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2018 (10) TMI 2014 - ITAT RAIPUR
Income surrendered in survey proceedings - Addition for undisclosed income out of entries in loose papers found on survey - during the course of survey proceedings both the partners were out of station and survey proceedings were represented by brother of one of the partner, in their absence and his statement was recorded by the Department to know sources of various discrepancies found on survey - HELD THAT:- From the records it can be seen that the assessee firm surrendered the income under the head “Loose papers found and impounded on survey” and included both in the trading and profit & loss account for the year ended on 31.03.2010 and computation of total income for the A.Y. 2010- 11 under the head “profits and gains of business”. The assessee also explained each of the loose papers before the AO but the AO as well as the CIT(A) ignored the explanation offered by the assessee. Therefore, we are of the opinion that both the CIT(A) as well as Assessing Officer are not correct in making this addition. The order of the CIT(A) is set aside.
Disallowance out of remuneration paid to partners - computation of book profit for the purpose of admissibility of remuneration u/s 40(b)(v) - HELD THAT:- The assessee firm had no other source of income except income from trading of marbles, granite, tiles etc. during the year under consideration as is appearing from the audited financial statement and audit report for the concerned year. Besides that on survey proceedings no documents were found by the Revenue Authorities which revealed that the assessee firm was involved in other business activities as well. Therefore, we are of the opinion that the CIT(A) as well as Assessing Officer both are not correct in restricting the remuneration of the partners.
Appeal of the assessee is allowed.
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2018 (10) TMI 2013 - SC ORDER
Exemption u/s 11 - HC decided issue in favour of assessee - HELD THAT:- Delay condoned.
Leave granted.
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2018 (10) TMI 2012 - ITAT SURAT
Unexplained cash deposits in bank - assessee is a LIC Agent - HELD THAT:- Where the assessee deposits cash amount to the bank account and failed to submit proper explanation to substantiate the amounts deposited by him then, the Revenue authorities have valid powers to pick up the issue for taxation purposes. At the same time, it is a well-accepted principle of tax jurisprudence that in such cases when the assessee is regularly depositing and withdrawing amounts to the alleged bank account for the purpose of his business or profession activity then, entire amount of deposit cannot be treated as income in the hands of the assessee keeping aside the amounts of withdrawal during the year.
In the present case, assessee is a LIC Agent, who is claiming that he received cash amounts as premium from his clients and he deposited the same to the bank account and further made payment to LIC on the instructions of his clients. From the copy of bank account available it is also clear that the assessee is depositing cash and also making payments to LIC and other entities.
In this situation, the entire cash deposits cannot be treated as income of the assessee and only peak amount credited to the bank of the assessee, can be treated as income in the hands of the assessee. Therefore, alternative prayer of the assessee is allowed and AO is directed to make the addition of peak amount to the returned income of the assessee on account of cash deposits to his bank account. Decided partly in favour of assessee.
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2018 (10) TMI 2011 - ITAT BANGALORE
Disallowance u/s 40(a)(ia) - Assessee paid interest on car loan availed - 'assessee in default’ u/s 201(1) - whether filing of Form No.26A namely the certificate of the Chartered Accountant as prescribed u/s 201(1) can be taken as a conclusive proof that the recipients of the payment from the assessee has taken into account the sum received from an assessee on which no tax had been deducted at source for computing his income in such return of income?
HELD THAT:- A reading of the proviso to Sec.201(1) of the Act and Rule 31ACB of the Rules shows that once a declaration in Form No.26A by a Chartered Accountant is furnished then the Assessee cannot be treated ‘as an Assessee in default’ and consequently no disallowance u/s.40(a)(ia) can be made.
Requirement in Rule 31ACB is purely procedural and noncompliance of furnishing Form No.26A before the Director General of Income Tax (Systems) cannot be the basis to make disallowance u/s.40(a)(ia) - Rule 31ACB cannot override or provide for more conditions than what is contemplated by the provisions of proviso to Sec.201(1).
The proviso to Sec.201(1) refers to only prescription of particular form and does not authorise laying down any further condition to be satisfied to escape the rigours of Sec.201(1) of the Act. Its fundamental that Rules cannot override the Act.
Disallowance u/s.40(a)(ia) in the present case cannot be sustained and the same is directed to be deleted. Decided in favour of assessee.
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2018 (10) TMI 2010 - GUJARAT HIGH COURT
Rejection of plaint under the provisions of Order VII Rule 11 CPC - suit barred by time limitation or not - non-production of documents - HELD THAT:- The material facts on which the plaintiff's cause of action would arise was duly placed on the record by the plaintiff. The material facts would depend upon the facts of each case and no rule of universal application can be laid. At any point of time, if it is declared by the plaintiff that agreement or any other relevant documents were not available or would be made available subsequently, or unable to produce the same would not meant that during the course of trial also, the plaintiff would not be in a position to produce the same. The suit cannot be rejected on the ground of non production of the documents.
While considering application under Order VII Rule 11 CPC, the Court is not required to take into consideration the defence set up by the defendant in its written statement. The question whether the plaint discloses any cause of action is to be decided by looking at the averments contained in the plaint itself and not the defence set up in the written statement. What is to be seen is whether or not the meaningful reading of the plaint discloses cause of action. While considering the application, the strength or weakness of the case of the plaintiff is not to be seen. The Court should look at the plant and documents accompanying the plaint and not the defence of the defendant or the documents relied upon by the defendants. The cause of action is to be culled out on a conjoint reading of all the paragraphs of the plaint - It is not competent for the Court to go into the correctness or otherwise of all the allegations constituting the cause of action, correctness or otherwise of the allegations constituting the cause of action is beyond purview of Order VII Rule 11[a] CPC where the allegations made in the plaint prima facie discloses cause of action, the plaint cannot be rejected.
It is clear that in order to consider Order VII Rule 11 CPC, the Court has to look into the averments made in the plaint as a whole and the same can be exercised by the trial Court at any stage of the suit. It is also clear that the averments in the instant case [Exh. 22] are immaterial and it is the duty of the Court to scrutinize the averments/pleadings in the plaint. The trial Court has overlooked these facts in deciding the application Exh. 22 and thereby ignored the averments made in the plaint. At this stage, the pleas taken by the defendant in its application Exh. 22 or raising of the dispute of non disclosure of cause of action in the plaint are wholly irrelevant, as the matter is to be decided only on the plain averments.
There are no hesitation in reversing the view taken by the learned trial Judge by setting aside the impugned Order dated 17th March 2017 allowing the Application Exh. 22 moved by the respondent-original defendant under Order VII Rule 11 CPC, and thereby rejecting the plaint of the appellant-plaintiff.
Appeal allowed.
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2018 (10) TMI 2009 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA
Sanction of Scheme of Amalgamation - HELD THAT:- Let Notice be served as per requirements of sub-section (5) of Section 230 of the Companies Act, 2013 read with Rule 16 (2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, along with a copy of the Scheme of Amalgamation on the Central Government, through the Regional Director, Eastern Region, Ministry of Corporate Affairs, Registrar of Companies, West Bengal, Ministry of Corporate Affairs and the concerned Assessing Officer along with the Chief Commissioner of Income Tax with PAN numbers of the Petitioner Companies and also the Official Liquidator, having jurisdiction over the Transferor and Transferee Companies, by hand delivery through personal messenger or by Registered Post or by Speed Post and by Electronic mail.
Petition disposed off.
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2018 (10) TMI 2008 - DELHI HIGH COURT
Seeking revocation of the order suspending from service - despite the lapse of six months from the date of suspension, neither has any departmental inquiry been initiated against the petitioner, nor has any charge-sheet been filed - HELD THAT:- Rule 20 of the CDA Rules postulates that placing, of an employee, under suspension, may be effected either by the "appointing authority", or any authority to which it is subordinate, or the Disciplinary Authority, or an authority empowered in that behalf by the management by general or special power.
The inevitable sequitur of this factual position, read in conjunction with Rule 20(1) of the CDA Rules of the NTPC, is, therefore, that the only authority, competent to place the petitioner under suspension would be the Hon'ble President of India. In other words, the 'competent authority', for the purposes of Rule 20 of the CDA Rules of the NTPC would necessarily be the Hon'ble President of India and none other. Sub-rule (3) of Rule 20 makes this expressly clear by stating, specifically, that 'the Competent Authority would be the authority which places the employee under suspension/under deemed suspension or any other higher authority'.
The suspension of the petitioner Kulamani Biswal cannot be allowed to continue any further. It is a matter of record that, till date, no charge-sheet has been filed, against the petitioner in the criminal court, and no disciplinary proceedings have been initiated, against him, either - no review of the suspension of the petitioner, has taken place, on six monthly basis, as mandated by Rule 20(3) of the CDA Rules of the NTPC. No order, communicating the decision of any such review, passed by Hon'ble President of India or by order and in the name of the Hon'ble President of India, stands communicated to the petitioner till date.
The suspension of the petitioner from service, as effected by the order dated 14th December, 2017, cannot be allowed to continue any further - Petition allowed.
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2018 (10) TMI 2007 - DELHI HIGH COURT
Levy of service tax for the period prior to 01.06.2007 - Airport Services - HELD THAT:- This Court is of the opinion that since the question as to the correctness of the view expressed by the CESTAT on 02.01.2015 in the order impugned in these writ petitions is primarily the subject matter of appeal, the propriety requires that these writ proceedings should not be entertained. Undoubtedly, the CESTAT’s approach in ignoring the decision of this Court is a matter of serious concern; as a tribunal being subordinate to and subject to the control of this court under Article 226, it was not expected to overlook or disregard the binding decision. Yet that circumstance alone cannot compel us to exercise discretion to entertain these writ proceedings given that the impugned order in these proceedings is primarily a subject matter of appeal before the Supreme Court.
This Court is of the opinion that these writ petitions should not be entertained. It is open to the writ petitioners to seek appropriate remedy in accordance with law. The writ petitions are disposed of
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2018 (10) TMI 2006 - DELHI HIGH COURT
ITR - whether Annexure-II is the original Income-Tax Return filed?- HELD THAT:- The dispute and issue whether Annexure-II is the true and correct Return of Income is factual.
Normally, the Income-Tax Returns do not get uploaded to the official website unless the entire amount of tax and interest has been paid.
Prima facie, it appears that Annexure-II relied upon by the Revenue is a computation made by the Central Processing Centre at Bengaluru.
We are not aware whether Annexure-II filed with this appeal was filed by the Revenue before the Income-Tax Appellate Tribunal.
Principal Commissioner of Income Tax will personally examine the matter, if required, ascertain full facts form Central Processing Centre at Bengaluru and file his affidavit within 21 days on different issues highlighted above.
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2018 (10) TMI 2005 - CESTAT AHMEDABAD
Valuation of goods (final products) - inclusion of value of empty gas cylinders, supplied free of cost by the customers for filling Sulphur Dioxide (NRG) in the assessable value or not - HELD THAT:- Reliance placed a decision passed in their own case by this Tribunal in M/S TRANSPEK INDUSTRY LTD. VERSUS CCE VADODARA [2012 (9) TMI 855 - CESTAT AHMEDABAD], wherein the similar issue has been decided in favour of the appellant and accepted by the Revenue.
Demand set aside - appeal allowed.
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2018 (10) TMI 2004 - ITAT DELHI
TDS u/s 195 - Non-deduction of TDS u/s 40(a)(ia) on commission to foreign entities - scope for taxing any payments whose genesis was outside India - HELD THAT:- As decided in own case [2018 (7) TMI 1620 - ITAT DELHI] as relying on Kikani Exports Pvt. Ltd [2014 (9) TMI 96 - MADRAS HIGH COURT] non-resident commission agents based outside India rendering services of procuring orders cannot be said to have a business connection in India and the commission payments to them cannot be said to have been either accrued or arisen in India - we are of the considered opinion that the assessee is not liable to deduct tax under the provisions of section 195 on account of foreign agency commission paid outside India for promotion of export sales outside India. Accordingly, the order of the CIT(A) is set-aside and the grounds raised by the assessee are allowed.
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2018 (10) TMI 2003 - ITAT MUMBAI
Deemed Dividend addition u/s. 2(22) (e) - assessee’s common share in both the concerns granting advances to assessee firm - assessee defended the same by submitting that the stated advances were mere trade advances in nature towards purchase of land - HELD THAT:- We find that similar additions u/s 2(22)(e) were made in the hands of the firm which were deleted by first appellate authority in case of the firm Pathik Construction [2015 (2) TMI 898 - ITAT MUMBAI] finding the same to be purely commercial transactions. The stand of FAA has been confirmed by the Tribunal vide cited order.
Therefore, since a view has already been taken, we find no reason to take a different view, the factual matrix being identical.
Another reason to concur with the stand of the assessee is that the assessee herself has not received any amount from the Company rather the amount has been received by the firm, in which the assessee was a partner to the extent of 23%. Therefore, the basic condition of Section 2(22)(e) i.e. the assessee has received the amount from the concern, is missing in the case. Decided in favour of assessee.
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2018 (10) TMI 2002 - SC ORDER
Unexplained investment in house property - statement recorded u/s 132(4) of the assessee surrendering income at this point - ITAT deleted the addition also confirmed by HC - Held that:- Upon hearing the counsel the Court made the following
Delay condoned. Leave granted.
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2018 (10) TMI 2001 - CESTAT AHMEDABAD
Taxable service or not - prime contention of the appellant is that Industrial Effluent transported by them are not goods and therefore no service Tax can be charged under the head of Transportation of Goods other than Water through pipeline or other conduit - HELD THAT:- The decision of Tribunal in case of M/S GUJARAT STATE FERTILIZERS & CHEMICALS LTD. VERSUS CCE VADODARA [2014 (7) TMI 893 - CESTAT AHMEDABAD] examines the identical issue and held in favour of appellant. The said decision has not been challenged and Revenue and Commissioner (Appeals) has dropped demand of subsequent period following the said decision.
Following the decision of Tribunal in case of GSFC, the demand is set aside and appeal is allowed.
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2018 (10) TMI 2000 - ITAT CHENNAI
Weighted deduction u/s.35(2AB) - R & D expenditure - HELD THAT:- The act does not place any restrictions to incur the expenditure. The expenditure incurred for the purpose of scientific research required to be allowed as deduction u/s.35(AB) subject to complying the conditions laid down in Rule 6. The expenditure was incurred by the assessee which is certified by the tax audit report. There is no dispute regarding the actual amount incurred by the assessee.
The decisions relied upon by the Ld.AR are not directly related to the issue of R&D expenditure incurred over and above the specified limit of DSIR, but the essence of the judgments relied upon by the Ld.AR suggests to allow the actual expenditure. There is no dispute regarding the genuineness of expenditure. Therefore, we hold that the assessee is entitled for the weighted average deduction on the amount actually spent. Decided in favour of assessee.
Disallowance of carry forward additional depreciation in respect of assets acquired in the preceding assessment year - HELD THAT:- It is not disputed that the claim of the assessee was on the balance of the additional depreciation remaining after what was availed on assets acquired during the preceding assessment year. As relying on Brakes India Ltd [2017 (4) TMI 511 - MADRAS HIGH COURT] we direct the AO to allow the claim of the balance additional depreciation.
Additional depreciation on an air circulator - Claim disallowed by the lower authorities considering it to be electrical installation - HELD THAT:- There is nothing on record to show that electrical installation on which additional depreciation was claimed by the assessee was an air circulator which could be construed as plant and machinery. Accordingly, we are of the opinion that lower authorities were justified in denying the claim of additional depreciation on the said item. We do not find any reason to interfere with the orders of the lower authorities.
Proportionate disallowance on the deduction claimed by the assessee u/s.10B - AO charged a part of the R & D expenditure to the units on which assessee was claiming deduction u/s.10B - claim of the assessee was that R & D unit was a separate one and its expenses could not be charged to the units on which deduction was claimed u/s.10B - HELD THAT:- As decided by Hon’ble Apex Court in [2016 (12) TMI 881 - SUPREME COURT] though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. Decided against revenue.
TDS u/s 195 - Disallowance u/s.40(a)(i) - logistic service charges paid to a Non Resident - HELD THAT:- As in assessee’s own case for assessment years 2007-08 to 2009-2010 [2017 (5) TMI 1749 - ITAT CHENNAI] the profits of the services rendered outside India cannot be taxed in India unless the non-resident has permanent establishment/or business connection in India as envisaged in Sec.9(1) - CIT(A) deleted the addition correctly relying on the decision of GE Technological Centre Pvt. Ltd [2010 (9) TMI 7 - SUPREME COURT].
Depreciation at the rate of 60% on UPS - HELD THAT:- CIT (A) was justified in allowing the claim of depreciation at the rate of 60% on UPS.
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2018 (10) TMI 1999 - BOMBAY HIGH COURT
Applicability of sections 10B(7) r.w.s. 80IA(10) - revision u/s 263 - HELD THAT:- As admitted on following substantial questions of law:-
“Whether on the facts, circumstances of the case and in law, the Tribunal was justified in not appreciating the fact that that by arranging its affair with the AE, the assessee has inflated the profit in India on which deduction u/s 10B is claimed and assessee has arranged its transaction to evade the taxes and the provisions of sections 10B(7) r.w.s. 80IA(10) are clearly attracted in the assessee's case?
(ii) Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that there is no merit in invoking jurisdiction by the Commissioner u/s 263 of the Act in this case?”
We do not think that in the light of this order, we should reopen the finding of the Tribunal that Section 263 of the Income Tax Act, 1961 was not attracted.
To be heard along with other Income Tax Appeal. Assessee waives service.
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2018 (10) TMI 1998 - ITAT CHANDIGARH
Deemed dividend u/s 2(22)(e) - assessee received a loan from company in which assessee is the beneficial owner of shares holding more than 10% of shares in the said company - HELD THAT:- As find that the amounts have been indeed received by Barkley Retails Pvt. Ltd. which can be considered as a trade advance. Thus we find that, the observation of the CIT(A) that the advance was utilized for personal purpose and not for meeting the business expediency is based on wrong interpretation of the facts. Hence placing reliance on the judgment of Bagmare Constructions Pvt. Ltd.[2015 (1) TMI 403 - KARNATAKA HIGH COURT] addition made is hereby directed to be deleted.
Disallowance u/s 14A - as argued During the year the assessee has not earned any exempt income - AO has disallowed an amount u/s 14A which the CIT(A) has confirmed - HELD THAT:- As in the case of CIT Faridabad v. Lakhani Marketing INC [2014 (7) TMI 44 - PUNJAB AND HARYANA HIGH COURT] have held that the disallowance u/s 14A can be made only to the extent of receipt of dividend income. Since in the instant case the assessee has not earned any exempt income no disallowance u/s 14A is warranted. Appeal of the Assessee is allowed.
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2018 (10) TMI 1997 - CESTAT CHANDIGARH
Exemption under Notification No. 89/95-C.E., dated 18-5-1995 - wastes, gums, etc. arising during the course of refining of vegetable oil - HELD THAT:- As the issue has already been settled by the Larger Bench of this Tribunal in the case of M/S RICELA HEALTH FOODS LTD., M/S J.V.L. AGRO INDUSTRIAL LTD., M/S KISSAN FATS LIMITED VERSUS CCE, CHANDIGARH, ALLAHABAD [2018 (2) TMI 1395 - CESTAT NEW DELHI], wherein it has been held that wastes, gums, etc., arising during the course of refining of vegetable oil, the appellant is entitled for exemption under Notification No. 89/95-C.E. ibid therefore, it is held that the appellant is entitled for exemption under Notification No. 89/95-C.E. ibid.
Appeal allowed.
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2018 (10) TMI 1996 - SC ORDER
Non-allowability of deduction on account of investment in subsidiary company written off - as argued by learned Additional Solicitor General, that the Order of the High Court is non-speaking inasmuch as it has not given its own reasons.
HELD THAT:- Issue notice, returnable in three weeks.
This Court shall also decide on the next date of hearing whether the case should be sent back to the High Court for reconsideration
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2018 (10) TMI 1995 - ITAT CHANDIGARH
Gain on land sold - nature of land sold - Capital asset u/s 2(14) - Whether the land is situated within Municipal Limit or not? - urban or rural land - AO held that since the land sold by the assessee falls within one kilometer on left hand side of Mohali – Kharar Road (National Highway -21), the sale consideration received on its transfer is chargeable to capital gains - HELD THAT:- The Sub-Registrar vide report No. 6 dt. 03/01/2014 and No. 50 dt. 22/01/2014 has intimated that the land sold by Smt. Tej Kaur is Rural land and outside the Municipal limit of Kharar and Mohali. Its distance from National Highway No. 21 is above 1 K.M.(4427 ft. 804 Karam). Accordingly, the land of the assessee is out of urban area.
Thus after making due enquiries the ITO has accepted the returned income in the case of one of the applicants namely Smt. Tej Kaur in the earlier year, hence, it can be said that the Revenue, having accepted the distance after due enquiries bringing the proceeds of the sale of remaining part of the land to taxation cannot be accepted. Not only that, the certificate from the Tehsildar, Mohali again reiterated the fact that the land in question is beyond the distance of 1 Km from the National Highway.
Certificates of the Land Revenue Authorities, and orders of the Department in the case of the one of the assessee for the earlier years, we hereby direct that the addition made be deleted. Appeals of the Assessee are allowed.
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