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Showing 21 to 40 of 2006 Records
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2018 (4) TMI 1990
Deduction u/s 80P(2)(d) - interest received from co-operative banks - AO rejected the claim on the ground that interest received from other co-operative societies alone is deductible u/s 80P(2)(d) and since the word "Bank" is not there in the above said section - HELD THAT:- We notice that an identical issue was considered by the co-ordinate bench in the case of Lands End Co-operative Housing society Ltd [2016 (2) TMI 620 - ITAT MUMBAI] and this issue was decided in favour of the assessee as held assessee is entitled to the deduction in respect of interest received/derived by it on deposits with coop. banks and therefore the appeal of the assessee is allowed by reversing the order of the CIT(A).
We hold that the assessee is entitled for deduction u/s 80P(2)(d) of the Act in respect of interest income earned on deposits kept with the co-operative banks. Accordingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to allow deduction.
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2018 (4) TMI 1989
Reopening of assessment u/s 147 - reasons to believe - notice being issued beyond a period of four years - unexplained cash purchases of cotton from farmers - additional requirement of lack of true and full disclosure on the part of the assessee leading to income chargeable to tax escaping assessment
As per AO during survey, the assessee could not produce documentary evidence to prove that the sellers were the cultivators, assessee could not produce a single farmer before the authority, land records showed many discrepancies, assessee could not produce PAN or returns of the sellers, election card details of the farmers did not match with the Government's official record in some cases,net profit ratio of the assessee was very low and in large number of cases, the records were not verifiable.
HELD THAT:- In the present case, the return filed by the assessee was originally taken in scrutiny and during which scrutiny assessment, the AO had examined this issue pointedly. This therefore was a scrutinized issue.
We may also remember that the impugned notice has been issued beyond the period of four years from the relevant assessment year. We may approach the different grounds which weighed with the AO which are summarized above, with this background in mind.
The combined effect of these ground pressed in service by the AO seems to be that during the post survey inquiries, he put the entire burden of reestablishing the genuineness of the purchasers on the assessee.
These purchases were made several years before from thousands of individual agriculturists who were the growers of the crop. The fact that the assessee could not produce documentary evidence to prove that the sellers were the cultivators during the survey can therefore hardly be a factor which could weigh while judging that income chargeable to tax has escaped assessment.
The agriculturists who had sold the crop to the assessee at the relevant time, would be reluctant to come before the Revenue authorities and this therefore, by itself, may also not be a relevant factor. In any case, we are informed that in the present year, the assessee had produced every person who the AO required for the purpose of ascertaining the factum of sale.
Such persons had also backed the assessee. The fact that some of the land records did not show the names of the agriculturists concerned was also explained by the assessee by pointing out that in most of the cases, the land was in the name of the near relative of the producer. In some cases, it may happen that the producer may not own the land.
However, merely not owing the land does not mean that he is not cultivating the land. Being enrolled in some other village as a voter also would not be conclusive since it is not uncommon that in case of migrating population, the name may be shown as a voter in the native place whereas the person may have settled for work or occupation at a different place.
The income from agriculture being exempt, the petitioner cannot be blamed if PAN or returns of sellers were not produced.
Thus, AO has referred to some bids and pieces of material to form a belief that the purchases were not genuine. During the course of original assessment, the Assessing Officer may be well within its rights to carry out minute possible detailed inquiry with respect to all such sales and purchases. However, one such inquiry was over. Scrutiny assessment framed, during which, these transactions came up for pointed consideration, reopening of assessment cannot be permitted on mere surmises, conjectures, suspicion or for further inquiry. The added element of the notice being issued beyond the period of four years from the end of relevant assessment year is also relevant. Decided in favour of assessee.
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2018 (4) TMI 1988
Unexplained jewellery - no source of investment in the gold and diamond studded jewellery provided - total jewellery of all the family members was valued by approved valuer at one place - HELD THAT:- Jewellery which has been found from the bedroom of Dr. Shobha Tomar, Dr. Anurag Tomar and Dr. Swati Tomar belongs to all the family members who were staying jointly with the assessee at the relevant point in time. The same is confirmed by the assessee in his statement recorded u/s 132(4) of the Act where the assessee has categorically stated that the jewellery so found belong to him, his wife, son, daughter in law and B.S.Tomar (HUF). Therefore, we find that the jewellery so found where remained unexplained, the addition has to be made equally in the hands of the each of the family members to whom the said jewellery belongs. Therefore, we found that the observation of the Assessing Officer that since the assessee is the head of family, the whole of the addition shall be made in his hand is not emerging from the facts on record and therefore, the same cannot be accepted. In absence of any specific identification of the jewellery belonging to the assessee and to the other family members, it would be reasonable that if the addition has to be made, it should be made equally in hands of all the family members staying with him at the relevant point in time and the assessee's HUF.
The contention regarding the overall valuation of the explainable jewellery amounting to Rs 60,16,749/- being higher than the value of Rs 55,65,762 as determined by the approved valuer is not found acceptable as there is a clear cut finding by the AO that jewellery weighing 2595.72 grams was found as against explainable jewellery of 2212.04 grams.
We confirm the findings of the AO to the extent that the jewellery worth Rs 55,65,762 remains unexplained.
The addition, towards the unexplained investment in the jewellery so found during the course of search, should be made equally in hands of all the family members staying with him at the relevant point in time. The proportionate addition in the hands of the assessee comes to Rs 245,422 (1/5 of Rs. 12,27,109/-). The balance addition of Rs 981,687 is therefore directed to be deleted. In the result, the ground of appeal is partly allowed.
Investment in countries outside India - No evidence regarding the genuineness of the above transactions was submitted during the course of post-search proceedings -case of the Revenue is that an amount of Rs. USD 3,00,000 equivalent to Indian Rupees 1,84,35,000/- has been transacted and transferred on behalf of Dr. B. S. Tomar to various foreign bank accounts - HELD THAT:- AO has referred to certain discreet enquiries during pre-search investigation that Tomar family is making a lot of investment in countries outside India, particularly in Madagascar and Mozambique. However, we find that there is nothing available on record in terms of such inquiries which have been conducted by the Revenue and as to how the Revenue has come to such a finding. Therefore, in absence of any material on record in terms of the nature of such enquiries, the person from whom such inquiries have been made, any documentation which has been found and what is the exact findings arising out of such inquiries, we do not find there is any basic to hold that the so called discreet inquiries anyway establishes the fact that Dr. B.S.Tomar has made any investments in countries outside India and the impunged remittances are in connection thereto.
Statement of Dr. B. S. Tomar recorded during the course of search u/s 132(4) - It is clear that the assessee has confirmed that he does not have any foreign bank account, no foreign exchange dealings have been made by him and he does not have any business activities outside the country. If Revenue were to disbelieve such statement which has been recorded on oath, the onus is on the Revenue to demonstrate through verifiable evidence that what the assessee has stated in his statement on oath is incorrect or there is falisity in such statement. Merely disbelieving such statement without bringing anything contrary on record cannot advance the cause of the Revenue.
Seized documents which have been found during the course of search - It is not clear whether the said remittance has actually happened or not. There is no subsequent confirmation or any bank advice which has been found unlike the initial remittance of US$ 100,000. Similarly, according to seized document, there is another email communication from Christine Ramos of Axius Gold of 17th July, 2014 giving the bank details for transfer of US $ 100,000 to the Oceanix International FZE. It is again not clear and there is nothing on record which suggest that there is any remittance which has actually happened in this regard. In light of the same, the mere fact that certain email communications have been addressed and forwarded to Dr. B.S.Tomar regarding the foreign remittances, to our mind, the same is not sufficient enough to hold that the remittance have been made either by Dr. B.S.Tomar or on his behalf from the undisclosed sources of income.
We find that the Settlement Commission has also reached at the same conclusion as we have arrived above that the mere fact that certain email communications have been addressed and forwarded to Dr. B.S.Tomar regarding the foreign remittances, the same is not sufficient enough to hold that the remittance have been made either by Dr. B.S.Tomar or on his behalf from his undisclosed sources of income.
No basis for making the addition in the hands of the assessee. The said addition is hereby directed to be deleted. The ground of appeal taken by the assessee is thus allowed.
Foreign travel expenses - as based on various seized documents and details collected during the course of post search investigation, the assessee and his wife have frequently travelled to foreign countries - HELD THAT:- AR has reiterated the contentions raised before the CIT(A) and submitted that the assessee's drawings during the year are sufficient enough to explain the source of such expenditure. In support, our reference was drawn to the assessee's capital account for the financial year ended 31st March, 2015 which shows total drawings. In absence of anything contrary on record, it would be reasonable to hold that the foreign tour expenses of Rs 203,450 are met out of such drawings. In the result, the addition made by the AO is hereby deleted and ground of the assessee's appeal is allowed.
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2018 (4) TMI 1987
Revision u/s 263 - CIT (A) refused to exercise the jurisdiction u/s 250 on the ground that the order impugned before him was passed by the learned AO pursuant to the directions given by the CIT u/s 263 of the Act and inasmuch as the CIT and CIT (A) are coequal authorities, the remedy of the assessee is not before the CIT (A) but it is only before the ITAT - Whether CIT (A) was not justified in not deciding the issues i.e. addition u/s 36(1)(iii) and addition u/s 80IB(7A) on merits stating that the directions u/s 263 have been given by co-equal judicial authority which is illegal and not correct?
HELD THAT:- We are unable to understand the stand taken by the learned CIT (A) because what was challenged before him was the order passed by AO when the matter was set aside for the consideration of certain aspects suggested by the CIT. If the order u/s 263 is challenged before the CIT (A) then it was open for the learned CIT (A) to refuse to exercise jurisdiction inasmuch as the authority who passed the order u/s 263 of the Act and the authority who has to consider the appeal were equal in authority.
The directions given by the CIT (A) u/s 263 of the Act passed to consider the aspects in respect of which the income might have escaped assessment. If we accept the logic adopted by the learned CIT (A) in this matter, it would result in reading something which is not to be found in the Act because in that case all the assessment orders passed giving effect to the orders u/s 263 of the Act will be directly appealable to the ITAT but not before the CIT(A), which is not contemplated by the scheme of appeals in the Act.
Refusal of exercise the appellate jurisdiction by the learned CIT (A) is improper and the matter needs to be set aside to the file of CIT (A) for considering the appeal on merits and to give a finding thereon according to law. With this view of the matter, we set aside the order of the learned CIT (A) and remit it back to him for disposal according to law. Appeal of the assessee is allowed for the statistical purposes.
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2018 (4) TMI 1986
Admission of section 7 application - Debtor has defaulted in making payment of 886 Crores to the Financial Creditor - HELD THAT:- By going through the pleadings on record and submissions made it can be carved out that the Financial Creditor has duly sanctioned and disbursed the various loan facilities and the Debtor had also availed the same - it is also established by the Financial Creditor that the nature of Debt is a "Financial Debt" as defined under section 5 (8) of the Code. It has also been established that admittedly there is a "Default" as defined under section 3 (12) of the Code on the part of the Corporate Debtor as the Debtor is failed in make payment of outstanding loan amount.
After the lapse of opportunity to reply and keeping admitted facts in mind that the Financial Creditor had not received the outstanding Debt from the Debtor and that the formalities as prescribed under the Code have been completed by the Financial Creditor it is my conscientious view that this Petition deserves 'Admission' - Having admitted the Application, the provisions of Moratorium as prescribed under Section 14 of the Code shall be operative henceforth with effect from the date of order shall be applicable by prohibiting institution of any Suit before a Court of Law, transferring/encumbering any of the assets of the Debtor etc.
Petition admitted.
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2018 (4) TMI 1985
Deduction u/s 80IB - excise duty reimbursement granted by the Government to the assessee is not a profit derived from the assessee's manufacturing activity for which deduction u/s 80IB is recognized - HELD THAT:- Assessee is a manufacturer and receives excise duty reimbursement which is waived by the Government of India under a scheme.
Tribunal correctly relied on a recent judgment of Meghalaya Steels Ltd. [2016 (3) TMI 375 - SUPREME COURT] in which it was held that what is to be seen for the applicability of sections 80IB and 80IC is whether the profits and gains are derived from the business. So long as profits and gains emanates directly from the business itself, the fact that the immediate source of the subsidies is the Government, would make no difference.
Also decided in Dharam Pal Prem Chand Ltd [2008 (11) TMI 231 - DELHI HIGH COURT] as held that the refund of excise duty was provided on the manufacturing activity carried on by the assessee. It was pivoted around such manufacturing activity and the assessee was therefore, entitled to deduction under section 80IB of the Act in relation to such benefits also. This part of the question is therefore, not considered.
Deduction u/s 80IB on research and development expenditure which the assessee attributes exclusively to its noneligible units - Tribunal however in further appeal by the assessee noted that three different units were manufacturing different items. The assessee has placed before DRP the materials to contend that it had not carried out any research and development activity for formulation being manufactured by Jammu and Kashmir unit. This aspect was not rebutted by the Revenue. No specific material was quoted to disturb the assessee's detailed accounts maintained separately for each unit. It would thus appear that the assessee had canvassed before the revenue authorities and the Tribunal a specific case that formulation being manufactured at its unit at Jammu and Kashmir did not entail any research and development expenditure. Such research and development expenditure was incurred exclusively for the purpose of formulation being manufactured elsewhere. The assessee had also produced detailed accounts separately maintained for all three units giving minute details which the Tribunal accepted. This being a factual aspect, no question of law arises. This question is therefore, not considered.
Disallowance of foreign currency loss - HELD THAT:- This Court in case of Commissioner of Income tax v. Friends and Friends Shipping (P) Ltd. [2013 (5) TMI 458 - GUJARAT HIGH COURT] CIT(Appeals) has made some observations which would prima facie suggest that there was no direct corelation between the exchange document and the precise export contract. However, such observations cannot be seen in isolation. CIT(Appeals) himself has noted that the assessee had entered into seven separate contracts with the bankers. In the case of M.G.Brothers [1984 (7) TMI 37 - ANDHRA PRADESH HIGH COURT] was concerned with a case where the assessee was carrying on business of groundnut oil and the assessee entered into forward transactions in neem oil and cotton seed oil. In that view of the matter, the Court held that it was not a hedging transaction since there was no evidence that the assessee had adequate stock of raw materials to the extent of hedging transactions.
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2018 (4) TMI 1984
Disallowance of expense being capital in nature - ITAT deleted addition - HELD THAT:- We notice that similar question came up for consideration before this Court in [2015 (2) TMI 331 - GUJARAT HIGH COURT] question was rejected by an order.
Addition made u/s 36(1)(iii) - ITAT deleted addition - HELD THAT:- Similar issue was considered by this Court in [2015 (1) TMI 1348 - GUJARAT HIGH COURT]. Question was rejected.
Disallowance u/s 35(2AB) - ITAT deleted addition - HELD THAT:- We notice that similar issue had come up before this Court in [2015 (1) TMI 1348 - GUJARAT HIGH COURT], this question was rejected.
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2018 (4) TMI 1983
Sanction of Scheme of Merger - Sections 230 to 232 of the Company Act, 2013 - HELD THAT:- From the material on record, the Scheme of Merger by Absorption appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.
The scheme is sanction - application allowed.
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2018 (4) TMI 1982
Maintainability of the writ petition preferred under Article 226 of the Constitution of India against the judgment of the Tribunal - registration of plot including mosque as waqf property - in the registration certificate the nature of the mosque declared as Ahl-e-Hadees - HELD THAT:- In Sadhana Lodh [2003 (1) TMI 701 - SUPREME COURT], the Supreme Court has held that where a statutory right to file an appeal has been provided for, it is not open to the High Court to entertain a petition under Article 227 of the Constitution. Even if where a remedy by way of an appeal has not been provided for, the remedy against the order and judgment of a District Judge, the remedy available to the aggrieved person is to file a revision under Section 115 of the Code of Civil Procedure. Where remedy for filing a revision is expressly barred, only in such case a petition under Article 227 of the Constitution would lie and not under Article 226 of the Constitution.
In view of the binding precedent of the Supreme Court in Sadhana Lodh, when a statutory right to file a revision has been given to the person aggrieved under the proviso to sub-section (9) of Section 83 of the Waqf Act, 1995, it would not be open to this Court to entertain a petition under Article 226 or 227 of the Constitution of India. Merely because petitions under Articles 226/227 of the Constitution of India have been entertained in past, such petition cannot be held to be maintainable in law - there are no merit in the submissions of the learned counsel for the petitioner and the Board that since such petitions are being entertained before this Court and several decisions have been given in past which have attained finality, a petition under Article 226/227 of the Constitution of India would be maintainable against the decision or order of the Tribunal.
In MUMTAZ AHMED AND ORS. VERSUS STATE OF H.P. AND ORS. [2016 (11) TMI 1757 - HIMACHAL PRADESH HIGH COURT], a Division Bench of the High Court of Himachal Pradesh while considering a bunch of petitions framed the following question for determination - “Whether regular First Appeal or Civil Revision or petition under Article 227 of the Constitution of India would lie against the order passed by the Waqf Tribunal.” After examining the issue in detail, the Division Bench held that writ petition or appeal is not maintainable against the order of a Tribunal since sub-section (9) of Section 83 of the Waqf Act, 1995 provides an efficacious alternative remedy to the aggrieved party to invoke the revisional jurisdiction of the High Court.
This Court is of the considered opinion that a petition under Article 226/227 of the Constitution of India against the judgment or order passed by a Tribunal constituted under the Waqf Act, 1995 is not maintainable - the instant writ petition is dismissed as not maintainable.
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2018 (4) TMI 1981
Petition for Emergency parole - Challenged the rejection of the parole request based on the petitioner being classified as a hardcore criminal and not having completed five years of sentence -Judicial Review - seeking to release under the Haryana Good Conduct Prisoners (Temporary Release) Act, 1988 for the petitioner to care for his ailing father - Petitioner serving a ten-year sentence following a conviction u/s 18 of the Narcotic Drugs and Psychotropic Substances Act, 1985.
HELD THAT:- The petitioner does not fall under the category of hardcore prisoner and moreover, he is not a hardcore prisoner. As per the provisions, the release of a prisoner on parole can be declined in case his release on parole is likely to endanger the security of the State or the maintenance of public order. The recommendation made by the concerned authority for not releasing the petitioner on parole is merely that the petitioner is undergoing life imprisonment and is involved in many cases. No such eventuality has been mentioned neither in the reply nor in the arguments raised by learned State counsel.
Admittedly, the administrative decision is subject to judicial review in exercise of supervisory writ jurisdiction of this Court under Article 226 of the Constitution of India. Although this Court is not to act as an Appellate Court but the administrative action or even a non-statutory administrative action may relate to judicial review. The violation of constitutional provisions or any statutory provision would invalidate the administrative decision. However, every administrative decision must be reasonable.
The principle of reasonableness known as 'Wednesbury principle', which is having three elements i.e. the authority should take all relevant facts into consideration; it should exclude or irrelevant facts from consideration; and the decision should neither be perverse nor irrational. 'Perverse' means improper or contradictory but in the context of administrative decision, it symbolizes a decision not supported by any evidence and 'irrational' means an absurd or illogical decision.
Accordingly, the present petition is allowed and the petitioner is directed to be released on parole.
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2018 (4) TMI 1980
Refusal to implead the petitioners as defendants in Special Civil Suit - specific performance of an agreement to sell - Order I, Rule 10 (2) of the Code of Civil Procedure - HELD THAT:- In the present case the trial Court as noticed earlier had found some favour with the case set up, based on the final order passed in the inventory proceedings in which the applicant No. 1 is shown to be the heir in respect of the suit property. In my considered view the petitioners would be proper parties to the suit which would enable the court to effectually and completely to adjudicate upon and to decide the controversy in the suit namely whether the relief of specific performance should be granted and if granted in which form i.e. whether or not restricting it to a certain share and the like. This is not a case where, unlike the case of Kasturi [2005 (4) TMI 635 - SUPREME COURT] (where the impleadment was sought on the basis of an adverse title against the Vendor) would enlarge the scope of the suit. More over the impleadment can be allowed subject to appropriate conditions as set out in the case of Mumbai International Airport Private Ltd. [2010 (7) TMI 1159 - SUPREME COURT].
This is not a case where, prima facie, it can be said that the petitioners do not have a 'semblance of a title' as held in the case of Sumatibai [2007 (10) TMI 653 - SUPREME COURT] so as to refuse impleadment. Section 19 of the Specific Relief Act also cannot come in the way of such impleadment. This is because section 19 of the Act enumerates the persons against whom specific performance of a contract can be enforced, which would mean that section 19 set outs the party/parties who can be arrayed as necessary parry to the suit, inasmuch as, for enforcing such specific performance, the presence of the parties as enumerated in the said section would be necessary. As noticed earlier, no relief need be claimed against a proper party. Thus, if the considerations as set out in Order I, Rule 10(2) of the Code are satisfied, a party can be added as a proper party.
The impleadment needs to be granted - The application for impleadment filed by the petitioners is allowed.
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2018 (4) TMI 1979
Disallowance of warranty provision - assessee could not explain to scientific basis on which the warranty provision was paid - assessee explained that the assessee gives post sales warranty against the performance of its product and manufacturing defects therein and this can be observed in the terms of delivery and payment mentioned in the sample copies of the order confirmation document - HELD THAT:- This provision for warranty is estimated by the assessee on scientific basis and assessee has claimed net of provision utilized during the year as per reversal method of accounting and hence we find no infirmity in the claim of the assessee. Accordingly, we reverse the orders of the lower authorities and allow the claim of the assessee. This issue of assessee’s appeal is allowed.
Nature of gain - Gain arising on land building as a separate long term capital gain and short term capital gain - HELD THAT:- We find that the CIT(A) has rightly treated the sale consideration arising out of land as long term capital gain and sale consideration attributable to building as short term capital gain. Hence, we find no infirmity in the order of CIT(A) and hence the same is confirmed. The issue of Revenue’s appeal is dismissed.
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2018 (4) TMI 1978
Denial of cum tax benefit and imposition of simultaneous penalty under Section 76 as well as under Section 78 of the Finance Act, 1994 - Non-payment of service tax - entire amount of service tax with interest was paid to the Department before issuance of SCN - Security Services - HELD THAT:- It is not in dispute that at the relevant point of time, the appellant had charged a consolidated amount from the customers and while charging such amount, the appellant was not aware about the liability of service tax payable on the security services, which they discharged subsequently. Therefore, as observed in Advantage Media Consultant’s case [2008 (3) TMI 59 - CESTAT KOLKATA] even though for the period before 2006, the tax component is inbuilt into the value charged from the customers and ought to be considered as cum-tax price; the said benefit accordingly admissible to the appellant.
Simultaneous penalty under Section 76 and 78 of the Finance Act, 1994 - HELD THAT:- The issue is covered by the judgment of the Hon’ble Gujarat High Court in Raval Trading Co. case [2016 (2) TMI 172 - GUJARAT HIGH COURT]. Consequently, imposition of penalty under Section 76 of the Finance Act is liable to be set aside and accordingly, dropped. In the result, the impugned order is modified and cum tax benefit is hereby allowed penalty continued under Section 76 of the Finance Act is set aside. Further, the matter is remanded to the adjudicating authority to recalculate the amount of service tax payable after extending cum tax benefit to the appellant.
Appeal allowed by way of remand.
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2018 (4) TMI 1977
Disallowance u/s 14A r.w.Rule 8D - HELD THAT:- This issue is covered by the judgment of this Court in the case of ‘Commissioner of Income Tax-VI vs. Taikisha Engineering India Ltd.[2014 (12) TMI 482 - DELHI HIGH COURT] where the Court held that unless the AO rejects the explanation that induces the necessity to offer a specific amount as expenditure by some reasons, the mere rejection per se is unacceptable. The ITAT followed that decision; therefore, no question of law arises on this aspect.
MAT Computation - Second question urged by the Revenue does require consideration, which is as follows:-
“Did the ITAT fall into error in overlooking the Explanation (f) to Section 115J of the Act, in the circumstances of the case?”
Issue notice of the appeal to the assessee, returnable on 27th July, 2018.
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2018 (4) TMI 1976
Seizure of goods - goods not accompanied by the E-way bill - HELD THAT:- On perusal of relevant documents, namely, Invoice, Goods receipt, E-way Bills etc., which are enclosed as Annexures to the writ petition and found that the E-way bill under the UPGST Act has been downloaded by the petitioner, much before the detention and seizure of the goods and the vehicle, disclosing all the necessary informations.
There are no irregularity in the present transaction and, therefore, the seizure order as well as penalty notice dated 07.04.2018 issued under Sections 129(1) and 129 (3) of the Act as well as the consequential proceedings are hereby set aside.
Petition allowed.
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2018 (4) TMI 1975
Seizure of goods - goods not accompanied by the E-way bill - HELD THAT:- On perusal of relevant documents, namely, Invoice, Goods receipt, E-way Bills etc., which are enclosed as Annexures to the writ petition and found that the E-way bill under the UPGST Act has been downloaded by the petitioner, much before the detention and seizure of the goods and the vehicle, disclosing all the necessary informations.
There are no irregularity in the present transaction and, therefore, the seizure order as well as penalty notice dated 07.04.2018 issued under Sections 129(1) and 129 (3) of the Act as well as the consequential proceedings are hereby set aside.
Petition allowed.
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2018 (4) TMI 1974
Detention and seizure of goods - goods not accompanied by the E-way bill-01 - HELD THAT:- On perusal of relevant documents, namely, Invoice, Goods receipt, E-way Bills etc., which are enclosed as Annexures to the writ petition and found that the E-way bill under the UPGST Act has been downloaded by the petitioner, much before the detention and seizure of the goods and the vehicle, disclosing all the necessary informations.
There are no irregularity in the present transaction and, therefore, the seizure order as well as penalty notice dated 22.03.2018 issued under Sections 129(1) and 129 (3) of the Act as well as the consequential proceedings are hereby set aside.
Petition allowed.
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2018 (4) TMI 1973
Direction to official Respondents to consider the name of the first Respondent herein for appointment to the IPS by taking into account the service records for the period from 1.4.2003 to 31.3.2008 - appointment to the IPS by notionally treating such appointment with effect from the date of notification, i.e., 5.5.2009, and also by giving appropriate place of seniority to the first Respondent amongst the private Respondents - HELD THAT:- No doubt, the Selection Committee may be guided by the classification adopted by the State Government but, for good reasons, the Selection Committee may evolve its own classification which may be at variance with the grading given in the Annual Confidential Reports. As has been held by this Court in the case of UPSC v. K. Rajaiah and Ors. [2005 (5) TMI 676 - SUPREME COURT], the power to classify as "Outstanding", "Very Good", "Good" and "Unfit" is vested with the Selection Committee. That is a function incidental to the selection process. The classification given by the State authorities in the Annual Confidential Reports is not binding on the Selection Committee. Such classification is within the prerogative of the Selection Committee and no reasons need be recorded, though it is desirable that in a case of grading at variance with that of the State Government, reasons be recorded.
This Court has repeatedly observed and concluded that the recommendations of the Selection Committee cannot be challenged except on the ground of mala fides or serious violation of the statutory rules. The courts cannot sit as an appellate authority or an umpire to examine the recommendations of the Selection Committee like a Court of Appeal. This discretion has been given to the Selection Committee only, and the courts rarely sits as a Court of Appeal to examine the selection of a candidate; nor is it the business of the Court to examine each candidate and record its opinion. Since the Selection Committee constituted by the UPSC is manned by experts in the field, their assessment have to be trusted, unless it is actuated with malice or bristles with mala fides or arbitrariness.
The High Court was of the view that since the records submitted before the Selection Committee did not include the grading of the officers recorded by the State Government, the Selection Committee did not have an opportunity to take into account the grading recorded by the State Government while coming to its conclusion, the said observations cannot be agreed upon.
The records pertaining to the grading of the officers recorded by the State Government could have been secured by the High Court from the State Government. Instead of securing records from the State Government, the High Court has strangely observed that such records were not available before the Selection Committee. It is but natural for the Selection Committee to send back the records to the State Government after the selection process is ended and appointments are made.
The judgments of the CAT and the High Court of Judicature at Madras stand set aside - appeal allowed.
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2018 (4) TMI 1972
Disallowance u/s 14A - assessee has earned exempt income or not? - HELD THAT:- We find that the assessee has not earned any dividend income during the year. As the assessee has not earned income which is exempt from tax during the year, no disallowance can be made u/s 14A as held by the Hon’ble Jurisdictional High Court in the case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] Therefore, Ground No.1 is allowed.
Nature of expenses - expenditure on amortization of leasehold land - revenue or capital expenditure - HELD THAT:- Assessee issue is covered by the decision of assessee’s own case [2017 (8) TMI 77 - ITAT DELHI] wherein the issue has been set aside to the file of the AO for denovo adjudication as there is no material on record to show that assessee has made these payments as advance rent for future years to secure any reduction in rent payable for future years or for any other business consideration.
We are, therefore, unable to appreciate arguments advanced by Ld. Counsel that these advances paid are towards advance rent. Even from the terms of agreements, it is not clear as to whether advances paid has been adjusted against future rent or whether these are in the nature of security deposits which are refundable in nature on termination of agreements. Both parties before us have expressed their intention regarding issue being re-adjudicated by assessing officer de novo. Ground allowed for statistical purposes.
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2018 (4) TMI 1971
Revision u/s 263 - withdrawal of deduction u/s 80IC for the reason that AO failed to verify whether Form No.10CCB was available with him at the time of scrutiny and also AO failed to verify whether those are covered in the negative list as specified in Schedule XII of the Act - HELD THAT:- On a reading of the decision in Kewal Kishan Clothing P. Ltd. (2015 (4) TMI 1323 - ITAT MUMBAI) we find that the facts are almost identical. In that case also form 10 CCB was not filed and the AO allowed the claim made by the assessee for earlier nine years. While placing reliance on the decision in Zenith Processing Mills (1995 (9) TMI 37 - GUJARAT HIGH COURT], the Mumbai tribunal held that the Audit Report in prescribed form no.10CCB could be filed even if revision jurisdiction is exercised by the CIT u/s 263 of the Act.
Thus we hold that non-submission of the form 10 CCB or the non-verification of the eligibility of the product to claim deduction under section 80 IC of the Act, in view of the fact that such a deduction was allowed for 5 years earlier, do not constitute valid grounds to exercise jurisdiction under section 263. We therefore find it difficult to sustain the order passed u/s 263 by the Commissioner of income tax, Delhi. Decided in favour of assessee.
Deduction u/s 80IC - Manufacturing item or not? - manufacturing DGX and Pillar filler - assessee’s case is that the Pillar filler is in an irregular shape, specific to the requirement of the motor vehicle manufactured has assumed the character of an automobile component and it cannot be used for any other purpose - As per AO Application of DGX need very high level of thixotropic properties so that it can be pumped and applied as stable bead and, therefore, the assessee company is manufacturing item which is included in the negative list of Schedule XIII which disentitle the assessee to claim deduction u/s 80IC - HELD THAT:- AO made the report of CIPET the sole basis for his conclusion that the assessee has been manufacturing plastic and plastic product and failed to notice the elaborate process which the raw materials have undergone to become the finished product which have only one usage i.e. in automobile industry and none else.
It is not brought to our notice that these two products either pillar filler or the DGX are generic in their use as plastic or they could be put to use everywhere the plastic could be. The sole and single purpose of the finished goods in the automobile industry sets the raw material of plastic apart from the finished goods which are known as automobile parts in the commercial world. We do not find any perversity either in the approach or in the conclusions reached by the learned CIT(A) after appreciating the same material which the learned AO made basis for his conclusion. AO stopped at the chemical composition whereas learned CIT(A) took it a little further to its logical conclusion by identifying the products with their usage and their nomenclature in the world where they are made use of. The reasoning given by the learned CIT(A) is impeccable and we find ourselves in agreement with the same. Such findings of learned CIT(A) do not warrant any interference.
Nature of expenses - deduction of royalty paid by the assessee to Company in Germany - revenue treated such an expenditure is towards the acquisition of assets by way of intangible assets of the nature provided u/s 32(1)(ii) of the Act and accordingly allowed depreciation @ 25% and made addition on that account - HELD THAT:- Tribunal in own case allowed the royalty fee paid to Company in Germany u/s 37(1) of the Act as revenue expenditure on the ground that such payment was only for right to use the technical knowhow and no benefit of enduring nature accrued to the assessee.
CIT(A) further recorded that in respect of Asstt. Year 2006-07 to 2008-09, such a finding was returned by the first appellate authority only. As rightly observed by the learned CIT(A), the AO has not brought on record any change in the facts and circumstances that took place from the earlier years. In the absence of any compelling reasons pleaded by the revenue before us, we do not find any reason to take a different view from the one taken for the earlier years by the authorities below.
Difference of 10% gross profit rate - Basing on the comparative gross profit, learned AO opined that the assessee had disclosed more profit in 80IC unit than the other unit by 10% just to claim enhanced deduction u/s 80IC and the profit of the eligible unit need to be calculated and resultant disallowance on account of claim of deduction u/s 80IC need to be calculated - CIT(A) found that since the full details and figures were not available to examine the price at which the inputs are obtained or the output is transferred to the warehouse so to draw an appropriate conclusion, the AO may make further enquiry to arrive at a suitable conclusion - HELD THAT:- CIT(A) observed that basically if in market condition the goods could have been sold at the same prices at which these are transferred by the non-eligible unit to the eligible unit or vice versa, then there is no case of any addition u/s 80 IA(8) following the arm’s-length principle. He considered the submissions advanced on behalf of the assessee that only to ensure timely delivery as per the requirement, the finished goods are first transferred to the warehouse of Gurgaon, Pune and Chennai units with warehouse facility only in order to provide proximity to the location of the customer to ensure immediate transfer as per requirement.
CIT(A) further considered the submission on behalf of the assessee that as per Excise, the transfer is to be made to the warehouse at the final sale price to the customers that is market price and therefore question of adjustment under section 80 IA (8) does not arise. Lastly he recorded that he broadly agreed with the rationale of this argument. However, inasmuch as the facts and figures were not available to the full extent, he allowed the AO to make further enquiry in this regard.
Having observed so, CIT(A) found that to draw an appropriate conclusion, the full details and figures are necessary to examine the price at which the inputs are obtained are the output is transferred to the warehouse and for such purpose learned CIT(A) permitted the AO to make further enquiry in this regard and reach a suitable conclusion.
No necessity to interfere with this observation of the Ld. CIT(A) and suffice it to say that the Ld. AO may base the conclusion on the facts and figures obtained during the enquiry but not on any surmises and conjectures or extraneous inferences. We therefore approve the observations of the learned CIT(A) to the Ld. AO to cause enquiry after obtaining the full details and figures to examine the price at which the inputs are obtained or the output is transferred to the warehouse and reach a factual conclusion firmly based on the facts and figures.Cross objection filed by the assessee are allowed accordingly.
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