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Showing 361 to 380 of 935 Records
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2013 (6) TMI 582
Personal penalty - stay - penalty on partners - Held that:- Following the decision in CCE vs. Jai Prakash Motwani [2009 (1) TMI 501 - GUJARAT HIGH COURT], since penalty penalty was imposed on the firm, no penalty can be imposed on partners - stay granted.
So far as imposition of penalties upon the authorized signatories and transporter are concerned, it is observed that Commissioner (A) has given elaborate reasons for imposing penalties upon these appellants. Both the authorized signatories and transporter were aware of the clandestine activity being undertaken - An amount of 50% of penalty directed to be pre-deposited.
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2013 (6) TMI 581
Valuation of medicaments - MRP bases valuation - clandestine removal - demand based of statement of chemists - as per revenue the excess collection of cash than the assessable value on which the appellant has discharged duty, stands clearly admitted by the Director of the company - Held that:- appellants have not been able to make out a good prima facie case in their favour so as to dispense with the condition of pre-deposit of the entire amount. - Directed to deposit 50%.
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2013 (6) TMI 580
Modvat / Cenvat Credit - Job Work - Direct sending of the inputs to the job-worker from the factory of the input manufacturer, or from the port of entry - Held that:- as soon as the assessee received the duty paying documents in respect of inputs which were sent directly to the job-worker, the assessee took the credit of goods in RG23 Part I and accounted for them. However, as envisaged under Rule 57G, the assessee did not take credit of duty paid since credit could be taken only after the inputs were received in the factory.
CBEC Circular No. 265/99/96-CX dated 12.11.1996, wherein it is clarified that the credit can be taken in respect of inputs sent directly to the job-worker only when the same are received from the job-worker. - Credit allowed - decided in favor of assessee.
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2013 (6) TMI 579
Interest on Refund - price escalation clause - Provisional assessment - supply of LPG cylinders to IOCL, BPCL and HPCL - Held that:- The claim for refund dates back to 26-6-2006, which is the date on which they claimed refund on the basis of the order dated 12-6-2006 of the Commissioner (Appeals), who had directed sanction of Rs. 4,36,364/- to the assessees by setting aside the direction of the adjudicating authority for credit of the above mentioned amount to the Consumer Welfare Fund. It is not for the first time that the assessees claimed refund of the amount in question only in September, 2008, since claim for the amount ultimately sanctioned although reduced, was filed in 2006 June itself. It is clear that there has been a delay in sanction of the refund in December, 2008, well beyond the statutory period of three months. Therefore, the assessees claimed for interest at the appropriate rate due to the delay in sanction of the refund merits acceptance. The assessees are held to be eligible to interest after the expiry of three months from 26-6-2006 till the date of payment of interest at the appropriate rate. - Decided in favor of assessee.
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2013 (6) TMI 578
Import of Cottonseed Oil of Edible Grade - food safety - human consumption - reprocessed material after refinement was found to have Iodine content of 97, which is less by 1 as prescribed under the Rules. - Held that:- the sole intention of the earlier order of this Court was to see that the consignment in question is not released so long as it does not meet the standard prescribed by the Rules, 1955, on the basis of testing by that particular Laboratory. In such circumstances, if on refinement on the first occasion, the petitioner’s reprocessed goods could not pass the said standard, another opportunity should be given to the petitioner for further reprocessing, so that on such further reprocessing the consignment can be brought within the norms prescribed under the Rules.
Further opportunity given to the petitioner for reprocessing the material further so as to bring it within the norms laid down under the Rules and to present the sample for further examination by the said Laboratory. In other words, so long the Central Food Laboratory, Mysore, will not clear the material on such test after further processing, the Directorate of Revenue Intelligence (D.R.I.) Authority will not release the goods for the purpose of human consumption. The petitioner is, therefore, at liberty to further reprocess the material and to present the sample on such reprocessing for the purpose of testing.
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2013 (6) TMI 577
Refund claim - Whether can filled by the respondent directly, without first challenging the assessment order - benefit of Notification No. 13/2006 denied by the Customs Authorities - Held that:- There was a list between the respondent and the Revenue, which was required to be solved first. The only mode for solving the same was filing an appeal there against before the higher appellate forum. The origination of refund claim would come subsequently, as a consequence of the decision of the higher appellate forum, on the disputed issue. As such, agree with the DR that direct filing of refund claim before settling the dispute on the availability or otherwise of the notification, is not in accordance with the law declared by in the case of Priya Blue Industries Ltd. vs. CC (Preventive) ( 2004 (9) TMI 105 - SUPREME COURT OF INDIA).
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2013 (6) TMI 576
Form H - sale in the course of Export - Exemption on the purchases of raw hides from unregistered dealer - held that:- the test to be applied is, whether there is an inseverable link between the local sale or purchase on export and if it is clear that the local sale or purchase between the parties is inextricably linked with the export of the goods, then a claim under section 5 (3) for exemption from State sales tax is justified, in which case, the same goods theory has no application.
The applicant purchased raw goat skins from unregistered dealer and sold to the exporter. The authorities below have recorded the finding that the goods mentioned in the invoices, by which the goods have been sold, are different to the goods mentioned in the bill of ladding and Form 'H'. It means that the goods, which had been exported, were different to the goods sold by the applicant. In Form 'H' the foreign buyer's order number and date are not mentioned.
Therefore, Form 'H' filed was incomplete and inadmissible for the transaction in dispute. The copy of the order of the foreign buyer has not been produced before any of the authorities to show that the purchases by the exporter from the applicant was inextricably connected with the export and there existed a bond between the contract of sale and the actual export. Such link is missing in the present case.
Therefore, in view of the law laid down by the apex Court, in the case of State of Karnataka v. Azad Coach Builders Pvt. Ltd. And another [2010 (9) TMI 879 - SUPREME COURT OF INDIA], the sale by the applicant to the exporter cannot be said to be in the course of export under Section 5(3) of the Central Sales Tax Act. The Tribunal has rightly held so. - Decided against the assessee.
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2013 (6) TMI 575
Reopening of assessment - if the provisions of Sections 61 to 63 are attracted as has been claimed by the assessee, and the income of Rs.32.83 Crores which has been claimed by the assessee to be exempt is treated as exempt, in that event an alternate basis for taxing the income in the hands of the AOP of the contributories is sought to be set up - Held that:- There is no ambiguity whatsoever in the reasons which have been communicated to the assessee in the order dated 18 May 2012, but in the affidavit in reply, it has been stated that the income of Rs.32.83 Crores arising from the investment of contributions of the contributors to the Venture Capital Fund which has been claimed as exempt in the hands of the Petitioner should be assessed as income in the hands of the AOP of the contributors of the Petitioner “on a protective basis”. Again it has been stated that the issue of taxing the AOP of the contributors of the Petitioner “has arisen from the submission of the Petitioner before the appellate authorities” where the Petitioner has contended that the transactions amount to a revocable transfer and that the income which would arise should be taxed in the hands of the individual contributors.
The reopening of an assessment under Section 148 on the basis of a submission which is raised before the appellate authority by the assessee is clearly impermissible because what Section 147 requires is a formation of a reason to believe by the AO. In the present case, there is clearly a want of compliance with the jurisdictional condition. AO has not formed a reason to believe that income has escaped assessment since the reopening is based purely on a contingency that may arise upon a particular outcome before the appellate tribunal.
To accept the contention of the Revenue in the present case would be to allow a reopening of an assessment under Section 148 on the ground that the AO is of the opinion that a contingency may arise in future resulting an escapement of income. That would be wholly impermissible and would amount to a rewriting of the statutory provision. Thus setting aside the notice of reopening. In favour of assessee.
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2013 (6) TMI 574
Validity of order passed by the Settlement Commission u/s 245D - validity of application moved for settlement of cases - whether the Commission bound to consider whether there has been a full and true disclosure at the stage of a proceeding under sub-section 2C of Section 245D - Held that:- Error in the order of the Commission in the present case lies in permitting the application for settlement of cases to proceed without that satisfaction being recorded by the Commission, which is a fundamental aspect which goes to the root of its jurisdiction to entertain an application under Section 245C.
The Commission has proceeded on the basis that at this stage it cannot hold a view that the income offered in the statement of facts is not a true and full disclosure. In the same vein, the Commission was of the view that the subject of true and full disclosure is open for examination in the proceedings under subsection 4 of Section 245D. In holding this, the Commission has moved over to the stage of Section 245D(4) without entering upon the fundamental issue as to whether the application was or was not invalid. This exercise had to be carried out by the Commission at the stage of the proceedings under sub-section 2C of Section 245D on the basis of the report submitted by the Commissioner and after hearing the applicant. The Commission has abdicated the discharge of that obligation at that stage, by deferring its consideration at a later stage.
The Commission, thus was completely in error in holding that unless it is established by a competent authority that the purchases are all bogus, that the application at this stage could not be held to be invalid, though the department may have in its possession certain evidence indicating the fact that the income has not been truly and fully disclosed, or that the quantum of income disclosed in the application in comparison to the claim of the department is meager. The Commission could not have declined to determine as to whether the application fulfilled the requirements or prerequisites of a valid application under Section 245C(1). The Commission has to consider as to whether or not the application is invalid. Thus the impugned order of the Settlement Commission is unsustainable and would have to be quashed and set aside.
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2013 (6) TMI 573
Rectification of mistake - as per assessee Tribunal had not considered submission of assessee that AO misdirected himself in law in attributing the entire expenditure against the so-called exempt income and assessing interest income on gross basis without deduction of any expenditure that provisions of section 14A required and laid down specific method of attributing and disallowing the expenses in relation to an exempt income - Held that:- Considering assessee's submission and DR statement section 14A was not applicable Tribunal's conclusion to restore the matter back to the file of the AO for deciding upon mutual as well as non-mutual activities cannot be termed mistake apparent from record. It is not the case of the assessee that any judgment delivered by the Hon'ble jurisdictional High Court or Supreme Court relied by the assessee have not been considered.
By a long drawn process of reasoning assessee wants to review the order of 16th November, 2012 which is not permissible as per the provisions of section 254(2). Rectification available to the Tribunal u/s.254(2) cannot be exercised on failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion because it is an error of judgment and not an error apparent on the record. See CIT Versus Ramesh Electric And Trading Co. [1992 (11) TMI 32 - BOMBAY High Court] & CIT Versus EARNEST EXPORTS LTD. [2010 (2) TMI 261 - BOMBAY HIGH COURT]. Against assessee.
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2013 (6) TMI 572
Profit arriving from purchase & sale of shares - Capital gain v/s business income - Held that:- From the detail as produced it find that 73.75% of investments transacted were held for more than 6 months, despite the fact that numbers of transactions were 61 in 46 scrips, which resulted in only 13.95% shares held as investments. Based on these facts applying the decisions of Gopal Purohit [2009 (2) TMI 233 - ITAT BOMBAY-G] which now has found approval even by the Hon'ble Supreme Court [2010 (11) TMI 222 - Supreme Court of India], the Hon'ble Bombay High Court had insisted upon intention at the time of purchase and consistency in the nature of holdings. On both these grounds, the issue is squarely covered by the decision.
Coming to the charts and the details in the Balance Sheet, with regard to the holding pattern of shares, held under investments and trading, it is evidently clear that the assessee was maintaining separate distinct portfolios. This fact, not having been denied by the AO, is basically the spine of the submissions of the assessee, before the revenue authorities. Hence the facts gets squarely covered by the decision of Gopal Purohit (supra).
Thus Respectfully following the decisions above no reason to disturb the order of the CIT(A)stating that profit arising on sale of such shares cannot be assessed under the head business and the claim of the assessee that it is assessable under the head long term capital gains has to be accepted. Against revenue.
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2013 (6) TMI 571
Project completion method rejected by the AO - Held that:- As decided in assessee's own case [2012 (12) TMI 808 - ITAT, MUMBAI] AO accepted the fact that on completion of project, the assessee has offered the income to tax after claiming the deduction u/s 80 IB(10). Therefore when the assessee offered the income to tax from the entire project which has been adopted by the AO for estimation of the income for the year under consideration, then this fact goes to prove that there is no difference in the rate of profit declared by the assessee for the A.Y and the rate adopted by AO for the year under consideration. Thus there is no revenue effect and the income offered by the assessee on completion of the project is revenue neutral. In favour of assessee.
Measurement of the plot of the project - Held that:- As a consequence of the directions of the coordinate Bench in assessee's own case [2012 (12) TMI 808 - ITAT, MUMBAI] it was submitted that the verification was assigned to the valuation cell of the department, who submitted the report on 19.03.2013. According to the annexure to the report, the actual size of the plot is 4097.81 sq. mt., which is more then one acre and certified as such by Shri Suresh Thavrdasani, Asst. Valuation Officer, Income Tax Department, Thane, AO is directed to provide full benefit, in so far as the deduction is concerned. In favour of assessee.
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2013 (6) TMI 570
Telephone expenses disallowed - Held that:- As only in the impugned assessment year, the AO has made a disallowance, which has not been followed up even in the subsequent years, though, the assessments were framed u/s 143(3). Thus the rule of consistency cannot be ignored as laid down by a host of decisions in various fora. Therefore set aside the order of the CIT(A) sustaining the disallowance at Rs. 58,557/- on this issue and direct the AO to delete the disallowance made at Rs. 78,076/-. In favour of assessee.
Disallowance of partners conveyance - CIT(A) restricted it to 10% - Held that:- The conveyance allowance are fixed by the company to its partners. This fact, as well as the fact that the disallowance has been made only in the impugned year has not been denied by the DR. Thus following the rule of consistency no further disallowance is called for. In favour of assessee.
Disallowance of business development expenses - Held that:- As no disallowance made even in the subsequent years. Since the AR has pleaded for a reasonable and suitable reduction ad-hoc disallowance of Rs. 15,000/- would meet the ends of justice. Partly in favour of assessee.
Disallowance of foreign travel expenses - Held that:- From the breakup reproduced along with the bills with regard to foreign travel, which do have a positive presumption of carrying professional/business connection, because, durations are small, which can only be presumed to be professional/business oriented. But expenses shown under "others" and "Visa fee", cannot be allowed, because, visa once given can be used by the person for any number of times, including for personal requirements and there are no details of others (Rs. 20,728/-). Therefore, set aside the order of the CIT(A) and direct the AO to restrict the disallowance to Rs. 20,728/- and allow the balance aggregating to Rs. 3,92,115/-. Partly in favour of assessee.
Disallowance u/s 40(a)(i) for non deduction of TDS - assessee paid membership fee to Baker Tilly International (BTI), located in England - Held that:- No part of the payment made as subscription to BTI has resulted in income in its hands. Clause 3.5 of the agreement specifies that the company shall not constitute any partnership, joint venture or agency relationship with its members. This clears the deck to come to the conclusion that the subscription paid to BTI does not involve any income element and therefore, the provisions of TAS shall not be applicable. Thus set aside the orders of both the revenue authorities and direct the AO to delete the disallowance made to BTI. In favour of assessee.
Disallowance of payment made to the legal heirs of the deceased partner - Held that:- The issue, in so far as the assessee is concerned, can be said to in favour and covered by an order of the coordinate Bench in its own case in assessment year 1981-82. Also AO has himself conceded that in the case of Mulla & Mulla [1990 (9) TMI 32 - BOMBAY High Court] has held that an overriding charge to have been created over the assessee, "where, by the obligation, income is diverted before it reaches the assessee, it is deductible". Since the payment has been made by the firm to the legal heir of its deceased partner, as per the clauses of the partnership deed dated 1.4.2000 having unequivocal covenants. Thus the amount so paid to the legal heir of the deceased partner is an allowable expense. In favour of assessee.
Non deduction of TDS on payments made to professionals - Held that:- As payments had been made to non professional who are contracted for 3-4 months to do and learn the basic concepts of profession of accountancy. The persons are students who are perusing their accountancy degree/diploma or even as interns. It is economical for the employees to engage such persons, who would come, do the basic work of a paid employee, prepare some details/reports and go in 3-4 months time. Thus assessee has made payments to such students or small time accountants, who take up office job work at certain period of times & shall not attract deduction of tax at source and hence would not be hit by section 40(a)(ia). In favour of assessee.
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2013 (6) TMI 569
FBT on expenses incurred on non- employees - Held that:- As decided in CIT Vs Tata Consultancy Ltd. [2013 (6) TMI 516 - ITAT MUMBAI] employer/employee relationship is a pre-requisite for the levy of fringe benefit tax. Thus as no employer-employee relationship exists with non- employees payment deserves to be kept out side the purview of FBT. In favour of assessee.
FBT on fringe benefit which are taxable in the hands of employees - Medical reimbursement & Medical facilities - Held that:- As decided in case of Vijaya Bank [2011 (8) TMI 751 - ITAT BANGALORE] where perquisites/benefits which are fully attributable to the employee and are taxed in their hands, would be continued to be taxed under the existing provisions of Sec. 17(2) of the Act. In the present case, these two items are directly attributed to the personal benefit of the employees therefore deserves to be kept outside the purview of fringe benefit tax. The other three items i.e. education facilities, maintenance of residential colony for employees and Insurance premium paid by employer to keep in force an insurance on health of employees are all perquisites liable to be taxed in the hands of the employees individually thus deserves to be kept outside the purview of FBT. In favour of assessee.
FBT on administration expenses incurred on driver/pilot - Held that:- Expenses on repair, running and maintenance of motor car/aircraft do not include remuneration paid to drivers/pilot as supported by the decision of CIT Vs Sholinger Textiles Ltd. [1998 (4) TMI 83 - MADRAS High Court] - exclusion of value of such fringe benefit from the taxable value of fringe benefit. In favour of assessee.
FBT on Insurance premium for motor car and aircraft - Held that:- As decided in CIT Vs Tungabhadra Industries Ltd [1991 (11) TMI 6 - CALCUTTA High Court] expenditure incurred on repairs and insurance of car cannot be considered for disallowance u/s. 37(3A) - exclusion of value of such fringe benefit from the taxable value of fringe benefit. In favour of assessee.
FBT on pre-operative expenses - Held that:- CBDT in its explanatory note on the provisions relating to FBT answered that expenditure on any capital asset in respect of which depreciation is allowable u/s. 32 does not fall within the scope of sub-sec. (2) of Sec. 115WB. Since the approximate objective of incurring such expenditure is the acquisition of a capital asset therefore, such expenditure is not included in reckoning the value of fringe benefit - exclusion of value of such fringe benefit from the taxable value of fringe benefit - In favour of assessee.
FBT on expenses on maintenance of residential accommodation not in the nature of guest house - Held that:- As decided in assessee's own case where the buildings have been used by the employees and other related visitors such as customers, surveyors, contractors, government officials, auditors etc., cannot be considered as guest house as they are connected with assessee's business - exclusion of value of such fringe benefit from the taxable value of fringe benefit - In favour of assessee.
FBT on presentation articles distributed to business related persons - Held that:- As these expenses are incurred on persons related to or connected with the business but are not employees exclusion of value of such fringe benefit from the taxable value of fringe benefit directed - In favour of assessee.
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2013 (6) TMI 568
Deduction u/s 80IC - CIT(A) restricting the deduction only at Rs.90,62,385/- in place of Rs.1,14,96,983/- - Assessee is engaged in the business of Engineering running two Units separately one at Faridabad and the other at Rudrapur in Uttaranchal - Held that:- As it is not in dispute that the net profit of the assessee company during the period 31.03.2006 was Rs,.6,30,38,583/- and during the period 31.03.200-7 was Rs.5,10,88,326/-. Thus merely because there was a negative net work of the company does not necessarily mean that the profit generated by the company during the period 31.03.2006 and 31.03.2007 could not have been invested for the purpose of investment in Rudrapur unit. However, at the same time, merely because the loan amount has gradually reduced from 31.03.06 to 31.03.2008 and as because there was profit earned by the company during the years ended 31.03.2006 to 31.03.2008 it cannot be concluded that the investment in the Rudrapur unit was made from the profits so generated only.
As the party wise details of the loan on which the interest expenditure of Rs.1,53,25,937/- was incurred by the assessee was not brought on record before us by both the parties & no material to show the purpose for which loan in question was taken by the assessee and how the loan amount for which the interest expenditure was utilized during the period under consideration. The year-wise breakup of investment made in the Rudrapur unit was also not filed by both the parties. Thus in absence of complete details restore this part of the ground of appeal back to the file of the AO for proper verification of the utilization of the loan amount in respect of the interest expenditure - appeal of the assessee is partly allowed for statistical purposes as stated above.
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2013 (6) TMI 567
Voluminous and frequent purchase and sale of shares - capital gain v/s business income - as per AO in view of the CBDT Instruction No.1827 dated 31.08.1989 the profits from transactions and shares and units of the assessee are treated as business profits - Held that:- By following the order of the Tribunal passed in A.Yr.2004-05 in assessee's own case [2013 (6) TMI 515 - ITAT KOLKATA] allowed the appeal of the assessee by holding that the profits from sale and purchase of shares and units are to be treated as capital gains of the assessee. As DR could not point out any specific error in the order of the CIT(A) or bring any material on record to show that this order of the Tribunal was varied in appeal by any other higher authority no good and justifiable reason to interfere with the order of CIT(A) - appeal of the revenue is dismissed.
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2013 (6) TMI 566
Enhancement of income - disallowance of expenses - Net profit adoption - Held that:- In the absence of supporting material of the books of accounts i.e., bills and vouchers the assessing authority should have rejected books of account and should have framed assessment in terms of section 144 & 145 and for that AO must act honestly and not vindictively or capriciously because he must exercise judgment in the matter but from records it is evident otherwise.
Thus a reasonable estimate can be made and the assessee might have made purchases without procuring bills and might have avoided sales tax and other government dues. It means that assessee might have earned a little higher profit than earlier years. As Tribunal has confirmed the application of net profit at 5.35% in earlier year i.e. in AY 2003-04 a reasonable net profit i.e. @ 8% will meet the end of justice. Accordingly direct the AO to re-compute the assessee's income after deleting all the additions as made by AO and enhanced by CIT(A) but restrict the addition only at 8% of gross contract receipts - appeal of assessee allowed partly.
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2013 (6) TMI 565
Work in progress - whether be shown under the caption Land procurement and registration - CIT(A) deleted the addition - Held that:- Assessee had shown a sum under the head land procurement and registration charges in the profit and loss account & had simultaneously included this amount in the work in progress in the profit and loss account. As entire amount of expenses were debited to the work in progress of the assessee thus it shows that the assessee has not claimed any deduction for a sum of Rs.42,36,000/- under the head land procurement and registration therefore no disallowance same could have been made by the AO while computing the income of the assessee. In favour of assessee.
Non deduction of TDS - software development expenses, financial consultancy charges and Director's remuneration - Held that:- As form paper book filed by the assessee profit and loss account for the period from 14.06.2006 to 31.03.2007 as filed that the entire expenditure of Rs.1,01,06,389 during the year has been shown as closing work in progress at Rs.1,01,04,668/-. Thus it is seen that no expenditure has been claimed as deduction in the profit and loss account by the assessee. Hence the question of making any disallowance of any expenditure for non deduction of tax at source by invoking the provisions of section 40(a)(ia) does not arise. In favour of assessee.
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2013 (6) TMI 564
Sharing of manpower between group companies - reimbursement of the expenditure - Levy of service tax - Business Auxiliary Services - Held that:- After examining the memorandum of ASSOCIATION of the appellant company and the group of companies, prima facie it appears to be a case of recruiting staff for the group companies and supplying them to the group companies to deal with the activities undertaken by the group companies. Such an activity does not, prima facie, come under the purview of the Business Auxiliary services as defined under Section 65 (90) of the Finance Act, 1994. - prima facie view that the appellant has made out a case in their favour for grant of stay. - stay granted.
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2013 (6) TMI 563
GTA service for the period 16/11/1997 to 01/06/1998 - Held that:- for the period involved during 16/07/1997 to 02/06/1998, the show-cause notice should have been issued during the said period and the notice issued after the retrospective amendment is not sustainable in law. - Demand set aside.
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