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2012 (1) TMI 209
Issues involved:
The judgment involves issues related to the validity of assessment under section 147, jurisdictional aspects of completing assessment under section 143(3) without issuing notice under section 143(2), computation of long term and short term capital gains under section 45(2) of the Act, and liability to interest under section 234B of the Act.
Validity of Assessment under Section 147:
The appellant challenged the assessment under section 147 as being void-ab-initio due to lack of jurisdiction under section 148. The first appellate authority dismissed the objection citing the appellant's participation in assessment proceedings. The appellant contended that the omission to issue notice under section 143(2) is not curable, citing relevant case laws. The Tribunal held that the burden of proof regarding the notice under section 143(2) lies with the revenue, and since no evidence was presented, the reassessment without the notice is invalid.
Jurisdictional Aspect of Completing Assessment under Section 143(3) without Notice under Section 143(2):
The appellant argued that the reassessment under section 143(3) was completed without issuing the mandatory notice under section 143(2), rendering the order invalid. The Tribunal noted that the appellant had raised this objection before the first appellate authority as well. Citing relevant case laws, including a Special Bench order, the Tribunal held that the absence of notice under section 143(2) is a fatal flaw in the reassessment process. The Tribunal emphasized that the provisions of section 292BB are not retrospective and do not apply to this case.
Computation of Capital Gains under Section 45(2) of the Act:
The authorities assessed long term and short term capital gains under section 45(2) by considering stock-in-trade received by the appellant on partition as capital assets converted into stock in trade. The appellant contended that the computation was excessive and should be reduced. However, since the jurisdictional issue was decided in favor of the appellant, the Tribunal did not adjudicate on the merits of this computation.
Liability to Interest under Section 234B of the Act:
The appellant denied liability to be charged interest under section 234B and reserved the right to seek waiver. The Tribunal, after setting aside the assessment due to jurisdictional issues, did not delve into this aspect.
Conclusion:
The Tribunal partly allowed the appeal filed by the appellant, primarily on the grounds of jurisdictional defects in the assessment process. The assessment under section 147 was deemed invalid due to the absence of a notice under section 143(2), as per relevant legal precedents. The other grounds raised by the appellant were not addressed due to the decision on the jurisdictional issue.
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2012 (1) TMI 208
Issues Involved:
1. Determination of Arms' Length Price (ALP) in respect of international transactions.
2. Exclusion of telecommunication charges and foreign exchange loss from total turnover while computing deduction under section 10A.
3. Levy of interest under section 234B of the Income-tax Act, 1961.
Detailed Analysis:
1. Determination of ALP in respect of International Transactions:
The assessee challenged the assessment order which included an adjustment of Rs.1,84,11,998/- under section 92CA. The assessee argued that the lower authorities erred in various aspects including:
- Disregarding principles of natural justice.
- Making a reference to the Transfer Pricing Officer (TPO) without demonstrating a motive of tax evasion.
- Using current year data and rejecting the Cost Plus Method (CPM).
- Adopting inappropriate comparables and not providing the opportunity to cross-examine parties.
- Not allowing the benefit of the +/-5% range under section 92C(2).
The Tribunal, after considering the submissions and following the decision in the case of M/s. Genesis Integrating Systems (India) Pvt. Ltd., remitted the matter back to the TPO with specific directions:
- Only consider the operating revenue and cost of transactions relating to associated enterprises.
- Use comparables with a turnover between Rs.1 crore and Rs.200 crores.
- Provide all information relating to comparables to the assessee.
- Allow the assessee to cross-examine the parties whose replies are used against them.
- Address the objections regarding additional comparables.
- Apply the standard deduction of 5% under the proviso to section 92C(2).
2. Exclusion of Telecommunication Charges and Foreign Exchange Loss from Total Turnover:
The assessee contested the exclusion of telecommunication charges and foreign exchange loss from the total turnover while computing the deduction under section 10A. The Tribunal referred to the judgment of the Hon'ble High Court of Karnataka in the case of CIT v M/s. Tata Elxsi Ltd. & Others, which held that such expenses should be excluded from both the export turnover and the total turnover to maintain uniformity in the formula.
The Tribunal directed that telecommunication charges and foreign exchange loss should be excluded from both the total turnover and the export turnover in computing the deduction under section 10A.
3. Levy of Interest under Section 234B:
The assessee also appealed against the levy of interest under section 234B amounting to Rs.35,53,271/-. The Tribunal noted that the levy of interest under section 234B is mandatory and consequential in nature and therefore did not address this issue further.
Conclusion:
The appeal was partly allowed for statistical purposes, with the matter regarding ALP determination remitted back to the TPO for fresh consideration, and directions were issued to exclude telecommunication charges and foreign exchange loss from both total turnover and export turnover while computing the deduction under section 10A. The issue of interest under section 234B was deemed mandatory and consequential, thus not requiring further deliberation.
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2012 (1) TMI 207
Issues Involved:
1. Reopening of assessment u/s 148.
2. Applicability of section 50C of the Income Tax Act.
3. Calculation of capital gains on the transfer of property.
4. Validity of invoking section 50C in the context of an unregistered sale agreement.
Summary:
Reopening of Assessment u/s 148:
The assessee challenged the reopening of the assessment by issuing a notice u/s 148. The assessee argued that the information from the Inspector of Stamps and Registration Department pertained to a sale deed registered on 16-05-2007, which was irrelevant to the transaction completed on 06-09-2002. The Tribunal found that the reopening of the assessment was not justified as the information was not relevant to the assessment year 2003-04.
Applicability of Section 50C:
The primary issue was whether the provisions of section 50C applied to the transfer of property through an unregistered sale agreement. The Tribunal noted that various Benches, including the Jaipur Bench, consistently held that section 50C does not apply to transfers made through unregistered agreements. The Tribunal cited the case of Navneet Kumar Thakkar vs. ITO, where it was held that section 50C could not be invoked if the property was transferred through an unregistered agreement.
Calculation of Capital Gains:
The AO calculated the capital gains based on the valuation of Rs. 2,58,44,260/- determined by the Sub Registrar, which the assessee contested. The Tribunal observed that the AO should have referred the matter to the valuation officer as per section 50C(2) when the value assessed by the stamp valuation authority exceeded the fair market value. The Tribunal also noted that in the case of the purchaser, the DVO valued the property at Rs. 32,01,100/-, and the CIT (A) accepted the declared value of Rs. 18,00,000/-.
Validity of Invoking Section 50C:
The Tribunal held that the provisions of section 50C were not applicable in the present case as the property was transferred through an unregistered sale agreement. The Tribunal also noted that the adjacent plot sold by the assessee's husband was treated differently, and the proceedings u/s 148 were dropped in that case.
Conclusion:
The Tribunal concluded that the addition made by the AO, confirmed by the CIT (A), was not justified. The Tribunal deleted the impugned addition and allowed the appeal of the assessee. The Tribunal did not address the legal ground against the initiation of proceedings u/s 148 as the addition was already deleted on merit.
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2012 (1) TMI 206
Issues Involved:
The issues involved in this case are the deletion of addition of share application money u/s 68 of the IT Act and the establishment of the genuineness of transactions regarding the increase in share capital.
Deletion of Addition of Share Application Money:
The appellant, a limited company engaged in manufacturing and sale of paper products, received share application money during the assessment year. The Assessing Officer made an addition of Rs. 70,000,000/- on the appellant's income u/s 68 of the IT Act as the identity of the share applicants could not be established. The appellant contended that it had received share application money from different investors, but the departmental officers in Lucknow and Agra reported that no such companies existed at the given addresses. The Assessing Officer required the appellant to produce the M.D./C.E.O. of these companies for examination, but no such person was produced. The Ld. Commissioner of Income Tax (Appeals) observed that the appellant had furnished adequate details during assessment proceedings to substantiate the increase in share capital. The Ld. Commissioner held that the onus had shifted from the appellant to the Assessing Officer, who failed to show any discrepancy in the evidence provided. Consequently, the Ld. Commissioner decided the issue in favor of the appellant.
Establishment of Genuineness of Transactions:
The ITAT Delhi found that the identity of the share holders was not established, as the departmental officers could not locate the share applicant companies at the given addresses. The documents relied upon by the Ld. Commissioner of Income Tax (Appeals) were not scrutinized by the Assessing Officer, and the premium at which the shares were issued was not examined by the authorities below. Therefore, the ITAT Delhi remitted the matter to the file of the Assessing Officer for a fresh consideration. The ITAT Delhi allowed the appeal filed by the Revenue for statistical purposes, emphasizing the need for a thorough examination of the documents and the premium at which the shares were issued.
Separate Judgement:
The order was pronounced by the ITAT Delhi on 31/1/2012.
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2012 (1) TMI 205
Issues involved:
1. Whether the State of Uttar Pradesh has the authority to fix the State Advised Price (SAP) over and above the minimum price set by the Central Government?
Detailed Analysis:
Issue 1: State's Authority to Fix SAP
The central issue in this judgment revolves around whether the State of Uttar Pradesh possesses the power to establish the State Advised Price (SAP) for sugarcane, in addition to the minimum price determined by the Central Government. The appellants argue that the State lacks the authority to fix prices under the U.P. Sugarcane Act, citing the Constitution Bench judgment in Ch. Tika Ramji's case, which highlighted the legislative history and concluded that the State did not have the power to set sugarcane prices. This contention is supported by the absence of provisions in the U.P. Sugarcane Act for price fixation. The conflicting interpretations between Tika Ramji's case and the later U.P. Cooperative Cane Unions Federations case regarding the potential repugnancy of State-fixed prices with Central legislation further complicate the matter.
Issue 2: Conflict in Judgments
The judgment identifies a clear conflict between the decisions of the Constitution Benches in Tika Ramji's case and U.P. Cooperative Cane Unions Federations case. Given the recurring nature of disputes on similar issues in courts, the resolution of this conflict through an authoritative judgment of a larger Bench is deemed necessary in the interest of justice. The appellants advocate for a reference to a larger Bench to provide clarity on the legal principles involved.
Issue 3: Questions for Consideration
The judgment outlines several crucial legal questions to be deliberated by a larger Bench, including the exclusive power of the Central Government to fix sugarcane prices, the State Government's authority under the U.P. Sugarcane Act to determine prices, and the potential repugnancy of State laws with Central enactments. Additionally, the validity and legality of SAP fixation, compliance with constitutional provisions, and the presence of guidelines for price fixation are key issues requiring examination.
Conclusion and Direction
In light of the conflicting judgments and the need for a comprehensive resolution, the judgment refers all Civil Appeals and related matters to a larger Bench for adjudication. Meanwhile, the directive is issued for sugar factories to pay outstanding amounts to cane growers based on the SAP, with a stipulated timeline for payment. Failure to comply would result in interest liabilities. Notably, this payment directive does not prejudice the sugar factories' challenge to the State Government's legislative competence in imposing SAP, emphasizing the separate agreements in place between the parties.
This detailed analysis encapsulates the legal complexities, conflicting interpretations, and the need for a definitive resolution through a larger Bench's authoritative judgment in the context of the State's authority to fix sugarcane prices in Uttar Pradesh.
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2012 (1) TMI 204
Import of popcorn-maize - actual user condition - N/N. 38/2002-2007 dated 04.10.2002 - Held that: - the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government bound by its previous policy. It would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions required in the scheme. The High Court, therefore, was right in its conclusion that the Government is not barred by the promises or legitimate expectation from evolving new policy in the impugned notification.”
The policy of the Government of India stipulating the customs duty at Nil rate and withdrawing the condition of actual user cannot be said to be arbitrary, particularly, in view of the factual position evident from the table, extracted above, that the imports being way below the quota prescribed has no affect on domestic growers or the market and no harm to domestic growers or consumers is caused by notifying duty free import of maize (corn) and withdrawing the restriction of actual user.
Petition disposed off - decided partly in favor of petitioner.
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2012 (1) TMI 203
Issues involved: Appeal u/s 260-A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal regarding carrying forward excess expenditure over income to subsequent years in the case of a trust registered under the Societies Registration Act for advancement of science and technology.
Summary:
1. The appellant-Revenue filed an appeal u/s 260-A of the Income Tax Act challenging the order of the Income Tax Appellate Tribunal regarding allowing the assessee to carry forward excess expenditure over income to subsequent years. The Tribunal followed a decision of the High Court which stated that income derived from property held under trust for charitable purposes can be applied in subsequent years for charitable purposes. The Court held that adjusting expenses incurred for charitable purposes in an earlier year against income earned in a subsequent year qualifies as application of income for charitable purposes. The Delhi High Court also decided a similar issue in a judgment. The Court found no reason to interfere with the Tribunal's decision and dismissed the appeal.
2. The assessee, a trust registered under the Societies Registration Act for advancement of science and technology, had its assessment completed for the Assessment Year 2006-07 with a total income of &8377;6,04,34,990. The grant received from the Government of Gujarat was allowed to be carried forward and set off against income of the succeeding year by the CIT(Appeals).
3. The Revenue challenged the CIT(Appeals) order before the Tribunal, which followed a decision of the High Court and allowed the carrying forward of excess expenditure over income to subsequent years. The Tribunal's decision was based on the principle that income applied for charitable purposes in subsequent years qualifies as application of income for charitable purposes.
4. The Court, after considering the arguments presented by the Revenue, found no reason to interfere with the Tribunal's decision. The Court noted that the issue had been conclusively decided by the High Court and that no new material was presented to warrant a different decision. Therefore, the Tax Appeal was dismissed with no costs.
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2012 (1) TMI 202
Issues involved: Stay petition seeking extension of stay against recovery of outstanding tax arrears for assessment year 2006-07.
The Appellate Tribunal ITAT Bangalore considered a Stay Petition filed by the assessee requesting an extension of stay against the recovery of outstanding tax arrears amounting to Rs. 1,28,47,185 for the assessment year 2006-07. The interim stay previously granted by the ITAT had expired on specific dates. The assessee's representative provided reasons for seeking the extension, highlighting that the delays in the appeal process were not due to the appellant. The Tribunal noted the arguments presented by both parties and after considering the material on record, found that the assessee had established a prima facie case for the extension of stay. In the interest of justice, the Tribunal granted an extension of stay for a further period of 180 days or until the disposal of the appeal, whichever is earlier. The Tribunal emphasized that the delay in disposing of the appeal was not attributable to the assessee, citing relevant judgments to support their decision. Consequently, the Stay Petition filed by the assessee was allowed.
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2012 (1) TMI 201
Jurisdictional issue pertaining to the Committee – Commissioner of Central Excise, Dibrugarh, had by his order dated 23-4-2008 dropped all the charges brought against M/s. Kothari Products Ltdand consequentially allowed its products to be cleared from the factory - Members of the Committee on a consideration of the materials on record, adjudged the said decision of the Commissioner and directed him (Commissioner of Central Excise, Dibrugarh) to apply to the Tribunal for a correct determination of the points as enumerated in its order dated 24-7-2008 – Respondents preferred against the decision dated 24-7-2008 of the Committee, questioned its (Committee) jurisdiction and authority contending that the composition thereof was not in accordance with the mandatory requirements of Section 35(1B) of the Act and the relevant Rules framed thereunder – According to them, two members thereof namely Shri Rajendra Prasad who acted as Chief Commissioner of Central Excise, Shillong, and Shri Hrishikesh Sharan who did so as Chief Commissioner of Central Excise, Kolkata, had no locus standi to discharge their said roles as the necessary notification under Rule 3(2) of the Central Excise Rules, 2002 to that effect which is obligatory, had not been issued.
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2012 (1) TMI 200
Whether the detaining authority acted rather casually in the matter in issuing the order of detention and the High Court also appears to have missed the right to liberty as contained in Article 21 of the Constitution and Article 22(2) thereof, as well as the provisions of Section 167 of the Code of Criminal Procedure?
Whether the impugned order of detention dated 31st January, 2011, passed by the District Magistrate, Imphal West District, Manipur, in regard to the detention of Yumman Somendro @ Somo @ Tiken son of Y. Roton Singh, is acceptable?
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2012 (1) TMI 199
Issues Involved:
1. Delay in passing the detention order.
2. Misleading appraisal regarding legal representation before the Advisory Board.
3. Alleged difference in grounds of detention.
4. Non-supply of the proposal submitted by the Sponsoring Authority.
5. Reliance on in-camera statements recorded after release on bail.
6. Non-consideration of the complainant's affidavit.
7. Non-application of mind regarding the complaint registered against unknown persons.
8. Non-consideration of the anticipatory bail order of the co-accused.
Summary:
1. Delay in Passing the Detention Order:
The petitioner challenged the detention order u/s 3(2) of the Maharashtra Prevention of Dangerous Activities Act, 1981, citing delays between 2nd September 2011 to 27th September 2011 and 27th September 2011 to 7th October 2011. The Detaining Authority explained the delays were due to the Additional Commissioner of Police (Crime) being busy with the Ganpati Festival Bandobast and investigations related to the 13th July 2011 serial bomb blasts, and the Detaining Authority's foreign visit. The court found these explanations sufficient and held that mere delay does not vitiate the detention order unless it snaps the live-link with the prejudicial activities.
2. Misleading Appraisal Regarding Legal Representation Before the Advisory Board:
The petitioner argued that being informed he could not be represented by a legal practitioner before the Advisory Board was misleading, citing State of Maharashtra & Ors. vs. Zubair Haji Qasim. The court noted that the grounds of detention merely restated the position u/s 11(5) of the Act and did not mislead the petitioner. The petitioner did not request legal representation before the Advisory Board, and thus, this ground was rejected.
3. Alleged Difference in Grounds of Detention:
The petitioner claimed that the grounds of detention translated on 12th October 2011 differed from those formulated after 13th October 2011. The Detaining Authority clarified that the grounds were the same and were duly considered before issuing the detention order on 14th October 2011. The court found this grievance to be based on assumptions and devoid of merit.
4. Non-Supply of the Proposal Submitted by the Sponsoring Authority:
The petitioner contended that the proposal by the Senior Inspector of Police, Borivali Police Station, was a vital document that should have been furnished. The Detaining Authority countered that the proposal was only referred to and not relied upon. The court, referencing previous judgments, held that non-supply of the proposal did not vitiate the detention order as it was not a relied-upon document.
5. Reliance on In-Camera Statements Recorded After Release on Bail:
The petitioner argued that in-camera statements recorded on 5th and 8th August 2011, after his release on bail, should not be relied upon, citing Pradeep Nilkanth Paturkar. The court noted that the statement on 5th August 2011 was contemporaneous with the release on bail and did not find the reliance on these statements to render the detention illegal.
6. Non-Consideration of the Complainant's Affidavit:
The petitioner claimed that the Detaining Authority did not consider an affidavit absolving him of charges. The Detaining Authority stated that the affidavit was considered along with a subsequent statement indicating it was made under duress. The court found no merit in this challenge as the affidavit was duly considered.
7. Non-Application of Mind Regarding the Complaint Registered Against Unknown Persons:
The petitioner argued that a complaint registered against unknown persons could not be the basis for his detention. The court noted that the Detaining Authority relied on a subsequent statement identifying the petitioner and found no merit in this ground.
8. Non-Consideration of the Anticipatory Bail Order of the Co-Accused:
The petitioner contended that the Detaining Authority did not consider the anticipatory bail order of the co-accused. The Detaining Authority confirmed awareness of the co-accused's bail and had considered it. The court found this ground to be without merit.
Conclusion:
The petition was dismissed as all grounds of challenge were found to be devoid of merit.
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2012 (1) TMI 198
Issues Involved:
1. Maintainability of writ petition for payment of interest.
2. Entitlement to interest on the seized amount.
3. Claim for interest post-refund of the principal amount.
Summary:
1. Maintainability of Writ Petition for Payment of Interest:
The learned Single Judge dismissed the writ petition relying on precedents, stating that a writ petition claiming only payment of interest is not maintainable. However, the court noted that the Apex Court in Godavari Sugar Mills Ltd. Vs. State of Maharashtra (2011) 2 SCC 439 clarified that while normally a writ petition for enforcing a civil liability is not entertained, the High Court can order payment of money in enforcement of statutory functions. The court found the present case fit for exercising discretion under Article 226 of the Constitution of India, as the facts were undisputed and the seizure was without authority of law.
2. Entitlement to Interest on the Seized Amount:
The court held that the seizure of Rs. 4,50,000/- was without authority of law and the respondent had a duty to refund the amount along with any accretion thereon. The principle of restitution was invoked, and it was noted that the respondent had earned interest of Rs. 4,42,500/- on the seized amount. The court emphasized that allowing the respondent to retain the benefits accrued from the wrongful seizure would amount to unjust enrichment. The court directed the respondents to pay Rs. 4,42,500/- to the appellant within eight weeks, failing which the amount would incur interest at the rate of 10% per annum.
3. Claim for Interest Post-Refund of the Principal Amount:
The court differentiated the claim for interest post 1st December 2009 on the amount of Rs. 4,42,500/-. It was held that this claim could not be adjudicated in writ proceedings and required a civil suit. Rule 8 of the Foreign Exchange Management (Encashment of Draft, Cheque, Instrument and Payment of Interest) Rules, 2000, which provides for interest at 6% per annum on the principal amount, was found inapplicable to the claim for interest on the interest amount. The court upheld the learned Single Judge's dismissal of the writ petition regarding this claim, granting liberty to the appellant to institute a suit for the same.
Conclusion:
The appeal was allowed to the extent of directing the respondents to pay Rs. 4,42,500/- to the appellant within eight weeks, with a 10% per annum interest penalty for non-compliance. The claim for interest post 1st December 2009 was dismissed, with liberty to the appellant to pursue a civil suit. The court also awarded costs of Rs. 20,000/- to the appellant.
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2012 (1) TMI 197
Whether the High Court is justified in interfering with the order dated 27.09.2004 passed by the Additional Collector (Finance and Revenue), Lucknow demanding differential stamp duty with interest and penalty in respect of the sale deed dated 16.04.2003 executed in favour of the respondents herein?
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2012 (1) TMI 196
Issues Involved:
1. Validity of the order passed by CIT u/s 263.
2. Examination of contravention of Section 269SS.
3. Verification of expenses and maintenance of stock registers.
4. Verification of closing stock and work in progress.
5. Examination of sundry creditors and applicability of Section 40(a)(ia).
Summary:
1. Validity of the order passed by CIT u/s 263:
The assessee challenged the order passed by CIT u/s 263, claiming it was "bad in law and bad in facts." The CIT had considered the assessment order erroneous and prejudicial to the interest of the revenue. The Tribunal noted that the AO had already made inquiries and recorded findings on various aspects, including maintenance of stock registers and verification of expenses. The Tribunal emphasized that sufficiency of inquiry is subjective and if the AO had made inquiries and considered all aspects, the order could not be termed erroneous and prejudicial to the revenue.
2. Examination of contravention of Section 269SS:
The CIT raised concerns about potential contravention of Section 269SS due to cash deposits in the bank account. The assessee provided extracts from the cash book showing deposits were made from cash in hand. The Tribunal found no evidence that the assessee accepted deposits in violation of Section 269SS, noting that the tax audit report indicated compliance. Thus, the Tribunal held that the CIT's concerns on this issue did not justify invoking Section 263.
3. Verification of expenses and maintenance of stock registers:
The CIT criticized the AO for not verifying expenses and maintaining stock registers. However, the Tribunal observed that the AO had already noted the absence of stock registers and vouchers, and had applied a net profit rate after rejecting the books of accounts. The Tribunal ruled that the AO's inquiries were sufficient and the CIT's concerns did not warrant revision under Section 263.
4. Verification of closing stock and work in progress:
The CIT claimed the AO failed to verify the closing stock and work in progress, which could have led to a higher income assessment. The Tribunal noted that the assessee consistently followed a method of accounting where purchases were treated as consumption, and changing this method would require adjustments in the opening stock as well. The Tribunal concluded that the AO's acceptance of the assessee's consistent accounting method did not make the order erroneous or prejudicial to the revenue.
5. Examination of sundry creditors and applicability of Section 40(a)(ia):
The CIT argued that the AO did not verify sundry creditors, which could have implications under Section 40(a)(ia). The Tribunal referenced the jurisdictional High Court's ruling in CIT vs. G.K. Contractors, which held that no separate addition for cash credits could be made if the books of accounts were rejected. The Tribunal found that the AO's approach was consistent with this precedent and thus not erroneous or prejudicial to the revenue.
Conclusion:
The Tribunal concluded that the CIT was not justified in invoking Section 263, as the AO had made necessary inquiries and the issues raised by the CIT were either already considered by the AO or were not grounds for revision. The Tribunal canceled the CIT's order and allowed the assessee's appeal.
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2012 (1) TMI 195
Issues Involved: The judgment involves the deletion of trading addition and short term capital gains addition by the CIT(A) u/s 250(6) of the Income-tax Act, 1961.
Deletion of Trading Addition:
The revenue raised the issue of deletion of trading addition of Rs. 4,99,000 made by the AO after rejecting the books of account u/s 145(2). The CIT(A) held that the provisions of Section 145(3) cannot be applied based on non-maintenance of stock register. The CIT(A) observed that all books of account and vouchers were submitted by the appellant without any discrepancies, leading to the deletion of the addition. The Tribunal referred the issue back to the CIT(A) for fresh adjudication to examine the relevant material and draw proper inferences.
Deletion of Short Term Capital Gains Addition:
The revenue challenged the deletion of the addition of Rs. 3,75,000 on account of short term capital gains by the CIT(A). The AO made the addition as the assessee failed to prove the nature and source of the amount spent on the settlement of a property dispute. The CIT(A) deleted the addition citing lack of dispute regarding the expenditure and unsatisfactory treatment by the AO. The Tribunal found that the assessee failed to provide evidence of incurring the expenditure, leading to the allowance of the revenue's appeal. The Tribunal emphasized the need for corroborative documentary evidence to support the claim of expenditure.
Conclusion:
The Tribunal partly allowed the revenue's appeal concerning the deletion of trading addition and short term capital gains addition. The decision highlighted the importance of providing credible evidence to support claims and the necessity of thorough examination of relevant material in tax assessments.
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2012 (1) TMI 194
Valuation - retail sale price - clearances made to exports - cement bags - whether retail sale price is required to be written on the cement bags in terms of Standard Weight & Measurement Act, 1976? - Held that: - the identical issue stands dealt by the Tribunal in the case of Ultratech Cement Ltd. [2011 (11) TMI 717 - CESTAT NEW DELHI] where it was held that the Sl.No.1 (C) of the Notification would be proper serial number for payment of duty in respect of the cement cleared for export - condition of pre-deposit dispensed with - petition allowed.
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2012 (1) TMI 193
Issues involved: Lack of pre-revision notice, authority of respondent to pass impugned order, limitation prescribed under Section 55 of Tamil Nadu General Sales Tax Act, 1959.
Impugned Order without Pre-Revision Notice:
The petitioner's counsel argued that the impugned order dated 03.09.2009 was passed without issuing a pre-revision notice to the petitioner. It was contended that the respondent lacked the authority to revise the earlier assessment order made on 23.09.2004 for the assessment year 2003-2004, as it exceeded the limitation prescribed under Section 55 of the Tamil Nadu General Sales Tax Act, 1959.
Admission by Respondent's Counsel:
In response, the respondent's counsel admitted that the impugned order of 03.09.2009 was indeed issued without a proper notice to the petitioner as required under Section 55 of the Act. Consequently, the impugned order was set aside. The respondent was directed to issue a fresh notice to the petitioner in accordance with the relevant provisions of the Act to revise the assessment order dated 23.09.2004 for the assessment year 2003-2004. The petitioner was instructed to raise all available grounds, including the limitation aspect, in its objections upon receiving the fresh notice.
Court's Decision:
The court ordered the writ petition in favor of the petitioner, directing that no costs be imposed. Additionally, the connected M.P.No.1 of 2012 was closed as a result of the judgment. The respondent was instructed to issue a fresh notice to the petitioner for revising the assessment order, and upon receiving objections from the petitioner, the respondent was required to consider and pass appropriate orders in accordance with the law and the objections raised by the petitioner.
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2012 (1) TMI 192
Issues Involved:
1. Constitutional validity of Section 2 of U.P. Act No.18 of 1991.
2. Validity of the Circular dated 13.8.2008 amending the L.R. Manual.
3. Legality of the removal and non-renewal of the petitioner as Additional District Government Counsel (Criminal).
Summary:
Issue 1: Constitutional Validity of Section 2 of U.P. Act No.18 of 1991
The writ petitions challenged the constitutional validity of Section 2 of U.P. Act No.18 of 1991, which amended Section 24 of the Code of Criminal Procedure (CrPC) by omitting sub-sections (4), (5), and (6), and the phrase "after consultation with the High Court" from sub-section (1). The court held that the amendment was arbitrary and unfounded, as it was based on non-existent facts and lacked a rational nexus to the object sought to be achieved. The amendment was found to be contrary to the original scheme and object of the CrPC, as well as the recommendations of various Law Commissions, which emphasized the need for an independent prosecuting agency. The court declared the amendment ultra vires, unconstitutional, and void, restoring the original provisions of Section 24 CrPC.
Issue 2: Validity of the Circular dated 13.8.2008 Amending the L.R. Manual
The petitioner also challenged the Circular dated 13.8.2008, which made consultation with the District Judge mandatory for the appointment of District Government Counsels. The court found the Circular to be arbitrary and in violation of the principles laid down by the Supreme Court in Km. Shrilekha Vidyarthi's case, which emphasized the importance of maintaining an independent prosecuting agency. The court quashed the Circular and directed the State of U.P. to amend the L.R. Manual in line with the observations made in the judgment.
Issue 3: Legality of the Removal and Non-Renewal of the Petitioner
The petitioner, who was appointed as Additional District Government Counsel (Criminal) Budaun and had her appointment renewed from time to time, was removed from her post based on adverse reports and complaints. The court found that the removal and non-renewal of the petitioner were arbitrary, as the State Government relied on the opinion of an Additional District Judge rather than obtaining the opinion of the District Judge, as required under the L.R. Manual. The court quashed the removal order and directed the State Government to reconsider the petitioner's case in light of the observations made in the judgment.
Order:
1. The Code of Criminal Procedure (U.P. Amendment) Act, 1991 (Act No.18 of 1991) (Section 2) is declared ultra vires, unconstitutional, void, and illegal, restoring the original provisions of Section 24 CrPC.
2. The order dated 22.3.2011 and the order dated 30.3.2011 passed by the District Magistrate, Badaun, are quashed with consequential benefits to the petitioner.
3. The State of U.P. is directed to reconsider the petitioner's case and permit her to discharge her duties in the meantime.
4. The State of U.P. is directed to amend the L.R. Manual within three months in accordance with the observations made in the judgment.
5. No orders as to costs.
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2012 (1) TMI 191
Issues:
1. Payment of Value Added Tax by respondent No.1 to the State of U.P.
2. Determination of liability for Value Added Tax on goods transported through the State of U.P.
3. Burden of Value Added Tax on customers.
4. Consideration of arrear dues by the High Court.
5. Timely disposal of the case by the High Court.
Analysis:
1. The respondent No.1, represented by Mr. Harish N. Salve, expressed readiness to pay the Value Added Tax imposed by the State of U.P. from a specified date, without prejudice to their rights and contentions during the final hearing. This willingness led to the suggestion of sending the matter back to the High Court for determining the payment of Value Added Tax.
2. Mr. Krishnan Venugopal, representing the State of U.P., agreed to the proposal as long as the payments were made, indicating no objection to remitting the case back to the High Court for a final decision on the liability for Value Added Tax on goods transported through the State. The Union of India also supported this submission, emphasizing the need for the High Court to decide on the party responsible for paying the tax.
3. Concerns were raised on behalf of the customers regarding the burden of the Value Added Tax, prompting a clarification that the High Court must determine who would ultimately bear this tax liability, depending on whether it is found payable or not. This issue of tax burden on customers was highlighted for the High Court's consideration.
4. The High Court was directed to address the question of arrear dues while making a final decision on the matter, ensuring that all outstanding payments are taken into account during the resolution process. The importance of this aspect was underscored in the judgment to ensure a comprehensive resolution of financial obligations.
5. Emphasizing the need for expeditious resolution, the High Court was urged to promptly dispose of the case, ideally within a timeframe of three months from the communication of the Supreme Court's order. This directive aimed to facilitate a swift conclusion to the legal proceedings, promoting efficiency and timely adjudication of the tax-related issues at hand.
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2012 (1) TMI 190
Issues involved: The judgment involves the levy of short term capital gain on the sale of agricultural land.
Levy of Short Term Capital Gain on Sale of Agricultural Land:
- The appeals by the Revenue arose from separate orders of the Commissioner of Income-tax (Appeals)-III, New Delhi, concerning two different assessees.
- The common issue in all appeals was the levy of short term capital gains on the sale of agricultural land, with the facts being identical except for figures.
- The assessees claimed exemption from capital gains tax as the lands sold were situated more than 8 kilometers from the outer limits of Gurgaon.
- The Assessing Officer (AO) treated the lands as capital assets and taxed the profits as short-term capital gains, suspecting the possibility of a shorter route.
- Before the CIT(A), it was argued that the lands were agricultural and situated beyond 8 kilometers from Gurgaon's municipal limits, supported by certificates from the Tehsildar and District Town Planner.
- The CIT(A) held that since the lands were more than 8 kilometers away from Gurgaon's outer municipal limit, they were not capital assets, thus exempt from tax.
- The Revenue contended that the nature of the lands should have been examined, citing a decision from ITAT Cochin Bench and the presence of a Container Depot nearby.
- The assessees maintained that the lands were agricultural, more than 8 kilometers from Gurgaon's municipal limits, and the AO's suspicions were unfounded.
- The Tribunal found no evidence to support the AO's claim that the lands were within 8 kilometers of Gurgaon's municipal limits, and since the nature of the lands was not in dispute, upheld the CIT(A)'s decision to grant relief to the assessees.
- Consequently, the appeals filed by the Revenue for both assessment years were dismissed.
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