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Showing 221 to 240 of 1191 Records
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2011 (3) TMI 1622
Issues involved: Assessment u/s. 115JB, Rectification u/s. 154, Penalty u/s. 271(1)(c) for furnishing inaccurate particulars of income.
Assessment u/s. 115JB: The assessee company filed its return of income declaring total income and the same was processed u/s. 143(1). Subsequently, it was found that the company is liable to tax u/s. 115JB on the net book profit. The assessment was rectified u/s. 154 after the company did not respond to the notice u/s. 154, resulting in the total income being determined at the net book profit amount.
Penalty u/s. 271(1)(c): The Assessing Officer (AO) imposed a penalty u/s. 271(1)(c) on the assessee for furnishing inaccurate particulars of income. The AO held that the company had not disclosed its income as per the provisions of Sec. 115JB, leading to understatement of income. The AO relied on a decision of the Gujarat High Court to support the imposition of the penalty, emphasizing that even if some figures are disclosed, penalty may still be imposed for inaccurate particulars. The AO concluded that the company had a malafide intention to avoid tax by submitting inaccurate particulars of income, thus levying a penalty.
Appeal and Confirmation: The assessee appealed to the Ld. CIT(A) arguing that the penalty should not be levied for incorrect tax calculations on already disclosed income. The Ld. CIT(A) upheld the AO's order, stating that the assessee failed to declare income u/s. 115JB and did not provide necessary details, leading to the confirmation of the penalty.
Appellate Tribunal Decision: The Appellate Tribunal dismissed the assessee's appeal, noting that the company had not declared book profits as required by Sec. 115JB, thereby furnishing inaccurate particulars of income. The Tribunal held that the plea that no penalty is leviable in such cases cannot be accepted as the company avoided paying taxes and did not provide explanations for the discrepancies, upholding the Ld. CIT(A)'s order.
Conclusion: The appeal filed by the assessee was dismissed, affirming the penalty imposed for furnishing inaccurate particulars of income.
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2011 (3) TMI 1621
Issues involved: Appeal against order of Commissioner of Income Tax(Appeals)-VI, Ahmedabad u/s 143(3) of the Income Tax Act, 1961 regarding addition of rent on property income.
Summary:
The appellant appealed against the order of the Commissioner of Income Tax(Appeals)-VI, Ahmedabad, challenging the addition of rent on property income. The appellant had given an industrial shed to a sister concern without charging any rent, as interest-free deposit was received. The Assessing Officer estimated the Annual Letting Value ("ALV") without basis, based on information collected without informing the appellant. The appellant argued for a more rational estimation based on rental valuation by municipal authorities or interest rate on the property cost, citing a High Court case. The Department did not object to setting aside the matter for re-adjudication based on the High Court decision. The Tribunal referred to the High Court case, emphasizing the relevance of the property's capital value in determining ALV. The Tribunal set aside the lower authorities' order and directed the Assessing Officer to determine ALV based on a reasonable interest rate on the property cost, ensuring the appellant's right to be heard. The appeal was allowed for statistical purposes.
In conclusion, the Tribunal's decision emphasized the importance of a reasonable basis for estimating property income, following a High Court precedent and ensuring the appellant's right to a fair hearing.
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2011 (3) TMI 1620
Issues involved: Determination of applicable section for TDS on payments made for hiring buses by an educational institution.
Summary:
Issue 1: Applicability of section for TDS on hiring of buses
The Revenue contended that TDS should have been deducted u/s 194I for hiring of buses by the educational institution, as the nature of the transaction amounted to payment of rent. The CIT(A) held that the relationship between the parties was a contract covered u/s 194C, based on similar cases and clarifications obtained from the Income Tax Department under RTI Act.
Issue 2: Arguments of the parties
The Revenue argued that the exclusive possession and use of the buses by the educational institution indicated a tenancy arrangement, making section 194I applicable. The assessee maintained that the payment was consideration for a contract with bus operators for student transportation, qualifying for TDS u/s 194C. The assessee cited precedents and ITAT judgments supporting their stance.
Judgment:
The ITAT upheld the CIT(A)'s decision, noting that hiring of buses falls under a contract covered by section 194C, as held in similar cases by Coordinate Benches. The discrepancy in TDS deduction by the Income-tax Department itself on similar transactions was highlighted, supporting the decision that TDS u/s 194C was appropriate. The appeals of the Revenue were dismissed based on these observations.
This judgment clarifies the distinction between TDS provisions u/s 194I and 194C in the context of payments made for hiring buses, emphasizing the contractual nature of such transactions for TDS determination.
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2011 (3) TMI 1619
Claim for sales-tax Benefits - nature of receipt - capital or revenue - The appellant is an HUF which is, inter alia, engaged in a range of business activities viz. manufacture and sale including generation and sale of power. In the course of its activities, the assessee company set up wind mills in the State of Maharashtra for generation of wind power. The Government of Maharashtra in terms of its policy on wind power generation granted various benefits, including sales-tax benefit. assessee was also entitled to the facility of transferring the sales-tax benefit to the third party. The assessee after obtaining the requisite permission from the State Government transferred the sales-tax benefit entitlements to a third party and the consideration thereof amounting to ₹ 63,74,291/- was claimed as a capital receipt.
HELD THAT:- In the present case, it is not the timing of the subsidy alone but the grant is linked to achieving operational efficiencies and that too for only six continuous years. If a unit which is otherwise eligible for incentive, does not achieve the plant load factor of 12% or above, it would not be entitled to receive the sales tax benefit. Therefore, it could not be said that the sales-tax benefit is available merely on commencement of generation. in our considered opinion, though the object of the Scheme is to promote generation of energy through non conventional sources but the same is sought to be achieved by the Government in the form of supporting the units to perform more efficiently and profitably. Thus, applying the purpose test to the facts of the present case and keeping in mind the objects behind the payment of incentive subsidy, we are satisfied that the sales-tax benefits received by the assessee under the instant Scheme are in the course of carrying on its trade more profitably and therefore such receipt cannot be characterized as capital in nature. Thus, the assessee fails on this Ground.
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2011 (3) TMI 1618
Issues Involved:
1. Applicability of tax and interest u/s 201(1) and 201(1A).
2. Deduction of tax at source u/s 194C on the value of materials supplied to contractors.
3. Obligation to pay tax u/s 201(1) when the recipient has already paid the tax.
Summary:
Issue 1: Applicability of tax and interest u/s 201(1) and 201(1A)
The Appellate Tribunal held that the assessee was not a defaulter and the provisions of s.201(1) and 201(1A) of the Act were not applicable. The Tribunal noted that the assessee was under no obligation to deduct tax at source for the supply portion of the contract, as the materials were purchased by the assessee and given to the contractor for carrying out the work. The Tribunal emphasized that the contract between the assessee and the contractor was a "contract for supply" and not a "contract of work."
Issue 2: Deduction of tax at source u/s 194C on the value of materials supplied to contractors
The Tribunal concluded that the CIT (A) erred in treating the agreement for supply of goods as part of a composite contract. The Tribunal found that there were three separate contracts for supply of goods, erection works, and civil engineering works, and the transaction for supply of materials was essentially a sale of goods. Therefore, the provisions of s.194C of the Act did not apply to the supply portion, and the assessee was not required to deduct tax at source on these payments.
Issue 3: Obligation to pay tax u/s 201(1) when the recipient has already paid the tax
The Tribunal noted that the CIT (A) dismissed the assessee's contention that the recipient had paid the tax on the amount received due to lack of evidence. However, the Tribunal referred to the Supreme Court ruling in Hindustan Coco Cola Beverage P. Ltd. v. CIT, which states that if the payee has already paid the tax on the income, recovery of tax cannot be made again from the tax deductor. The Tribunal found that the assessee was under the bona fide belief that there was no liability to deduct tax on the supply portion and had deducted tax at source for other contracts, thus, there was reasonable cause for non-deduction of tax on the supply portion.
Conclusion:
The Tribunal allowed the assessee's appeals for the assessment years 2005-06 to 2009-10, holding that the assessee was not an "assessee in default" u/s 201(1) and was not liable for interest u/s 201(1A) of the Act. The Tribunal's decision was consistent with its earlier ruling in the case of KPTCL, Bangalore Division.
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2011 (3) TMI 1616
Issues Involved: Disallowance of expenses under section 14A, Bad debts written off, Disallowance of out-of-pocket expenses
Disallowance of Expenses under Section 14A:
The appeal involved the disallowance of expenses amounting to &8377; 20,22,077/- under section 14A of the Income Tax Act, 1961, related to tax-free dividend income. The Assessing Officer applied the section and disallowed 5% of the dividend income as expenses. The argument presented was that attributing 5% of the dividend income from a single group company as expenses was arbitrary. The Tribunal considered previous orders and noted that dividends are passive income, often received without extra effort. Citing a judgment, it emphasized the need for tax authorities to be reasonable when invoking section 14A. Consequently, the disallowance was reduced to &8377; 2,00,000/-, aligning with the Tribunal's view on nominal expenditure for such income, thus partially allowing the ground.
Bad Debts Written Off:
Regarding bad debts of &8377; 2,22,192/- written off by the assessee, the Tribunal referred to a previous order in favor of the assessee for a different assessment year. Following the precedent, the Assessing Officer was directed to allow the deduction of the bad debts. Additionally, the disallowance of out-of-pocket expenses of &8377; 10,47,643/- written off by the assessee was discussed. The CIT(A) had allowed this claim as a business loss under section 28 of the Act, even though not as a bad debt. The representative for the assessee acknowledged this allowance, rendering the ground dismissed as infructuous.
Conclusion:
The appeal was partly allowed by the Tribunal, with the disallowance of expenses under section 14A being significantly reduced and the deduction of bad debts being directed in favor of the assessee based on previous rulings. The disallowance of out-of-pocket expenses was considered allowed as a business loss, leading to the dismissal of the related ground.
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2011 (3) TMI 1615
Disallowance of brokerage and commission
Whether Ld. CIT(A) erred in deleting the disallowance of brokerage and commission expenses made by the A.O? - HELD THAT:- There are no infirmity in the impugned order of the learned CIT(A) deleting the ad hoc disallowance of 10% made by the Assessing Officer out of commission and brokerage expenses claimed by the assessee. If the nature of the business of the assessee is taken into consideration, there was no reason to doubt the genuineness of the expenses incurred by the assessee on payment of brokerage and commission. As a matter of fact, even the Assessing Officer did not dispute this position and allowed 90% of the brokerage and commission expenses claimed by the assessee. He, however, disallowed the balance 10% of the expenses on the ground that complete details thereof were not furnished by the assessee - There is also nothing brought on by the Assessing Officer to show that the commission and brokerage expenses claimed by the assessee were excessive and unreasonable. The disallowance of 10% made by the Assessing Officer out of commission and brokerage expenses thus was not sustainable and the learned CIT(A) was fully justified in deleting the said disallowance. The impugned order of the learned CIT(A) is upheld on this issue.
Disallowance of professional fees
Whether Ld. CIT(A) erred in deleting the disallowance of professional fees expenses made by the A.O? - HELD THAT:- It is observed that complete details of the payments made by the assessee on account of professional fees amounting to ₹ 8,90,000/- were furnished by the assessee along with invoices and receipts issued by the concerned payees as found by the learned CIT(A) from the relevant assessment records. As further found by the learned CIT(A), there was no discrepancy whatsoever, which was pointed out by the Assessing Officer in the said details and evidences filed by the assessee in support of its claim for professional fees of ₹ 8,900,000/- paid to two parties - the learned Departmental Representative has not been able to rebut/controvert these findings of fact recorded by the learned CIT(A) and this being so, there are found no justifiable reason to interfere with the impugned order of the learned CIT(A) deleting the disallowance made by the Assessing Officer out of professional fees holding that the same was not well founded - appeal of Revenue on this ground dismissed.
Disallowance of loss on account of auction bidding made by the A.O.
Whether Ld. CIT(A) erred in deleting the disallowance towards loss on account of auction bidding made by the A.O. as not having incurred wholly and exclusively for business purpose? - HELD THAT:- It is observed that the main business of the assessee is that of making investment and trading in shares and securities. The loss claimed to be incurred by the assessee on account of auction bidding was related to purchase of property and although it was submitted before the Assessing Officer during the course of assessment proceedings that the assessee company was planning to do property related business, neither the Assessing Officer nor the learned CIT(A)has given any finding on this aspect which is relevant - The Learned CIT(A), was not correct to say that there was no reason given by the Assessing officer to disallow the loss claimed by the assessee in auction bidding. It is pertinent to ascertain as to whether the assessee was also engaged in he property related business so as to consider the allowability of its claim for loss on auction bidding and since neither the Assessing Officer nor the Learned CIT(A) has gone into this aspect, this issue is restored to the file of the Assessing Officer for deciding the same afresh after verifying this relevant aspect. Ground No. 3 of the Revenue’s appeal is accordingly treated as allowed.
Disallowance of Dividend Income
Whether Ld.CIT(A) erred in confirming the disallowance to the extent of 3% of dividend income, u/s.14A of the Act holding that 3% of the dividend income is disallowable u.s.14A of the Act, which is without any reasonable basis? - HELD THAT:- It is observed that in its recent judgment delivered in the case of GODREJ AND BOYCE MFG. CO. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT], the Hon’ble Bombay High Court has held that Rule 8D of the Income-tax Rules 1962 is applicable only prospectively that is from the assessment year 2008-09 and the quantum of disallowance u/s.14A for the years earlier to assessment year 2008-09 has to be worked out by adopting some reasonable method. As rightly pointed out by the learned Departmental Representative in this regard, the Learned CIT(A) has not given any basis to show that the disallowance sustained by him to the extent of 3% of the dividend income is reasonable - the impugned order on this issue is set aside - matter restored to the file of the Assessing Officer with direction to decide the same afresh in the light of the decision of the Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd.
The appeal of the revenue is treated as partly allowed for statistical purposes.
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2011 (3) TMI 1614
Issues involved: Allowability of depreciation on stock exchange card under section 32(1)(ii).
Summary:
The appeal was filed by the assessee against the order of CIT(A) for the assessment year 2007-08, specifically disputing the allowability of depreciation on a stock exchange card. The AO disallowed the depreciation claim based on a judgment of the Hon'ble High Court of Mumbai in the case of Techno Shares and Stock Ltd., which held that stock exchange card did not qualify as a business or commercial asset under section 32(1)(ii). The CIT(A) upheld the AO's decision, leading the assessee to appeal before the tribunal.
Upon hearing both parties and examining the records, the tribunal deliberated on the issue of depreciation on the stock exchange card. Initially, the Bombay High Court ruled that stock exchange card did not fall under section 32(1)(ii) for depreciation purposes. However, the Hon'ble Supreme Court later reviewed the same case and determined that a stock exchange card should be treated as a license, making it eligible for depreciation under section 32(1)(ii). Consequently, the tribunal, in line with the Supreme Court's judgment, overturned the CIT(A)'s decision and allowed the assessee's depreciation claim.
As a result, the appeal of the assessee was allowed, and the tribunal pronounced the order in the open court on 29.03.2011.
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2011 (3) TMI 1613
Disallowance u/s 92 read with Section 37(1) - Royalty paid to Holding Co. for duplicating and Sub-Licencing of Software - AO's Jurisdiction to determine amount of Profits - AO disallowed royalty paid by the assessee to its holding company beyond 30% of the sub-licensing fees earned by the assessee - As per Tribunal, assessee would be entitled to get the deduction in respect of entire amount paid by way of royalty. Also, Section 92 would have no application to the facts of this case.
HELD THAT:- If the conditions mentioned in provision of Sec. 92 are satisfied, the section empowers the AO to determine the amount of profits which is reasonably deemed to have been derived from there. The first two conditions mentioned in provision of section 92 i.e. Business is carried between a resident and a non-resident and Close connection between resident and a non-resident are undoubtedly satisfied.
It is, thus, to be examined as to whether it is a case where the transaction between the assessee and its parent company has resulted in no profit or less than the ordinary profits which might be expected to arise in the business. As assessee declared a certain amount of income, it is not a case of 'no profits'.
Next question regarding, how to determine whether the profits are less than the ordinary profits which might be expected to arise in the business? This can be found only when exercise is undertaken comparing the income of the assessee with other comparable business enterprises in India. However, the AO did not do this exercise at all. Definitely, onus in this behalf u/s 92 lays on the AO. This pertinent aspect coupled with the fact that price fixed is acceptable as Arm's Length Price by the TPO u/s 92 itself is sufficient to clinch the issue in favour of the assessee.
In this backdrop, we have to examine whether such an expenditure could still be disallowed and the opinion of the AO was correct that the payment made cannot be treated to be wholly and exclusively for business purpose of the assessee to enable it to cover the same u/s 37(1). Once it is held that the payment of royalty by the assessee to its parent company is not hit by the provisions of section 92 and the price fixed is ALP as determined by the TPO himself, there is no reason to hold that the expenses would not be allowed u/s 37(1)
It is, thus, clear that what is to be seen is that the expenditure was incurred by the assessee in the course of business and had nexus with the business of the assessee. It could not be disputed that the payment of royalty is a business expenditure, which was expended wholly and exclusively for the purpose of business of the assessee. The nature of the expenses is also not such which would fall in any of the exceptions carved out under sections 30 and 36. Once these conditions are satisfied, the expense is to be allowed in toto as business expenditure, and the Revenue cannot sit in the arm's chair of the assessee and decide as to how affairs of the business are to be run and wasteful or excessive expenditure is to be curtailed. The question of commercial expediency is to be judged by the assessee and not by the AO.
It is well-settled that it is not open to the Department to adopt a subjective standard of reasonableness and disallow a part of business expenditure as being unreasonably large, or decide what type of expenditure the assessee should incur and in what circumstances. This was so held by the Supreme Court in the case of COMMISSIONER OF INCOME-TAX, BOMBAY VERSUS WALCHAND AND COMPANY PVT. LIMITED. [1967 (3) TMI 2 - SUPREME COURT], which principle has thereafter been often repeated and remains the bedrock of section 37 of the Act till date.
Thus, the jurisdiction of the AO is only confined to deicide "Profits and gains of business or profession", i.e., whether the expenditure claimed was actually and factually expended or not and whether it was wholly and exclusive for the purposes of business. Reasonableness of the expenditure can be considered only from this limited angle for the purpose of determining whether in fact amount was spent or not.
Ld. Senior Counsel was right in his submission that AO committed serious error in mixing the provisions of section 92 and section 37. Thus, Tribunal was justified in law in allowing the deduction disallowed by the AO.
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2011 (3) TMI 1612
Issues involved: Appeal against treatment of interest in computation of capital gains.
Summary:
The appeal pertains to the assessment year 2004-05, where the assessee, an individual engaged in investments, borrowed money from Sahara India Financial Corporation Limited for investing in shares of Indraprastha Gas Limited. The Assessing Officer disallowed the interest paid on the borrowing as a deduction in computing capital gains. The Tribunal found evidence establishing a direct nexus between the borrowed funds and the shares acquired, citing a similar decision by the Madras High Court. It held that the interest paid can be allowed as part of the cost of acquisition of shares, as the assessee is in the business of investment in shares and securities.
The Tribunal also considered a decision by the Mumbai Bench of ITAT regarding interest expenses for holding shares as investments. It noted that interest expenditure cannot be claimed as a deduction under section 14A if related to exempted income, as it would result in double deduction. However, it upheld the assessee's claim for deduction of interest paid to Sahara as part of the cost of acquisition, following the precedent set by the Madras High Court.
The appeal was partly allowed, with the direction to recompute capital gains by allowing the deduction for the interest paid. Another ground related to the computation of long-term capital gains on the sale of shares of Tanna Builders Private Limited was dismissed as not pressed.
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2011 (3) TMI 1611
Addition on ground of Undisclosed Income - Documents seized from Third Party - During the course of search operations, loose documents indicated transactions involving the name of the assessee company were seized from third party - AO based upon such documents made addition on account of undisclosed income - Tribunal deleted such addition by stating if evidentiary value of the said loose papers and documents is considered, the same cannot possibly construed, as books of account regularly kept in the course of business and such evidence would, therefore, be outside the purview of section 34 of the Evidence Act, 1872 in the light of the ratio of the decision of VC. SHUKLA & ORS. [1998 (3) TMI 675 - SUPREME COURT]
HELD THAT:- The conclusion arrived at by the Tribunal is on the basis of the findings of fact recorded by it cannot in any manner be said to be unreasonable. Said conclusion is based upon findings of fact recorded by it upon appreciation of the evidence on record, which findings have not been dislodged by the revenue by pointing out any evidence to the contrary, therefore, does not warrant any interference. Thus, the Appellate Tribunal was right in law in deleting the additions made on the basis of statements of third party. Decided in favour of assessee.
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2011 (3) TMI 1610
Issues Involved:1. Jurisdiction of the Assessing Officer (AO) post Settlement Commission's order. 2. Validity of additions made by AO based on seized documents after Settlement Commission's order. Summary:1. Jurisdiction of the Assessing Officer (AO) post Settlement Commission's order:In these appeals, the Revenue questioned whether the AO had the jurisdiction to make fresh assessment orders after the Settlement Commission had passed an order u/s 245D(4) of the Income-tax Act, 1961. The AO argued that the Settlement Commission's order dated 31st March 2008 suffered from defects as it did not bifurcate the undisclosed income assessee-wise and did not specify the income pertaining to each assessment year. The AO issued a show cause notice to the assessee regarding matters not placed before the Settlement Commission, which the assessee did not respond to, leading the AO to complete the assessments u/s 153A read with Section 144/245F(4). The ld.CIT(A) allowed the appeal of the assessee, directing the AO to delete the additions made based on the seized documents, citing the decision of the Hon'ble jurisdictional High Court in the case of Smt. Neeru Agarwal vs. Union of India [2010] 187 Taxman 198 (All.). The High Court held that after the Settlement Commission passes an order, no power vests in the AO or any other authority to issue notices or make further assessments for the period and income covered by the Settlement Commission's order, except in cases of fraud or misrepresentation of facts. 2. Validity of additions made by AO based on seized documents after Settlement Commission's order:The AO made additions/disallowances based on seized documents, arguing that the Settlement Commission did not provide an opportunity to the Revenue to present its case, thus violating principles of natural justice. However, the ld.CIT(A) observed that the Settlement Commission's order had not been challenged by the Department and was final and binding as per Section 245-I of the Act. The ld.CIT(A) concluded that the AO had no jurisdiction to make fresh assessments or additions based on the seized documents after the Settlement Commission's order. The ITAT upheld the ld.CIT(A)'s decision, emphasizing that the Settlement Commission's order is conclusive and binding, and the AO was not justified in presuming that all matters and materials were not placed before the Settlement Commission. The ITAT dismissed all the appeals filed by the Revenue, confirming that the AO had no authority to frame another assessment order for the period covered by the Settlement Commission's order. The order pronounced in the open Court on 17.3.11.
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2011 (3) TMI 1609
Issues Involved:
1. Registration of the reference.
2. Assessment of the assessee's income.
3. Tribunal's rejection of additional ground of appeal.
4. Tribunal's reliance on Supreme Court judgment.
5. Remand to the Tribunal for de-novo hearing.
Summary:
1. Registration of the Reference:
The court noted a "comedy of errors" in the registration of the reference, where both the assessee and the revenue sought a reference of various questions of law, but a single reference was registered. The reference was titled inconsistently in the paperbook and the Cause List.
2. Assessment of the Assessee's Income:
The assessee, a wholly-owned subsidiary of ONGC, was involved in a Joint Structure Agreement (JSA) for drilling and selling petroleum. Due to the 1978 Iranian revolution, the assessee's business was immobilized, leading to a Settlement Agreement dated 26.12.1993, where the assessee was to receive USD 6 million and delayed payment charges at LIBOR one year base. The Assessing Officer's order dated 20.03.1987 included several additions, which were partially allowed by the CIT(A) on 04.11.1987.
3. Tribunal's Rejection of Additional Ground of Appeal:
The Tribunal, in its judgment dated 31.10.1991, rejected the assessee's additional ground of appeal regarding the effective date of the Settlement Agreement, stating that the assessee did not provide good reasons for not raising the ground earlier and that further investigation of facts was required. The Tribunal's reasoning was found to be specious as it did not consider whether the assessee had actually exercised the choice of adopting different previous years for different sources of income.
4. Tribunal's Reliance on Supreme Court Judgment:
The Tribunal relied on the Supreme Court judgment in Jute Corporation of India Ltd. Vs. Commissioner of Income Tax (1991) 187 ITR 688, which allows raising additional grounds if there are sufficient reasons and bona fide on the part of the assessee. The court found that the Tribunal misconstrued the ratio of the judgment and did not consider the entire gamut of facts and circumstances. The Supreme Court's judgment in National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 further supports the view that the Tribunal has wide powers to entertain additional grounds if they arise from the facts on record.
5. Remand to the Tribunal for De-novo Hearing:
The court set aside the Tribunal's judgment dated 31.10.1991 and remanded the matter for a de-novo hearing, instructing the Tribunal to consider the additional ground without allowing the assessee to introduce new material. The court consciously refrained from expressing its view on the merits of the matters, disposing of both references in these terms.
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2011 (3) TMI 1608
Suspension of CHA licence - time limitation - Held that: - The instructions issued by the Central Board of Excise and Customs are binding on the Department. The time stipulations in the Circular are apparently directory and not mandatory, as will be evident from the language and tenor thereof. Furthermore, the Circular does not provide for the consequences of failure to adhere to the time schedule - There can be no doubt that a Custom House Agent cannot be kept under indefinite suspension without initiating necessary proceedings. Necessary proceedings would have to be initiated forthwith and concluded with utmost expedition - applications disposed off.
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2011 (3) TMI 1607
The Supreme Court in Citation 2011 (3) TMI 1607 - SC Order, with Justices Mr. D.K. Jain and Mr. H.L. Dattu, condoned delay and admitted the appeals. Appellant represented by Mr. H.P. Rawal, ASG, Mr. Arijit Prasad, Adv., Mr. Rahul Kaushik, Adv., Mr. B. Krishna Prasad,Adv. Respondent represented by Mr. Alok Yadav, Adv., Mr.M.P.Devanath,Adv.
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2011 (3) TMI 1606
Issues involved: Appeal against orders passed by Commissioner of Income Tax (Appeals) regarding addition of gifts received during respective years.
Summary:
The appeals were filed by different assesses against orders passed by the Commissioner of Income Tax (Appeals) regarding the addition of gifts received during the respective years. The Assessing Officer observed that the gifts received were not genuine as the sources and creditworthiness of the donors were not established. The assessee failed to produce the donors for examination, and it was noted that the gifts were received from individuals not related to the assessee. The Commissioner of Income Tax (Appeals) confirmed the Assessing Officer's decision, stating that the donors' capacity to give such gifts was not proven, and the transactions seemed suspicious. The assesses were involved in real estate business, which raised concerns about unexplained cash availability. Despite the assessee producing one of the donors during the appellate proceedings, it was found that the donor was not capable of giving the alleged amount of gift. The lower authorities' findings regarding the genuineness of the gifts and the creditworthiness of the donors were upheld, leading to the dismissal of all appeals by the assesses.
In conclusion, the Tribunal upheld the decision of the lower authorities, dismissing all appeals of the assesses regarding the addition of gifts received during the respective years.
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2011 (3) TMI 1605
The Appellate Tribunal CESTAT NEW DELHI dismissed four appeals due to non-compliance with the pre-deposit order under Section 129-E of the Customs Act, 1962. The appellants did not comply with the order and no compliance report was filed.
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2011 (3) TMI 1604
Issues Involved:1. Alleged suppression of production and clandestine removal of aerated water bottles. 2. Denial of Cenvat credit on crates. 3. Mis-match between the quantity of concentrate used and production recorded. 4. Mis-match between electricity consumption and production accounted. 5. Alleged excess use of crown corks. Summary:1. Alleged Suppression of Production and Clandestine Removal:All appeals involve a common issue alleging suppression of production and clandestine removal of aerated water bottles. The demands were based on discrepancies in the consumption of crown corks, concentrate, and electricity. The Tribunal noted that the department issued separate show-cause notices based on each parameter without integrating the investigations, leading to overlapping demands. The Tribunal found that the statements recorded from the appellants' representatives were not provided to them, and there was no clear decision on the treatment of 200 ml bottles as 300 ml bottles. The Tribunal remanded the matter for fresh consideration, directing the Commissioner to verify the electricity consumption figures and provide copies of the relied-upon statements to the appellants. 2. Denial of Cenvat Credit on Crates:In Appeal No.118/06, there was an issue relating to the denial of credit amounting to Rs. 1.63 Crores on crates. The appellants argued that the crates should be treated as packing materials and are durable and returnable in nature. They claimed that the proportionate cost of the crates was included in the cost of aerated water bottles. The Tribunal found that this claim was made for the first time before them and required verification. The matter was remanded for fresh consideration. 3. Mis-match Between Quantity of Concentrate Used and Production Recorded:The demand was based on a mis-match between the quantity of concentrate consumed and the production recorded in RG I Account. The Commissioner relied on the input-output ratio from 1999-2000 to estimate production and found shortages, leading to duty demands. The appellants argued that different products required different percentages of concentrate, and the average from 1999-2000 was wrongly adopted for other years. The Tribunal found that the Commissioner linked her findings to an earlier order and adopted different yardsticks for confirming the demand. The matter was remanded for fresh consideration. 4. Mis-match Between Electricity Consumption and Production Accounted:The demand was based on a mis-match between electricity consumption and production accounted by the appellant unit. The appellants argued that the demand was made on presumption and that the Commissioner did not consider the electricity consumed using DG Sets. The Tribunal noted wide variations between the electricity figures in the show-cause notice and the bills provided by the appellants. The matter was remanded for verification with the Electricity Board and fresh consideration. 5. Alleged Excess Use of Crown Corks:The demand was based on alleged excess use of crown corks, with the appellants arguing that the corks were also used for 200 ml bottles and that wastage occurred during manufacturing. The Tribunal found that the show-cause notice and the order-in-original did not clearly address the appellants' claims regarding the use of crown corks. The matter was remanded for fresh consideration, with the Commissioner directed to provide copies of the relied-upon statements to the appellants. Conclusion:The Tribunal set aside the impugned orders and remanded the matters for fresh consideration, directing the appellants to make further submissions within 45 days and the Commissioner to conduct necessary verifications and provide copies of relied-upon statements. The denovo proceedings should be completed expeditiously, preferably within six months.
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2011 (3) TMI 1603
Issues:
Challenge to notifications affecting excise duty exemption on tobacco products and pan masala; Interpretation of Policy, 2007; Application of Section 154 of the Finance Act, 2003; Promissory estoppel and legitimate expectation doctrines.
Analysis:
1. The petitioner challenged notifications withdrawing excise duty exemption on tobacco products and pan masala under Policy, 1997. The Court dismissed the challenge citing Section 154 of the Finance Act, 2003, which recalled exemptions retrospectively. The Court upheld the withdrawal based on public interest and the power of the Ministry to modify policies.
2. The petitioner argued for the applicability of Policy, 2007, claiming entitlement to exemptions despite being on the negative list. The Court rejected this argument, stating that the negative list rendered the petitioner ineligible for benefits. The Court emphasized that Policy, 2007 was not challenged, leading to the dismissal of claims based on promissory estoppel and legitimate expectation.
3. The review applicant contended that Section 154 did not apply to pan masala without tobacco, highlighting a mistake in the judgment. The Court acknowledged the error and recognized that the provision did not affect pan masala without tobacco. This clarification narrowed the debate to the interpretation of Policy, 2007 regarding pan masala without tobacco.
4. The Court reiterated that pan masala without tobacco fell under the negative list of Policy, 2007, thus not eligible for exemptions. The judgment upheld the impugned notification aligning with the policy intent. The Court rejected claims based on Section 38A, promissory estoppel, and legitimate expectation due to the unchallenged Policy, 2007.
5. Ultimately, the Court recalled the judgment's conclusions related to pan masala without tobacco, sustaining other aspects of the decision. The review petition was rejected, emphasizing the alignment with Policy, 2007 and the ineligibility of pan masala without tobacco for exemptions.
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2011 (3) TMI 1602
Issues Involved:
Cross appeals challenging validity of proceedings u/s 148 and deletion of additions by CIT(A).
Validity of Proceedings u/s 147/148:
The CIT(A) held that the assessing officer did not fail to pass a speaking order on objections raised by the appellant regarding the initiation of proceedings u/s 147. The appellant's denial of transactions with a third party during reassessment proceedings was not considered as an objection to the proceedings. The CIT(A) concluded that the reassessment u/s 147 was valid based on the provided reasons.
Deletion of Addition u/s 69A:
The CIT(A) deleted the addition made u/s 69A by the assessing officer, as the appellant denied any financial or business transaction with the third party in question. The assessing officer failed to provide necessary statements or conduct a thorough investigation to justify the addition. The CIT(A) found that the assessing officer did not establish a case against the appellant and made the addition unjustifiably without corroborative evidence or opportunity for cross-examination.
Assumption of Wrong Jurisdiction:
The Tribunal rejected the appellant's argument that issuing a notice on a deceased person was invalid, as the notice did not refer to the word "proprietor." The Tribunal agreed with the jurisdiction assumed by the assessing officer and deemed any inadvertent errors in subsequent notices as curable under section 292B. The appellant's failure to raise objections on certain notices indicated acceptance of the proceedings.
Sufficiency of Material for Escaped Assessment:
The Tribunal upheld the assessing officer's decision to issue a notice u/s 148 based on reasonable material found during a search related to a third party. The Tribunal found that the assessing officer had sufficient grounds to believe that income had escaped assessment, dismissing the appellant's claim of lack of material on record.
Deletion of Addition u/s 69A Upheld:
The Tribunal upheld the CIT(A)'s decision to delete the addition u/s 69A, as the assessing officer failed to provide the complete statement of the third party involved and did not allow cross-examination. The CIT(A)'s findings were supported by the lack of adverse observations in the remand report and absence of corroborative evidence, leading to the conclusion that the addition was unjustified.
Conclusion:
Both the appeals, by the assessee and the revenue, were dismissed by the Tribunal, upholding the decisions made by the CIT(A) regarding the validity of proceedings u/s 147/148 and the deletion of additions u/s 69A.
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