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Showing 181 to 200 of 1194 Records
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2013 (8) TMI 1017
Issues Involved:
1. Validity of assessment u/s 153A.
2. Claim of depreciation as a cash in-flow.
3. Levy of interest u/s 234A, 234B, and 234C.
Summary:
Validity of Assessment u/s 153A:
In ITA No. 30/PN/2013, the assessee challenged the validity of the assessment completed u/s 143(3) instead of u/s 153A or 153C for the assessment year 2007-08, arguing it was without jurisdiction. The Tribunal held that the assessment was completed within the time specified u/s 153B(1)(b) and based on seized material, thus there was no infirmity in the assessment order. Consequently, the ground was dismissed.
Claim of Depreciation as a Cash In-Flow:
The main issue across multiple appeals was whether depreciation allowable under Section 44AE could be considered as a source of cash in the cash-flow statements to explain investments found during a search. The Tribunal acknowledged that depreciation is a non-cash expense and could, in principle, be considered as cash available. However, due to the lack of adequate material to substantiate the exact amount of cash available, the Tribunal directed the Assessing Officer to allow credit for 40% of the depreciation claimed by the assessee in the cash-flow statements and to re-compute the total income accordingly. This decision was applied consistently across all related appeals.
Levy of Interest u/s 234A, 234B, and 234C:
The issue of interest levied u/s 234A, 234B, and 234C was deemed consequential and dependent on the final computation of income after considering the Tribunal's directions.
Result:
All appeals were partly allowed, with the Assessing Officer directed to re-compute the total income by considering 40% of the depreciation as cash in-flow and to re-assess the interest levied accordingly.
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2013 (8) TMI 1016
Expenses incurred to keep its corporate entity allowed or not? - Temporary lull in the business of the assessee - No business income - HELD THAT - The claimed nature of expenses such as audit fees, salaries, professional charges, insurance etc are necessary to maintain the corporate entity and thus allowable. In no case, the Assessing Officer could form an opinion that assessee has closed its business and disallow expenses.
Decision in favor of assessee.
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2013 (8) TMI 1015
Nature of loss - speculation loss u/s 43(5) v/s non-speculation loss - Held that:- The ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of A.O. We order accordingly and direct him to decide this issue afresh as per law in the light of the afore-noted Tribunal order. We want to make it clear that the issue is left open to be decided by the Assessing Officer. The applicability of the Tribunal order in the case of Arnav Akshay Mehta [2012 (9) TMI 447 - ITAT MUMBAI] should be considered by the Assessing Officer as per law and facts of the instant case. He will also dealt with the assessee’s contention on the applicability of proviso (a) to section 43(5) if the case is found to be falling in proviso (d) to section 43(5). Without prejudice ground taken by the assessee about the direction to the Assessing Officer to allow set off of the alleged speculation loss against profit arising to the assessee in similar transaction in subsequent year, is clearly not acceptable because firstly we have not upheld the view of the Revenue in treating the loss of ₹ 1.99 crore as speculation and secondly subsequent assessment year is not before us.
Disallowance on account of exchange rate fluctuation - Held that:- The Hon’ble Supreme Court in the case of CIT v. Woodward Governor [2009 (4) TMI 4 - SUPREME COURT ] has held that loss suffered by the assessee in respect of fluctuation in the rate of foreign exchange as on the date of the balance sheet is an item of expenditure u/s 37(1) in the year of approval. It is relevant to note that apart from claiming deduction for ₹ 62.62 lakh, the assessee offered income of ₹ 34.37 lakh in respect of gain on foreign exchange fluctuation with refernce to the rate of purchase and sale transaction entered during the year, which has been duly accepted as taxable by the authorities below. In such a situation and respectfully following the precedent rendered by the Hon’ble Supreme Court, we are of the considered opinion that the assessee deserves deduction of ₹ 62.62 lakh.
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2013 (8) TMI 1014
Issues involved: Cross appeals filed by the Assessing Officer (AO) and the assessee for the assessment years 2005-06 to 2007-08.
Assessing Officer's Appeal:
1. The AO charged interest u/s 234A, 234B, and 234C. The assessee contended that being a notified entity under the Special Court Act, no interest could be charged, as assets were under the control of the custodian. The First Appellate Authority (FAA) directed deletion of the interest.
2. The Departmental Representative (DR) relied on the AO's order, while the Authorized Representative (AR) mentioned a similar issue in another case. The Tribunal remanded the issue back to the FAA for re-adjudication.
3. The issue of interest for AYs 2006-07 and 2007-08 was also remitted back to the FAA. The AO's appeals for these years were partly allowed.
Assessee's Appeal:
1. The AR did not press grounds 1 to 3 for all three AYs, leading to their dismissal.
2. Ground 4 related to the disallowance of interest amounts. The Tribunal noted a similar issue in the case of the assessee's husband for previous years, which was remitted back to the AO for fresh adjudication. Consequently, the appeals of the assessee for all three AYs were partly allowed.
Conclusion: Both the AO's and the assessee's appeals were partly allowed, with certain issues remitted back for re-adjudication.
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2013 (8) TMI 1013
TDS u/s 194I or 194J - royalty payment - Held that:- We have perused the definition of royalty as given in Explanation 2 to clause (vi) of section 9(1) and find that the scope of royalty is limited to consideration paid for transfer of certain rights in respect of, e.g., patent, invention, model, design, secret formula or process or trade mark or similar property, etc. The impugned sum paid by the assessee does not fall under any of the clauses of Explanation 2 to clause (vi) of sub-section (1) of section 9. As stated earlier, the ld. Authorised Representative for the assessee also could not establish as to how the impugned payments made by the assessee fell under Explanation 2 to clause (vi) of sub-section (1) of section 194J. In this view of the matter, it is held that there was no basis with the assessee for deducting tax at source u/s 194J. The ld. CIT(A) has rightly held that the assessee was required to deduct tax at source u/s 194I.
Non/short-deduction of tax at source u/s 194I - Held that:- The assessee shall not be treated as assessee in default in case the AO is satisfied, after due verification, that the conditions stipulated by the first proviso to sub-section (1) of section 201 have been fulfilled by the assessee but in that situation also the assessee shall be liable to pay interest u/s 201(1A) at the prescribed rate from the date on which such tax was deductible u/s 194I to the date of furnishing of return of income by the payee. All grounds of appeal taken by the assessee in both appeals, except Ground No.1.1 taken by the assessee in both the appeals, and the issues raised in the appeals filed by the Revenue thus stand restored to the file of the AO for passing a fresh order as per directions earlier given by us.
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2013 (8) TMI 1012
Award rendered in favour of the Contractor - NHAI claimed to be aggrieved and approached the Court under Section 34 of the Arbitration Act, 1996 - Held that:- In this case there is no dispute that the bid was eventually finalized by the letter dated 29th August, 2005. Yet the Court cannot be oblivious of the circumstance that the Contractor in this case was none other than the one who approved the sub-Contractor for the very same contract, which had been successfully tendered for by another Contractor, who had entered into the original Agreement in 2001. The fao(os) 347/2013 Page 6 terms of the bid or offer made by the respondent Contractor itself are revealing - in the letter dated 29th August, 2005, they were willing to execute the balance left out work on the same terms and conditions and BOQ rates with price adjustment formula, as applicable and would be bound by the same rates with original contract as per original sub-Contractors. The Arbitrator held that the subsequent rate of taxation had to be borne by the NHAI; a determination which was also formed by the learned Single Judge.
There is no infirmity in the reasoning of the impugned judgment in this regard. If the respondent Contractor stepped into the shoes of the original Contractor as he concededly did, his compelling rationale is obvious; if the original Contractor had continued with the Agreement, the enhanced rates were to be borne by the appellant - NHAI. Even otherwise, the reasonable construction - which has been favoured by the Arbitrator and the learned Single Judge concurrently as to clause 14.3 is that the 28 days of the period, which is determinative for fixing the rate of taxation was applicable in the present case and the period of 28 days prior to the bid or offer made by the Contractor sometimes the end in fao(os) 347/2013 Page 7 December, 2004. At that time, concededly the rate of taxation was lower; it was enhanced later. The Court is unimpressed with the submission that the parties were negotiating and the contract was finalized only on 29th August, 2005. The reason is again simple; even in the case of the original bid, negotiations would have ensued on various aspects. But, it did not necessarily mean that the time or period mentioned in clause 14.3 was variable. It was constant and unaltered. Present appeal is meritless
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2013 (8) TMI 1011
Dental College - Renewal of permission for the Next academic Session for MDS Courses in (6 specialties) - Dental council of India (DCI) found Deficiencies in Laboratory - Respondent University had given the affiliation to the petitioner-college to start MDS Courses in 6 specialties out of 9 courses mooted by it and students were admitted by the petitioner for the academic session 2012-13. However, for the academic session 2013-14, permission has not been extended for two disciplines namely Oral and Maxillofacial Surgery as well as Orthodontics and Dentofacial Orthopaedics. For granting renewal of permission, the Dental council of India (DCI) conducted the inspection of the petitioner. The petitioner was not supplied with the report of the Inspectors but informed by the DCI about the deficiencies. The petitioner submitted compliance report regarding the deficiencies. However, without affording any hearing, a decision was taken by the Central Government and addressed to the petitioner, whereby the permission was declined for renewal.
HELD THAT:- The order of Learned single judge was set aside and remitting the case back to the Central Government for taking fresh decision, court directed that it would not relate to the academic session 2013-14. However, the case can be considered for renewal of permission for the next academic session on the basis of existing material. For this, hearing should be given to the petitioner to demonstrate that they have overcome the deficiencies and they no longer exist. If the Central Government is satisfied on these aspects it may grant renewal permission for the next academic session 2014-15. In case the renewal of permission is rejected, the petitioner will have to undergo the process of seeking fresh permission for next academic session i.e. 2014-15 by submitting fresh scheme/proposal to the DCI for that year, as per the procedure prescribed in the Act & Regulations.
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2013 (8) TMI 1010
Revision u/s 263 - allowance of penal charges on belated payment of employees’ provident fund - Held that:- The Administrative Commissioner in exercise of his revisional jurisdiction found that the assessing officer without examination allowed the claim of the assessee towards penal charges on belated payment of employees’ provident fund even though in the tax audit report this amount was shown as disputed penal charges on belated payment of dues . The Commissioner also found that every year the amount was debited in the profit and loss account. However, this was disputed by the ld.representative for the assessee. The fact remains that the assessing officer has not applied his mind to the claim made by the assessee. There is no discussion in the assessment order with regard to the penal damages paid by the assessee on the belated payment of employees’ provident fund. The assessing officer without any discussion allowed the claim of the assessee.
The assessing officer being a quasi judicial authority is expected to apply his mind to the claim made by the assessee and by a speaking order. An assessment order shall speak for itself. The application of mind shall be reflected in the assessment order. It is well settled principles of law that reasons for the conclusion arrived at in a quasi judicial order / judicial order shall be in the order itself. The reason for the conclusion cannot be substituted by way of an affidavit or additional material before the appellate / revisional proceedings. - Decided against assessee
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2013 (8) TMI 1009
Mistake apparent from record is Rectifiable or not? u/s. 254(2) - Assessee had deposited the amounts under ESI and EPF contributions prior to the filing of the return under s. 139(1) of the Act. Tribunal held that assessee firm is in default for depositing the aforesaid amounts beyond the stipulated time period. Proviso to s. 43B was retrospective and no disallowance could be made if the payment had been made before the due date prescribed u/s 139(1) of the Act- interpreted vide judgment delivered by Hon'ble High Court in 2006- COMMISSIONER OF INCOME-TAX VERSUS AVERY CYCLE INDUSTRIES P. LIMITED (NO. 1). [2006 (9) TMI 153 - PUNJAB AND HARYANA HIGH COURT] and in March 2007 delivered by the Hon'ble Supreme Court in CIT VERSUS VINAY CEMENT LTD. [2007 (3) TMI 346 - SC ORDER]. The said decisions were prior in point of time to the decisions of the Tribunal on 5th Nov. 2007 and 23rd Nov., 2007 - HELD THAT : - Non-consideration of the decision of the jurisdictional High Court or of the Supreme Court would constitute "mistake apparent from the record" and such mistake can be rectified u/s 254(2) by the tribunal. The Tribunal was in error in declining to rectify the mistake which was apparent on the face of the record.
Decision in the case of- ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT VERSUS SAURASHTRA KUTCH STOCK EXCHANGE LTD [2008 (9) TMI 11 - SUPREME COURT], relied upon.
Decision in favour of Assessee.
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2013 (8) TMI 1008
Penalty u/s 271(1)(c) - Held that:- For levying the penalty in cases of search after 1st June 2007, the deeming provisions of Explanation 5A can only be invoked, which clearly carves out the exception in the cases where due date of filing of the return of income had not expired at the time of search. Thus, for levy of penalty under Explanation 5A, it has to be seen whether any assets or income found on the date of search has been acquired out of the previous year and not afterwards for which penalty can be levied or initiated under other provisions of section 271(1)(c). Thus, in our opinion, once the due date had not expired for filing the return of income for the assessment year 2007–08, at the time of search, penalty cannot be levied under the deeming provisions of Explanation 5A. Consequently, we set aside the impugned order passed by the learned Commissioner (Appeals) and hold that on this preliminary ground, penalty levied by the Assessing Officer and as confirmed by the Commissioner (Appeals) cannot be sustained and same is deleted. - Decided in favour of assessee
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2013 (8) TMI 1007
Computation of deduction under Section 10B - whether deduction allowed before adjusting brought forward losses and unabsorbed depreciation? - Held that:- the provision of Section 10B, amongst others, is not treated to be any head of income and it cannot be brought within the purview of computing income for the purpose of taxation. We, therefore, hold accordingly that the Department has to exclude this portion of the income first at the threshold and thereafter proceed to compute the income for the purpose of taxation and then usual deductions under the other provisions of law have to be given.
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2013 (8) TMI 1006
Issues:
The sales tax revision petition challenging the order of the Tax Board allowing the appeal of the respondent-assessee and reversing the order of the assessing officer.
Issue 1: Retrospective Amendment and Benefits
The respondent-assessee claimed benefits under a retrospective amendment made by the State of Rajasthan in 2007, which amended a notification from 1987. The counsel for the respondent argued that the Tax Board correctly concluded that the benefits were available to the assessee, citing previous judgments supporting similar claims under the Incentive Scheme of 1987.
Issue 2: Violation of Sales Tax Incentive Scheme
The petitioner-Department contended that the respondent-assessee had violated clause 4(e)(i) of the Sales Tax Incentive Scheme, 1987 by engaging in activities not in accordance with the benefits conferred. Despite not disputing the retrospective amendment and previous court judgments, the petitioner sought to reverse the Tax Board's order.
Judgment:
After considering the arguments and relevant notifications, the court found that the retrospective amendment issued in public interest by the State Government conferred benefits to similarly situated assessees. Citing previous judgments, the court held that the Tax Board had correctly decided in favor of the respondent-assessee. Consequently, the revision petition was dismissed, deciding the question of law against the petitioner-Department and in favor of the respondent-assessee.
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2013 (8) TMI 1005
Rental income - Head of income - assessee’s income from incubation project as ‘business’ income or from ‘house property’ - Held that:- The hon’ble jurisdictional high court in the case of M/s. Elnet Technologies Ltd (2012 (11) TMI 671 - MADRAS HIGH COURT ) has squarely decided the issue in favour of the assessee wherein it has been held that in case of a company providing software infrastructural facilities on lease in lieu of rent payment, the receipt is ‘business’ income instead of that from ‘house’ property. In the course of arguments, the Revenue has not been able to cite any distinguishing features. Accordingly, we rely upon the said decision and decide the issue in favour of the assessee.
Allowability of expenditure - Held that:- The assessee is entitled for the expenses in question. We also find that the Commissioner of Income Tax (Appeals) has already issued necessary directions to the Assessing Officer to allow ‘revenue’ expenditure and also to capitalize the expenses which are not in the nature of current repairs. In our opinion, since the Commissioner of Income Tax (Appeals) has issued appropriate directions to the Assessing Officer to verify the nature of the expenses, we affirm with the same and leave the Assessing Officer to act as directed by the Commissioner of Income Tax (Appeals).
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2013 (8) TMI 1004
Disallowance u/s 14A - Held that:- The undisputed facts are that the assessee earned exempt dividend income of ₹ 13,22,641/- during the year under consideration and claimed that it has incurred no expenditure for earning such exempt income. The Assessing Officer, by applying Rule 8D r.w.s 14A, computed the disallowance of expenditure relating to the exempt dividend income at ₹ 26,88,155/- and added the same to the income of the assessee.
On appeal, the ld. CIT(A) has restricted the disallowance to 2% of the exempt dividend income.
The ld. DR could not point out any specific error in the above quoted order of the ld. CIT(A). Therefore, we do not find any good and justifiable reason to interfere with the order of the ld. CIT(A) which is confirmed and the grounds of appeal of the Revenue are dismissed.
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2013 (8) TMI 1003
Share transactions - capital gain or business income - Held that:- It is not in dispute that with respect to the very shares, which were sold during the assessment year in question, in the Assessment Year 2004-05, the same were treated as investment in shares. Under the circumstances, when in the immediate earlier year i.e. Assessment Year 2004-05 and with respect to the very shares, the Assessing Officer had accepted the same as investments in shares and when these very shares came to be sold by the assessee during the year under consideration, no error and/or illegality has been committed by the CIT(A) as well as Income Tax Appellate Tribunal in deleting the additions made by the Assessing Officer and treating it as business income for the purpose of short term capital gain and long term capital gain
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2013 (8) TMI 1002
Nature of land - agricultural land - Held that:- We are of the view that findings in respect of distance of agriculture land, which is more than 8 kms from the municipal limit is based on appreciation of the certificate issued by the local authorities, revenue authorities etc.
It is not the case of the department that those certificates are incorrect or never issued by the above-mentioned departments.
The Land Revenue Officer (Tehsildar) had also mentioned the Survey No.95 Area 4.22 acre, Survey No.96/1 Area 1.20 acre and has mentioned that the land in question is about 10 kms. from the municipal limit and the population of the village is about 2000 persons. The assessee has also produced a certificate from the land Surveyor wherein it has been mentioned that the impugned land is situated at 9.09 kms. from the municipal limit. The assessee has also placed on record the google map. All these certificates clearly say that the impugned land is situated beyond 9 kms. from the from the municipal limit, therefore, as per Section 2(14)(iii) of the Act, the impugned agricultural land is situated in the revenue record of Village Lasudia Parmar whose population is about 2000 people, which is less than the condition mentioned in Section 2(14)(iii)(a) of the Act.
So far as the condition mentioned in sub-clause (b) of the aforesaid Section is concerned, from record it is clear that the impugned land is beyond the prescribed limit of 8 kms from the municipal limit.We are of the view that there is no mistake in the conclusion drawn in the impugned order.
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2013 (8) TMI 1001
Issues involved: Construction services, Cenvat credit, Service tax, Nexus between services and output services, Prima facie case, Waiver of pre-deposit, Registration as a pre-requisite for availing credit.
In the judgment by Appellate Tribunal CESTAT BANGALORE, the appellant, involved in constructing a 5-Star hotel, availed Cenvat credit of service tax paid on construction services and other services received during the construction period. The dispute arose as the hotel had not yet started functioning, leading to the denial of Cenvat credit based on the grounds that credit cannot be taken before commencing the activity and that the services received lacked nexus with the output services. Additionally, interest and penalty equal to service tax were imposed, with the total amount involved being &8377; 7,78,43,150/-.
Upon hearing both sides, the Tribunal found that the appellant had established a prima facie case in their favor. The services received were utilized for the construction of the hotel, from which various output services such as mandap keeper service, outdoor catering service, health services, and short-term accommodation service were to be provided. The definition of 'input service' includes services used in relation to setting up, modernization, renovation, or repairs of premises where output services are provided. It was noted that the services used in constructing the hotel could be considered as used for setting up the premises for providing output services, indicating a nexus between the services received and the future output services.
Another ground raised was that the credit was availed before obtaining registration. However, previous decisions have held that registration is not a pre-requisite for claiming the credit of service tax paid on input services. Considering these circumstances, the Tribunal concluded that the appellant had successfully made a prima facie case for complete waiver. As a result, there was a waiver of pre-deposit and a stay against the recovery of dues during the appeal process. The order was pronounced and dictated in open court.
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2013 (8) TMI 1000
Expenses incurred on the issuance of such FCCBs - Held that:- expenditure on the issue of convertible debentures is admissible. We find that there is no qualitative difference between the issuance of debentures or bonds. Both fall in the realm of loan. In the light of these precedents, we are of the considered opinion that the assessee deserves deduction for this amount
Denial of deduction u/s 80-IB on duty drawback / DEPB - Held that:- Tribunal in assessee’s own case has denied similar deduction on DEPB in the past. This position was fairly admitted by the learned AR as well. However it was argued that the receipt of duty drawback to the extent of actual expenses should be allowed. In support of this contention the learned AR relied on some order passed by the Ahmedabad Bench of the Tribunal. We are unable to accept this contention in view of the direct judgment of the Hon’ble Supreme Court in Liberty India v. CIT [2009 (8) TMI 63 - SUPREME COURT ] in which it has been held that duty drawback / DEPB are not derived from industrial undertaking and hence no deduction is available u/ss 80-I, 80-IA and 80-IB.
Denial of deduction u/s 80-IB on interest income on subsidy received under the Textile Upgradation Fund - Held that:- The authorities below did not allow deduction u/s 80-IB on subsidy received under TUF. We are convinced with the view point of the authorities below that such subsidy received on account of interest on loan borrowed for acquisition of plant and machinery cannot be considered as an income derived from industrial undertaking.
Interest under TUF scheme - revenue or capital receipt - Held that:- We find that there being a pure question of law as to whether such subsidy is a revenue or a capital receipt, can be taken up for consideration before the Tribunal for the first time. Since there is no adjudication by the authorities below on this point, we are of the considered opinion that the ends of justice would meet adequately if the matter is restored to the file of Assessing Officer for examination and evaluation of this contention.
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2013 (8) TMI 999
Addition u/s 14A - Held that:- Assessing Officer and the CIT(A) have nowhere applied mind arriving at ‘satisfaction’ qua assessee’s plea that it had not incurred any expenditure in earning the impugned dividend income, we deem it fit to directing Assessing Officer to re-decide the matter after affording adequate opportunity of hearing to the assessee.
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2013 (8) TMI 998
Addition made on account of difference in stock, admitted during survey, and declared in profit and loss account - Held that:- There is uncontroverted finding in the impugned order that the learned CIT(A) duly verified different silver accounts which were submitted by the assessee during survey and the Assessing Officer overlooked the stock of silver/silver ornaments copies of which were made available at the time of survey. The correct excess stock of silver was 71.295 kms valued at ₹ 7,40,515/- which was offered by the assessee in its profit and loss account. We are also in agreement with the finding of the learned CIT(A) that so far as the shortage in gold ornaments is concerned, only profit embedded in the sale can be taken as income of the assessee. There is further uncontroverted finding that correct difference of income has been offered by the assessee in its profit and loss account. In view of these facts, we find no infirmity in the conclusion drawn in the impugned order. It is affirmed.
Disallowance made on account of interest expenses - Held that:- There is uncontroverted finding in the impugned order that the same rate of interest was paid by the assessee in last year and no such disallowance was made. Even otherwise, unless and until corroborative material is brought on record, it is not expected from the Assessing Officer to conclude that the interest rate of 15% was too high. At the same time, the interest rate on secured loan from banks cannot be compared with interest rate on unsecured loan. The businessman knows his interest best. The Assessing Officer is not expected to sit in the chair of the businessman and decide the reasonableness of rate of interest that too without bringing any corroborative material on record. In view of these facts, on this ground also we find no justification to interfere with the conclusion drawn by the learned CIT(A)
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