|
Advanced Search Options
Case Laws
Showing 201 to 220 of 858 Records
-
2010 (3) TMI 1090
Issues Involved:
1. Disallowance of deduction for admission fee paid to OTC Exchange of India Ltd.
2. Deletion of addition made on account of penalty paid to NSE.
3. Deletion of disallowance of VSAT, lease line charges, and transaction charges due to non-deduction of tax at source.
Summary:
1. Disallowance of Deduction for Admission Fee Paid to OTC Exchange of India Ltd.:
The assessee, a company engaged in share broking, trading, and dealing in shares and securities, claimed a deduction of Rs. 6,00,000/- as an admission fee paid to OTC Exchange of India Ltd. The Assessing Officer (AO) disallowed this claim, considering it a capital expenditure. The CIT(A) upheld the AO's decision, noting the lack of evidence that the surrender of membership by the assessee was accepted by the OTC Exchange. The Tribunal observed that the nature of the claim as a write-off of the admission fee was not clear from the records. The Tribunal set aside the order of the CIT(A) and remanded the issue back to the AO for fresh consideration, emphasizing that the deduction could only be allowed if the fee had not been claimed in any earlier assessment year and if the OTC Exchange recognized the surrender of membership by the assessee.
2. Deletion of Addition Made on Account of Penalty Paid to NSE:
The assessee claimed a deduction of Rs. 40,300/- paid as fines and penalties to NSE for trade violations and delays in submission of statements. The AO disallowed the claim, considering these payments as penalties for infraction of law. The CIT(A) deleted the addition, holding that the payments were not for offenses prohibited by law but were compensatory in nature. The Tribunal upheld the CIT(A)'s decision, agreeing that the fines and penalties were trade-related and not statutory penalties, thus allowable as deductions.
3. Deletion of Disallowance of VSAT, Lease Line Charges, and Transaction Charges Due to Non-Deduction of Tax at Source:
The AO disallowed the deduction of VSAT charges, lease line charges, and transaction charges paid by the assessee to stock exchanges, citing non-deduction of tax at source u/s 194J. The CIT(A) deleted the disallowance, following the precedent set in the case of Kotak Securities Ltd., where it was held that such charges were not for technical services but for the use of infrastructure facilities. The Tribunal concurred with the CIT(A), referencing the Madras High Court's decision in Skycell Communications Ltd. Vs. DCIT, which clarified that payments for the use of standard facilities do not constitute fees for technical services. The Tribunal dismissed the Revenue's appeal, affirming that the charges were for infrastructure use and not technical services, thus not subject to TDS u/s 194J.
Conclusion:
The Tribunal allowed the assessee's appeal for statistical purposes and dismissed the Revenue's appeal, providing clarity on the nature of deductions and the applicability of TDS provisions in the context of stock exchange-related charges.
-
2010 (3) TMI 1089
Issues involved: Challenge to judgment and order u/s 260A of the Income-tax Act, 1961 regarding rectification of intimation under section 143(1) after finalization but before notice u/s 143(2).
Judgment Summary:
Issue 1: Rectification under section 154 of the Income-tax Act
The appellant challenged the judgment of the Income-tax Appellate Tribunal regarding the rectification of intimation under section 143(1) after finalization but before the notice under section 143(2). The substantial question of law was whether such rectification is permissible under section 154 ignoring the independence of sections 143(1) and 143(3). The respondent cited a previous judgment where the Assessing Officer issued a notice for rectification after the notice u/s 143(2), which was upheld. However, reference was made to another case where it was held that rectification of the original notice under section 143(1)(a) cannot be issued. The Court affirmed the Tribunal's judgment based on the settled position of law, stating that the appeal lacked merit.
In conclusion, the appeal was dismissed as the controversy was found to be covered by previous judgments, and the rectification under section 154 was not permissible in the present case.
-
2010 (3) TMI 1088
Issues involved: Constitutional validity of rule 3(2)(c) of Karnataka Value Added Tax Rules, 2003 and other Rules challenged in W.P. No. 9464/08.
The High Court of Karnataka heard and disposed of the appeal finally, which was directed against the order of the learned single Judge in W.P. No. 9464/08 dated 16.07.2008. The appellant's senior counsel argued that similar matters have been remanded to the assessing officer by the division bench, suggesting that the same approach should be followed in this appeal. On the other hand, the Government Pleader contended that if the matter is remanded to the assessing officer, the issue could be reconsidered without delving into the constitutional validity. The Court, considering the submissions and its previous decision in STRP No. 119/08, remanded the matter to the Assessing Officer to reevaluate the issue concerning the discount given post-invoice issuance, affecting the turnover. The assessee was granted the liberty to present all relevant documents, and the assessing officer was directed to review the case in line with the provisions and observations from the earlier decision.
In conclusion, the writ appeal was disposed of by remanding the matter to the Assessing Officer for reconsideration based on the discount issue, as per the Court's previous decision in STRP No. 119/08.
-
2010 (3) TMI 1087
Maintainability of appeal - Held that: - in view of Section 83 of the FA, 1994, provisions of Section 35(G) & (L) of the CEA, 1944 is made applicable and in view of the same, the present appeal is not maintainable - appeal dismissed being not maintainable.
-
2010 (3) TMI 1086
Issues Involved:
1. Quashing of termination of services.
2. Nature of the Centre as a 'state' under Article 12 of the Constitution of India.
3. Amenability of the Centre to writ jurisdiction under Article 226 of the Constitution of India.
4. Imposition of personal costs on Dr. V.A. Pai Panandiker.
Detailed Analysis:
1. Quashing of Termination of Services:
The Centre for Policy Research (Centre) terminated the services of respondent No.1 on 16.8.2000. Respondent No.1 challenged this in WP (C) No.5928/2000, and the learned single Judge granted an interim stay on termination. The writ petition was decided on 18.1.2002, quashing the termination and imposing costs of Rs. 10,000 against Dr. V.A. Pai Panandiker. The Centre accepted the quashing of the termination but constituted an Inquiry Committee to investigate respondent No.1's conduct, which led to further legal challenges.
2. Nature of the Centre as a 'State' under Article 12 of the Constitution of India:
The learned single Judge made observations about the Centre being a 'state' within the meaning of "other authority" under Article 12 of the Constitution of India, raising doubts. However, the counsel for respondent No.1 did not press this issue, and the Court agreed that these observations were unsustainable and set them aside.
3. Amenability of the Centre to Writ Jurisdiction under Article 226 of the Constitution of India:
The main issue debated was whether the Centre was amenable to writ jurisdiction under Article 226. The Court noted that the Centre's functions, including educational activities and receiving government grants, brought it within the ambit of public duty. The Centre's involvement in higher education, agreements with Manipal Academy of Higher Education, and exemptions under the Income Tax Act as an educational institution were significant factors. The Court emphasized that the Centre's activities, supported by government aid and oversight, made it amenable to judicial scrutiny under Article 226, especially in employment matters.
4. Imposition of Personal Costs on Dr. V.A. Pai Panandiker:
The imposition of personal costs on Dr. V.A. Pai Panandiker was upheld. The Court found that his actions warranted such costs, and there was no error in the learned single Judge's decision. The costs had not been paid despite no stay being granted.
Conclusion:
The appeals were dismissed, except for setting aside the observations related to Article 12. The Centre was held amenable to writ jurisdiction under Article 226, and the imposition of personal costs on Dr. V.A. Pai Panandiker was upheld. The appeals were dismissed with costs of Rs. 10,000 each.
-
2010 (3) TMI 1085
Issues involved: Appeal by Revenue against CIT(A) orders for assessment years 2003-04 and 2005-06 regarding exemption u/s 11 of the IT Act 1961 for a sports club.
Summary:
Issue 1: Exemption u/s 11 of the IT Act 1961
The appeals were filed by the Revenue against CIT(A) orders directing the Assessing Officer to allow exemption u/s 11 of the IT Act 1961 for the assessee, treating it as a Public Trust. The Revenue contended that the assessee, a sports club, should not be considered a charitable institution as its activities mainly benefit members. However, it was noted that similar issues had been decided in favor of the assessee by various benches of the Mumbai Tribunal in previous cases.
Details:
- The G-Bench of the Tribunal had previously ruled in favor of the assessee for the assessment year 2003-04.
- Previous orders for assessment years 2004-05 and 2006-07 also favored the assessee.
- Following precedent, the Tribunal upheld the CIT(A) orders and dismissed the Revenue's appeals.
In conclusion, both appeals by the Revenue were dismissed, affirming the exemption u/s 11 of the IT Act 1961 for the sports club.
-
2010 (3) TMI 1084
Issues Involved:
1. Validity of addition of share application money u/s 68.
2. Onus of proving the genuineness and creditworthiness of share applicants.
3. Reliance on investigation reports and statements without cross-examination.
Summary:
1. Validity of Addition of Share Application Money u/s 68:
The AO added the entire share application money and commission to the assessee's income, citing that the share capital was not genuine based on an investigation report. The CIT(A) deleted this addition, observing that the assessee had provided comprehensive details including PAN numbers, share application forms, board resolutions, bank statements, and income tax returns of the applicant companies. The CIT(A) relied on the Supreme Court's decision in the case of Lovely Exports, which held that if share application money is received from alleged bogus shareholders whose names are given to the AO, no addition can be made in the hands of the assessee company.
2. Onus of Proving Genuineness and Creditworthiness:
The assessee argued that it had discharged its onus by furnishing all necessary details of the shareholders, including their PAN numbers, bank statements, and income tax returns. The CIT(A) supported this by noting that the bank statements showed sufficient funds and no cash deposits before the issuance of cheques. The Tribunal agreed, stating that the assessee had established the identity and creditworthiness of the shareholders and that the department had not provided any evidence to the contrary.
3. Reliance on Investigation Reports and Statements Without Cross-Examination:
The AO relied on an investigation report indicating that the share applicant companies were providing accommodation entries. The assessee contended that the AO did not verify the correctness of these statements nor provided an opportunity for cross-examination. The Tribunal emphasized that without corroborative material and cross-examination, such statements could not be used against the assessee. The Tribunal directed the AO to verify the source of the money and, if found to be unaccounted, consider the addition in the hands of the actual providers of the funds.
Conclusion:
The Tribunal restored the matter to the AO for further verification of the source of funds and directed that any addition should be made in the hands of the persons who provided the money, not the assessee company. The appeal of the Revenue was allowed in part.
-
2010 (3) TMI 1083
Issues Involved:
1. Disallowance of expenses.
2. Deletion of addition of transfer fee.
3. Taxability of income on the principle of mutuality.
Summary:
1. Disallowance of Expenses:
The Revenue challenged the reduction of disallowance of expenses from Rs. 13,18,756 to Rs. 7,61,826 by the CIT(A). The CIT(A) allowed additional expenses such as 40% of salary and bonus, water expenses, advertisement expenses, service tax, staff medical expenses, municipal tax, audit fees, legal fees, stationery and printing expenses, insurance premium, and depreciation on various assets. The CIT(A) followed the decision of the ITAT Ahmedabad in the case of M/s. Gulmarg Association, directing that the surplus of Rs. 10,870 be taxed as income from other sources.
2. Deletion of Addition of Transfer Fee:
The CIT(A) deleted the addition of Rs. 2,00,000 being the transfer fee on transfer of plots, relying on the Tribunal's decision in the case of Gulmarg Association v. ITO Ward-8(7) Ahmedabad. The Tribunal upheld this deletion, noting that the income earned by the society from its members is exempt under the principle of mutuality.
3. Taxability of Income on the Principle of Mutuality:
The assessee argued that its income is not taxable based on the principle of mutuality. The Tribunal agreed, referencing the jurisdictional High Court's decision in Adarsh Co-operative Housing Society Ltd. and the Bombay High Court's decision in Sind Co-op. Housing Society & Others. The Tribunal concluded that the income earned by the society from interest, rent, and other miscellaneous sources from its members is exempt under the principle of mutuality. The Tribunal emphasized that the society's activities were not commercial and were aimed at maintaining the property for the benefit of its members.
Conclusion:
The Tribunal dismissed the Revenue's appeal and allowed the assessee's cross-objection, affirming that the income earned by the co-operative housing society is exempt under the principle of mutuality.
-
2010 (3) TMI 1082
Issues involved:
The judgment involves the challenge to the reopening of assessment for assessment year 2004-05 u/s 148 of the Income Tax Act, 1961 based on three reasons provided by the Assessing Officer. The assessee objected to the reopening, claiming it was a mere change of opinion without fresh material post original assessment u/s 143(3).
Reasons provided for reopening:
The three reasons furnished by the Assessing Officer for reopening the assessment were:
A. Debiting capital expenditure to profit and loss account leading to income escapement.
B. Treating liability on returnable containers as a provision, resulting in income escapement.
C. Adding back one month's investment in raw materials for suppressed sales instead of the entire year, causing income escapement.
Objections and Disposal:
The assessee objected to the reopening through a letter dated 30th July, 2009, which was disposed of by the Assessing Officer on 14th December, 2009. The principal argument was the lack of fresh material post original assessment and the reopening being a mere change of opinion.
Legal Analysis and Decision:
The High Court held that the Assessing Officer failed to consider the objections raised by the assessee and did not provide tangible material for the reopening, as required u/s 147. The court set aside the order disposing of objections and remanded the proceedings back to the Assessing Officer to pass a fresh order in line with principles laid down by the Supreme Court. The Assessing Officer was directed to pass a new order after hearing the assessee within four weeks.
Conclusion:
The impugned order was quashed, and the proceedings were remanded back to the Assessing Officer for a fresh decision. The Assessing Officer was instructed to consider the objections raised by the assessee and provide a reasoned order within four weeks. The interim order was to remain in effect during this period, and no costs were awarded.
-
2010 (3) TMI 1081
Issues involved:
The issues involved in the judgment include waiver of pre-deposit and stay of recovery sought by the appellants in relation to the demand of duty and penalties confirmed against them. The main issue revolves around the clandestine manufacturing and clearance of MS ingots by the assessee, with a focus on the estimation of production capacity and quantification of duty based on electric consumption.
Details of the Judgment:
Estimation of Production Capacity and Quantification of Duty:
The impugned demand of duty on MS ingots was based on findings that the production capacity of the induction furnace was underreported by the assessee. The Commissioner relied on an experiment conducted by the department, which indicated a higher energy consumption for the production of 1MT of MS ingots compared to the assessee's disclosures. The differential quantity of MS ingots was calculated, leading to the demand of duty.
Cross-Examination of Witnesses and Legal Arguments:
The appellant argued that the denial of cross-examination of witnesses and reliance on experimental results were not sustainable. Reference was made to previous cases and stay orders to support the plea for a fresh adjudication. The appellant contended that the Commissioner's findings were flawed and requested a de novo adjudication of the case.
Consideration of Case on Merits:
After careful consideration, the Tribunal found significant factual differences between the present case and previous judgments. The experimental production of MS ingots in the assessee's factory was organized and witnessed by company functionaries and an engineer. The total energy consumption was analyzed to estimate the duty payable on the suppressed quantity of MS ingots. The Tribunal concluded that the decisions in previous cases were not directly applicable to the present situation.
Direction for Pre-Deposit and Stay of Recovery:
The Tribunal directed the assessee to pre-deposit a specific amount of duty under Section 35F of the Central Excise Act, considering financial hardships raised by the appellant. Compliance was required within eight weeks, with the provision for waiver of pre-deposit and stay of recovery for penalties and the remaining duty amount upon due compliance.
This judgment highlights the importance of factual analysis, legal arguments, and compliance with procedural requirements in cases involving duty demands and penalties in the context of clandestine manufacturing activities.
-
2010 (3) TMI 1080
Issues involved: Appeal under Section 260-A of the Income-tax Act, 1961 regarding the confirmation of assessment order made u/s. 158BD r.w.s. 144 of the I.T. Act.
Summary:
The appeal involved a case where a search was conducted in the Khadkhad Group cases, revealing undisclosed income. The assessment was made under Section 158BD of the Act, but the Commissioner (Appeals) annulled the assessment order due to lack of opportunity provided to the agent. The Tribunal upheld this decision, emphasizing the necessity of giving an opportunity of hearing to the person to be treated as an agent, as per Section 163(2) of the Act.
The appellant Revenue argued that since the notice was served on the agent and no objection was raised, it should be deemed that an opportunity of hearing was granted. However, the Tribunal found no such opportunity was given, leading to the dismissal of the appeal.
The judgment highlighted Section 163 of the Act, which defines who may be regarded as an agent, emphasizing the requirement of providing an opportunity of being heard before treating a person as the agent of a non-resident. Without such an order under Section 163, the concerned person is deprived of the right to challenge the decision. In this case, the agent did not meet the criteria specified under Section 163(1) of the Act.
Ultimately, the Tribunal's decision was upheld, as no substantial question of law was found to warrant interference with the impugned order. The appeal was dismissed accordingly.
-
2010 (3) TMI 1079
Issues Involved:
1. Justification of penalty levied under Section 271(1)(c) of the Income-tax Act, 1961.
2. Application of Explanation 5 to Section 271(1)(c).
3. Impact of the assessee's declaration under Section 132(4) on penalty proceedings.
4. Interpretation of provisions and precedents relevant to Explanation 5.
Issue-wise Detailed Analysis:
1. Justification of Penalty Levied Under Section 271(1)(c):
The primary issue is whether the Commissioner of Income Tax (Appeals) [CIT(A)] was justified in confirming the penalty of Rs. 44,27,692/- levied by the Assessing Officer (AO) under Section 271(1)(c) of the Income-tax Act, 1961. The AO initiated penalty proceedings after the assessee filed a return declaring a loss of Rs. 19,08,840/- but later surrendered Rs. 121 lac as unaccounted income during search operations. The penalty was based on the assertion that the assessee concealed income by not declaring it in the original return or in the response to the notice under Section 153A.
2. Application of Explanation 5 to Section 271(1)(c):
Explanation 5 to Section 271(1)(c) deals with the conditions under which the presumption of concealment of income can be lifted. The AO argued that the conditions for lifting the presumption were not met because the income was neither recorded in the books of account nor disclosed to the Chief Commissioner or Commissioner before the date of the search. The CIT(A) upheld this view, stating that the concealed income would not have come to light but for the search operations.
3. Impact of the Assessee's Declaration Under Section 132(4):
The assessee contended that the declaration made under Section 132(4) should provide immunity from penalty under Sub-Clause (2) of Explanation 5. The assessee argued that the disclosure was made to buy peace and under the impression that penalty would not be levied. However, the AO and CIT(A) found that the declaration was retracted when the assessee reiterated the original return of loss in response to the notice under Section 153A.
4. Interpretation of Provisions and Precedents Relevant to Explanation 5:
The Tribunal considered various precedents to interpret Explanation 5. The assessee relied on the decision in CIT Vs. S.D.V. Chandru, where it was held that if a confession is made and tax and interest are paid, the assessee gets immunity under Explanation 5. However, the Tribunal noted that in the present case, the manner in which the income was derived was not specified, and the income was not declared in the books of account. The Tribunal also distinguished the facts from other cases cited by the assessee, such as Kanhiya Lal and Radha Kishan Goel, where the specifics of the income source were disclosed, and taxes were paid promptly.
Conclusion:
The Tribunal concluded that the penalty was justified because the assessee retracted the declaration made under Section 132(4) by reiterating the original return of loss in response to the notice under Section 153A. The Tribunal held that the immunity under Explanation 5 was not applicable because the mode and manner of earning the income were not disclosed, and the income was not recorded in the books of account. The appeal was dismissed, and the penalty was upheld.
-
2010 (3) TMI 1078
Issues involved: Addition of cash credits u/s 68 of the IT Act and non-genuine loan addition.
Addition of Cash Credits u/s 68 of the IT Act:
The appeal was against the order of the CIT(A)-V, Surat for the assessment year 2004-05. The assessee sought adjournment multiple times but did not appear during the appeal hearing. The AO made additions of cash credits u/s 68 of the IT Act and non-genuine loans based on findings during a survey at the assessee's premises. The AO found non-compliance and inadequacy of evidence from the assessee's side. The CIT(A) remanded the matter back to the AO to record statements of parties related to the cash credits. Despite opportunities, the assessee did not provide complete details of the creditors. Some credits were found genuine, but for others, the assessee failed to furnish necessary information. The AO treated undisclosed amounts as income u/s 68 due to lack of cooperation from the assessee. The Tribunal noted the burden on the assessee to prove the genuineness of the undisclosed credits, which the assessee failed to do at both the assessment and appellate stages. The appeal was dismissed due to lack of merit.
Non-Genuine Loan Addition:
Apart from the cash credit issue, the AO also made an addition for a non-genuine loan. The CIT(A) directed the deletion of a specific amount related to a creditor named Shri Mulchand Khandelwal. The AO's supplementary remand report verified loans from five parties and directed the deletion of those amounts. The remaining additions were confirmed. The assessee's lack of compliance and failure to provide complete details led to the confirmation of most additions. The Tribunal upheld the decision based on the non-cooperative attitude of the assessee and the failure to substantiate the genuineness of the credits.
Separate Judgement by Judge:
No separate judgment was delivered by the judges in this case.
-
2010 (3) TMI 1077
Issues Involved:
1. Validity of the proceedings in the Lok Sabha commencing from 29th January 2004.
2. Interpretation of Article 87(1) of the Constitution regarding the President's address.
3. Judicial review of the Speaker's decision under Article 32 of the Constitution.
4. Applicability of Article 122 regarding the validity of parliamentary proceedings.
5. Infringement of fundamental rights under Article 32.
Detailed Analysis:
1. Validity of the Proceedings in the Lok Sabha:
The petitioner challenged the validity of the Lok Sabha proceedings starting from 29th January 2004, arguing that the President did not address both Houses of Parliament as required under Article 87(1) of the Constitution. The petitioner contended that the session commencing on 29th January 2004 was the first session of the year, necessitating a Presidential address.
2. Interpretation of Article 87(1):
The petitioner argued that Article 87(1) mandates the President to address both Houses at the commencement of the first session each year. The Attorney General countered that the session starting on 29th January 2004 was a continuation of the Winter Session that began on 2nd December 2003 and was adjourned sine die on 23rd December 2003. Therefore, it did not constitute a new session requiring a Presidential address. The Court agreed with this interpretation, stating that the resumed sittings on 29th January 2004 were merely a continuation of the same session and not a new session.
3. Judicial Review of the Speaker's Decision:
The petitioner questioned the Speaker's decision to resume the sittings of the Lok Sabha without a Presidential address. The Court examined whether such a decision is subject to judicial review under Article 32. The Court held that under Article 122, the validity of parliamentary proceedings cannot be questioned on the grounds of procedural irregularity. The Speaker's decision to resume sittings was deemed a procedural matter, not subject to judicial scrutiny.
4. Applicability of Article 122:
Article 122 precludes courts from inquiring into the validity of parliamentary proceedings based on procedural irregularities. The Court emphasized that the Speaker's direction to resume sittings falls within the procedural domain of Parliament and is immune from judicial review. The Court reiterated that the Speaker's role includes regulating the procedure and conduct of business in the House, and such decisions are final and binding.
5. Infringement of Fundamental Rights:
The Court noted that the petitioner did not allege any infringement of fundamental rights guaranteed under Part III of the Constitution. The Court reiterated that Article 32 is applicable only for the enforcement of fundamental rights. Since no fundamental rights were claimed to be violated, the petition under Article 32 was deemed not maintainable.
Conclusion:
The Court dismissed the writ petition, concluding that:
- The resumed sittings on 29th January 2004 were a continuation of the Winter Session and did not require a Presidential address under Article 87(1).
- The Speaker's decision to resume sittings was a procedural matter, immune from judicial review under Article 122.
- The petition did not involve any infringement of fundamental rights, making it non-maintainable under Article 32.
The judgment underscores the constitutional balance between the Legislature, Executive, and Judiciary, emphasizing the autonomy of parliamentary procedures and the limited scope of judicial intervention in such matters.
-
2010 (3) TMI 1076
Whether the appellants in these appeals except the appeal arising out of SLP(C) No. 14133/2006 are entitled to allotment of residential plots in Phases VIII-A and VIII-B, Mohali, Punjab developed by the Punjab Small Industries and Export Corporation Ltd. ?
Whether the State Government's refusal to sanction change of land use from industrial to residential is vitiated by arbitrariness and malafides are the questions which arise for determination in these appeals filed against orders dated 23.9.2005 and 28.7.2006 passed by the Division Bench of the Punjab and Haryana High Court?
Whether no promise much less an enforceable promise was made by the Corporation to the prospective applicants that by making an application pursuant to the advertisement and on being declared successful in the draw of lots, they will get residential plots?
-
2010 (3) TMI 1075
Valuation - agricultural tractors of engine capacity, not exceeding 1800 CC, as well as exceeding 1800 CC - Held that: - In the instant case, the bare perusal of the record would reveal that the assessee was engaged in manufacture of agricultural tractors of engine capacity not exceeding 1800 CC as well as exceeding 1800 CC. It (assessee) has also been manufacturing the Internal Combustion Engines of de-placement capacity below 1800 CC used in the manufacture of tractor, which was exempted from Central Excise duty. Meaning thereby the assessee is using the common inputs in manufacturing the exempted and dutiable final products i.e. the tractors.
The credit of duty is admissible on the inputs used by the manufacturer on the exempted and dutiable goods - decided against Revenue.
-
2010 (3) TMI 1074
The Appellate Tribunal CESTAT Chennai ruled in favor of the assessee regarding the admissibility of CENVAT credit for Service tax paid on Rent-a-Cab scheme. The Tribunal cited previous decisions in support of their ruling and allowed the appeal.
-
2010 (3) TMI 1073
Issues Involved:
1. Disallowance of business loss of Rs. 43,45,978/- claimed by the assessee.
2. Violation of natural justice due to the absence of cross-examination of witnesses.
3. Examination of the genuineness of transactions and surrounding circumstances.
Detailed Analysis:
1. Disallowance of Business Loss:
The assessee, a partnership firm engaged in trading raw wool, synthetic waste, and acrylic fiber, declared a loss of Rs. 58,81,580/- in its return for the assessment year 1996-97. The Assessing Officer (AO) scrutinized the return and disallowed a business loss of Rs. 43,45,978/-. The AO observed that the assessee purchased raw wool at Rs. 210/- per kg but sold it at significantly lower prices (Rs. 127/- to Rs. 165/- per kg), which was unusual and not justified by market conditions. The AO issued a show-cause notice and found discrepancies in the assessee's explanations and documents, including the absence of a written agreement and inconsistencies in the fax message from Suvidha Woollen Mills. The AO concluded that the loss claimed was not genuine and disallowed it.
2. Violation of Natural Justice:
The assessee appealed to the CIT(A), arguing that the AO relied on statements from third parties without allowing cross-examination, violating natural justice. The CIT(A) directed the AO to provide an opportunity for cross-examination, but due to various reasons, including the unavailability of witnesses, the cross-examination did not occur. The CIT(A) upheld the AO's decision, noting that the assessee failed to substantiate the loss and that the statements of the witnesses, even if not cross-examined, indicated no depression in the raw wool market.
3. Examination of Genuineness and Surrounding Circumstances:
The Tribunal examined whether the disallowance of the loss was justified despite the procedural lapse. It noted that the assessee consistently purchased raw wool at higher prices and sold it at lower prices, which was not indicative of normal business conduct. The Tribunal found that the assessee could not provide a convincing explanation for these transactions, nor did it incur expenses typically associated with retail sales, such as salaries or labor charges. The Tribunal also considered the conduct of the assessee and the surrounding circumstances, including the pattern of booking losses to offset substantial interest income in subsequent years. The Tribunal concluded that the claim of loss failed the test of human probabilities and the normal course of human conduct.
Conclusion:
The Tribunal upheld the disallowance of the business loss of Rs. 43,45,978/-, dismissing the appeal filed by the assessee. It emphasized that while the procedural lapse regarding cross-examination was acknowledged, the overall evidence and circumstances justified the disallowance. The Tribunal applied the principles of human probabilities and the surrounding circumstances to determine the genuineness of the transactions, ultimately finding the assessee's claim to be unsubstantiated and contrary to normal business practices.
-
2010 (3) TMI 1072
Issues involved:
The issue involves the payment of interest on ineligible Cenvat credit taken by the appellants.
Summary:
The appellants, manufacturers of Cement availing Cenvat Credit facility, had availed Cenvat Credit on Furnace Oil from M/s. IOCL, Guntakal. The department found that M/s. IOCL had wrongly passed on excess credit to various customers, including the appellants. A show cause notice was issued proposing disallowance of Cenvat Credit. The appellants reversed the demanded amount but challenged the imposition of interest. The learned Commissioner (Appeals) upheld the confirmation of the reversal and the interest imposition. The appellant argued that Rule 7(2) of Cenvat Credit Rules, 2002 was satisfied, and Rule 14 may not apply. The learned SDR contended that interest was payable as the appellants utilized the irregular credit. The issue was the interest payable on the ineligible Cenvat credit taken by the appellants.
The learned Commissioner (Appeals) upheld the leviability of interest, stating that the appellants had used the irregular credit for duty payment without sufficient balance. The impugned order was upheld, rejecting the appeal. However, the appellant had not produced the Cenvat credit account extract before the learned Commissioner (Appeals). The Tribunal set aside the order and remanded the matter to reconsider the interest amount utilized by the appellants, following the principles of natural justice.
In conclusion, the impugned order confirming the interest amount was set aside and remanded for reconsideration.
-
2010 (3) TMI 1071
Issues Involved:
1. Violation of principles of natural justice in the departmental inquiry.
2. Adequacy of opportunity provided to the respondent during the inquiry.
3. Compliance with procedural requirements under the Code of Civil Procedure (CPC) and the Indian Evidence Act.
4. Validity of documentary evidence not properly proved.
5. Consequences of the respondent's retirement on the relief granted.
Detailed Analysis:
1. Violation of Principles of Natural Justice in the Departmental Inquiry:
The court examined whether the departmental inquiry against the respondent adhered to the principles of natural justice. The respondent argued that he was not given adequate, proper, reasonable, and sufficient opportunity to defend himself during the inquiry, which vitiated the entire process. The trial court found that there was a complete violation of principles of natural justice, as the respondent was not afforded a reasonable opportunity to present his case. This finding was upheld by the appellate courts, including the Supreme Court.
2. Adequacy of Opportunity Provided to the Respondent During the Inquiry:
The appellants contended that the respondent was given sufficient opportunity but deliberately remained absent, leading to an ex-parte inquiry. However, the court noted that the respondent was not informed about the specific charges or the basis of the findings against him. The court emphasized that the respondent should have been given a copy of the inquiry report and a proper opportunity to respond to the charges. The court concluded that the inquiry was conducted in a callous manner, violating the respondent's right to a fair hearing.
3. Compliance with Procedural Requirements under the CPC and the Indian Evidence Act:
The court scrutinized whether the appellants complied with procedural requirements under the CPC, particularly Order XII Rules 1 and 2, which pertain to the admission of documents. The appellants failed to serve a notice of admission or denial of documents on the respondent, as required by the CPC. The court highlighted that the documents filed by the appellants were not properly proved in accordance with the provisions of the Indian Evidence Act. The failure to comply with these procedural requirements significantly weakened the appellants' case.
4. Validity of Documentary Evidence Not Properly Proved:
The court emphasized that mere admission of documents in evidence does not amount to their proof. The appellants did not lead any oral evidence to support their documentary evidence. The court reiterated that documents must be proved by primary or secondary evidence as per the Indian Evidence Act. The appellants' failure to prove the documents in accordance with the law meant that these documents could not be relied upon to support their case.
5. Consequences of the Respondent's Retirement on the Relief Granted:
Given that the respondent had retired in the year 2000, the court noted that reinstatement was not a feasible remedy. Instead, the court focused on the monetary benefits due to the respondent. The court affirmed the trial court's decree, which quashed the order of dismissal and directed reinstatement with all consequential benefits, including payment of salary for the intervening period. However, due to the respondent's retirement, the relief was limited to monetary compensation.
Conclusion:
The Supreme Court dismissed the appeal, affirming the lower courts' findings that the departmental inquiry was conducted in violation of the principles of natural justice. The appellants' failure to comply with procedural requirements under the CPC and the Indian Evidence Act further weakened their case. The court also acknowledged the respondent's retirement, limiting the relief to monetary benefits. The appellants were ordered to bear the cost of litigation throughout, with counsel's fee fixed at Rs. 10,000.
............
|
9911796707
