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2012 (9) TMI 1078
Issues: Interpretation of deduction under Clause (iv) of Section 115JB of the I.T. Act, 1961.
The High Court considered the substantial question of law regarding the computation of deduction under Clause (iv) of Section 115JB of the I.T. Act, 1961. The issue was whether the Appellate Tribunal erred in holding that the calculations should be based on adjusted book profit rather than income assessable under the head "Profits and gains of business and profession." The Court referred to the decision of the Apex Court in Ajanta Pharma Ltd. v. CIT [2010] 327 ITR 305, which clarified the distinction between the "eligibility" and "deductibility" of profits under section 115JB. The Apex Court emphasized that the relief under section 80HHC should be computed subject to specific conditions, and compliance with these conditions is necessary. The Court concluded that the difference between "eligibility" and "deductibility" of profits must be maintained to ensure the effectiveness of section 115JB as a self-contained code. The revenue could not dispute this position, leading to the answer being in the negative, against the revenue and in favor of the assessee. Consequently, the appeal was disposed of with no order as to costs.
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2012 (9) TMI 1077
Issues involved: Reference u/s 256(1) of the Income Tax Act, 1961 for Assessment Year 1989-90 regarding addition made to assessee's income.
Summary:
1. The Tribunal referred the question of law to the High Court regarding the correctness of upholding a part of the addition made to the assessee's income.
2. The case involved the construction and sale of industrial galas by the assessee in Mumbai during the assessment years 1989-90 and 1990-91.
3. The Revenue added an amount as 'on money' for the sale of galas in 1989-90 based on a confession made by the assessee for the subsequent year.
4. The Commissioner of Income Tax (Appeals) upheld the addition of 'on money' based on the significant price difference in the sale of galas between the two assessment years.
5. The Tribunal partially allowed the appeal, making an ad-hoc addition of Rs. 7,00,000 to the income declared by the assessee.
6. The assessee challenged the ad-hoc addition as arbitrary and unsupported by evidence for the assessment year 1989-90.
7. The Revenue argued that the Tribunal's finding of fact should not be disturbed and that the evidence from the subsequent year justified the addition.
8. The High Court found that there was no material evidence to support the addition of 'on money' for the assessment year 1989-90 and criticized the Tribunal's arbitrary conclusion without proper reasoning.
9. The High Court ruled in favor of the assessee, stating that the Tribunal's decision lacked supporting reasons and was based on suspicion rather than concrete evidence.
10. The High Court disposed of the reference with no order as to costs.
This summary provides a detailed overview of the legal judgment, highlighting the key issues and arguments presented by both parties, ultimately leading to the High Court's decision in favor of the assessee.
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2012 (9) TMI 1076
Issues:
1. Disallowance of PF contribution under section 36(1)(va)
2. Disallowance of Land Survey expenditure
3. Addition of unexplained investment due to difference in land valuation
Analysis:
1. The first issue pertains to the disallowance of PF contribution under section 36(1)(va). The Tribunal deleted the disallowance of Rs. 46,964, which was challenged by the Revenue. The Court noted the small tax implication and decided not to consider the question further without delving into the merits.
2. Moving on to the second issue, concerning the disallowance of Rs. 57,04,000 made on account of Land Survey expenditure. The Appellate Commissioner had reversed the Assessing Officer's order, but the Tribunal, considering a previous decision of the Gujarat High Court, upheld the deletion of the disallowance. The High Court had previously ruled that conducting land surveys for assessing suitability for windmills was a revenue expenditure for a business involved in purchasing land for such purposes.
3. The final issue revolves around the addition of Rs. 34,09,400 due to a difference in land valuation, treated as unexplained investment by the Assessing Officer. The CIT (Appeals) had deleted this addition, which was later confirmed by the Tribunal. The Tribunal emphasized that section 50C of the Income Tax Act applies to sellers, not purchasers. Section 50C deems the stamp duty valuation as the full value of consideration for the seller, not the purchaser. Therefore, the Tribunal's decision to uphold the CIT (Appeals) view that the Assessing Officer wrongly applied stamp duty valuation for determining the actual consideration was deemed correct.
In conclusion, the Court dismissed the Tax Appeal, upholding the decisions regarding the Land Survey expenditure and the difference in land valuation, emphasizing the application of section 50C in determining the full value of consideration in such cases.
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2012 (9) TMI 1075
The Supreme Court dismissed the Special Leave Petition but directed the petitioner to comply with the pre-deposit order dated 14th February, 2011 within four weeks for their appeals to be revived and disposed of on merits.
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2012 (9) TMI 1074
Issues Involved:1. Accrued interest on funds lent to local bodies and Mega City/IDSMT Funds Programme. 2. Claim of exemption u/s 10(23G). 3. Deduction u/s 36(1)(viii) on interest from short-term deposits. Summary:Issue 1: Accrued Interest on Funds Lent to Local Bodies and Mega City/IDSMT Funds ProgrammeThe Department and the assessee filed appeals against the CIT(A) orders for various assessment years. The primary issue was the addition of accrued interest on funds lent by the assessee to local bodies and under the Mega City/IDSMT Funds Programme. The CIT(A) had deleted the addition of Rs. 1,52,71,188/- on account of accrued interest from IDSMT, relying on the Karnataka High Court's decision in CIT v. Karnataka Urban Infrastructure Development & Finance Corpn. (284 ITR 582), which stated that interest earned on such funds, being utilized for public welfare projects, is not taxable. The Tribunal upheld the CIT(A)'s decision, confirming that the interest earned is not taxable as it is used for the implementation of government schemes. Issue 2: Claim of Exemption u/s 10(23G)The assessee's claim for exemption u/s 10(23G) was disallowed by the CIT(A) and upheld by the Tribunal. The Tribunal noted that the issue had already been decided against the assessee in previous years (AY 2003-04 and 2004-05) and that the assessee had not obtained the necessary approval from the CBDT for claiming the exemption. Therefore, the claim for exemption u/s 10(23G) was denied. Issue 3: Deduction u/s 36(1)(viii) on Interest from Short-Term DepositsThe assessee's claim for deduction u/s 36(1)(viii) on interest from short-term deposits was disallowed by the CIT(A) and upheld by the Tribunal. The Tribunal reasoned that interest income from short-term deposits cannot be treated as business income and must be classified as "Income from other sources." The Tribunal cited the Supreme Court's decision in Pandian Chemicals Ltd. v. CIT (262 ITR 278) to support its conclusion that such interest income is not eligible for deduction u/s 36(1)(viii). Conclusion:All seven appeals filed by the assessee and the Revenue were dismissed, and the order of the CIT(A) was confirmed. The Tribunal upheld the CIT(A)'s decisions on all issues, including the non-taxability of interest earned on government funds used for public welfare projects, the denial of exemption u/s 10(23G), and the disallowance of deduction u/s 36(1)(viii) on interest from short-term deposits.
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2012 (9) TMI 1073
Issues Involved:
1. Disallowance of depreciation claimed by the assessee.
2. Interpretation of double deduction in the context of depreciation.
3. Consideration of earlier tribunal decisions and High Court orders.
4. Application of legal precedents regarding depreciation claims for charitable institutions.
Analysis:
1. Disallowed Depreciation Claim:
The appeal pertains to the disallowance of depreciation claimed by the assessee, a Trust registered under section 12A of the IT Act, for the assessment year 2006-2007. The Assessing Officer disallowed the depreciation claimed by the assessee on the grounds that the amount invested in assets for which depreciation was claimed had already been treated as an application of income under Section 11 of the Act. Consequently, allowing depreciation on the same assets would result in a double deduction. This disallowance led to a negative figure in the return turning into a positive one.
2. Interpretation of Double Deduction:
The crux of the issue lies in determining whether claiming depreciation on assets already considered as an application of income amounts to double deduction. The first appellate authority allowed the assessee's appeal, citing a previous decision by the Hon'ble ITAT, which held that the assessee was indeed entitled to depreciation. The ITAT decision was based on the precedent set by the Hon'ble Bombay High Court in a similar case. The Revenue, however, contested this decision, arguing that the entire amount of the capital asset being treated as an application of income precludes further deduction for depreciation.
3. Consideration of Tribunal and High Court Orders:
The Revenue's appeal raised several grounds challenging the first appellate authority's decision to follow the ITAT's ruling in favor of the assessee. The Revenue pointed out a different decision by the ITAT in another case, emphasizing that the ITAT's decision in the present case was not accepted by the Revenue and an appeal was filed before the High Court of Karnataka. The High Court had granted interim stay and admitted the appeal for consideration of substantial questions of law, creating a conflict in legal interpretations.
4. Application of Legal Precedents for Charitable Institutions:
During the hearing, the Tribunal emphasized the importance of following legal precedents set by jurisdictional High Courts regarding depreciation claims for charitable institutions. Citing decisions by various High Courts, the Tribunal reiterated that the amount of depreciation debited to the accounts of a charitable institution should be deducted to determine the available income for charitable and religious purposes. Relying on these legal precedents, the Tribunal dismissed the Revenue's appeal and upheld the assessee's right to claim depreciation on the assets used for trust activities.
In conclusion, the Tribunal's decision to dismiss the Revenue's appeal was based on the application of legal precedents and interpretations of double deduction in the context of depreciation claims for charitable institutions, as established by previous tribunal and High Court rulings.
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2012 (9) TMI 1072
Issues involved:
The issues involved in the judgment are the challenge to the order passed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi, regarding the waiver of pre-deposit of duty and the appeal of the petitioner on the merits.
Details of the Judgment:
Challenge to CESTAT Order:
The petitioner, a Public Limited Company engaged in manufacturing and sale of Flock Fabrics, challenged the order dated 23.03.2012 passed by the CESTAT. The petitioner claimed exemption from Central Excise Duty based on the Notification dated 10.06.2003, which provided exemptions for units undertaking substantial expansion. The dispute arose when the Commissioner, Central Excise, Meerut-1 confirmed a demand of L 4,40,72,632/- and penalty. The CESTAT directed the petitioner to deposit the full amount of demand within eight weeks. The petitioner contended that all manufacturing operations were completed after 07.01.2003 and argued against the demand of duty. The CESTAT's order was challenged on grounds of undue hardship and safeguarding the interest of revenue.
Maintainability of Writ Petition:
The Senior Standing Counsel for the respondents raised objections regarding the maintainability of the writ petition under Article 227 of the Constitution of India. It was argued that the petitioner had an alternate statutory remedy of appealing under Section 35-G of the Act. The CESTAT had granted partial relief to the petitioner by waiving a portion of the penalty, and it was contended that the petitioner should avail the statutory appeal process rather than seeking relief through a writ petition.
Court's Decision:
The Court considered the arguments presented and emphasized the provision of Section 35-G of the Act, which allows an appeal to the High Court from every order passed by the Appellate Tribunal. The Court dismissed the writ petition on the ground of the availability of an alternative remedy of appeal under Section 35-G of the Act. It was noted that while there is no absolute bar to entertaining a writ petition, such power should be exercised sparingly, especially when a statutory alternative remedy is available. The judgment highlighted that the case did not present a strong enough reason to ignore the statutory appeal process provided under the Act.
Conclusion:
The writ petition challenging the CESTAT order was dismissed on the basis of the availability of an alternative remedy of appeal under Section 35-G of the Act. The Court's decision emphasized the importance of following the statutory appeal process in cases where such remedy exists.
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2012 (9) TMI 1071
Issues involved: Application for recall of ex parte order u/s 254(2) of the Act for A.Y. 2004-05.
Summary:
The Misc. Application was filed by the assessee challenging the order passed by the Tribunal in M.A. No. 433/Mum/2011 for A.Y. 2004-05, where the Tribunal recalled the ex parte order passed in M.A. No. 319/Mum/2011. The assessee contended that the Tribunal had omitted to consider ground Nos. 3 to 7 raised by the assessee in the appeal for A.Y. 2004-05. The Tribunal acknowledged the mistake and recalled the order to decide ground Nos. 3 to 7. The parties were directed to appear before the Tribunal without further notice on the specified date. The Misc. Application filed by the assessee was allowed, resulting in the recall of the order to address the omitted grounds.
In conclusion, the Misc. Application filed by the assessee was allowed, and the order was pronounced in the open court on 21-9-2012.
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2012 (9) TMI 1070
Issues Involved:
1. Disallowance of interest income on Non-Performing Assets (NPA) as per RBI guidelines.
2. Disallowance of delayed payment of Provident Fund.
3. Disallowance of expenditure related to dividend income.
4. Addition of accrued interest on Government Securities.
5. Treatment of software expenditure as capital or revenue expenditure.
Summary:
1. Disallowance of interest income on Non-Performing Assets (NPA) as per RBI guidelines:
The assessee reversed income of Rs. 45,78,232/- following RBI guidelines on "Prudential Norms" for income recognition in respect of NPAs. The AO disallowed this, stating the reversal was not in accordance with the Income Tax Act, particularly section 43D. The CIT(A) did not accept the assessee's primary plea but accepted an alternative plea, restoring the matter to the AO for verification. The Tribunal, relying on the Delhi High Court decision in CIT vs. Vasisth Chay Vyapar Ltd., ruled that the RBI guidelines take precedence over section 145 of the Income Tax Act, allowing the assessee's claim of Rs. 45,78,232/-.
2. Disallowance of delayed payment of Provident Fund:
The AO disallowed Rs. 2,11,495/- for employer's contribution to Provident Fund and Rs. 2,632/- for employees' contribution, which were paid after the due date. The CIT(A) upheld the disallowance. The Tribunal allowed the assessee's claim, citing the Delhi High Court decision in CIT vs. Dharmendra Sharma, as the payments were made before the due date of filing the return.
3. Disallowance of expenditure related to dividend income:
The AO disallowed Rs. 45,40,697/- as management/administrative expenses related to earning dividend income, estimating 25% of the dividend income of Rs. 1,81,62,786/-. The CIT(A) upheld this disallowance. The Tribunal found that 98% of the dividend income was from long-term investments in group companies, requiring no extra effort. The matter was restored to the AO for reasonable disallowance based on the facts.
4. Addition of accrued interest on Government Securities:
The AO added Rs. 81,99,745/- representing interest on Government Securities, stating it had accrued to the assessee following the mercantile system of accounting. The CIT(A) deleted this addition, following the Tribunal's decisions for earlier years and the ITAT decision in State Bank of Bikaner and Jaipur vs. DCIT. The Tribunal upheld the CIT(A)'s decision, rejecting the revenue's appeal.
5. Treatment of software expenditure as capital or revenue expenditure:
The AO treated software expenditure of Rs. 1,64,152/- as capital expenditure, allowing depreciation and disallowing Rs. 1,23,114/-. The CIT(A) treated the expenditure as revenue, considering rapid technological developments. The Tribunal upheld this, following its own decision for AY 1997-98 and the Delhi High Court's affirmation that software like MS Office requires regular upgrades and is not of enduring nature.
Conclusion:
Both the appeals by the assessee and the department were partly allowed for statistical purposes, with specific issues restored to the AO for further verification and reasonable disallowance. The Tribunal's decisions were guided by precedents and statutory guidelines, ensuring compliance with applicable laws.
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2012 (9) TMI 1069
Issues involved: Appeal against the order of Commissioner of Income-tax(Appeals) regarding entitlement to benefit under section 11 of the Income-tax Act, 1961 and violation of section 13(1)(c) of the Act.
Entitlement to benefit under section 11:
The appellant, an educational organization registered under section 12AA of the Act, filed for exemption under section 11. The Assessing Officer denied the exemption, citing violation under section 13(1)(c) due to advances made to related concerns. On appeal, the Commissioner of Income-tax(Appeals) found no contravention of section 13(1)(c) and granted the exemption under section 11. It was established that the appellant only repaid loans previously availed, not exceeding owed amounts, to related concerns, and no benefit accrued to the managing trustee to invoke section 13(1)(c).
Violation of section 13(1)(c):
The Assessing Officer contended that advances made by the appellant to related concerns, where the managing trustee held positions, violated section 13(1)(c) as it benefited the trustee. However, the Commissioner of Income-tax(Appeals) analyzed the transactions and concluded that the appellant had not exceeded its liabilities to related concerns during the financial year 2007-08. The payments made were found to be repayments of loans and not additional benefits to the managing trustee, thus not violating section 13(1)(c).
Decision:
The Commissioner of Income-tax(Appeals) directed the Assessing Officer to allow the benefit of exemption under section 11, as there was no violation of section 13(1)(c). Consequently, the appeal filed by the Revenue was dismissed, upholding the decision in favor of the appellant. The order was pronounced in an open court on September 5, 2012, in Chennai.
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2012 (9) TMI 1068
Issues involved:
The judgment involves issues related to the deletion of addition on account of loss on sale of repossessed assets and disallowance of extra depreciation on computer peripherals/accessories in the revenue's appeal, and the confirmation of adhoc disallowance of expenses in the assessee's appeal.
Revenue's Appeal:
1. The revenue's appeal challenged the deletion of addition on account of loss on sale of repossessed assets and extra depreciation on computer peripherals/accessories.
2. The Assessing Officer disallowed the claim of the assessee regarding the loss on sale of repossessed assets based on a previous court decision, but the High Court ruled in favor of the assessee.
3. The High Court also decided that depreciation at the rate of 60% is allowable on computer peripherals, supporting the assessee's position.
4. The revenue's appeal was dismissed based on the High Court's decisions and the lack of infirmity in the CIT(A)'s order.
Assessee's Appeal:
1. The assessee's appeal primarily contested the adhoc disallowance of expenses.
2. The Assessing Officer made a 10% adhoc disallowance of expenses without sufficient reasoning, which the CIT(A) confirmed.
3. The assessee argued that the expenses were legitimate business expenditures, supported by books of accounts and vouchers, and the disallowance was arbitrary.
4. The High Court emphasized the need for the assessee to substantiate the business purpose of the expenses and remitted the issue back to the Assessing Officer for further verification.
5. The assessee's appeal was allowed for statistical purposes, indicating a partial victory for the assessee.
In conclusion, the judgment addressed issues related to the deletion of additions and adhoc disallowance of expenses, highlighting the importance of substantiating business expenditures and following proper assessment procedures.
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2012 (9) TMI 1067
The Appellate Tribunal CESTAT Mumbai dismissed the applications for waiver of dues due to non-prosecution. The applicants are directed to deposit the entire dues as per the impugned order within four weeks and report compliance by 01.11.2012.
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2012 (9) TMI 1066
Fringe Benefit Tax computation - excluding Sales Promotion expenses and Promotion event expenses om Fringe Benefit Tax - Hel that:- 1After carefully considering the details filed by the assessee and the explanations given by the CBDT in its circular 8/2005 dt. 29.8.2005, we have no hesitation to hold that all these expenses hereinabove are outside the purview of FBT. We also find that the Ld. CIT(A) has allowed the appeal relying upon the aforementioned Circular of CBDT. Therefore, we do not find any reason to tinker with the findings of the Ld. CIT(A) which we confirm.
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2012 (9) TMI 1065
Issues involved:
The judgment involves the following Issues:
1. Allowability of TDS amount as a deduction in the hands of the assessee.
2. Interpretation of TDS payments made to VISA and MASTER Card as a business expense.
Issue 1: Allowability of TDS amount as a deduction:
The appellant appealed against the CIT(A)'s order, contending that the TDS amount of Rs. 21,61,004 on payments to VISA and MASTER Card should not be allowed as a deduction in the hands of the assessee. The AO had added this amount to the income of the assessee company, stating that it was not incurred wholly and exclusively for business purposes.
Issue 2: Interpretation of TDS payments as a business expense:
The assessee-company, engaged in credit card operations, claimed expenses towards non-reimbursement TDS for Master Card and VISA Card under 'operating expenses'. The AO questioned this claim, stating it was not a liability of the assessee. The FAA, however, held that as per the agreement between the parties, the TDS payments were part of a contractual liability and allowable as a deduction from business expenses.
In the judgment, the ITAT Mumbai considered the arguments presented by both parties. The AO acknowledged that the assessee had a contractual obligation to bear the tax liability as per the agreement with VISA and Master Card agencies. The ITAT Mumbai opined that payments made as a result of contractual obligations are allowable expenditures. Additionally, the ITAT Mumbai noted that a previous decision by the 'I' Bench of ITAT had ruled in favor of the assessee on a similar issue.
The ITAT Mumbai referred to a case involving Standard Polygraph Machines P. Ltd., where it was held that amounts paid by the assessee to discharge a liability under an agreement were allowable deductions. The ITAT Mumbai also cited decisions by the Madras High Court and Karnataka High Court supporting the view that payments made in discharge of contractual liabilities are allowable expenses.
Ultimately, the ITAT Mumbai dismissed the appeal filed by the Assessing Officer, upholding the FAA's decision to allow the deduction of the TDS amount in question. The judgment was pronounced on 18th September 2012.
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2012 (9) TMI 1064
Unexplained cash credit under section 68 - Held that:- Tribunal rightly held that the assessee had not discharged his burden. The identity of the creditors itself was in doubt. Their creditworthiness was not established. In view of such facts, in our opinion, no question of law arises.
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2012 (9) TMI 1063
Issues Involved:
1. Whether the lands situated at Ambali, Vejalpur, and Makarba are urban lands and taxable under the Wealth Tax Act, 1957.
Summary:
Issue 1: Classification of Lands as Urban Lands
The primary issue in this appeal was whether the lands situated at Ambali, Vejalpur, and Makarba should be classified as urban lands and thus taxable under the Wealth Tax Act, 1957. The assessee contended that these lands were agricultural and not urban lands, arguing that construction was not permissible under the law without prior permission from the District Collector as per Section 65 of the Bombay Land Revenue Code, 1879.
The A.O. rejected this contention, stating that the mere fact that no permission had been sought for non-agricultural use did not change the status of the land as urban land. The A.O. noted that these lands were within 8 kms of the municipal limits of Ahmedabad Municipal Corporation and were surrounded by residential and commercial complexes, indicating their urban nature. Consequently, the A.O. included the value of these lands in the total wealth of the assessee and initiated penalty proceedings u/s 18(1)(c) of the Wealth Tax Act for furnishing inaccurate particulars of net wealth.
The CWT(A) upheld the A.O.'s decision, agreeing that the lands fell within the definition of "urban land" as per Explanation (b)(ii) to Section 2(ea)(v) of the Wealth Tax Act, which includes land situated within 8 kms from the local limits of any municipality. The CWT(A) dismissed the assessee's argument that construction was not permissible, noting that the lands were in areas with significant urban development and that the prohibition on construction was conditional upon obtaining permission, not an absolute ban.
The Tribunal, after hearing both parties, affirmed the findings of the lower authorities. It held that the lands in question were indeed urban lands as they were situated within 8 kms of the municipal limits of Ahmedabad Municipal Corporation. The Tribunal noted that Section 65 of the Bombay Land Revenue Code did not prohibit construction but required permission from the Collector, which did not change the urban character of the lands. The Tribunal concluded that the lands were taxable under the Wealth Tax Act and dismissed the assessee's appeal.
Conclusion:
The Tribunal upheld the classification of the lands at Ambali, Vejalpur, and Makarba as urban lands taxable under the Wealth Tax Act, 1957, and dismissed the assessee's appeal. The decision was based on the proximity of the lands to the municipal limits and the conditional nature of the construction prohibition under the Bombay Land Revenue Code.
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2012 (9) TMI 1062
Issues involved: Appeal against the order of Ld. CIT(A)-3, Mumbai for the assessment year 2005-06 regarding the treatment of cost of abandoned film as revenue expenditure.
Summary:
The appeal was filed by the revenue challenging the decision of Ld. CIT(A)-3, Mumbai regarding the treatment of the cost of abandoned film as revenue expenditure for the assessment year 2005-06. The grounds of appeal included the contention that the cost of abandoned film should be considered as capital expenditure. The Assessing Officer (AO) disallowed the expenditure, adding it back to the assessed income, citing a pending appeal before the Hon'ble High Court. However, Ld. CIT(A) allowed the claim of the assessee, following various Tribunal decisions and the decision of the Hon'ble Supreme Court in CIT vs. Ralson Industries Ltd. The department, aggrieved by this decision, raised grounds of appeal against Ld. CIT(A)'s order.
It was argued by the appellant that the Tribunal's decision in a similar case had been upheld by the Hon'ble Jurisdictional High Court, providing precedence for allowing the cost of abandoned films as revenue expenditure. On the other hand, the Departmental Representative (D.R) relied on the AO's order.
After considering the submissions and the relevant legal precedents, the Tribunal noted the decisions of the Hon'ble High Court in similar cases, where the appeals by the revenue were dismissed. As Ld. CIT(A) had correctly followed the Tribunal decisions and the decisions of the Hon'ble Jurisdictional High Court, the department's appeal was dismissed, upholding the allowance of the cost of abandoned film as revenue expenditure.
Therefore, the appeal filed by the department was dismissed, affirming the decision of Ld. CIT(A) in favor of the assessee.
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2012 (9) TMI 1061
The Supreme Court dismissed the special leave petition after hearing the petitioner's counsel and condoning the delay. The decision was based on the facts and circumstances of the case.
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2012 (9) TMI 1060
Arbitration proceedings - Held that:- Subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once the Supreme Court grants special leave and decides to hear the matter on merits. The aforesaid proposition was invoked to hold that the provision contained in Section 14 of the Limitation Act was available to the respondent.
The said principle cannot be invoked by the appellant to require this Court to stay its hands and not to proceed to dispose of the objection petition, or even this appeal, particularly when the issues raised by the appellant have attained finality insofar as this Court is concerned. Accordingly, we dismiss the aforesaid applications as well as the present appeal.
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2012 (9) TMI 1059
Issues involved: Determination of whether consideration received by the assessee in respect of property 'Indraprastha' should be assessed under the head "capital gains" or "business income".
Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal filed by the department against the order of the ld CIT(A) -35, Mumbai for the assessment year 2004-05. The department raised the issue of whether the ld CIT(A) was justified in accepting the claim of the assessee regarding the nature of consideration received for the property 'Indraprastha'.
None appeared on behalf of the assessee during the proceedings. The Tribunal proceeded to consider the appeal based on the available material and the submissions of the ld D.R. The ld D.R. relied on the order of the Assessing Officer (AO) but acknowledged that the issue had been previously decided in favor of the assessee by the ITAT for the assessment year 2004-05. The Tribunal confirmed that the transactions were not an adventure in the nature of trade and the income earned was taxable as capital gains.
The property 'Indraprastha' was inherited by co-owners in 1938, and an agreement was made with Godrej Properties & Investment Ltd for construction. The AO treated the arrangement as an adventure in the nature of trade, but the ld CIT(A) allowed the appeal by holding that the income should be taxed as capital gains. The Tribunal upheld the findings of the ld CIT(A) and confirmed that the sale consideration was on account of the sale of capital assets.
The department appealed to the High Court, which confirmed the Tribunal's decision. Based on these facts and the precedent set in a similar case, the Tribunal upheld the order of the ld CIT(A) that the consideration received from the property redevelopment should be taxed as capital gains, not business income. The appeal filed by the department was dismissed, and the decision was in favor of the assessee.
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