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Showing 21 to 40 of 1904 Records

2015 (12) TMI 1891

TDS u/s 194A - interest on deposits held by the Branch - assessee in default for not deducting tax at source on alleged deposits which were funds of the Central Government - CIT(A) has held that societies which are being wholly funded by Government would qualify for non deduction of tax u/s 194A in accordance with notification No. 3489 dated 22.10.1970 - HELD THAT:- As per the PMGSY [a scheme of the Ministry of Rural Development], any interest income accrued on surplus funds of the project parked in the bank would be of Ministry of Road Developments and State Rural Road Development Agency would not have any right over the interest income. Chapter X of the Accounting Manual of PMGSY Scheme is explicit in this regard and the AO erred in relying on Chapter XIII of the said Manual.

Chapter X of the Accounting Manual is specific with regard to the nature and state of interest income, stating the interest income as belonging to the Ministry of Rural Development. The State Rural Road Agency does not have any control whatsoever on the interest income. That being so, the contents of Chapter XIII of the Accounting Manual, as rightly held by the ld. CIT(A), cannot over ride those of Chapter X of the Manual.

J&K State Rural Road Agency is a body established by the Government of J & K, registered under the Societies Registration Act and is fully funded by the Government and it is not required to make TDS.

Then, in BRANCH MANAGER, STATE BANK OF BIKANER & JAIPUR [2012 (4) TMI 210 - ITAT JAIPUR] as held that for interest on such like deposits, TDS provisions of section 194A of the Act are not attracted. This decision was also taken note of by the ld. CIT(A) while deleting the demand raised. Also, no contrary decision has been pressed into service before us on behalf of the department. Decided in favour of assessee.
2015 (12) TMI 1890

Additional disallowance of depreciation enhanced by CIT(A) - “assets” have already entered into the ‘block of assets’ - HELD THAT:- As “assets” in question were forming part of ‘block of assets’ which were used earlier for the purpose of business. The said asset were destroyed / lost in theft in the assessment year 2006-07 and no insurance claim has been received to the assessee. To the extent of the amount of claim made to the insurance company was reduced from the block of assets in the earlier years and accordingly, assessee has claimed depreciation on the reduced written down value.

Since the assessee could not receive the insurance claim, the amount of insurance claim was added back and accordingly, depreciation was claimed on this amount.

CIT(A) has enhanced the disallowance of depreciation on the ground that the said asset has not been put to use for the business purpose. Such a reasoning given by the CIT(A) for the enhancement cannot be sustained, because now it is quite a settled proposition that if the “assets” have already entered into the ‘block of assets’ and is forming part of the gross block of assets, then deprecation has to be allowed even if the said assets has not been used in the relevant year.

This proposition now stands settled by the catena of decisions including that of case of CIT vs G.R. Shipping Ltd [2009 (7) TMI 1169 - BOMBAY HIGH COURT] Otherwise also, if the assessee’s claim for insurance has not been settled and amount has been added back, then the depreciation has to be allowed on such an amount. Accordingly, we direct the AO to grant deprecation in the previous year relevant to AY 2006-07, that is, when it was added back to the block of assets and secondly, rework the deprecation for the assessment year under appeal accordingly. Appeal of the assessee is allowed.
2015 (12) TMI 1889

Nature of expenses - Corporate debt restructuring - replacement of remembraning cells - AO treated both these claims capital expenditure - HELD THAT:- Revenue’s argument seeking to treat assessee’s CDR claim as capital expenditure is rejected. We rely on co-ordinate bench decision in assessment year 2004-05 [2013 (11) TMI 773 - ITAT AHMEDABAD] and leave it for the AO to calculate this corporate restructuring expenditure as adopted in assessment year 2004-05.

Expenditure on replacement of remembraning cells - As assessee has already succeeded before the hon’ble jurisdictional high court in its own case [2015 (2) TMI 118 - GUJARAT HIGH COURT] rejecting the very substantial question framed in assessment year 1999-2000. There is no exception pointed out before us. We respectfully follow the same and uphold the lower appellate findings under challenge. Revenue’s appeal partly accepted for statistical purposes.

TDS u/s 192 - Default u/s 201(1) and (1A) - medical reimbursement - non deduction of tds - HELD THAT:- The assessee has acted fairly and honestly in computing its TDS liability qua salary and other allowances paid to its employees u/s. 192 - Nor it is the Revenue’s case that it has not acted in the above stated bonafide manner or that quantum of medical allowance question appears to be payment of salary in garb thereof. The case file does not reveal that these very sums stand assessed in individual employees’ hands.

Revenue fails in controverting all of the above stated findings. We accordingly reverse lower authorities’ action and accept assessee’s first substantive ground challenging section 201(1) and (1A) demand in question. This first substantive ground relating to medical reimbursement issue succeeds.
2015 (12) TMI 1888

Penalty proceedings u/s 271(1)(c) - revised return showing higher income was filed on the basis of which notice for reopening was issued - undisclosed agricultural income - assessee in his statement recorded u/s 131 on oath by the ADIT (Investigation), Nashik had confessed that the agricultural income shown by him during the assessment year 2005-06 from sale of agricultural produce did not match with the agricultural crops shown in the 7/12 extracts - HELD THAT:- Assessee had no plausible explanation towards the source of Rs.3,00,000/- which he had introduced in his business as agricultural income. Although the assessee has filed the revised return by disclosing the additional income of Rs.3,00,000/- the same cannot be said to be voluntary because the return was filed only after the enquiries were conducted by the Department and the assessee was unable to substantiate the source of the same for which he declared the additional income.

As per the provisions of section 271(1)(c) of the Act, penalty is leviable if the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. In the instant case, the assessee by declaring business income as agricultural income in the return of income has concealed the particulars of his income and furnished inaccurate particulars of such income.

Provisions of section 271(1)(c) are clearly attracted. Various decisions relied upon by the assessee before the CIT(A) are distinguishable and are not applicable to the facts of the present case. Grounds raised by the assessee are dismissed.
2015 (12) TMI 1887

Captive Consumption of Molasses - Manufacturing of Rectified Spirit and ENA - benefit of exemption Notification No. 67/95-CE on Molasses captively used in the manufacture of Rectified Spirit and ENA.

HELD THAT:- The appeal is admitted.
2015 (12) TMI 1886

Maintainability of appeal before Tribunal - low tax effect - HELD THAT:- In view of the latest CBDT Circular No.21/2015 dated 10th December, 2015, the appeals of the Department are not maintainable inview of the tax effect being less than the monetary limit prescribed by the said Circular. The tax effect in filing the appeal before the Tribunal should be above Rs.10 lakhs in view of the above said Circular. The above Circular has clearly mentioned to have retrospective effect and is to have application to the pending appeals. Accordingly, in view of the said Circular, all the appeals of the Revenue are dismissed as not maintainable.
2015 (12) TMI 1885

Identification of handwriting in the cheque - Whether a Civil Court may not send a disputed handwriting/signature to a handwriting expert (under Section 45 of the Evidence Act) if the time gap between the admitted signature and the disputed signature is very large? - HELD THAT:- Nature and extent of variation differs from person to person and, in its way, forms an important element in identification process. Writing variation is due to various factors external factors like writing position, writing instrument, care of execution, etc; physical and mental conditions like fatigue, intoxication, drug use, illness, nervousness, etc. These factors produce a varying degree of variation. The variation is commensurable in its degree with the intensity of the cause - Variation does not preclude identification of the writing. In fact, it forms an additional factor that serves to personalize the writing.

Writing of an adult will show an obvious steady change with passage of time. In these circumstances provision of a whole set of signatures written over a period of years will prove of inestimable value to the document examiner - When serious illness occurs, a signature often undergoes a remarkable change in a very short period and if a suspect will is dated near the day of death, standard (admittedly genuine) signatures covering this period are essential if reliable evidence of the authenticity or otherwise of the signature is to be established.

The gist of the experts opinion, emerging from the above Report, is to the effect that it is not always necessary to have contemporaneous handwritings/signatures for comparison. However, as a general rule, it would be desirable to undertake comparison of admitted handwritings/signatures with disputed handwritings/signatures which fall within the range of 2 or 3 years from each other. Therefore, there can be no hard and fast norm as to when comparison can or cannot be undertaken owing to the time lag between the two sets of handwritings/signatures. Various other factors would have to be taken into consideration, as opined by the experts - It is therefore not open to the Court to refuse to entertain an application seeking comparison of disputed handwritings/signatures with admitted handwritings/ signatures on the ground of a long lapse of time between the two sets of handwritings/signatures.

It is only too well-known that the appearance of a signature depends on many factors. The type of pen used, the ink, the quickness of the flow of the pen, the paper on which it was written, the place where the signature is put e.g., a signature on a rough paper would not be exactly the same as that on a smooth paper. In the same way, a signature written with a rough pen would not be the same as a signature with a good smooth-writing pen. Similarly if some smooth pad or some such object is used for resting the paper at the time of the signature, then that signature would be different from the signature put on a paper resting on a rough surface.

No time could be fixed for filing applications under Section 45 of the Indian Evidence Act for sending the disputed signature or writings to the handwriting expert for comparison and opinion and same shall be left open to the discretion of the court; for exercising such discretion when exigencies so demand, depending upon the facts and circumstances of the each case - merely because an application seeking expert opinion is filed belatedly, it would not automatically mean that the signatures sent for comparison are not contemporaneous.

The matters may be posted before the Court concerned for adjudication on merits.
2015 (12) TMI 1884

Seeking payment of the rebate in cash, on exports made in terms of the erstwhile Rule 57 F (13) of the Central Excise Rules, 1944 - HELD THAT:- Though various issues are raised in this Writ Petition, and defending the same, a counter affidavit is also filed, now, the learned counsel appearing for the petitioner has submitted that, it would be suffice, if a direction is issued to the respondent to adjudicate the issue, which culminated in the issuance of show cause notice, dated 09.02.2000 alone, after affording due opportunity to the petitioner to fortify its case. Insofar as the claim made by the petitioner, vide Application, dated 30.11.1998, regarding payment of statutory interest on the refund amount is concerned, the learned counsel submitted that the petitioner would not press upon the interest on the refund amount, and to that effect, the petitioner has also filed an undertaking affidavit today, specifically stating that they will not claim the statutory interest payable on the refund, subject to the sanction of refund to the petitioner by the respondent.

The writ petition is disposed off.
2015 (12) TMI 1883

Exemption u/s 11 - benefit of certificate u/s 12(A) - conditions stipulated under the provisions of sub-section (3) of section 12AA which empowers the authority to cancel the registration - HELD THAT:- As appellants has fairly stated that the questions of law raised in this appeal are covered by the decision of this Court in the case of ‘The Director of Income Tax Exemption Vs. M/s. Karnataka Badminton Assn. [2015 (1) TMI 1202 - KARNATAKA HIGH COURT] wherein the questions have been answered in favour of the Assessee and against the Revenue.

Accordingly, for the reasons given in the aforesaid Judgment in Karnataka Badminton Assn.’s case [supra], this appeal is dismissed and the questions of law raised are answered in favour of the Assessee and against the Revenue.
2015 (12) TMI 1882

Validity of proceedings u/s 153A - as argued the premises which were searched u/s 132 were not of the Assessee - HELD THAT:- ITAT has noted as a matter of fact that the premises that was searched i.e. 3rd Floor, Global Arcade, M. G. Road, Gurgaon was not of the Assessee. There was nothing on record to connect the Assessee with the premises searched. Therefore, qua the Assessee, the proceedings u/s 153A was invalid. This being a factual aspect, no question of law arises.
2015 (12) TMI 1881

Issues:
- Applicability of Circular No.21 of 2015 issued by the Central Board for Direct Tax
- Tax effect threshold for filing appeals in Income Tax matters

Analysis:
The judgment by the High Court of Bombay pertains to the Assessment Year 1989-90 and revolves around the interpretation and application of Circular No.21 of 2015 issued by the Central Board for Direct Tax. The circular sets monetary limits for filing appeals in Income Tax matters before different authorities. Specifically, the circular states that appeals should not be filed solely based on exceeding the monetary limits, and the decision to file an appeal in such cases should be based on the merits of the case. The circular also clarifies that it will apply retrospectively to pending appeals and those to be filed in the future before High Courts and Tribunals. Appeals below the specified tax limits may be withdrawn or not pressed, as per the circular's instructions.

In the present case before the High Court, the tax effect is noted to be Rs. 5.07 lakhs, falling below the monetary limit specified for appeals before the High Court. Consequently, the learned Counsel representing the Revenue, Mr. Suresh Kumar, decided not to press the appeal based on the tax effect being below the prescribed limit. As a result, the High Court dismissed the appeal as not pressed and ordered the refund of court fees in accordance with the rules. This judgment highlights the importance of adhering to the monetary limits set by the Circular for filing appeals in Income Tax matters and emphasizes the need to consider the case's merits before initiating legal proceedings.
2015 (12) TMI 1880

Restraint on invocation of Bank Guarantee - Execution of bank guarantee was made for securing payment in lieu of the products supplied by the Appellant to Respondent No. 1, M/s. RMSFC - Unconditional Bank Guarantee - Outstanding Certificate seeking payment, on account of despatch of fruit to M/s. RMSFC - balance of convenience - HELD THAT:- The principles laid down by this Court in U.P. Cooperative Federation Ltd. v. Singh Consultants and Engineers (P) Ltd. [1987 (11) TMI 375 - SUPREME COURT], and in Vinitec Electronics Private Ltd. v. HCL Infosystems Ltd. [2007 (11) TMI 588 - SUPREME COURT] have been gone into - Having given thoughtful consideration to the law laid down by this Court, in respect of grant/refusal of an injunction of an unconditional bank guarantee, and keeping in mind the terms and conditions, more particularly of the contractual conditions extracted and narrated above, we are satisfied that the courts below were not justified in injuncting the invocation of the three bank guarantees, executed by the State Bank of Mysore, at the instance of M/s. RMSFC.

The Respondent Nos. 2 and 3 - the State Bank of Mysore is directed to honour the same forthwith.

Appeal disposed off.
2015 (12) TMI 1879

Unexplained investment in undisclosed bank account - CIT-A applying the concept of peak theory and requirement of additional capital - HELD THAT:- We find that the assessee opened a bank account in ICICI Bank and deposited cash on various dates and also made withdrawals. The total deposits during the year and the same was treated by the A.O. as unexplained credit while framing the assessment.

We also note that the said account was not disclosed by the assessee in his balance sheet whereas all the withdrawals were made under his signatures. CIT(A) applied the theory of net peak balance and sustained the addition of peak balance of Rs.50,435/- and also sustained Rs.25,000/- as additional capital requirement as unexplained investments and treated the same as income of the assessee. No infirmity in the order of CIT(A) as he had rightly applied the theory of peak balance i.e. Rs.50,435/- and took additional capital at Rs.25,000/-. Appeal of Revenue is dismissed.
2015 (12) TMI 1878

Dishonor of Cheque - insufficient funds - legally enforceable liability or not - blank cheques were handed over to the petitioner with the signature of respondent No. 1 - section 138 of NI Act - HELD THAT:- In the present case in hand, the petitioner is coming with a specific case that the cheques were handed over duly signed and he had not filled in the contents, which would include the body of the cheques and the amount which is disputed. The respondent No. 1 has to be given a fair chance to substantiate the defence.

In that view of the matter, there are no case for interference under the extra ordinary jurisdiction of this Court is made out.

Criminal writ petition dismissed.
2015 (12) TMI 1877

Nature of receipts - Income accrued on account of carbon credits - revenue or capital receipt - HELD THAT:- The issue is covered in favour of the assessee by order of DCIT Vs Kotla Hydro Power Pvt. Ltd. [2015 (4) TMI 1346 - ITAT CHANDIGARH] assessee was carrying on the business of power generation for the assessment year 2007-08. Carbon credit was not an offshoot of business of the assessee but an offshoot of environmental concerns. No asset was generated in the course of business but it was generated due to environmental concerns. There was no cost of acquisition or cost of production to get entitlement for the carbon credits. Therefore, the income from sale of carbon credits was to be considered as capital receipt and not liable to tax under any head of income under the Income-tax Act, 1961 - Decided against revenue.
2015 (12) TMI 1876

Dishonor of Cheque - defence of forgery - petitioner can be be precluded from taking steps in Law to prove her innocence and preventing the same will lead to serious miscarriage of justice or not - real grievance of the Revision Petitioner/Accused is that she is entitled in law to take any type of defence till the conclusion of the trial of a case and in this regard, the valuable right of the Revision Petitioner/Accused cannot be taken away abruptly because of the simple reason that the 'Defence of Forgery' was not taken at the earliest point of time - principles of natural justice.

HELD THAT:- One cannot brush aside a very vital fact that a 'Fair Trial' includes fair and adequate opportunities allowed by Law to establish ones innocence. It is to be remembered that adducing necessary oral or documentary evidence in support of a defence is a valuable right and if the same is denied, then it amounts to 'denial of fair trial', as opined by this Court. That apart, Section 243 authorises the defence to project an application for summoning the witnesses and imposes a duty upon the Court to summon such witnesses. A Court of Law cannot avoid /shirk the duty unless it considers that such petition ought to be refused for any of the reasons mentioned in the sub-section, in the considered opinion of this Court.

It cannot be gainsaid that what must be the nature of evidence to be adduced by a person/accused should be left the discretion of a party/accused and the same should not be left within the ambit of a Court. Also, it cannot be frightened that the right of an accused to lead evidence in his defence is not absolute. Notwithstanding the presumption that can be raised under Section 118 (a) or 139 of Negotiable Instruments Act, 1881, an opportunity of rebuttal must be granted to an accused for adducing evidence to discharge it.

This Court taking note of the peculiar facts and circumstances of the present case and also this Court bearing in mind a prime fact that a Court of Law is to consider an application filed by the Petitioner/Accused praying for comparison of a signature on a disputed document with her admitted signature on its own merits and if an opportunity is granted to the Petitioner/Accused to substantiate her case, then no prejudice would be caused, this Court comes to an irresistible and inevitable conclusion that the view taken by the trial Court with a view to protract the proceedings of the main case etc., are not legally tenable in the eye of Law.

Petition allowed.
2015 (12) TMI 1875

Compounding of offences punishable u/s 276B r.w.s.278B - admitted default in deposit of TDS - HELD THAT:- Issue notice.

There shall be stay of initiation of prosecution. The prayer in respect of other interim reliefs stands rejected.
2015 (12) TMI 1874

Penalty u/s 271(1)(c) - bogus purchases - AO treated the additional income as concealed income considering the fact that only after the finding of the bogus purchases by the department, assessee accepted and filed the revised return of income - HELD THAT:- In the present case, the assessee had accepted the bogus purchase as additional income voluntarily due to the fact that assessee was not in a position to substantiate the claim, even though, the transaction was made through banking channel. The assessee had declared the additional income voluntarily and filed return of income, which the AO accepted the revised return of income to complete the assessment u/s 143(3) r.w.s. 147.

We are inclined to note that the assessee filed the revised return of income which was duly accepted by the AO. From the above observations, it is clear that the assessee had neither concealed the particulars of the income nor furnished inaccurate particulars of such income. Hence, this is not a fit case to attract penalty proceedings u/s 271(1)(c) - Appeal of assessee allowed.
2015 (12) TMI 1873

Undisclosed income u/s 69A - undisclosed cash receipt on sale of stone quarry is handwritten loose paper termed ‘isar pawati’ signed by the partners and also signed on behalf of the buyers - addition assuming a piece of paper as constituting “Issar Pavati” i.e. advance receipt - piece of paper was found in survey action u/s 133 - as argued piece of paper i.e. ‘Isar Pavati’ has been wrongly presumed as agreement to sell - HELD THAT:- Since the concerned loose paper is found to be pertaining to the Appellants herein, seizure of the same in the hands of other corporate entity represented by one of the partners of the Appellant firms herein will not render it extraneous per se for assessment purposes. In our considered view, the Revenue is entitled to use the incriminating evidence against the assessee in the given facts.

It is also pertinent to notice the other limb of the argument on behalf of the Assessee that impugned loose paper found in survey under S. 133A do not constitute evidence and can not give rise to presumption against the Assessee in the absence of any actual cash found as alleged to be unaccounted income. We have already observed that contents of loosed paper i.e. isar pawati impounded is entitled to great weight due to its substantial corroboration of payments with registered document, naturally without cash. We are of the opinion that once it is concluded on facts that the contents of the document found are relevant and true which establishes ownership, non-detection of physical cash or other equivalent asset per se would not be a handicap to invoke section 69A of the Act. Hence, notwithstanding nondeduction of physical cash, deeming provision of section 69A of the Act will apply.

In the facts of the case, loose paper found in the drawer of the director of the company surveyed who is also the partner of the Assessee and contents found to have been vindicated, the presumption against the assessee is supportable in law. The loose paper or isar pawati in our opinion assumes the colour of valid evidence against the assessee on its corroboration by payment details of registered document. Thus, the plea of the Assessee in this regard does not hold water.

Addition u/s 69A No merit in assessee contention since no unaccounted cash were actually found, nor any investment was found, section 69A of the Act is not attracted - The word ‘owner’ employed has to be understood in the context. We have already observed that physical presence of cash or other corresponding unaccounted investment per se to support an entry found in the documents is not the pre requisite to support its ownership for assessment purposes under section 69A.

We are alive to the fact that the scope in respect of coverage of premises under section 133A of the Act are limited. Also, the circumstances have to be weighed to come to conclusion about the alleged unaccounted money for assessment purposes. In the instant case, in our view, money in the form of cash was found to be attributable to the assessee as per the incriminating document i.e. Isar Pavati, nature and source whereof has not been explained satisfactorily. AO has sought explanation on alleged cash not founded to be recorded in book and found the explanation offered by the assessee as unsatisfactory. Therefore, we do not find merit in the plea of the Assessee with regard to non applicability of S. 69A. - We endorse the essence of the findings of the CIT(A) that in view of the speaking facts narrated in the loose paper found at the time of survey which clearly matches on material particulars with the registered sale deed executed subsequently, there is no room left to disbelieve the contents of the loose paper. It is trite that when a part of the document has been accepted, other part of the same document cannot be ignored in the absence of any tangible proof to the contrary. In our considered view, assessee failed to rebut the contents of the loose paper satisfactorily and thus failed to discharge the onus which lay upon it to prove what is apparent as per loose paper is not real. - Decided against assessee.
2015 (12) TMI 1872

Eligibility of Deduction u/s 80IB - HELD THAT:- We find that since the facts are identical and in assessee’s own case the Tribunal has decided the issue, judicial discipline mandates that we follow the order of the Tribunal. We further note that the Revenue has already filed appeal before the Hon’ble High Court in Income Tax Appeal - In this view of the matter since the Hon’ble jurisdictional High Court [2010 (4) TMI 1232 - BOMBAY HIGH COURT] has not reversed the decision of ITAT, we follow the above said order of ITAT in assessee’s own case - Hence we set aside the order of learned CIT(Appeals) and hold that the assessee is eligible for deduction u/s 80IB.

Addition of electricity expenditure - AO while making the disallowance relied on the statement of Smt. Anju Saraf recorded on 07-12-2009 before the ACIT, Circle-1, Nagpur wherein it has been stated that crushing and screening machines are run on generator and there is no electricity connection is available for running crushing and screening machines - HELD THAT:- It is clear that the assessee has paid the expenditure on account of electricity to its associate concern. The expenditure is duly supported by bills and vouchers. Such expenditure were claimed in earlier years and were allowed. Merely because the expenditure was paid to sister concern, the same cannot be disallowed. Accordingly we uphold the order of learned CIT(Appeals) on this issue.

Addition on account of wind mill maintenance expenses - CIT-A deleted the addition - HELD THAT:- We find that the AO’s main plank of argument is that the expenditure incurred was excessive. For this he has compared some agreements entered into with other concerns with the payee. We agree with the learned CIT(Appeals) that no case has been made out as to whether the maintenance charges paid by others were comparable to the one paid by the assessee. Hence in our considered opinion the AO is trying to enter into shoes of the businessman to decide as to how he should enter into an agreement. No case has been made out that the payments are bogus or the services were not rendered. In these circumstances, we do not find any infirmity in the order of learned CIT(Appeals). Accordingly we uphold the same. The appeal of the Revenue is dismissed.