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Showing 181 to 200 of 558 Records
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2012 (2) TMI 559
Issues involved: Appeal against order of Commissioner of Income-tax (Appeals) for assessment year 2005-06 regarding unexplained investment of Rs. 200.82 lakhs with VSNL.
Summary:
The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2005-06. The Assessing Officer had issued notices u/s.148 and u/s.142(1) of the Income Tax Act, 1961 as the assessee had made an investment of Rs. 200.82 lakhs with VSNL. The Assessing Officer added this amount as unexplained investment and completed the assessment u/s.144/147 of the Act. The Commissioner of Income-tax (Appeals) decided the appeal ex-parte, upholding the action of the Assessing Officer due to lack of explanation or evidence from the assessee. The appeal was based on the principles of natural justice, requesting the matter to be restored back to the file of the Assessing Officer for a fresh decision. The Appellate Tribunal considered the submissions and decided to give the assessee another opportunity to explain the deposit of Rs. 2 crores with BSNL, thus allowing the appeal for statistical purposes. The order was pronounced on 02-02-2012.
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2012 (2) TMI 558
Addition u/s 69 - Held that:- In view of the scheme of income tax, no income can be taxed twice, as has been done by the revenue. Firstly, taxing the same income of ₹ 64 lacs in the hands of the company, the present appellant assessee as also in the hand of Shri Gurlal Singh Grewal. We fully agree with the contention raised by the assessee in the matter of taxing single item of income tax twice, is not tenable under the scheme of the Income-tax Act. Therefore, having regard to the findings of the ld. CIT(A) and above discussion, the impugned addition is deleted and ground of appeal of the revenue is dismissed.
Addition on account of unaccounted interest income earned - Held that:- In the case of Oswal Spinning Mills, the Hon'ble Punjab & Haryana High Court [2010 (7) TMI 765 - Punjab and Haryana High Court ] held that interest paid on acquisition of machinery, can be treated as part of the cost of machinery. Ld. CIT(A) deleted the impugned addition made by the AO. The ld. CIT(A), on the basis of submission filed before him, held that the appellant had not raised any loan from any bank or any financial institution against installation of machinery during the year under consideration. This contention was also raised before the AO. The AO failed to give specific finding on this aspect and, hence, ld. CI T(A) held that it cannot be presumed that any interest bearing funds, have been invested, in the capital work, in process, shown by the assessee. Ld. CIT(A), found the cases relied upon by the AO as distinguishable, factually and materially. We do not find any infirmity in the findings of the ld. CIT(A) and, hence, findings of the ld. CIT(A) are upheld and ground of appeal raised by the revenue is dismissed.
Disallowance of interest u/s 36(1)(iii) - Held that:- Advances by company were out of its own funds of share capital or out of mixed funds, not sufficient to discharge the onus- Decided in favour of revenue
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2012 (2) TMI 557
Issues Involved:
The issues involved in the judgment are the set off of business loss/unabsorbed depreciation against short term capital gains u/s.50 on sale of depreciable assets and the interpretation of the term "profits and gains of any business or profession" u/s 72 of the Income Tax Act, 1961.
Issue 1: Set off of Business Loss/Unabsorbed Depreciation against Short Term Capital Gains u/s.50:
The Assessee, a company, appealed against the order of the ld CIT(A) Central-5, Mumbai for A.Y. 2006-07, which disallowed the set off of business loss/unabsorbed depreciation against short term capital gains u/s.50 on sale of depreciable assets. The AO held that as per Sec.72 of the Act, loss under the head "Profits and gains of business or profession" can only be set off against profits of any business in the subsequent year. The Assessee argued that the profit on sale of assets, though short term capital gain, was income from business and should be allowed for set off. However, the AO maintained that the loss adjustment was not permissible as there was no loss under any heads of income during the year. The ld CIT(A) upheld the AO's decision, leading to the appeal before the Tribunal.
Issue 2: Interpretation of "Profits and Gains of Any Business or Profession" u/s 72:
During the appeal hearing, the parties referred to a Special Bench decision in the case of M/s. Nandi Steels Ltd. Vs. A.C.I.T., where the issue of set off of brought forward loss against income from capital gains u/s 72 was discussed. The Tribunal emphasized the term "profits and gains of any business or profession" in Sec.72(1) of the Act. It was clarified that only business loss can be carried forward u/s 72 and set off against business income assessable for the relevant assessment year. The Tribunal concluded that the capital gains on sale of capital assets should not be set off against brought forward loss from earlier years. Citing the decision in the case of M/s Express Newspapers Ltd., the Tribunal rejected the Assessee's grounds of appeal, aligning with the revenue.
In conclusion, the Tribunal dismissed the appeal by the Assessee, upholding the decisions of the ld CIT(A) and the AO. The judgment emphasized the specific provisions of the Income Tax Act regarding the set off of losses against income, particularly in the context of short term capital gains and business income.
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2012 (2) TMI 556
Issues involved: Application for recalling the combined order passed by the Tribunal dated 05.01.2011 in ITA No. 2991/Ahd./2008 and 284 & 285/Ahd/2010 for the assessment years 2005-2006, 2003-2004 and 2004-2005 respectively.
The assessee filed Miscellaneous Applications seeking recalling of the combined order passed by the Tribunal dated 05.01.2011 in ITA No. 2991/Ahd./2008 and 284 & 285/Ahd/2010 for the assessment years 2005-2006, 2003-2004 and 2004-2005 respectively. The appellant urged that the order was passed dismissing the appeal on the ground of non-prosecution due to failure in attending the hearing despite a request to merge the appeals. The appellant requested for restoration of the appeal citing technical default and reasonable cause. The ld. A.R. requested the recall of the order, which the ld. D.R. did not oppose. The Tribunal considered the submissions and decided to recall the order in the interest of justice, directing the appeal to be fixed on a specific date without the need for further notice to both parties. Consequently, the miscellaneous applications filed by the assessee were allowed.
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2012 (2) TMI 555
Nature of payment - payments were made to six non-resident entities - purely on account of services or nature of royalty - Held that:- As transactions in respect of which the impugned payments were made was purely on account of services and there is no transfer of right to use the goods. In the result, it is held that the Assessing Officer was not justified in treating the payment as royalty and invoking the provisions of sec. 195. See CIT Vs. Godavari Devi Saraf [Smt] [1977 (9) TMI 24 - BOMBAY High Court ]
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2012 (2) TMI 554
Issues involved: The judgment pertains to the assessment year 2001-02 and addresses multiple issues raised by the Revenue against the respondent-assessee.
Issue No.1: The court considered whether the addition made to book profits under section 115JB of the Income Tax Act on account of provision for doubtful debts should be deleted. The court ruled in favor of the Revenue due to a retrospective amendment by the Finance Act, 2009.
Issue Nos. 2 and 3: The court examined the deletion of additions made by the Assessing Officer on account of provision for warranty expenses. Citing the decision in Rotork Controls India (P) Ltd. Vs. CIT, the court ruled in favor of the assessee, stating that provision for warranty expenses is allowable under section 37 of the Income Tax Act.
Issue Nos. 4 and 5: The court considered the deletion of additions on account of foreign exchange fluctuation loss. Relying on the decision in CIT Vs. Woodward Governor India (P) Ltd., the court ruled in favor of the respondent-assessee.
Issue No.6: The court analyzed whether the provisions of section 234D of the Income Tax Act are clarificatory in nature. Referring to DIT Vs. Jacabs Civil Incorporated, the court ruled that interest under section 234D is chargeable from the assessment year 2004-05.
Issue No.7: The court deliberated on the disallowance of expenses on advertisement and sales promotion. Citing the decision in CIT Vs. Salora International Ltd., the court ruled in favor of the respondent-assessee, stating that the expenses are revenue in nature.
Issue No.8: The court examined the justification for disallowance of 10% of advertisement and sales promotion expenses. Referring to Commissioner of Income Tax, Delhi-I Vs. Adidas India Marketing (P.) Ltd., the court ruled that the expenses were incurred for business promotion and were fully deductible as allowable business expenditure.
In conclusion, the court disposed of the appeal, ruling on each issue based on relevant legal provisions and precedents, with costs not awarded.
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2012 (2) TMI 553
Issues involved: Validity of addition on account of sale of agricultural land as book profit u/s. 115JB of the Income-tax Act, 1961.
The judgment by the Appellate Tribunal ITAT COCHIN in the case involved the appeal by the Revenue against the Order by the Commissioner of Income-tax (Appeals)-IV, Kottayam, for the assessment year 2007-08. The sole issue was the validity of the addition on account of sale of agricultural land as book profit u/s. 115JB of the Income-tax Act, 1961.
The Revenue contended that profit on the disposal of an asset should be incorporated in the Profit & Loss Account of a company for computing the 'book profit' under the MAT provisions, including s. 115JB. They argued that there is no basis for excluding the profit derived from the sale of agricultural land by the assessee. On the other hand, the assessee relied on previous tribunal decisions and Circular No. 550 issued by CBDT to contest the Revenue's claim.
The tribunal, after hearing both parties and examining the material on record, held that the profit from the sale of agricultural land, which is not considered a capital asset u/s. 2(14) of the Act, should be excluded from the computation of book profit u/s. 115JB. The tribunal's decision was based on previous rulings and the nature of agricultural income as exempt from capital gains tax. The tribunal found no reason to deviate from this view and dismissed the Revenue's appeal accordingly.
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2012 (2) TMI 552
Issues involved:
The assessee sought the Tribunal to recall/modify its order related to undisclosed income and ex parte assessment u/s 144 of the Income Tax Act for the block period from assessment years 1997-98 to 2002-03.
Undisclosed Income Issue:
The assessee contended that commission and receipts from a company were duly recorded in the books of account, thus not undisclosed income. The opening cash balance was explained as savings from abroad and loans advanced to friends. The Tribunal noted the ex parte assessment under section 144 and the CIT (A)'s limited power to set aside assessments post-2001. The Tribunal upheld its order, stating it cannot review its own decision under section 254(2) of the Act. The Tribunal emphasized that rectification under section 254(2) is limited to correcting apparent mistakes, not for rehearing the entire matter. The Tribunal dismissed the Miscellaneous Application, finding no mistake in its order.
Ex Parte Assessment Issue:
The Tribunal highlighted the ex parte assessment by the Assessing Officer and the CIT (A)'s restricted power to set aside assessments post-2001. The Tribunal clarified that under section 254(2) of the Act, it cannot review its own decision, as this provision is limited to rectifying mistakes apparent from the record. The Tribunal emphasized that recalling an order is permissible only under specific circumstances outlined in ITAT Rules, 1963, such as absence during the appeal hearing. In this case, the Tribunal found no mistake in its order and dismissed the Miscellaneous Application.
Conclusion:
The Tribunal dismissed the Miscellaneous Application filed by the assessee, upholding its original order related to undisclosed income and ex parte assessment. The Tribunal clarified the limited scope of rectification under section 254(2) of the Act and emphasized that recalling an order is only allowed under specific circumstances as per ITAT Rules, 1963. The Tribunal found no mistake in its order and maintained its decision.
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2012 (2) TMI 551
Treat the data base as plant and allow depreciation on it - excessive or unreasonable claim - Held that:- There is no material whatsoever to establish or even indicate that the price of ₹ 12 crores paid for the Acquired Business Database is excessive or unreasonable and only the basis of Assessing Officer's coming to the conclusion about his subjective judgment.
When in Assessment year: 2002-03 valuation of Acquired Business Database has been examined by TPO while concluding that the database price adjustment for the said year and no adverse inferences have been recorded in respect of the same, there could be no good reason for the AO to deviate from the stand of the TPO and substitute his own opinion as to what should be the correct price at which Acquired Business Database should have been purchased. We are of the considered view that the CIT(A) was indeed in error in restricting the value of Acquired Business Database at ₹ 3 crores as against ₹ 12 crores paid by the assessee. To this extent, we vacate the order of the CIT(A).
As per section 32(1)(ii), depreciation is allowable in respect of know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature." In view of these discussions as also bearing in mind the entirety of the case, we are of the considered opinion that the CIT(A) ought to have allowed the depreciation on the entire payment of ₹ 12 crores towards Acquired Business Database. We, therefore, reject the appeal filed by the Assessing Officer against partial relief granted by the CIT(A) and uphold the grievance of the assessee in this regard.
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2012 (2) TMI 550
Issues Involved:
1. Employer-employee relationship between the assessee and the expatriate employee.
2. Nature of services rendered by the expatriate employee as technical services.
3. Requirement of tax deduction at source (TDS) under Section 195 of the IT Act for reimbursement of salary.
Issue-wise Detailed Analysis:
1. Employer-employee relationship between the assessee and the expatriate employee:
The assessee company contended that there existed an employer-employee relationship between it and Mr. Graham J Lythgoe, the expatriate employee deputed by Caterpillar Asia Ltd. (CAL), based on the secondment agreement. The assessee argued that Mr. Lythgoe was under its control, direction, and supervision while working in India. However, the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)] disagreed, stating that the assessee company did not have the authority to terminate the employment or decide the salary of Mr. Lythgoe, indicating no direct employer-employee relationship. The Tribunal referred to a similar case, M/s IDS Software Solutions (India) Pvt. Ltd. vs. ITO, where it was held that the secondment agreement constituted an independent contract of service, making the assessee company the economic employer during the relevant period. The Tribunal concluded that the facts of the present case were identical and thus, the assessee company should be considered the employer of Mr. Lythgoe.
2. Nature of services rendered by the expatriate employee as technical services:
The ITO held that the services rendered by Mr. Lythgoe were in the nature of technical services as defined under Explanation-2 to Section 9(1)(vii) of the IT Act, which includes managerial, technical, or consultancy services. The CIT(A) upheld this view. However, the Tribunal, referencing the case of IDS Software Solutions, noted that the secondment agreement's clauses indicated an employer-employee relationship rather than a contract for providing technical services. The Tribunal highlighted that the duties outlined in the secondment agreement made the expatriate employee responsible and subservient to the assessee company, which would not be typical in an agreement for rendering technical services. Therefore, the Tribunal did not consider the payment as fees for technical services.
3. Requirement of tax deduction at source (TDS) under Section 195 of the IT Act for reimbursement of salary:
The ITO argued that the reimbursement of salary to CAL required TDS under Section 195 of the IT Act, as it was considered fees for technical services. The assessee contended that TDS had already been deducted under Section 192 on the salary paid to Mr. Lythgoe in India, and thus, no further TDS was required under Section 195. The Tribunal, following the precedent set in the IDS Software Solutions case, held that since the salary was subject to TDS under Section 192 and paid to Indian tax authorities, the reimbursement to CAL did not attract TDS under Section 195. The Tribunal concluded that the assessee was not liable to deduct tax on the reimbursement amount.
Conclusion:
The Tribunal allowed the appeal filed by the assessee, holding that there existed an employer-employee relationship between the assessee and Mr. Lythgoe, the services rendered were not technical services, and the reimbursement of salary did not require TDS under Section 195 of the IT Act. The order of the CIT(A) confirming the ITO's decision was overturned.
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2012 (2) TMI 549
Order passed u/s 201(1) and 201(1A) - Secondment of Employee - Held that:- Host company shall take all reasonable actions necessary to ensure that the Employee is in compliance with all applicable local laws, regulations or other requirements applicable to immigration and the services. The Employee will report to, and be under the direction and control of, Host Company and comply with Host Company’s policies and procedures applicable to the services, including without limitation, reasonable directives of Host Company concerning job safety and confidentiality in the handling of data and information.
Home Company represents that, to the best of its knowledge; (i) the Employee has,or will have, the professional training and skills necessary to fulfill the functions he/she is to perform for the Host Company during the secondment based upon the requirements provided by Host Company, and (ii) Home Company has obtained, or promptly shall obtain, from the Employee his/her consent to the secondment.
Employee-Related Costs - Held that:- During the period of this agreement, for administrative convenience, the Home Company shall make payment of salary, bonus and all other benefits to the Employee as per the terms with the Employee on behalf of the Host Company.
Host Company shall promptly reimburse Home Company for any and all costs in borne on its behalf in accordance with sec.3.
Costs of Host Company. Unless agreed upon otherwise in writing between the parties. Host Company shall bear and directly pay all the related local costs and expenses. Such costs may include, but shall not limited to, housing, rent, utilities, furniture, company car or other transportation and any other foreign service allowances. As can be seen from the above clauses, the facts of the case before us are exactly the same. In view of the same, we do not see any reason to take any other view. In view of the same, assessee’s appeal is allowed.
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2012 (2) TMI 548
Addition of bogus purchases and payments - Held that:- The present assessee who has been maintaining cash book, purchase register, sales register, stock register, ledger account etc., and also his case comes under the purview of the provisions of section 44AB Act.
We are of the firm view that if the disallowance is restricted/sustained to the extent of 12.5% on account of the bogus purchases, it would meet the ends of justice. It is, therefore, ordered accordingly. Revenue’s appeal is dismissed.
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2012 (2) TMI 547
1. ISSUES PRESENTED and CONSIDERED The core legal questions considered in this judgment are: - Whether the capital gain arising from the sale of the property should be treated as a short-term capital gain or a long-term capital gain.
- At what point did the assessee become the owner of the property for the purposes of calculating capital gains tax?
- How should the provisions of the Income Tax Act, particularly section 2(47) regarding the definition of "transfer," be applied in this context?
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Classification of Capital Gain - Relevant Legal Framework and Precedents: The legal framework involves the interpretation of the term "transfer" under section 2(47) of the Income Tax Act, 1961, and its amendments. The precedents considered include the Supreme Court decisions in CIT v. Podar Cement Pvt. Ltd. and Mysore Minerals Ltd. v. CIT.
- Court's Interpretation and Reasoning: The court interpreted the term "transfer" to include the acquisition of possession and rights under a lease-cum-sale agreement, as per the amendments introduced by the Finance Act, 1987. The court emphasized the significance of possession and enjoyment of property rights over formal registration.
- Key Evidence and Findings: The assessee had entered into a lease-cum-sale agreement and took possession of the property in 1991. Full payment for the property was made at the time of the agreement, and the possession certificate was issued in 1991.
- Application of Law to Facts: The court applied the amended definition of "transfer" to conclude that the assessee's acquisition of possession in 1991 constituted a transfer of ownership rights, despite the formal sale deed being executed in 2002.
- Treatment of Competing Arguments: The court distinguished the case from Dr. V.V. Mody, which was decided before the relevant amendments and Supreme Court rulings. The arguments presented by the Revenue were based on outdated interpretations of ownership.
- Conclusions: The court concluded that the capital gain should be classified as a long-term capital gain, as the property was held for more than 36 months from the date of possession in 1991.
3. SIGNIFICANT HOLDINGS - Preserve Verbatim Quotes of Crucial Legal Reasoning: "Merely because the above lease was converted into sale-deed on 30.12.2002 does not mean that the assessee became the owner of the property on 30.12.2002 and not from the date of possession of the property i.e. 2.1.1991."
- Core Principles Established: The ownership for tax purposes can be established through possession and payment under a lease-cum-sale agreement, without the necessity of formal registration. The amendments to section 2(47) and relevant Supreme Court decisions support this interpretation.
- Final Determinations on Each Issue: The tribunal directed that the capital gain from the sale of the property should be assessed as a long-term capital gain, not a short-term capital gain, thereby allowing the appeal by the assessee.
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2012 (2) TMI 546
Issues involved: Assessee's appeals against separate orders of CIT(A) challenging calculation of deduction u/s 80-HHC for A.Y. 2003-04 & 2000-01 regarding interest income and application of section 28(iiid) of the Act.
Summary:
The appeals were heard together and disposed of by a consolidated order for convenience. The issue was previously decided in favor of the assessee, but the High Court remitted the case back to ITAT for fresh adjudication. Following this, the ITAT restored the matter to the file of AO for reevaluation. The issues were to be reconsidered in light of relevant judicial authorities, including a decision by the Supreme Court in a related case. Consequently, both assessment years' issues were sent back to the AO for fresh adjudication in accordance with the law. As a result, the assessee's appeals were allowed for statistical purposes.
*Order pronounced in open court on 17-02-2012.*
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2012 (2) TMI 545
Issues Involved:
1. Disallowance of amortization claim u/s 35D.
2. Disallowance of bad debts u/s 36(1)(iii).
3. Addition on account of unutilized CENVAT credit.
4. Disallowance of deduction u/s 80HHC in respect of DEPB profit.
5. Disallowance of excise duty and bonus paid u/s 43B.
6. Disallowance of contribution to provident fund.
7. Disallowance of maintenance of livestock.
8. Computation of deduction u/s 80HHC for book profit u/s 115JB.
Summary:
1. Disallowance of Amortization Claim u/s 35D:
The assessee's claim for amortization of registration fees paid for increasing authorized share capital was disallowed by the Assessing Officer (AO) and upheld by the Commissioner (Appeals). The Tribunal agreed with the Commissioner (Appeals) that the expenditure did not qualify for deduction u/s 35D as it was not incurred for public subscription of shares.
2. Disallowance of Bad Debts u/s 36(1)(iii):
The AO disallowed the bad debts claim on the grounds that the debts were not proven to be bad. The Commissioner (Appeals) upheld this disallowance. However, the Tribunal, following the Supreme Court judgment in TRF Ltd. v/s CIT, remitted the matter back to the AO to verify if the debts were written off in the books, directing allowance of the claim if they were.
3. Addition on Account of Unutilized CENVAT Credit:
The AO added the unutilized CENVAT credit to the closing stock value. The Commissioner (Appeals) directed adjustments for stocks, purchases, sales, and excise duty payments. The Tribunal restored the issue to the AO for de novo adjudication as per the Bombay High Court's ruling in Mahalaxmi Glass Works Pvt. Ltd.
4. Disallowance of Deduction u/s 80HHC in Respect of DEPB Profit:
The AO disallowed the deduction u/s 80HHC due to export losses. The Commissioner (Appeals) upheld the disallowance except for DEPB utilized for imports. The Tribunal, following the Supreme Court judgment in Topman Exports v/s CIT, remitted the issue back to the AO for fresh adjudication.
5. Disallowance of Excise Duty and Bonus Paid u/s 43B:
The AO disallowed claims for excise duty and bonus due to lack of evidence. The Commissioner (Appeals) directed verification for bonus payments and rejected the excise duty claim. The Tribunal upheld the Commissioner (Appeals)'s findings, dismissing the assessee's ground on excise duty and allowing the bonus claim subject to verification.
6. Disallowance of Contribution to Provident Fund:
The AO disallowed the contribution to provident fund due to lack of evidence. The Commissioner (Appeals) directed re-examination of payments made within the grace period. The Tribunal, following the Supreme Court judgment in CIT v/s Vinay Cement Ltd., allowed the deduction for payments made before filing the return.
7. Disallowance of Maintenance of Livestock:
The AO disallowed the expenditure on livestock maintenance, not considering it part of the assessee's business. The Commissioner (Appeals) allowed the expenditure as a staff welfare measure. The Tribunal upheld this decision, recognizing the commercial expediency of the expenditure.
8. Computation of Deduction u/s 80HHC for Book Profit u/s 115JB:
The Tribunal directed the AO to apply the Supreme Court's judgment in Ajanta Pharma Ltd. v/s CIT for computing the deduction u/s 80HHC for book profit u/s 115JB, allowing the ground for statistical purposes.
Conclusion:
The appeals by the assessee and the Revenue were partly allowed, and the cross objection by the assessee was dismissed. The Tribunal directed the AO to re-examine several issues in light of relevant judicial precedents.
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2012 (2) TMI 544
Issues involved: Appeal u/s 35-G of Central Excise Act against Tribunal's order on use of pentaeryphritol in final product.
Summary:
Issue 1: Use of pentaeryphritol in final product
The Commissioner of Central Excise appealed against the Tribunal's order stating that the final product did not contain pentaeryphritol based on test reports. The Tribunal held that the respondent-assessee wrongly claimed modvat credit for using pentaeryphritol in the manufacture of cable filling compound. The Revenue relied on test reports from scientific experts, but the respondent-assessee cross-examined the expert and explained the reasons for not using pentaeryphritol after a surprise search found it in their premises. The Tribunal dismissed the appeal, stating no substantial question of law arises and the order is not perverse.
Conclusion:
The High Court dismissed the appeal, finding no substantial question of law and upholding the Tribunal's decision regarding the use of pentaeryphritol in the final product.
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2012 (2) TMI 543
TDS u/s 194H - Disallowance under section 40(a)(ia) - non deducting the TDS on the service fees charged by bank on credit card transactions - Held that:- There is no such relation between the bank and the shop keeper which establishes the relationship of a Principal and Commission Agent. Technically it may be written that bank will charge certain percentage of commission but this is not a commission because assessee sells its goods against credit cards, and on presentation of bills, the bank has to make the payment. It is not the case that bank has advised the assessee to sell their goods to its customers then he will pay the commission.
It is reversed in a situation as bank issued credit cards to the credit card holders on certain fees or whatever the case may be and the card holder purchases material from the market through his credit card without making any payment and that shop keeper presents the bill to the bank against whose credit card the goods were sold and on presentation of bill as stated above the bank makes the payment. Therefore, provisions of section 194H are not attracted in this type of transaction. Therefore, we hold that addition made and confirmed by ld. CIT (A) was not justified. See case of M/s. Gem Paradise [2012 (2) TMI 521 - ITAT JAIPUR ] - Decided in favour of assessee.
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2012 (2) TMI 542
Issues involved: Determination of Capital gains on sale of land located at Ayyanthole, Thrissur for the assessment year 2005-06.
Capital gains calculation:
The assessee inherited 1/4th share of land and sold it for &8377; 44 lakhs, receiving &8377; 11 lakhs. Claimed market value as on 1.4.1981 at &8377; 10,000. Claimed compound wall construction cost of &8377; 3,50,000 as 'Cost of improvement'. Invested &8377; 11 lakhs for purchase of another land at Koothattukulam. Deducted this investment u/s 54F against long term capital gain.
Assessing officer's restrictions:
AO restricted cost of improvement to &8377; 50,000 due to lack of evidence. Restricted exemption u/s 54F to &8377; 1.00 lakh based on purchase deed values. Rejected alternative claim of exemption u/s 54B as agricultural land status not proven.
CIT(A) decision:
Enhanced cost of improvement to &8377; 1.00 lakh. Confirmed AO's view on other issues. Assessee appealed.
Exemption u/s 54B:
Assessee claimed exemption u/s 54B post-return filing. Evidence provided included photographs, water cess receipt, and certificates. CIT(A) dismissed claim due to insufficient evidence of agricultural use. Tribunal upheld decision, emphasizing land use over nature for sec.54B eligibility.
Deduction u/s 54F:
AO and CIT(A) restricted deduction to &8377; 1 lakh based on purchase deed values. Assessee argued farm house also constitutes residential house. Tribunal agreed, estimating plot and land value at &8377; 2 lakh for deduction u/s 54F in addition to super structure value.
Conclusion:
Tribunal partly allowed the appeal, directing AO to allow &8377; 2 lakh deduction u/s 54F. Pronounced on 17-02-2012.
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2012 (2) TMI 541
Issues Involved:
1. Jurisdiction of the Commissioner of Customs (Preventive), Mumbai to issue show cause notice.
2. Validity of demands and penalties imposed based on the jurisdictional issue.
Summary:
Jurisdiction of the Commissioner of Customs (Preventive), Mumbai:
The appellants contested the jurisdiction of the Commissioner of Customs (Preventive) to issue the show cause notice, arguing that Sahar Air Cargo Complex falls under Mumbai Suburban district, which is not within the jurisdiction of the Commissioner of Customs (Preventive) as per Notification No. 15/2002-Cus. (N.T.). The adjudicating authority held that the Commissioner of Customs (Preventive) has jurisdiction over both Mumbai City and Mumbai Suburban districts. The Tribunal, in its majority decision, agreed with this interpretation, stating that the term "Mumbai District" in the notification should be interpreted to include both Mumbai City and Mumbai Suburban districts to avoid rendering the notification redundant. The Tribunal distinguished the case from the Noble Asset Co. Ltd. decision, which dealt with jurisdiction over the Exclusive Economic Zone, not applicable here.
Validity of Demands and Penalties:
Given the majority decision that the Commissioner of Customs (Preventive) has jurisdiction over Sahar Air Cargo Complex, the show cause notice and subsequent demands and penalties were deemed valid. The Tribunal directed that the stay application be considered on merits, affirming the jurisdictional authority of the Commissioner of Customs (Preventive) over the area in question.
Separate Judgments:
Member (Judicial) Ashok Jindal initially held that the Commissioner of Customs (Preventive) lacked jurisdiction, rendering the demands unsustainable. However, Member (Technical) P.R. Chandrasekharan disagreed, leading to a reference to a third member, Sahab Singh, who concurred with the view of Member (Technical). The majority decision thus upheld the jurisdiction of the Commissioner of Customs (Preventive).
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2012 (2) TMI 540
Issues involved: Appeal u/s 260A of the Income-tax Act against order dismissing addition of income u/s 68 of the Act.
Summary:
1. The revenue appealed against the order of the Tribunal upholding the deletion of an addition of income made by the Assessing Officer u/s 68 of the Income-tax Act for the Assessment Year 2000-01.
2. The assessee, a private limited company, declared income and unsecured loans in its return for the relevant year. The Assessing Officer added a certain amount under section 68 as the assessee failed to prove the genuineness of transactions and creditworthiness of creditors.
3. The Commissioner, after considering additional evidence under Rule 46A of the Income Tax Rules, deleted the addition, concluding that the assessee had established the genuineness of transactions and creditworthiness of the creditor.
4. The Tribunal upheld the Commissioner's order, emphasizing that the assessee proved the identity, creditworthiness, and genuineness of the transactions. The Tribunal found no legal infirmity in the view taken by the Commissioner and dismissed the appeal.
5. The High Court held that no substantial question of law arose in the appeal as the Commissioner and Tribunal had made factual findings in favor of the assessee. The court noted that the revenue failed to counter the additional evidence presented by the assessee, and the assessee demonstrated the lack of service of notices under relevant sections of the Act. The court upheld the decision to dismiss the appeal, as the assessee had sufficiently proven the essential aspects of the transactions.
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