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Showing 361 to 380 of 628 Records
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2011 (12) TMI 433
Denial of refund claim - Bar of unjust enrichment - Held that:- appellant has been able to prove that they have passed the bar of unjust enrichment and the adjudicating authority has rightly allowed their refund claim. The Commissioner (Appeals) has not considered these documents produced by the appellant before the Commissioner (Appeals). Therefore, the impugned order is liable to be set aside - Decided in favour of assessee.
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2011 (12) TMI 432
Valuation of goods - variation in MRP in different areas - Department alleges that higher the MRP shall be assessable value for all the goods sold in an area - Held that:- unable to find any cogent reason recorded in the impugned order to deny variation. Hypothetical proposition is not acceptable to law unless the proposition stands to reason why variation in not permissible - authority does not demonstrate any exercise made by him independently to deny variation. It is established principle of law that the Appellate Authority when reaches to conclusion on the basis of fact, should support his decision testing the fact with law and evidence and state reasons of his decision - Decided in favour of assessee.
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2011 (12) TMI 431
Valuation - Method of valuation - Held that:- appellant cleared the goods from their factory during 23-4-2001 to 3-5-2001. There was no sale of the goods from the depot during this period. There was no sale of goods from the depot prior to 23-4-2001 also. The first sale of the goods from the depot was made on 8-5-2001 at the rate of Rs. 5,500/- per kg. The rate of Rs. 5,500/- per kg. continued from 8-5-2001 to 5-6-2001 in invoices No. 1 to 23. We find that the transaction value of such goods sold from the depot at or about the same time (during the period 23rd April 2001 to 3rd May 2001) is not available. Therefore, under Rule 7 of the Valuation Rules, the value of the goods under assessment shall be the transaction value of the goods sold from the depot at the time nearest to the time of removal and in the present case, the time nearest to the period of 23-4-2001 to 3-5-2001 is 8-5-2001. We, therefore, hold that the lower authorities have rightly ordered the assessment of the goods at Rs. 5,500/- per kg. at which the goods were sold on 8-5-2001 from the depot. We, therefore, find no infirmity in the impugned order - Decided against assessee.
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2011 (12) TMI 430
Confiscation of goods - Imposition of redemption fine - Held that:- Appellants are not the manufacturer of the goods. They have financed M/s. Jaina Cast Ltd. under hire purchase agreement for purchase of the six machines. When the instalments were not paid by M/s. Jaina Cast Ltd. the appellants took possession of the machines and also informed the department about the same. After going through the show-cause notice issued to the appellants, it is a fact that the confiscation of the machines was proposed under Sec. 9 of the Central Excise Act whereas under the Order-in-Original the machines were confiscated by the Central Excise Authorities under Rule 173Q and Rule 25 of the Central Excise Rules. The appellants were never told about the Rule 173Q and Rule 25 in the show-cause notice. This is also a fact that under Rule 25, the manufacturer, purchaser and registered dealer are covered and the appellants are neither a purchaser, manufacturer or registered dealer - Decided in favour of assessee.
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2011 (12) TMI 429
Rectification of mistake - Held that:- Sub-rule (3) of Rule 57-I was a part of the record and the same ought to have been considered by the Bench whether or not it was cited before it. This view, it appears, can claim support from the Honble Supreme Courts judgment in the case of Saurashtra Kutch Stock Exchange Ltd. (2008 (9) TMI 11 - SUPREME COURT). The Apex Court held that non-consideration of a decision of the jurisdictional High Court or of the Supreme Court could be said to be a mistake apparent from the record, to be rectifiable under Section 254(2) of the Income Tax Act. In my view, non-consideration of a statutory provision would ipso jure constitute apparent mistake. The mistake in the instant case is of this kind and the same needs to be rectified - Decided in favour of assessee.
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2011 (12) TMI 428
Denial of CENVAT Credit - exemption Notification No. 22/2007-C.E. - Penalty under Rule 15 of the Cenvat Credit Rules, 2004 - Held that:- After examining the provisions of Rule 15 of the Cenvat Credit Rules, 2004, I find that sub-rule (1) provides for confiscation and penalty where any Cenvat credit is taken or utilized in respect of inputs or capital goods or input services wrongly or in contravention of any of these provisions. In the instant case, the assessee obviously contravened Rule 6(3) by not maintaining separate accounts and also Rule 11 by not reversing Cenvat credit on inputs in stock as on the date immediately before opting for exemption from payment of duty on final product under Notification No. 22/2007-C.E. Of course, the credit wrongly taken was subsequently reversed. However, the cause of action for penalty under Rule 15 remained. The rule does not require any mens rea to be established by the Department against the assessee for a penalty. In this view of the matter, the penalty under challenge cannot be vacated. Though, apparently, substantial relief was given to the assessee by the lower appellate authority, I am of the view that considerations like financial constraints can also have a bearing on the quantum of penalty to be imposed under Rule 15(1). The impugned order does not indicate that this aspect was considered - Penalty reduced - Decided partly in favour of assessee.
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2011 (12) TMI 427
Interest on the pre-deposit - Delayed payment of refund - Held that:- In the present case there is a delay of 39 days beyond the period of 3 months from the date of final order passed by the Tribunal. We find that Tribunal in the case of CCE v. Kamdeep Marketing Pvt. Ltd. reported as (2010 (12) TMI 278 - CESTAT, DELHI) allowed the interest on delayed refund of pre-deposit relying upon the decision of Honble Supreme Court in the case of I.T.C. (2004 (12) TMI 90 - SUPREME COURT OF INDIA). In view of above decision, the appellants are entitled for interest on the delayed payment of pre-deposit and the Revenue is at liberty to recover from the concerned officers as per the Boards Circular - Decided in favour of assessee.
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2011 (12) TMI 426
Limitation period of Completing Assessment u/s 153(1) - AO passed the assessment orders before the expiration of the limitation period but the said orders were sent for communication to the assessee after the expiry of the time limit for passing the assessment orders. Ld. CIT (A) held that the said assessment orders are barred by limitation and accordingly are ineffective and non-est in law as per sec. 153(1) - HELD THAT:- The said Assessment orders, though made on time, were served on the assessee after 85 days from the date of order. Also, there is no material in the assessment record which could indicate that initiative was taken by the AO to serve the assessment orders along with demand notice immediately after passing of the assessment orders.
The decisions in the cases of B.J. SHELAT VERSUS STATE OF GUJARAT [1978 (3) TMI 209 - SUPREME COURT], as well as the decision of hon'ble Kolkata High Court, in the case of MOHENDRA J. THACKER AND CO. VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL [1981 (6) TMI 13 - CALCUTTA HIGH COURT], were followed, where it was categorically held that the communication is a condition precedent to an order of assessment becoming effective. Thus, the impugned orders passed by the ld. CIT(A) are perfectly valid and sustainable for legal scrutiny. Thus, upheld.
Decision in favour of Assessee.
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2011 (12) TMI 425
Issues involved: Disallowance of interest paid to Kotak Mahindra Bank Ltd. u/s 139(5) of the Income Tax Act.
Summary:
The appeal was filed by the assessee against the disallowance of interest paid to Kotak Mahindra Bank Ltd. The Assessing Officer did not consider the revised computation of income filed by the assessee, stating that only a revised return of income could be filed u/s 139(5) of the Act. The Commissioner of Income-tax (Appeals) upheld this decision, citing the need for a revised return of income as per the Supreme Court's ruling in Goetze India Ltd. v. CIT [2006] 284 ITR 323 (SC). The assessee argued that the revised computation of income should have been considered, referring to the decision in Pradeep Kumar Harlalka v. Asst. CIT [2011] 47 SOT 204 (Mumbai). The Tribunal, after considering the precedents, directed the Assessing Officer to reconsider the revised computation of income and decide the issue afresh.
In conclusion, the appeal of the assessee was allowed for statistical purposes, and the matter was remitted to the Assessing Officer for further consideration in accordance with the law.
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2011 (12) TMI 424
Issues Involved:
1. Claim of depreciation on twin pouch packing machine.
2. Addition on account of suppressed sales.
3. Disallowance of interest payment higher than prevailing rates.
4. Disallowance of salary payment due to lack of evidence of service rendered.
Issue-wise Detailed Analysis:
1. Claim of Depreciation on Twin Pouch Packing Machine:
The assessee purchased two twin pouch packing machines in the financial year 2000-01. The Assessing Officer (AO) disallowed the depreciation claim of Rs. 3,15,156 for the assessment year 2002-03, asserting the machines were not used during the year. The Commissioner of Income-tax (Appeals) [CIT(A)] upheld this disallowance, but the ITAT overturned this decision. The ITAT emphasized that the machines formed part of the block of assets and had been used in previous years. Citing the Delhi High Court's judgment in Bharat Aluminium Co. Ltd., the ITAT clarified that depreciation is allowable on the block of assets, not on the individual use of each asset within the block. Therefore, the ITAT allowed the depreciation claim.
2. Addition on Account of Suppressed Sales:
For the assessment year 2002-03, the AO added Rs. 23,49,100 to the assessee's income, representing sales outside the books. The CIT(A) rejected the AO's approach, applying a gross profit rate of 8.6% on the unrecorded sales, resulting in an addition of Rs. 2,02,022. The ITAT upheld the CIT(A)'s decision, referencing the Gujarat High Court's ruling in President Industries, which stated that only the profit margin, not the entire sales amount, should be added to income. For the assessment year 2005-06, the ITAT again upheld the CIT(A)'s approach of adding only the profit margin on unrecorded sales, rejecting the Revenue's appeal.
3. Disallowance of Interest Payment Higher than Prevailing Rates:
The AO disallowed interest payments at 18%, considering 12% as the prevailing rate. The CIT(A) deleted this disallowance, noting that unsecured loans typically attract higher interest rates. The ITAT upheld the CIT(A)'s decision, agreeing that the 18% rate was neither unreasonable nor excessive, and the Revenue failed to provide evidence that commercial unsecured loans were not available at this rate.
4. Disallowance of Salary Payment Due to Lack of Evidence of Service Rendered:
The AO disallowed a salary payment of Rs. 1,20,000 to Shri Atul Kumar Jain, citing a lack of evidence of services rendered. The CIT(A) deleted this disallowance, finding that the salary payment was reasonable and the employee's identity and association with the company were established. The ITAT upheld the CIT(A)'s decision, noting that the employee was an income-tax payee and the employer-employee relationship was not in doubt.
Conclusion:
The ITAT allowed the assessee's appeal for the assessment year 2002-03, granting the depreciation claim and upholding the CIT(A)'s approach to the suppressed sales addition. The ITAT dismissed the Revenue's appeals for both assessment years, supporting the CIT(A)'s decisions on interest disallowance and salary payment issues.
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2011 (12) TMI 423
Issues Involved:
Reopening of assessment u/s 147, Disallowance u/s 40(a)(ia) of the Income Tax Act, 1961, Interest under section 234B of the Act
Reopening of Assessment:
The appeal arose from the reopening of the assessment by the Assessing Officer based on discrepancies in TDS deductions. The Assessing Officer observed that TDS had not been deducted on a certain amount as required by section 194C of the Act, leading to the reassessment notice under section 148 issued in 2010. The Commissioner of Income-tax (Appeals) upheld the reopening, stating that it was not a mere change of opinion but a valid reassessment based on new findings. The Tribunal concurred, emphasizing that the failure to deduct TDS on the entire amount warranted the reassessment, dismissing the appeal against the reopening.
Disallowance u/s 40(a)(ia) of the Act:
The issue revolved around disallowance under section 40(a)(ia) concerning tax deductions on payments to contractors. The Assessing Officer disallowed a specific amount under this section, which was upheld by the Commissioner of Income-tax (Appeals). However, the Tribunal disagreed with this decision, noting that the amendment to section 194C with effect from October 1, 2004, did not apply retrospectively. As the payments in question were made before this date and were below the threshold for TDS deduction, the disallowance was deemed unjustified. Therefore, the Tribunal directed the deletion of the disallowed amount, reversing the decision of the Commissioner of Income-tax (Appeals).
Interest under section 234B of the Act:
The final ground of appeal related to the charging of interest under section 234B, which was deemed mandatory and consequential in nature. The Tribunal acknowledged the mandatory nature of this interest provision, affirming its applicability in the case. However, no specific details were provided regarding the decision on this ground in the summary.
In conclusion, the Tribunal partially allowed the appeal of the assessee, overturning the disallowance under section 40(a)(ia) and providing clarity on the retrospective application of tax deduction provisions. The decision highlighted the importance of compliance with TDS requirements and the significance of statutory amendments in tax assessments.
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2011 (12) TMI 422
Disallowance under section 40(a)(ia) - TDS u/s 194C - Held that:- Disallowance under section 40(a)(ia) only when the provisions of section 194C are applied to consider the hardship faced by the assessees has been totally ignored by the Assessing Officer and the learned Commissioner of Income-tax (Appeals) in so far as it was never the case of the assessee to claim expenditure of ₹ 33,898 being disallowed by the Assessing Officer merely because the amount paid by the assessee was on May 12, 2008. We are inclined to find the contention of learned counsel for the assessee appropriate for raising the alternate submissions in so far as learned counsel for the assessee has tried to analyse the interpretation of various decisions of the Tribunal and the High Courts relating to the issue regarding the due date of payment whether has to be considered in accordance with the amended provisions with effect from April 1, 2010 and whether the deduction of tax on payments without having entered into contracts have been subjected to TDS which has to be considered first for proceeding for disallowance under section 40(a)(ia).
The disallowance under section 40(a)(ia) in the present case, is not justified and as such we direct the deletion of the said disallowance by allowing the appeal of the assessee.
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2011 (12) TMI 421
Writ petition - company invoked the provisions of the Sick Industrial Companies court passed an order of winding up - Scheme was approved by Court and debts of creditors including that of corporation were settled - corporation also invoked guarantee given by managing director asking for payment of rest of amount
Whether the revival scheme submitted by the petitioner under sections 391 and 394 of the Companies Act, 1956 and accepted by court amounts to compounding with the principal debtor leading to the discharge of the surety within the meaning of sections 134 and 135 of the Indian Contract Act, 1872 Held that:- Once the principal debtor has settled its loan account with the Corporation, the petitioner, who is a guarantor, cannot be made liable to pay any amount over and above the amount paid by the principal debtor - liability of the guarantor is co-extensive with that of the principal debtor and not exceeding the liability of the principal debtor. Once the Corporation has settled its loan account with the principal debtor, the guarantor cannot be saddled with any additional liability In favor of petitioner
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2011 (12) TMI 420
Winding up company unable to pay its debts winding up petition by Bank power of attorney - Atulya Sharma and Kaushik Chandrakant Shaparia are the power of attorney holders and they are authorised to initiate all legal proceedings including bankruptcy or insolvency of any person or firm on behalf of the petitioner - they authorised Mr. Sudarshan Sreedharan and Damodaran Sreenivasan by duly executing power of attorney Power of attorney basing on which the winding up proceedings have been initiated by Mr. Sudarsan Sridharan and Mr. Damodaran Sreenivasan on behalf of the petitioner-bank against the respondent-company - Held that:- It is nowhere indicated in the power of attorney that they are authorised to initiate winding up proceedings against the respondent-company - When the signatories to the petition had no proper authorisation to initiate winding up proceedings, it cannot be said that the petition has been validly instituted Petition dismissed
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2011 (12) TMI 419
Scheme of arrangement - Re-calling of the order - CTL and CML were family companies - Mining Division of CTL transferred and vested to CML CTL moved an application for withdrawal of the application for transfer of the mining lease Held that:- transfer of mining lease by CTL to CML is complete. The consent of the State Government has, since, been obtained. Therefore, in no case, the scheme could be frustrated - in between CTL and CML, the transaction is valid. CTL cannot, now, turn round and throw out CML on the plea of the transaction being unauthorised when CTL in the balance sheet admitted that the mining division of CTL has been transferred and vested in CML - application was jointly moved by CTL and CML. The order is a consent order. Therefore, it cannot be re-called at the instance of one of the party Application dismissed
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2011 (12) TMI 418
Winding up- sale deed not executed before commencement of winding up proceedings - vendee neither deposited the entire sale consideration nor got the sale deed registered in his favour before the commencement of winding up Held that:- once a winding-up order is passed the undertaking and the assets of the company pass under the control of the liquidator whose statutory duty is to realise them and to pay from out of the sale-proceeds its creditors. Such creditors acquire on such order being passed the right to have the assets realised and distributed among them pari passu. No new rights can thereafter be created and no uncompleted rights can be completed - only a part of consideration was paid prior to appointment of provisional liquidator, sale should not be confirmed and disposition of property should not be validated Application dismissed
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2011 (12) TMI 417
Winding up - Enforcement of orders of one Court by other Courts Held that:- Provision of section 635 makes it clear that it is sufficient to produce to the court, which is required to execute its order, a certified copy of the order sought to be executed - it is not necessary to comply with the procedure laid down in section 39 of the Civil Procedure Code, and Order 21, rules 4 and 5 of the Civil Procedure Code and get the order first transferred by the court which made it to the court which is to enforce it and then make an application to execute it - any order of winding up of a company may be enforced in any place in India by any other Court which would have had jurisdiction in respect of company, if its registered office were situated within that other Court's jurisdiction
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2011 (12) TMI 416
Validity of the reopening - Condonation of delay in filing of cross objection - Held that:- it appears that the assessee took the provisions of condonation of delay in a casual manner and granted. It is well settled that the Court helps vigilant and not indolent. Hence, we are of the view that the assessee has not disclosed a reasonable/good much less a sufficient cause for not filling the cross objections within the period of limitation and the delay of about 5 years. - Cross Objections filed by the assessee are dismissed as time barred.
Right of the assessee (respondent) to raise issues under rule 27 of the ITAT Rules, even without filing the cross objection or appeal against the order of the CIT(A). - held that:- it is clear from the observation of the Hon'ble jurisdictional High Court in the case of B R Bamasi (1970 -TMI - 8216 - BOMBAY High Court ) that the effect of the plea raised by the assessee against the validity of the reopening would be only to the extent of defence against the appeal and if assessee succeeds in the said ground then, the appeal of the revenue would fail.
Regarding reopening - Held that: the information and the material gathered during the course of assessment proceedings and assessment of exhibition income for the AY 2001-01 u/s 143(3) constitute a tangible material for coming to the conclusion that the income assessable to tax has escaped assessment - Decided against the assessee.
Regarding exemption u/s 10(23C)(iv) - held that:- Since the assessee has not maintained separate books of account for these activities of providing other services and charging with a margin, the notification issued u/s 10(23C)(iv) will not applicable in respect of such income from other activities and therefore, the exemption u/s 10(23C)(iv) is not available in respect of the income earned by the assessee from the activity of providing power installation, electricity, telephone facilities, compressed air hire etc. etc. Accordingly, the Assessing Officer is directed to allow exemption with respect to the receipt and accumulations from the holding and organizing the exhibition and hence, the income from other activities in providing other services by charging huge profit has to be taxed as income of the assessee. - Decided partly in favor of revenue.
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2011 (12) TMI 415
Disallowance as per provisions of section 40A(3) of the Act - cash payment exceeded the limit prescribed - The assessee submitted that the provisions of section 40A(3) are not applicable as payment made in cash was towards electricity bill, telephone bill and Octroi and made to the Government/local authorities Held that:- Since the tax auditor has also found that amount was inadmissible under section 40A(3) of the Act and the payments were not made to the Government within clause (b) of Rule 6DD and the cash payment exceeding Rs.20,000/- has been made by the assessee without any exceptional circumstances ground of assessee is dismissed.
Disallowance of prior period expenses AO stated that the debit notes produced covered only a part of such expenditure assessee submitted the additional evidence reflecting prior period expenses Held that:- in the interest of natural justice and fair play the matter is restored back to the file of AO for fresh adjudication after providing reasonable opportunity of being heard to the assessee. This ground of assessee is allowed for statistical purposes.
Disallowance out of Employees' Welfare expenses being amount paid to Shroff Foundation Trust Held that:- Details of payments made to Shroffs Foundation Trust (copy of the ledger account and copies of invoices received, on sample basis) to substantiate that the payment was made for services availed of the medical centre run by the said trust and was not a donation to the said trust - on submitting additional evidence and in the interest of natural justice and fair play the matter is restored back to the file of AO for fresh adjudication after providing reasonable opportunity of being heard to the assessee - ground of assessee is allowed for statistical purposes.
Additional ground of assessee CIT(A) held that the provisions of section 14A of the Act read with Rule 8D of the Income tax Rules, 1962 are applicable in the facts and circumstances of the case - AO stated that assessee has received dividend/UTI income claiming exemption u/s 10(33) without allocating any expenses against this income - investment in shares, govt. securities, UTI, etc., which are dividend bearing investments - AO disallowed interest on average rate of borrowings u/s 14A - CIT(A), he directed the AO to recompute the disallowance in terms of section 14A read with rule 8D Appeal by both assessee and revenue Held that:- Rule 8D of Income tax Rules is applicable w.e.f. Asst. Year 2008-09, the ld. CIT(A)'s order is not sustainable in law as the asst. year under appeal in this case is 2002-03 and the additional evidence of copy of the ledger account and copies of invoices received appeal of both allowed.
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2011 (12) TMI 414
Set off of loss of the undertaking eligible for deduction u/s 10A against profit of the undertaking eligible for deduction u/s 80HHE AO stated that while two units were eligible for deduction u/s 10A, the assessee could not claim deduction u/s 10A in respect of its Hyderabad Unit since there was a taxable loss in it appeal allowed by CIT(A) Held that:- uphold the order of the CIT(A) by deciding this issue in favour of the assessee as relied upon the case CIT LTU vs. M/s. Yokogawa India Ltd. and others (2011 - TMI - 211353 - Karnataka High Court) stating that deduction under section 10A has to be excluded from the total income of the assessee the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise - against revenue.
Deleting the addition being the provision for gratuity while determining the book profits u/s 115JB of the Act - CIT(A) allowed the assessee's claim by holding that the provision for gratuity could not be added back under the Explanation (1c) to sec.115JB while determining the book profits revenue appeal Held that:- no infirmity in the order of the CIT(A) who made the decision relying on Bharat Earth Movers vs. CIT (2000 - TMI - 5816 - SUPREME Court) case stating that if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date against the revenue.
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