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Showing 181 to 200 of 383 Records
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2012 (1) TMI 249
Issues Involved:
1. Invocation of revisional jurisdiction u/s 263 of the Income-tax Act.
2. Examination of receivables, investment in property, and cash deposits by the AO.
3. Applicability of case laws and principles of natural justice.
Summary:
1. Invocation of Revisional Jurisdiction u/s 263:
The assessee challenged the CIT's invocation of revisional jurisdiction u/s 263, arguing that the assessment order passed by the AO u/s 143(3) was neither erroneous nor prejudicial to the interests of the revenue. The CIT had canceled the assessment order, directing the AO to reassess the case.
2. Examination of Receivables, Investment in Property, and Cash Deposits:
The CIT noted that the AO failed to examine several critical issues, including receivables shown in the balance sheet amounting to Rs. 8,15,800/-, the investment of Rs. 6,60,000/- in the purchase of SCF 59, Phase 9, Mohali, and cash deposits of Rs. 2,20,000/- in Union Bank of India. The CIT's show cause notice highlighted these lapses, leading to the cancellation of the assessment order and a directive for a denovo assessment.
3. Applicability of Case Laws and Principles of Natural Justice:
The assessee relied on various case laws, including CIT v. Vikas Polymers, Capital Estate v. CIT, and Baljees v. A.C.I.T., to argue against the applicability of section 263. However, the tribunal found these cases factually distinguishable from the present case. The tribunal emphasized that the AO had not made the necessary inquiries or applied his mind to the issues raised by the CIT, thus justifying the invocation of section 263.
The tribunal also referred to the Supreme Court's decision in Malabar Industrial Co. Ltd. V. CIT, which clarified that for section 263 to apply, the order must be both erroneous and prejudicial to the interests of the revenue. The tribunal concluded that the AO's failure to make inquiries and apply his mind constituted an erroneous order, thereby satisfying the conditions for invoking section 263.
Conclusion:
The tribunal upheld the CIT's findings, confirming that the AO's lack of inquiry and application of mind warranted the invocation of section 263. The appeal filed by the assessee was partly allowed, with the tribunal supporting the CIT's directive for a reassessment. The order was pronounced on 18th Jan., 2012.
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2012 (1) TMI 248
Expenditure towards community development - Held that:- Exact nature of the expenditure is not clear either from assessment order or from the CIT(A)or the ld. CIT(A) for assessee has not filed any paper book describing the exact nature of the expenditure we set aside the orders of the CIT(A) and remit back the issue to the file of AO for fresh adjudication and decide the same as per law after giving a reasonable opportunity of being heard to assessee.
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2012 (1) TMI 247
Valuation - MRP based valuation- Chewing tobacco in 5 gms in 9 gms pouches cleared in bulk packs - the decision in the case of COMMISSIONER OF CENTRAL EXCISE, ROHTAK Versus GUPTA TOBACCO CO. [2009 (9) TMI 492 - CESTAT, NEW DELHI] contested where it was held that goods sold by weight only and net weight being less than 10 gms, not covered under Standards of Weights and Measurements (Packaged Commodity) Rules, 1977 - Held that: - In view of the decisions of this Court in Commissioner of Central Excise, Vapi v. Kraftech Products Inc. [(2008) 12 SCC 321], where it was held that Multi peace package of 3 pouches of 3 gms each, provisions of MRP not applicable and valuation is do be done u/s 4 of Central Excise Act, 1944 , nothing survives for our consideration in this appeal - appeal dismissed.
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2012 (1) TMI 246
Issues involved: Appeal against CIT(A)'s order for assessment year 2008-09. Interpretation of eligibility for claim under section 11 without approval under sub-clause (vi) to section 10(23C). Power of CIT(A) to set aside issues to Assessing Officer.
Interpretation of eligibility for claim under section 11: The Revenue appealed CIT(A)'s decision, arguing that the assessee was not eligible for claim under section 11 without approval under sub-clause (vi) to section 10(23C). The Revenue contended that the approval under sub-clause (vi) is distinct from registration u/s 12A of the Act. The Revenue highlighted that the Act explicitly deals with the issue, emphasizing the legislative intention. The Revenue also pointed out that a prior decision of the Apex Court was made before the introduction of sub-clause (vk) to section 10(23C) and that the approval under section 10(23C)(vi) is a prerequisite for exemption by any educational institution.
Power of CIT(A) to set aside issues to Assessing Officer: The ITAT Hyderabad observed that the CIT(A) exceeded its power by directing the Assessing Officer to verify the collection of donations and fees. The ITAT held that the CIT(A) setting aside the issue to the Assessing Officer amounted to an impermissible action. Consequently, the ITAT canceled the CIT(A)'s order but remitted the issue back to the Assessing Officer to verify if the assessee collected any amount over and above the prescribed fees for student admissions, referencing a previous Tribunal decision.
Conclusion: The appeal of the Revenue was allowed for statistical purposes, and the order was pronounced on 11th January 2012.
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2012 (1) TMI 245
Issues involved: Stay of outstanding demand u/s. 254 of Income Tax Act for assessment year 2007-08 pending disposal of appeal filed by assessee.
The assessee filed an application u/s. 254 of the Income Tax Act seeking a stay of the outstanding demand of Rs. 63,85,261 for the assessment year 2007-08 pending the disposal of the appeal filed by the assessee in ITA No. 157/Mum/2012. The Assessing Officer had reduced the claim for deduction u/s. 10A of the IT Act by Rs. 4,83,24,907 and made a disallowance u/s. 14A of Rs. 8,27,276, resulting in the determination of income at Rs. 4,85,13,990. The tax determined by the AO was Rs. 2,33,85,261, including interest of Rs. 72,57,495 u/s. 234B of the IT Act. The assessee had paid Rs. 1,70,00,000 against the demand, which was approximately 72.70% of the total demand, including interest. The assessee disputed the entire tax demand raised by the department in the appeal, emphasizing that the issue of entitlement for deduction u/s. 10A was also pending from the preceding assessment year 2006-07. The Tribunal had heard a similar issue for the earlier assessment year, and the order was awaited. The assessee requested the outstanding demand to be kept in abeyance until the appeal was decided by the ITAT.
The Departmental Representative did not dispute the submissions of the assessee's representative, except for mentioning that the assessee had not stated any financial hardships if the balance amount was also recovered. After considering the submissions of both parties and examining the relevant material on record, the Tribunal found that the balance of convenience favored the assessee. Therefore, the Tribunal granted a stay of the balance outstanding demand of Rs. 63,85,261 for a period of 6 months or until the disposal of the appeal by the Tribunal, whichever was earlier. The assessee was instructed to inform the Registry to prioritize the appeal once the order of the Tribunal regarding the assessment year 2006-07 was received. The Stay Application of the assessee was allowed, and the order was pronounced in the Open Court on 27.01.2012.
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2012 (1) TMI 244
Issues involved: Appeal against CIT order u/s 263 of the Income Tax Act for assessment year 2006-07 regarding disallowance of interest payment to foreign supplier u/s 40(a)(ia).
Summary:
1. Assessment and Disallowance:
The assessee filed its return for the assessment year 2006-07, declaring total income. The case was selected for scrutiny, and the assessment was completed under Section 143(3). The assessee debited the profit and loss account for interest on a foreign supplier without TDS deduction, which was not disallowed in the original assessment.
2. CIT Order u/s 263:
The CIT held that the AO should have disallowed the interest payment under Section 40(a)(ia) due to non-deduction of TDS, deeming the original order as erroneous and prejudicial to revenue. The assessee objected to the proceedings, citing various arguments and case laws in support.
3. Tribunal Decision:
The ITAT Hyderabad bench considered the arguments and previous decisions, noting that similar payments were not subject to TDS. The CIT's revision under Section 263 was deemed unnecessary as the AO had already enquired into the matter during the original assessment. The tribunal found no error in the AO's decision and allowed the assessee's appeal, emphasizing the need for proper enquiry before disallowing expenses.
4. Conclusion:
The tribunal's decision highlighted the importance of thorough enquiry before disallowing expenses and upheld the assessee's appeal against the CIT's order u/s 263, emphasizing the need for proper assessment procedures to avoid erroneous decisions.
Judges: Chandra Poojari (Accountant Member) and Asha Vijaya Raghavan (Judicial Member)
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2012 (1) TMI 243
Issues Involved:
1. Taxability of capital gain in A.Y. 2007-08.
2. Applicability of section 50C of the Income Tax Act.
Summary:
Issue 1: Taxability of Capital Gain in A.Y. 2007-08
The revenue challenged the order of the Ld. CIT (A)-27, Mumbai, which directed the addition of Rs. 68,45,651/- as Long Term Capital Gain (LTCG) and accepted that the Tenancy Right got converted into ownership right as per the consent decree dated 28.05.1999, not in A.Y. 2007-08 when the agreement for giving ownership right was registered through a transfer deed. The revenue contended that the assessee tenant surrendered/exchanged/transferred the Tenancy Right acquired for Rs. 9 lakhs with ownership right worth Rs. 1,13,49,000/- on 22.02.2007, not on 28.05.1999 when the consent decree was passed.
The A.O. held that the Deed of confirmation registered on 22.02.2007 constituted a transfer within the meaning of section 45(1) r.w. sec. 2(47) of the I.T. Act, making the LTCG taxable in A.Y. 2007-08. The Ld. CIT (A) disagreed, stating that the ownership was acquired as per the Consent Decree dated 28.05.1999, and thus, the capital gain could not be taxed in A.Y. 2007-08. The Tribunal upheld the Ld. CIT (A)'s decision, confirming that the transfer took place on 04.11.2004 when the agreement in compliance with the Consent Decree was executed, not on 22.02.2007.
Issue 2: Applicability of Section 50C
The revenue argued that the Ld. CIT (A) erred in applying section 50C, whereas the exchange/surrender/transfer value was taken at Rs. 1,13,49,000/- by applying sections 2(47), 45, 50C, 55, and 112, not just section 50C. The Tribunal found this ground infructuous as it held that no transfer occurred in A.Y. 2007-08, rendering the applicability of section 50C irrelevant.
Conclusion:
The Tribunal dismissed the revenue's appeal, confirming that the capital gain could not be taxed in A.Y. 2007-08 and that section 50C was not applicable. The order was pronounced in the open court on 18th January 2012.
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2012 (1) TMI 242
Income from sale of shares - nature of income - capital gain or business income - Held that:- AO in the case of assessee while making the assessment for the assessment year 2004-05 has accepted the short term capital gain and the long term capital gain on sale of shares vide order dated 22.12.2006 passed u/s 143(3) of the Act, therefore, we are of the view that the assessee’s case is squarely covered in favour of the assessee by the decision of the Tribunal in the case of Shri Satpal Singh Sethi (2011 (9) TMI 1035 - ITAT MUMBAI).
This being so and in the absence of any distinguishing features or contrary material brought on record by the Revenue, we respectfully following the consistent view of the Tribunal and the ratio of the decision of the Hon’ble Jurisdictional High Court in the aforementioned cases, hold that the ld. CIT(A) was fully justified in directing the AO to accept the appellant’s claim of short term capital gain and long term capital gain on share transactions, where the delivery has been taken or given and Security Transaction Tax has been paid.
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2012 (1) TMI 241
Issues Involved:
1. Deletion of addition made on account of undisputed disallowance u/s 143(3) not disclosed in return filed u/s 153A.
2. Deletion of addition made on account of dismantling expenses without seized materials.
3. Allowance of expenses not recorded in books or seized material on presumptive basis u/s 153A.
4. Taxation of "on money" receipts and advances in the year of transfer instead of the year of receipt.
5. Reliance on Tribunal decision in the case of Golani Bros Vs. ACIT despite differences in facts.
Summary:
A.Y. 2001-02:
1. The Ld. CIT(A) deleted the addition of Rs. 1,09,325/- made on account of undisputed disallowance u/s 143(3) not disclosed in the return filed u/s 153A, noting that the assessee had already accepted the addition and paid taxes, thus separate addition in the order u/s 153A read with section 143(3) is not justified.
A.Y. 2002-03:
1. The Ld. CIT(A) deleted the addition of Rs. 2,49,000/- made on account of dismantling expenses, ignoring the fact that no seized materials indicated any such expenses.
2. The Ld. CIT(A) held that u/s 153A, expenses not recorded in the books of account or not noted in seized material can be allowed on presumptive basis.
3. The Ld. CIT(A) directed the AO to tax the "on money"ť receipts and advances in the year of transfer of shops instead of the year of receipt.
4. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
A.Y. 2003-04:
1. The Ld. CIT(A) deleted the addition of Rs. 9,93,000/- on account of advances and Rs. 3,00,000/- on account of on-money during the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros. Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 99,000/- on account of disallowance of commission and Rs. 1,24,800/- on account of disallowance of watchman's salary, holding that expenses not recorded in the books or not noted in seized material can be allowed on presumptive basis in assessment u/s 153A.
A.Y. 2004-05:
1. The Ld. CIT(A) deleted the addition of Rs. 12,03,000/- on account of advances and Rs. 4,40,000/- on account of on-money during the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 2,20,000/- on account of disallowance of commission, Rs. 1,53,600/- on account of disallowance of watchman's salary, and Rs. 19,954/- on account of disallowance of dismantling expenses, holding that expenses not recorded in the books or noted in seized material can be allowed on presumptive basis in assessment u/s 153A.
A.Y. 2005-06:
1. The Ld. CIT(A) deleted the addition of Rs. 40,10,000/- on account of advances in the transfer of shops, directing the AO to tax the advances in the year of transfer, not in the year of receipt.
2. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the High Court, Bombay.
3. The Ld. CIT(A) deleted the addition of Rs. 45,600/- on account of disallowance of watchman's salary, Rs. 40,150/- on account of supervision charges, and Rs. 8,804/- on account of disallowance of dismantling expenses, holding that expenses not recorded in the books or not noted in seized material can be allowed on presumptive basis.
4. The Ld. CIT(A) restricted the addition u/s 69C from Rs. 2,14,663/- to Rs. 1,72,663/-, allowing relief of Rs. 42,000/-, ignoring the fact that the source of such expenditure was unexplained and would be deemed to be the income of the assessee for the relevant financial year as held by the Hon'ble Calcutta High Court in the case of CIT V Bhagwati Developers (P) Ltd. (2003) 261 ITR 658.
Additional Grounds for A.Y. 2001-02:
1. The Ld. CIT(A) held that u/s 153A, expenses not recorded in the books of account or not noted in seized material can be allowed on presumptive basis.
2. The Ld. CIT(A) directed the AO to tax the on money receipts of Rs. 3,20,000/- and the advances of Rs. 2,10,000/- in the year of transfer of shops instead of in the year of receipt.
3. The Ld. CIT(A) relied on the decision of the Tribunal in the case of Golani Bros. Vs. ACIT, despite the revenue's contention that the facts were not identical and the decision was under litigation before the Bombay High Court.
Conclusion:
The Tribunal upheld the decisions of the Ld. CIT(A) on all issues, dismissing the revenue's appeals for all assessment years.
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2012 (1) TMI 240
Issues involved: The judgment deals with the levy of penalty under section 271(1)(c) for furnishing inaccurate particulars of income.
Summary:
The appeal was filed against the order of CIT(A) for the assessment year 2006-07 regarding the penalty under section 271(1)(c). The AO had disallowed various amounts and initiated penalty proceedings. CIT(A) upheld the penalty, stating that the assessee had furnished inaccurate particulars of income. The assessee argued that a similar penalty on the brother had been deleted by the Tribunal for identical additions. The Tribunal found that the additions made were similar to the brother's case, where penalty was deleted based on legal precedents. The Tribunal held that the disallowance of claims did not amount to furnishing inaccurate particulars of income, citing the judgment in the case of Reliance Petroproducts (P) Ltd. The penalty was deleted, following the precedent set in the brother's case.
Therefore, the Tribunal set aside the order of CIT(A) and deleted the penalty levied under section 271(1)(c) for the assessee, as the facts were identical to the brother's case where the penalty was deleted. The appeal of the assessee was allowed.
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2012 (1) TMI 239
Refusing to grant the registration u/s 12AA - assessee running a school is charging high fees and running the elite educational institution/school and poor students of the society are unable to take/derive the benefit of the assessee-school - Held that:- As per the Trust Deed of the said assessee, it was permissible to award Scholarship outside the ‘Arur Family’ and also provided that the applicants deserving in the ‘Saraswat Community’. As per the Scheme of the Trust Deed as a whole, it was seen that the dominant object was benefits of scholarship for any members of the ‘Arur family’, in the case of female members limited to three degrees of relationships from the donee. The power to use surplus income for scholarship for deserving Members of the ‘Saraswat Community’ and the power to make advances to enable a start in life to be made by a scholar are subsidiary objects. It was held that the trust, though educational in character was for benefit of only family members and was having limited scope. In our humble opinion, the issue before their Lordships in the case of D.V. Arur (supra) was different and has not relevance to the issue before us.
We, therefore, hold that the assessee is entitled for registration u/s.12AA of the Act as the assessee is imparting the ‘education’ which is a ‘charitable purpose’. - Decided in favour of assessee.
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2012 (1) TMI 238
Issues involved: Appeal against order of ld CIT(A)-II, Jaipur regarding deletion of addition of excess depreciation claimed on Wind Turbine.
Issue 1: Excess depreciation claimed on Wind Turbine
1. The revenue filed an appeal against the order of ld CIT(A)-II, Jaipur dated 20/06/2011, challenging the deletion of addition of Rs. 38,60,680 made by the AO by way of disallowance of excess depreciation claimed on Wind Turbine.
2. The Tribunal noted that a similar issue was raised by the revenue in the case of the assessee for the earlier assessment year. In that case, the Tribunal had dismissed the appeal of the revenue after observing that the AO allowed 80% depreciation only on the cost of the windmill plant, and other related items were also entitled to depreciation at a higher rate due to being integral parts of the windmill.
3. Citing the decision of the Hon'ble Madhya Pradesh High Court in a similar case, the Tribunal held that items like foundation, platform, erection, installation of plant and machinery, and other civil work carried out for installation are integral parts of the windmill and are entitled to claim depreciation at 80%. Therefore, the Tribunal found no infirmity in the order of the ld CIT(A) deleting the addition made by the AO on account of excess claim of depreciation.
4. Following their previous order in a related case, the Tribunal upheld the decision of the ld CIT(A) to disallow the addition made by the AO on account of excess claim of depreciation to the extent of Rs. 36,39,773.
5. Consequently, the Tribunal held that the ld CIT(A) was justified in directing the AO to allow depreciation, and therefore, the appeal of the revenue was dismissed.
The judgment was pronounced in open court on 13.01.2012 by N. L. Kalra (Accountant Member) of the Appellate Tribunal ITAT Jaipur.
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2012 (1) TMI 237
Issues Involved:
1. Disallowance of interest expenses claimed by the assessee.
Issue-wise Detailed Analysis:
1. Disallowance of Interest Expenses:
Facts and Background:
Both appeals pertain to the disallowance of interest expenses claimed by two different assessees for the assessment year 2007-08. The appeals challenge the orders of CIT(A) XVI, Ahmedabad, which upheld the disallowance made by the Assessing Officer (AO). The core issue in both appeals is the disallowance of interest expenses on the grounds that the assessees had given interest-free advances to certain parties.
Assessee's Arguments:
The assessees argued that the interest-free advances were given for business purposes. They contended that the advances were not made in the current year but in earlier years and that these should not be disallowed.
Assessing Officer's Findings:
The AO noted that the assessees had given substantial interest-free advances to certain parties while simultaneously incurring interest expenses on unsecured loans. The AO disallowed the proportionate interest attributable to these interest-free advances, reasoning that the advances were not for business purposes as there were no business transactions with the parties involved.
CIT(A)'s Decision:
CIT(A) upheld the AO's disallowance, agreeing that the interest-free advances were not for business purposes and that the assessees failed to demonstrate any business connection or commercial expediency.
Tribunal's Analysis:
The Tribunal examined the arguments and evidence presented by both sides. It noted that the assessees did not provide any evidence to show that the interest-free advances were given out of interest-free funds or for business expediency. The balance sheets of the assessees indicated that there were no sufficient interest-free funds available for making such advances.
Judicial Precedents:
The Tribunal considered various judicial pronouncements cited by both parties:
- CIT vs. Prem Heavy Engineering Works P. Ltd. (285 ITR 554): Not applicable as the facts differed.
- CIT vs. Tin Box Co. (260 ITR 363): Not applicable due to different facts.
- CIT vs. Motor Sales Ltd. (304 ITR 123): Not applicable as the facts differed.
- Madhu Industries vs. ITO (132 TTJ 233): Not applicable as the advances in that case were business advances.
- CIT vs. Reliance Utilities & Power Ltd. (313 ITR 340): Not applicable due to different facts.
- Punjab Stainless Steel Industries vs. CIT (324 ITR 396): Applicable, as it held that disallowance of interest is justified when interest-free advances are made from borrowed funds without establishing commercial expediency.
Conclusion:
The Tribunal concluded that the assessees failed to establish any commercial expediency for the interest-free advances and that no sufficient interest-free funds were available for making such advances. It held that the issue is squarely covered against the assessees by the judgment of the Delhi High Court in Punjab Stainless Steel Industries vs. CIT, where it was held that the relevant test is the purpose for which the advances were extended, not the source of the funds.
Decision:
Both appeals were dismissed, and the disallowance of interest expenses was upheld.
Order Pronouncement:
The order was pronounced in the open court on the date mentioned in the judgment.
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2012 (1) TMI 236
Issues Involved:
1. Validity of the Settlement Commission's order dated 8.4.2011.
2. Methodology adopted by the Settlement Commission for determining MRP.
3. Immunity from prosecution under the Central Excise Act.
Summary:
1. Validity of the Settlement Commission's Order:
The Revenue challenged the final order of the Settlement Commission dated 8.4.2011, which involved an alleged artificial increase of 10% in price for the next year and a reduction of the weighted average MRP by 10% to arrive at MRP for 2007-08. The petitioner argued that the Settlement Commission's methodology was unscientific and hypothetical. The High Court deemed it necessary to examine the order's legality, referencing the Apex Court's decisions in Paul Industries (India) vs. Union of India and Union of India vs. Ind-Swift Laboratories Ltd., which emphasized the High Court's obligation to ensure the Settlement Commission's order complies with the law.
2. Methodology Adopted by the Settlement Commission:
The Settlement Commission settled the differential duty at Rs. 32,61,792/- and granted immunity from penalties and prosecution. The Revenue contended that the Commission's reduction of 10% per year in MRP would lead to an absurd reduction over time, potentially resulting in a negative sum. The High Court noted that the Commission's approach was not in line with the principles of valuation under Section 4A of the Central Excise Act and the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008. The Court found the Settlement Commission's methodology unsustainable and directed it to re-adjudicate the issue using a more scientifically sound approach.
3. Immunity from Prosecution:
The High Court highlighted that the respondent did not challenge the Settlement Commission's order independently nor contest the present petition. Consequently, the immunity from prosecution granted by the Settlement Commission under Section 32K(1) of the Act would continue to be available to the respondent. The Court clarified that the Settlement Commission should adjudicate the issue independently and pass necessary orders regarding fines if deemed fit.
Conclusion:
The High Court quashed the Settlement Commission's order dated 8.4.2011 and directed both parties to approach the Settlement Commission within 8 weeks. The Commission was instructed to use actual MRP details or similar quality MRP if actuals were unavailable, and to calculate differential duty, interest, and fines accordingly. The immunity from prosecution granted to the respondent remained intact.
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2012 (1) TMI 235
Issues involved:
The judgment involves the interpretation of provisions of section 50C of the Income-tax Act, 1961 and the determination of whether the income arising from a specific transaction is assessable in the hands of the assessee or another party.
Summary:
Issue 1: Assessment u/s 143(3) read with section 147 for AY 2004-05
The case involved an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals)-II, Nashik, arising from the order passed by the Assessing Officer under section 143(3) read with section 147 of the Income-tax Act, 1961 for the assessment year 2004-05.
Issue 2: Application of section 50C and Capital Gains Assessment
The Assessing Officer invoked section 50C of the Act to determine the total consideration for computing capital gain on a property transaction. The dispute centered around whether the property in question should be considered a capital asset, giving rise to capital gains, or not.
Issue 3: Nature of Income and Ownership of Property
The Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer, stating that the property was not a capital asset and therefore did not attract capital gains. The dispute arose regarding the ownership of the property and whether the income should be assessed in the hands of the assessee or another party.
Key Details:
- The assessee initially declared income from insurance commission and salary.
- The Assessing Officer issued a notice under section 148 regarding income from the sale of land.
- The dispute revolved around a Development Agreement and the ownership of the property.
- The Commissioner of Income-tax (Appeals) concluded that the property was not a capital asset, hence no capital gains.
- The primary issue of income assessable in the hands of the assessee was not determined by the Commissioner of Income-tax (Appeals).
- The Tribunal set aside the order for fresh adjudication on the primary issue of income assessment.
- The Commissioner of Income-tax (Appeals) was directed to allow a reasonable opportunity of hearing to the assessee for a fresh order.
This judgment highlights the importance of determining the ownership of property and the nature of income for accurate assessment under the Income-tax Act, emphasizing the need for thorough examination of primary issues before proceeding to alternate pleas.
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2012 (1) TMI 234
The Bombay High Court ruled that blending activity by the assessee qualifies as manufacturing for deduction under Section 10B of the Income Tax Act. The court upheld the decision of the ITAT, stating that the process results in a distinct product eligible for the deduction. The appeal was dismissed with no costs.
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2012 (1) TMI 233
Issues involved: Cross Appeals by the Assessee and the Revenue challenging assessment u/s.153C r.w.s. 153A & 143(3) of the Income-tax Act, 1961 for the assessment years 2001-02 to 2007-08.
Summary:
The Appellate Tribunal ITAT COCHIN heard a set of nine Cross Appeals by the Assessee and the Revenue arising from separate Orders by the Commissioner of Income-tax (Appeals)-I, Kochi, deciding the assessee's appeals contesting its assessment u/s.153C r.w.s. 153A & 143(3) of the Income-tax Act, 1961 for the assessment years 2001-02 to 2007-08. The Assessee's counsel argued that the facts and circumstances were identical to another case and urged that the Tribunal's decision in that case should be followed. The Revenue, however, contended that there was suppression of income based on evidence found in search. The Tribunal noted that no fresh facts or materials were presented, and decided to follow its previous decision in a similar case. Consequently, the appeals by the Revenue for AYs 2001-02 and 2002-03 were dismissed, the assessee's appeal for AY 2007-08 was dismissed, while that for AY 2003-04 was partly allowed. The assessee succeeded for the other years.
In the detailed discussion, the Assessee's counsel argued that the assessments were based on the same search materials as another case and should be decided similarly. The Revenue contended that there was suppression of income, which was systematically monitored and withdrawn by the partners. The Tribunal found that the evidence and circumstances were identical to a previous case and decided to follow its decision. The Revenue was advised to seek recourse to a higher appellate forum if aggrieved by the Tribunal's decision. Ultimately, the appeals were decided based on the Tribunal's previous ruling and the specific circumstances of the case.
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2012 (1) TMI 232
Denial of deduction u/s 80-IB - manufacturing - Held that:- When the coordinate bench of the Tribunal in the case of Sheetal Diamonds Ltd. (2011 (3) TMI 1044 - ITAT, MUMBAI ) has held that cutting and polishing of diamonds amounts to manufacture and deduction should be allowed, there is no reason to deny deduction under similar circumstances. As such we overturn the impugned order on this issue and order for the granting of deduction u/s 80-IB in all the years in question.
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2012 (1) TMI 231
Issues involved: Cross appeals by assessee and Revenue against common order passed by Ld. CIT (A)-III, Ahmedabad for block period 1-4-1990 to 7-3-2001.
Summary:
The assessee raised 25 grounds of appeal while the Revenue raised 17 grounds. The assessee filed an Additional Ground challenging the assessment completed without issuing notice u/s. 143(2) of the Income Tax Act, 1961. The Ld. AR argued that this Additional Ground is admissible based on the law laid down by the Apex Court in a specific case. The Ld. DR objected to the admission of the Additional Ground, citing the need for verification of facts. The Tribunal clarified that the order is limited to deciding the admission of the Additional Ground and not the original grounds raised in the appeals.
Referring to a case involving National Thermal Power Co. Ltd., the Tribunal discussed the discretion of allowing new grounds to be raised by the Tribunal. It was emphasized that the Tribunal should consider questions of law arising from facts on record in the assessment proceedings. The Tribunal found that the fact of whether the AO issued notice u/s. 143(2) during block assessment is on record. The Additional Ground raised by the assessee was admitted, and the matter was remanded to the CIT (A) for detailed examination and decision, ensuring natural justice principles are followed.
The cross appeals were decided based on the legal ground raised by the assessee in the Additional Ground. No opinion was expressed on the original grounds raised in the appeals. Both appeals were allowed for statistical purposes.
*Order pronounced in Open Court on 13-01-2012.*
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2012 (1) TMI 230
Issues involved:
The issues involved in the judgment are the entitlement of an assessee under the Central Excise Act to claim interest on delayed repayment of duty amount, the appropriate remedy for claiming interest, and the misconceived attempt of filing a writ petition seeking relief.
Entitlement to Claim Interest:
The judgment clarifies that when the issue of payment of interest to an assessee on tax or duty refund is governed by statute, the appropriate remedy is to exhaust all statutory remedies before approaching the writ court under Article 226/227 of the Constitution of India. The Act provides a specific remedy for the assessee to claim interest on adjudicated dues if not paid within the specified time after determination.
Misconceived Attempt of Filing Writ Petition:
The court finds the filing of the writ petition to be a misconceived attempt as the relief claimed is vague and general, lacking essential details such as due dates, quantification of dues, and specifics of the claim for interest. Even if these details were provided, the statutory remedy under the Act should have been pursued before approaching the writ court. The judgment highlights that the claim for interest on the refunded duty amount was not entertainable as the amount was paid to the assessee on the same day as the order of determination, leaving no basis for claiming interest.
Decision and Dismissal of Writ Petition:
The court dismisses the writ petition, finding it devoid of merit and liable for dismissal. The judgment emphasizes that since the claim for interest was not tenable under the Act itself, it could not be entertained in the writ petition. The court rejects the contention that the writ petitioner was entitled to claim interest based on a previous decision, stating that the claim for interest did not arise due to the prompt payment of the quantified duty refund amount. The writ petition is dismissed with no cost awarded.
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