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2016 (8) TMI 1595
Doctrine of Estoppel - Who is real landlord? - eviction suit - whether the previous statement made by the petitioner that Mrs. Aysha Moosa Haji was not his landlady, but, in fact, Mr. Mohammad Shafi was his landlord, can be read against the petitioner in the present case where he has denied Mr. Mohammad Shafi as being his landlord or not? - HELD THAT:- Estoppel is a collective name given to a group of legal doctrines whereby a person is prevented from making assertions that are contradictory to their prior position on certain matters before the court; thereby, the person is said to be "estopped".
Judicial estoppel is said to be parcel of doctrine of equitable estoppel. Judicial estoppel binds a party to his/her previous judicial declaration, such as allegations contained in a lawsuit, complaint, written statement, or testimony given under oath. The object of judicial estoppel is to preserve the integrity of the courts, and to uphold the sanctity of the oath. Under judicial estoppel a party to a litigation cannot be permitted to take contradictory stand and to change its position from the previous litigation to the subsequent one. For, a litigant cannot be permitted to take a court out for a ride by his shifting stand.
Admittedly, in the present case the petitioner has changed his position from the previous suit vis-à-vis the issue as to who is the landlord? In the previous suit, the petitioner claimed that Mr. Mohammad Shafi is his landlord; in the subsequent suit, filed by Mr. Mohammad Shafi, the petitioner claims that Mr. Shafi is not his landlord. Obviously, the petitioner cannot be permitted to blow hot and cold simultaneously. He cannot change his position under the doctrine of Judicial Estoppel. Litigants, like the petitioner, cannot be allowed to pull the wool over the eyes of the court.
Considering the definition of "landlord", the petitioner cannot claim that Mr. Shafi is not his landlord. Since the rent has been paid to Mr. Shafi, he is deemed to be the landlord under the Act.
This court does not find any illegality or perversity in the impugned order - Petition dismissed.
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2016 (8) TMI 1594
Addition u/s 69C - peak cash credit in respect of alleged bogus purchases - HELD THAT:- AO issued notice u/s 133(6) of the Act to the said suppliers which were not replied and when the assessee was confronted with the said fact, it was submitted that they had shifted their business locations.
AO received information from the Sales Tax Department qua the above suppliers being suspicious dealers. We find merit in the arguments of the ld. AR that sources of purchases of material were not in dispute. The assessee has made purchases from these suppliers and duly made payments to the said suppliers and therefore the payments were duly reflected in the books of accounts of the assessee and therefore the provisions of section 69C of the Act cannot be invoked
A plain perusal of the provisions of section 69C reveals that where the assessee has incurred any expenditure and the sources whereof could not be explained before the AO or AO is not satisfied with the explanation of the assessee only then provisions of section 69C could be invoked and not otherwise. In our view the order of CIT(A) upholding the application of provision of section 69C of the Act was wrong as the source of payment was not doubted or disputed. Decided in favour of assessee.
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2016 (8) TMI 1593
Provision of warranty - deduction u/s 37 denied - assessee had failed to maintain systematic data in support of its claim for provision of warranty - Assessee’s contention that such warranty was necessary and was part of contract of sale - CIT(A) deleted the addition - HELD THAT:- As per accounting system regularly followed by assessee, such provision was made @ 2% of sales and would written back if in excess at the expiry of warranty period.
CIT(A) observed that assessee’s case is squarely covered by the decision of M/s. Rotork control India Pvt. Ltd. [2009 (5) TMI 16 - SUPREME COURT] wherein observed that the valve actuators manufactured by the assessee, were sophisticated goods and statistical data indicated that every year some of these were found defective; that valve actuators being a sophisticated items, no customer was prepared to buy a valve actuator without a warranty.
Therefore the warranty became an integral part of the sale price; in words the warranty was attached to the sale price of the product. In this case the warranty provision had to be recognized because the assessee had a present obligation as a result of past event resulting in outflow of resources and reliable estimate could be made of the amount of obligation.
As assessee had incurred a liability during the assessment year which was entitled to deduction u/s 37 - Facts being similar, so, following same reasoning, CIT(A) was justified in granting relief to assessee. This reasoned factual finding of CIT(A) needs no interference from our side - Decided against revenue.
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2016 (8) TMI 1592
Addition on account of capital gain on the basis of valuation of asset by DVO - FMV determination - resorting to section 50C - Commissioner (Appeals), who observed that if the stamp duty valuation is higher than the amount declared by the assessee the same has to be considered as a fair market value and if the valuation arrived at by the DVO was less than the value adopted by the stamp valuation authority, the fair market value is to be taken as the value by the DVO - as decided by HC [2016 (4) TMI 480 - GUJARAT HIGH COURT] the condition precedent for resorting to the provisions of sub-section (1) of section 50C is that the land or building should have been transferred for a lesser consideration than that adopted or assessed or assessable by the stamp valuation authority and in the present case, undisputedly the valuation made by the assessee exceeds the value adopted by the stamp valuation authority - condition precedent for invoking sub-section (1) of section 50C of the Act is, therefore, clearly not satisfied. Consequently, there was no question of referring the valuation of the plots in question to the Valuation Officer.
HELD THAT:- We do not see any reason to interfere with the impugned order. The special leave petition is dismissed.
Pending applications, if any, stand disposed of.
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2016 (8) TMI 1591
Violation of principles of natural justice - reduction in the strength of admission - core stand of the Petitioner is that the Fifth Respondent/University on 21.06.2016, addressed a letter to the Petitioner, to rectify the deficiencies recorded in the Standing Committee Report, dated 16.06.2016 and suggestion to reduce admission strength to 60 - HELD THAT:- In the instant case on hand, the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, in reference No. E1/W.P. No. 14238/2016, dated 02.07.2016, addressed to the Petitioner had observed that the Standing Committee in the report in respect of reduction of students strength from 120 to 60 and time limit of six months for improving the infrastructure facility and staff strength was already sent on 21.06.2016 and the same was forwarded. On 23.06.2016 and further informed that the Petitioner's response in this regard was not received so far. Apart from that, the Petitioner/Trust was requested to send its response for the Standing Committee report immediately. However, the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, by proceedings bearing reference No. E1/AC.131/II.4/2016, dated 03.07.2016, had communicated the decision in respect of the reduction of students strength at 60 from the academic year 2016-2017 (in respect of B.Sc. (Agri) Degree Programme), considering the infrastructural facilities of the Petitioner/College, run by Sri Krishna Educational Trust, Bangalore.
This Court pertinently points out that in between the letter dated 02.07.2016 of the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore and proceedings dated 03.07.2016 of the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, there was a gap of only one day. In the letter dated 02.07.2016 of the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, the Petitioner/College, was requested to send its response for the Standing Committee Report immediately and no time limit was prescribed expressly in the said communication of the Fifth Respondent for sending the response of the Petitioner/College. Since on the next day viz., 03.07.2016, the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, had communicated the decision in regard to the reduction of students strength at 60 in respect of B.Sc. (Agri) degree programme from the academic year 2016-2017 in respect of the Petitioner's College, this Court is of the considered view that the Petitioner/College was not provided with adequate/reasonable time to submit its response for the Standing Committee Report in question. As such, this Court comes to a resultant conclusion that there is violation of Principles of Natural Justice.
The decision of the Academic Council (the supreme body in respect of academic affairs) to reduce the students admission strength from 120 to 60 to the Petitioner's College (based on the premise that the petitioner has no reply to the Standing Committee's Report) is per se not correct, in the Eye of Law. Therefore, the impugned proceedings of the Fifth Respondent/Registrar (In charge), Tamil Nadu Agricultural University, Coimbatore, dated 03.07.2016 communicating the reduction of strength at 60 from the academic year addressed to the Petitioner suffers from legal infirmity.
Petition allowed.
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2016 (8) TMI 1590
Ex-parte order passed by CIT(A) - on various dates of hearing the case was not attended by the counsel - assessee contended that no proper opportunity of hearing was afforded to the assessee - CIT(A) was not justified in rejecting the appeals of the assessee ex-parte. The documents relied by the AO were not made available to assessee - HELD THAT:- The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given opportunity to defend himself. This principle is sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross examination, right to legal representation, disclosure of evidence to party, report of enquiry to be shown to the other party and reasoned decisions or speaking orders.
We find that the right of hearing is decided by the Hon'ble Supreme Court in the case of Maneka Gandhi vs. Union of India, [1978 (1) TMI 161 - SUPREME COURT] as held that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of norm of rule of audi alteram partem.
We find that in this instant case, the assessee was not given proper hearing. Therefore, we are of the view that the assessee must be given one more opportunity of hearing and to represent his case. Therefore, we restore these appeals to the file of ld. CIT(A) for allowing proper opportunity of being heard in accordance with law. Appeals of the assessee are allowed for statistical purposes.
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2016 (8) TMI 1589
Dishonour of Cheque - cheque issued by the accused to the complainant in discharge of legally enforceable debt or liability - Security cheque or not - rebuttal of presumption - HELD THAT:- In the present case, the object of the parties when the transaction was entered into cannot be said to be to circumvent or defeat the purpose of the Income Tax Act. The defendant would not have issued the cheque in question had the object of the loan transaction been to defeat the provisions of the Income Tax Act.
In cases where the complainant claims to have advanced a friendly loan in cash, and where the transaction of loan is not evidenced by any other documentary or other reliable evidence, no doubt, the aspect whether the availability of funds in cash with the complainant/lender, and its advancement as loan to the accused have been reflected in the income tax returns of the complainant/lender, or not, become relevant. If, the availability of funds, and the loan transaction itself is not so reflected, that factor is taken note of by the Court as relevant to hold that the presumption under Section 118 and 139 of the NI Act stands rebutted - In the present case, the loan transaction, though not recorded in an agreement, or a receipt or acknowledgement executed by the accused, and though not reflected in the income-tax returns of the complainant, is evidenced by the oral testimony of CW-2, who is an independent witness and highly credible.
The cheque in question cannot be said to be merely a security cheque for the reason that the same was issued in consideration of the loan of Rs. 10 lacs taken by the respondent/accused from the appellant/complainant. Merely because the debt may have been repayable subsequently in instalments, it cannot be said that on the date of issuance of the cheque, the debt did not exist. The mode and manner of its repayment was all that was postponed. In any event, on the date of presentation of the cheque, the debt was crystallised and ascertained.
It is unheard of, that in the normal course of transactions, the drawer of the cheque issues separate instructions to the holder/payee authorising him to deposit the cheque for encashment. Absence of such authorisation certainly cannot be taken as a factor against the complainant, so as to rebut the presumption under Section 118 and 139 of the NI Act - the finding returned by the Trial Court that the cheque in question was a security cheque, or that it was not issued in respect of an outstanding debt or liability, cannot be sustained and is set aside. The respondent/accused has not been able to rebut the presumption that there was an outstanding debt owed by the respondent accused to the appellant of Rs. 10 Lakhs, and the cheque was issued towards repayment thereof. Consequently, the dishonour of the said cheque, and non-payment of the amount despite service of statutory notice under Section 138, resulted in the commission of offence under Section 138 of the NI Act.
The respondent is held guilty of commission of offence under Section 138 of the Negotiable Instruments Act - List on 24.08.2016 for hearing on the aspect of sentence. The respondent shall remain personally present in Court on the next date.
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2016 (8) TMI 1588
Assessment of trust - Income earned from conducting casual and ‘non-recognized’ courses - educational institution within the meaning of Section 10(23)(c)(vi) - HELD THAT:- The issue stands covered against the Revenue and in favour of the Assessee by the decision of Delhi Music Society vs. DGIT [2011 (12) TMI 124 - DELHI HIGH COURT] - Consequently, no substantial question of law arises for determination.
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2016 (8) TMI 1587
CIT-A dismissing the appeal on the ground of non-payment of admitted taxes - mandatory conditions to invoke the jurisdiction u/s 153C of the Act did not exist - HELD THAT:- While filing an appeal before the CIT(Appeals), the assessee is required to pay the tax on the admitted return of income. But in the instant case, on the admitted return of income, the assessee has already paid the taxes. The assessee has not paid the taxes on the revised return which was not treated to be valid by the AO and was non est in law. Since the revised return was treated to be non est in law, there was no question of making payment of tax on the income declared therein.
Therefore, we are of the view that the assessee has already paid the tax on the admitted income declared in the original return filed which was acted upon by the AO for framing the assessment u/s. 153C of the Act. In the light of these facts, we are of the view that the CIT(Appeals) was wrong in dismissing the appeal of the assessee. Therefore, we set aside his order and restore the matter to his file with a direction to readjudicate the appeal on merits by passing a reasoned order.
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2016 (8) TMI 1586
Deduction u/s. 80IB(10) - housing project ‘Kumar Puram’ developed by the assessee - HELD THAT:- Assessing Officer in the assessment year 2001-02 had raised similar objections in disallowing the claim of deduction u/s. 80IB(10) on the housing project ‘Kumar Puram’ developed by the assessee. In appeal filed by the assessee before the Tribunal, the Tribunal decided the issue in favour of the assessee. The Commissioner of Income Tax (Appeals) in the impugned order has followed the order of Tribunal i [2013 (2) TMI 925 - ITAT PUNE] and accepted the claim of the assessee in assessment years under appeal.
DR has not placed on record any material to controvert the findings of Tribunal. In the absence of any contrary material, we find no infirmity in the order of CIT (Appeals) on this issue. Accordingly, the findings of CIT (A) on this issue are affirmed and the ground raised by the Department against allowing claim of deduction u/s. 80IB(10) of the Act to the assessee is dismissed.
Disallowance u/s. 14A r.w. Rule 8D - HELD THAT:- Assessee has earned exempt income from share of profit from the partnership firm and dividend. The disallowance has been made by the AO u/s. 14A read with Rule 8D. The Hon'ble Jurisdictional High Court in the case of Godrej and Boyce Mfg. Co. Ltd [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D would apply from assessment year 2008-09.
Some reasonable disallowance has to be estimated u/s. 14A for earning income exempt from tax. The Commissioner of Income Tax (Appeals) has restricted the disallowance to 10% of the exempt income - The assessee has accepted the same. We do not find any infirmity in the order of CIT (Appeals). Accordingly, the issue raised by the Department against restricting the disallowance u/s. 14A to 10% of the exempt income is devoid of any merit. Accordingly, this ground of appeal of the Revenue is dismissed.
Depreciation on Motor Cars - AO disallowed the claim of depreciation on motor cars on the ground that twin conditions for claiming depreciation u/s. 32 assets should be used for the purpose of business and assets should be owned by the assessee, are not satisfied - HELD THAT:- Commissioner of Income Tax (Appeals) has allowed the claim of the assessee by placing reliance on the decision of the Co-ordinate Bench of the Tribunal in the case of Rohan Builders and Developers Pvt. Ltd. [2012 (6) TMI 319 - ITAT PUNE]. We do not find any infirmity in the order of CIT (Appeals) in accepting the claim of the assessee. Thus, in view of the facts of the case and the decision of Co-ordinate Bench, the ground of appeal raised by the Department against allowing of depreciation on motor vehicles registered in the name of Directors of the assessee company is dismissed.
Deduction u/s. 80IA(4)(iii) - assessee has complied with all the conditions laid down under the Industrial Park Scheme, 2008 and thus, the assessee is eligible to claim deduction u/s. 80IA(4)(iii) - HELD THAT:- In the present case the project of the assessee was initially approved under IPS 2002 on 15-02-2005. The assessee had claimed deduction u/s. 80IA(4)(iii) in assessment year 2006-07 which was allowed to the assessee. The assessee could not complete the project within the time frame specified in IPS 2002 i.e. 31-03-2006. The assessee applied for notification of the project under IPS 2008. The project was notified by CBDT on 09-07-2010. After notification of the project under IPS 2008, the eligibility of deduction has to be seen with respect to the new scheme.
Thus, in view of the facts of the case and the observations of the Co-ordinate Bench of the Tribunal we find no merit in the contentions of the ld. DR that the assessee is not eligible to claim deduction u/s. 80IA(4)(iii) in assessment years under appeal.
Second objection of the Revenue is that minimum 30 units were not established as per the scheme - The order of the Tribunal in the case of M/s. Kolte Patil Developers Ltd. Vs. Dy. Commissioner of Income Tax [2015 (3) TMI 363 - ITAT PUNE] further strengthens the case of assessee in allowing the deduction u/s. 80IA(4)(iii) of the Act. Accordingly, the ground of appeal raised by Department against allowing deduction u/s. 80IA(4)(iii) to the assessee is dismissed.
Disallowing the claim of assessee with respect to interest expenditure pertaining to interest free advances given to various parties - HELD THAT:- As in view of the absence of vital information, we are of the considered view that this issue needs a revisit to the file of Assessing Officer to ascertain the financial position of the assessee at the time of giving advances. In case own interest free funds of the assessee are sufficient to cover the advances at the time of making such advances, no disallowance should be made in view of the decision of Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Reliance Power Utility Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] Accordingly, ground No. 3 raised in the appeal of the assessee for assessment year 2007-08 is allowed for statistical purpose.
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2016 (8) TMI 1585
Assessment u/s 153A - Rejection of books of accounts - estimation of turnover and profit thereon - Addition based on material on record - Assessing Officer did not accept the books of account, so, he estimated the turnover and profit thereon - AR submitted that these additions are not based on the seized materials at the time of search as discussed above, but only on the basis of cash flow statement prepared by assessee irrespective of correlation to search material - HELD THAT:- Addition in question has no nexus with search material, so, addition is not justified in view of decision of All Cargo Global Logistic Ltd. [2012 (7) TMI 222 - ITAT MUMBAI(SB)] So, in the proceedings after search in the assessment u/s.153A of the Act addition should have nexus with seized material found at the time of search.
Without prejudice to above, estimation of turnover and profit thereon in question is also not based on material on record. Agreeing to alternative contention of assessee, we find that assessee had been doing agency work on behalf of other parties. There is nothing on record to suggest that assessee was doing the said transaction at his own. Assessing Officer has not brought anything on record to suggest that above land transaction were done by assessee in his name. It could have been corroborated by AO with real instances of transaction which has not been done by him. In such situation, assessee cannot be taxed on the basis of on money transaction of its client. So, addition in hand of assessee is not justified. Same is directed to be deleted.
Unsecured loan as undisclosed cash credit u/s 68 - HELD THAT:- Agreeing to the contention of ld. Authorized Representative, we are of the view that Assessing Officer was not justified in making addition u/s.68 of the Act without making nexus of the same with the seized material found at the time of search. Moreover, non appearance of creditor before Assessing Officer is not sound basis of addition in question while they have confirmed the same and all details of parties were with Assessing Officer at relevant point of time including their PAN number. Assessing Officer has not exercise his option to summon parties to verify the fact which has not been done for the reasons known to him. So, addition in question is not justified. Same is directed to be deleted.
Addition u/s.68 on account of current liabilities as unexplained cash credit - Assessment of income of deceased assessee - Assessee failed to establish the identity and creditworthiness of aforesaid parties and genuineness of such transactions u/s.68, So, same was added to the income of deceased assessee - HELD THAT:- Since, deceased assessee had filed confirmation from both parties, addition was not warranted. Deceased assessee has categorically given the details of parties and transactions therewith. Once transaction was stated to be completed, so, it was no more liability. All details in this regard were filed before Revenue authorities. Assessee has tried to prove the identity by giving details of parties. Agreeing to alternate contention of assessee, we hold that addition in question having no nexus with seized material as discussed above, so in view of the ratio laid down in All Cargo Global Logistic Ltd. [2012 (7) TMI 222 - ITAT MUMBAI(SB)], addition u/s.68 of the Act is not justified. Under facts and circumstances, the addition in question is directed to be deleted.
Addition of household expenses - Estimating withdrawal as against shown in capital account - Assessing Officer estimated withdrawals at Rs.4,80,000/- as against Rs. 2,34,218/- on account of household expenses - HELD THAT:- The stand of deceased assessee has been that this addition is on the basis of purely on estimation and having no nexus with the seized material found at the time of search. Agreeing to the contention on behalf of assessee and in view of ratio laid down in All Cargo Global Logistic Ltd. (supra) as discussed above, addition in question is not justified. Same is directed to be deleted.
Unexplained expenditure u/s.69C - HELD THAT:- There is nothing on record to suggest that assessee was doing the said transaction at his own. Assessing Officer has not brought anything on record to suggest that above land transaction were done by him in his personal capacity. In such situation, assessee cannot be taxed on the basis of on investment transaction of its client. So, addition in hand of assessee is not justified. Same is directed to be deleted.
Addition made on account of current liabilities and unsecured loan as cash credit u/s.68 - Assessee has shown current liabilities against various parties’ narrations - Since, deceased assessee was not able to give satisfactory answer to the Assessing Officer, so, same was u/s.68 - HELD THAT:- As stated above, assessee was broker, transactions were doen on behalf of investor. Assessing Officer has brought nothing on record to suggest that as in fact dealing in land as parties. Same could be done by making nexus to land deal. But, on such effort has been made by revenue authorities. In view of above discussion, addition in question is not justified. Same is directed to be deleted.
Protective assessment of all deposits of an account - HELD THAT:- As the substantive addition on account of unexplained bank deposits made by Assessing Officer in the hands of deceased assessee was deleted. However, in order to safeguard the interest of the Revenue, it was held that protective addition towards unexplained deposits in aforesaid bank account will continue in the hands of assessee till the said amount is finally assessed in the hands of assessee’s HUF. Once CIT(A) held that the amount belongs to bank account deposit should be assessed in the hands of Late Sunil D. Gulati (HUF), so, protective addition in case of deceased assessee is not justified and same is directed to be deleted.
Addition on account of Deal Wise Excel Sheets for a sum as unexplained expenditure u/s.69C - HELD THAT:- A preliminary analysis of these two statements revealed that they had several defects/ shortcomings as outlined in paras 33 to 3.3.4 on page 3-4 of the impugned order for which no clarification was given at the time of assessment. It was concluded that these statements did not reflect the true and correct picture of the business and personal transactions of the appellant and as such could not be relied upon. During course of assessment proceedings, deceased assessee was asked to furnish complete details/explanation in respect of all such DWES along with supporting documents and evidences. Similar issue arose in A.Y. 2003-04 wherein vide para 3 of this order wherein we have deleted similar addition. Facts being similar, so following same reasoning, the addition in question is directed to be deleted.
Addition on account of other cash / unaccounted transaction by treating it as unexplained expenditure u/s.69C - HELD THAT:- Revenue authorities have to bring concurrent evidence with regard to the said explanation vis-à-vis plot. Deceased assessee was not an investor. He was doing investment on behalf of other parties. He might have done something wrong for increasing brokerage business. After search, Revenue authorities had option to unearth transaction correspondence to the expenditure in question which has not been done, meaning thereby, Revenue authorities have not found this document in course of search. So, such transactions done for the sake of business cannot be made sound basis for addition in question. In view of above discussion, addition is not justified. Same is directed to be deleted.
Cash/unaccounted transaction by treating same as unexplained expenditure - HELD THAT:- As deceased assessee’s consistent stand has been accepted by us that he was only a Real Estate agent or broker or deal maker and hence he used to block the plots by giving some advances to the plot owners-cum-farmers on behalf of investors only. Revenue authorities had not brought anything on record to suggest that assessee himself purchased property in question from the farmers. In such a situation, assessee was entitled for brokerage only. In view of above, addition in question is not justified. Same is directed to be deleted.
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2016 (8) TMI 1584
Seeking sanction of Scheme of Amalgamation of two Transferor Companies - section 391 to 394 of the Companies Act, 1956 - HELD THAT:- The observations made by the Regional Director, Ministry of Corporate Affairs, do not survive - the present scheme of amalgamation is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned. The Scheme is hereby sanctioned.
Petition allowed.
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2016 (8) TMI 1583
Wealth tax assessment - value the immovable property as per section 7 and Schedule III of the Wealth Tax Act - Value of assets, how to be determined? - HELD THAT:- As evident that the Revenue, has to mandatorily value the assets of the assessee in accordance with Section 7 and Schedule-III of the Wealth Tax Act at the option of the assessee. It appears from the order of the Revenue that these provisions of the Wealth Tax Act are lost sight off. Therefore, we hereby direct the learned Wealth Tax Officer to compute the value of the immovable properties of the assessee in accordance with section 7 Schedule III PartB of the Wealth Tax Act for the purpose of levying Wealth Tax in the case of the assessee. Thus this ground is allowed in favour of the assessee.
Consideration of the liability incurred by the assessee towards M/s. Jaya Publications for purchase of jewellery - From the order of the learned Wealth Tax Officer, it is evident that the assessee has incurred liability of ₹ 40.00 lakhs towards M/s. Jaya Publication. Section 6 of the Wealth Tax Act makes it clear that any liability owing to asset has to be excluded. From the facts of the case, it is not in dispute that the assessees have not incurred the liability of ₹ 40.00 lakhs towards M/s. Jaya Publication. The existence of such liability is also not disproved as on date. Now the only issue involved is whether it is attributable for the purchase of jewellery. There is nothing on record to suggest that these liabilities are not attributable for the purchase of jewellery. Obviously, it has to be related to one of the assets of the assessee which the assessee claims it to be jewellery. In any case, as per the definition of ‘Net Wealth’ section 2(m) of the Wealth Tax Act, the liability of debt has to be excluded while determining the net wealth of the assessee. Therefore, we hereby direct the learned Wealth Tax Officer to exclude the liability while valuing the jewellery of the assessee. Accordingly this issue is also decided in favour of the assessee.
Valuation of the interest in partnership firm in accordance with section 7(1) read with schedule III-15 & 16 Part- E - On perusing the relevant provisions of the Wealth Tax Act we find merit in the contention of the learned Authorized Representative. As per the provisions of Wealth Tax Act, interest in firm has to be valued as per Section 7 read with Schedule III-15 & 16 Part-E of the Wealth Tax Act. Therefore, we hereby direct the learned Wealth Tax Officer to value the assessee’s interest in the partnership firm in accordance with section 7(1) r.w Schedule III-15&16 Part-E of Wealth Tax Act. Thus, this issue is also allowed in favour of the assessee.
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2016 (8) TMI 1582
TP Adjustment - Comparable selection - international transaction pertaining to provision of software development services undertaken by the assessee with its AE - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected.
Depreciation on UPS - treating it as ‘Plant and Machinery’ eligible for 15% rate of deprecation as against the claim of 60% made by the assessee on the ground that, the same has to be treated as part of the computer - HELD THAT:- Before us, nothing has been brought on record to the on the fate of such a finding given by the DRP in the AY 2009-10. Once in the earlier year, depreciation has been allowed @ 15% not 60%, then no different stand can be taken in this year, because depreciation has to be allowed on WDV. Accordingly, ground as taken by the assessee is treated as dismissed.
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2016 (8) TMI 1581
Seeking placing of applicant under Weaker Section (EWS)/Disadvantaged Group (DG) Category by granting age relaxation - petitioner-school submitted that MACT did not have the jurisdiction either to direct the petitioner-school to admit Master Priyanshu or to create seats qua EWS quota more than twentyfive per cent of the general category seats - HELD THAT:- This Court finds that admittedly the total number of students in Grade1 in the petitioner-school are thirty-four, whereas the number of students admitted in the EWS category are only seven - the obligation under Section 12(1)(c) of the RTE Act, 2009 is to "admit in Class 1, to the extent of at least twenty-five percent of the strength of that class" students from EWS category. Consequently, there is no bar on a private unaided school from admitting more than twenty-five per cent students in EWS category, provided the appropriate government agrees to pay for such extra seats under Section 12(2) of the RTE Act, 2009 - which the respondent no.2-DOE is willing to do in the present case.
According to reports filed by the Field Officer and co-counsel for respondent no.2-DOE, Master Priyanshu speaks conversational Hindi and can understand and answer all questions in Hindi. He can also count in Hindi from numeral 1 till numeral 30 and he remembers the English alphabets A to Z. According to respondent no.2-DOE's Field Officer the child will pick up education quite quickly, if he is admitted in Class 1 - Since the petitioner-school did not grant Master Priyanshu admission, as an interim measure, he was admitted in Class 1 in a local municipal school. Master Priyanshu informed the Field Officer and co-counsel for respondent no.2-DOE that he enjoys attending classes in Grade 1 and is comfortable with his fellow students and what is being taught.
This Court is of the view that as Master Priyanshu has not had any prior formal education, Class 1 which is the first class for formal education is the ideal class for him to begin his education. This view is also in consonance with the reports filed by the Field Officer and co-counsel for the respondent no.2-DOE - It is settled law that this Court has extremely broad jurisdiction under Article 226 of the Constitution and under the said Article it can pass whatever orders are necessary for doing equity and justice. The Supreme Court in N S Mirajkar Vs. State of Maharashtra, [1966 (3) TMI 77 - SUPREME COURT] has held that “unlike a inferior court, in respect of a High Court, which is also a Court of Record, it is assumed that every action is within its jurisdiction, unless expressly shown otherwise.”
Though this Court is of the opinion that the impugned orders have been passed by the President Officer, MACT, with intent to do substantial justice and to give the victim of motor accident real succour, yet as they are without jurisdiction, they are set aside - This Court places on record its appreciation for the empathy and sensitivity displayed by the Presiding Officer, MACT, as well as officials of Directorate of Education and both the learned counsel for respondent No.2- DOE as well as the learned Amicus Curiae.
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2016 (8) TMI 1580
Principle of mutuality - Allowance of depreciation - assessee was settled / incorporated as per the order of Hon'ble jurisdictional High Court to treat the effluent of hazardous / created in and around of Vapi - HELD THAT:- As decided in assessee own case []2012 (4) TMI 813 - ITAT AHMEDABAD] basic object of the company is to give treatment of effluent in the form of liquid and solid to prevent the pollution in Vapi Industrial area on the suggestion of the Hon’ble Gujarat High Court. The company is limited by guarantee. There is no share capital of the members. Only subscription is made on the basis of wastage delivered by their plants. No dividend has been distributed by the company so far. The object mentioned in the main and ancillary object are as per the line of the company act but it is not for profit earning. The Board of Director has to pass resolution to allow the outsider to get the services of the company. No director is outside from the members of Vapi Industrial Association.
On the basis of decision of Hon’ble Gujarat High Court in the case of Sports Club of Gujarat [1987 (10) TMI 21 - GUJARAT HIGH COURT] the assessee also has declared the interest income in return as taxable on fixed deposit with bank however, it was admitted that no outsider had provided the services of the company but the AO is directed to verify the claim of the assessee whether any outsider is getting services or not from non-members, has to be taxed accordingly after giving full opportunity to the assessee. The assessee is also directed to cooperate with the A.O. and give all the evidences as required by the A.O. for his satisfaction. The revenue appeal on allowance of depreciation by the CIT(A) has no bearing as the principle of mutuality has been accepted by this Court.
We affirm CIT(A)’s findings under challenge in these facts and circumstances. Revenue’s other substantive ground are rendered academic in view of our adjudication on mutuality principle in assessee’s favour.
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2016 (8) TMI 1579
Allowable business expenses u/s 37(1) - expenses incurred for the running of the business of the assessee OR Income from house property - disallowing the claim of expenses from the business income on the alleged plea that the said expenses was claimed by the appellant against the Income from Houses Property - as per DR All the expenses have to be included for disallowance as business is composite - HELD THAT:- Respectfully following the afore-stated decision of the co-ordinate bench of this Tribunal in assessee’s own case in the immediately preceding assessment year [2016 (4) TMI 1435 - ITAT MUMBAI] for assessment year 2010-11 as facts are identical in the instant appeal, we are also inclined to set aside the matter to the file of the A.O. for verification of the various expenses like business promotion expenses , advertisement expenses and any other expenses debited to Profit and Loss which are directly attributable to earning of lease rental income having regards to the account of the assessee , will be disallowed by the A.O.
It is also noted that in the preceding assessment year , the assessee suo motu voluntarily disallowed electricity expenses incurred in relation to R-Mall but the same are not disallowed in the instant assessment year under appeal which aspect shall also be looked into by the AO. This disposes of Ground No. 1, 2 & 3 raised by the assessee in the memo of appeal filed with the Tribunal as set out above. We order accordingly.
Disallowance u/s 14A - as contended no expenses have been incurred for earning the exempt income as the assessee was having sufficient own funds for the investments made in the shares - HELD THAT:- We find that on identical facts in the immediately preceding year, the co-ordinate Bench of this Tribunal in assessee’s own case [2016 (4) TMI 1435 - ITAT MUMBAI] for assessment year 2010-11 has set aside the matter back to the file of the A.O. to decide the matter in accordance with the ratio of case of Cheminvest Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT] and also work out disallowance of interest expenses after considering the availability of assessee’s own funds vis-à-vis investments made which yields exempt income - thus we set aside and restore the matter back to the file of the A.O. with the same directions as were given in the Tribunal afore-stated order for the immediately preceding assessment year.
Disallowance u/s 40(a)(ia) being the alleged difference between amount mentioned in the tax audit report and the return of income - assessee is in second appeal before the Tribunal - HELD THAT:- As observed that the assessee has failed to deduct tax at source on the work-in-progress - Since the work-in-progress is part of the P&L account , the assessee was required to disallow the same on the grounds of non-deduction of tax as per provisions of Section 40(a)(ia) of the Act and the same cannot be claimed as expenses while computing income from business as the tax has not been deducted at source.
Assessee has submitted that it has disallowed voluntarily the said amount of its own in WIP while filing return of income which needed verification by the authorities below and hence we are inclined to set aside and restore this issue to the file of the AO for de-novo determination of the issue on merits after considering the relevant evidences of the assessee. Needless to say proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law.
Disallowance u/s 80G - Difference as per the tax audit report the deduction calculated and assessee had claimed deduction u/s 80G - HELD THAT:- The assessee submitted that if an opportunity is provided to the assessee, the necessary documents in support of the claim of the assessee can be submitted which can be verified by the AO and deduction can then be allowed on merits as per provisions of Section 80G of the Act. The ld. D.R. submitted that he has no objection in granting an opportunity to the assessee to submit the relevant documents and matter may be restored to the file of AO for verification. In our considered view and in the interest of justice, we set aside and restore this issue to the file of the A.O. for verification of the claim of the assessee with respect to allowability of deduction on account of donation paid by the assessee as per provisions of Section 80G.
Assessee’s appeal partly allowed for statistical purposes.
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2016 (8) TMI 1578
Nature of receipt - amount received under the sales-tax incentive scheme - revenue or capital receipt - HELD THAT:- As relying on [2015 (11) TMI 1882 - ITAT NAGPUR] assessee company was justified in claiming the sales tax incentives as exempt and not to be taken into account in computing the taxable income. The view taken by the learned CIT(A) is accordingly confirmed. The ground of appeal raised by the Revenue is dismissed.
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2016 (8) TMI 1577
Penalty under Section 114(i) of Customs Act, 1962 - Seizure of goods - export of pan masala containing gutka - packing material are prohibited for export or not - permission to withdraw the export - HELD THAT:- The prohibition in use of plastic material for packaging was put in place at the end of August, 2011 and the goods were removed from the factory of manufacture shortly thereafter. The goods were removed under documentation for export which was approved by the officer of Central Excise. It would appear that the enforcing officials themselves were not aware of the prohibition.
It is also noticed that the appellant were ready to withdraw the export. The goods were subject to absolute confiscation which, in these circumstances, is harsh enough without adding the penalty as a further measure of harshness. In view of the above, the imposition of penalty under Section 114(i) of Customs Act, 1962 is set aside.
Appeal allowed.
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2016 (8) TMI 1576
Contribution of the employees to the provident fund or other welfare fund - Addition u/s 36(1) (va) or/and u/s 43B - Whether the second proviso of section 43B of Income Tax Act applies only in respect of employers' contributions to provident fund and does not apply in respect of employees' contribution to provident fund? - HELD THAT:- This issue has been decided in the case of CIT versus Alom Extrusions Ltd., [2009 (11) TMI 27 - SUPREME COURT] wherein Hon'ble Supreme Court, after considering the said explanation to Section 36(1) (va) of the Income Tax Act, has held that Section 43B of the Act would apply to the employees' contribution also.
In the present case, on 31st October, 2005 i.e. before filing of the returns, the contribution was already made to the provident fund of the employees' as well as employees' state insurance fund by this appellant and hence, the amount, in question, is covered under Section 43B of the Income Tax Act.
Thus the amount deposited by this appellant for employees' contribution to the provident fund as well as employees' state insurance fund is covered under Section 43B of the Income Tax Act. Thus the aforesaid question of law is answered accordingly.
Addition being fresh capital introduced by partners - HELD THAT:- It appears that before the assessing officer balance sheet of the assessee showing partners capital amount but no such balance sheet of the partners nor their bank statement or capital account of the partners have been presented before the assessing officer despite the adequate opportunities were given, whereas, looking to the order passed by CIT (Appeals), it has been mentioned before the Commissioner of Income Tax (Appeals) vide order dated 15th January, 2009 which is at Annexure-4 to the memo of this appeal wherein it has been mentioned that this appellant- assessee had produced the requisite evidence before AO. But AO has overlooked this evidence and document. Hence, no error has been committed by the Income Tax Appellate Tribunal in remanding the matter to AO to consider the evidence on record.
So far as partners capital account of Rs. 14,26,139.82 paise is concerned, we see no reason to take any other view what has taken by the AO as well as by the CIT (Appeals). Thus the issue raised as stated here-in-above is required to be decided on the basis of the evidence on record and hence, fresh decision will be taken by the AO on the basis of the evidence on record. So far as addition is concerned, if the said decision has not yet been taken by the assessing officer.
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