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Showing 221 to 240 of 1052 Records

• 2011 (4) TMI 1336
  
  Issues involved: The judgment involves issues related to depreciation on leasehold rights, disallowance of depreciation on goodwill, provision for warranty, deduction under section 80HHC on interest income, computation of book profits, and additional depreciation on computers.
  
  Depreciation on Leasehold Rights (ITA No. 965/PN/2009 - Asstt. Year 2003-04 - Assessee's appeal): The issue pertains to the claim of depreciation on leasehold rights. The Tribunal noted that the rights were considered capital in nature and not depreciable assets by the Revenue. The assessee cited various judgments, including one by the Supreme Court, to support their claim for depreciation. The Tribunal decided to set aside the matter to the Assessing Officer (AO) for re-examination in light of the cited judgments.
  
  Disallowance of Depreciation on Goodwill (ITA No. 965/PN/2009 - Asstt. Year 2003-04 - Assessee's appeal): The dispute revolved around the disallowance of depreciation on goodwill, with the AO denying the deduction based on the timing of the agreement. The assessee argued that beneficial ownership was transferred after the relevant amendment to the Income Tax Act. The Tribunal directed the matter to the AO for further examination after the assessee provided supporting documents.
  
  Provision for Warranty (ITA No. 965/PN/2009 - Asstt. Year 2003-04 - Assessee's appeal): The issue concerned the disallowance of provision for warranty. The Tribunal upheld the assessee's position, citing past judgments and the principle that liabilities should be certain and capable of estimation with reasonable certainty. The Tribunal found no reason to disturb the settled position on this matter.
  
  Deduction under Section 80HHC on Interest Income (ITA No. 965/PN/2009 - Asstt. Year 2003-04 - Assessee's appeal): The dispute involved the claim of deduction under section 80HHC on interest income treated as 'income from other sources'. The Tribunal relied on relevant judgments to conclude that such interest receipts do not constitute business receipts and are not eligible for deduction under section 80HHC. The appeal on this ground was dismissed.
  
  Computation of Book Profits (ITA No. 966/PN/2009, Asstt. Year 2003-04 - Assessee's appeal): The Tribunal addressed the computation of book profits concerning provisions for warranty and leave encashment and gratuity. The Tribunal found in favor of the assessee, emphasizing the scientific basis for calculating these provisions and citing relevant court judgments. The grounds related to this issue were allowed.
  
  Additional Depreciation on Computers (ITA No. 1203/PN/2009 - Revenue's Appeal): The sole issue raised by the Revenue was regarding the grant of additional depreciation on computers used in the manufacturing process. The Tribunal considered relevant judgments and concluded that the computers were eligible for additional depreciation under section 32(1)(iia). The appeal by the Revenue was dismissed.
  

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• 2011 (4) TMI 1335
  
  Issues involved: Challenge to order of Tribunal declining to condone delay in preferring an appeal against order of First Appellate Authority.
  
  In this case, the assessee filed a writ petition challenging the Tribunal's order refusing to condone a delay of 79 days in filing an appeal against the decision of the First Appellate Authority. The affidavit submitted by the assessee explained the reasons for the delay, attributing it to the late receipt of the letter notifying the appeal's disposal. Despite this explanation, the Appellate Authority deemed the reasons insufficient. The petitioner argued that the delay was reasonable and justified due to the delayed receipt of the disposal letter. Upon review of the evidence, the Court found the petitioner's cause for the delay genuine and held that the Appellate Authority's decision needed to be overturned. Consequently, the Court allowed the writ petition, set aside the impugned order, condoned the 79-day delay in filing the appeal, and remitted the matter back to the Appellate Authority for consideration on merits and in accordance with the law. Each party was directed to bear their own costs.

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• 2011 (4) TMI 1334
  
  Issues involved: Appeal by Revenue against CIT(A) order for assessment year 2007-08 regarding deduction on write off expenditure for abandoned film.
  
  Comprehensive Details:
  
  1. Issue of Deduction on Write Off Expenditure:
  - The appeal was filed by the Revenue against the CIT(A) order directing the Assessing Officer to allow the claim of the assessee for deduction on account of write off expenditure incurred on the abandoned film for the assessment year 2007-08.
  - The counsel for the assessee argued that the issue was similar to a previous Tribunal decision in the case of ACIT vs. M/s. Dream Merchants Enterprises, where the deduction was allowed for similar expenditure.
  - The Tribunal in the earlier case had considered the matter and upheld the CIT(A)'s decision to delete the disallowance made by the Assessing Officer.
  - The Tribunal in the current case followed the decision in the earlier case and upheld the CIT(A)'s order, giving relief to the assessee on this issue.
  - Consequently, the appeal of the Revenue was dismissed.
  
  2. Decision Basis on Similar Cases:
  - The Tribunal considered the facts and arguments presented by both sides, noting that the CIT(A) had deleted the disallowance made by the Assessing Officer based on the earlier Tribunal decision.
  - The Tribunal found no infirmity in the CIT(A)'s order as it was in line with the decisions of the Tribunal in similar cases.
  - The Tribunal emphasized that the consistent decisions by the jurisdictional Tribunal in different cases supported the allowance of deduction for write off expenditure on abandoned films.
  - The Tribunal rejected the Revenue's grounds of appeal and upheld the relief granted to the assessee by the CIT(A) based on the precedent set by previous cases.
  
  3. Final Outcome:
  - Ultimately, the Tribunal dismissed the appeal of the Revenue, affirming the decision of the CIT(A) to allow the deduction on account of write off expenditure for the abandoned film, in line with the earlier Tribunal decisions and the principles established in similar cases.

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• 2011 (4) TMI 1333
  
  Issues Involved:
  1. Disallowance of premium paid to BMRDA.
  2. Prior period expenses.
  3. Disallowance of PF and ESI payments.
  4. Disallowance of expenditure on tax-free bonds.
  5. Additional ground for prior period expenses.
  6. Revenue's appeal on VSAT shifting expenses.
  7. Revenue's appeal on interest u/s 36(1)(iii).
  
  Summary:
  
  1. Disallowance of Premium Paid to BMRDA:
  The assessee challenged the CIT(A)'s order confirming the disallowance of Rs. 1,13,25,250/- paid to BMRDA, treating it as capital in nature. The issue was previously decided against the assessee in ITA No. 2181/Mum/1999 for A.Y. 1995-96, where it was held that the payment for leasehold land for 99 years was capital in nature and not allowable as a deduction. Consequently, the ground was rejected.
  
  2. Prior Period Expenses:
  - Professional Fees: Bills received during the impugned year, though dated prior, were crystallized during the year. The A.O. was directed to allow Rs. 82,000/-.
  - Hire Charges: Rs. 43,418/- paid to M/s. Anil Electric Co. was not allowed as there was no evidence of bills received during the year.
  - Software Expenses: Rs. 73,510/- was disallowed as it was accounted for in the previous year and not crystallized during the current year.
  - Travelling Expenses: Rs. 8,272/- was allowed as the claim was made during the relevant year.
  - Meeting & Conference Expenses: Rs. 8,521/- was allowed as the bill was received during the current year.
  
  3. Disallowance of PF and ESI Payments:
  The CIT(A) confirmed the disallowance of Rs. 5,790/- paid beyond the due date. However, amounts paid by the time the return was filed were allowed based on the Supreme Court decision in CIT vs. Alom Extrusions Ltd. 319 ITR 306.
  
  4. Disallowance of Expenditure on Tax-Free Bonds:
  The A.O. disallowed 2% of the expenditure, while the CIT(A) restricted it to 0.5%. The Tribunal opined that a 1% disallowance would meet the end of justice, rejecting the assessee's ground.
  
  5. Additional Ground for Prior Period Expenses:
  The assessee raised an additional ground for Rs. 1,78,562/- disallowed in A.Y. 1999-2000. The issue was restored to the A.O. to consider the expenditure after the decision for A.Y. 1999-2000 by the ITAT.
  
  6. Revenue's Appeal on VSAT Shifting Expenses:
  The A.O. treated Rs. 2,09,10,000/- as capital expenditure, but the CIT(A) allowed it as revenue expenditure. The Tribunal upheld the CIT(A)'s decision, stating that the expenditure was for realigning existing networks and did not provide an enduring advantage.
  
  7. Revenue's Appeal on Interest u/s 36(1)(iii):
  The A.O. disallowed interest of Rs. 22,89,103/- capitalized in the books. The CIT(A) allowed it as revenue expenditure, following earlier years' decisions and Supreme Court rulings. The Tribunal upheld the CIT(A)'s order, rejecting the Revenue's ground.
  
  Conclusion:
  Both appeals were partly allowed, with specific directions and confirmations on various grounds as detailed above.

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• 2011 (4) TMI 1332
  

  Nature of interest received on the amount of grant - grants-in-aid - taxable income of the society - The assessee received grants through State Government and interest from the banks on the deposits. The AO held that assessee failed to spend 85% of its income as required for exemption u/s 011. It was further held that tied-up grants were at par with voluntary contributions and were liable to be treated as income of the assessee. The AO also held that interest income was to be treated as taxable income being separate from the grants-in-aid. The CIT(A) set aside the additions holding that tied-up grants will not constitute income of the assessee. It was further held that interest received by the assessee was to be treated as part of the grant.

  HELD THAT:- it was held that grants-in-aid received from the Government for specific purpose cannot be treated as voluntary contribution or as taxable income of the society. In M/s Punjab Energy Development Agency [2009 (7) TMI 654 - PUNJAB & HARYANA HIGH COURT] it was held that interest received by the assessee on the amount of grant deposited in the bank was also in the nature of grant itself. Therefore, the view taken by the Tribunal is consistent with the view already taken by this Court.

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• 2011 (4) TMI 1331
  

  Bogus LTCG - unexplained credit u/s 068 - This is an appeal filed by the Revenue directed against the order of the CIT(A). In present case, AO questioned the veracity of the fact brought in the affidavit of Mr. Mekesh Chokshi. The AO has doubted the genuineness of the very transactions entered by the appellant and were sold by the appellant at R.79 to 95 per share where in the rate quoted in the Ahmedabad Stock Exchange (ASSESSEE) was only ₹ 49/- per share on the last trading. The AO was of the view that selling of the shares of Talent Infoway Ltd. at ₹ 79 to ₹ 95 per share as against ₹ 49/- per share quoted in the ASSESSEE on the last trading of share itself give a vital view of the fabricated transaction. The AO also expressed his apprehensions for the genuineness of the real buyers of the shares from M/s Mahasagar securities Pvt. Ltd. The AO also gave a finding that appellant failed to establish any real buyer has purchased the shares and no detail was given by M/s Mahasagar securities Pvt. Ltd. regarding the buyers of the shares.

  HELD THAT:- Considering all the facts and the fact that the similar addition on similar grounds was deleted by the CIT(A), the deletion was confirmed by the Hon’ble Mumbai ITAT with the following remarks “We first take up the revenue of the as the both the parties have agreed that the issue is covered in favour of the assessee and against the revenue by the decision of this Bench of the Tribunal in the case of Shri Mukesh R. Morolia [2005 (12) TMI 457 - ITAT MUMBAI] and a decision in the case of Mrs. Rajnidevi K. Chaudhary[2009 (4) TMI 936 - BOMBAY HIGH COURT] as confirmed by the Hon’ble Bombay High Court, we uphold the order of the CIT(A).

  Respectfully following this decision of the Hon’ble ITAT on similar facts in the case of the appellant’s brother and taking into consideration all the reasons discussed, the addition made by the AO treating LTCG as unexplained credits u/s 068 of the Act is deleted and AO is directed to assess the same as LTCG as shown by the appellant.

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• 2011 (4) TMI 1330
  
  Issues:
  1. Confirmation of duty demands, interest, and penalty on assesses for wrongly availing credit on rejected goods without manufacturing process under Rule 16(2) of Central Excise Rules, 2002.
  
  Analysis:
  The judgment by the Appellate Tribunal CESTAT Chennai addressed the issue of duty demands, interest, and penalty imposed on assesses for availing credit on rejected goods without undergoing any manufacturing process. The Tribunal examined Rule 16(2) of the Central Excise Rules, 2002, which mandates payment of duty if the goods are not subjected to a manufacturing process before removal. The Tribunal referred to the decision in Apollo Tyres Limited vs Commissioner of Central Excise, Pune-III, highlighting that when goods are not processed, duty is payable under the second part of Rule 16(2). Distinctions were drawn from other cases cited by the Respondent, indicating that those cases involved rejected goods undergoing some form of processing, unlike the current scenario.
  
  The Tribunal, following the precedent set by the Apollo Tyres case, concluded that the assesses in the present case were liable for duty under Rule 16(2) as they did not subject the returned goods to any manufacturing process. Consequently, the impugned orders confirming duty demands, interest, and penalty were set aside, and the appeals were allowed. The judgment emphasized the applicability of the Apollo Tyres decision to the factual circumstances of the case, leading to the favorable outcome for the assesses. The decision was dictated and pronounced in open court, providing clarity on the interpretation and application of Rule 16(2) in similar cases involving the availing of credit on rejected goods without undergoing manufacturing processes.

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• 2011 (4) TMI 1329
  

  Assessment u/s 153C - HELD THAT:- The document on the basis of which the AO initiated proceedings u/s 153C was admittedly not written by the assessee. It, of course, had certain references to the estimations and expenditure, etc. of the properties belonging to the assessee. Nevertheless, we cannot hold that such document belonged to the assessee.

  When we find that the very foundation for instituting the proceedings by the AO was missing, the consequential actions and orders must fail. In the result, only on this ground we are inclined to dismiss the appeals.

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• 2011 (4) TMI 1328
  

  Levy of service tax - whether service tax is leviable when a foreign company has transferred technology to the Indian Company for valuable consideration? - Held that: - Section 66A was inserted in the FA, 1994, which came into force from 18-4-2006 foisting such liability on the recipient of the service - appeal dismissed - decided against Revenue.

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• 2011 (4) TMI 1327
  
  Issues Involved:
  1. Levy of penalty u/s 271D for contravention of s. 269SS.
  2. Validity of penalty order based on limitation period.
  3. Bona fide belief and reasonable cause for transactions between individual and HUF.
  
  Summary:
  
  1. Levy of Penalty u/s 271D for Contravention of s. 269SS:
  The primary issue in this appeal is the levy of penalty u/s 271D of the IT Act, 1961, for the assessment year 2003-04. The AO observed that the assessee accepted loans or deposits aggregating Rs. 28,34,000 in cash, contravening s. 269SS. The Addl. CIT imposed a penalty of Rs. 31,78,500, which was upheld by the CIT(A), who found no reasonable cause for the cash transactions.
  
  2. Validity of Penalty Order Based on Limitation Period:
  The assessee contended that the penalty order was barred by limitation, arguing it should have been passed before 31st March 2008 or 31st Aug 2008, whichever is later. However, the CIT(A) held that the penalty proceedings were validly initiated with the issuance of the penalty notice on 25th Feb 2008, and the order was passed within the prescribed time limit.
  
  3. Bona Fide Belief and Reasonable Cause for Transactions Between Individual and HUF:
  The assessee argued that the transactions were between his individual capacity and HUF, managed single-handedly, and were not aware that such transactions could attract penalty u/s 271D. The Tribunal noted that the transactions were genuine, accepted under s. 143(3), and there was no intention to camouflage unaccounted money. The Tribunal referenced several decisions, including the Hon'ble Jharkhand High Court in Omec Engineers v. CIT, which held that genuine transactions accepted under s. 143(3) should not attract penalty if the breach was technical.
  
  Conclusion:
  The Tribunal concluded that the assessee had a bona fide belief that the transactions between his individual capacity and HUF were not covered by s. 269SS. The transactions were genuine, and there was no intention to evade taxes. Therefore, the assessee had a reasonable cause for the failure to comply with s. 269SS, and the penalty u/s 271D was not justified. The Tribunal set aside the CIT(A)'s order and directed the Addl. CIT to delete the penalty.
  
  Result:
  The appeal of the assessee is allowed.

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• 2011 (4) TMI 1326
  

  Whether the Division Bench of the Allahabad High Court was justified in entertaining and allowing the writ petition filed by respondent No.1-Moti Lal Agarwal in 2008 for nullifying the acquisition of his land by the State Government vide notification dated 8.9.1998 issued under Section 4(1) read with Section 17(1) and 17(4) of the Land Acquisition Act, 1894 (for short, “the Act”) which was followed by declaration dated 7.9.1999 issued under Section 6(1) read with Section 17(1) on the ground of non passing of award within the time prescribed under Section 11A?

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• 2011 (4) TMI 1325
  
  Issues Involved:
  1. Deletion of addition on account of bad debts written off.
  2. Deletion of addition on account of interest and financial charges.
  3. Deletion of addition on account of gratuity payable.
  
  Summary:
  
  Issue 1: Deletion of addition on account of bad debts written off

  The Revenue challenged the deletion of Rs. 1,13,05,316/- made by the AO on account of bad debts written off. The AO disallowed the claim as the bad debts included advances for capital goods and staff advances, which were not shown as income in earlier years and were not related to the assessee's business of money lending. The CIT(A) allowed the claim under Section 37(1) of the Act, stating that the payments were made wholly and exclusively for business purposes. However, the Tribunal found that the CIT(A) did not verify the details and basis of the advances and restored the matter to the AO for fresh consideration under Section 28/37(1) of the Act.

  Issue 2: Deletion of addition on account of interest and financial charges

  The Revenue contested the deletion of Rs. 1,59,28,955/- made by the AO on account of interest and financial charges. The AO disallowed the claim, alleging that the transaction of transferring the distillery business to a subsidiary was a colourable device and the interest liability should have reduced. The CIT(A) found that the interest was related to earlier borrowings for business purposes and allowed the claim. The Tribunal upheld the CIT(A)'s decision, stating that the sale of the distillery business did not affect the interest on earlier borrowings and the AO's reasons were irrelevant.

  Issue 3: Deletion of addition on account of gratuity payable

  The Revenue appealed against the deletion of Rs. 65,62,103/- on account of gratuity payable. The AO disallowed the claim under Section 43B(b), stating that gratuity is allowable only if actually paid. The CIT(A) allowed the claim, noting that the liability was discharged and adjusted against the sale consideration. The Tribunal found that the CIT(A) did not verify whether the gratuity was transferred with the employees' consent and whether it was in the nature of retrenchment compensation. The matter was restored to the AO for fresh adjudication, considering the provisions of Sections 40A(7) and 43B.

  Conclusion:

  The appeal by the Revenue is partly allowed for statistical purposes, with matters on bad debts and gratuity payable remanded to the AO for fresh consideration.

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• 2011 (4) TMI 1324
  
  Issues involved: Proceedings under Central Excise Act, 1944; Alleged mis-declaration of excisable article; Cross-examination of Chemical Examiner and departmental officers.
  
  Proceedings Summary:
  The petitioners are facing proceedings under the Central Excise Act, 1944 due to alleged mis-declaration of the excisable article. The Department claims that the product is not Pan Masala as it lacks required ingredients. The petitioners sought to cross-examine the Chemical Examiner and departmental officers involved in taking samples. Initially, the Adjudicating Officer allowed cross-examination of the Expert but later refused. The petitioners approached the High Court seeking permission for cross-examination.
  
  Upon hearing the parties, the High Court decided not to address the request for cross-examination of departmental officers, leaving it for future arguments. However, regarding the cross-examination of the Chemical Expert, the Court found merit in the petitioners' request. Referring to a previous order granting permission for such cross-examination, the Court allowed the petitioners to cross-examine the Chemical Examiner from the Custom House Laboratory, Kolkata. The cross-examination could be conducted in person or via Video Conferencing, subject to certain conditions.
  
  In conclusion, the High Court directed that the petitioners are permitted to cross-examine the Chemical Expert to clarify the issue of mis-declaration. The Court emphasized that the cross-examination should be completed on the same day without seeking adjournments, ensuring a fair and efficient process for both parties.

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• 2011 (4) TMI 1323
  
  Issues involved: Question of law regarding the initiation of reassessment proceedings based on the report of the Valuation Officer without first rejecting the books of accounts.
  
  Summary:
  The High Court addressed the question of whether the ITAT was legally correct in confirming the findings of CIT (A) that reassessment proceedings cannot be initiated solely based on the report of the DVO, as it does not constitute evidence as per section 147 of the IT Act, 1961. The ITAT had considered the DVO's opinion but held that it does not qualify as evidence under Section 147, leading to the dismissal of the revenue's appeal for reassessment. The Court noted that the ITAT did not address the issue of the Valuation Officer's report under Section 142-A of the Income Tax Act, as mandated by the Supreme Court in Sargam Cinema vs. Commissioner of Income Tax. It was highlighted that the Assessing Officer cannot refer the matter to the DVO without first rejecting the books of accounts, which was not done in this case. Therefore, the appointment of the Valuation Officer and the notice for reassessment were deemed to be without jurisdiction. The appeal was dismissed on these grounds, with the Court emphasizing that the question of law as framed did not even arise in this context.

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• 2011 (4) TMI 1322
  
  Issues involved: Condonation of delay in filing appeal against order u/s 263 of the IT Act by the Assessee.
  
  Summary:
  The appeal by the Assessee was directed against the order dated 16.3.2007 passed u/s 263 of the IT Act by the Ld. Commissioner of Income Tax, Delhi-V, New Delhi. The Assessee filed a condonation petition citing delay of 1049 days in filing the appeal. The ITAT, after considering the rival contentions, noted that the Assessee had not challenged the order of the C.I.T. when it was received initially. The ITAT observed that the order passed u/s 263 had become final, as the C.I.T. had decided the issue himself and directed the Assessing Officer to re-compute the income based on his decision. The Assessee later filed an appeal against the C.I.T. order u/s 263 on 8.4.2010, much later than the initial order. The ITAT found that the delay in filing the appeal was not liable to be condoned, as the Assessee had accepted the C.I.T.'s order u/s 263 initially and changed its mind after a significant delay. Consequently, the appeal was dismissed as time-barred on the grounds of lack of cogent reason for the delay.
  
  In conclusion, the delay of 1049 days in filing the appeal against the order u/s 263 was not condoned, leading to the dismissal of the Assessee's appeal by the ITAT.

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• 2011 (4) TMI 1321
  
  Issues involved: Challenge to notice u/s 148 of Income-Tax Act, 1961 seeking to reopen assessment for AY 2003-2004.
  
  Summary:
  The High Court of Bombay heard a writ petition challenging a notice dated 24.3.2010 issued u/s 148 of the Income-Tax Act, 1961 to reopen the assessment for AY 2003-2004. The notice was based on the claim of double deduction by the assessee trust, which was considered as under assessment. However, the Court noted that the additions sought to be made had been held impermissible in a previous case and that the assessment was sought to be reopened beyond the permissible four years. As there was no failure on the part of the assessee to fully disclose material facts, the Court held that the notice under section 148 cannot be sustained.
  
  In detail, the notice sought to reopen the assessment for AY 2003-2004 based on the claim of double deduction by the assessee trust. The notice highlighted that the trust claimed capital expenditure as application of income and also depreciation on these assets, resulting in a double deduction which was considered as under assessment. The notice mentioned that the assessee had failed to fully disclose material facts, leading to the belief that income had escaped assessment.
  
  The Court observed that the additions sought to be made through the reopening of assessment had been previously held impermissible in a similar case. Additionally, the assessment was being reopened beyond the permissible four years. There was no evidence to suggest any failure on the part of the assessee to disclose material facts necessary for assessment purposes. Therefore, the Court concluded that the notice issued u/s 148 of the Income Tax Act, 1961 could not be sustained.
  
  Consequently, the High Court quashed and set aside the impugned notice dated 24/3/2010, making the rule absolute and ordering no costs to be paid.

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• 2011 (4) TMI 1320
  
  Issues Involved:
  1. Disallowance of commission payments.
  2. Disallowance of short-term capital loss on redemption of LIC mutual fund.
  
  Summary:
  
  1. Disallowance of Commission Payments:
  The assessee and the revenue filed cross appeals against the orders of CIT(A) for A.Y. 2005-06 and 2006-07. The common ground raised by the assessee was the confirmation of disallowance of Rs. 9,21,305/- (5%) for A.Y. 2005-06 and Rs. 7,71,056/- (5%) for A.Y. 2006-07, while allowing 95% of the total commission paid. The assessee argued that the disallowance was made on an adhoc estimated basis without pointing out any deficiency in the information and evidence submitted. The revenue contended that the CIT(A) erred in deleting the disallowance of Rs. 1,75,04,863/- out of the total disallowance of Rs. 1,84,26,168/- made by the AO on account of commission claimed to have been paid to various agents.
  
  The ITAT noted that the assessee had provided all relevant details, including the names and addresses of agents, mode of payment, and confirmations from agents. The ITAT referenced its earlier decision for A.Y. 2004-05, where it had allowed the commission payments, and the decision was upheld by the Hon'ble Delhi High Court and the Hon'ble Supreme Court. The ITAT held that the facts and circumstances remained the same for the years under consideration, and therefore, the entire commission paid by the assessee to its agents/distributors was to be allowed. The ITAT dismissed the revenue's appeals and allowed the assessee's appeals on this ground.
  
  2. Disallowance of Short-Term Capital Loss on Redemption of LIC Mutual Fund:
  The only other ground raised by the assessee for A.Y. 2005-06 was the confirmation of disallowance of Rs. 15,68,627/- to the extent of dividend received out of short-term capital loss incurred in redemption of LIC Mutual Fund by applying the provisions of section 94(7). The assessee argued that the units were held for more than three months as per the law applicable on the date of sale, and the amended provision w.e.f. 1/4/2005 was not applicable.
  
  The CIT(A) upheld the AO's order, holding that the Finance Act is applicable to the whole year, and the transaction was effected when the finance bill was under consideration. The ITAT upheld the CIT(A)'s order on this issue, confirming that the provision of section 94(7) was applicable from 1-4-2004.
  
  Conclusion:
  The ITAT partly allowed the assessee's appeal for A.Y. 2005-06, allowed the appeal for A.Y. 2006-07, and dismissed the revenue's appeals. The order was pronounced in open court on 29-04-2011.

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• 2011 (4) TMI 1319
  
  Issues Involved:
  1. Validity of the nomination papers filed by the respondent.
  2. Interpretation and application of the Government Order (G.O.) dated November 16, 1951.
  3. Authority and competence of the Divisional Engineer and Superintending Engineer to terminate contracts.
  4. Disqualification under Section 9A of the Representation of People Act, 1951.
  
  Issue-wise Detailed Analysis:
  
  1. Validity of the Nomination Papers Filed by the Respondent:
  The appellant contested the election of the respondent on the grounds that the respondent had subsisting contracts with the Government at the time of filing his nomination papers. The appellant argued that the respondent's nomination papers should have been rejected as per Section 9A of the Representation of People Act, 1951, which disqualifies a person with subsisting contracts with the Government from contesting elections.
  
  2. Interpretation and Application of the Government Order (G.O.) Dated November 16, 1951:
  The G.O. allowed contractors to terminate their contracts to contest elections, provided certain conditions were met, including the availability of a substitute contractor acceptable to the Chief Engineer. The G.O. specified that there should be a final and complete settlement of rights and liabilities between the Government and the existing contractor. The High Court initially held that the G.O. was merely an administrative instruction and not a statutory requirement. However, the Supreme Court emphasized that the G.O. had to be strictly followed for valid termination of contracts.
  
  3. Authority and Competence of the Divisional Engineer and Superintending Engineer to Terminate Contracts:
  The Supreme Court found that only the Chief Engineer was competent to terminate contracts under the G.O. The Divisional Engineer and Superintending Engineer did not have the authority to terminate the contracts or ratify such termination. The evidence showed that the Divisional Engineer terminated the contracts, which was later ratified by the Superintending Engineer. However, this process was deemed invalid as it did not comply with the G.O., which required the Chief Engineer's direct involvement.
  
  4. Disqualification Under Section 9A of the Representation of People Act, 1951:
  Section 9A disqualifies a person with subsisting contracts with the Government from contesting elections. The Supreme Court concluded that the contracts entered into by the respondent were not validly terminated as per the G.O. dated November 16, 1951, and thus were subsisting at the time of filing the nomination papers. Consequently, the respondent was disqualified under Section 9A, rendering his election null and void.
  
  Conclusion:
  The Supreme Court allowed the appeal, declaring the respondent's election illegal, null, and void due to non-compliance with the G.O. dated November 16, 1951, and the resultant disqualification under Section 9A of the Representation of People Act, 1951. The court emphasized the importance of adhering to the specific procedures and authorities outlined in the G.O. for the termination of contracts to stand valid in the context of election eligibility.

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• 2011 (4) TMI 1318
  
  Issues Involved:
  
  1. Deduction under Section 80HHC on export incentives.
  2. Disallowance of employees' share of provident fund.
  3. Treatment of office renovation expenses.
  4. Treatment of interest income.
  5. Deduction under Section 80HHC for export incentives.
  6. Addition due to difference in stock value.
  7. Disallowance of building repair and maintenance expenses.
  8. Disallowance of loss of stock in fire.
  9. Disallowance of bad debts.
  10. Depreciation rate on machinery purchased under TUF Scheme.
  11. Allowance of foreign travel expenses.
  
  Issue-wise Detailed Analysis:
  
  1. Deduction under Section 80HHC on export incentives:
  The assessee claimed a deduction under Section 80HHC on export incentives, which was partially disallowed by the Assessing Officer (AO) due to failure to meet conditions stipulated in the Third Proviso to Sub-section (3) of Section 80HHC. The CIT(A) upheld the disallowance, noting that the assessee did not satisfy the conditions that the DEPB rate should be lower than the duty drawback rate and that the assessee had an option to choose between the two benefits. The tribunal agreed with the CIT(A) that the conditions were not met and dismissed the assessee's claim.
  
  2. Disallowance of employees' share of provident fund:
  The AO disallowed the deduction for employees' provident fund contributions made late. The CIT(A) upheld the disallowance. However, the tribunal referenced the Supreme Court decision in CIT vs. Alom Extrusions Ltd., which held that the amendment to Section 43B by the Finance Act, 2003, was curative and retrospective. Since the contributions were paid before the due date for filing the return, the tribunal allowed the deduction.
  
  3. Treatment of office renovation expenses:
  The AO treated the office renovation expenses as capital expenditure. The CIT(A) reversed this, stating the expenses were revenue in nature since they were incurred on rented premises and no new structure was created. The tribunal, noting the lack of evidence that the expenses were on rented premises, concluded the expenses were capital in nature but allowed depreciation if the asset was put to use.
  
  4. Treatment of interest income:
  The tribunal noted that this ground was not pressed by the assessee and thus dismissed it as not pressed.
  
  5. Deduction under Section 80HHC for export incentives:
  The revenue contended that the assessee was not entitled to deduction on export incentives received from an export house due to the word "derived" in Section 80HHC(1A). The tribunal, referencing the Supreme Court decision in CIT vs. Baby Marine Exports, held that the export house premium is an integral part of the sale proceeds and allowed the deduction.
  
  6. Addition due to difference in stock value:
  The AO added Rs. 8,38,77,635 due to a difference between stock value declared to the bank and in the books. The CIT(A) deleted the addition, stating the AO did not show any defect in the books. The tribunal upheld the CIT(A)'s decision, emphasizing that the books of account, maintained in the regular course of business and accepted by VAT and Excise authorities, were more reliable than the bank statement.
  
  7. Disallowance of building repair and maintenance expenses:
  The AO capitalized the expenses, but the CIT(A) treated them as revenue expenses. The tribunal, noting the significant purchases of construction materials, held the expenses were capital in nature but allowed depreciation if the asset was used.
  
  8. Disallowance of loss of stock in fire:
  The AO disallowed the loss due to lack of details. The CIT(A) allowed the claim based on evidence of insurance settlement and other supporting documents. The tribunal upheld the CIT(A)'s decision, noting the loss was on trading account and substantiated by evidence.
  
  9. Disallowance of bad debts:
  The AO disallowed the bad debts due to lack of evidence. The CIT(A) allowed the claim, noting the debts were taken into account in earlier years and written off in this year. The tribunal upheld the CIT(A)'s decision, confirming the write-off was justified.
  
  10. Depreciation rate on machinery purchased under TUF Scheme:
  The AO allowed a lower depreciation rate, but the CIT(A) allowed a higher rate after verifying the machinery was under the TUF Scheme. The tribunal upheld the CIT(A)'s decision, finding no error in the factual findings.
  
  11. Allowance of foreign travel expenses:
  The AO disallowed the expenses as the travelers were not partners. The CIT(A) allowed the expenses, noting they were incurred for business purposes. The tribunal upheld the CIT(A)'s decision, agreeing the expenses were business-related.
  
  Conclusion:
  Both the assessee's and the revenue's appeals were partly allowed. The tribunal provided a detailed analysis of each issue, maintaining the integrity of legal principles and factual findings.

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• 2011 (4) TMI 1317
  

  Tour operators - SCN issued asking them to take registration and pay service tax on the service rendered by them - the decision in the case of COMMISSIONER OF C. EX., RAJKOT Versus BHARAT TRAVELS [2010 (7) TMI 471 - CESTAT, AHMEDABAD] contested, where the appellant-Revenue were not able to produce any evidence to demolish the conclusion arrived at by the learned Commissioner (Appeals)- Held that: - the appeal is dismissed - decided against Revenue.

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