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Showing 221 to 240 of 1271 Records
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2015 (6) TMI 1060
Penalty u/s. 271AAA - as during the search assessee disclosed unaccounted income from “on money” - Held that:- CIT(A) while deleting the penalty has noted that Assessee had disclosed the amount in the statement made u/s. 132(4), has substantiated the undisclosed income by quantifying the amount of ₹ 15 crore and thus the requirement of specifying the manner for which the income has been earned has been complied by the Assessee. He has further given a finding that the A.O in principle has accepted the disclosure and the method of earning the income. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). Considering the aforesaid facts, we are of the view that ld. CIT(A) has rightly deleted the penalty and therefore we find no reason to interfere with the order of ld. CIT(A) and thus this ground of Revenue is dismissed. - Decided in favour of assessee.
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2015 (6) TMI 1059
Notice of hearing - Held that:- Notice of hearing was sent to the assessee by registered post with acknowledgement due on 20/05/2015 fixing the case for hearing on 9.6.2015. When the case was called for hearing none appeared on behalf of the assessee and neither any adjournment petition was filed. This shows that the assessee is not serious in pursuing with this appeal, and therefore, by following the decision in CIT Vs. Multiplan India Pvt. Ltd.(1991 (5) TMI 120 - ITAT DELHI-D ), we dismiss this appeal of the assessee in limine.
The assessee may, if so advised, file an application before this Tribunal for restoration of its appeal and hearing on merits by showing reasonable cause for not appearing before the Tribunal on the date of hearing. The Bench, if so satisfied, may recall its order and restore the appeal to its original number for hearing on merits.
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2015 (6) TMI 1058
Demand of sales tax / vat on sale of aviation turbine fuel (ATF) to foreign aircrafts - Constitutional validity of notification - Held that:- there may be various other airlines originating from foreign countries which are not parties to the said convention, but in order to identify those airlines which originate from the countries which are parties to the convention,such a declaration is required. Therefore I do not find that notification dated December 3, 2003 is illegal, or it lacks competence and it is contrary to the provision of the Central enactment. On the contrary, the requirement of issuance of declaration by a purchaser of ATF and lubricants, i.e., aircraft of a foreign country which is a party to the Convention on International Civil Aviation or which has entered into air services or air transport agreement with India and operating international air services to or from India would get endorsed. Therefore there is a distinct purpose in insisting for production of such declaration made by the State Government and hence the contention raised by the petitioner's counsel on the vires of the said notification is without any substance.
Validity of assessment orders - Held that:- in respect of certain transactions made to certain airlines there are declarations produced and in respect of other transactions of the very same airline, it may not be produced is the submission of the petitioner's counsel. It is also noted that in respect of airlines of certain foreign countries no declaration may have been produced. This aspect would have to be examined and there may be certain cases where the declarations have not been produced with regard to certain aircrafts.
Petitioner would have to be given an opportunity to produce evidence pointing out the list of countries which are parties to the convention or which have entered into agreements with India and in respect of whose aircrafts thesale of ATF and lubricants have taken place to the satisfaction of the third respondent/authority. If the third respondent is satisfied on the material to be produced by the petitioner, then it could consider the grant of exemption in respect of those transactions. But if the third respondent is of the opinion that the additional materials to be produced by the petitioner are not sufficient to come to a conclusion that an exemption would have to be granted, then in that case it can grant some time to the petitioner to produce requisite declarations from foreign airlines and thereafter proceed to consider the matter afresh and pass a fresh order in that regard. - Matter remanded back.
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2015 (6) TMI 1057
Levy of service tax on life insurance coverage to the employees of the State Government - By the judgment under appeal, learned single Judge held that the life insurance provided pursuant to Rules 22A and 22B of Part I KSR is not exigible for service tax. It is this judgment which is under challenge before us. - Held that:- Reading of the CBEC circular shows that it has been clarified by the CBDT that activities performed by sovereign/ public authorities under the provisions of law are in the nature of statutory obligations which are fulfilled in accordance with law, as the functions, according to the Board, are mandatory and statutory functions and are not in the nature of service to any particular individual for any consideration. On this basis, it is clarified that such activities performed under the provisions of law do not constitute taxable service and that no service tax is leviable on such activities.
As we have already seen, the respondent department is providing personal insurance and group insurance in pursuance of the statutory mandate as contained in Rules 22A and 22B of Part I KSR. In other words, the insurance provided is a mandatory statutory function discharged by a State Government Department. Such an activity is not a taxable service for the purpose of service tax in the light of the circular issued by the Central Board of Customs and Excise referred to above. This, therefore, means that the view taken by the learned single Judge does not merit interference.
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2015 (6) TMI 1055
Validity of service of notice - Admittedly, the same was returned with a specific postal endorsement ''LEFT'' since the said office was closed during the month of May, 2011. Thereafter, the respondent has chosen to send the above notice by registered post to Thiru Ajay Metha, Director, No.A20, Anand Niketan, New Delhi-21 and the same also appears to have been served on the above address. Therefore, the defence raised by the learned Counsel for the petitioner that there was no notice served on the registered office of the petitioner and served only at his residential address cannot be construed to be a value service of notice is rejected.
When the respondent with all responsibility has served a notice at the residential address of the Director of the petitioner's company, it is the duty cast upon the petitioner to respond to the said notice by filing a detailed reply. But the petitioner has failed to file any objections.
Writ Petition fails and the same is accordingly dismissed.
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2015 (6) TMI 1054
Levy of purchase tax u/s 4 - agriculture product processors i.e. (1) rice millers, or (2) dhal millers, or (3) soyabean oil millers, or (4) cotton millers - whether in the nature of levy on farmers - Held that:- in the light of the provisions under Section 4 (4) of the VAT Act and under the CST Act, in K.G.F. COTTONS(P) LTD. v . ASST. COMMR. (CT) (T AND AP) [2015 (5) TMI 804 - ANDHRA PRADESH HIGH COURT] matter remanded back.
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2015 (6) TMI 1053
Denial of cenvat credit of Central Excise duty paid on S.S. Dozer, Copper Bus Bar and M.S. Setter - Held that:- Invoice on the strength of which cenvat credit has been taken by the appellant clearly indicate the disputed goods and their central excise Tariff classification. Therefore, the observations of ld. Commissioner (Appeals) that no documentary evidences have been submitted by the appellant to prove that the goods are eligible for capital goods is not proper. Further, storage tank is finding a place in clause (vii) in the definition of capital goods contained in Rule 2 (a)(A) of the Cenvat Credit Rules, 2004. Therefore, denial of credit on S.S. Dozer and M.S. Settler is not proper and justified. Since, Copper Bus Bar is used by the appellant as component/spare or accessory to the electrical goods falling under Chapter 85 of the Tariff Act, irrespective of the tariff classification of those disputed goods, Cenvat credit is available, considering the same as capital goods in terms of clause (iii) of Rule 2 (a)(A) of the Cenvat Credit Rules, 2004.
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2015 (6) TMI 1052
Allowance of expenses incurred on account of acquisition of software license - revenue v/s capital expenditure - Held that:- Keeping with the tests as laid down by the Special Bench of the ITAT, in the case of CIT vs. Amway India Enterprises, (2008 (2) TMI 454 - ITAT DELHI-C ), three tests have to be met in order to pass the expenditure incurred on account of software expenses as capital, or otherwise. These are the ownership test, the enduring benefit test and the functionality test.
In the present case, as rightly considered by the ld. CIT(A), none of these tests fails the claim of the assessee. The software was not owned by the assessee. The assessee acquired the license only to use the same. The license fee was not paid for obtaining any right qua the transfer of the software. Then, obsolescence also does not prove any enduring benefit to the assessee. It is not the case of the Department that the longevity of the software is any more than two years. Rather, it has not been disputed that all but one of the items of expenditure have a life much less than two years. Apropos the functionality test, the Department again does not refute the fact that the software license was acquired by the assessee to carry out its routine operations in a more efficient manner. Further, the fixed capital of the assessee has not been shown to have undergone any change as a consequence of the acquisition of the license. In fact, it was either an antivirus software, or a software for filing TDS return or payments for support service for maintenance of firewalls, maintenance charges of Microsoft licenses, annual hosting fees, etc. Therefore, the nature of the software acquired is that of a revenue expense, the ld. CIT(A) has rightly held it to be so.
CIT(A) capitalized the expense for software for indexing operations documents. In fact, this expenditure paid to M/s First Indian Corporation was a one-time cost, expended for the use of the software to over two years, fetching an enduring benefit to the assessee. The ld. CIT(A) added back this amount as a capital expenditure while granting depreciation thereon. The assessee has not challenged this add back before us. Thus, the ld. CIT(A) has duly taken into consideration all the relevant factors for deciding the expenditure to be a revenue expenditure. In this regard, reliance placed by the assessee on the case of “Raychem RPG Ltd.” (2011 (7) TMI 953 - Bombay High Court ) is also appropriate, therein the Hon’ble jurisdictional High Court upheld the decision of the Tribunal in allowing software expenditure as a revenue expenditure. - Decided in favour of assessee
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2015 (6) TMI 1051
Denial of CENVAT credit on steel items - show cause notice issued by invoking extended period of limitation - Held that:- Respondent is having a good case on limitation. As show cause notice has been issued by invoking extended period of limitation same is not sustainable in the eyes of law. Therefore, demand sought to be confirmed against the respondent by invoking extended period of limitation are rightly set aside by the Ld. Commissioner (A). - Decided in favour of assessee
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2015 (6) TMI 1050
Whether the petitioner can take the benefit of copy of money receipt issued to the transporter carrying his goods by the check gate officer while assessing the tax payable by the petitioner - Held that:- the order of the learned First Appellate Authority confirming the order of the learned Assessing Authority with the observation that Xerox copies of documents are not admissible without following the procedure, as depicted under the Circular No.25118/CT dated 18.12.1999 issued by the Department, by interpreting the same for its applicability for the unregistered dealer is equally bad in law. The observation of opposite party No.2 that Xerox copy of any document is inadmissible in legal proceeding unless it is certified by the appropriate authority is also equally beyond the legal principles before the quasi-judicial authority. Opposite party No.2 has not properly evaluated the copies of documents produced by the petitioner for which his reasons for rejecting the appeal and confirming the order of the Assessing Authority is also vulnerable one. From the foregoing discussion, it must be observed by us that the observation of opposite party Nos.1 & 2 by not accepting the copies of receipts issued to the transporter in compliance with the circular issued by the Department in 1999 is contrary to section 7(4) of the O.E.T. Act, 1999 (unamended) and, as such, the petitioner is entitled to the benefit of such adjustment.
Validity and legality of impugned orders - reasonable opportunity has been given to the petitioner in accordance with law to produce evidence - Held that:- reasonable opportunity to produce the original Books of Accounts with original money receipt from the transporter has not been afforded to the petitioner because the impugned order does not indicate that the petitioner was given opportunity to produce the Books of Accounts and the original money receipts in support of his claim for adjustment of payment at the check gate. Mere observation of the learned Assessing Authority that the petitioner was given opportunity to produce the satisfactory proof for completeness and correctness of the document submitted is without any compliance as per law. On the other hand, we are of the opinion that reasonable opportunity has not been given to the petitioner to produce satisfactory proof of payment of tax to the transporter or incidence of payment of tax towards adjustment of tax at the check gate while submitting the return for the year 2001-2002.
Maintainability of writ petition - Held that:- it is found that the question of enforcement of any of the fundamental rights, in the present facts and circumstances, does not arise. Even if opportunity was not given to submit the documents, but there was hearing of the case and judgment has been passed and, as such, it cannot be said that principle of natural justice is not followed. In view of the discussions in point Nos.(i) & (ii), we are of the considered view that there is no compliance with the provisions of the O.E.T. Act and the circular issued by the Department under the relevant rules framed under the said Act. Therefore, it must be held that the impugned orders of the Assessing Authority and the Appellate Authority have been passed without jurisdiction. Although alternative remedy as per the decision reported in Titaghur Paper Mills Co. Ltd. Vs. State of Orissa [1983 (4) TMI 49 - SUPREME Court] is available, but by virtue of the later decision of the Hon’ble Apex Court in the case of Haribanslal Saharia and another Vs. Indian Oil Corporation Limited and others [2002 (12) TMI 564 - SUPREME COURT], entertaining the writ petition is not barred, even if alternative remedy is available. It is, therefore, held that the present writ petition is maintainable.
The impugned orders are quashed and the matter is remitted back to the opposite party No.1 with a direction to reassess the incidence of payment of tax for the year 2001-2002 within a period of three months from the date of receipt of copy of this order after giving reasonable opportunity to both parties to produce their respective evidence. - Petition disposed of
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2015 (6) TMI 1049
Imposition of penalty - Section 10(A)(1) of the Central Sales-Tax Act - No transit sale also under CST - Misuse of C forms - Held that:- the Tribunal found that there was a bit of uncertainty in relation to the transaction whether the same is required to be assessed under C.S.T. or A.P.G.S.T. Act. Apart from that the Tribunal also found that there was no intention on the part of the assessee which is a requirement at the relevant point of time for levy of penalty. The Tribunal also relied on the principles laid down by this Court in Ravi Enterprises v. State of Andhra Pradesh [1988 (3) TMI 419 - ANDHRA PRADESH HIGH COURT] . Further, the transaction relates to the assessment year 1983-1984 whereas the penalty proceedings came to be initiated on 09.08.1992 i.e. after a long lapse of nine years. Therefore, the Tribunal had considered various aspects on record and gave a finding which is not challenged before this Court. The Tribunal, being the last finding authority and in the absence of such conclusive finding being challenged raising a specific question of perversity, we do not find any questions of law much less substantial questions for adjudication in the present case. - Decided against the revene
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2015 (6) TMI 1048
Rectification appeal - mistake apparent on the face of the record - Held that:- Commissioner ought not to have impugned the ultimate direction. Today, the position is that the rectification application of the dealer is allowed. The dealer had partly succeeded before the Tribunal and had persuaded it to remand the matter to the Joint Commissioner. That initial order dated September 12, 2012, is wholly set aside. The Tribunal has directed that the appeal will have to be heard afresh on merits and in accordance with law. Both parties will have adequate opportunity of placing their versions when the appeal is heard afresh. We do not see any prejudice to the Commissioner and rather the Department of Sales Tax. We are surprised that the Commissioner has approached this court.
Commissioner does not impugn the initial order of remand and partial success of the respondent in the appeal. It is the dealer-respondent who approached the Tribunal and by filing rectification applications. In such circumstances, the Commissioner could not have instituted the present writ petition. Moreso, when there is presently no loss of revenue nor is any serious prejudice caused to the Revenue. The Commissioner/Revenue will have full and complete opportunity to satisfy the Tribunal when it hears the appeal afresh that the order passed by the Joint Commissioner on April 21, 2011 is in accordance with law. In such circumstances, this writ petition has no merit and is completely misconceived. - Decided against the Revenue
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2015 (6) TMI 1047
Eligibility for abatement - sub-rule (2) of Rule 96ZP - factory of the respondent was closed during the period from 28.06.1997 to 12.10.1997 - before re-start of production, the respondent on 10.10.1997 exercised option to operate under Rule 96ZP (3) - Demand of duty as determined, w.e.f. 1st September, 1997 - Held that:- it is clearly borne out from the records that the respondent had intimated the option for availing of the Scheme on 10.10.1997 under Rule 96ZP (3) of Central Excise Rules, 1944. Therefore, duty is payable under the said sub-rule (3) only with effect from 10.10.1997. In respect of the period 28.06.1997 to 12.10.1997 as the factory was closed, the respondent is eligible for abatement under sub-rule (2) of Rule 96 ZP, as rightly held by the Commissioner in the impugned order. - Decided against the revenue
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2015 (6) TMI 1046
Whether the Hon'ble Tribunal has followed the directions given by the Hon'ble A.P. High Court and the directions of the Hon'ble Supreme Court in ordering pre-deposit of ₹ 6.00 crores which is much below the 1/3rd of service tax demand - Held that:- the Tribunal had made a reasoned order after taking into consideration the facts presented before it. It is not in dispute that the Tribunal has the discretion and power to grant waiver. The Tribunal has exercised its discretion after taking into consideration the facts on record. With regard to the question which has been framed for consideration by this Court as stated supra, the earlier orders being not precedents, there is no irregularity committed by the Tribunal in not adhering to its earlier orders. - Decided against the revenue
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2015 (6) TMI 1045
Disallowance of interest u/s 40a(ia) - claim of the appellant that the interest has to be allowed U/s 36(1)(iii) - Held that:- Section 36(1)(iii) and section 37(1) so far as the allowance of interest is concerned, run parallel to each other. But these two sections do differ and it can be discerned that under section 36(1)(iii) the borrowed amount may be utilized even for procuring a capital asset related to the business. However, on the other hand, under section 37(1) the debt incurred must not be utilized for procuring a capital asset. Hence considering the totality of the facts and circumstances of the case, even the alternative plea is acceptable that the interest in question is otherwise allowable under section 37(1) of the I.T. Act being wholly and exclusively for the purpose of business. Thus considering the totality of the facts and circumstances of the case, we are of the considered opinion that, there was no logical basis by the Assessing Officer to disallow the claim of interest under section 36(1)(iii) of the IT. Act. Accordingly this part of the action of the Assessing Officer is hereby reversed.
The insertion of Second Proviso appears to be on the ground of equity and natural justice because the income-tax cannot be levied two times on the same income. Further, according to us, there should be one more reasons that the provisions of section 40(a)(ia) are otherwise harsh in nature because an expenditure which is otherwise allowable under section 37 or under General provisions of I.T. Act are forced to be disallowed by invoking this section simply because of the reason that the requirement of TDS was not followed. The consequence of the provisions of section 40(a)(ia) is that a genuine expenditure which is incurred wholly and exclusively for the purpose of business although allowable under the normal provisions of IT. Act should be curtailed simply because of the reason that the payee or the assessee who has incurred the expenditure has not deducted the tax. Therefore, to overcome this hardship, specially when the deductee has paid the tax on the said amount, the respected legislature, in our humble view, seems to be justified in inserting this new Proviso, Therefore, we are also of the opinion, as expressed by the respected coordinate Bench Agra, that the amendment has brought into the statute was mainly to mitigate the rigour of harsh provisions of disallowance of expenditure under section 40(a)(ia), therefore, intended to be applied retrospectively, specially when there is no indication in the language of the said Proviso about the prospective applicability.
We, therefore, conclude that after laying down the applicability of Second Proviso to section 40(ia) with retrospective effect, we here by remit the issue back to the file of the Assessing Officer to decide according to law after having verified the payment of tax by the recipient of the interest income in his respective hands by filing the return as prescribed in the statute. The assessee is side by side directed to furnish the requisite details to the Assessing Officer and fully cooperate with the proceedings - the ground raised by the assessee being restored back for readjudication, hence may be treated as allowed for statistical purposes.
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2015 (6) TMI 1044
Computation of deduction u/s 10A - Tribunal came to the conclusion that there was nothing on record to show that the profits arrived at by the assessee in respect of the section 10A unit carrying on the business of manufacturing industrial sewing machine needles was not in the normal course of its business and that the abnormally high profit was due to extraordinary arrangement between the assessee and the German company entered into only with a view to boost the profits of the assessee and therefore allowing deduction of ₹ 20,53,26,910 ? - Tribunal held that there was no material available with the Assessing Officer to estimate the profits of the section 10A unit eligible for deduction invoking the provisions of section 80-IA(10) read with section 10A(7) of the Act
Held that:- The impugned order of the Tribunal has followed it's own order in respect of the same assessee for assessment year 2004-05 and the decision of this court in CIT v. Schmetz India P. Ltd. [2012 (9) TMI 407 - BOMBAY HIGH COURT ] wherein held Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter – against revenue, thus upholding the above order of the Tribunal for the assessment year 2004-05 - Decided against revenue
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2015 (6) TMI 1043
Whether the transfer of cement, steel and explosives by the Petitioner to the contractors vide their respective agreements was a ‘sale’ under Section 2(m) of the Act, 1983 - Held that:- for the purpose of instant case, sub-clause (b) and (d) of clause (m) of Section 2 of the Act, 1983 are relevant. Sub-clause (b) talks about the transfer of goods involved in the execution of works contract and sub-clause (d) talks about the transfer of the right to use any goods for any purpose for cash, deferred payment or other valuable consideration. This clearly means that in addition to the main definition of ‘sale’ all such events of transfer, delivery or supply of goods by one person to other person in any one of the above ways under sub-clauses (a) to (f) would be a ‘sale’.
Various clauses of agreement shows that the said goods were supplied to the contractors on a fixed rate, and were to be consumed in the work as per approval and then the deductions of their sale price were to be made. Thus, it is clear that the above event of supply of specified goods were clearly covered under sub-clauses (b) and (d) of clause (m) of Section 2 of the Act, 1983 and were ‘sale’ within the meaning of such clauses. As we have already held that, there was transfer of goods involved in the execution of works contract with the transfer of right to use the goods. Thus the taxation authorities have rightly held that the said instances were ‘sale’ within the meaning of Section 2(m) of the Sikkim Sales Tax Act, 1983 and the assessee was liable to pay the sales tax on such transactions. - Decided against the petitioner
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2015 (6) TMI 1042
Disallowance of expense incurred on maintenance of colonies - CIT(A) deleted the addition - Held that:- The nature of expenses is upliftment of street lighting, development and laying of roads, underground tanks etc. These assets would never belong to the assessee but would belong to the community living in the colony and therefore, it cannot be said that assessee has derived enduring benefit from such expenses, therefore, in our opinion, the assessee was under obligation to maintain this colony for which such expense is a necessity. Therefore, we find nothing wrong with the order of Ld. CIT(A) and confirm the same. - Decided in favour of assessee
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2015 (6) TMI 1040
Non-payment of the Central Excise Duty liability - Confirmation of demand and penalty - Held that:- Duty liability has been discharged by the appellant on each and every clearance of the finished product from the factory by utilizing cenvat credit, such payment is in conformity with the above statutory provisions. Thus, confirmation of the duty demand by the authorities below is not in agreement with the statutory mandate.
Imposition of penalty under Rule 25 of the Central Excise Rules read with section 11 AC of the Central Excise Act 1944 has no application in the present case, inasmuch as, non-payment of duty as prescribed in Rule 8 (3A) of the Central Excise Rules, 2002 is not attributable to suppression, wilful misstatement or contravention of any of the provisions of the Rules, with intent to evade payment of duty
Considering the fact that the duty attributable to removal of excisable goods has not been paid by the appellant within the stipulated time, the provisions of Central Excise Rules, 2002 have been violated, for which penalty can be imposed under Rule 27 of the rules. Accordingly, penalty imposed in the adjudication order and confirmed in the impugned order are set aside and the same is restricted to ₹ 5,000/- under Rule 27 of the rules.
Since there is no element of mensrea in the present case, imposition of penalty on the Director of the company is not justified and accordingly, the impugned order confirming the penalty amount on the Directors is set aside.
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2015 (6) TMI 1039
Estimation of unaccounted turnover - determination of undisclosed income of the Assessee - Held that:- In case of estimation, there is an element of guess work involved and as long as the same is made following the settled principles, the determination of undisclosed income of the assessee on a reasonable basis is purely a question of fact.
Direction to AO to estimate the unaccounted turnover at 35% of the accounted turnover for the assessment years 1996-97 to 2001-02 and at 54.62% for the broken terminal period forming part of the block period falling under assessment year 2002-03 and then estimate undisclosed income in relation to such unaccounted turnover adopting net profit rate of 3.91% for all the assessment years and terminal broken period falling in the block period. In the present case, in the absence of any material to take a contra view, the question of fact as determined by the Tribunal is required to be accepted. Hence, we see no reason to interfere with the orders of the Tribunal with regard to the determination of undisclosed income.
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