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Showing 261 to 280 of 1194 Records
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2013 (8) TMI 937
MAT - addition to the book profit shall be made on account of alleged expenditure incurred to earn exempt income while computing the income under section 115JB - Held that:- No addition to the book profit shall be made on account of alleged expenditure incurred to earn exempt income while computing the income under section 115JB
Provisions for operation and maintenance - Held that:- As decided in assessee's own case for the assessment year 2009-10 without doubt, the amounts whether claimed as provision or outstanding, if worked out strictly in accordance with agreements, has to be allowed. This is because assessee is legally bound to pay to M/s GE Inc. USA the amounts due to it as per the agreements. Actual date of payment is irrelevant. Though assessee has argued that the provisioning done by it was in accordance with such agreements, the table extracted above, does not substantiate such contention. We are, therefore, of the opinion that the matter requires re-visit by the A.O. We set aside the orders of authorities below and remit the issue back to Assessing Officer for verifying the provisioning done by assessee vis-à-vis the agreements entered with M/s GE Inc. USA. If it is strictly in accordance with agreements, the amount shown as provision has to be allowed. Amounts in excess of what is payable as per the agreements, can be disallowed. Thus we set aside the orders of authorities below on this aspect and remit the issue back to the file of A.O. for consideration afresh, in accordance with law.”
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2013 (8) TMI 936
Addition by the A.O. merely on the basis of statement recorded u/s 132(4) - Held that:- The ingredient for retraction of statement made during the search, therefore, stand duly satisfied as the assessee is found to have made retraction within a reasonable time immediately after the copies of statement were provided to him. Furthermore, there being no material or evidence on record to show that appellant has carried any business outside the books for sale and purchase of items of pharmaceutical companies that could give rise to income to the extent of ₹ 30,00,000/-, addition merely on the basis of such statement which stood validly retracted could not have been made. On similar basis and reasoning in the case of Suresh Medical Agency another assessee of the group who were also searched on the same day along with this appellant, vide our order dated 21.8.2013 in ITA No. 443/JP/2012 have found the retraction made as valid and also deleted the addition. We, therefore, find no factual or legal justification in sustenance of addition by Ld. CIT (A) in this regard.
Unexplained jewellery found at the time of search - Held that:- The search party did not ask any further question in this regard and no further detail was required from him. The Assessing Officer also did not make any enquiry after he received the explanation of the assessee claiming that 240 gms jewellery belongs to his brother in law Shri Mukti Lal Agarwal. The explanation filed by the assessee, however, has been rejected by the Assessing Officer without making any further enquiry or requiring the appellant to adduce further evidence. The explanation so given has not been found false. Therefore, the claim of 240 gms jewellery explained by the assessee as belonging to Shri Mukti Lal Agarwal cannot be rejected on surmises and conjectures. We, therefore, direct deletion of addition on this account.
As regards the claim of jewellery belonging to his son Shri Praful Mittal Assessing Officer rejected this claim by saying that the said paper is a dumb document and without any date and in the absence of any bill for purchase of jewellery claim was not allowed. On the peculiar facts of surrender of income by Shri Praful Mittal and entries showing purchase of jewellery in the seized documents the valid explanation ought to have been accepted. We, therefore, do not find any justification in sustenance of addition on this basis and direct deletion thereof.
As regards jewellery weighing 300 gms belonging to Shri Lal Chand Mittal and Shri Madan Lal Mittal embark any enquiry from the appellant on this issue after the appellant had explained that jewellery weighing 150 gms each belong to such two persons, namely, Shri Lal Chand Mittal and Shri Madan Lal Mittal nor he was required to produce both these persons for cross examination or verification of facts stated by the appellant. If the claim made by these two persons for their jewellery having been left in the house of Shri Radheyshyam Mittal who was residing next door was to be taken as wrong claim, the Assessing Officer could have made addition as of unexplained investment in jewellery in their respective hands. This, however, has not been done. The appellant having furnished a reasonable explanation and considering the peculiar facts of the case, we do not find any justification in sustenance of addition on account of the jewellery weighing 300 gms in the hands of the appellant as unexplained investment. We, therefore, direct deletion thereof and allow relief to the appellant. As a result assessee’s appeal stands allowed.
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2013 (8) TMI 935
Revenue outgo incurred on Compact Drafting System allowed as revenue expenditure.
Expenditure of carding machines gave enduring benefit to the assessee and was a capital outgo.
Claim of the assessee under Section 80-IA - Held that:- Initial assessment year could only be considered as the first year in which assessee had claimed deduction under Section 80-IA of the Act, and by virtue of the decision of Hon'ble jurisdictional High Court in the case of Velayudhaswamy Spinning Mills v. ACIT (2010 (3) TMI 860 - Madras High Court), for the purpose of claiming deduction under Section 80-IA, each unit has to be considered independently.
Lower authorities fell in error in considering the Carbon Credit as revenue receipts.
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2013 (8) TMI 934
Issues Involved:
1. Whether the revenue authorities are justified in bringing to tax long-term capital gain of Rs. 86,07,480/- in the hands of the assessee.
Summary:
Issue 1: Justification of Taxing Long-Term Capital Gain
- Facts and Background: The property in question was owned by Shri B.L. Bettaiah Setty and after his death, his heirs (4 sons and 6 daughters) became entitled to the property. A partition suit led to a compromise where the sons retained the property and agreed to pay Rs. 5.25 Crores to the daughters. The daughters executed a release deed relinquishing their rights over the property.
- Assessment by AO: The AO viewed the transaction as a direct sale by the daughters to the developer, resulting in long-term capital gains. The AO relied on statements from family members and the developer, concluding that the daughters transferred their rights to the developer.
- CIT(A) Findings: The CIT(A) upheld the AO's decision, stating:
- The release deed constituted a transfer of a capital asset u/s 2(47) of the IT Act, 1961.
- The compromise decree was not a family settlement.
- U/s 47(i) of the Act, the distribution of capital assets on partition of a HUF is not regarded as a transfer, but this was not applicable as there was no HUF property.
- The joint development agreement indicated a commercial transaction, not a family settlement.
- Tribunal's Analysis: The Tribunal considered the following:
- Family Arrangement: The Tribunal referred to judicial precedents, emphasizing that family arrangements are not considered transfers under the IT Act. The money received by the assessee was pursuant to a family arrangement, not a transfer.
- Definition of Transfer: U/s 2(47) of the Act, the transaction did not meet the criteria for a transfer. The compromise decree and subsequent release deed were part of a family arrangement, not a commercial transaction.
- Partition and Capital Gains: The Tribunal noted that the money received was in lieu of the assessee's share in the property, akin to a partition, which is not considered a transfer. The provisions of Sec.47(i) and judicial precedents support that such transactions do not attract capital gains tax.
- Conclusion: The Tribunal held that the revenue authorities were not justified in taxing the sum of Rs. 89,16,667 as capital gain. The appeal by the assessee was allowed, and the sum in question was not chargeable to tax.
Result: The appeal filed by the assessee is allowed.
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2013 (8) TMI 933
... ...
... ... ..... l Appeals are dismissed on the ground of delay.
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2013 (8) TMI 932
Capital gain - assessment year - Held that:- No capital gain can be charged in the impugned assessment year and since such decision of the CIT(A) has not been challenged by the Department, the other issue with regard to adoption of rate of construction has actually become inconsequential as it is purely academic in nature. Even otherwise also, the finding of the CIT(A) with regard to cost of construction adopted at ₹ 450/- per sq.ft. for car parking is reasonable as in our view the rate adopted by the Assessing Officer is high and excessive and without any basis. The Assessing Officer without bringing on record any comparable case has simply adopted the rate, out of his own imagination. In the aforesaid circumstances, we do not find any reason to interfere with the order of the CIT(A) in this regard. Accordingly, we uphold the order of the CIT(A) and dismiss the grounds raised by the revenue
Transfer within the meaning of section 53A of Transfer of Property Act read with section 2(47(v) of the IT Act - Held that:- it is a fact on record that the developer was handed over the possession of the property after obtaining permission from GHMC on 05/08/2008 and further the second development agreement executed on 11/02/2011 with RBD Legend, though, is an unregistered document, however, clearly reveals that the earlier developer i.e. Legend Estates Pt. Ltd. had not only taken possession of the property but has also started construction of the project. Furthermore, the registered development agreement with the developer M/s Legend Estates P. Ltd. has not been cancelled. Therefore, it cannot be said that the developer M/s Legend Estates P. Ltd. has backed out or expressed its unwillingness in carrying out the development activity. The development agreement executed on 11.02/2011 being an unregistered document it cannot have much relevance. In the aforesaid circumstances, therefore, the conclusion arrived at by the CIT(A) to the effect that there is a transfer within the meaning of section 53A read with section 2(47)(v) of the Act, cannot be held to be without any substance.
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2013 (8) TMI 931
Disallowance of Advertisement Expenses - Held that:- The Tribunal held that by incurring expenditure on advertisement and sales promotion, assessee had not acquired any fixed capital asset but these expenditures were incurred for earning better profits for facilitating assessee’s operation of providing cellular mobile services. The action of the Ld. CIT (A) has been upheld with this finding that the Ld. CIT(A) had rightly allowed assessee’s claim in respect of expenditure so incurred.
Addition on account of Recruitment & Training Expenses - Held that:- Identical issue was raised before the Delhi Bench of the Tribunal in the case of Sapient Corporation Ltd Vs. DCIT (2011 (5) TMI 499 - ITAT, DELHI ), wherein after discussing the case in detail, the Tribunal has held that the expenditure incurred on account of recruitment and training expenses cannot be said to be capital expenditure. The issue is thus covered in favour of the assessee.
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2013 (8) TMI 930
Whether limitation for filing the application for re-determination of the compensation under Section 28A of the Land Acquisition Act, 1894 would commence from the date of the award or from the date of knowledge of the court’s award on the basis of which such application is being filed?
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2013 (8) TMI 929
Issues involved: Appeal against order dismissing appeal due to failure of pre-deposit under Section 35F of the Central Excise Act, 1944.
Summary:
The appeal was filed against the order of the Commissioner (Appeals) dismissing the appeal due to non-compliance with the pre-deposit requirement. The appellant had provided erection, commissioning, or installation services, leading to a service tax liability determination of &8377; 29,84,848/- along with interest and penalties under Sections 75, 77, and 78 of the Act. The lower appellate authority had directed a deposit of &8377; 10 lakhs within 15 days as a condition for waiver of pre-deposit of penalty, which the appellant failed to comply with. Consequently, the appeal was dismissed under Section 35F of the Central Excise Act, 1944.
The President of the Appellate Tribunal noted that since the substantive appeal was straightforward, the appeal itself was disposed of on merits without the need for a stay application. The order passed by the Commissioner (Appeals) was found to be impeccable in the given circumstances, leading to the dismissal of the appeal without costs.
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2013 (8) TMI 928
Issues involved:
The issues involved in this case are:
1. Whether the appellant was entitled to deduction under Section 80IB on the surrendered amount utilized for business without placing any evidence against the assessee on record?
2. Whether the Income Tax Appellate Tribunal was justified in denying the claims of the appellant under Section 80IB by relying on a previous judgment?
3. Whether the findings of ITAT were against the evidence on record and unsustainable in law?
4. Whether the ITAT misdirected itself in deciding the issue for claiming deduction under Section 80IB?
Issue 1:
The assessee, engaged in the manufacture of hand tools, surrendered an amount during a survey operation under Section 133A of the Income Tax Act. The Assessing Officer disallowed the deduction under Section 80IB as the income was not proven to be derived from the industrial undertaking. The CIT(A) partly allowed the appeal, but the Tribunal set aside the order. The appellant argued that the surrendered amount was business income and thus eligible for deduction under Section 80IB.
Issue 2:
The Tribunal held that the surrendered income did not meet the conditions under Section 80IB as it was not derived from the industrial undertaking. The burden of proof was on the assessee, and the Tribunal found no evidence to support the claim for deduction. The Tribunal's decision was based on the requirement that eligible profits should be derived from the industrial undertaking.
Issue 3:
The appellant contended that the income was assessed under the head "business," but the record did not support this claim. The Tribunal concluded that the onus on the assessee was not discharged in proving that the income qualified for deduction under Section 80IB. The Tribunal cited previous judgments to support its decision.
Issue 4:
The Tribunal emphasized that the income surrendered during the survey was not automatically eligible for deduction under Section 80IB. The Tribunal found no nexus between the surrendered income and the industrial undertaking, as required by law. The Tribunal's decision was in line with previous rulings and the specific facts of the case.
In conclusion, the High Court dismissed the appeal, ruling against the assessee and in favor of the revenue based on the lack of evidence supporting the claim for deduction under Section 80IB.
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2013 (8) TMI 927
The appeal was dismissed by the Appellate Tribunal CESTAT, Bangalore for non-compliance with the conditions of the stay order requiring the deposit of interest and penalty. The dismissal was based on provisions of Section 35F of the Central Excise Act and Section 83 of the Finance Act.
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2013 (8) TMI 926
Transfer pricing adjustment - MAM - whether CPM is to be considered as the most appropriate method for determining ALP and suitable adjustments should be made an account for differences between the export and domestic segment? - Held that:- The entire marketing cost is pertaining to domestic segment and the same should be reduced from the selling price. Similarly, there are no bad debts in export segments and therefore, the amount of bad debts should be reduced from the selling price of the domestic segment. According to the Id. DR the assessee has not quantified any adjustments for volume difference. While assessee had enclosed a letter wherein it was mentioned that if the target achieved is upto 20%, turnover discount of 1% was to be given. On that basis, the assessee had requested for an adjustment of about 20% considering the fact that the top five AEs had cumulatively placed orders of more than ₹ 180 Crs. In this regard, we find that there are so many differences in the two segments and considering the fact that suitable adjustments are not possible, CPM has to be rejected, There are differences as accepted by the Transfer Pricing Officer and therefore, in view of the decision of Drilbits International Pvt. Ltd.,[2011 (8) TMI 1083 - ITAT PUNE ] CPM should not be applied, according to us.
Addition u/s 14A - Held that:- Most of dividend received was under the Reinvest operation i.e. the dividend was automatically reinvested by the respective mutual fund. No portion of salary paid to staff and other expenses were incurred in relation to exempt dividend. According to assessee, there is nothing on record to suggest that assessee had incurred expenditure for earning of exempt income. Taking all facts and circumstances disallowance u/s 14A is restricted to ₹ 2,50,000/-. Assessing Officer is directed accordingly.
Disallowance of EDP service charges - Held that:- Assessee claims to have made this payment to its Associated Enterprises for usage of service and assessee is not aware of software's or licences as well as infrastructure which is acquired by associated enterprises in rendering the service. This issue need disapprove until the matter. Let this expenditure be looked in light of above and submissions of assessee. Assessing Officer can also look into fact whether this expenditure is made for usage of service and has not acquired any asset of enduring nature. Assessing Officer is directed to decide this issue as per fact and law after giving opportunity of hearing to the assessee.
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2013 (8) TMI 925
Addition made on account of premium amortization expenses - Held that:- The allowability of amortized expenses on premium on Government Securities has been provided u/s. 36(1)(ii) of the provisions have been clarified and explained by CBDT, New Delhi vide Instruction No. 17 of 2008 dated 26.11.2008. As per this clarification, investments of banks classified under HTM (Held to Maturity) category need not be marked to market and are carried at acquisition cost unless these are more than the face value, in which case, the premium should be amortized over the period remaining to maturity. On the basis of this Instruction, different Tribunals, as mentioned above by assessee, have allowed the amortized expenditure. The AO has ignored the provisions of Instruction which is binding on him while discussing the issue and disallowing the expenditure. Since, the Instructions and Circulars are binding in nature on AOs and different Tribunals have given decisions against the revenue, respectfully following the same, ground of appeal of assessee is allowed
Addition made on account of Gift expenses - Held that:- As in the case Taluka Co-op. & Sale Union Ltd. (1980 (9) TMI 85 - GUJARAT High Court) where expenditure incurred for purchase of articles for presentation only to its members for keeping alive good image among members and for generating goodwill and ensuring continuity of business with member societies was geld to be expenditure incurred wholly and exclusively for the purpose of business.
Addition made on account of Staff Ex-Gratia - Held that:- Since Ld. CIT(A) has given relief to the assessee in view of the fact that expenses being regularly incurred and claimed by the assessee and worked out on the basis of Memorandum of Understanding it is ascertainable liability which is allowable as per the provision of the Act, we are not inclined to interfere with the order passed by Ld. CIT(A) and the same is hereby upheld
Addition made on account of disallowance of Special Long Term Finance Fund claimed u/s. 36(1)(vii) - Held that:- Since the finding of the Ld. CIT(A) that assessee has credited a sum of ₹ 17,50,000/- to the special reserve which is less than 20% of the profit remained uncontroverted at the time of hearing before us, we feel no need to interfere with the order passed by him and the same is hereby upheld. This ground of the revenue is also dismissed.
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2013 (8) TMI 924
Reopening of assessment - Held that:- The admitted fact that 143(2) notice was neither issued nor served on the assessee, we see no infirmity in the order of CIT(A) holding the case as void ab-initio. See case Alpine Electronics Asia Pvt. Ltd. [2012 (1) TMI 100 - DELHI HIGH COURT] - Decided in favour of assessee
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2013 (8) TMI 923
TDS u/s 194I - deduct tax at source from the payment of lease premium made to MMRDA - Held that:- The lease premium paid by the assessee to MMRDA not being in the nature of rent as contemplated in section 194-I of the Act, the assessee was not liable to deduct tax at source from the said payment and hence could not be treated as the assessee in default u/s 201(1) & 201(1A) of the Act. The appeal filed by the Revenue is accordingly dismissed.
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2013 (8) TMI 922
Amortization of premium on investments - Held that:- CBDT Circular No.17 dated 26-11-2008 states that the investments classified under HTM category need not be marked to market and could be carried at acquisition cost unless it was more than the face value, in such case premium should be amortized over the period remaining to the maturity.
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2013 (8) TMI 921
CENVAT credit - Brass Sheets - description of goods mentioned wrongly in the invoices.
Held that:- There is no denial of the fact that the description of the goods was mentioned in the invoices issued by the registered dealer as only 'brass sheet' and the same stands reflected by the Appellant in their statutory records. The same have also been used in the manufacture of final products, on which duty has been paid by them - CENVAT Credit cannot be denied - appeal dismissed - decided against Revenue.
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2013 (8) TMI 920
The Bombay High Court admitted an appeal concerning substantial questions of law related to penalties imposed on a Customs House Agent (CHA) for loading containers on a vessel without a Let Export Order. The court questioned the appropriateness of reducing the penalty and upheld the penalty on the CHA under section 114(iii) of the Customs Act, 1962. Hearing was expedited.
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2013 (8) TMI 919
Issues involved: Appeal against the order of the Commissioner of Wealth-Tax (Appeals)-XV, Ahmedabad for A.Y.2007-2008 regarding the classification of Ambali, Vejalpur, and Makarba village lands as agricultural lands.
Issue 1: Classification of lands as agricultural lands
The Revenue contended that the lands in question were wrongly classified as agricultural lands, leading to the deletion of certain additions. The Revenue argued that the ld.CWT erred in law and on facts in deleting the additions made. The learned DR supported the assessment order, while the learned AR of the assessee referred to a Tribunal decision in the assessee's own case for A.Y.2000-2001, which was under appeal before the Hon'ble Gujarat High Court. The AR highlighted a retrospective amendment in the Wealth-tax Act, 1957 by the Finance Act, 2013, affecting clause (ea) of section 2. The Tribunal noted this retrospective amendment and decided to set aside the order of the ld. CWT(A) for a fresh decision in light of the amendment. The Tribunal emphasized that the ld. CWT(A) should reconsider the issue based on the retrospective amendment, leading to the appeal of the Revenue being allowed for statistical purposes.
Conclusion: The Tribunal allowed the appeal of the Revenue for statistical purposes, directing the ld. CWT(A) to decide the classification issue afresh in light of the retrospective amendment to clause (ea) of section 2 of the Wealth Tax Act, 1957.
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2013 (8) TMI 918
Issues involved: Complaint dismissed for absence of complainant and counsel, nonbailable warrants for missing accused, improper procedure followed by Trial Court.
Issue 1: Complaint dismissal for absence of complainant and counsel
The petitioner was the complainant in a case registered for offenses u/s 114 and 135 of the Customs Act. The Trial Court dismissed the complaint on a day when both the complainant and counsel were absent. Despite the absence of accused Nos. 3 and 8, the Trial Court did not call upon the complainant to adduce evidence, but instead closed the case and cancelled bail bonds of other accused. This procedure was found to be contrary to the provisions for trial of warrant cases under the Criminal Procedure Code.
Issue 2: Nonbailable warrants for missing accused
Out of nine accused in the case, accused Nos. 3 and 8 could not be secured by the Trial Court even after issuing nonbailable warrants from time to time. Due to the inability to secure these accused, the case against them was separated from the main proceedings.
Issue 3: Improper procedure followed by Trial Court
The Trial Court's decision to dismiss the complaint and cancel bail bonds without allowing the complainant to adduce evidence was deemed incorrect. The High Court held that the impugned order cannot be sustained and directed the Trial Court to restore the complaint against the respondents. It was further instructed that the Trial Court should proceed with the case in respect of the available accused, while acknowledging that one of the respondents, S.D. Kini, was reported to be deceased.
This judgment highlights the importance of following proper legal procedures, ensuring the rights of all parties involved in a case, and upholding the principles of natural justice even in the absence of certain accused individuals.
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