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Showing 21 to 40 of 1831 Records
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2017 (5) TMI 1817
Credit of TDS - TDS deducted by Bank on Interest income held by the assessee in fiduciary capacity - assessee was appointed as a nodal agency by the Government of Rajasthan for Police Housing Scheme and funds were received by the assessee from HUDCO on behalf of State Government for disbursement to various agencies for construction of houses for the Police department - HELD THAT:- Undisputedly, the interest income has not been brought to tax by the Revenue accepting the assessee’s contention that the receipt of funds and interest thereon is in the fudiciary capacity on behalf of the State of Rajasthan. The State of Rajasthan being not a taxable entity, there should not be any TDS at first place.
For reasons best known to the assessee and the bank, the TDS has been deducted. Given that interest income is not taxable either in the hands of the assessee or the state of Rajasthan, the TDS has to be refunded. Since the assessee is acting as the nodal agency and all funds have been routed through it, the refund of TDS has to be routed through it to the State of Rajasthan. Accordingly, we direct the Revenue to refund the TDS to the assessee with the undertaking to return the said amount to the State of Rajasthan.
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2017 (5) TMI 1816
Method of valuation - Rule 8 read with Rule 9 of the Central Excise (Valuation) Rules, 2000 or not - clearing goods to their alleged sister unit as well as the independent buyers - HELD THAT:- Admittedly, the said issue came up before the Larger Bench of this Tribunal in the case of ISPAT INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAIGAD [2007 (2) TMI 5 - CESTAT, MUMBAI], wherein it is held that when the assessee is clearing goods to sister unit as well as to independent buyers at the same price, in that circumstance, Rule 8/Rule 9 of the valuation rules are not applicable.
Further, it is found that in the case of M/S HH INTERIOR AND AUTO COMPONENTS LTD., SHRI. PARVESH SONI, SHRI. RAJEEV KUMAR RAI VERSUS CCE, DELHI-IV, FARIDABAD [2017 (1) TMI 1229 - CESTAT CHANDIGARH], this issue came up before this Tribunal and this Tribunal held that in such case Rule 8/Rule 9 of the Central Excise (Valuation) Rules, 2000, are not applicable and no charge of under valuation is sustainable.
The charge of under valuation is not sustainable against the appellants as they cleared goods to sister unit as well as to independent buyers at the same price - There are no merit in the impugned order and no force of the argument advanced by the Ld. AR.
Appeal allowed.
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2017 (5) TMI 1815
TP Adjustment - comparable selection - Turnover filter - HELD THAT:- As the turnover filter or less than 1 / 10th of the assessee company's turnover or more than 10 times Of the turnover of the assessee company is a good filter and by applying the same, we direct the AO/TPO to exclude two companies i.e. Infosys BPO Ltd and M/S L & T Infotech Ltd from the list of final comparables by applying higher turnover filter because, the turnover of these two companies is more than 10 times of the turnover of Software Development Segment of the assessee company. Similarly, in respect Of ITES Segment, we direct the to exclude two companies i.e. Infosys BOPO Ltd and TCS E-Serve Ltd. by applying turnover filter because, the turnover of these two companies is more than 10 times of the turnover of ITES segment Of the assessee company.
Request of the assessee for exclusion of Persistent Systems Ltd. in Software Development Segment and universal Print Systems Ltd. (Seg.) and BNR Udyog Ltd. (Beg.) in ITES Segment. we direct the AO/TPO to examine these companies Afresh on account of functional dissimilarity being claimed by the Assessee because regarding these 4 comparable companies, the Order of DRP is very cryptic and therefore, this issue should be decided afresh in respect of both these segments for these 4 comparable company by way of a speaking and reasoned order.
Request for inclusion of two comparable companies in the final list of comparables for Software Development Segment i.e. Thinksoft Global Services Ltd, and Evoke technologies Pvt. Ltd. and the request for inclusion of two companies in the final list of comparables for ITES segment i.e. Jindal Intellicom Ltd. and Microland Ltd. also, we direct the AO/TPO to decide this issue afresh because we find that the order the DRP regarding these four comparables is also very crypti
Two comparables companies in each of these two segments are excluded by applying turnover filter and the issue regarding exclusion and inclusion of various other comparables of these two segments is restored to AO/TPO for fresh decision as discussed above. The AO/TPO should decide this issue Afresh by way of speaking and reasoned order and after affording adequate opportunity of being heard to the assessee.
Appeal of the assessee stands allowed for statistical purposes.
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2017 (5) TMI 1814
TP Adjustment - method of computation of working capital adjustment in case of M/s ICRA Management Consulting Services Pvt. Ltd., being one of comparables finalized by Ld. TPO - HELD THAT:- TPO that while computing working capital adjustment, margin in the case of M/s ICRA Management Consulting Services Pvt. Ltd., has attributed receipts, in the column of average receivables, which disturbed entire calculation. From the financial of M/s ICRA Management Consulting Services Pvt. Ltd., it is observed that there are sufficient trade receivables during the year under consideration. It has been submitted by Ld. Counsel that all these details were before Ld. TPO during assessment proceedings and again during the rectification proceedings under section 154 of the Act.
Under such circumstances, and in the interest of natural justice, we are of the considered opinion that these figures needs to be considered while deriving working capital adjustment of M/s. ICRA Management Consulting Services Pvt. Ltd., Accordingly, we set aside this issue to file of Ld. TPO for re-computing working capital adjustment in the light of financial report of M/s. ICRA Management Consulting Services Pvt. Ltd. - In the result this ground raised by assessee stands allowed for statistical purposes.
TPO computed net operating margins of two comparable companies, by excluding provision of doubtful debts from operating expenses - To the facts of the present case also the revenue has not disputed the provision of doubtful debts being excessive in the hands of the assessee for the year under consideration. It is also observed that the DRP had directed TPO to have consistent treatment in terms of items includable/excludable in non-operative profit, with assessee as well as with comparables which evidently has not been followed by Ld. TPO. Respectfully following the view taken by this Tribunal in the case of Techbooks International Pvt. Ltd. [2015 (7) TMI 473 - ITAT DELHI] we direct Ld. TPO to treat provision of doubtful debts in the case of BVG India Ltd and Cameo Corporate Services Ltd., as operating as well. Accordingly, this ground raised by assessee stands allowed
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2017 (5) TMI 1813
Classification of goods - Heena Powder - Heena Dye Powder - Heena Cone (paste) - classified under Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985 or not - applicability of N/N. 11/2017-CE (NT) dated 24.04.2017 - period from 01.08.2008 to 01.11.2011 - HELD THAT:- It appears that the matter is squarely covered by Notification No. 11/2017-CE (NT) dated 24.04.2017 whereunder the subject goods which are in the category of Heena Powder and Heena Dye falling under Chapter 33 of the First Schedule to the Central Excise Tariff Act, 1985 have been exempted from the duty of Central Excise for the period from January 1st 2007 to March 1st, 2013. The disputed period in the present case is from 01.08.2008 to 01.11.2011.
As the disputed period is covered by the Notification No. 11/2017- CE(NT), the impugned order is set aside - appeal allowed
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2017 (5) TMI 1812
Disallowance u/s 14A r.w.r. 8D - expenditure incurred on earning exempt income - HELD THAT:- AO while computing the disallowance has taken into consideration both investments related to exempt income as well as taxable income. Under these facts in our considered view, AO was not justified in making the disallowance by invoking provision section 14A.
The mandate of the section 14A(2) is that the AO shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income but in the given case the AO has not restricted itself to the exempt income also considered the taxable income, while computing the disallowance. The AO failed to give a clear finding in respect of the submissions of the assessee that the investment was made out of interest free fund.
CIT(A) demonstrated from the accounts of the assessee that the assessee was having sufficient on interest free fund for making such investment. Therefore, we do not see any reason to interfere into the order of the Ld. CIT(A), same is hereby affirm. The ground of the Revenue’s appeal is dismissed.
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2017 (5) TMI 1811
Estimation of income - bogus purchases - CIT(A) estimated @ 12.5% - HELD THAT:- The assessee has, admittedly, made bogus purchases from the stated parties but has made payment by account payee cheques and obtained tax invoices. Assessee has maintained inventory of stock and also consumed the material purchase in executing contract work. It means that the assessee has obtained bogus bills from the above stated hawala entry operators who provides only bills and not actual goods.
Actually, the assessee admitted that he has made purchases from grey market from where he has avoided payment of VAT and also at lower rate than the market price. Once, the stock tally is there and no defect is pointed out only option left with the Revenue authorities is to apply profit rate and CIT(A) has rightly applied profit rate at the rate of 12.5% of the bogus purchases. Decided against revenue.
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2017 (5) TMI 1810
Disallowance u/s 14A r.w.r. 8D - no disallowance has been made by the assessee despite earning exempt income - HELD THAT:- Hon'ble Delhi High Court in case of Joint Investment Pvt. Ltd. [2015 (3) TMI 155 - DELHI HIGH COURT] has held that disallowance u/s 14A cannot swallow the entire amount as it has happened in this case as per assessment order. Therefore, we are of the opinion that as the exempt income itself is Rs. 1700/- only the disallowance cannot exceed that sum. Hence, no further disallowance can be made. Therefore, the appeal of the revenue is deserves to be dismissed.
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2017 (5) TMI 1809
Cancellation of License of the Gas Agency - indulging in malpractices to enforce the provisions of the Essential Commodities Act.
It is the submission of appellant that, in view of the offence, for which the applicants have been charged for has been committed while acting or purporting to act in discharge of their official duty sanction of the Government was a must.
HELD THAT:- Section 197 of the Code of Criminal Procedure provides that when any person or a public servant is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction of the Government.
In the case of SHAMBHOO NATH MISRA VERSUS STATE OF U.P. AND ORS. [1997 (3) TMI 645 - SUPREME COURT], the Supreme Court referred to the judgment of B. Saha vs. M.S. Kochar [1979 (7) TMI 242 - SUPREME COURT]. In the aforesaid case, a complaint was filed under Sections 409, 420, 465, 468, 477-A against a cashier who after fabricating the signature of the complainant therein withdrew money. The High Court recorded a finding that the act was done in discharge of duties as there was a reasonable connection between the act and discharge of official duties.
In the case of Parkash Singh Badal [2006 (12) TMI 548 - SUPREME COURT], the Supreme Court has referred to a judgment in the case of PK PRADHAN VERSUS THE STATE OF SIKKIM REPRESENTED BY C.B.I. [2001 (7) TMI 1298 - SUPREME COURT]. In the case of P.K. Pradhan, the Supreme Court while dealing with the legislative mandate of Section 197 that the offence alleged to have been committed must have something to do, or must be related in some manner, with discharge of official duty, even if it is excess if the needs and requirements establish then it can be said to be done in discharge of official duty and after reviewing the case law it was held that The Court had observed that before arriving at a conclusion whether the provisions of Section 197 of the Code will apply, the court must conclude that there is a reasonable connection between the act complained of and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty.
Recently also the Supreme Court considered the case law on Section 197 of the Code of Criminal Procedure in the case of Punjab State Warehousing Corporation versus Bhushan Chander and Another reported in [2016 (6) TMI 1138 - SUPREME COURT]. In the said case, the Supreme Court was considering the case of an employee of a Public Sector Undertaking. The High Court had held that the offences under Sections 467, 468 and 471 were also with one under Section 409 of the IPC and therefore the offences were so intermingled with the discharge of official duty, sanction was necessary.
In light of the decisions of the Supreme Court it needs to be decided as to whether the offence alleged can be said to be one directly connected with the duty of the petitioners or has a reasonable nexus with the duties that they performed.
There is a clear finding in the report that there has been tampering with the record. The learned Magistrate based on such a report has come to the conclusion that the protective umbrella of Section 197 of the Criminal Procedure Code is in the facts of the case not available to the petitioners as the offence cannot be said to have been committed in discharge of or in purported discharge of official duty nor can it be said to have been reasonably connected with the duties or under colour of office. The act or offences for which they are charged for are under Sections 465, 467, 471 read with Section 120(B) of the Indian Penal Code. The act of fabrication or tampering may be a part of the same transaction, however the objectionable action is performed under the cloak of office, whereas the intention was apparent.
From the ratio of the judgments, what is culled out is that even while discharging official duties, if a public servant enters into a criminal conspiracy or indulges in criminal misconduct, such misdemeanor on his part cannot be treated as a part of his official duties and hence provisions of section 197 are not attracted. Looking to the case on hand, when the offence alleged to have been committed is tampering of records such conduct cannot but only amount to a misdemeanor not connected with or while in purported exercise of official duties. Here only the official capacity enabled the accused to carry out inspection and record statements. Further, under the cloak of such official duty or when such capacity has been used to fabricate records, it cannot be said that the act is under colour of duty, in discharge of official duty or has a nexus with the duty. The contention of learned Senior Counsel Mr. Raju that since the offence is committed while in discharge of official duty or in purported exercise thereof is therefore rejected.
Having said that no protection under Section 197 is available to the petitioners, the Order of the Magistrate dated 11/2/2010 issuing process cannot be faulted - Having held that Section 197 of the Criminal Procedure Code would not apply to the case, consequentially even the contention of the petitioners that the action of filing the FIR and investigation violates the provisions of Section 15-A of the Essential Commodities Act also deserves to be rejected.
Application dismissed.
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2017 (5) TMI 1808
Classification of goods - sale of Multi Functional Devices (MFD) and Facsimile Machine (FM) - taxable at the rate of 4% or 12.5%? - levy of penalty - HELD THAT:- The functioning of “FM” becomes operative only when there is a telephone line/connection and unless there is a telephone line/connection, “FM” as it stands, will not be viable.
The “FM” would certainly can be said to be covered under entry 7 of Schedule-IV reproduced hereinbefore. It is a case where “FM” as noticed hereinbefore becomes operative only when there is a telephone line/connection and unless and until there is a telephone line/connection, “FM” does not operate. Therefore, it has been held to be falling in the entry 7 of Schedule-IV of the RVAT Act, and I concur with the reasoning of this court. Merely because “FM” specifically has not been included in entry 7, is no reason to infer that it will fall in Schedule-V. Once the claim of the assessee is that it fall under entry 7 Schedule-IV, then the revenue has to bring material on record, which has not been brought on record.
The finding reached by all the three authorities appear to be unjust and accordingly the finding reached by all the three authorities is reversed and it is held that “FM” will fall in entry 7, and the claim of assessee is just and proper and allowed.
Penalty - HELD THAT:- Once the claim of assessee has been accepted that it was liable to a rate of 4% only, therefore, question of penalty does not arise. Even otherwise, it is case where the matter was relating to classification of entries - The Apex Court in the case of Shree Krishna Electricals (supra) and this court in COMMERCIAL TAXES OFFICER, ANTI-EVASION, ZONE-II, JAIPUR VERSUS BAMBINO AGRO INDUSTRIES LTD. [2015 (9) TMI 1504 - RAJASTHAN HIGH COURT] and in some other cases, has also taken a consistent stand that in a case of classification, question of penalty does not arise. Admittedly, though survey has been conducted, but the Revenue has not been able to pin point or find any defect in the sales version, except whether rate of 4% is leviable or 12.5%, thus, the petitions of Revenue in this regard also stands dismissed. This court in the case of CTO v. M/s. Bambino Agro Industries Ltd., has held penalty not leviable.
The petitions preferred by the assessee stand allowed, while the petitions preferred by the Revenue stand dismissed, with no order as to costs.
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2017 (5) TMI 1807
Long term capital gain - addition interpreting the provision u/s 50C - transfer of capital asset in which year - difference between the market value as per Stamp Valuation Authority within the meaning of section 50C and the sale consideration for sale of properties - HELD THAT:- Assessee has received 25% of sale consideration in the assessment year 2011-12, the year in which the agreement to sell was made and due to the reasons beyond the control of the assessee viz. permission to sell from the Collector could not be obtained in that year itself and the same could be obtained in the assessment year 2012-13.
Taking respectful note of the decision of Sanjeev Lal [2014 (7) TMI 99 - SUPREME COURT] wherein held that when the agreement to sell in respect of any capital asset is made then obviously some rights had been transferred in favour of the vendee/purchaser and the remaining rights which the appellant-seller had in respect of the capital asset, in question, had been extinguished as after execution of the sale agreement it is not validly permissible to sell the same property to someone else as per the provisions of Transfer of Property Act.
Amendment inserted by way of Finance Act, 2016 w.e.f. 1.4.2017 to the said provision for full valuation of consideration in certain cases u/s 50C - The mandate of the legislature is that where the date of agreement fixing the amount of consideration and the date of registration for the transfer of capital asset are not the same, the value adopted or assessable by the stamp valuation authority on the date of agreement may be taken for the purpose of computing the full value of consideration for such transfer. This amendment is applicable w.e.f. 1.4.2017 as per the amendment itself.
In our considered opinion, this amendment is not a substantial amendment but the same is clarificatory, therefore, if this amendment is taken into consideration in the light of the dicta laid down in the case of Sanjeev Lal [2014 (7) TMI 99 - SUPREME COURT] then it has to be held that the date of agreement of sale is relevant for the purpose of computing full value of consideration of such transfer and hence the conclusion drawn by the CIT (Appeals) is quite reasonable and meaningful.
CIT (Appeals) was quite correct in adopting the same and following the order of ITAT, Delhi Bench in the case of ITO vs. Modipan Limited[2015 (1) TMI 609 - ITAT DELHI]
We are inclined to accept the contention of assessee which was accepted by the CIT (Appeals) that the circle rate prevailing on the date of registration of agreement to sell and not circle rate as on the date of sale deed, should be adopted as sale consideration for computation of income of the assessee from LTGS u/s 50C of the Act. Decided against revenue.
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2017 (5) TMI 1806
Rejection of books of account u/s 145(3) - estimation of net profit - AO applied the GP rate of 4.1 per cent being average GP rate of assessee's three office's GP to the total freight receipts (excluding own trucks) - HELD THAT:- AO has pointed out some defects mainly that the assessee has not submitted the name and addressed of the owner of the trucks and their PAN which in fact could have been submitted and are part of the record. Assessee has submitted the truck number and their registration number as well. All the details of the expenses have been submitted is a matter of record. Books of account are maintained in which no defect as such has been pointed out except as above.
The details of the driver salary, Bhatta expenses though were on the self made vouchers, but all the details were submitted before both the parties below and the amount paid to the recipient was also submitted. In the circumstances and facts of the case, the AO was not justified in invoking the provision of s. 145(3) of the Act and accordingly the order of the learned CIT(A) is reversed.
Estimation of income - Once books of account are not found to be rejected, no estimation of the net profit can be made. However, during the impugned year the assessee has declared a net profit @ 0.58 per cent as compared to the preceding year @ 0.34 per cent and @ 0.29 per cent in the year before the preceding year. It is the assessee had declared the better results and it is a settled law that even the books of account are rejected no addition can be made on such account - no additions can be made to the income of the assessee and additions so sustained is directed to be deleted. Accordingly, grounds of the assessee on the issues are allowed.
Treatment of the income u/s 44AE of the Act of the trucks owned by assessee - Assessee has maintained the separate books of account and therefore the provisions of s. 44AE cannot be made applicable, therefore, the addition so made is directed to be deleted. Hence, all the grounds of the assessee are allowed.
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2017 (5) TMI 1805
TP Adjustment - comparable selection - HELD THAT:- M/s TCS E-serve Limited had wrongly been included by the TPO as a comparable, and thus direct the AO/TPO to exclude the same from the final list of comparables.
We direct the AO/TPO to exclude the aforesaid companies, viz TCS Eserve Limited(supra) and M/s Wipro Technology Services Ltd.(supra) from the final list of comparables. We find that the exclusion of the aforesaid two companies from the final list of comparables, as submitted by the Ld. A.R on the basis of a chart filed before us, marked as ‘Permutation of Margin of Comparable Companies’, therein brings the ALP of the assessee from 25.28% to 18.68%, and as such within the range of +/-5% adjustment, as a result whereof no TP adjustment would be called for in the hands of the assessee. The Grounds of appeal No. 1 to 4 are thus allowed in terms of our aforesaid observations.
Deduction u/s 10A - profit of the assessee as modified by the disallowance made on account of foreign exchange loss - HELD THAT:- DRP had directed that the Foreign Exchange Gain in the hands of the assessee for the year under consideration would form part of the profits eligible for computation of deduction u/s 10A. We are persuaded to be in agreement with the observations of the DRP, whom we find going by the principle laid down by the Hon’ble jurisdictional High Court Gem Plus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT] had directed the A.O to include the Foreign Exchange Gain as part of the profit eligible for computation of deduction u/s 10A - We thus finding no infirmity in the aforesaid observations of the DRP in respect of the issue under consideration, therefore uphold the same. The Grounds of appeal raised by the revenue before us are thus dismissed.
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2017 (5) TMI 1804
Non adjudication of legal issue by CIT-A - Initiating the assessment proceedings without serving the notice u/s 143(2) - HELD THAT:- Legal issue was raised by the assessee before the ld. CIT(A) but the same was not adjudicated by observing that the assessee raised this issue first time before the ld. CIT(A) during the appellate proceedings. It is well settled that a legal issue can be raised at any stage.
We, therefore, deem it appropriate to set aside this issue back to the file of the ld. CIT(A) and direct him to adjudicate this issue in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2017 (5) TMI 1803
Revision u/s 263 by CIT - allowability of interest u/s 36(1) (iii) and 14A - HELD THAT:- The issue of allowability of interest u/s 36(1) (iii) and 14A was exhaustively examined in the course of regular assessment proceedings including issue of capitalization and revenue expenditure and the AO after examining in detailed all the aspects disallowed part of interest expenditure u/s 14A and in computing capital gains and allowed balance expenditure u/s 36(1)(iii) of the Act. It is an undisputed fact that the assessee has already challenged the interest disallowance by filing an appeal which is still pending as on date.
From the records, it is also reflected that the AO has examined all the aspects including source and utilization of funds for land transaction and in this respect, the AO had issued summons u/s 133(6) of I.T. Act to Americorp which was duly responded with all details. Therefore, in the light of above facts and circumstances, it cannot be concluded by Ld. Pr.CIT that no inquiry was done or enquiry done was inadequate. However as per the facts of the present case, it is a case of detailed inquiry by partly disallowing and partly allowing the same. It is a settled law that the power conferred u/s 263 of the I.T. Act, upon the Commissioner cannot be invoked for reactivating stale issues.
Therefore, after considering the above facts and circumstances of the present case, we allow these grounds of appeal filed by the assessee as the order of Pr. CIT u/s 263 is not sustainable. Decided in favour of assessee.
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2017 (5) TMI 1802
Cancellation of the registration of the selling dealer - restoration of C-Forms - HELD THAT:- The matter is covered in favour of the Petitioner by the decision of this Court in Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax [2016 (6) TMI 304 - DELHI HIGH COURT]. Learned counsel for the Respondents states that the Value Added Tax Officer has, being conscious of the above judgment, already recommended restoration of the C Forms. He assures the Court that the necessary orders will be passed in that regard not later than four weeks from today.
Taking the assurance of learned counsel for the Respondents on record, the writ petition is disposed of.
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2017 (5) TMI 1801
Reopening of assessment u/s 147 - Assessment barred by limitation - HELD THAT:- Before proceeding with the matter it will not be out of place to mention that the second assessment order for the year 94-95 was over on 29th February, 2000.
Taking into consideration that the second reassessment order was between the same parties, the transactions were examined and reopened for the third time after a lapse of almost one year on 28th March, 2001. This is nothing but against the fact that has been observed by Delhi High Court in WEL INTERTRADE PRIVATE LIMITED (FORMERLY WEL INTERTRADE LIMITED) & ANOTHER [2008 (8) TMI 18 - HIGH COURT DELHI] - It is nothing but harassment and in the year 95-96 which has been considered by the CIT(A) is complete answer to the issue.
Decided in favour of the assessee against the department.
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2017 (5) TMI 1800
Validity of assessment - Jurisdiction of AO issuing notice - assessment was completed without AO’ being ACIT issuing notice to the Assessee under Section 143(2) - HELD THAT:- AO having jurisdiction i.e. Respondent No.1 ought to have issue a notice under Section 143(2)(a) of the Act within the prescribed time limit i.e., 30th September, 2014 in order to proceed with the assessment. Considering that a similar mistake of an AO not having jurisdiction over the Assessee issuing a notice to it had been committed earlier, there was no occasion for the Revenue to continue to repeat the same mistake and expect that it will be condoned.
The impugned assessment order is unsustainable in law since it has been passed without the AO having jurisdiction over the Assessee issuing notice to it under Section 143(2)(a) within the prescribed time limit i.e. on or before 30th September, 2014. The impugned assessment order dated 31st March, 2016 is hereby set aside.
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2017 (5) TMI 1799
Penalty u/s 271(1)(c) - Defective notice u/s 274 - Default of Concealment of particulars of income and Furnishing of inaccurate particulars of income - treatment of business loss as speculation loss - HELD THAT:- Applicability of Explanation to Section 73 of the Income Tax Act in the case of assessee in view of the judgments passed in the case of CIT vs. HSBC Securities and Capital Markets India Pvt. Ltd.[2012 (6) TMI 715 - BOMBAY HIGH COURT] is a debatable question and even otherwise treatment of business loss as speculation loss by the AO can neither be treated as the particular of income being concealed nor can it be called as furnishing inaccurate particulars of income. Assessee during the assessment or appellate proceedings had not furnished wrong or incorrect particulars of income. Merely based on change of head, the AO cannot adduce the concealment or furnishing inaccurate particulars of income by the assessee.
Perusal of the notice issued u/s 274 r.w.s. 271 reveals that the AO has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee, i.e. whether it is concealment of particulars of income or furnishing of inaccurate particulars of income that the penalty under section 271(1)(c) of the Act is sought to be levied. In this regard, we find that in the case of M/s Manjunatah Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] relied on by the assessee, has held that such a notice, as has also been issued in the case on hand, is invalid and the consequential penalty proceedings are also not valid.
Thus we hold that the notice issued under section 274 r.w.s. 271 for initiating penalty proceedings under section 271(1)(c) of the Act in the case on hand is invalid and consequently, the penalty proceedings are also invalid. Therefore the penalty levied by AO and upheld by the Ld. CIT(A) is hereby dropped. Appeal filed by the assessee stands allowed.
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2017 (5) TMI 1798
Validity of assessment order - Legality and validity of the notice - Power of revision by Commissioner conferred under Section 49 (3) of the Chhattisgarh Value Added Tax Act, 2005 - when the proceeding is deemed to have been initiated under Section 49 (3) of the Act, 2005? - HELD THAT:- The word “initiate” or “initiation” has not been defined in the Act, 2005. Since it has not been defined in the Act, it would be appropriate to refer the dictionary meaning of the word “initiate”. In Webster's Third New International Dictionary, the word “initiate” has been defined as to begin or set going; make a beginning of; perform or facilitate the first actions, steps or stages of. Likewise, in Shorter Oxford English Dictionary, the word “initiate” has been defined as to begin, commence, enter upon; to introduce, set going, originate - The word “initiate” has been used in Section 20 of the Contempt of Courts Act, 1971. Section 20 of the Contempt of Courts Act, 1971 provides that no court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed.
The aforesaid provision came up for consideration before the Supreme Court in the matter of Pallav Sheth v. Custodian and Others [2001 (8) TMI 1239 - SUPREME COURT]. and Their Lordships while considering the scope and meaning of the word “initiate” under Section 20 of the Contempt of Courts Act, 1971 have held that in the case of suo motu proceedings, contempt proceeding must be initiated by the court by issuing a notice and in other cases initiation can only be by a party filing an application. Further, the Supreme Court clearly held that under Section 20 of the Contempt of Courts Act, 1971, action can be initiated, either by filing an application or by the court issuing notice suo motu, within a period of one year from the date on which the contempt is alleged to have been committed.
Thus, in the considered opinion of the Court what is required and condition precedent for initiation of proceeding by invoking Section 49 (3) of the Chhattisgarh Value Added Tax, 2005, would be initiation of proceeding under Section 49 (3) of the Act, 2005 and initiation can be done only when the revisional authority applies its mind to the facts of the case of his own motion or on the information received. Once there is application of mind by the revisional authority for exercise of suo motu proceeding on the basis of the information received and he decides to issue notice as contemplated in Rule 61 of the Chhattisgarh Valued Added Tax Rules, 2006, then the exercise of initiation is complete and initiation cannot be said to be done only when the notice is received under Rule 61 by the assessee. Service of notice to the assessee is a further step after initiation of suo motu proceeding by the revisional authority to complete and conclude the exercise of suo motu revisional jurisdiction.
Whether the revisional authority has initiated proceeding under sub-section (3) of Section 49 of the Act, 2005 well within the period prescribed? - HELD THAT:- The penalty proceeding has been closed against the petitioner by order dated 29-7-2013 (Annexure P-2) and three calendar years would expire on 31-12-2016, and in the instant case, the Commissioner, Commercial Tax in exercise of suo motu jurisdiction applied its mind to the facts of the case, it appears, on or before 26-12-2016 and issued notices to the petitioner on 26- 12-2016. Therefore, the proceeding is deemed to have been initiated on or before 26-12-2016 before completion of three calendar years from the date of imposing penalty i.e. 29-7-2013 - the contention of the petitioner that the notice dated 26-12-2016 issued by the revisional authority is without jurisdiction and without authority of law sans merit.
The writ petition is dismissed.
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