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Showing 241 to 260 of 1251 Records
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2012 (12) TMI 1013
Issues involved: Appeal against order deleting addition u/s 80IB and accepting fresh evidence u/s Rule 46A of IT Rules, 1962.
Issue 1 - Addition u/s 80IB:
The department appealed against the deletion of an addition made u/s 80IB for assessment year 2006-07. The assessee, a Hindu Undivided Family (HUF), claimed deduction u/s 80IB for profits from a unit set up at Baddi, Himachal Pradesh. The Assessing Officer disallowed the deduction as the value of old machinery provided by another company exceeded the permissible limit under Explanation 2 of section 80IB. The CIT(A) accepted the assessee's plea that the value of machinery did not exceed the limit and directed the deduction to be allowed.
Issue 2 - Fresh evidence under Rule 46A:
The department raised a ground regarding the acceptance of fresh evidence in violation of Rule 46A of IT Rules, 1962. The Tribunal found that the department failed to show any fresh evidence accepted by the CIT(A) without following the mandatory conditions of Rule 46A. Consequently, this ground was dismissed.
In the appeal, the department argued that the CIT(A) wrongly allowed the deduction u/s 80IB without proper evidence. The assessee contended that all relevant documents were submitted to establish eligibility for the deduction. The Tribunal observed that the Assessing Officer's rejection was based on the total value of old machinery exceeding the limit, while the CIT(A) found otherwise. Since the department failed to provide contrary material, the CIT(A)'s decision was upheld, and the appeal of the Revenue was dismissed.
In conclusion, the Tribunal upheld the CIT(A)'s decision regarding the deduction u/s 80IB and dismissed the department's appeal.
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2012 (12) TMI 1012
Issues involved:
The issues involved in the judgment are whether the appellant should be considered as a job worker u/s Rule 10A of Central Excise Valuation Rules, 2000 and whether the duty demand and penalties imposed on the appellant are justified.
Summary:
Issue 1: Appellant's classification as a job worker under Rule 10A
The appellant, a manufacturer of plastic moulded furniture for M/s. Neelkamal Limited, was alleged by the department to be job workers, triggering the application of Rule 10A of Central Excise Valuation Rules. The Commissioner upheld this view, leading to duty demands and penalties. However, the appellant argued that they were not job workers as per the agreement terms, citing the agreement clauses and a relevant tribunal judgment. The Tribunal found that the appellant purchased raw materials themselves, not supplied by M/s. Neelkamal Limited, thus not meeting the job worker criteria under Rule 10A. The Tribunal agreed with the appellant's stance and waived the pre-deposit requirement for the appeal.
Issue 2: Justification of duty demand and penalties
The department contended that the appellant's real intent was to act as job workers based on specific clauses in the agreement. However, the Tribunal analyzed the agreement clauses and determined that the appellant's actions did not align with the job worker definition under Rule 10A. The Tribunal found in favor of the appellant, allowing the appeal and staying the recovery of the demanded duty, interest, and penalties until the appeal's disposal.
In conclusion, the Tribunal ruled in favor of the appellant, determining that they were not job workers as per Rule 10A and waiving the pre-deposit requirement for the appeal. The stay applications were allowed, and the appeals were scheduled for further proceedings.
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2012 (12) TMI 1011
Claim of exemption under section 10(23C)(iiiab) - Held that:- Substantial part did not connote an idea of being a major part i.e. more than 50%, in which in the context of section 2(22)(e)(ii)) it was held that in case 40% of assets were deployed by way of loans and advances then the business of money lending has to be considered as substantial part of the business of the assessee.
CIT(A) also relied on the judgment in the case of Indian Institute of Management (2010 (8) TMI 890 - KARNATAKA HIGH COURT), in which it was held that when 37.85% of total income was financed by Central Government it had to be considered as substantially financed by the government. In case of the assessee 57.46% of gross receipts is financed by the government. Further in the earlier orders similar financing by the government had been considered as substantially financed and exemption allowed to the assessee. We, therefore see no infirmity in the order of CIT(A) in allowing the claim of the assessee
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2012 (12) TMI 1010
The applicant sought waiver of pre-deposit of duty, interest, and penalty due to improper invoice. The Tribunal found the applicant entitled to input service credit and granted 100% waiver. The Tribunal referred to a previous case where benefit couldn't be denied on procedural grounds. The impugned order was set aside, and the appeal was allowed with consequential relief.
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2012 (12) TMI 1009
Issues Involved:
1. Addition of Closing Work in Progress (WIP)
2. Disallowance of Interest on Interest-Free Loans
3. Consistency in Method of Accounting
4. Double Taxation Concerns
5. Opening Stock/Opening WIP
6. Interest-Free Loans and Advances
7. Distinction from Supreme Court Decision
8. Levy of Interest u/s 234A, 234B, and 234C
Summary:
1. Addition of Closing Work in Progress (WIP):
The assessee declared a total income of Rs. 1,42,43,430/- with a gross turnover of Rs. 28,78,16,634/-. The AO noted the absence of closing stock or WIP in the financial statements and made additions totaling Rs. 36,41,702/- for materials, wages, earth filling, and fuel expenses. The CIT(A) confirmed these additions. The Tribunal found that the assessee consistently followed the same accounting method for many years, which the Revenue did not dispute. The Tribunal held that the AO and CIT(A) were not justified in adopting a different methodology without providing a deduction for opening stock, thus reversing the CIT(A)'s order.
2. Disallowance of Interest on Interest-Free Loans:
The assessee contested the disallowance of Rs. 38,000/- interest on interest-free loans. The Tribunal did not specifically address this issue in the judgment, implying that the primary focus was on the addition of closing WIP.
3. Consistency in Method of Accounting:
The Tribunal emphasized the principle of consistency, noting that the assessee's method of accounting had been accepted in previous assessment years without dispute. The Tribunal cited various court decisions supporting the principle of consistency and ruled that the AO was not justified in changing the method of accounting without proper justification.
4. Double Taxation Concerns:
The assessee argued that most of the stock at sites was accounted for in running bills, leading to potential double taxation. The Tribunal found that the AO's computation of income was based on surmises and conjectures, without proper basis, and thus could not be upheld.
5. Opening Stock/Opening WIP:
The Tribunal noted that the AO failed to account for the opening stock when making additions for closing stock, which is an accepted method of accounting. Therefore, the AO's addition was not justified.
6. Interest-Free Loans and Advances:
The assessee argued that interest-free funds were sufficient to cover interest-free advances. The Tribunal did not specifically address this issue, focusing instead on the addition of closing WIP.
7. Distinction from Supreme Court Decision:
The CIT(A) distinguished the assessee's case from the Supreme Court decision in Munjal Sales Corporation. The Tribunal did not find this distinction relevant to the primary issue of closing WIP addition.
8. Levy of Interest u/s 234A, 234B, and 234C:
The assessee did not press this ground, and it was dismissed as not pressed.
Conclusion:
The Tribunal reversed the CIT(A)'s order, allowing the assessee's appeal regarding the addition of closing WIP and emphasizing the principle of consistency in the method of accounting. The appeal was partly allowed.
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2012 (12) TMI 1008
Reopening of assessment - non furnishing of reasons to believe - Held that:- Undisputable facts on record establish beyond doubt that the reasons recorded for initiation of proceedings under section 147/148 of the Act were never furnished to the assessee by the Assessing Officer before completion of the assessment proceedings on 29/12/2008, 33 months after the request was made by the assessee by letter dated 16/4/2007. The subsequent furnishing of the reasons recorded to the assessee by the learned CIT(A) by letter dated 28/1/2010 does not achieve any purpose or mitigate the illegality of the action of depriving the assessee its right to raise objections against the initiation of proceedings under section 147/148 of the Act.
In this view of the matter, we hold that the order of assessment passed under section 143(3) rws 148 of the Act dated 29/12/2008 for the assessment year 2005-06 without the Assessing Officer furnishing the recorded reasons for initiation of proceedings under section 147/148 of the Act to the assessee within reasonable time and prior to the completion of the assessment proceedings, renders this order of assessment invalid and unsustainable in law.
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2012 (12) TMI 1007
The High Court of Allahabad dismissed the revision filed by the State for the assessment year 2001-02 against the tribunal's order. The question of whether UPS and inverters are electronic goods was answered in favor of the assessee based on a previous court decision. The court upheld the tribunal's order, stating no question of law arises. The revision was dismissed with no costs.
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2012 (12) TMI 1006
Issues Involved:
1. Classification of Gains as Business Income or Capital Gains.
2. Treatment of Long Term Capital Gains (LTCG).
3. Treatment of Short Term Capital Gains (STCG).
Summary:
Issue 1: Classification of Gains as Business Income or Capital Gains
The Revenue contended that the gains from the sale of shares should be treated as business income, citing the average holding period of shares (15-30 days) and the number of transactions (200 odd) as indicative of business activity. The Assessing Officer (AO) concluded that the profits from the sale of shares constituted business income, not capital gains, based on factors such as the time devoted, the normal activity of the assessee, the motive/intention, the source of funds, the period of holding, the frequency of transactions, and the number of stocks invested.
Issue 2: Treatment of Long Term Capital Gains (LTCG)
The assessee argued that the gains from the sale of shares held for more than 12 months should be treated as LTCG. The CIT (A) agreed, noting that the shares were held as investments and not as stock-in-trade. The CIT (A) found that the assessee's intention was to earn dividends and appreciate capital investment, and the shares were held for a longer period without any intra-day trading. The CIT (A) allowed the claim of Rs. 22,46,495/- as LTCG.
Issue 3: Treatment of Short Term Capital Gains (STCG)
The assessee claimed that the gains from shares held for less than 12 months should be treated as STCG. The CIT (A) examined various parameters, including the period of holding, the absence of borrowed funds, and the nature of transactions, and concluded that the gains of Rs. 84,88,017/- should be treated as STCG. The CIT (A) noted that the assessee maintained two separate portfolios for investment and trading, and the shares were shown as investments in the books of accounts.
Conclusion:
The ITAT upheld the CIT (A)'s decision, dismissing the Revenue's appeal. The ITAT agreed that the gains from the sale of shares held for more than 12 months should be treated as LTCG and those held for less than 12 months as STCG. The ITAT found that the assessee's activities were consistent with investment rather than business, considering factors such as the absence of borrowed funds, the nature of transactions, and the holding period of shares. The appeal of the Revenue was dismissed, and the order of the CIT (A) was upheld.
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2012 (12) TMI 1005
The checked-in-baggage had already been handed over to the officials of the Airliner and even according to the prosecution, the checked- in- baggage was offloaded from the Aircraft and brought to place where the mahazer was being drawn.
whether the checked-in-baggage offloaded was locked and whether it was opened by the petitioner
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2012 (12) TMI 1004
Issues Involved:
1. Restitution of conjugal rights.
2. Dissolution of marriage.
3. Custody of the child.
4. Return of jewelry and other items.
5. Permanent alimony and maintenance.
6. Admissibility of secondary evidence.
7. Mental cruelty.
8. Desertion.
Detailed Analysis:
1. Restitution of Conjugal Rights:
The appellant-wife filed for restitution of conjugal rights under Section 9 of the Hindu Marriage Act, 1955. She alleged that her husband withdrew from her society without justifiable reason. The Family Court dismissed her application, concluding that she had treated her husband with cruelty and had not taken steps for reunion.
2. Dissolution of Marriage:
The respondent-husband sought dissolution of marriage under Sections 13(1)(i-a), 26, and 27 of the Hindu Marriage Act, 1955, citing mental cruelty and desertion. The Family Court granted the decree for divorce, which was upheld by the High Court. The Supreme Court affirmed the divorce on the ground of mental cruelty, noting that the wife's behavior caused humiliation and embarrassment to the husband, affecting his public image and self-respect.
3. Custody of the Child:
The Family Court held that the child would remain in the custody of the mother, emphasizing the principle that the welfare of the child is paramount. This decision was not contested in the appeals.
4. Return of Jewelry and Other Items:
The husband's claim for the return of jewelry and other items was dismissed by the Family Court due to the lack of cogent evidence. This finding was not challenged in the higher courts.
5. Permanent Alimony and Maintenance:
The Family Court directed the husband to pay permanent alimony of Rs. 5 lakhs each to the wife and the minor son. The High Court additionally ordered the husband to pay Rs. 12,500 per month as maintenance from the date of the order by the Chief Metropolitan Magistrate at Hyderabad until the High Court's order. The Supreme Court modified the permanent alimony to Rs. 50 lakhs, considering the husband's financial status and the need for the wife and child to live with dignity.
6. Admissibility of Secondary Evidence:
The High Court admitted a photostat copy of a letter (Exhibit R-8) as secondary evidence under Section 65 of the Evidence Act. The Supreme Court overturned this finding, stating that the foundational evidence required for admitting secondary evidence was not adequately established.
7. Mental Cruelty:
The Supreme Court confirmed the findings of the Family Court and High Court that the wife had treated the husband with mental cruelty. The husband's testimony about the wife's consistent ill-treatment, public embarrassment, and unfounded allegations against his family was deemed credible. The Court noted that mental cruelty includes sustained humiliation and calculated torture, which was evident in this case.
8. Desertion:
The Family Court and High Court concluded that the wife had deserted the husband. However, the Supreme Court found no specific pleading or prayer for divorce on the ground of desertion in the husband's petition. Consequently, the finding of desertion was overturned.
Conclusion:
The Supreme Court affirmed the decree of divorce on the ground of mental cruelty and modified the permanent alimony to Rs. 50 lakhs, ensuring the wife and child's financial security and dignity. The appeals were dismissed, with each party bearing their respective costs.
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2012 (12) TMI 1003
When the show cause notice contains detailed narration of events apparently leading to the conclusion of intention to evade payment of duty, whether mere non-invocation of specific/provision to Section 11A will vitiate the show cause notice for purpose of imposition of penalty under Section 11AC of Central Excise Act, 1944?
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2012 (12) TMI 1002
Provisional release of goods - Held that: - In case, the appeal is filed within a period of ten days along with an application for interim stay, the application for interim stay will be considered and decided within a period of five days from the date of filing of the application and appeal will be disposed off finally in accordance with law, as early as possible, but not later than a period of two months from the date of filing of the appeal - Application disposed of.
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2012 (12) TMI 1001
Provisional release of goods - Held that: - In case, the appeal is filed within a period of ten days along with an application for interim stay, the application for interim stay will be considered and decided within a period of five days from the date of filing of the application and appeal will be disposed off finally in accordance with law, as early as possible, but not later than a period of two months from the date of filing of the appeal - Application disposed of.
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2012 (12) TMI 1000
Valuation - Value of Software – include ability in the value of software - The allegation of the Revenue is that the value of the impugned goods have been split up into hardware and software portion with an intention to evade payment of Customs duty - Imposition of redemption fine and penalty.
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2012 (12) TMI 999
The Supreme Court allowed the withdrawal of the Special Leave Petition after hearing arguments from the petitioners' senior counsel. The case was disposed of as withdrawn.
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2012 (12) TMI 998
Provisional release of goods - Held that: - In case, the appeal is filed within a period of ten days along with an application for interim stay, the application for interim stay will be considered and decided within a period of five days from the date of filing of the application and appeal will be disposed off finally in accordance with law, as early as possible, but not later than a period of two months from the date of filing of the appeal - Application disposed of.
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2012 (12) TMI 997
Issues involved: Stay application for waiver and stay of service tax demand, appropriation of payment, erroneous quantification of demand, liability under 'Survey and Mapping Service', limitation period, financial hardships.
Stay Application and Payment Appropriation: The appellant sought waiver and stay for a service tax demand of over Rs. 2.47 crores for the period from 16.6.2005 to 31.3.2010 under 'Survey and Mapping Service'. The appellant claimed to have paid Rs. 1,77,69,730, but the appropriation was only Rs. 1,47,33,351. It was acknowledged that no other demand was pending against the appellant. The appellant contended that the demand was quantified erroneously based on credits from bank statements retrieved by investigating officers. The appellant argued that they were not liable to pay service tax under this head before 16.6.2005, the date of its introduction. The appellant also raised the issue of a part of the payment being for services rendered before the said date, which was contested by the Superintendent (AR).
Limitation and Financial Hardships: The appellant claimed that the extended period of limitation was not applicable as they obtained registration under 'Survey and Mapping Service' on 17.6.2005 and had been paying service tax since then. The appellant highlighted that the investigation started in December 2007, but they had been filing returns since October 2007. Financial hardships were also pleaded by the appellant. Considering the circumstances, the Tribunal ordered the appellant to deposit Rs. 20,00,000 within four weeks in addition to the previous payments, with compliance to be reported to the Deputy Registrar by 7.2.2013. The waiver and stay of the penalty and the balance amount of service tax and interest were subject to this compliance.
Miscellaneous Application: The miscellaneous application, along with the appeal, was scheduled to be heard in due course, as pronounced and dictated in open court.
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2012 (12) TMI 996
Waiver and stay of penalty - consideration received in the form of land by the assessee from the service recipients (land owners) - whether twin houses and villas are also to be considered as a residential complex in view of the expression building or buildings used in the definition of residential complex?
Held that: - the appellant, indeed, paid service tax in respect of 62 houses (22 villas and 40 twin houses) constructed in the same premises. Those villas and twin houses were also constructed and given to individual buyers. However, the aforesaid issue is relevant to the said houses also. As the appellant paid service tax in respect of those constructions, we shudder to think how they can resist the present demand on merits - we are inclined to ask for a reasonable amount of predeposit from the appellants - there shall be waiver and stay in respect of the penalty imposed on the appellants on compliance - appeal disposed off - decided partly in favor of appellants.
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2012 (12) TMI 995
Issues Involved:
1. Deletion of penalty levied u/s 271D for contravention of Section 269SS.
2. Deletion of penalty levied u/s 271E for contravention of Section 269T.
Summary:
Issue 1: Deletion of penalty levied u/s 271D for contravention of Section 269SS
The Revenue appealed against the order of the Commissioner of Income-tax (Appeals)-I, Baroda, which deleted the penalty of Rs. 2,20,72,844/- levied u/s 271D for accepting loans in contravention of Section 269SS. The Assessing Officer had noticed that the assessee accepted cheques (other than account payee cheques) exceeding Rs. 20,000/- from certain individuals, which was deemed as acceptance of loans or deposits otherwise than by account payee cheque or draft, violating Section 269SS. The assessee explained that the transactions were cheque discounting, not loans or deposits. The CIT(A) accepted this explanation, stating that the transactions did not amount to loans or deposits as defined in Section 269SS. The Tribunal upheld the CIT(A)'s decision, confirming that the provisions of Section 269SS were not applicable, and dismissed the Revenue's appeal.
Issue 2: Deletion of penalty levied u/s 271E for contravention of Section 269T
The Revenue also appealed against the deletion of penalty of Rs. 2,10,44,348/- levied u/s 271E for repayment of loans/deposits in cash, violating Section 269T. The Assessing Officer considered the cheque discounting transactions as repayment of loans or deposits in cash. The CIT(A) clarified that the transactions were cheque discounting, not repayment of loans or deposits, and thus outside the scope of Section 269T. The Tribunal agreed with the CIT(A), noting that the assessee had not repaid any loans but had received repayments from farmers. Therefore, the provisions of Section 269T were wrongly applied by the Assessing Officer. The Tribunal upheld the CIT(A)'s order and dismissed the Revenue's appeal.
Conclusion:
Both appeals by the Revenue were dismissed, and the orders of the CIT(A) were upheld, confirming that the transactions in question did not amount to loans or deposits, and thus, the penalties u/s 271D and 271E were not applicable.
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2012 (12) TMI 994
Issues involved: Revision under section 58 of the U.P. Value Added Tax Act, 2008 against the cancellation of penalty u/s 54(1)(14) of the VAT Act for the assessment year 2009-10.
Summary:
The case involved a revision filed against the cancellation of a penalty under section 54(1)(14) of the VAT Act for the assessment year 2009-10. The petitioner, engaged in manufacturing and sale of detergent powder, had a penalty levied due to a blank column in Form No.38 during a truck inspection. The first appellate authority upheld the penalty, but the Tribunal later canceled it. The High Court, after hearing both parties, noted that the blank column was due to insufficient space and was pasted on the back of the form. No discrepancy was found upon physical verification, and there was no malafide intention to conceal information. Citing precedents, the Court emphasized the absence of mens rea and loss to revenue, leading to the dismissal of the revision and upholding the Tribunal's decision.
The High Court considered the technical nature of the mistake in Form No.38, where a column was left blank due to insufficient space, leading to the penalty imposition. However, upon physical verification, no discrepancy was found, indicating no malafide intention to conceal information. The Court highlighted the absence of mens rea and loss to revenue as crucial factors in justifying the cancellation of the penalty, following established legal principles from relevant case laws.
The Tribunal's decision to cancel the penalty was based on the inadvertent and technical nature of the mistake in Form No.38, where necessary information was pasted on the back due to space constraints. The Court emphasized the lack of malafide intention or concealment of information by the assessee, leading to the conclusion that there was no justification for the penalty imposition. Citing legal precedents, the Court upheld the Tribunal's decision, dismissing the revision filed by the department and emphasizing the importance of mens rea and revenue loss in penalty cases.
In conclusion, the High Court dismissed the revision filed by the department, upholding the Tribunal's decision to cancel the penalty under section 54(1)(14) of the VAT Act for the assessment year 2009-10. The Court's decision was based on the technical nature of the mistake, absence of malafide intention, and the lack of revenue loss, highlighting the significance of mens rea in penalty cases.
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