Addition u/s 40(a)(ia) - tax at source on payment made to CKIL - as argued obligation of the assessee to deduct tax at source has been fulfilled by M/s CKIL - HELD THAT:- As decided in own case AY 2012-13 CIT(A) has recorded a finding that M/s CKIL has duly complied with TDS provisions at the time of making payments to the concerned payees. Thus, it is noticed that the payment by way of rent and repairs have been duly subjected to deduction of tax at source. The assessee has reimbursed the amount to M/s CKIL on which tax has already been deducted at source.
Since the impugned payments have been made M/s CKIL on behalf of the assessee and the tax has been deducted at source there from by M/s CKIL, it should be construed that M/s CKIL has deducted tax at source also on behalf of the assessee. In this view of the matter, the obligation of the assessee to deduct tax at source has been fulfilled by M/s CKIL and hence agree with the view taken by Ld CIT(A) that the provisions of sec. 40(a)(ia) would not get attracted in this factual matrix - Appeal of the assessee is allowed.
Disallowance u/s. 14A read with Rule 8D - HELD THAT:- We direct the AO to restrict the disallowance under Section 14A to 2% of the exempt income. in the result the ground of appeal raised by the assessee is allowed.
Disallowance on account of bad debts written off u/s 36(1)(vii) - HELD THAT:- Proviso to clause (vii) stood introduced in order to protect the Revenue. It would be meaningless to invoke the said proviso where there is no threat of double deduction. In case of rural advances, which are covered by the provisions of clause (viia), there would be no such double deduction. The proviso limits its application to the case of a bank to which clause (viia) applies. Clause (viia) applies only to rural advances. This has been explained by the Circulars issued by CBDT. Thus, the proviso indicates that it is limited in its application to bad debt(s) arising out of rural advances of a bank. It follows that if the amount of bad debt(s) actually written off in the accounts of the bank represents only debt(s) arising out of urban advances, the allowance thereof in the assessment is not affected, controlled or limited in any way by the proviso to clause (vii). Accordingly, the above question is answered in the affirmative, i.e., in favour of the assessee(s).
Disallowance made by the AO on account of broken period interest - HELD THAT:- It is not disputed that in respect of the securities held by the respondent on 31st March, 2001, the due date for payment of interest thereon had not arrived on 31st March, 2001 and that the respondent sold some of such securities prior to the next due date for payment of interest. It is only the holder of the security on such date to whom interest can be said to have accrued. In any event interest did not accrue to the respondent on 31st March, 2001, as admittedly interest was not payable on that date as per the terms of the said securities. The appellate authorities, therefore, rightly deleted the addition of ₹ 1,21,57,517/- by the Assessing Officer as interest income.
MAT applicabilityu/s 115JB - HELD THAT:- In terms of the provisions of Section 115 JB {2), every assessee is required to prepare its profit and loss account in terms of the provisions of Part II and III of Schedule VI to the Companies Act. Unless the profit and loss is so prepared, the provisions of Section 115JB cannot come into play at all. However, the assessee is a banking company and under proviso to Section 211(2) of the Act the assessee is exempted from preparing its books of accounts in terms of requirements of Schedule VI to the Companies Act, and the assessee is to prepare its books of accounts in terms of the provisions of Banking Regulation Act. It is thus contended that the provisions of Section 115JB do not apply in the case of banking companies which are not required to prepare the profit and loss account as per the requirements of Part II and III of Schedule VI to the Companies Act. Since the provisions of Section 115 JB do not apply to the assessee company
Valuation of securities while shifting from Available for sale to Hold to Maturity - HELD THAT:- We have noted that almost on identical facts on identical question of law the Hon'ble High Court in the case of CIT vs. HDFC Bank Ltd [2014 (7) TMI 724 - BOMBAY HIGH COURT] held that loss incurred on account of security held under category “ available for sale” to ‘held to maturity’ was to be allowed as business loss. Therefore, respectfully following the decision of jurisdictional high court this ground of appeal raised by revenue is dismissed.
Addition u/s 68 - unexplained cash credits - AO had added assessee’s customer’s advances by terming the same to be both non genuine as well as suppressed revenue receipts cessation of liability u/s 41(1) - HELD THAT:- There is no dispute that the assessing authority had nowhere invoked section 68 so far as the impugned customer’s advance are concerned in particular. He had made this addition by holding that corresponding liability towards the customers had ceased to exist in the impugned assessment year. It is therefore clear that the CIT(A) has applied section 68 of the Act qua the remaining advances which could not be explained in the remand proceedings. The assessee has nowhere been put to notice before invoking section 68 during course of lower appellate proceedings. There is no further issue that section 41(1) applies in the case of outstanding advances carried forward from the preceding assessment years which are either remitted as a case of cessation of liability in the impugned assessment year. We therefore find no merit in the impugned addition converted from cessation of liability to unexplained cash credits for this assessment year. The same stands deleted accordingly.
There is no dispute that the assessing authority had nowhere invoked section 68 so far as the impugned customer’s advance are concerned in particular. He had made this addition by holding that corresponding liability towards the customers had ceased to exist in the impugned assessment year. It is therefore clear that the CIT(A) has applied section 68 qua the remaining advances which could not be explained in the remand proceedings. The assessee has nowhere been put to notice before invoking section 68 during course of lower appellate proceedings.
There is no further issue that section 41(1) of the Act applies in the case of outstanding advances carried forward from the preceding assessment years which are either remitted as a case of cessation of liability in the impugned assessment year. We therefore find no merit in the impugned addition of ₹ 9,77,500/- converted from cessation of liability to unexplained cash credits for this assessment year. The same stands deleted accordingly.
Section 40 (a)(ia) disallowance - Assessee's only argument before us is that section 40(a)(ia) as amended by Finance Act 2014 w.e.f. 01.04.2015 prescribing such disallowance to be restricted to 30% only than the entire amount of ₹ 1,79,800/-; applies with retrospective effect - HELD THAT:- We find no force in Revenue’s instant arguments as a coordinate bench of this tribunal in Shri Rajendra Yadav [2016 (3) TMI 358 - ITAT JAIPUR] already concludes the above amendment w.e.f. 01.04.2015 to be retrospective effect being curative in nature. We therefore direct the Assessing Officer to restrict the impugned disallowance to 30% only to be followed by necessary computation as per law. This latter substantive ground is treated as partly accepted in above terms.
Applicability of Criminal Procedure Code - interrogation of petitioner - HELD THAT:- The Petitioner shall not be arrested in connection with the investigations under DRI without following the procedure prescribed under the Criminal Procedure Code - It is however made clear that the Petitioners shall cooperate with the investigation. The Petitioners shall respond to the notices/summons issued by the Customs Authorities / DRI.
The Petitioner Nos.1 to 4 are directed to remain present before the Customs Authorities / DRI as and when required which would be done by the Customs Authorities / DRI by issuance of prior summons - However in so far as the Petitioner No.5 is concerned, he would remain present before the Customs Authorities / DRI on Monday 2372018, at 11.00 a.m. The Learned Senior Counsel Mr. Chaudhari assures the court accordingly.
The Customs Authorities / DRI shall videograph recording of the statement and examination of the Petitioners as well as goods. The same shall be at the cost of the Petitioners. Needless to state that the Petitioners / accused would not be entitled to copy thereof, unless so ordered by this Court.
Jurisdiction - power to issue SCN - whether, an Additional Director General of Directorate of Revenue Intelligence has jurisdiction to issue a show-cause notice under Section 124 of the Customs Act, 1962? - HELD THAT:- Since, the issue as to the jurisdiction of Additional Director General of Directorate of Revenue Intelligence to issue a notice under Section 124 of the Customs Act, 1962 stands decided in NAVNEET KUMAR VERSUS UNION OF INDIA & OTHERS [2018 (7) TMI 794 - CALCUTTA HIGH COURT], and since the same notice as that of Navneet Kumar is the subject matter of the present writ petition, it would be appropriate to quash the impugned notice as against the petitioner on the strength of Navneet Kumar.
Cessation of liability u/s 41(1)(a) - HELD THAT:- Hon'ble Gujarat high court’s judgment in CIT vs. Nitin S Garg [2012 (5) TMI 30 - GUJARAT HIGH COURT] has placed reliance on much a celebrate judgment of hon'ble apex court in CIT vs. Sugauli Sugar Works (P) Ltd. [1999 (2) TMI 5 - SUPREME COURT] to hold that the mere fact of a liability having continued to be shown for very many years would not attract section 41(1) since it is for the AO has who has to show that concerned assessee has drawn any benefit by way of cessation or remission thereof.
CIT(A)’s above extracted detailed discussion has examined all the facts as well as the relevant legal position at length which has nowhere been rebutted from the Revenue side. We therefore conclude that the CIT(A) has rightly reversed the assessment findings holding the amount in question of to be a case of cessation of liability u/s 41(1) of the Act - Decided against revenue.
Deduction u/s 10A - deduction of expenditure incurred for ‘Export Turn Over’ - HELD THAT:- What is excluded from ‘export turnover’ must also be excluded from ‘total turnover’, since one of the components of ‘total turnover’ is export turnover. Any other interpretation would run counter to the legislativeintent and would be impermissible. As decided in HCL Technologies Ltd [2018 (5) TMI 357 - SUPREME COURT] when the object of the formula is to arrive at the profit from export business, expe makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well
TP Adjustment - working capital adjustment - As per tribunal DRP correctly directed the A.O./TPO to work out the working capital adjustment as per the actual figure without putting any upper cap - HELD THAT:- The controversy involved herein is no more res integra in view of the decision of M/s.Softbrands India Pvt. Ltd.[2018 (6) TMI 1327 - KARNATAKA HIGH COURT] wherein it has been observed that unless the finding of the Tribunal is found ex facie perverse, the Appeal u/s. 260-A of the Act, is not maintainable.
Present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed.
Same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where the Tribunal giving its own reasons and findings has found certain comparables to be good comparables to arrive at an ‘Arm’s Length Price’ in the case of the assessees with which the assessees may not be satisfied and have filed such appeals before this Court. Therefore we clarify that mere dissatisfaction with the findings of facts arrived at by the learned Tribunal is not at all a sufficient reason to invoke Section 260-A of the Act before this Court.
TP Adjustment - determination of Arm’s Length Price (ALP) in respect of an international transaction entered into by the assessee with its Associated Enterprise (AE) - Comparable selection - HELD THAT:- Assessee company is providing software development service , thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Working capital adjustment - TPO computed the adjustment on account of working capital at 2.54%. He, however, restricted working capital adjustment only to a sum of 1.63% - HELD THAT:- As relying on ZYME SOLUTIONS P. LTD.[2016 (6) TMI 1375 - ITAT BANGALORE] we hold that working capital adjustment has to be allowed at 2.54% as computed by the TPO and cannot be restricted to 1.63% as done by the TPO.
Revision u/s 263 by CIT - setting aside the assessment order framed u/s 143(3) - investments in EOPL and their diminution in value - MAT computation - AO disallowing the claim of capital loss and at the same time, not considering the same for computation of book profit u/s 115JB - HELD THAT:- Book profit is computed and report in Form No. 29B is placed at pages 48 to 50. It can be seen from the aforementioned details given in the audited financial statement of account that the assessee company had clearly disclosed the investments in EOPL and their diminution in value due to court approved Capital Reduction Scheme. It can be further seen that the assessee has written off loss on transfer/write off of investment under the head ‘Other expenses’ and details of non-current investments mentioned elsewhere that the provisions for diminution in value of investments is only 4.69 lakhs.
A perusal of the order of the PCIT shows that he has proceeded on wrong proposition that the assessee has not only claimed loss in diminution in value of shares in Profit and Loss account, but has suo moto added back while computing the taxable profit at normal rate of tax. We find that this very basis is bad on facts of the case in hand. The assessee did add back loss while computing the profit at normal rate of tax but the same has been claimed as capital loss under the head ‘income from capital gains and this very claim of loss has been disallowed by the AO while framing the assessment order u/s 143(3) of the Act.
The second fallacy in the order of the PCIT is that he has presumed that the diminution in the value of shares has been claimed as a provision in the balance sheet and, therefore, the same has to be added back for the purpose of calculating book profit u/s 115JB of the Act. On the contrary, the fact is that the assessee never claimed this as provision in the balance sheet and has, in fact, written off by reducing its assets and, therefore, claiming that provision has to be added back is bad in law.
AO, while computing the income u/s 115JB of the Act has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The AO, thereafter, has limited power of making increases and reductions as provided for in Explanation 1 to section 115JB of the Act. Thus, it can be safely concluded that the AO does not have jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in Explanation 1 to section 115JB of the Act.
Since the assessee has actually reduced its assets, it cannot be said that he has shown provision on the liability side of the balance sheet. Therefore, Explanation 1 to section 115JB of the Act is not at all applicable. Moreover, this very issue was examined by the AO during the course of scrutiny assessment proceedings and has specifically disallowed the claim of loss. Therefore, it cannot be said that the AO never examined the issue.
AO while framing the assessment u/s 143(3) of the Act has taken a possible view by disallowing the claim of capital loss and at the same time, not considering the same for computation of book profit u/s 115JB of the Act, the PCIT cannot impose his view upon the AO on wrong appreciation of facts.
We failed to persuade ourselves to accept the order of the PCIT framed u/s 263 of the Act, which, in our opinion, has to be set aside - Decided in favour of assessee.
Disallowance u/s 14A under clause (iii) of rule 8D of the IT Rules - assessee's argument is that disallowance cannot exceed exempt income and secondly, for the purpose of working out disallowance under clause (iii) of rule 8D, the only investments which yielded dividend income or exempt income alone should be considered - HELD THAT:- The proposition that the amount of disallowance cannot exceed exempt income is settled. Accordingly, we hold that the disallowance cannot exceed the amount of exempt income. On the second limb of argument that only investments which yielded exempt income should alone be considered, in the light of the decision of ACIT v. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] the contention of the assessee is accepted. Accordingly, we restore the issue back to the file of the AO for disallowance u/s 14A by restricting the amount of disallowance to the lower of exempt income or amount arrived at by prescribed formula under rule 8D clause (iii) by taking into only those investments which yielded exempt income. Appeal filed by the assessee is partly allowed for statistical purposes.
Rectification of mistake u/s 254(2) - validity of show cause notice issued u/s 263 - withdrawing the approval u/s 10(23C)(vi) - HELD THAT:- Provisions of section 10(23C)(vi) were duly considered by the Tribunal and it was found that the show cause notice for withdrawing the approval granted under section 10(23C)(vi) is a mandatory condition and can be issued by the Competent Authority who has power to withdraw the approval.
This defect in the show cause notice cannot be cured and, therefore, the provisions of section 292BB cannot be pressed into service for such an illegality and defect in the show cause notice. Tribunal has also considered all the aspects of show cause notice issued as per the directions of the ld. CIT (E) and, therefore, it was found by the Tribunal that there is nothing in the language of the show cause notice to reveal that the decision was taken by the ld. CIT (E) to set out the grounds in the show cause notice for withdrawal of approval.
Tribunal has specifically considered this aspect and found that the language of show cause notice does not exhibit any thought process of CIT(E) but it reveals that it was issued and signed by the DCIT Hqrs as per the instructions and directions of the CIT (E).
Tribunal even went further on this point and observed that the matter would have been different if the show cause notice brings out the thought process and application of mind by the ld. CIT (E), but was only signed by the DCIT Hqrs.
Hence the Tribunal found that the CIT (E) delegated the power to the DCIT Hqrs to issue the show cause notice which is not permissible as per the provisions of the Act. In view of the detailed finding based on the analysis of the facts and provisions of law, the Miscellaneous Application filed by the revenue has no substance as the revenue is raising the contentions on the merits of the issue and not pointed out any apparent mistake which can be rectified as per the provisions of section 254(2) of the Act.
The scope and jurisdiction to rectify the mistake under section 254(2) is very limited and circumscribed. The Tribunal can rectify the mistake which is manifest and apparent on the face of the record and not something which requires a long drawn reasoning. Hence the decision taken on merits cannot be reviewed or revised in the proceedings under section 254(2) - Tribunal has not restricted its finding only on the technical issue but the merits of the order passed by the CIT (E) withdrawing the approval under section 10(23C)(vi) was also decided and hence in view of the facts and circumstances of the case, the Miscellaneous Application filed by the revenue is devoid of any merit. Miscellaneous Application filed by the revenue is dismissed.
The Supreme Court granted leave in a case and allowed an application for exemption from filing a copy of the impugned judgment. The delay was condoned, and the case was tagged with Civil Appeal Nos. 13921-22 of 2015.
Refund of License fee - refund of proportionate amount of license fee calculated at the rate of Re. 1.00 L.P. Litre on the Minimum Guarantee Quantity (MGQ) of country liquor - unlawful closure of its/their manufacturing and bottling plant - HELD THAT:- One thing is admitted that prior to sealing of the premises on various occasions the license of the petitioner was neither suspended nor cancelled by the authorities of the Excise Department, on one occasion when the Excise Commissioner passed an order dated 20.01.2016 (Annexure-11) suspending the license of the petitioner for a period of 90 days which was beyond the actual period of license of the petitioner, the Board of Revenue was pleased to grant interim stay of the order dated 20.01.2016 and it was directed that the petitioner shall be permitted to operate its licensed premises.
Considering the pleadings available on the record, we find that in the case of M/s Welcome Distilleries also the premises of the petitioner was sealed on different occasions as stated in the writ application without affording the petitioner a reasonable opportunity to show cause. There is no denial of the statement of the petitioner that the order of suspension was passed without show cause notice to the petitioner by the Excise Commissioner and that the Excise Commissioner was not competent in law to pass such order of suspension.
The prayer made by the petitioner to hold and declare that the repeated sealing and closure of the licensed premises of the petitioner for a total period of 95 days is wholly without any authority in law, and therefore has no liability for payment of the differential amount and license fee for the period of unlawful and illegal closure is fit to succeed and be allowed.
The Principal Secretary, Registration, Excise and Prohibition Department, Government of Bihar and the Excise Commissioner, Government of Bihar, are directed to consider the quantum of the license fee and the excess differential amount recovered from the petitioner(s) in all these cases for the period their premises remained unlawfully sealed/closed and refund the entire excess amount to the petitioner(s) within a period of three months from the date of receipt/production of a copy of this orders.
Assignment Agreement - benefit of the holders of the secured receipts issued by the trustee - Section 3 of the Securitisation and Assets Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - petitioner claims that by virtue of Section 5(4) of the SARFAESI Act, the petitioner company is entitled to continue, prosecute and enforce all the applications, appeals and legal proceedings of whatsoever nature, which are pending on the date of Deed of Assignment with regard to 6th respondent - HELD THAT:- Sub clause (1) allows any securitisation company or reconstruction company to acquire the financial assets of any bank or financial institution by issue of debentures or bonds or any other security in the nature of debenture for consideration agreed upon between the said companies and the bank or financial institution incorporating therein such terms and conditions as may be agreed upon between them. This is more like delegating the power of the banks to recover from the debtors by securitisation company or acquisition company.
However, there is no explicit power given to such delegated securitisation company or asset recovery company to further assign the same to another company or enter upon Assignment Agreement with another company to recover the secured debts of the bank.
The petitioner company cannot blow hot and cold, on the one hand, by entering into an Assignment Agreement with the third party and on the other hand, when the said agreement did not fructify, now reverting back to the original position and trying to step into the shoes of the 15th and 16th respondents and the same cannot be permitted.
There are no merit in the Writ Petition - petition dismissed.
Penalty u/s 271AAA - assessee did not disclose the source of undisclosed income unearthed at the time of search - HELD THAT:- CIT(A) deleted the said penalty levied under Section 271AAA of the Income Tax Act, which has been confirmed by the learned Tribunal, after following the decision of the Division Bench of this Court in the case of Principal Commissioner of Income Tax Vs. Mukeshbhai Ramalal Prajapati [2017 (7) TMI 966 - GUJARAT HIGH COURT] Revenue failed to question the assessee while recording his statement under section 132 (4) of the Act as regards the manner of deriving such income, the Revenue cannot jump to the consequential or later requirement of substantiating the manner of deriving the income. In the context of the requirement of the assessee specifying the manner of deriving the income the decision of this Court in case of Commissioner of Income Tax vs. Mahendra C.Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT] would hold the field even in the context of sub-section (2) of section 271AAA of the Act. It is only when the officer of the raiding party recording the statement of the assessee under section 132(4) of the Act elicits a response from the assesse's this requirement, the assessee's responsibility to substantiate the manner of deriving such income would commence. When the base requirement itself fails, the question of denying the benefit of no penalty would not arise. No substantial question of law.
Exemption u/s 11 - Absence of “Dissolution Clause” in the Trust Deed - net assets of the Trust on its dissolution would be transferred to any entity / distributed among the trustees thus defeating the very purpose of Registration u/s 12AA - HELD THAT:- Issue raised herein stands concluded against the Revenue and in favour of the respondent assessee by the decisions of this Court in CIT (Exemptions) Vs. Tara Educational & Charitable Trust [2017 (8) TMI 377 - BOMBAY HIGH COURT]
Appeal admitted on substantial question (ii) - Whether Tribunal was right in holding that the assessee is entitled to Registration u/s 12A ignoring the fact that as per Section 12AA(b) of the I.T. Act, 1961, registration is to be granted only where the CIT is satisfied about the genuineness of the activities of the Trust and the genuineness of the activities can be judged only when some activities are actually under taken in pursuance of its objects ?
TDS u/s 194J - subscription fees paid by the assessee without deducting tax at source - HELD THAT:- The assessee produced debit notes issued by DHS, Mumbai as supporting evidence. The assessee has to pay subscription fees through Delloite, Haskins and Sells, Mumbai (DHS, Mumbai) for this purpose to DTT. However, as DHS, Mumbai makes the payment after deducting TDS and the assessee only reimburses its share of expenses, tax was not required to be deducted again in respect of its reimbursement of share of expenses to DHS, Mumbai. It is not the case of the AO that the expenses were not genuine. It is also not the case of the AO that the expenses were not incurred wholly and exclusively for the purposes of business or profession. The assessee has claimed the expenses in accordance with its cash system of accounting and the AO has not disputed the system of accounting. The AO has concluded that the assessee had paid for the professional services rendered by DHS, Mumbai without specifying the nature and details of services rendered by DHS, Mumbai.
The assessee has furnished copies of debit notes issued by DHS, Mumbai mentioning the amount debited as “being your share of DTT Operational Budget (Subscription Fee) & Tech, Subscription Fees paid to Deloitte Touch Tohmatsu, New York” which have not been questioned by the AO. The assessee has also furnished evidence to prove that the assessee is a member of the global network of DTT, enjoys certain advantages as a result of the membership and has paid its contribution of the subscription to the membership of the global network.
We note that Hon’ble High Court of Bombay in the case of CIT vs. Zee Entertainment Enterprises Ltd. [2018 (3) TMI 317 - BOMBAY HIGH COURT] held that reimbursement of expenses is not taxable
Addition on account of rent paid by assessee on hire computers without deducting TDS u/s 194J r.w.s. 40(a)(ia) - HELD THAT:- The details on record including the details of apportionment of rent on the basis of number of employees of the participating user entities goes to show that the essence of the transaction was obtaining on lease of laptops by DTTIPL for use by employees of various concerns forming part of the network in India and the rent was paid by DTTIPL to Rent Works India (P) Ltd. after deduction of tax at source at the applicable rate.
AO has held that tax was deductible at source presuming that the assessee had obtained the laptops on rent from DTTIPL which is not correct and cannot be inferred on the basis of the facts on record. Therefore, the assessee had reimbursed its share of the rent for the laptops to DTTIPL. In view of the legal position governing such reimbursement of expenses discussed in connection with reimbursement of subscription fees in para 11 of this order, no tax is deductible at source on such payments. Moreover, we note that that a similar deduction on account of rent reimbursed to DTTIPL was claimed and allowed by the AO in scrutiny assessment for the A.Y.2008-09.
Addition of indemnity insurance expenses incurred for the purpose of business - HELD THAT:- We note that like any other insurance premium, the assessee has paid it to cover itself against loss arising out of damages etc. claimed from it in consequence of wrongful act in connection with professional business. Therefore, the assessee is not insured for unlawful acts or acts opposed to public policy or law. The fact that the policy has to be renewed every year by paying renewal premium precludes any enduring benefits resulting from the policy and the payment of the premium is clearly to cover losses to the business. Thus, the expenditure on professional indemnity insurance has been incurred wholly and exclusively for the purpose of business and is an admissible deduction.
Expenditure on professional indemnity insurance has been incurred wholly and exclusively for the purpose of business and is an admissible deduction. That being so, we decline to interfere with the order of Id. C.I T.(A) deleting the aforesaid addition.
Characterization of income - compensation received by the assessee on account of compulsory acquisition of its land - interest taxable u/s 56 or in the nature of compensation which was exempt from capital gain tax u/s 10(37) - HELD THAT:- Undisputedly the interest amount had been received u/s 28 of the Land Acquisition Act, 1894. We find that the nature of the said interest and its taxability had been settled by the Hon'ble Apex Court in its decision in the case of Ghanshyam, HUF [2009 (7) TMI 12 - SUPREME COURT] which has been reiterated by the apex court in the case of Gobind Bhai Mamaiya [2014 (9) TMI 587 - SUPREME COURT] and Hari Singh & Others [2017 (11) TMI 923 - SUPREME COURT] holding the same to be in the nature of compensation taxable as such.
We hold that the interest received by the assessee during the impugned year on the compulsory acquisition of its land u/s 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income from other sources u/s 56 of the Act as held by the authorities below. The compensation being exempt u/s 10(37) of the Act is not disputed. In view of the same the order passed by the CIT(Appeals) upholding the addition made by the AO on account of interest on enhanced compensation is not sustainable. - Decided in favour of assessee
Condonation of delay denied - Non-availability of the order of CIT(A) - HELD THAT:- We are of the opinion that without the proof of the service of the impugned order of CIT (A) being placed on record before the learned Tribunal or the learned Tribunal having any other material to draw an inference of the actual service of the impugned order on the assessee, the learned Tribunal ought not to have dismissed the said appeal on the ground of delay. The Tribunal was not justified in placing negative burden on the assessee to establish the ‘non-service’ of the order. It was for the Revenue to establish the service of the order on the assessee.
We are therefore inclined to set aside the impugned order of the learned Tribunal and remit the case back to the learned Tribunal for deciding the appeal on merits in accordance with law.
Conviction u/s 302 and 324 of the Indian Penal Code - appellant was of unsound mind or not - HELD THAT:- The appellant has been able to create sufficient doubt in our mind that he is entitled to the benefit of the exception under section 84 I.P.C. because of the preponderance of his medical condition at the time of occurrence, as revealed from the materials and evidence on record. The prosecution cannot be said to have established its case beyond all reasonable doubt. The appellant is therefore entitled to the benefit of doubt and consequent acquittal. The appeal is allowed. He is directed to be released from custody unless wanted in any other case.
It is considered necessary to give further directions under Section 335 or 339 of the Criminal Procedure Code, as the case may be, so that the appellant is not exposed to vagaries and receives proper care and support befitting his right to life under Article 21 of the Constitution of India.
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