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Showing 381 to 400 of 1237 Records

• 2014 (3) TMI 859
  

  Jurisdiction of AO u/s 142(1) of the Act – Place of initiation of inquiry - Held that:- A bare perusal of the record shows that notice dated 24.12.2013 issued u/s 142 of the Act speaks that in connection with the assessment for the assessment year 2011-12 the petitioner was required to furnish in writing and verify in the prescribed manner information called for – u/s 142 (2), the AO has been empowered to make such enquiry as he considers necessary for the purpose of obtaining full information in respect of the income or loss of any person - the main place of profession during the year of assessment in question shall be the place for assessment – thus, the has rightly exercised his power u/s 142 of the Act - once the AO has arrived at conclusion that the jurisdiction is vested with him, which he has correctly arrived at, the provisions of Section 127 of the Act are not attracted, unless competent authority exercises his power u/s 127 of the Act – Decided against Assessee.

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• 2014 (3) TMI 858
  

  Claim of 100% deduction on transformer oil u/s 80IA(2)(iv)(c) of the Act - Process amounts to manufacture or not - Whether the Tribunal is legally correct in its view that the assessee's business is an industrial undertaking within the meaning of Section 80IA of the Act – Held that:- The assessee company performs work in the nature of business for repairing and manufacturing of transformer – assessee contended that the company has been manufacturing aluminium HT/LT Leg Coils, which were used in old burnt transformers and in this regard, it had also submitted in detail before the assessing - the inclusive definition of "Manufacture" or "Produce" as enunciated and elaborated in Section 10-A and 10-B of the I.T. Act is applicable to provisions of section 80-I or section 80-IA because these words have been defined with a particular purpose or with reference to the limited/particular context i.e. free trade Zone and 100% Export Oriented Undertakings - prima-facie, there appears to be a discrimination yet this is a reasonable/discrimination because it is well within the competence of the legislature to define a word for specific purposes or object or section and not for general connotation where ever these words occur in the I.T. Act.

  Relying upon CIT Vs. Venkateswara Hatcheries (P) Ltd. [1999 (3) TMI 12 - SUPREME Court] - the word "Manufacture" and "produce" has not been defined in section 80-IA and there is no specific mention in it that the definition of these words as given in Section 10-A and 10-B will apply to section 80-IA, the Dictionary Meaning and understanding of common parlance has been taken/construed to be the logical/reasonable meaning/interpretation/definition - by means of continuous and regular action or succession of action taking place or carried on in a definite manner and leading to the accomplishment of some result then only some benefits could be conferred in favour of the assessee.

  The definition of processing would not be applicable especially in the background that the transformer oil has been purchased by the assessee from market and centrifuging had been done by centrifugal machine in order to make it usable in Transformer, but in substance no new substance or articles or things has been emerged from the said processing, only some special processing or treatment had been given to transformer oil through a particular method – thus, it cannot be construed that due to this transformation or activity there was change in the substance and new substance or article had come out - the assessee did not indulge in any manufacturing activities or producing any new articles or things – thus, the assessee is not entitled to the benefits of 100% deduction under section 80IA (2)(iv)(c) of the Act – Decided in favour of Revenue.

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• 2014 (3) TMI 857
  

  Surplus wastage – 1/3rd addition made by the AO – Consumption of Tendu patta – Held that:- The Tribunal was of the view that the turnover gross profit and gross profit rate declared by the assessee were better than the earlier years - the items in which the assessee is dealing are subject to the Excise and no discrepancy had been noted in the excise record maintained by the assessee by the concened authorities - assessee maintained the proper books of account and the same method of accounting was followed which the assessee followed consistently in the earlier years – the CIT(A) sustained the addition to the extent of 1/3rd on the basis that similar type of additions were sustained in the earlier year but he ignored this fact that the addition sustained by him in the earlier years were deleted by the Tribunal – The Tribunal after considering all the relevant facts including the details of the consumption register of 'Tendu Patta' recorded a finding that the addition was unsustainable - 1/3rd addition which was maintained by the CIT (A) was also set aside by the Tribunal – thus, the order of the Tribunal is upheld – no question of law arises for consideration - Decided against Revenue.

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• 2014 (3) TMI 856
  

  Disallowance of interest expenses u/s 14A of the Act r.w. Rule 8D of the Rules – Held that:- The decision in CIT vs. Winsome Textile Industries Ltd. [2009 (8) TMI 220 - PUNJAB AND HARYANA HIGH COURT] followed - the assessee did not make any claim for exemption – thus, section 14A could have no application - subsection( 1) of section 14A provides that for the purpose of computing total income under chapter IV of the Act, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act - the tribunal has recorded the finding of fact that the assessee did not make any claim for exemption of any income from payment of tax - It was on this basis that the tribunal held that disallowance under section 14A of the Act could not be made – no question of law arises for consideration – Decided against Revenue.

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• 2014 (3) TMI 855
  

  Disallowance of interest u/s 14A of the Act – Held that:- Revenue contended that the principal amounts were initially used for the purpose of business, without further proof of the use in the relevant previous year, interest could not have been allowed as a business expense - CIT(A) and the Tribunal was of the view that for the previous years as well as for the years when the funds were borrowed, there was no adverse finding against the assessee necessitating its adding back – thus, as such no substantial question of law arises for adjudication as the issue is already remitted back to the AO for reconsideration – Decided against Revenue.

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• 2014 (3) TMI 854
  

  Rate of disallowance of expenses – Held that:- The AO had gone into the matter in quite some detail after obtaining the responses pursuant to notices issued to the suppliers of the goods - in respect of large number of notices only 4 suppliers came forward and supplied the details - That forms the basis for analysis - As to whether the percentage was rightly kept at 3% or 6% is not a substantial question of law arises for consideration – the assessee itself did not appeal to the Tribunal against the disallowance of 3% sustained by the CIT (A), a position which can be prima facie taken as indicative of the reliability of its books and the evidence there was no merit in the appeal - Decided against Assessee.

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• 2014 (3) TMI 853
  

  Genuineness of transaction - Assessment of income derived from sale of jewellery – Held that:- The decision in Manoj Aggarwal and others Versus Deputy Commissioner Of Income-tax, Central Circle - 3, New Delhi [2008 (7) TMI 446 - ITAT DELHI-A] followed - the order requires to be set aside and the matter remitted to the Tribunal for considering all aspects so that a clear finding as to whether transaction for sale of jewellery was genuine or not in this case – Decided in favour of Revenue.

  Jurisdiction of the AO to reopen the assessment – Held that:- The assessee’s conduct in not preferring any cross objections when the appeal was being heard precludes it from now contending that it has a grievance in respect of the jurisdiction of the Assessing Officer – Decided against Assessee.

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• 2014 (3) TMI 852
  

  Validity of order - principle of natural justice - nature of an order passed by AO after an inquiry made with another AO about the Assessee as per direction given by CIT(A) – Exercise of power u/s 251 of the Act – Held that:- The AO had addressed a letter on 11 July 2013 to the ITO, Ward-VI(I), Chennai, who had jurisdiction over the proprietor of the two parties in respect of whom the CIT (A) had directed an inquiry to be made - Thereafter, a letter was addressed on 21 February 2014 to the ITO, Ward-25(2), New Delhi regarding the verification of transactions of the aforesaid two parties with the assessee since the PAN had been transferred to the aforesaid ITO at New Delhi.

  Admittedly, these facts were not disclosed to the assessee nor was the assessee given any opportunity to controvert the material. The Assessing Officer has acted in haste by passing an order without notice to the assessee and in clear breach of the principles of natural justice.

  Even if we treat the impugned order of the Assessing Officer dated 24 February 2014 as an order under Section 143 (3), it is clear that there has been a violation of the principles of natural justice and it would not be necessary to relegate the assessee to an appeal under Section 246. On the other hand, if the order is treated as an order under Section 251, which is the provision which was invoked by the Assessing Officer, the order would be clearly without jurisdiction and would not be subject to an appeal under Section 246. Hence, in either view of the matter, the impugned order dated 24 February 2014 is unsustainable. – thus, the order is set aside and remanded back to decide afresh – Decided in favour of Assessee.

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• 2014 (3) TMI 851
  

  Validity of notice for reassessment u/s 148 of the Act - Held that:- The decision in Commissioner of Income Tax, Delhi vs. Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT OF INDIA] followed - a tax administrator would act within jurisdiction if notice of reassessment is issued in a given case, based on “tangible” or fresh material - Re-appraisal of previously assessed returns, based on a change of opinion or an improved understanding of the law, would not pass muster as the basis for a valid reassessment proceeding, because the law would not uphold such change of opinion as it amounts to an impermissible review - an erroneous previous view warranting exercise of revisional jurisdiction cannot authorize a valid reassessment notice.

  During the assessment proceeding, and the first reassessment proceeding, the question of dealers’ commission as well as TDS on those amounts, had been gone into - The attempt to revisit this issue a third time is nothing but the tax authorities’ effort to overreach the law and resultantly a sheer harassment of the assessee – the notice and all further proceedings conducted pursuant to it are without jurisdiction – Decided in favour of Assessee.

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• 2014 (3) TMI 850
  

  Denial to grant registration u/s 12A of the Act – Interpretation and Scope of section 24(iv) of Delhi Sikh Gurudwara Act, 1971 – Powers of the committee to enter into JV on revenue sharing basis - Held that:- Reliance placed by ITAT on Section 24 (iv) of the Act is misplaced – neither Section 24 nor Section 40 (which empowers the Committee to frame regulations) enables the Committee to efface their duties and create other entities for carrying out their functions - Even more importantly, such creations cannot do what Committees are not permitted to perform, i.e utilize Committees’ properties or monies through the device of trusts and societies, to engage in indirect commercial activity, which the trust was authorized and created to indulge – the ITAT clearly fell into error in holding that the Act permitted the Committee to enter into the agreement which enabled it to set up a joint venture for a hospital, on revenue sharing basis - such trust was ultra vires the Committee’s powers and beyond its statutory mandate – thus, the order of the Tribunal set aside and the denial of exemption u/s 12A by DIT(E) restored – Decided in favour of Revenue.

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• 2014 (3) TMI 849
  

  Validity of Tribunal’s order - Liquor contractors – Rejection of books of accounts - Whether the Tribunal and the Commissioner (Appeals) were justified in deleting the additions exorbitantly without stating any logic reason or arguments despite the fact that the application of Section 145(2) of the Act was not disputed – Held that:- The Tribunal has not recorded any finding of fact and no reasons are assigned as to why the Tribunal does not agree with the finding recorded by the AO or CIT (Appeals) as the case may be - In an order of affirmation, repetition of the reasons elaborately may not be necessary but even then the arguments advanced/points urged deserves to be dealt with.

  Reasons for affirmation have to be indicated, though in appropriate cases they may be briefly stated - Recording of reasons is part of fair procedure and reasons are harbinger between the mind of the maker of the decision in the controversy and the decision or conclusion arrived at and they always substitute subjectivity with objectivity - the judgment of the ITAT being the stereo typed, nonspeaking, unreasoned, arbitrary and whimsical, and there is no option except to remand the matter back to the ITAT to re-visit the issue afresh de-novo - All the orders passed by the ITAT, wherein appeals (Schedule-A) have been filed either by the revenue or by the assessees cannot be sustained in the eyes of law and are set aside to be decided afresh and de-novo in accordance with law – Decided in favour of Revenue.

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• 2014 (3) TMI 848
  

  Validity of adjustment made by the TPO – Need for remitting back in case of no other comparable company - Held that:- Assessee contended that some justification that the matter was referred to the TPO u/s 92CA of the Act and based on the findings of TPO, a draft assessment was made which the assessee challenged before the DRP u/s 144C of the Act - the TPO had taken MALCO as a comparable unit. DRP has also accepted that MALCO was a comparable unit - because there is no other comparable company, there was no necessity of remanding the matter - the contention made by the assessee must prevail - Whether there was any other comparable unit or any other method, might be a question to be considered by the TPO once the matter is remanded to him. It was not a proper exercise of discretion on the part of the learned Tribunal to have given a quietus to the matter after deleting the additions.

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• 2014 (3) TMI 847
  

  Disallowance of interest expenditure u/s 14A of the Act – Dividend income received – Held that:- Both the authorities have correctly approached the issue in as much as the record clearly had reflected from the balance sheet of the assessee-company that the interest free funds available was much larger to the extent of Rs. 84,45,567 lakhs as compared to the investment which was only Rs. 22.707 lakhs - Both the authorities have also noted faultlessly that the dividend income which was earned out of the investments made in the earlier years and there was no investment made in the year under consideration – Relying upon CIT v. Gujarat State Fertilizers & Chemicals Ltd. [2013 (7) TMI 701 - GUJARAT HIGH COURT] – no substantial question of law arises for consideration – Decided against Revenue.

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• 2014 (3) TMI 846
  

  Revisional powers u/s 263 of the Act - Netting and set off of interest towards interest paid - Whether the assessee is entitled for netting of interest by setting off of interest earned towards interest paid – deposits made by the assessee were made due to compulsion for procuring import licence and letter of credit - Held that:- Revenue rightly contended that the Tribunal committed grave error of law in directing the AO to allow netting of interest and grant set off of interest earned towards interest paid without verifying whether the deposits made by the assessee were made due to compulsion for procuring import licence and letter of credit and that the assessee had borrowed the amount from the bank on interest.

  The assessee did not place any material on record to show that the fixed deposits were made due to compulsion for procuring import licence and letter of credit and for that purpose the assessee had borrowed the amount from the bank on interest - the jurisdictional Commissioner of Income Tax shall examine the case/record if he deems fit and proper and in exercise of his revisional powers u/s 263 of the IT Act – the Commissioner shall examine whether the assessee is entitled for setting-off of interest earned towards interest paid – Decided in favour of Revenue.

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• 2014 (3) TMI 845
  

  Deletion made on account of difference in final accounts – Held that:- CIT(A) was of the view that the AO has gone totally by the provisional account and added the differences to the income. Since the account has been audited u/s 44AB - the assessee had filed two sets of final accounts before the AO - one of the sets was audited statement of accounts - the CIT(A) has very correctly considered the audited statement of account – thus, there is no infirmity in the findings of the CIT(A) – Decided against Revenue.

  Addition made on account of difference in balance of creditors -Difference in purchase and sales Held that:- Revenue contended that the CIT(A) has admitted certain evidences which were in violation of Rule 46A since these details were never filed before the AO - the details ought to have been filed before the AO – thus, the matter is remitted back to the AO – Decided in favour of Revenue.

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• 2014 (3) TMI 844
  

  Stay of outstanding demand – Disallowance of broken period interest – Held that:- Assessee contended that already in his own case for the previous years, stay has been granted - Relying upon American Express International Banking Corporation vs. CIT [2002 (9) TMI 96 - BOMBAY High Court] - in A.Y. 2002-03 a similar disallowance was made by the AO on account of broken period interest which was deleted by the CIT(A) and the department did not prefer any appeal against the order of ld. CIT(A) for A.Y. 2002-03 on this issue - the assessee thus has a good prima facie case to succeed in its appeal on the main issue of broken period interest and once it is decided in favour of the assessee, it will result in refund of tax for the year under consideration instead of the present outstanding demand - the balance of convenience lies in favour of the assessee and it is a fit case to stay the outstanding demand as sought by the assessee – thus, the outstanding demand stayed till the disposal of appeal – Decided in favour of Assessee.

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• 2014 (3) TMI 843
  

  Rectification of order – Bar of limitation - Whether the orders u/s. 201(1) and 201(lA) passed by the AO were barred by limitation – Held that:- The Tribunal observed that the order passed for the A.Ys. 2002-03 and 2003-04 is within the time limit, it is incumbent upon the Tribunal to remit the issue back to the CIT(A) to decide the same on merit with reference to the issue of TDS deduction - As the Tribunal failed to do so, it is fair to correct the error committed by the Tribunal and remit the issue back to the file of the CIT(A) to decide the issue raised by the assessee.

  The powers of the Tribunal are co-extensive with the powers of the AO and that of the first appellate authority and are, in fact, wider powers than those authorities, subject to the limitation that the Tribunal does not have the power to enhance the assessment which power has been specifically conferred upon the Commissioner (Appeals) u/s 251(1)(a) of the Act – Relying upon CIT v. Mahalaxmi Textile Mills Ltd. [1967 (5) TMI 4 - SUPREME Court] - the doctrine of incidental or implied power has been recognized for the exercise of powers by the Appellate Tribunal - On the same logic it can be said that the Tribunals which has wide powers in respect of the subject-matter of an appeal before it, can decide any question which is material to the subject matter even though it was not raised - Where particular issue has been omitted to be considered or has not been adjudicated properly or where perverse findings have been recorded in total disregard of the material on record, the Tribunal is competent enough to set aside the order of the lower appellate authority to that extent, although no specific ground is taken for that purpose by the concerned party.

  Whether a mistake can be pointed out on the part of ITAT even when the assessee did not seek any relief from the Tribunal – Held that:- The Tribunal while reversing the order of Commissioner (Appeals) on the point of validity of notice u/s 148, should have also directed the Commissioner (Appeals) to decide the other grounds on merits - The omission to do so i.e., not restoring the matter to the file of Commissioner (Appeals) and not issuing direction for adjudicating the grounds on merit, therefore, amounted to be a mistake on the part of the Tribunal – thus, the CIT(A) is directed to decide the appeals relating to A.Ys. 2002-03 and 2003-04 on merit of the issue raised by the assessee – Decided partly in favour of Assessee.

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• 2014 (3) TMI 842
  

  Exemption u/s 54EC of the Act – Investment in NHAI bonds - Whether the investment of ₹ 45 lacs was made within six months from the date of the transfer of the "Long Term Capital Asset" so as to qualify for the exemption u/s.54EC of the Act and whether the word "month" refers in this section a period of 30 days or it refers to the months only – Held that:- The decision in Munnalal Shri Kishan Mainpuri [1987 (3) TMI 81 - ALLAHABAD High Court] followed - there is nothing in the context of section 256(2) to warrant the conclusion that the word 'month' in it refers to a period of 30 days, therefore, refers to six months in Section 256(2) is to six calendar months and not 180 days - in the absence of any definition of the word ' month' in The Act, the definition of General Clauses Act 1897 shall be applicable and by doing so there is no attempt on our part to interpret the language of Sec. 54EC - what to say a liberal or literal interpretation - the Legislature has in its wisdom has chosen to use the word ' month' - the word 'month' to be read within the recognized ways of interpretation.

  There is no dispute about the investment which had actually been made by the assessee - The investment had been made in the month of December, 2008 - alleged to be few days late from the date of transfer in the month of June, 2008 - Once the purpose of the introduction of the section was served by making the investment in the specified assets then that purpose has to be kept in mind while granting incentive - the investment in question qualifies for the deduction U/s 54EC – Decided in favour of Assessee.

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• 2014 (3) TMI 841
  

  Acquittal of accused - offences under Sections 23 and 29 of the NDPS Act. - appellant submitted that the High Court grossly erred in coming to the conclusion that in the absence of proof that the Ganja allegedly seized from the custody of the respondent is of foreign origin, Section 23 of the NDPS Act is not attracted. - construction of Section 23 of the NDPS Act - Held that:- the expression “tranships” occurring therein must necessarily be understood as suggested by the learned counsel for the respondent.

  It can be seen from the language of the Section 9(1) that the Central Government is authorized to make rules which may permit and regulate various activities such as cultivation, gathering, production, possession, sale, transport, inter state import or export of various substances like coca leaves, poppy straw, opium poppy and opium derivatives etc., while the Parliament used the expression transport in the context of inter-state import or export of such material in sub- Section 1(a)(vi), in the context of importing to India and export out of India, Parliament employed the expression transhipment in Section 9(i)(a)(vii).

  Therefore, the High Court rightly concluded that the conviction of the respondent under Section 23 of the NDPS Act cannot be sustained. - Decided against the revenue.

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• 2014 (3) TMI 840
  

  Recovery of Duty drawback - failure to produce bank realisation certificates evidencing the realisation of export proceeds within the period stipulated - Rule 16A of the Drawback Rules, 1995 - Held that:- The petitioner had moved the Reserve Bank of India for granting extension of time to realise the payments of export proceeds. From the order of the Revisional Authority, it appears that the Reserve Bank had initially allowed the extension of time for realisation of the proceeds until 13 June 2013. Subsequently, on 5 March 2014 the Reserve Bank extended the time for receipt of the export proceeds until 31 March 2014 - The case of the petitioner, as set up in the writ petition, is that the petitioner has in fact realised the sale proceeds.

  Matter remanded back to the Revisional Authority to verify the documentary evidence which has been relied upon by the petitioner for the purposes of establishing the realisation of the export proceeds within the extended period of time as granted by the Reserve Bank of India in respect of the shipping bills covered by the duty drawback which has been received. - Decided partly in favor of assessee.

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