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Showing 381 to 400 of 858 Records
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2010 (3) TMI 910
Issues: Application for injunction against selling shares, appointment of special officer, appointment of receiver, and other interim reliefs.
Analysis:
1. The applicants sought an injunction against the respondents to prevent the sale of shares in a company and requested the appointment of a special officer and a receiver, among other interim reliefs. They alleged that the respondents had been running the company without informing shareholders, siphoning off funds, and planning to sell a substantial number of shares in a profitable company, which could devalue the company. The applicants argued that the sale could harm the company's interest and sought to protect shareholders' rights.
2. The respondents countered by stating that the shares were purchased at a certain price, and the allegations of oppression and mismanagement were not raised for several years. They argued that the offer to purchase the shares at a higher price was fair and beneficial for the company. The respondents highlighted that the decision to sell shares was a collective board decision and not oppressive unless proven otherwise, citing legal precedents to support their stance.
3. The main issue to be decided was whether selling the shares at a specified price would be prejudicial to the company's interest. The respondents emphasized that the offer price was fair and above the initial purchase price, indicating a positive value for the shares. They argued that as long as the decision was sound and not detrimental to the company, it should not be considered oppressive to any member.
4. The Board considered the arguments from both sides and acknowledged the minority shareholders' interest in the sale proceeds. While the act of selling shares was not deemed oppressive, the Board recognized the need to protect the minority shareholders' interests. The Board aimed to balance the interests of all shareholders and prevent any irreversible harm to the majority shareholders, ultimately dismissing the application for injunction but directing the respondents not to utilize the sale proceeds pending the main company petition's disposal.
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2010 (3) TMI 909
Issues Involved:
1. Allegations of approaching the Company Law Board (CLB) with unclean hands and mala fide intent.
2. Suppression of material particulars by the petitioner.
3. Collusion with RBI Marketing Netherlands B.V. to facilitate termination of the patent license.
4. Financial mismanagement and dilution of the petitioner's shareholding.
5. Allegations of poaching employees and setting up a competing business.
6. Request for dismissal of the company petition and vacating interim relief.
Issue-wise Detailed Analysis:
1. Allegations of Approaching the CLB with Unclean Hands and Mala Fide Intent:
The respondents argued that the petitioner approached the CLB with unclean hands and mala fide intent, aiming to sabotage the respondent No. 1-company. The petitioner was accused of acting in collusion with RBI Marketing to terminate the patent license agreement and bring the company to a standstill. The CLB emphasized that its jurisdiction is an equity jurisdiction, requiring the petitioner to approach with clean hands and not act detrimentally to the company's interest.
2. Suppression of Material Particulars by the Petitioner:
The petitioner was accused of suppressing the shareholders' agreement dated 11-6-2007, which outlined the conditions for issuing sweat equity and the financial responsibilities of the petitioner. The CLB found that the petitioner had not invested any money in the company and had suppressed material facts, including his role in the day-to-day management of the company. The petition was filed to facilitate the termination of the patent license agreement with the respondents by RBI Marketing.
3. Collusion with RBI Marketing Netherlands B.V.:
The petitioner was found to have acted in concert with Josy Cohen of RBI Marketing to terminate the patent license agreement and halt the production and marketing of RBI Grade 81 by the respondent No. 1-company. The CLB noted that the petitioner had informed RBI Marketing about the interim order promptly, indicating collusion. The petition was filed to benefit the petitioner and RBI Marketing, leading to the termination of the patent license agreement and the filing of a civil suit by RBI Marketing against the respondents.
4. Financial Mismanagement and Dilution of the Petitioner's Shareholding:
The petitioner alleged financial mismanagement by respondent No. 2 and dilution of his shareholding. However, the CLB found no evidence of financial mismanagement and noted that the petitioner was involved in the day-to-day management of the company. The petitioner's resignation and subsequent filing of the company petition were seen as part of a strategy to facilitate the termination of the patent license agreement. The CLB also noted that the petitioner was present at the board meeting where additional shares were allotted, contradicting his claims of being kept in the dark.
5. Allegations of Poaching Employees and Setting Up a Competing Business:
The respondents alleged that the petitioner poached several employees from respondent No. 1-company to set up a competing business with RBI Marketing. The CLB found these allegations to be true, as the petitioner did not deny them. This further supported the inference that the petitioner acted in collusion with RBI Marketing to terminate the patent license agreement and halt the company's operations.
6. Request for Dismissal of the Company Petition and Vacating Interim Relief:
The CLB concluded that the company petition was filed with an evil and mala fide design, in collusion with RBI Marketing, to strangulate the business of respondent No. 1-company. The petition was deemed a gross abuse of the CLB's process. Consequently, the CLB vacated the interim order dated 3-12-2009, dismissed the company petition, and awarded exemplary costs of Rs. 2,00,000 to the respondents. The respondents were also permitted to transfer the plant and machinery from the Manesar Plant to the Jaipur Plant.
Conclusion:
The CLB found that the petitioner acted in collusion with RBI Marketing to terminate the patent license agreement and halt the operations of respondent No. 1-company. The petition was filed with unclean hands, suppressing material facts, and with a mala fide intent. The CLB dismissed the petition, vacated the interim relief, and awarded exemplary costs to the respondents.
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2010 (3) TMI 907
Disallowance u/s 43B - held that:- According to the perception of the Income-tax Department as contained in Circular No. 528, dated December 16, 1988, the disallowance was to cover any amount payable to any statutory authority including local authority and could be allowed only in the year in which such an amount is paid. In that view, therefore, the amendment was made and it was clarified that such an amount would also be allowable only on actual payment irrespective of the previous year in which liability to pay such sum was incurred. In view thereof, the amendment was made and it was clarified that such an amount would also be allowable only on actual payment irrespective of the previous year in which liability to pay such sum was incurred.
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2010 (3) TMI 906
Demand of service tax - 'Commercial Training or Coaching Service' and 'Scientific or Technical Consultancy' service - Supreme Court dismissed appeal where Tribunal held that since research activities of appellant are related to social science, they can be called as a ‘science or technology’ institution therefore would not come in the ambit of ‘Scientific or Technical Consultancy'.
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2010 (3) TMI 905
ENVAT Credit of service tax paid on CHA services availed for export of goods by 100% EOU – When sale of goods is on FOB/CIF basis, place of removal is the port where goods are loaded for export – Service tax paid on CHA services, is eligible as CENVAT Credit for a manufacturer
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2010 (3) TMI 904
Issues Involved:
1. Violation of Fundamental Rights under Article 14, 19, and 21 of the Constitution.
2. Lack of basis for inferring any act of omission or commission by the detenu.
3. Inordinate delay in issuance of the detention order.
4. Non-placement of vital and material documents before the Detaining Authority.
5. Detention order passed on irrelevant, extraneous, vague, and non-existent grounds.
Detailed Analysis:
1. Violation of Fundamental Rights under Article 14, 19, and 21:
The petitioner argued that exercising the powers under Section 3(1) of COFEPOSA violates the fundamental rights of the detenu, as FEMA makes it a civil compoundable offense. The court, however, referred to the Supreme Court's decision in Union of India Vs. Venkateshan (2002) 5 SCC 285, which clarified that the enactment of FEMA does not prevent the authorities from passing a detention order under COFEPOSA.
2. Lack of Basis for Inferring Any Act of Omission or Commission:
The petitioner contended that the Detaining Authority failed to recognize that there was no basis for inferring any act of omission or commission by the detenu. The court emphasized the principles laid down in Alka Subhash Gadia, which permit interference at the pre-execution stage only in exceptional cases. The court also clarified that the detenu does not have the right to the order of detention or the grounds thereof before the order is executed.
3. Inordinate Delay in Issuance of the Detention Order:
The petitioner argued that there was an abnormal delay in passing the detention order, which vitiates the order. The court examined the timeline and found that the delay was justified and explained. The court noted that the authorities did not want to pass the order in haste and needed sufficient material to support the detention. The court concluded that the time taken was due to due diligence and thorough examination of the case.
4. Non-placement of Vital and Material Documents:
The petitioner claimed that vital documents, including letters of retraction and representations, were not placed before the Detaining Authority. The court found that the letters of retraction were considered by the Detaining Authority. Regarding the representation dated 25.06.2009, the court noted that it was addressed to the Member (Customs) and was not received by the Sponsoring Authority or the Detaining Authority. The court held that the representation did not raise new issues that were not already considered.
5. Detention Order Passed on Irrelevant, Extraneous, Vague, and Non-existent Grounds:
The petitioner argued that the detention order was based on irrelevant and non-existent grounds. The court emphasized that the grounds of detention and the material relied upon are not served upon the detenu at the pre-execution stage, and thus, the detenu cannot challenge the order on merits at this stage. The court reiterated that such a challenge is permissible only after the order is executed.
Conclusion:
The court dismissed the writ petition, finding no merit in the contentions raised by the petitioner. The court clarified that any observations made in the judgment would not prejudice the petitioner when challenging the detention order appropriately after its execution. The court emphasized the limited jurisdiction at the pre-execution stage and refrained from deeper scrutiny into the merits of the grounds of detention.
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2010 (3) TMI 903
Transfer of business of partnership firm to company - closing stock and some asset taken over by the partner - capital gain - deduction of interest valuation of closing stock - held that:- Not only addition in the fixed assets, there is repayment of unsecured loans also which has come down to Rs. 5 lakhs as on 17-9-1991 as against the opening balance of Rs. 10 lakhs. If the assets and liabilities are not taken over by the assessee-firm how deduction on account of interest payment on loan is claimed in the profit and loss account.
Value of asset transferred to partner after dissolution of partnership firm - held that:- the assets were transferred by the partner to the assessee-firm and on this date, no income is chargeable in the hands of Shri MM Goel who has transferred these assets to the assessee-firm as his capital contribution because such transfer was recorded in the books of the firm at book value only. But on 17-9-1991 when on dissolution of the firm, there is distribution of assets to the second partner i.e., M/s. PSPPL, market value has to be considered for the purpose of capital gain.
Closing stock taken over by the partner - Assessing Officer to compute the business profit after including the difference in market value in closing stock as on 17-9-1991 and book value of closing stock as shown by the assessee in profit and loss account and such difference should be added in business income of the assessee.
Allowability of deduction to the assessee under section 80-I - industrial undertaking – whetehr benefit of section 80-I were attached to the undertaking and not to the owner thereof and the assessee having taken over the running under taking which was otherwise entitled to the benefit of section 80-I – Held that:- Assessee-firm was formed by the reconstruction of a business already in existence as a sole proprietory concern of Shri M.M. Goel and hence, the assessee does not fulfill the conditions laid out in section 80-I(2)(i) and therefore, the assessee is not entitled for deduction under section 80-I of the Act - ground of the revenue is also allowed - appeal of the revenue is allowed
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2010 (3) TMI 902
Disallowance made under the head ‘expenditure’ incurred for repairing the space used for recreation room – Held that:- Since assessee did not acquire a capital asset but put up a construction of building only for purpose of business, same was allowable as revenue expenditure
Disallowance on account of foreign travel – Held that:- Foreign travel was necessitated to grow the business of the assessee’s magazines, periodicals, etc. which is now on globalization and on competition, which requires to know more about to cut down the cost of the publications and printings and such other matters, which are required for the purpose of the business - foreign travel expenses were incurred only for the purpose of business. - Decided in favour of assessee.
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2010 (3) TMI 901
Disallowance under section 40A(3) of the Income-tax Act - being 20 per cent. of Rs. 25,21,700 payments made in cash – Held that:- Statutory limit of payment under section 40A(3) of the Act applies to each payment and not to the aggregate of the payments made to a party in the course of the day - When the genuineness of the transportation work done and the payment made for such work as a whole is not doubted - there is no justification to ignore the self made vouchers by which the payment is made - As per the self-made voucher, payment was below Rs. 20,000 at a time, in respect of such payment - disallowance made under section 40A(3) of the Act deleted
Disallowance of parking expenses incurred – Held that:- Assessee could not give any satisfactory explanation as to why the assessee made the payment of parking expenses when the trucks were owned by others and not by the assessee - no justification could be given for making such payment only at the Chennai branch when no such payment is being made at the head office or other branches - claim of truck expenses is only on notional basis, i.e., on the basis of per trip and not on the basis of actual parking expenses incurred by the truck owner – disallowance upheld
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2010 (3) TMI 900
Addition under section 68 – Cash credit - Assessing Officer noticed that the assessee had shown to have received share capital from the shareholders - When the assessee was called upon to explain the sources of investment towards share capital assessee had explained the sources of shareholders-wise deposit – Held that:- Identity of share applicants is beyond doubt and further that they have admitted to have given money to the assessee-company then onus is discharged by the assessee-company - The Assessing Officer thereafter having not brought any material on record to show that it was the assessee-company’s money which was routed back as share application money, addition cannot be sustained in its hands - assessee has discharged the initial onus put on it under section 68 of the Act and the Revenue having brought no cogent material – addition deleted
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2010 (3) TMI 899
Penalty under section 271(1)(c) of the Act on account of excess claim of depreciation – Held that:- Claim of depreciation at 15 per cent. was a clerical error - written down value of building, furniture and fixtures was taken as single block and depreciation was claimed at 15 per cent. as against 10 per cent. allowable as per the Income-tax Rules - During the assessment proceedings, the assessee itself had furnished the revised chart and’ worked out that the depreciation claimed by it was higher - written down value of building, furniture and fixtures was taken as a single block by mistake and clue to clerical error’ the depreciation was claimed at 15 per cent., seems plausible – penalty canceled – in favor of assessee
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2010 (3) TMI 898
Transfer pricing - ALP – Comparable - assessee supplied software to Vedaris, UK, which was an international transaction - documents were not maintained to justify the ALP on cost plus method, the matter was discussed further with the assessee and finally the Transactional Net Margin Method ("TNMM" for short) was adopted for determining the ALP - CIT(A) was of the view that there were five valid comparables – Held that:- Four comparables were involved in different lines of business and, therefore, did not meet requirements of rule 10C, which was a major factor in judging comparability of a case – on facts, ALP was to be determined only on basis of remaining one comparable - proviso as it existed for the relevant assessment year states that where more than one price is determined by the most appropriate method, ALP shall be taken to be arithmetical mean of such price, or, at the option of the assessee, a price which may vary from the arithmetical mean by an amount not exceeding 5 per cent of such arithmetical mean - provision is applicable where more than one price is determined by the appropriate method - there is only one comparable case of Soffia Software Ltd. Since more than one price has not been determined, the proviso is not applicable on the facts and in the circumstances of this case - appeal of the revenue dismissed
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2010 (3) TMI 897
Denial of deduction under section 80-IB - Profits and gains from industrial undertakings other than infrastructure development undertakings – Assessee was engaged in assembling of wind operated electricity generators and erection thereof in place of customers – alleged that assessee has not employed more than 10 persons – Held that:- Section 80-IB(2)(iv) says that such undertaking should employ ten or more "workers" if this activity is done with the help and aid of power - Copies of wage registers maintained during the relevant period have been produced and these were also produced before the Assessing Officer, but the Assessing Officer chose to rely on a statement of Shri Mani, an employee - such huge activity cannot be carried on without the help of more than 10 workers - assessee-company fulfils all the eligibility criteria for deduction under section 80-IB - appeal filed by the assessee is allowed.
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2010 (3) TMI 896
Computation of cost of construction - State PWD rates are to be adopted for valuation in place of CPWD rates adopted by the Assessing Officer – Held that:- PWD rates are applicable in the case of value of the property situated in a mofussil area - 15 per cent deduction apart from the deduction towards self-supervision should be given for matching the cost of construction estimated on the basis of CPVVD rates with the PWD rates - appeal filed by the revenue is dismissed.
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2010 (3) TMI 895
Capital gain - assessee was engaged in the business of manufacturing sugar - it was closed and no manufacturing activity of sugar was undertaken - Government of Maharashtra while implementing its scheme to start closed private sugar factories in the State by way of co-operativisation of the sugar factories permitted M/s. Ninaidevi Sahakari Sakhar Karkhana Limited (NSSK) to purchase the plant and machinery of the assessee-company for a sum of Rs. 351.13 lakhs and to takeover the liabilities of Rs. 100.53 lakhs towards Government dues – Assessee claimed that amount received by it were not taxable on plea that it was not towards plant and machinery but towards sale of industrial licence since without ‘licence’ value of plant and machinery was akin to scrap value – Held that:- sum of Rs. 100.53 lakhs was granted to the assessee in kind by way of taking over its liabilities "in consideration of the industrial license and sanctions and benefits". It becomes clear that the said consideration of Rs. 100.53 lakhs cannot be held to be anything but towards industrial license and sanctions. There is no dispute on the point that the license granted to the assessee had no cost of acquisition - capital gain could not be computed in respect of said consideration of Rs. 100.53 lakhs - plant and machinery and other capital assets, constituted block of assets with effect from 1-4-1988 - Assessing Officer was justified in computing capital gain in respect of those assets by invoking provisions of section 50
Computation of capital gain - depreciable assets – Held that:- Plant and machinery and other capital assets of the assessee were allowed depreciation up to 1984, they constituted block of assets with effect from 1-4-1988. Since these assets become subject-matter of transfer in the instant year, the provisions of section 50 clearly get attracted. As these are special provisions for computation of capital gain in case of depreciable assets, general provisions of section 48 etc. for the computation of capital gain shall apply with necessary modification - Assessing Officer is directed to re-compute the short-term capital gain
Capital gain - diversion of income - grievance of the assessee is that the sum of Rs. 160 lakhs directly paid by NSSK to Bank of Madurai be excluded from the sale consideration as that never became the income of the assessee as it stood diverted of overriding title and hence should be ignored for the purpose of calculating capital gain – Held that:- Sum of Rs. 160 lakhs was paid by NSSK to Bank of Madurai for and on behalf of the assessee in full and final settlement of the amount due to the bank over the period of time. It was, in fact, a liability of the assessee which was discharged by making direct payment through NSSK instead of routing it through the assessee. The said payment to the bank is only application of income not a charge on income - sum of Rs. 160 lakhs was rightly held to be not deductible out of the total consideration for the purpose of determining capital gain as there was no diversion of income as claimed by the assessee.
Expenditure incurred in connection with the transfer of plant and machinery – Held that:- Provisions of section 50 are to be applied on the capital asset forming part of block of assets and short-term capital gain is to be computed in respect of such depreciable assets - assessee will be entitled to claim deduction of Rs. 92.61 lakhs as revenue expenditure against the business of trading/dealing in shares continued in the instant year from which the trading profit of Rs. 1,06,196 was earned.
Interest under sections 234B and 234C – Held that:- Interest under sections 234B and 234C is required to be charged if the income is computed on the basis of the regular provisions of the Act. If on the other hand the income is computed under section 115J or section 115JA, no interest shall be charged under sections 234B and 234C
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2010 (3) TMI 894
Rejection of accounts - assessee-company is a non-resident company established in USA and operates its branch office from India - business of distribution of films and has derived income by way of distributing films and advertising accessories and trailers – claim of the assessee is that the said profit has been shown as per books of account regularly maintained by it and the Assessing Officer without examining the books of account rejected the same and applied net rate of profit at 25 per cent of gross film rental as per Boards letter - Held that:- Assessing Officer had no ground to reject books of account within meaning of section 145(3) and, thus, he was required to calculate income as per books of account by applying section 145(1) – matter remanded back to AO
Transfer pricing - Reference to transfer Pricing Officer – Assessing Officer referred matter to TPO under section 92CA(1) who vide order under section 92CA(3) directed that certain amount was required to be added to income of assessee - Assessing Officer made addition – Held that:- No opportunity has been provided by the Assessing Officer for final determination of income under sub-section (4) of section 92C read with sub-section (4) of section 92CA of the Act – matter remanded to AO
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2010 (3) TMI 893
Benefit of exemption under section 10(6A) – income by way of royalty/fees for technical service – assessee is a company incorporated in the Netherlands and is a tax resident of the Netherlands - assessee-company had entered into technology licence agreements - assessee filed a revised return under section 139(5) of the Act claiming a tax refund - Assessing Officer framed the assessment under section 143(3) on 29-3-2006, wherein he held that the assessee is not eligible for exemption under section 10(6A) of the Income-tax Act – Held that:- Agreement made by the assessee-company with the Indian concern, namely M/s. Essar group is before the 1-6-2002 - agreement has been approved by the Central Government prior to that date - all the conditions laid down for exemption under section 10(6A) are fully satisfied – exemption is available – in favor of assessee
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2010 (3) TMI 892
Issues involved: Appeal against order of CIT(A) for assessment year 2000-01 regarding interest charged u/s 234B of the Income-tax Act, 1961.
Facts: The assessee, a non-resident company in the business of ISO 9000 certification, filed a return declaring a loss but was assessed at an income by the Assessing Officer. The AO also charged interest u/s 234B. The assessee contended that being a foreign company, its entire income is subject to withholding tax u/s 195, thus no advance tax was payable and no interest u/s 234B should be levied.
Decision: The ld. CIT(A) held that interest u/s 234B is not applicable in this case, citing relevant case laws. The revenue appealed, arguing that the assessee should have paid advance tax and interest u/s 234B is justified. The Tribunal noted that as per section 195, the income is subject to tax deduction at source, hence no advance tax was required. Referring to a High Court judgment, it was held that when tax is to be paid at source, no interest can be imposed on the payee-assessee. The Tribunal upheld the CIT(A)'s decision to delete the interest charged u/s 234B.
Conclusion: The revenue's appeal was dismissed, affirming the deletion of interest charged u/s 234B by the ld. CIT(A) based on the obligation to pay tax at source u/s 195 and relevant legal precedents.
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2010 (3) TMI 891
Issues Involved:
1. Validity of reassessment proceedings under section 147.
2. Addition under section 68 regarding the redemption value of SBI Resurgent India Bond.
3. Disallowance of various expenses claimed under the head 'Income from other sources.'
Issue-wise Detailed Analysis:
1. Validity of Reassessment Proceedings under Section 147:
The primary issue was whether the reassessment proceedings initiated under section 147 were valid. The assessee contended that the Assessing Officer (AO) did not provide the reasons for reopening the assessment despite repeated requests, which is against the procedure laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19. The AO argued that the reasons were recorded in the order sheet, which was part of the assessment order. The Tribunal found that the AO failed to furnish the reasons for reopening the assessment to the assessee, violating the Supreme Court's directive. Consequently, the Tribunal set aside the reassessment proceedings and directed the AO to follow the procedure laid down by the Supreme Court before proceeding with the assessment.
2. Addition under Section 68 Regarding SBI Resurgent India Bond:
The second issue was the addition of Rs. 6,69,626 (for Kakali Panja) and Rs. 3,34,813 (for Bhabesh Chandra Panja) under section 68, which pertained to the redemption value of SBI Resurgent India Bond received as a gift from an NRI friend. The AO did not accept the gift, citing reasons such as the lack of relationship between the assessee and the donor, and the improbability of such a large gift from a mere acquaintance. The assessee provided extensive documentation to prove the genuineness of the gift, including the bond certificate, the donor's declaration, and the redemption advice from SBI. Despite this, the CIT(A) upheld the AO's addition, questioning the genuineness of the transaction and the creditworthiness of the donor. The Tribunal, however, did not adjudicate this issue due to the remand order on the first issue.
3. Disallowance of Various Expenses Claimed under 'Income from Other Sources':
The third issue involved the disallowance of various expenses claimed under 'Income from other sources.' The AO disallowed a significant portion of the expenses, arguing that they were not incidental to earning such income. The assessee contended that these expenses were necessary for earning income from multiple sources, including business and other investments. The CIT(A) upheld the AO's disallowance. However, this issue was also not adjudicated by the Tribunal due to the remand order on the first issue.
Separate Judgments:
There was a difference of opinion between the Judicial Member (JM) and the Accountant Member (AM) regarding whether the case should be remanded back to the AO. The JM, following the Supreme Court's decision in GKN Driveshafts (India) Ltd., remanded the matter back to the AO. The AM disagreed, arguing that the case should be decided on merit by the Tribunal. The Third Member (Vice-President) concurred with the JM, leading to the majority view that the matter should be remanded back to the AO to follow the procedure laid down by the Supreme Court.
Conclusion:
In accordance with the majority view, the appeals of both the assessees were partly allowed for statistical purposes, and the matter was remanded back to the AO to follow the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd. before proceeding with the reassessment.
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2010 (3) TMI 890
Issues Involved:
1. Validity of notice u/s 143(2) in block assessment.
2. Service of notice u/s 143(2) within the prescribed period.
3. Consequences of non-issuance of notice u/s 143(2) within the stipulated time.
Summary:
1. Validity of notice u/s 143(2) in block assessment:
The primary issue was whether the proviso to section 143(2) applies to block assessments. The Tribunal referred to section 158BC(b) which mandates that the provisions of section 143(2) apply to block assessments. The Tribunal cited the Hon'ble Supreme Court's judgment in Asstt. CIT v. Hotel Bluemoon [2010] 188 Taxman 113, which clarified that notice u/s 143(2) must be issued within one year from the end of the month in which the block return is filed. The Tribunal concluded that the issuance of notice u/s 143(2) is a mandatory requirement for block assessments.
2. Service of notice u/s 143(2) within the prescribed period:
The assessee filed the block return on 15-5-2000. The Tribunal examined whether the notice dated 16-5-2000 was served on the assessee. The Tribunal noted discrepancies in the notice, such as the incorrect date of return mentioned as 15-11-2000, which was impossible since the return was filed on 15-5-2000. The Tribunal also observed that the assessment record did not contain any entry for the issuance of the alleged notice on 16-5-2000. The Tribunal found that the only notice dated 20-12-2001 was served on the assessee on 24-12-2001, which was beyond the prescribed period.
3. Consequences of non-issuance of notice u/s 143(2) within the stipulated time:
The Tribunal held that since the notice dated 20-12-2001 was served on the assessee on 24-12-2001, it was time-barred. The Tribunal emphasized that the assessment cannot be based on a time-barred notice u/s 143(2). Consequently, the block assessment order was quashed. The Tribunal did not address the departmental appeal on merits due to the decision on the legal ground.
Conclusion:
The appeal of the revenue was dismissed, and the cross-objection of the assessee was allowed. The Tribunal quashed the block assessment order due to the invalidity of the notice u/s 143(2) served beyond the prescribed period.
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9911796707
