debt is not allowed, it is a trade debt as loss of advance paid by the assessee during the course of business. A.R. could not specify as to what item, assessee proposed to purchase from the said party to whom advance was made. Further, there is no invoice or any correspondence to substantiate the contention of the assessee. In view of above, we do not find any merit in the contention of ld A.R. Hence, we uphold the order of ld CIT(A) and reject the ground Nos.1 & 2 taken by the assessee.
Addition of interest received from Rajvaibhav Enterprises Pvt Ltd., based on AIR information - Held that:- Addition merely on the basis of AIR information and without bringing any evidence on record that the assessee has actually received the said interest of ₹ 2,66,916. It is not the case of the department that the said party was put to cross examination or the ledger account of the assessee in the books of account of the said party were given to the assessee and assessee was confronted thereon. We agree with ld A.R. that merely on the basis of AIR information and without bringing any evidence on record, it cannot be held that interest income has been received by the assessee from Rajvaibhav Enterprises (P) Ltd. Therefore, the said addition is not justified.
Addition on account of low G.P. on estimate basis - Held that:- We observe that AO made this addition merely on the ground that gross profit of G.P. in the assessment year under consideration is low as compared to earlier assessment year gross profit. We observe that no defects have been pointed out in the books of account. No purchase or sales shown by the assessee have been disputed by the authorities below. It is a fact that merely G.P. has fallen in the assessment year under consideration, the addition is not justified.
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2012 (8) TMI 1072
Issues involved: Appeal against ex-parte order passed by CIT(A) for A.Y. 2007-08.
Summary:
The assessee, engaged in manufacturing and finance, filed a return declaring total income as 'Nil'. The assessment was completed with disallowances resulting in income under normal provisions and book profit u/s 115JB of the Income Tax Act, 1961. The CIT(A) passed an ex-parte order dismissing the appeal due to lack of compliance by the assessee. The assessee challenged this order, claiming insufficient opportunity to be heard. The assessee's counsel submitted that despite requesting an adjournment due to a key person's absence, the CIT(A) passed the order ex-parte. The Department had no objection to setting aside the issue to the CIT(A)'s file. The ITAT found that the CIT(A) provided multiple opportunities for the assessee to be heard, but the last adjournment request was not considered, leading to the ex-parte decision. Citing a Rajasthan High Court decision, the ITAT concluded that the assessee had a valid reason for adjournment and set aside the CIT(A)'s order, directing a fresh decision with proper opportunity for the assessee to be heard. The appeal was partly allowed for statistical purposes.
The ITAT Mumbai, comprising Shri Dinesh Kumar Agarwal (J.M.) and Shri Rajendra Singh (A.M.), pronounced the order on 10-8-2012.
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2012 (8) TMI 1071
Issues involved: Appeal under section 260(A) of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal for the assessment year 2002-2003.
Amendments and Admission of Appeal:
The appellant was granted leave to amend by renumbering a question, and the appeal was admitted on substantial questions of law as stated in specific paragraphs. The appeal was dismissed in relation to certain other questions raised.
Question (D) - Buyback of Shares:
The issue revolved around whether expenses on the buyback of shares should be treated as capital expenditure. The expenditure incurred was clarified not to include the price paid to shareholders for buying back shares but related to the process itself. The Tribunal observed that the buyback was part of an ongoing process to enhance shareholder value and did not impact the capital structure of the company. The expenses incurred were deemed to be for the existing business of the company and were allowed as a revenue deduction.
Question (E) - Expenditure on Feasibility Report:
The question raised was regarding the justification of allowing expenditure related to a feasibility report for the Assessee's proposed acquisition and software development charges for e-learning. It was agreed by the parties that this question did not arise in the matter.
Question (P) - Deletion of Interest Charges:
The issue concerned the deletion of interest charged under section 234D inserted by the Finance Act 2003. The appeal was admitted specifically in respect of this question.
Conclusion:
The judgment addressed various questions raised in the appeal, including the treatment of expenses on buyback of shares, feasibility report expenditure, and interest charges under section 234D. The decision on each question was based on the specific circumstances and legal considerations outlined in the Income Tax Act.
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2012 (8) TMI 1070
Issues involved: Appeal against assessment order u/s 143(3) of the Income Tax Act, 1961, alleged unlawful upholding of disallowances on Labour Charges and Office Expenses by the Commissioner of Income Tax (Appeals) Jalpaiguri for the assessment year 2008-09.
Issue 1 - Assessment Order Contrary to Instruction No. 241/23/70:
The appellant contended that the assessment order was passed in violation of Instruction No. 241/23/70, which mandates passing orders within 14 working days from the last date of hearing. The appellant argued that the order was passed beyond this period, rendering it unlawful. However, the Senior DR argued that the delay in passing the order did not invalidate the actions of the Assessing Officer (AO).
Issue 2 - Disallowance on Labour Charges:
The AO disallowed Rs. 1,01,754 of expenses claimed under "Labour Charges" based on a suspicion of revenue leakage. The appellant provided supporting documents such as Labour Attendance Register and Wages Account to substantiate the expenses. The Tribunal found the disallowance arbitrary and lacking a valid basis, as the appellant's records were vouched and verifiable. The Tribunal held that the ad hoc disallowance of 5% was unjustified and ordered the disallowance to be deleted.
Issue 3 - Disallowance on Office Expenses:
A disallowance of Rs. 4,438 on "Office Expenses" was made by the AO, claiming the expenses seemed excessive. The Tribunal noted that no specific reasoning or basis was provided for this disallowance, and the appellant had maintained proper records to support the expenses. The Tribunal found the disallowance to be arbitrary and unsupported by evidence, leading to the deletion of the disallowance.
Conclusion:
After considering the submissions and evidence, the Tribunal partially allowed the appeal. Grounds 2 and 3 regarding the disallowances on Labour Charges and Office Expenses were accepted, while ground 1 related to the delay in passing the order was rejected. The Tribunal deemed the disallowances made by the AO and upheld by the CIT(A) as unsustainable in law, leading to the partial allowance of the appellant's appeal.
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2012 (8) TMI 1069
Issues involved: Whether the deletion of addition of undisclosed income by the Ld. CIT(A) is justified.
Issue 1: Addition of undisclosed income
The appeal pertains to the deletion of an addition of Rs. 16,67,250 as undisclosed income of the assessee. The Assessing Officer had initiated block assessment proceedings under section 158BD based on discrepancies in the purchase of land and advance payments not reflected in the computer print-out.
Details: The assessee, a society incorporated in 2001, purchased land for Rs. 23,22,600, but only Rs. 13,55,350 was reflected in the seized computer print-out. Additionally, an advance payment of Rs. 7,00,000 was not accounted for. The Assessing Officer considered the computer print-out as true books of account and added the difference as undisclosed income.
Issue 2: Justification for deletion
The Ld. CIT(A) deleted the addition after noting that the loans received from two individuals were utilized for land investments. These loans were reflected in the lenders' income tax returns and accepted by the Assessing Officer, indicating a legitimate source of funds for the assessee's transactions.
Details: The lenders, Shri K. Balachandran Nair and Shri K. Rajagopalan, had provided loans totaling Rs. 44,72,656, which were used by the assessee for land transactions. The Ld. CIT(A) found the investments fully explained and deleted the addition of undisclosed income.
Judgment Summary:
The ITAT Cochin upheld the Ld. CIT(A)'s order, dismissing the Revenue's appeal. The tribunal observed that the society had not engaged in any business activities before the search date, relying on loans for land transactions. The lenders' loans were duly reflected in their tax returns and accepted by the Assessing Officer, indicating a legitimate source of funds. The tribunal found no reason to doubt the regular books of accounts submitted by the assessee, concluding that the investments were adequately explained. Consequently, the addition of undisclosed income was deemed unjustified, and the Ld. CIT(A)'s decision was upheld.
Note: The judgment was pronounced on 10-08-2012 by B. R. Baskaran (Accountant Member) of the Appellate Tribunal ITAT Cochin.
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2012 (8) TMI 1068
Issues involved:
The judgment involves the interpretation of whether the assessee was entitled to claim exemption u/s 35G of the Central Excise Act, 1944, based on the compliance with circular requirements and the nature of export of goods.
Issue 1: Compliance with Circular Requirements
The appeal raised the question of whether the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) erred in concluding that despite non-compliance with certain circular requirements, the assessee had substantively complied with the requirements and was entitled to claim exemption.
Details:
The respondent-assessee, a manufacturer of corrugated cartons and duplex boxes, availed exemption as a Small Scale Industry (SSI) under a notification for duty payment up to a certain value. The issue arose when it was found that the assessee cleared goods to merchant exporters who used them for packing products for export, but the assessee did not directly export the goods. The department contended that the clearances did not qualify as "clearances for export" as per a circular, leading to a duty demand and penalty.
Issue 2: Nature of Export of Goods
The second issue involved determining whether the goods cleared by the assessee to merchant exporters were indeed exported, as per the circular requirements, and whether the conditions for exemption were met.
Details:
The Tribunal considered the circular requirements, including the use of 'H' forms as proof of export, and concluded that the merchant exporters had used the cartons for packing export goods, as evidenced by the 'H' forms. The Tribunal found that the requirements of the circular were substantively complied with, and the assessee was rightly entitled to claim exemption.
Conclusion:
The High Court upheld the Tribunal's decision, stating that the assessee had complied with the circular requirements and was entitled to claim exemption. The appeal by the Central Excise Department was dismissed, affirming the assessee's right to exemption under the Central Excise Act, 1944.
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2012 (8) TMI 1067
Issues involved: Challenge against non-speaking order of assessment u/s 17(5) of the Customs Act for goods covered by Shipping Bills.
Summary:
The High Court of Calcutta addressed a writ application challenging a non-speaking order of assessment by the Deputy Commissioner of Customs Export Department. The petitioner requested for speaking orders to be passed regarding the shipping bills within a specified time frame. The Court noted that u/s 17(5) of the Customs Act mandates assessment through a speaking order to facilitate a fair appeal process. However, the petitioner's request for a speaking order was made a year after the goods were cleared and duty was paid. The Court emphasized that the purpose of u/s 17(5) is to provide reasons for assessment for a fair appeal process. It was highlighted that the authorities should pass a speaking order unless the importers or exporters confirm acceptance of the assessment in writing. The Court found that the request for a speaking order should have been made promptly upon receipt of the final assessment, rather than two years later. Consequently, the Court deemed the writ petition as barred by delay and dismissed it solely on that ground. Affidavits were not called for, and allegations not supported by record were deemed as not admitted. The Court directed for urgent certified copies of the order to be provided to the parties upon application and compliance with formalities.
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2012 (8) TMI 1066
Issues Involved:
1. Seizure of goods and passport by Customs Authorities.
2. Non-issuance of show cause notice within six months.
3. Extension of the six-month period by the Commissioner of Customs.
4. Retention of the petitioner's passport by Customs Authorities.
Summary:
1. Seizure of Goods and Passport by Customs Authorities:
The petitioner, a permanent citizen of India, was intercepted by Customs Officers at Kolkata Airport on his return from Hong Kong via Dhaka. Upon searching his baggage, Customs Authorities seized 50 wrist-watches, 19 track pants, and an unbranded LED Video Processor u/s 110 of the Customs Act, 1962. The petitioner was subsequently arrested u/s 104 of the Customs Act.
2. Non-Issuance of Show Cause Notice within Six Months:
The petitioner argued that no show cause notice was issued within six months as mandated by Section 110(2) of the Customs Act, 1962, which necessitates the return of the seized goods if no notice is given within this period.
3. Extension of the Six-Month Period by the Commissioner of Customs:
The respondents contended that the six-month period was extended by the Commissioner of Customs by an order dated 19th April, 2012, communicated to the petitioner on 2nd May, 2012. The petitioner challenged the validity of this extension, suggesting it was backdated. However, the Court found no conclusive evidence to support this claim and observed that the extension was made to complete the investigation, as per the Supreme Court's guidelines in I.J. Rao, Assistant Collector of Customs v. Bibhuti Bhushan Bagh.
4. Retention of the Petitioner's Passport by Customs Authorities:
The petitioner contended that his passport was wrongfully retained by the Customs Authorities. The Court noted that the investigation was ongoing and declined to order the return of the passport at this stage. The Customs Authorities were advised to inform the Regional Passport Officer about the wrongful import for further action in accordance with the law.
Conclusion:
The Court directed the Commissioner of Customs to provide the petitioner a post-decisional hearing within 15 days of the order's communication. If no show cause notice is issued within the extended period, the goods must be returned. The writ application was disposed of with instructions for all parties to act on a signed photocopy of the order's operative part.
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2012 (8) TMI 1065
Issues Involved:
Cross appeals filed by the assessee and Revenue against the order of ld. CIT (A)-I, Rajkot dated 12.5.2009 for the assessments year 2005-06.
Issue 1: Disallowance u/s 40A(3) of Rs. 1,46,776/-
The ld. CIT(A) decided in favor of the assessee, stating that no purchase exceeding Rs. 20,000 in cash was made. Additionally, expenses for petrol/diesel at a site far from town were deemed covered by Rule 6DD(g), thus no disallowance u/s 40A(3) was warranted. The Tribunal found no reason to interfere with this decision.
Issue 2: Disallowance u/s 40A(ia) of Rs. 5,26,384/-
The ld. CIT(A) ruled in favor of the assessee, noting payments under Rs. 20,000 to any person. The Tribunal found no grounds to overturn this decision.
Issue 3: Disallowance u/s 40A(ia) of Rs. 40,94,923/-
The AO alleged a higher sub-contract work amount than claimed by the assessee. The ld. CIT(A) found fault with the AO's lack of inquiry from the contractor, leading to no basis for TDS deduction. The Tribunal upheld the ld. CIT(A)'s decision.
Issue 4: Disallowance u/s 40A(ia) of Rs. 45,53,398/-
The AO claimed TDS should be at 2.2% instead of 1.1%, but the ld. CIT(A) found no basis for this. The Tribunal agreed with the ld. CIT(A) on this issue.
Issue 5: Addition on account of suppression of receipt of Rs. 39,77,057/-
The ld. CIT(A) clarified that the amount represented deposits returned by the contractor, not income. Lack of verification by the AO led to the deletion of this addition, a decision upheld by the Tribunal.
Issue 6: Disallowance of expenses of Rs. 2,50,000/-
The AO made a disallowance of Rs. 3,00,000, reduced by the ld. CIT(A) to Rs. 50,000. The Tribunal found the reduced disallowance reasonable and confirmed the ld. CIT(A)'s decision.
General Grounds
Remaining grounds of appeal were of a general nature and were rejected without adjudication.
Separate Judgement:
The assessee's appeal was dismissed by the Tribunal after considering the grounds raised and finding no reason to interfere with the ld. CIT(A)'s order.
This summary provides a detailed overview of the issues involved in the legal judgment, the decisions made by the ld. CIT(A), and the Tribunal's findings on each issue.
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2012 (8) TMI 1064
Gains on the sale of shares - computation of Long Term Capital Gains (LTCG) / Short Term Capital Gains (STCG) on sale of shares of a few companies - Held that:- CBDT Circular No.768 dtd. 24.6.1998 was issued to clarify the determination of date of transfer and the period of holding of securities held in demat form. It has been stated there in that earlier Circular No. 704 issued by the CBDT relating to the "date of transfer" and "period of holding" does not change when securities are held in the dematerialized form.
Therefore in view of the above two circulars of CBDT it is clear that in case of securities the "date of purchase" has to be taken from the broker's note/contract note and the period of holding is also to be reckoned from the "date of purchase" and not from the "date of dematerializatjon". Since the holding period of the shares as per the broker's note and its subsequent sale after demateialjzatjon is Smt. Hamida J. Rattonsey, snore than 12 months, therefore, the shares become long term capital asset and the assessee's claim of long term capital gain is correct. In this view of the matter we set aside the order of the Id. CIT(A) and direct the A.O. to accept the long term capital gain declared by the assessee.
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2012 (8) TMI 1063
Issues involved: Adhoc addition to total income, Disallowance of TDS deduction u/s 194C and 194J.
Adhoc addition to total income: The Assessing Officer made an adhoc addition of Rs. 4,11,800 to total income on account of difference between balances with C&FA agent. The appellant did not press this ground during the hearing, so it was dismissed.
Disallowance of TDS deduction u/s 194C and 194J: The Assessing Officer disallowed Rs. 28,24,415 to total income due to a shortfall in TDS deduction u/s 194C and 194J. The appellant argued that only 7% of TDS was short deducted and 93% had been paid. The revenue authority erred in disallowing the entire expenses. The ITAT found that the actual deduction was short by Rs. 1,617 u/s 194C and Rs. 6,761 u/s 194J, but the entire amount had been disallowed. Referring to a similar case, the ITAT held that the revenue authority was not reasonable in disallowing the entire expenditure. The appellant had agreed to the disallowance of proportionate expenses, which were Rs. 73,971 u/s 194C and Rs. 1,23,738 u/s 194J. Following the decision of a co-ordinate Bench, the ITAT allowed this ground of appeal and partly allowed the appeal.
Decision: The appeal filed by the assessee was partly allowed.
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2012 (8) TMI 1062
Issues involved: Appeal against penalty u/s 271(1)(c) for incorrect tax rate on capital gains and disallowance of short term capital loss.
Issue 1 - Incorrect tax rate on capital gains:
The appellant declared long term capital gains, including gains from unlisted shares, at a lower tax rate of 10% instead of 20%. The Assessing Officer imposed a penalty u/s 271(1)(c) for this discrepancy. The CIT(A) deleted the penalty, stating that there was no concealment or inaccurate particulars, as the appellant disclosed all transaction details and the mistake was a bona fide calculation error. The Hon'ble Supreme Court's decision in Reliance Petroproducts Pvt. Ltd. was cited to support this view.
Issue 2 - Disallowance of short term capital loss:
The appellant claimed a short term capital loss on the sale of shares of a company that had issued bonus shares. The Assessing Officer disallowed this loss under Section 94(8) and imposed a penalty. The appellant argued that the loss claim was based on a bona fide mistake, as the bonus shares were valued at Nil price as per tax provisions. The CIT(A) accepted this explanation, emphasizing that incorrect claims not sustainable in law do not amount to furnishing inaccurate particulars. The penalty was deleted based on the Supreme Court's ruling in Reliance Petroproducts Pvt. Ltd.
In conclusion, the penalty u/s 271(1)(c) was deleted by the CIT(A) for both issues, as there was no concealment or inaccurate particulars in the appellant's disclosures. The appeal of the department against this decision was dismissed, affirming the CIT(A)'s findings based on legal precedents and the facts of the case.
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2012 (8) TMI 1061
Issues involved: Challenge to Tribunal's orders affirming Assessing Officer's decision, applicability of Section 6(5) of Kerala Value Added Tax Act, 2003, best judgment assessment, denial of input tax credit, liability under Section 6(1) vs. Section 6(5), retrospective effect of proviso introduced by Kerala Finance Act, 2011, claim of input tax credit conflicting with presumptive dealer status.
The assessee, a dealer in ice creams, challenged the Tribunal's orders affirming the Assessing Officer's decision for the years 2006-07 and 2007-08 under the Kerala Value Added Tax Act, 2003. The issue revolved around the applicability of Section 6(5) of the Act, which provides for presumptive tax payment at 0.5% for dealers with turnover below Rs. 50 lakhs. The Assessing Officer rejected the assessee's returns due to suppression of purchase, resulting in the entire turnover being assessed as it crossed the Rs. 50 lakhs limit for both years.
The first appellate authority modified the additions made by the Assessing Officer, but upheld the rejection of books of accounts and the best judgment assessment. The Tribunal also upheld these decisions and denied the input tax credit claimed by the assessee. The core issue was the legality of the best judgment assessment based on detected offences and the denial of the benefit of paying tax under Section 6(5) of the Act.
The claim for continuing as a presumptive dealer conflicted with the request for input tax credit, as per the Act's provisions. The Tribunal found that the suppression detected would still exceed the turnover limit under Section 6(5), justifying the best judgment assessment. The assessing authority's exercise of power in making the assessment was deemed proper and within jurisdiction, following principles outlined by the Supreme Court.
Regarding liability under Section 6(1) versus Section 6(5), the turnover assessed by the authority, including additions for omissions and suppressions, determined the assessee's tax status. The turnover exceeding the Section 6(5) limit necessitated the assessee's exclusion from the presumptive net. The retrospective proviso introduced by the Kerala Finance Act, 2011, supported this interpretation, emphasizing the consequences of detected offences on tax liability.
The claim for input tax credit was deemed invalid due to the detected suppressions, as established in previous court decisions. The case of Paul K.V. highlighted the necessity for compliance with Act provisions when transitioning from presumptive tax to value-added tax. The distinction was made between cases where turnover limit breaches were from suppression versus book discrepancies.
The issue of penalty proceedings under Section 67 was raised by the assessee but was not challenged in the revisions. The Court rejected the revisions, concluding that they lacked merit based on the assessments and legal interpretations presented.
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