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2010 (6) TMI 885
Issues involved: The appeal challenges the levy of penalty u/s 271(1)(c) amounting to Rs. 1,40,000 by the Ld. Commissioner of Income Tax (Appeals) for the assessment year 2006-07.
Details of the Judgment:
Issue 1: Sale of Car
The Assessing Officer observed that the assessee, a Private Limited Company engaged in manufacturing cum trading, claimed a loss on the sale of a car in the profit and loss account but did not add it back in the computation of income. The Assessing Officer made an addition of Rs. 15,194 on this account and initiated penalty proceedings. The assessee contended that the mistakes were bonafide, but the Assessing Officer levied the penalty under section 271(1)(c).
Issue 2: Set off of Brought Forward Loss
The Assessing Officer disallowed the set off of brought forward business loss against income from house property, citing that it is not permissible u/s 72 of the Act. The penalty was levied as the Assessing Officer concluded that the assessee deliberately ignored the explicit provisions of the law. The Ld. Commissioner of Income Tax (Appeals) upheld the penalty, referring to the decision in the case of C.I.T. vs. Escorts Finance Ltd.
Judgment:
The ITAT Delhi found that the assessee had disclosed the loss on the sale of the car in the profit and loss account but omitted to exclude it in the computation of income. The tribunal held that this omission did not amount to concealment or furnishing inaccurate particulars, as the loss was disclosed. Regarding the adjustment of brought forward loss, the tribunal noted that the disclosure of the adjustment was apparent, and the mistake was not deliberate concealment. The tribunal referred to relevant case laws and emphasized that penalty should not be imposed for technical breaches or bonafide beliefs. Citing various legal precedents, including the decision in the case of Reliance Petro Products Ltd., the tribunal set aside the penalty of Rs. 1,40,000.
Outcome:
The ITAT Delhi allowed the appeal filed by the assessee and deleted the levy of the penalty.
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2010 (6) TMI 884
Issues involved: Reassessment under section 147 of the Income Tax Act, 1961 for the assessment year 1999-2000.
Summary:
The appeal was filed against the order of the CIT (A)-II, Hyderabad dated 25-10-2005. The grounds raised by the assessee included challenges to the reduction of claims under sections 80HHC and 80IA, failure to apply CBDT Circular No.621, and not following a decision of the ITAT, B-Bench, Bangalore. The assessee, a public limited company in the pharmaceutical business, had its original assessment completed under section 143(3) of the Act. Disputes arose regarding deductions under sections 80HHC and 80IA, leading to a reassessment under section 147. The CIT (A)-II, Hyderabad partially allowed the appeal, confirming the restriction on deductions under section 80HHC in line with section 80IA(9) of the Act. The assessee appealed further.
The counsel for the assessee argued that the reassessment was a mere change of opinion without fresh material, and the deductions claimed were within limits. The Departmental Representative contended that the reassessment was valid as the issue of reducing deductions under section 80IA was not addressed in the original assessment. The Tribunal found merit in the Departmental Representative's arguments, upholding the reassessment under section 147. Referring to the decision in Hindustan Mint and Agro Products Pvt. Limited, the Tribunal emphasized preventing repetitive deductions on the same profit under different provisions. The matter was directed back to the assessing officer for verification in line with the Special Bench ruling.
In conclusion, the appeal of the assessee was treated as allowed for statistical purposes. The order was pronounced on 30-6-2010.
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2010 (6) TMI 883
Issues:
The judgment involves the validity of an order passed u/s 153A of the Income-tax Act, 1961.
Summary:
The appeal was filed by the Revenue against the CIT(A)'s order dated 22.09.2008, which declared the order passed u/s 153A as void. The case stemmed from a search at the premises of an individual, where documents belonging to a company were found. Subsequently, notices were issued u/s 153A and assessments were framed. The CIT(A) deemed the order u/s 153A invalid as the documents were impounded during a survey, not a search. The ITAT concurred with the CIT(A) that the AO lacked jurisdiction u/s 153 to assess the taxpayer, leading to the dismissal of the Revenue's appeal.
In the detailed analysis, the CIT(A) highlighted that the incriminating material was impounded during a survey under section 133A, not a search. This distinction was crucial as the AO's jurisdiction u/s 153A was based on the material found during the search, which was deemed invalid. The ITAT upheld the CIT(A)'s finding, emphasizing that the assessment made by the AO lacked legal basis due to the incorrect assumption of jurisdiction u/s 153. Consequently, the appeal by the Revenue was dismissed, affirming the CIT(A)'s decision.
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2010 (6) TMI 882
Issues involved: Appeal against order of ld. CIT(A)-XXXIII, Kolkata for Assessment Year 2005-06 disputing additions/disallowances made by AO.
Grounds of appeal:
1. AO and ld. CCIT's reason for initiating security proceedings not provided.
2. Ld. CIT(A) unjustified in holding order passed within stipulated time.
3. Ld. CIT(A) opinion on jurisdiction beyond scope.
4. Deduction of Rs. 60,000/- & Rs. 30,000/- wrongly disallowed u/s 40A(3).
5. Disallowance of labour payment u/s 40(a)(ia) justified, illegal, arbitrary.
6. Disallowance of Rs. 1,60,000/- to Guffar Mullah for purchase of Bricks illegal, excessive.
7. Payment of Rs. 1,75,000/- to Chowdhury and sons excessive, illegal.
8. Disallowance of Rs. 60,000/- to Sujit Sengupta unjustified, illegal, excessive.
9. Disallowance of Rs. 87,000/- to Banku Pal illegal, unjustified, excessive.
10. Disallowance of Rs. 23,100/- of donation illegal, unjustified, excessive.
11. Disallowance of Rs. 30,000/- from brokerage illegal, unjustified, excessive.
Dispute over disallowance to Guffar Mollah:
- Payment of Rs. 1,60,000/- made in cash for purchase of bricks.
- Disallowed 20% u/s 40A(3) as cash payment exceeded Rs. 20,000 on each occasion.
- Assessee claimed payment covered by Rule 6DD(g) of IT Rules.
- Tribunal directed AO to reconsider under Rule 6DD(g) for cottage industry purchases.
Dispute over donation disallowance:
- Payment of Rs. 23,100/- to puja committees and clubs.
- Claimed as essential business expenditure.
- Tribunal allowed deduction based on Calcutta High Court precedent.
Dispute over brokerage disallowance:
- Payment of Rs. 30,000/- as brokerage without TDS deduction.
- Disallowed under section 40(a)(ia) for non-compliance with TDS provisions.
- Tribunal upheld disallowance based on non-deduction of TDS.
Conclusion:
- Appeal partially allowed for statistical purposes.
- Tribunal directed reassessment on Rule 6DD(g) for cash payments.
- Donation expenditure allowed as essential business expense.
- Brokerage disallowance upheld due to non-compliance with TDS provisions.
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2010 (6) TMI 881
Issues Involved:1. Allowability of the loss incurred on future trading. Summary:Issue 1: Allowability of the loss incurred on future tradingThe assessee, engaged in share trading and broking, claimed a loss of Rs. 23,42,830 from Stock Index Futures transactions. The Assessing Officer (AO) questioned the treatment of this loss as notional and disallowed it, referencing the ICAI guidance note and relevant case laws. The AO concluded that the derivatives are marked to market daily, and the margin payments are not expenses but refundable advances. The AO disallowed the loss, citing it as unascertained liability or provision for loss, referencing CIT v Indian Overseas Bank (151 ITR 446) and CIT v Kamani Metal Products P Ltd (208 ITR 1017). On appeal, the CIT(A) upheld the AO's decision, stating that the mark-to-market loss is notional, and real loss or profit occurs on the settlement date. The CIT(A) disallowed the loss of Rs. 23,42,830 and enhanced the income by Rs. 13,33,180, being the loss incurred on 31.3.2005 and settled on the next day. The assessee appealed to the ITAT, arguing that futures contracts are settled daily, and the daily variations are actual payments, not notional. The ITAT agreed, stating that the losses or profits accrue daily and are settled, thus cannot be ignored for computing total income. The ITAT distinguished the AO's and CIT(A)'s reliance on case laws, noting that the losses in this case are actual and settled daily, not anticipatory or estimated. The ITAT held that the loss claimed by the assessee on a mark-to-market basis on the stock index future of Rs. 23,42,830 (incurred up to 31.3.2005) and Rs. 13,33,180 (incurred on 31.3.2005) is an accrued loss and allowable. In the case of Subhkam Securities Pvt. Ltd, the issue was identical, with the assessee claiming a loss of Rs. 14,40,720 from mark-to-market valuations in derivative trading. The AO disallowed it, and the CIT(A) confirmed the disallowance. The ITAT, following its reasoning in the previous case, held that the loss is an accrued loss and allowable. In conclusion, the appeals filed by the assessee in both cases were allowed. Order pronounced on this 25th day of June, 2010.
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2010 (6) TMI 880
Issues Involved:
1. Rejection of books of account u/s 145 of the Income Tax Act, 1961.
2. Deletion of addition made on account of suppression of production.
3. Deletion of addition made on account of disallowance of interest expenses.
4. Deletion of addition made on account of disallowance of interest on cash balance.
Summary:
Issue 1: Rejection of books of account u/s 145 of the Income Tax Act, 1961
The Learned Assessing Officer (A.O.) rejected the books of account of the assessee, a Private Limited Company engaged in manufacturing M.S and CTD Bars, citing large variations in electricity consumption vis-à-vis production. The A.O. invoked section 145(3) and estimated suppressed production based on electricity consumption, leading to an addition of Rs. 92,89,426/- to the income of the assessee. The Learned Commissioner of Income Tax (Appeals) [CIT(A)] held that the rejection was unjustified as the assessee maintained proper books audited under the Companies Act and u/s 44AB of the Income Tax Act, with no defects found by the auditors or excise authorities.
Issue 2: Deletion of addition made on account of suppression of production
The A.O. calculated suppressed production by comparing electricity consumption and production figures, estimating a suppression of 414.910 MT valued at Rs. 92,89,426/-. The CIT(A) deleted this addition, noting that the A.O. failed to provide material evidence of unaccounted manufacturing and sales or unaccounted purchases of raw materials. The CIT(A) also referenced the ITAT Delhi decision in Pondy Metal & Rolling Mills (P) Ltd., which held that high electricity consumption alone cannot justify rejecting accounts or estimating suppressed production.
Issue 3: Deletion of addition made on account of disallowance of interest expenses
The A.O. disallowed Rs. 55,000/- of interest expenses, alleging that an interest-free loan of Rs. 5,00,000/- was given to a party. The CIT(A) deleted this disallowance, accepting the assessee's argument that it had sufficient interest-free funds (share capital and free reserves of Rs. 1,02,16,696/- and unsecured loans of Rs. 38,86,415/-) to cover the loan, and thus, no interest-bearing funds were used.
Issue 4: Deletion of addition made on account of disallowance of interest on cash balance
The A.O. disallowed Rs. 33,000/- of interest on the grounds that the assessee maintained a cash balance of Rs. 3,00,000/- while withdrawing money from the bank for business purposes. The CIT(A) deleted this addition, stating that maintaining cash in hand is a business prerogative and not indicative of non-business use. The CIT(A) found no evidence that the cash was used for non-business purposes.
Conclusion:
The appeal of the revenue was dismissed, with the Tribunal confirming the CIT(A)'s order on all grounds. The Tribunal found no error in the CIT(A)'s findings and held that the A.O. failed to provide sufficient evidence to support the additions made.
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2010 (6) TMI 879
Issues Involved:
1. Disallowance of interest u/s 36(1)(iii) on interest-free loan to sister concern.
2. Commercial expediency of the interest-free loan.
3. Nexus between borrowed funds and business purpose.
Summary:
Disallowance of Interest u/s 36(1)(iii):
The assessee appealed against the CIT(A)'s order confirming the disallowance of Rs. 14,82,695/- u/s 36(1)(iii) of the I.T. Act. The Assessing Officer (AO) noted that the assessee had advanced Rs. 1,23,65,787/- interest-free to its sister concern, M/s Luxmi Engg. Works, out of borrowed funds. The AO disallowed the interest, citing the Hon'ble Punjab & Haryana High Court's decision in CIT Vs. Abhishek Industries [286 ITR 1 (P&H)], as the loan was not for business purposes.
Commercial Expediency:
The assessee argued that the interest-free loan was advanced to prevent M/s Luxmi Engg. Works from being declared a Non-Performing Asset (NPA) by the bank, which would affect the assessee's reputation and goodwill. The assessee relied on the Supreme Court's decision in S.A. Builders Ltd Vs. CIT [288 ITR 1 (SC)], which allows interest deduction if the loan is for commercial expediency. However, the AO and CIT(A) rejected this plea, stating that the loan was not for the assessee's business purposes.
Nexus Between Borrowed Funds and Business Purpose:
The Tribunal examined whether the interest-free loan was for the assessee's business purposes. It was found that both the assessee and its sister concern were independent entities with different products, and the loan was not for the assessee's business. The Tribunal upheld the disallowance, stating that the assessee failed to establish commercial expediency and the nexus between the borrowed funds and business purpose, as required by the Supreme Court in S.A. Builders Ltd (Supra).
Conclusion:
The Tribunal upheld the CIT(A)'s order, confirming the disallowance of Rs. 14,82,695/- u/s 36(1)(iii) of the Act. The appeal of the assessee was dismissed.
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2010 (6) TMI 878
Issues Involved:
1. Legality of the show cause notice issued u/s 8(1) of the FERA Act.
2. Validity of penalty imposition based on allegations not mentioned in the show cause notice.
3. Applicability of section 6(4) versus sections 8(1) and 8(2) of the FERA Act for non-issuance of encashment certificates.
Summary:
1. Legality of the show cause notice issued u/s 8(1) of the FERA Act:
The appellant, an Assistant Manager at the State Bank of India (SBI) Extension Counter at Anna International Airport, was charged under sections 8(1) and 8(2) of the Foreign Exchange Regulation Act (FERA) for possessing foreign currencies without proper accounting. The appellant argued that as an employee of an authorized dealer (SBI), he was empowered to deal in foreign exchange, making the show cause notice under sections 8(1) and 8(2) inapplicable. However, the court found that the appellant's actions were independent and not connected with the authorized dealer's activities, thus validating the notice under sections 8(1) and 8(2).
2. Validity of penalty imposition based on allegations not mentioned in the show cause notice:
The appellant contended that the penalty was imposed based on the non-procurement of encashment certificates, which was not mentioned in the show cause notice. The court noted that the respondent's reference to the absence of encashment certificates was to discredit the appellant's explanation for tallying accounts, not the basis for the penalty. The penalty was imposed for contravening sections 8(1) and 8(2), and the court found no merit in the appellant's argument that the penalty was based on a different reasoning.
3. Applicability of section 6(4) versus sections 8(1) and 8(2) of the FERA Act for non-issuance of encashment certificates:
The appellant argued that any violation related to non-issuance of encashment certificates should fall under section 6(4) of the FERA Act, not sections 8(1) and 8(2). The court held that the respondent's reference to the non-issuance of encashment certificates was to disbelieve the appellant's explanation for the possession of foreign and Indian currencies. The penalty was not imposed for failing to issue encashment certificates but for unauthorized dealing in foreign exchange, thus sections 8(1) and 8(2) were applicable.
Conclusion:
The court dismissed the appeal, upholding the penalties imposed by the respondent for violations of sections 8(1) and 8(2) of the FERA Act. The appellant's arguments regarding the legality of the show cause notice and the basis for the penalty were rejected.
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2010 (6) TMI 877
Issues Involved:1. Whether the project undertaken by the assessee was completed during the relevant accounting year. 2. Whether the profits from the project should be assessed in the said year. Summary:Issue 1: Completion of the ProjectThe Revenue contended that the CIT(A) erred in holding that the project undertaken by the assessee was not completed during the relevant accounting year. The Assessing Officer (AO) argued that the project was substantially completed during the year, as the total sale consideration was received and some agreements with buyers were registered. The AO also referenced the revised Accounting Standard-7, which recognizes the percentage of completion method as the only method for computing profits from construction business. However, the assessee provided evidence, including an Occupation Certificate and a certificate from the architect, indicating that the project was not completed as of 31.03.2005. The CIT(A) accepted the assessee's submissions, noting that the project was completed in the financial year ended 31.03.2007, and thus, the profits should be recognized in that year. Issue 2: Assessment of ProfitsThe AO estimated the profits at 8% of the total advances received by the assessee, amounting to Rs. 62,67,860/-, and assessed this as the income for the year under appeal. The CIT(A) disagreed, stating that the assessee consistently followed the project completion method since the assessment year 1994-95, which was accepted by the Department. The CIT(A) also noted that the revised Accounting Standard-7 was not applicable to the assessee, as it was developing the project on its own, not as a contractor. The CIT(A) concluded that the project was not completed in the relevant accounting year, and thus, the profits should not be assessed in that year. Conclusion:The Tribunal upheld the CIT(A)'s decision, emphasizing the rule of consistency and the additional facts supporting the assessee's claim. The Tribunal confirmed that the project was not completed as of 31.03.2005 and that the revised Accounting Standard-7 did not apply to the assessee. Consequently, the appeal filed by the Revenue was dismissed. Order:Order pronounced in the Open Court on 30th June 2010.
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2010 (6) TMI 876
Issues involved: The judgment involves the following issues: 1. Allowance of payments to clubs, 2. Allowance of bad debts and liquidated damages, 3. Exclusion of hire charges u/s 80HHC, and 4. Exclusion of discount receipt, balances, and provisions written back u/s 80HHC.
Allowance of payments to clubs: The Revenue challenged the allowance of payments to clubs amounting to Rs. 82,035, contending that such expenses did not promote the assessee's business. The Tribunal cited a precedent where membership fees to a club were considered an allowable expenditure for better contacts and publicity. Relying on this, the Tribunal dismissed the Revenue's ground.
Allowance of bad debts and liquidated damages: The Revenue disputed the allowance of Rs. 4,64,18,200 on account of bad debts and liquidated damages, arguing that the assessee failed to provide evidence of actual write-off in the books of account. The assessee invoked an amendment to Sec. 36(1)(vii) stating that only the write-off was required, not proof of irrecoverability. The CIT(A) accepted the submission, noting that similar claims were allowed in previous years. The Tribunal upheld the CIT(A)'s decision, citing a Supreme Court ruling that post-1989, only write-off is necessary, not proof of irrecoverability.
Exclusion of hire charges u/s 80HHC: The Revenue raised a ground regarding the exclusion of 90% of net hire charges while calculating deduction u/s 80HHC. The Tribunal found this ground irrelevant for the year and dismissed it as infructuous.
Exclusion of discount receipt, balances, and provisions written back u/s 80HHC: Regarding the exclusion of these items while computing deduction u/s 80HHC, the CIT(A) directed the AO not to exclude balances written back, considering them as revenue expenses. The Tribunal upheld this decision. For discount receipt and provisions written back, the Tribunal remitted the issues to the AO for further adjudication based on earlier decisions.
In conclusion, the Tribunal allowed the appeal filed by the Revenue for statistical purposes, addressing various grounds related to expenses, deductions, and exclusions under the Income Tax Act.
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2010 (6) TMI 875
Issues involved: Appeal against separate orders of CIT (A) for assessment years 2002-03 and 2004-05, involving sales commission paid to foreign agents without TDS, treatment of processing charges under S.80HHC, treatment of other incomes under S.80IA and 80IB, computation of deduction under S.80HHC after reducing deductions under S.80IA and 80IB, exclusion of sales-tax from turnover for S.80HHC, and treatment of non-compete fees as taxable capital gain.
Sales Commission without TDS:
- The CIT(A) deleted the addition of sales commission paid to foreign agents without TDS, citing Circular 786 dated 17-2-2000 exempting such payments from TDS under S.195.
- Rulings in Transmission Corporation of A.P. Limited and Cheminor Drugs cases were deemed inapplicable as the commission was directly paid to non-resident agents for services abroad.
- The order of the CIT(A) upholding the exemption was affirmed.
Treatment of Processing Charges under S.80HHC:
- Both parties agreed that the issue is decided in favor of the department by the Bombay High Court in Ajanta Pharma Ltd. case.
- The ground raised by the revenue regarding processing charges in computing deduction under S.80HHC was allowed.
Treatment of Other Incomes under S.80IA and 80IB:
- The Tribunal followed the decision in Godavari Drugs case, allowing treatment of foreign exchange gains and miscellaneous income while computing deductions under S.80IA and 80IB.
- The orders of the CIT(A) on this issue were confirmed.
Computation of Deduction under S.80HHC:
- The issue of computing deduction under S.80HHC after reducing deductions under S.80IA and 80IB was discussed based on a previous case.
- The matter was restored to the assessing officer to ensure compliance with the Special Bench ruling on preventing repetitive deductions.
Exclusion of Sales-Tax for S.80HHC Deduction:
- The issue of excluding sales-tax from turnover for computing deduction under S.80HHC was decided in favor of the assessee based on the CIT vs. Laxmi Machine Works case.
- The ground raised by the revenue was dismissed.
Treatment of Non-Compete Fees:
- The treatment of non-compete fees as taxable capital gain was ruled in favor of the assessee based on a previous Tribunal decision and the Calcutta High Court case.
- The insertion of sub-section (va) to section 28 of the Income-tax Act was deemed inapplicable for the assessment year in question.
- The ground raised by the revenue on this issue was dismissed.
Overall Result:
- Both appeals filed by the revenue were treated as partly allowed for statistical purposes based on the above findings.
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2010 (6) TMI 874
The Appellate Tribunal ITAT Mumbai dismissed the appeal filed by the assessee for the assessment year 2005-06 as the assessee did not appear for the hearing and showed no interest in prosecuting the appeal. The appeal was dismissed in limine on June 11, 2010.
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2010 (6) TMI 873
Issues:
The judgment involves the right of a co-defendant to cross-examine the deposing defendant in case of conflict of interest between them.
Summary:
The petitions were filed against the orders of the Court of the XXVIII Additional City Civil Judge, Bangalore, which denied permission for cross-examination of co-defendants in O.S. No. 15030/04. The defendant No. 4 sought the opportunity to cross-examine defendant No. 1 due to a conflict of interest. The Trial Court's order allowed cross-examination of the Court Commissioner by defendant Nos. 1 to 3, indicating a potential conflict. The defendant Nos. 1 to 3 argued that the plaintiff colluded with defendant No. 4, necessitating cross-examination. The main issue was whether a co-defendant has the right to cross-examine the deposing defendant in case of a conflict of interest.
In the judgment, it was established that in cases of conflict of interest between co-defendants, each party must have the opportunity to cross-examine the other. The Trial Court's prior observation hinted at a possible conflict between the defendant Nos. 1 to 3 and defendant No. 4. The judgment referenced legal precedents supporting the right of cross-examination for co-defendants when their interests clash. The Court highlighted the importance of allowing cross-examination in such situations to ensure fairness and justice.
The Court referred to judgments from Rajasthan High Court and Punjab and Haryana High Court, emphasizing the right of cross-examination for co-defendants in adversarial positions. The Trial Court's disallowance of cross-examination was deemed incorrect. Consequently, the impugned orders were quashed, permitting defendant Nos. 1 to 3 to cross-examine defendant No. 4 and vice versa. However, this permission was granted with the condition that cross-examination should only address the clash of interests between the parties. The judgment reiterated the need for fair proceedings and adherence to legal principles in allowing cross-examination among co-defendants.
Ultimately, both petitions were allowed in line with the clarified direction for cross-examination, and no costs were imposed.
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2010 (6) TMI 872
Issues involved: Appeal against deletion of addition of unexplained gift of RBI Resurgent Bond u/s 56(2)(v) for assessment year 2004-05.
Summary:
The Revenue appealed against the decision of the CIT(A) to delete the addition of Rs. 65,14,276 made by the Assessing Officer regarding unexplained gifts of RBI Resurgent Bonds. The AO based the addition on detailed enquiries and judicial decisions, claiming the gifts were not genuine and lacked natural love and affection. However, the CIT(A) deleted the addition after considering documentary evidence and relying on the decision of the Hon'ble Allahabad High Court in a similar case. The High Court's decision emphasized the legitimacy of gifts of Resurgent India Bonds and the promotion of gifts by NRIs to non-relatives. The Tribunal upheld the CIT(A)'s decision, noting the genuineness of the gifts and the immunity from taxation for the donee. The Tribunal found no merit in the Revenue's grounds and dismissed the appeal.
In conclusion, the Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 65,14,276 related to unexplained gifts of RBI Resurgent Bonds, based on the genuineness of the gifts and the legal provisions supporting such transactions.
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2010 (6) TMI 871
Maintainability of appeal - pre-deposit - Modification of Stay Order - Valuation - Held that:- This very same argument had been raised during the hearing of the stay petition and has been considered in para 2 of the stay order. The applicants are now seeking to reargue the application which is not permissible in law - modification of stay order declined - appeal dismissed for non-compliance with the statutory requirement of Section 35F of the Central Excise Act, 1944.
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2010 (6) TMI 870
Issues involved:
The appeal filed by the assessee against the order of CIT(A) for the assessment year 2001-02 under sections 147/143(3) of the IT Act, focusing on the validity of reopening under section 147.
Validity of Reopening under Section 147:
The assessment was reopened after four years from the end of the relevant assessment year, questioning the validity of the reopening under section 147. The appellant contended that all material facts necessary for assessment were fully and truly disclosed during the original assessment. The AO did not allege any failure on the part of the assessee to disclose material facts in the reasons recorded for reopening or the notice issued. The Tribunal referred to legal precedents emphasizing that reopening after four years without failure to disclose all material facts is impermissible. The Tribunal concluded that the reopening lacked legal basis due to the absence of any failure to disclose material facts by the assessee, thereby allowing the appeal.
Legal Precedents and Observations:
The Tribunal cited judgments from various High Courts highlighting that reopening assessments beyond four years without the assessee's failure to disclose all material facts is not valid. The principles enunciated by the Hon'ble Supreme Court emphasized the duty of the assessee to disclose primary facts, with the jurisdiction to reopen assessments under section 147 requiring a logical link between the material before the officer and the belief of income escapement due to the assessee's failure to disclose necessary facts. The Tribunal also referenced a case where the High Court held that failure to prove non-disclosure of material facts renders a notice under section 148 invalid.
Conclusion:
Considering the disclosure of share application money in the balance sheet and the timely response to queries by the AO, the Tribunal found no failure on the part of the assessee to disclose material facts. Upholding the legal position that reopening assessments after four years without failure to disclose all material facts is impermissible, the Tribunal reversed the lower authorities' decisions and allowed the appeal in favor of the assessee.
Judgment Outcome:
The Tribunal allowed the appeal of the assessee, emphasizing the legal requirement of disclosing all material facts for the validity of reopening assessments under section 147, ultimately ruling in favor of the assessee.
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2010 (6) TMI 869
The Bombay High Court dismissed an appeal against the Customs, Excise & Service Tax Appellate Tribunal's order, stating that there was no suppression of fact by the assessee and that the assessee acted in good faith based on the law and correspondence with the department. The court found the Tribunal's decision to be based on material available on record and upheld it.
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2010 (6) TMI 868
Issues Involved:
1. Rectification of the register of members.
2. Compliance with SEBI guidelines.
3. Issuance of duplicate share certificates.
4. Allegations of fraudulent transfer of shares.
5. Limitation period for filing the petition.
Issue-wise Detailed Analysis:
1. Rectification of the Register of Members:
The petitioner filed for rectification of the register of members of the respondent company under Section 111A(3) of the Companies Act, 1956, seeking re-entry of his name as a member/shareholder. The petitioner argued that the shares were transferred to R-3 without his consent and in violation of SEBI guidelines. The respondents contended that they acted in compliance with the law and SEBI guidelines, transferring shares based on duly executed transfer documents submitted by R-3. The judgment held that the transfer was done in haste and without providing the petitioner a copy of the documents submitted by R-3, thus directing the company to rectify the register by re-entering the petitioner's name.
2. Compliance with SEBI Guidelines:
The petitioner argued that the respondents violated SEBI guidelines, specifically 5.2.2, 5.2.3, and 5.3, which mandate procedures for handling lost share certificates. The respondents claimed compliance with SEBI guidelines and the Listing Agreement. The judgment found that the respondents did not comply with the SEBI guidelines, particularly in not issuing an advertisement for the lost shares and not confiscating the share certificates lodged by R-3. The court emphasized that SEBI guidelines issued under Section 11B of the SEBI Act are binding.
3. Issuance of Duplicate Share Certificates:
The petitioner completed the formalities for issuing duplicate share certificates, including filing an NCR, executing an indemnity bond, and submitting a demand draft. Despite this, the respondents did not issue duplicate certificates and instead transferred the shares to R-3. The judgment noted that the petitioner's request for duplicate shares was ignored, and the transfer was executed without the required contract note, thus directing the issuance of duplicate shares or their equivalent from the open market.
4. Allegations of Fraudulent Transfer of Shares:
The petitioner alleged that the transfer deed presented by R-3 was forged and that he never sold the shares. R-3 claimed the shares were sold to him in 1987, with the transaction witnessed by two individuals. The judgment found the petitioner's contention that the transfer was done in a hush manner credible, noting the absence of a contract note and the petitioner's repeated but ignored requests for time to submit documents. The court directed rectification of the register due to the suspicious nature of the transfer.
5. Limitation Period for Filing the Petition:
The respondents argued that the petition was barred by limitation, as it was filed beyond the two-month period stipulated under Section 111A(3). The judgment held that the limitation period is a mixed question of law and fact, and the petition could not be dismissed at the preliminary stage. The court noted that the petitioner was unaware of the transfer until 14.05.2008, thus the petition was not barred by limitation.
Conclusion:
The court directed the respondent company to rectify the register of members by re-entering the petitioner's name for the disputed shares and to issue duplicate shares or their equivalent from the open market. The petition was disposed of with no order as to cost.
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2010 (6) TMI 867
Public Service Commission - advertisement inviting applications for 35 posts - stipulation that vacancies may be increased or decreased - reservation in favour of SC/ST/OBC and horizontal reservation in favour of handicapped, and women etc - belonging to Uttaranchal - Facts of the case, The HC accepted the first submission of respondent No.1 after examining the record of selection and came to the conclusion that last selected woman candidate who was given benefit of horizontal reservation for Uttaranchal women had secured marks higher than the last selected candidate in general category. Thus, the said candidate ought to have been appointed against the general category vacancy and respondent No.1 ought to have been offered the appointment giving her the benefit of horizontal reservation for Uttaranchal women. Hence, these appeals.
HELD THAT:- Following the decision in case of the Rajesh Kumar Daria Vs. RPS & Ors.[2007 (7) TMI 713 - SUPREME COURT] held that Only if there is any shortfall, the requisite number of Scheduled Caste women shall have to be taken by deleting the corresponding number of candidates from the bottom of the list relating to Scheduled Castes. To this extent, horizontal (special) reservation differs from vertical (social) reservation. Thus women selected on merit within the vertical reservation quota will be counted against the horizontal reservation for women. In view of this, it is evident that the judgment and order of the High Court is not in consonance with law laid down by this Court in Rajesh Kumar Daria. The judgment and order impugned herein is liable to be set aside and all consequential orders become unenforceable and inconsequential.
Thus, appeals succeed and are allowed. Judgment and order of the High Court passed in Writ Petition is hereby set aside. No costs.
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2010 (6) TMI 866
Issues Involved:
1. Issuance of process u/s 498A IPC against petitioners.
2. Compliance with amended provisions of Section 202 CrPC.
3. Limitation period for taking cognizance of the offence.
Summary:
1. Issuance of Process u/s 498A IPC Against Petitioners:
The petitioners challenged the order dated 14.8.2008 by J.M.F.C. Kamptee in Criminal Complaint Case No. 660 of 2007, which issued process u/s 498A IPC against them. The complainant/respondent No. 2 had initially lodged an FIR against her husband and his family members. The police investigation led to a chargesheet only against the husband (petitioner No. 1), not the other family members (petitioners 2 to 4). Subsequently, the complainant filed a private complaint leading to the issuance of process against all petitioners, which the petitioners argued was mala fide and an abuse of process.
2. Compliance with Amended Provisions of Section 202 CrPC:
The petitioners contended that the trial court failed to comply with the amended provisions of Section 202 CrPC, which mandates an enquiry before issuing process when the accused resides outside the court's territorial jurisdiction. The court noted that the Magistrate issued the process mechanically without conducting the required enquiry, thus violating Section 202 CrPC. The court emphasized that the enquiry should be "good, satisfactory and sufficient" and not merely based on the complaint and verification statement.
3. Limitation Period for Taking Cognizance of the Offence:
The petitioners argued that the complaint was barred by limitation as the last incident of alleged ill-treatment occurred on 19.7.2004, and the complaint was filed on 15.12.2007, beyond the three-year limitation period u/s 498A IPC. The court agreed, noting that the complainant did not seek condonation of delay and that her actions appeared to be an abuse of process. The court rejected the argument that the delay was due to the police's failure to file charges against all petitioners and held that the complaint was clearly barred by limitation.
Conclusion:
The court quashed the order issuing process against the petitioners, holding that the Magistrate erred in law by not complying with the amended provisions of Section 202 CrPC and that the complaint was barred by limitation. The Criminal Writ Petition No. 431 of 2009 was allowed, and the rule was made absolute in terms of prayer Clause (1).
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