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Showing 201 to 220 of 886 Records

• 2013 (3) TMI 692
  
  Issues involved: Appeal by Revenue against CIT (A) orders for Assessment Years 2003-04, 2004-05, and 2005-06.
  
  Issue 1: Estimation of unaccounted turnover and income
  The appeal questioned the direction to delete the addition made on account of estimated unaccounted turnover and income without appreciating the case facts.
  
  The assessee argued that the Assessing Officer made estimations based on loose papers found during a search operation, citing relevant legal precedents. The CIT (A) relied on various decisions before allowing the appeals. The Revenue did not present new arguments. The Tribunal found that extrapolation beyond the assessment year for which seized papers are found is not legally permissible. It was noted that no incriminating material supported the Revenue's allegations of sales suppression for the years in question. The Tribunal confirmed the CIT (A)'s decision, dismissing the Revenue's grounds.
  
  In conclusion, the Tribunal held that estimations cannot be made without incriminating material or based on extrapolation. As there was no evidence of ongoing unaccounted transactions, the CIT (A)'s decision was upheld, and the Revenue's appeals were dismissed.
  
  *Judgment delivered on 8th March, 2013.*

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• 2013 (3) TMI 691
  
  The Bombay High Court heard the case involving substantial questions of law related to a lease agreement dated 04.09.1997. The questions included whether the lease was a finance lease, if the appellant was entitled to depreciation under Section 32 of the Act, and whether the lessee or lessor was entitled to depreciation in a finance lease.

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• 2013 (3) TMI 690
  
  Issues Involved:
  1. Claim of deduction u/s 80IB(10) for the "Citadel" project.
  2. Applicability of section 80IB(10)(d) regarding commercial area limits.
  3. Applicability of section 80IB(14)(a) regarding built-up area limits.
  
  Summary:
  
  1. Claim of Deduction u/s 80IB(10) for the "Citadel" Project:
  The assessee, a partnership firm engaged in real estate, filed a return of income for A.Y. 2007-08, claiming deductions u/s 80IB(10) for two projects: "Citadel" and "Citadel Enclave." The Assessing Officer denied the deduction for both projects, but the CIT(A) allowed the deduction for "Citadel Enclave" and denied it for "Citadel." The denial was based on the project's commercial area exceeding limits and some flats exceeding the built-up area limit of 1500 sq.ft. The Tribunal had previously dealt with similar objections for A.Y. 2003-04 to 2006-07, ruling in favor of the assessee.
  
  2. Applicability of Section 80IB(10)(d) Regarding Commercial Area Limits:
  The Revenue's objection was based on the commercial area exceeding the 2000 sq.ft. limit prescribed in section 80IB(10)(d), effective from 1-4-2005. The Tribunal, referencing the Hon'ble Bombay High Court's decision in Brahma Associates, held that the amendment is prospective and not applicable to projects commenced before 1-4-2005. The "Citadel" project, approved as a residential-cum-commercial project by the local authority, qualified for the deduction as the amendment did not apply retrospectively.
  
  3. Applicability of Section 80IB(14)(a) Regarding Built-Up Area Limits:
  The Revenue argued that some units exceeded the 1500 sq.ft. limit due to the inclusion of terrace and balcony areas, as defined in section 80IB(14)(a). The Tribunal held that this definition, effective from 1-4-2005, does not apply to projects commenced before this date. The built-up area should be considered as per local municipal rules, which do not include terraces. Thus, the assessee's project met the conditions for the deduction.
  
  Conclusion:
  The Tribunal upheld the assessee's claim for deduction u/s 80IB(10) for the "Citadel" project, aligning with previous decisions and the Hon'ble Bombay High Court's ruling in Brahma Associates. The appeal of the assessee was allowed.

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• 2013 (3) TMI 689
  

  Waiver of pre-deposit - Management, Maintenance or Repair Service - the amounts are to be paid as 'Society Deposit' and the promoters shall utilize the sum paid by the purchaser to the promoters for meeting all legal costs, charges and expenses including professional cost of the Solicitors / Advocates of the Promoters in connection with the formation of the aid Organisation, preparing its rules, regulations and byelaws and the cost of preparing the agreement - reliance placed in the case of M/s. Puravankara Projects [2009 (8) TMI 616 - CESTAT, BANGALORE], for waiver of pre-deposit, where on similar issue, the Tribunal has granted unconditional stay - pre-deposit waived - decided in favor of assessee.

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• 2013 (3) TMI 688
  

  Reference u/s. 142A - Held that:- Reference under section 142A of the Act by the A.O. is not in accordance with law as he referred the matter under section 142A without rejecting books of account. The order of A.O. on the issue is liable to be quashed and accordingly we quash the same.

  Entitlement to benefit of Section 11 or under Section 10(23C) - Held that:- We set aside the orders of Revenue authorities and contention of the assessee is allowed that if any addition is sustained, the assessee is entitled to benefit of Section 11/10(23C) of the Act. The A.O. is directed accordingly.

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• 2013 (3) TMI 687
  

  Adhoc disallowance of expenses deleted

  Rejection of books of accounts - N.P. addition - Held that:- After rejection of the books of accounts, the A.O. can look towards the past history of the assessee or of any comparable case. He cannot draw support from any and every decision without comparing the facts of that case with that of the assessee. He cannot tear out of context by cherry picking no such addition can be allowed to be made. The A.O. has adopted the N.P. rate but has ignored the N.P. Rate of the assessee disclosed in the immediately preceding year. The N.P. Rate of this year is better than the earlier year. Therefore, no addition, like one made by the A.O. is not justified. The ld. CIT(A) has also confirmed the same. On a wrong premise by following the reasons given by the A.O. and by not considering the contention of the assessee. In out considered opinion the first time imposition of Entry Tax of huge amount of ₹ 9,69,454/- as per assessee Paper Book page 18, which fact has not been denied or disputed by the revenue, is a good ground and factor to justify small fall in the G.P. Rate. Thus delete the entire addition

  Interest received from F.D.Rs. and N.S.Cs. placed with Government while obtaining contract from Government is required to be assessed as income from business. Since this interest income is business income which has been considered in estimation of income by applying N.P. rate, we, therefore, are of the considered view that no separate addition is warranted.

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• 2013 (3) TMI 686
  
  Issues Involved: Appeals against orders of CIT u/s. 263 for AY 2007-08 and 2008-09.
  
  For AY 2007-08:
  The assessee challenged the order passed by the CIT u/s. 263, contending that the assessment order by the Assessing Officer was not erroneous or prejudicial to the Revenue's interest. The CIT found that the AO failed to apply his mind, passed a stereotyped order, and did not make necessary inquiries. Citing the judgment in Malabar Industrial Co. Ltd. v. CIT, the CIT directed the AO to pass a fresh assessment order after proper inquiry and consideration of all aspects. The Tribunal's decision in Rajratna Metal Industries Ltd. v. CIT was deemed inapplicable as it pertained to a different scenario where necessary inquiries were made. The appeals were dismissed.
  
  For AY 2008-09:
  Similar to the AY 2007-08 issue, the assessee contested the CIT's order u/s. 263, arguing that the assessment order was not erroneous. The CIT found that the AO failed to apply his mind, issued a cryptic order, and did not conduct necessary inquiries. Relying on the judgment in Malabar Industrial Co. Ltd. v. CIT, the CIT directed the AO to issue a fresh assessment order after thorough inquiry and consideration of all relevant facts. The Tribunal's decision in Rajratna Metal Industries Ltd. v. CIT was considered irrelevant due to the absence of proper inquiries by the AO. Consequently, the appeals were dismissed.
  

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• 2013 (3) TMI 685
  

  Legality of of proceedings u/s.153C - whether money, bullion, jewellery or other valuable articles or things or books of account or documents seized belongs to assessee which disclosed that there is unaccounted expenditure - Cash payments made for purchase of land - Held that:- document seized from the possession of Shri Dilip Dherai does not belong to the assessee as none of these documents have been found from the possession of the assessee - these seized documents do not even mention the name of the assessee - in the absence of corroborative evidences, additions on the basis of slips, loose sheets cannot be upheld - until there are independent evidences exist, the addition on the basis of notings, jottings cannot be upheld - there is nothing on record to prove the source of the alleged cash expenditure

  The ‘satisfaction note’ as recorded by AO is of no legal consequence - u/s. 153C, the primary condition has to be fulfilled is that the money, bullion, documents etc., seized should belong to such other person - If this condition is not satisfied, no proceedings could be taken u/s. 153C of the Act - Here the seized documents do not belong to the assessee but were seized from the residential premises of Shri Dilip Dherai - Decided in favor of assessee

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• 2013 (3) TMI 684
  
  Issues involved: Appeal against order confirming penalty u/s 271(1)(c) for non-exemption of long term capital gain u/s 10(38).
  
  Summary:
  1. The appellant filed return declaring income for AY 2005-06. AO treated share transactions as income from other sources, later directed to tax under capital gains. CIT (A) upheld this but disallowed exemption u/s 10(38) for non-STT payment. Penalty u/s 271(1)(c) was levied by AO for non-exemption of long term capital gain.
  
  2. Assessee claimed STT not paid by broker, withdrew claim upon knowledge, citing bonafide reasons. AO initiated penalty for different issue, CIT (A) upheld penalty stating transactions were dubious, no STT paid, and intention to evade tax evident. Assessee's claim of bonafideness rejected.
  
  3. Assessee contended penalty was based on non-allowance of exemption u/s 10(38) by CIT (A), not AO's original issue. No inaccurate particulars furnished, reliance on SC principles. DR supported AO and CIT (A).
  
  4. ITAT found AO's penalty based on CIT (A)'s direction irrelevant, no examination by AO on exemption issue. Penalty cancelled due to bonafide claim, no variation in income amounts. AO's penalty calculation questioned but ultimately cancelled. Assessee's appeal allowed.

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• 2013 (3) TMI 683
  
  Issues Involved:
  1. Invocation of inherent powers u/s 482 of the Code of Criminal Procedure.
  2. Validity of the summoning order and complaint under Sections 174 and 175 of IPC.
  3. Retrospective amendment of Section 108 of the Customs Act and its implications.
  4. Application of Article 20 of the Constitution of India.
  
  Summary:
  
  Invocation of inherent powers u/s 482 of the Code of Criminal Procedure:

  The Petitioner sought to invoke the inherent powers of the High Court u/s 482 of the Code to set aside the summoning order and quash the complaint for offences punishable under Sections 174 and 175 of IPC.

  Validity of the summoning order and complaint under Sections 174 and 175 of IPC:

  The Petitioner was summoned by the Customs Officer to appear with import and sale documents. The Petitioner failed to comply with the summons due to personal reasons. The complaint was filed against the Petitioner for offences under Sections 174 and 175 IPC on the grounds of intentionally omitting to appear before a public servant and failing to produce the required documents.

  Retrospective amendment of Section 108 of the Customs Act and its implications:

  The Petitioner's counsel argued that at the time of issuance of the summons, the customs officer was not duly empowered by the Central Government as required by Section 108 of the Customs Act. The amendment in Section 108, which came into force retrospectively, cannot make the Petitioner liable for non-compliance of the summons issued by an officer who was not duly empowered at that time.

  This argument was supported by a judgment in Rakesh Kumar Goyal v. NCT of Delhi & Anr., where it was held that a retrospective amendment can confer procedural competency on an officer but cannot create an offence retrospectively.

  Application of Article 20 of the Constitution of India:

  The Court agreed that making an action punishable retrospectively by an amendment would be hit by Article 20 of the Constitution of India, which prohibits convictions under ex post facto laws. Therefore, the complaint under Sections 174 and 175 IPC and the summoning order dated 16.07.2011 were quashed.

  Conclusion:

  In light of the retrospective amendment and the protection under Article 20 of the Constitution, the High Court quashed the complaint and the summoning order, thereby disposing of all pending applications.

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• 2013 (3) TMI 682
  
  Issues involved: Determination of attempted illegal export of Phensydyl Cough Linctus Syrup, burden of proof in smuggling cases, appeal against the order of confiscation and penalty.
  
  Attempted illegal export: The Additional Commissioner of Customs found that the respondent, who purchased the drug formulation, was attempting to illegally export it to Bangladesh due to its misuse and demand in that country. The respondent's admission of having a drug license but not conducting any drug business, along with the lack of evidence of legitimate sales in his shop, led to the suspicion of illegal activities. The department relied on circumstantial evidence and legal provisions like section 106 and 114 of the Evidence Act to establish the case of attempted illegal export.
  
  Burden of proof in smuggling cases: The department argued that in smuggling cases, the burden of proof can be discharged by bringing on record facts and circumstances leading to the conclusion that the seized goods were smuggled. Legal precedents were cited to support the use of circumstantial evidence and presumptions under the Evidence Act to establish smuggling activities. The department was not required to prove with mathematical precision but on the preponderance of probability.
  
  Appeal against the order: The respondent appealed the order of confiscation and penalty before the Commissioner of Customs, who disagreed with the findings of the Additional Commissioner. The Commissioner's decision was criticized for not providing reasons for overturning the initial finding of attempted illegal export. The High Court set aside the order of the Commissioner, remanding the matter for a reasoned decision within a specified timeframe and suggesting the recusal of the Commissioner who allowed the appeal to ensure fairness in the proceedings.

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• 2013 (3) TMI 681
  

  Registration of transfer of immovable property - Refund of excess stamp duty and registration charges on Windmills - Inclusion of value of Windmills into the value of Property - Windmills are movable or immovable property?

  HELD THAT:- That windmills are movable property, which stood sold to the petitioners prior to registration of sale deed. Mulla in his book on Transfer of Property Act, 1966 (Sixth Edition) quoted with approval a decision of the Calcutta High Court in Janchand v.Kishore (AIR 1960 Calcutta 301) held that the machinery was not attached for the mere beneficial enjoyment of either the soil or the concrete; it was actually a case of the structure being built around the machinery to protect it”. Therefore,Windmills were also installed on the cemented platform on the land for running of windmills and not for the benefit of the land.

  Hence,No stamp duty was payable on the value of windmills and the petitioner is entitled to refund of stamp duty and additional registration charges.

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• 2013 (3) TMI 680
  
  Issues involved: The judgment involves the issue of not granting interest u/s 244A of the Income Tax Act upon the refund of the interest levied u/s 201(1A) of the Act.
  
  Summary:
  
  Issue 1: Appeal against orders of Ld.CIT(A) regarding interest u/s 244A:
  The appeals were filed by the assessee against three separate orders of the Ld.CIT(A) for the Assessment Years 2000-01, 2001-02, and 2002-03, challenging the non-granting of interest u/s 244A on the refunds of interest levied u/s 201(1A) of the Income Tax Act. The ITAT Mumbai held that the AO's orders u/s 201(1A) were time-barred and ordered refunds without granting interest u/s 244A. The Ld.CIT(A) held that the orders passed by the AO could not be appealed against u/s 246A and that interest u/s 244A could not be claimed directly before the CIT(A). However, the ITAT disagreed, citing precedents and statutory entitlements, and allowed the appeals, directing the AO to calculate and grant interest on the refunds.
  
  Issue 2: Entitlement to interest u/s 244A on refunds of interest levied u/s 201(1A):
  The Ld.AR contended that the assessee was entitled to interest on the refunds of interest levied u/s 201(1A), supported by various legal decisions. The Ld.DR, on the other hand, relied on the Ld.CIT(A)'s orders. The ITAT held that the assessee's right to appeal against the AO's orders giving effect to the ITAT's decision could not be denied. It emphasized that the AO was duty-bound to grant interest on refunds as per statutory provisions, and the circular cited by the Ld.CIT(A) did not apply to the case. The ITAT also clarified that the orders u/s 201(1A) were within the purview of 'assessment order' and that interest u/s 244A was admissible on the refunds.
  
  Conclusion:
  The ITAT allowed the appeals, setting aside the Ld.CIT(A)'s orders and directing the AO to calculate and grant interest u/s 244A on the refunds of interest levied u/s 201(1A) for the respective Assessment Years. The appeals filed by the assessee were allowed, and the orders were pronounced on March 6th, 2013.

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• 2013 (3) TMI 679
  
  Issues involved:
  The judgment involves the deletion of penalty imposed by the petitioner-Department under section 25(1) read with section 61 of the Sales Tax Act, based on the respondent's failure to collect and deposit Central sales tax (CST) on the sale of "Naswar" (snuff) on an inter-State basis during a specific period.
  
  Issue 1: Failure to Collect and Deposit CST:
  The petitioner-Department imposed a penalty on the respondent for not collecting and depositing Central sales tax (CST) on the sale of "Naswar" during a specified period. The respondent argued that they were unaware of the legal amendment and promptly deposited the due tax upon becoming aware. The Tax Board, after considering submissions, deleted the penalty of &8377; 54,680 under section 61 of the Act in the order dated March 27, 2012.
  
  Issue 2: Justification for Penalty Imposition:
  The petitioner contended that the penalty was rightfully imposed due to the respondent's failure to collect and pay VAT, which they were legally obligated to do. It was argued that the respondent, being a reputable company, should have been aware of the legal changes and fulfilled their tax obligations. The petitioner claimed that the deletion of the penalty by the Tax Board was unjustified, alleging evasion of tax by the respondent.
  
  Judgment Summary:
  Upon review, the court noted that the legal amendment regarding the taxation of "bidi" was effective from April 1, 2007, and the respondent promptly deposited the due tax upon becoming aware of the change. The court emphasized that the respondent's actions did not indicate any ulterior motive for tax evasion, especially since the tax was paid before the penalty order. The complexity of tax laws and frequent amendments were highlighted, indicating that the respondent could not be faulted for lack of awareness. The court found that all transactions were properly recorded, and there was no substantial basis for imposing the penalty under section 25(1) read with section 61 of the Act. Consequently, the court upheld the Tax Board's decision to delete the penalty, dismissing the revision petition.
  

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• 2013 (3) TMI 678
  
  Issues involved: Appeal against order of Commissioner of Income Tax (Appeals) u/s 143(3) of the Income Tax Act, 1961 for assessment year 2008-09.
  
  Grounds of Appeal:
  1. Orders passed by lower authorities deemed illegal, arbitrary, and bad in law.
  2. Rejection of books of account and application of net profit rate of 12% on net contract receipts.
  3. Non-allowance of deduction of interest and salary paid to partners u/s 40(b) of the Act.
  
  Details of Judgment:
  1. The assessee, a road contractor, declared total income of Rs. 61,23,300 for the year. During scrutiny, incomplete information led to rejection of books of account u/s 145(3) due to lack of stock register and original vouchers. Net income was estimated at Rs. 92,14,731 applying a flat rate of 12%.
  2. The appeal challenged the rejection of books and application of 12% net profit rate. The Tribunal found the rejection justified due to incomplete records. However, considering the assessee's declared net profit rate of 8.94%, a 9% rate was applied instead of 12%. Deductions for interest and partner salaries were allowed u/s 40(b).
  3. The Tribunal referred to a similar case where a 12% rate was not deemed appropriate, leading to the decision to adjust the net profit rate to 9% for the assessee. The appeal was partly allowed, with deductions allowed for interest and partner salaries.
  
  Conclusion:
  The appeal was partly allowed, with the net profit rate adjusted to 9% and deductions for interest and partner salaries permitted.

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• 2013 (3) TMI 677
  
  The High Court of Kerala directed the 5th respondent to decide on the stay petition filed by the petitioner within four weeks, staying the recovery of tax due under the assessment order until then. The petitioner was asked to submit a copy of the judgment and writ petition to the appellate authority for compliance.

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• 2013 (3) TMI 676
  
  Issues involved: Appeal against the order of the learned CIT(A)- XXI, Ahmedabad u/s 250 read with section 143(3) of the IT Act for the assessment year 2009-10, focusing on the deletion of depreciation disallowance amounting to Rs. 13,74,010/- claimed on assets purchased.
  
  Issue 1 - Disallowance of Depreciation:
  The appeal challenged the disallowance of depreciation by the learned CIT(A) amounting to Rs. 13,74,010/- on assets purchased, claimed as application of funds u/s 11(1)(a) of the Act. The Tribunal cited previous cases where it was held that income of the assessee trust must be computed on commercial principles, allowing for depreciation. The Tribunal emphasized that granting exemption u/s 11 and depreciation u/s 32 does not result in double deduction, as exemption u/s 11 is not a deduction but an exemption from tax liability. The Tribunal also noted that claiming depreciation does not affect cash position but is essential for asset replacement. The judgment of the Hon'ble Gujarat High Court was followed, and the appeal of the revenue was dismissed.
  
  Issue 2 - Precedent and Judicial Decisions:
  The Tribunal referred to previous decisions, including one where it was held that income from property held under a Trust should be computed based on normal accountancy rules, allowing for depreciation. The Tribunal highlighted that while depreciation is necessary for computing income in a commercial sense, it does not result in double application of funds. The Tribunal upheld the decision of the learned CIT(A) and dismissed the grounds raised by the Revenue. It was emphasized that Section 11(1)(a) and Section 32 of the Act apply independently under different circumstances, and both sections are applicable when their respective conditions are met.
  
  Separate Judgment by Judges:
  No separate judgment was delivered by the judges in this case.

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• 2013 (3) TMI 675
  

  Disallowance of the claim u/s.80IB(10)- whether building ‘E’ is a separate Housing Project or it is a part of the Housing Project originally sanctioned vide order dated 15-09-2003? - Held that:- There are no restrictions in the Income-tax Act on the assessee how to design his Housing Project. Moreover, merely because part of the FSI has been utilized in building ‘E’ which is claimed as separate Housing Project, the assessee should not be deprived of the benefit of Section 80IB(10). We, therefore, hold that on the facts and circumstances of this case, building ‘E’ is a separate Housing Project. Another aspect to be considered here, as submitted by the learned counsel, the utilities space is shifted to separate plot and building E was conceptuated separately. We, therefore, allow the appeal filed by the assessee and direct the Assessing Officer to allow the claim u/s.80IB(10) to the assessee.

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• 2013 (3) TMI 674
  
  Issues Involved:
  1. Deletion of disallowance of term loan waiver amounting to Rs. 1,74,13,729/-.
  2. Nature of the loan as working capital or capital in nature.
  3. Applicability of Section 41(1) of the Income Tax Act.
  
  Summary:
  
  Issue 1: Deletion of disallowance of term loan waiver amounting to Rs. 1,74,13,729/-

  The revenue contended that the Commissioner of Income Tax(Appeals) erred in deleting the disallowance of term loan waiver amounting to Rs. 1,74,13,729/-. The Commissioner overlooked the fact that the term loan was taken as working capital and hence connected with the business activity of the assessee, resulting in a taxable business profit.

  Issue 2: Nature of the loan as working capital or capital in nature

  The assessee argued that the loan was of a capital nature to the extent of the principal amount, with no interest element involved as the interest was already written off. The Commissioner of Income Tax(Appeals) accepted this contention, holding that only the interest element could be taxed if it had been claimed and allowed as a deduction in earlier years. Consequently, the addition made by the Assessing Officer was deleted.

  Issue 3: Applicability of Section 41(1) of the Income Tax Act

  The Tribunal examined whether the waiver of the loan under the BIFR scheme constituted a remission or cessation of trading liability u/s 41(1). It was noted that the liability reduction was part of the rehabilitation scheme for a sick industrial undertaking, not a trading liability remission. The Tribunal referenced multiple cases, including Commissioner of Income-tax v. Shree Pipes Limited (301 ITR 240) and Commissioner of Income-tax v. Tosha International Ltd. (331 ITR 440), concluding that the reduction of liability under the BIFR scheme does not result in income to the assessee either u/s 28(i), u/s 28(iv), or u/s 41(1) of the IT Act.

  Conclusion:

  The Tribunal upheld the order of the Commissioner of Income Tax(Appeals), finding no error or illegality. The appeal filed by the revenue was dismissed.

  Order Pronouncement:

  Order pronounced in the Open Court on this 26th day of MAR 2013.

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• 2013 (3) TMI 673
  

  Deduction for income of Co-operative Society u/s 80P - The taxpayer, an agriculture Co-operative society, has not filed the return of income within the due date provided u/s 139(1) or 139(4) of the Act. Though it has filed all the particulars with regard to depreciation. However, the assessing officer without any discussion disallowed part of the depreciation - HELD THAT : - As income tax return was not filed by the taxpayer within due date, he is not eligible for deduction u/s 80P of the Act. Though he submitted the depreciation particulars nothing prevents the A.O. from considering the issue and record reasons for disallowing the depreciation claim of the taxpayer.

  Disallowance u/s 40(a)(ia) - Non-deduction of TDS on interest u/s 194A(3)(viia) - Taxpayer, an agriculture Co-operative society, was accepting deposits and maintaining savings bank account and current bank account. The taxpayer was also providing cheque facilities to its customers. - HELD THAT : - Taxpayer is engaged in banking activities, hence bound to deduct tax u/s 194A(3)(viia) of the Act.

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