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Case Laws
Showing 281 to 300 of 1477 Records
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2016 (4) TMI 1198
Disallowance u/s 40(a)(ia) - payment on which TDS has been made and paid into Government Account before the due date for furnishing the return of income - Held that:- There is no denying that the tax was deposited by the assessee in the month of April, 2007. It is also an admitted fact that the Hon’ble Jurisdictional High Court in the case of Checkmate Services P. Ltd. [2014 (11) TMI 641 - GUJARAT HIGH COURT ] has held that the amendments to Section 40(a)(ia) allowing deduction for the payment, on which TDS has been made and paid into Government Account before the due date for furnishing the return of income is to take effect retrospectively. - Decided in favour of assessee
Estimation of profits @ 8% - Held that:- Since the audited books of accounts with supporting evidences were produced before the ld. CIT(A), the First Appellate Authority should have examined the books of accounts as his powers are co-terminus to that of the A.O. We find that the First Appellate Authority has not verified the details himself and again depended upon the A.O. We further find that in the immediately preceding assessment year on a turnover of ₹ 1.49 crores, the assessee has shown net profit @ 2.49%, whereas for the year under consideration on a turnover of ₹ 2.49 crores, the assessee has shown net profit @ 2.02%. On an increase of the turnover by ₹ 1 crore, there is marginal fall in the net profit rate which is 0.47%. We, therefore, do not find any justification in estimating the net profit at 8%. We, therefore, set aside the findings of the ld. CIT(A) and direct the A.O to accept the net profit shown by the assessee - Decided in favour of assessee
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2016 (4) TMI 1197
Condonation of delay - application for fixation of brand rate - appellant has filed this application beyond the period of three months but before the expiry of 12 months from the date of Let Export Order made in the shipping bills - Held that: - granting of drawback or industrial brand rate which is a beneficial legislation needs to be considered in a broader perspective rather than a narrow view - The statute mandates that an application can be filed for condoning the delay beyond the period of three months but within 12 months from the date of Let Export Order needs to be read in the correct perspective in line with beneficial legislation and delay, if any, needs to be condoned.
Matter remanded back to the Commissioner with direction to condone the delay by taking a liberal approach - appeal allowed by way of remand.
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2016 (4) TMI 1196
Premium paid towards keyman insurance policy - whether Keyman falls within the definition laid down in the Explanation below section 10(10D) - Held that:- The premium paid on the keyman insurance policy is to be allowed as business expenditure. The only thing to be seen is whether the Keyman falls within the definition laid down in the Explanation below section 10(10D). The Explanation states that "Explanation: For the purposes of this clause, "Keyman insurance policy" means a life insurance policy taken by a person on the life of another person is or was the employee of the first-mentioned person or is or was connected in any manner whatsoever with the business of the first-mentioned person. As per the Explanation, the only requirement is that "Keyman" should be an employee or a director and/or should be connected in some manner with the business of the firm.
The premium under such policy has been categorically declared by the Board to be allowable as deduction, specifically in view of the fact that the maturity amount receivable under the policy is no longer exempt from tax. It is a cardinal principle that where any income is subject to tax, the expenditure incurred on earning of such income would be allowable. The Board has merely reiterated this principle. We uphold the action of the ld. CIT(A) in holding that on redemption/withdrawal of the amount under the above policy will have to be taken as income in the hands of the company as business income u/s 28(vi) in the relevant year and as such there will be double taxation if the said amount is disallowed ACIT,2(1), Ujjain vs. M/s. Shriji Polymers Private Limited, Ujjain [2017 (2) TMI 1106 - MADHYA PRADESH HIGH COURT] and added to the income under present assessment year. Our interference is not required.
Disallowance of commission u/s 40A(2)(a) and 40A(2)(b) - Held that:- AO has not given emphasis on the nature and scope of the work and the services rendered. Section 40A(2) itself makes it apparent that regard must be had to the 'fair market value' of the services, as well as to the 'legitimate needs of the business'. These two criteria are satisfied and hence no disallowance is warranted. Tribunal was not correct in law in upholding the disallowance out of the remuneration paid by the assessee to ACIT,2(1), Ujjain vs. M/s. Shriji Polymers Private Limited, Ujjain 'SP' by invoking the provisions of section 40A(2) of the Act. Accordingly, the High Court deleted the addition made, and allowed the appeal. We, therefore, uphold the action of the ld. CIT(A) in deleting the addition.
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2016 (4) TMI 1195
Denial of deduction u/s 54F - symbolic purchase of residential property - Held that:- The facts in the case of the assessee is identical to the facts in the case of Mrs. Chhaya B. Parekh and hence the assessee cannot be denied the entitlement to deduction u/s. 54F of the Act on the purchase of same Juhu bungalow property(new asset) on pretext that the same was ‘symbolic purchase of residential property’ and not the ‘real purchase of residential property’ on the allegation that the same was never occupied after its acquisition by the assessee and the said co-owner Mrs Chhaya B. Parekh till demolition of the said bungalow after 2 years 8 months of its acquisition.
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2016 (4) TMI 1194
CENVAT credit - excess duty paid on inputs procured from Ghaziabad unit - Held that: - As per the provision of Rule 3 of CCR, 2004, the assessee is entitled to take the Cenvant Credit duty paid on the inputs - whatever, duty has been paid by the appellant, they are entitled to avail Cenvat Credit if the supplier has paid excess duty, the Revenue is at liberty to take action against the supplier but Revenue has not disputed the duty payment by the supplier. In these circumstances Cenvat Credit can’t be denied to the appellant - credit allowed - appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1193
Disallowance on account of depreciation on brands under section 32(1)(ii) - whether the brand is not an intangible asset? - Held that:- Brand name is an intellectual property right similar to knowhow, patents, trademarks and therefore the same is eligible for depreciation under section 32(1)(ii). See KEC International Ltd. vs. ACIT [2010 (6) TMI 523 - ITAT, MUMBAI]. The Ld. A.R. has further brought our attention to the fact that in earlier assessment years right from the year 2002-03 up to A.Y. 2005-06, the assessee has been consistently been allowed depreciation on the brand name. In view of this, we do not find any justification on the part of authorities in disallowing the claim of depreciation on the brands for the year under consideration. - Decided in favour of the assessee
Addition of contingent liabilities - Held that:- A.R. has brought our attention to the opening lines of para 5.2 of the assessment order wherein the Assessing Officer has categorically mentioned that the contingent liabilities have neither been debited nor credited in the profit and loss account. The Ld. A.R. has further demonstrated from the balance sheet that such liabilities have never been claimed by the assessee as part of expenditure. When the assessee had not claimed the said liability as part of expenditure in the return of income, then there was no question of any disallowance of the same. The additions made by the AO in this respect are totally unwarranted. This issue is also accordingly allowed in favour of the assessee.
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2016 (4) TMI 1192
Remission of duty - loss due to accident - molasses - whether the assessee are entitled remission of duties on molasses lost (in store) due to auto combustion, or accident? - Held that: - loss have occurred due to unavoidable accident - Similar question was earlier considered by this Tribunal in RBNS Sugar Mills Ltd. [1996 (5) TMI 205 - CEGAT, NEW DELHI], wherein this Tribunal took notice that, Auto Construction of molasses stored in tanks is a recurrent natural phenomenon.
There is no negligence found on the part of the appellant in taking reasonable care - the appellant is entitled to remission of duty under Rule 21 of CER - appeal allowed - decided in favor of appellant-assessee.
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2016 (4) TMI 1191
Cenvat credit - Capital goods - Penalty - Time limitation - Held that: - On perusal of the show-cause notice, it is seen that the notice relies upon the ER-1 return and the letter issued by appellant informing the details of credit. There is no evidence for any positive act of suppression or wilful misstatement committed on the part of the appellant. The appellants have disclosed details of the credit availed as required under law. There is no requirement/provision in the ER-1 returns to submit the details of each item on which credit is availed - Except the baseless allegation that appellant did not furnish details of credit in ER-1 returns there is no iota of evidence to prove that appellant is guilty of suppression of facts or wilful misstatement.
In the present case the show cause notice itself is based upon the ER-1 returns and details furnished by appellant and not on any private records or other source - Once the assessee files returns, it is for the proper officer to subject the returns to scrutiny and call for clarifications in case of any doubt - On bare perusal of definition of inputs, it can be seen that “input” include goods which are used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not. On such score, the contention of the revenue is totally untenable.
I do not agree with the contention of Revenue that credit is not admissible as the prefabricated parts are embedded to earth, I am unable to accept the argument of the learned counsel that clean room is an equipment. It may be correct that such a room is indispensible to the process of manufacture, as the appellants are engaged in manufacturing bulk drugs - But no way can a clean room be considered a capital good or component, accessory, or part of capital goods - However as the issue is an interpretational one and as the appellant had revered the credit for the normal period on pointing out by department, even before issuance of show cause notice I hold that no penalty can be imposed for the irregular credit availed on prefabricated building parts.
Appeal partly allowed.
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2016 (4) TMI 1190
N/N. 66/94-Cus., dated 1-3-1994 - import of Steam Geared Turbine Alternator - denial on the ground that the said certificate is signed by Dy. Advisor in the Ministry of Fertiliser and it was not clear whether the Dy. Advisor is an officer not below the rank of Dy. Secretary - Held that: - the Revenue’s claim that the imported goods are used for sulphuric acid plant and it is not a fertiliser plant. Such a submission is totally misdirected as it is common knowledge that for manufacture of fertilizer sulphuric acid is one of the prime raw material and is cost effective if produced within the plant wherein fertilizer is manufactured. It is not disputed that sulphuric acid plant is within the fertilizer plant of the respondent - Accordingly the benefit of N/N. 66/94-Cus. cannot be denied - appeal rejected - decided against Revenue.
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2016 (4) TMI 1189
CENVAT credit - duty paid on molasses - recovery of credit utilized for clearance of denatured rectified spirit - Held that: - denatured alcohol is acknowledged as an excisable goods and ‘output’ in terms of CCR, 2004. There cannot be discriminatory treatment in the treatment accorded to two manufacturers of the same product merely on the ground that one uses captively produced molasses and the other procures from external sources.
The rectified spirit is an exempt goods and as the appellants do manufacture dutiable goods also, Cenvat Credit Rules does permit them to take credit of duty paid on molasses subject to compliance with Rule 6 of CCR, 2004. There is no finding that they have not reversed the Cenvat credit taken on inputs that have gone into the exempt goods. This is sufficient compliance of Rule 6. They are, consequently, not required to be subject to recovery of duty on goods cleared by utilization of Cenvat credit and not required to make good the credit taken on inputs.
Appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1188
CENVAT credit - capital goods - penalty u/r 15 of the CCR, 2004 read with Section 11AC of the CEA, 1944 - Held that: - the content of mala fides on the part of the appellant are missing. In that circumstances, the penalty on the appellant is not imposable - appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1187
Revocation of CHA licence - revocation on the ground that CHA have failed in their obligation of verifying the identity of his client and their existence in the given address - Held that: - No physical verification of importer’s premises is mandated in the regulations nor it is a general requirement as per business practice. No violations have been noticed in respect of transactions with Customs with reference to consignment cleared through the appellants - As such the order of revocation of license, only on the ground that on later verification the importer was not found in the indicated premises, is not justifiable.
The time-limits prescribed under Regulation 20 of CBLR, 2013 have not been adhered to in this case. As such, the impugned order is not sustainable on this ground also.
Appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1186
Entry No.71 - whether the material which is being purchased and sold by the appellant is rightly excluded from entry No.71? - examination of matter by Advance Ruling Authority - Held that: - when we are not satisfied even after examining in detail that the Entry No.71 can be applied to the products or the items which are being dealt with by the appellant, no useful purpose would be served by examining the matter on the ground that there is no detailed discussion or examination by the Advance Ruling Authority - appeal dismissed - decided against appellant.
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2016 (4) TMI 1185
Cenvat credit - Rule 3(5A) of CCR - Penalty - Rule 15(2) of CCR - Held that: - I find that the ld. Commissioner have without any sanction of law arbitrarily held the champering machine at the time of the sale was not in scrap/waste condition. In absence of any ground-rules under the statute, the Revenue has to accept the treatment of the machinery by the assessee. Even by Rule of thumb, I find that the sale value is ₹ 41,000/- which is approximately 2% of the acquisition price of the machine. Thus, by Rule of thumb, it is definitely disposed of as waste and scrap - Appeal allowed.
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2016 (4) TMI 1184
Depreciation on assets not owned by the respondent - whether the Tribunal was right in its decision of treating toll roads as plant and machinery? - Held that:- Following the decision of this court in North Karnataka Expressway Ltd. (2014 (11) TMI 351 - BOMBAY HIGH COURT) wherein held that merely, because the road is laid out does not mean that the Assessee is the owner thereof. He has laid it out for the purpose of the union and for its ultimate vesting in the public we answer substantial questions of law in the negative, i.e., in favour of the appellant-Revenue and against the respondent-assessee.
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2016 (4) TMI 1183
Payment of liquidated damages - whether the amount was payment of dividend and not allowable/deductible expenditure in the hands of the appellant-company? - Held that:- The fact that the payment took the character of liquidated damages, does not obliterate the fact that the liability to pay was on account of dividend. Failure on the part of the assessee to pay dividend was a breach of the contract which entitled the UTI Bank to recover damages.
Therefore when the assessee paid the damages the assessee was really discharging its liability to pay dividend under the contract.
We are, as such, convinced that the payment was, in fact, a payment of the agreed dividend and therefore, the Tribunal, the Commissioner of Income-tax (Appeals) and the Assessing Officer took a correct view in the matter. - Decided in favour of revenue
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2016 (4) TMI 1182
Income from share transactions - business income or capital gain - Held that:- It could not be effectively pleaded by learned counsel for the appellant that the approach and the conclusion of the Tribunal warranted interference by this court. It was also noticed by the Assessing Officer that the assessee had declared income from trading of shares and which was treated as income of business and profession and normal tax was paid. Further the assessee had claimed income under the head capital gains as short-term capital gains as well as long-term capital gains on some other transactions of dealing in shares. Perusal of the balance- sheet revealed that the shares were shown as stock-in-trade and not as investment. Therefore, the transactions in shares were held to be in the nature of business activity and the income was assessed as income from business and profession. The finding of the Assessing Officer was confirmed by the Commissioner of Income-tax (Appeals). The Tribunal after examining the matter recorded that once the shares had been shown in stock in trade by the assessee itself, it could not be said that the assessee had made investment in such shares and thus these transactions were held to be in the nature of trading transactions.
the assessee-appellant was not successful in demonstrating that the findings recorded by the Tribunal were based on either misreading or misappreciation of material on record.
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2016 (4) TMI 1181
Maintainability of appeal - Held that: - The appeal being for a small amount of ₹ 25,000/- and Revenue has made a policy not to seek appeal remedy upto an amount of ₹ 10,00,000/- of demand, this appeal is dismissed on pecuniary jurisdiction - appeal dismissed.
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2016 (4) TMI 1180
Estimation of net profit in a Government contract - @ 10 per cent. as against 6 per cent. upheld by it in a large number of identical matters relating to Government contract - Held that:- We may ignore the assessment figures for the subsequent assessment years as placed before us by the appellant although they would also go to show that regular assessment of the assessee has been made. This figure of 4.46 per cent. was definitely a relevant material to have been taken into consideration by the Assessing Officer and the appellate authorities up to the Tribunal while considering the figure of 10 per cent. simply introduced on his say so by the Assessing Officer.
Tribunal has given a complete go-by to several decisions of the Tribunal itself fixing the final net profit rate of 6 per cent. in the case of other similarly situated assessees who were also in civil contract works of the Government. Taking the same into consideration, it can be said that no reasonable man would have put a figure of net profit at more than 8 per cent. of the estimated income received from the civil contract by the assessee. In the present matter even after the deduction on account of partner salary, interest and depreciation, it still has led to a final net profit rate of approximately 7.9 per cent. which is much above the net profit rate as it has been found after regular assessment made of the same assessee. The said figure is also not in accord with the other decision of the Tribunal in the case of similarly situated contractor.
Thus, on a consideration of the above circumstances, although there has been a concurrent finding of the authorities before us but the said finding is certainly not based upon any evidence and without taking into account relevant materials and thus it has to be held to be perverse. - Decided in favour of the assessee and against the Revenue.
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2016 (4) TMI 1179
Exemption u/s 12AA - non charitable activity - Held that:- Not found any material which would indicate that the assessee or its affairs are not being carried out in accordance with the object of the Trust or institution. If these are two aspects referred to in subsection (3) of Section 12AA and the materials in that behalf were completely lacking, then, we do not find any reason for the Director to exercise the power which he purported to exercise in the present case. On this short ground alone the assessee's appeal should have been allowed by the Tribunal.
Though the Tribunal has discussed the ambit and scope of the proviso to Clause 15 of Section 2 and subsection (3) of Section 12AA, we do not find that in the facts and circumstances of the present case, any such discussion was necessary and warranted, once the appeal could have been allowed on the above short ground. With this conclusion, we uphold the order of the Tribunal. We need not assign any other reason nor examine the contentions raised before us in further details. The questions, as are posed by Mr. Malhotra and in the backdrop of these proceedings can be decided in a proper case. With these observations, the appeal fails and it is dismissed.
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