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Showing 41 to 60 of 1047 Records
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2011 (1) TMI 1560
Issues Involved:
1. Judgment on admission based on ledger accounts.
2. Discrepancies in the plaintiff's petition.
3. Defendant's denial of admission and quality of supplies.
4. Application of Order XII Rule 6 of CPC.
Summary:
1. Judgment on Admission Based on Ledger Accounts:
The plaintiff applied for judgment on admission primarily based on ledger accounts for the period of April 1, 2009, to July 24, 2009, acknowledged by the defendant on August 12, 2009. The plaintiff claimed a sum of Rs. 1,55,14,191.66, with Rs. 1,44,81,432.66 admitted by the defendant in the ledger accounts and the remaining sum based on dishonored cheques issued by the defendant.
2. Discrepancies in the Plaintiff's Petition:
The defendant pointed out several anomalies in the plaintiff's petition, such as discrepancies in the purchase order quantities and the total amount claimed. The petition mentioned a total billed amount of Rs. 2,11,97,441/- with payments of Rs. 56,83,250/- made by the defendant, leaving a balance of Rs. 1,55,14,191.66, which was inexplicable as neither the billed amount nor the paid amount reflected any fraction of a rupee.
3. Defendant's Denial of Admission and Quality of Supplies:
The defendant denied the admission of liability, claiming the supplies were sub-standard and not according to specifications. The defendant argued that the ledger accounts were maintained in the usual course of business and could not be construed as an admission of liability u/s Order XII Rule 6 of CPC. The defendant also denied acknowledging the dues or certifying the balance as alleged by the plaintiff.
4. Application of Order XII Rule 6 of CPC:
The court examined the scope of Order XII Rule 6 of CPC, which allows for judgment based on clear, unequivocal, and unambiguous admissions. The court found that the defendant's affixation of its rubber-stamp on the ledger accounts and the issuance of cheques constituted an admission. The defendant's bald assertions of defective supplies and lack of consideration for the cheques were insufficient to discredit the admission. The court emphasized that the rule is intended to sift through unworthy defenses and expedite the judicial process.
Conclusion:
GA No. 1264 of 2010 succeeded, resulting in a decree in favor of the plaintiff for Rs. 1,55,14,191/- with interest at 9% per annum from August 12, 2009, until payment. CS No. 2 of 2010 was disposed of without any order as to costs, and the defendant's undertaking continued until full payment was made to the plaintiff.
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2011 (1) TMI 1559
Issues Involved:
The judgment involves issues related to disallowance of interest on advances for harvesting and transport of sugarcane, disallowance of expenses for inserting greetings to political functionaries, disallowance of cane development expenses, disallowance of general meeting expenses, disallowance of telephone expenses, disallowance of vehicle expenses, and disallowance of advertisement expenses.
Disallowance of Interest on Advances for Harvesting and Transport of Sugarcane:
The appellant had advanced significant amounts to harvesting and transport contractors without charging any interest. The Commissioner of Income-tax (Appeals) upheld the disallowance of interest, stating that the advances were not made for business exigencies. However, the Tribunal referred to a judgment by the Bombay High Court and ruled in favor of the assessee, stating that the advances were made to meet the business interests of the assessee, ensuring timely services during the crushing season. Consequently, the order of the Commissioner of Income-tax (Appeals) was set aside, and the addition was directed to be deleted.
Disallowance of Expenses for Inserting Greetings to Political Functionaries:
A disallowance of expenses incurred for inserting greetings to political functionaries was made on the grounds that it did not reflect any business need and appeared to be for personal purposes. The Tribunal, after considering the submissions, declined to interfere with the disallowance, confirming the disallowance of the expenses.
Disallowance of Cane Development Expenses:
A disallowance of expenses on cane development was made as it was deemed not obligatory on the part of the assessee. The Tribunal referred to a Supreme Court judgment and directed the matter to be restored to the Assessing Officer for further examination in light of the Supreme Court's directions. The Tribunal held that the claim for deduction of cane development expenses should be decided after examining the relevant material and particulars.
Disallowance of General Meeting Expenses, Telephone Expenses, Vehicle Expenses, and Advertisement Expenses:
The Tribunal found that the issues related to disallowance of general meeting expenses, telephone expenses, vehicle expenses, and advertisement expenses were covered in favor of the assessee by previous decisions. Following the precedent set by the coordinate Bench and High Court judgments, the Tribunal set aside the orders of the Commissioner of Income-tax (Appeals) on these issues and directed the Assessing Officer to allow the claims of the assessee. As a result, these grounds of appeal were allowed.
Conclusion:
The Tribunal partly allowed the appeal of the assessee, ruling in favor of the assessee on various disallowances while confirming the disallowance of certain expenses.
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2011 (1) TMI 1558
Issues Involved:
1. Disallowance of selling, publicity, and medical expenses.
2. Disallowance under section 14A.
3. Deduction under section 35(2AB) on various expenses.
4. Disallowance of long-term capital loss on assignment of unsecured loan.
5. Deduction under section 80HHC on various components.
6. Disallowance of software development expenditure.
7. Disallowance of garden expenses.
8. Disallowance under section 92B for international transactions.
9. Disallowance of club expenses.
10. Levy of interest under sections 234B and 234C.
Detailed Analysis:
1. Disallowance of Selling, Publicity, and Medical Expenses:
The Tribunal upheld the CIT(A)'s decision to delete the disallowance made by the Assessing Officer (AO) on selling, publicity, and medical expenses. The Tribunal noted that similar issues had been decided in favor of the assessee in earlier years, and the facts remained identical. The AO's disallowance was based on earlier years' orders, which had not been accepted by the Revenue. The Tribunal confirmed the CIT(A)'s decision to delete the disallowance, citing consistency with previous Tribunal decisions.
2. Disallowance under Section 14A:
The Tribunal upheld the CIT(A)'s decision to restrict the disallowance under section 14A to Rs. 1 lakh out of Rs. 30,54,041 made by the AO. The Tribunal noted that the assessee had not incurred any specific expenditure for earning exempt income (dividend). The CIT(A) had reasonably estimated the disallowance, and the Tribunal found no reason to interfere with this estimation.
3. Deduction under Section 35(2AB) on Various Expenses:
The Tribunal upheld the CIT(A)'s decision to allow weighted deduction under section 35(2AB) on security expenses, municipal tax, salary paid to Mr. Dutt, and building expenses. The Tribunal referred to its earlier decision in the assessee's own case, where similar expenses were allowed. The Tribunal found no reason to deviate from its previous ruling and confirmed the CIT(A)'s order.
4. Disallowance of Long-Term Capital Loss on Assignment of Unsecured Loan:
The Tribunal upheld the CIT(A)'s decision to allow the assessee's claim for long-term capital loss on the assignment of an unsecured loan. The Tribunal agreed with the CIT(A) that the loan was a capital asset within the meaning of section 2(14) of the Act. The Tribunal noted that the assignment of the loan was supported by a valuation report and was justified given the financial condition of the borrower (TGBL). The Tribunal confirmed the CIT(A)'s order allowing the long-term capital loss.
5. Deduction under Section 80HHC on Various Components:
The Tribunal addressed multiple sub-issues under section 80HHC:
- Excise Duty and Sales Tax: The Tribunal upheld the CIT(A)'s decision to exclude excise duty and sales tax from the total turnover for computing deduction under section 80HHC, citing the Supreme Court's decision in Lakshmi Machine Works.
- Foreign Exchange Gains: The Tribunal allowed the assessee's claim, following the jurisdictional High Court's decision in Amba Impex.
- Scrap Disposal, Insurance Receipts, etc.: The Tribunal set aside these issues to the AO for verification of nexus with export activities, following the Supreme Court's decision in K. Ravindranath Nair.
- Profit on Sale of DEPB: The Tribunal set aside the issue to the AO for fresh consideration in light of the amendment to section 28(iiid) and relevant case law.
- Export Trading Loss: The Tribunal upheld the CIT(A)'s decision to reduce export trading loss from export manufacturing profit, following the Supreme Court's decision in IPCA Laboratory Ltd.
- Interest Income: The Tribunal set aside the issue to the AO for verification of whether the interest income was business income or income from other sources, following the Bombay High Court's decision in Asian Star Co. Ltd.
- Processing Charges and Job Work Charges: The Tribunal set aside these issues to the AO for verification of their nexus with export activities.
6. Disallowance of Software Development Expenditure:
The Tribunal allowed the assessee's claim for software development expenditure as revenue expenditure. The Tribunal noted that the software was essential for the smooth running of the business and lacked enduring benefit, thus qualifying as revenue expenditure.
7. Disallowance of Garden Expenses:
The Tribunal upheld the CIT(A)'s decision to allow garden expenses, following its earlier decision in the assessee's own case. The Tribunal agreed that the expenses were incurred for maintaining a better environment in the factory, which was necessary for the business.
8. Disallowance under Section 92B for International Transactions:
The Tribunal upheld the CIT(A)'s decision to delete the addition made by the AO under section 92B. The Tribunal noted that the difference in the Arm's Length Price was less than 5% of the price taken by the assessee, and the CIT(A) had followed the CBDT Circular correctly.
9. Disallowance of Club Expenses:
The Tribunal upheld the CIT(A)'s decision to allow club expenses, following the jurisdictional High Court's decision in Gujarat State Export Corporation Ltd. The Tribunal agreed that the expenses were incurred for business promotion and maintaining business contacts.
10. Levy of Interest under Sections 234B and 234C:
The Tribunal directed the AO to recompute the interest under sections 234B and 234C, following its earlier decision in the assessee's own case. The Tribunal noted that interest should not be charged in respect of demand created due to retrospective amendments.
Conclusion:
The Tribunal's judgment comprehensively addressed various issues, largely upholding the CIT(A)'s decisions and providing detailed reasoning for each issue. The Tribunal's reliance on earlier decisions and relevant case law ensured consistency and adherence to judicial precedents.
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2011 (1) TMI 1557
Issues Involved:
1. Initial demand of bribe on 4th July 1989.
2. Subsequent demand of bribe on 7th July 1989.
3. Acceptance of bribe on 8th July 1989.
4. Reliability of witness testimonies.
5. Application of statutory presumption u/s 20 of the Prevention of Corruption Act, 1988.
Summary:
1. Initial Demand of Bribe on 4th July 1989:
The learned trial court acquitted the Respondent on the ground that the initial demand on 4th July 1989 was made by P.S. Saini, and the Respondent was at a distance on both occasions. The High Court found that the factum of initial demand was proved from the testimony of PW2, the Complainant, who stated that both Shri Saini and the Respondent asked him to pay the amount, threatening to seize his articles and harass him for six months if he did not comply.
2. Subsequent Demand of Bribe on 7th July 1989:
The trial court held that the demand made on telephone on 7th July 1989 was denied by the accused in his statement u/s 313 Cr. P.C., and the brother-in-law of the Complainant, who was present during the call, was not examined as a witness. The High Court found this reasoning erroneous, stating that the testimony of the Complainant regarding the telephone demand was credible and did not require corroboration from the brother-in-law, whose testimony would have been hearsay.
3. Acceptance of Bribe on 8th July 1989:
The trial court disbelieved the subsequent demand and acceptance on the ground that the Complainant turned hostile and PW3, the shadow witness, was a stock witness. The High Court noted that the testimony of a hostile witness is not entirely effaced and can be relied upon for parts that are credible. PW3's testimony, corroborated by scientific evidence and the testimony of PW4 and PW8, proved the demand and acceptance of the bribe. The money was recovered from the cot in the Respondent's drawing room, and the right-hand wash of the Respondent tested positive for phenolphthalein.
4. Reliability of Witness Testimonies:
The trial court found the testimony of PW3 unreliable due to his involvement in multiple CBI raids. The High Court disagreed, stating that such witnesses cannot be discredited solely for their repeated involvement in CBI cases. The testimony of PW3 was corroborated by other evidence, making it reliable.
5. Application of Statutory Presumption u/s 20 of the Prevention of Corruption Act, 1988:
The High Court emphasized that once demand and acceptance are proved, the statutory presumption u/s 20 arises, shifting the onus to the Respondent to rebut the presumption. The Respondent's defense that the money was earnest money for acting as an informer was not supported by evidence. The High Court held that the statutory presumption was not rebutted by the Respondent.
Conclusion:
The High Court found compelling reasons to interfere with the trial court's judgment, setting aside the acquittal. The Respondent was convicted for the offense punishable u/s 7 of the Prevention of Corruption Act, 1988.
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2011 (1) TMI 1556
Issues involved:
The issues involved in the judgment are:
1. Interpretation of deduction under Section 80HHC of the Act in relation to Section 80IB of the Act.
2. Application of Section 80IB(13) and Section 80IA(9) to Section 80HHC of the Act.
3. Entitlement to deduction of Doctor's Sponsorship Expenses under Explanation to Section 37(1) of the Act.
Interpretation of deduction under Section 80HHC:
The Tribunal erred in considering the appellant's entitlement to deduction under Section 80HHC of the Act on the total income after excluding the deduction available under Section 80IB of the Act. The Tribunal should have recognized that the appellant was entitled to deduction under Section 80HHC on the gross total income without reducing it by the deduction allowed under Section 80IB of the Act. The provisions of Section 80IB(13) read with Section 80IA(9) were found to have no application to Section 80HHC of the Act. The appellant is entitled to full deduction under Sections 80HHC and 80IB of the Act, subject to its gross total income.
Entitlement to deduction of Doctor's Sponsorship Expenses:
The Tribunal erred in denying the appellant the deduction of Doctor's Sponsorship Expenses based on the Explanation to Section 37(1) of the Act. However, the appellant decided not to press this issue due to the minimal tax effect involved.
Conclusion:
The High Court disposed of the appeal with a direction to the Tribunal to re-compute the deduction in accordance with the decision of the Court. No order was given as to costs.
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2011 (1) TMI 1555
Issues Involved:
The appeal involves the entitlement to deduction u/s.10B of the Act on exchange rate fluctuation and whether the gain on foreign exchange fluctuation is attributable to the assessee's export or external factors.
Entitlement to Deduction u/s.10B:
The appeal by the Revenue challenged the order of the Commissioner of Income-tax(Appeals) regarding the assessee's entitlement to deduction u/s.10B of the Act on exchange rate fluctuation. The CIT(A) allowed the deduction, noting that the issue was covered by a previous ITAT order in a similar case. The Tribunal upheld the CIT(A)'s decision based on the principle that exchange fluctuation gain is part of the receipt of sale proceeds converted into Indian rupee, following a precedent set by the Gujarat High Court. The Tribunal emphasized that the gain arose from the change in the rate of exchange after the export sale, resulting in the assessee receiving more sale proceeds and earning exchange fluctuation gain. The Tribunal dismissed the Revenue's appeal, citing the precedent established in the previous assessment year.
Judicial Precedent and Application:
The Tribunal referred to a previous ITAT order in a similar case involving the same assessee in the preceding assessment year, where the Department's appeal was dismissed. The Tribunal held that since the identical ground had already been decided in favor of the assessee in the previous year, the issue was covered against the Revenue. Consequently, the Tribunal dismissed the Revenue's appeal based on the precedent set by the earlier decision.
Conclusion:
Considering the precedent set in the previous assessment year and the Tribunal's decision in a similar case, the appeal was dismissed, affirming the assessee's entitlement to deduction u/s.10B on exchange rate fluctuation. The Revenue's appeal was therefore dismissed, and the order was pronounced in open court on 28th January 2011.
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2011 (1) TMI 1554
Issues Involved:
1. Disallowance of bad debts amounting to Rs. 7,75,000/-
2. Disallowance of depreciation on let out and residential property and addition of notional rent
3. Addition of expenditure incurred on repairs of building amounting to Rs. 15,18,344/-
4. Treating revenue expenditure as capital expenditure amounting to Rs. 68,859/-
Summary:
1. Disallowance of Bad Debts:
The assessee claimed a deduction for bad debts amounting to Rs. 7,75,000/- written off as an inter-corporate deposit (ICD) with M/s Pittie Cement Ltd. The AO disallowed the claim stating that the assessee is not in the business of money lending, hence the deduction u/s 36(1)(vii) is not allowable. The alternative claim u/s 37(1) was also rejected as the loan was not expended wholly and exclusively for business purposes. The CIT(A) upheld the AO's decision, noting that the assessee's primary business activities do not include money lending, and the ICDs were isolated transactions. The Tribunal confirmed the orders of the AO and CIT(A), deciding the issue against the assessee.
2. Disallowance of Depreciation and Addition of Notional Rent:
The AO disallowed depreciation of Rs. 3,46,528/- on let out and residential property and added notional rent of Rs. 1,54,688/-. The CIT(A) confirmed the disallowance and addition, stating that the assessee had shown rental income as income from house property and availed deductions u/s 24, making depreciation non-allowable. The Tribunal upheld the CIT(A)'s decision, noting that the issue of notional rent had been decided against the assessee in the previous assessment year and was not contested further.
3. Addition of Expenditure on Repairs of Building:
The assessee claimed an expenditure of Rs. 15,18,344/- for building repairs. The AO did not disallow this, but the CIT(A) proposed an enhancement, disallowing the expenditure as it was not clear whether it pertained to the office building or let out property. The Tribunal set aside the CIT(A)'s order and remanded the issue back to the AO for fresh verification and examination, directing the AO to provide a fair hearing to the assessee.
4. Treating Revenue Expenditure as Capital Expenditure:
The AO treated an expenditure of Rs. 68,859/- as capital expenditure, which included items like fire extinguishers, carpets, ceiling fans, and fabricator grills. The CIT(A) confirmed this disallowance. The Tribunal upheld the decision, agreeing that the expenditure was for acquiring capital assets and thus could not be allowed as revenue expenditure.
Conclusion:
The appeal was partly allowed, with the Tribunal confirming the disallowance of bad debts, depreciation, and capital expenditure treatment, while remanding the issue of building repairs back to the AO for further examination.
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2011 (1) TMI 1553
Issues involved: Appeal against deletion of addition u/s 41(1) for assessment year 2005-06.
The Department appealed against the deletion of an addition of Rs. 10,56,750 made on account of cessation of liability u/s 41(1) of the Income Tax Act for the assessment year 2005-06. The Assessing Officer added the amount as the liability was deemed to have ceased to exist since the creditor did not approach the assessee for payment. However, the ld. Commissioner of Income-tax (Appeals) deleted the addition, noting that the liability was carried forward from the previous assessment years and was consistently shown in the Balance-sheet. The Commissioner emphasized that without evidence of payment or cessation of the liability, invoking section 41(1) was unwarranted. The Tribunal concurred with the Commissioner's decision, highlighting that the mere absence of the creditor's address did not imply the cessation of the liability. Thus, the Tribunal upheld the deletion of the added amount and dismissed the Department's appeal.
In the appeal, the Department contended that the ld. CIT(A) erred in deleting the addition u/s 41(1) without proper consideration of the evidence. The Assessing Officer's basis for the addition was the belief that the liability had ceased to exist due to non-recovery by the creditor. Conversely, the ld. CIT(A) found that the liability had been consistently reflected in the Balance-sheet since 2001-02, indicating its ongoing existence. Citing a precedent from the Hon'ble Madras High Court, the ld. CIT(A) emphasized that without concrete proof of payment or cessation, the addition under section 41(1) was unjustified. The Tribunal supported this view, affirming that the liability's continuous presence in the Balance-sheet over several years negated the presumption of cessation. Consequently, the Tribunal upheld the ld. CIT(A)'s decision to delete the added amount, rejecting the Department's appeal.
The Department's appeal challenged the deletion of an addition u/s 41(1) for the assessment year 2005-06. The Assessing Officer added Rs. 10,56,750, asserting that the liability had ceased to exist as the creditor had not demanded payment. However, the ld. CIT(A) overturned this addition, noting that the liability had been carried forward from previous years and was consistently shown in the Balance-sheet. Relying on the absence of evidence indicating payment or cessation, the ld. CIT(A) deemed the addition unwarranted. The Tribunal concurred with this reasoning, emphasizing that the mere absence of the creditor's address did not prove the liability's cessation. Consequently, the Tribunal upheld the deletion of the added amount and dismissed the Department's appeal.
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2011 (1) TMI 1552
Issues involved:
The judgment deals with the issue of disclosure of information sought under RTI application and the applicability of Section 8(1)(h) of the Right to Information Act, 2005 in the context of impeding the prosecution of offenders.
Information sought by the Appellant:
The Appellant sought information regarding the letters or documents on which the competent authority had issued sanction for investigation under Section 6A of the DSPE Act, 1946.
Decision Notice:
The Central Information Commission considered the submissions made by the Appellant and the Respondent. The interpretation of the phrase "prosecution of offenders" under Section 8(1)(h) of the RTI Act, 2005 was discussed, emphasizing that prosecution concludes with the final judgment. The judgment highlighted the importance of context in interpreting statutes, citing relevant case law. It was noted that seeking information through RTI could impede the trial court's discretion and interfere with the prosecution process.
The judgment referred to a previous case where it was established that seeking information related to an ongoing prosecution through RTI could prejudice the trial court's decision-making process. It was emphasized that the Trial Court has the authority to decide on the disclosure of such information, and any action under RTI could impede the prosecution proceedings.
The judgment also cited another case where it was clarified that information related to evidence in an ongoing prosecution is under the control of the Trial Court, and seeking such information through RTI could interfere with the court's discretion, impeding the prosecution process. The only appropriate channel for seeking such information was deemed to be the Competent Court.
The judgment further referenced a Bombay High Court case to explain the stages involved in supplying documents to the accused during the investigation process. It was concluded that the completion of investigation does not exempt information from Section 8(1)(h) if its disclosure could impede the prosecution of offenders.
In the present case, as the matter was sub-judice and the prosecution proceedings were ongoing, the requested information, other than the RC numbers, was considered confidential and essential for prosecution. The FAA's decision to refuse disclosure under Section 8(1)(h) was upheld, noting that providing such information could impede the prosecution process. The judgment rejected the appeal and upheld the FAA's order with modifications.
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2011 (1) TMI 1551
Issues involved: Determination of compensation for acquired lands u/s Land Acquisition Act, 1894 based on auction sale transactions, proximity of sale transactions to acquired lands, appropriate deduction for competitive-hike in auction prices, and consideration of urban development potential of acquired lands.
Summary:
Issue 1: Compensation Determination based on Auction Sale Transactions
- The acquired lands in Betegeri village were valued for compensation based on auction sale transactions.
- Reference Court initially determined compensation at &8377; 2,17,372/- per acre using sale deed Exhibit P-2.
- High Court increased compensation to &8377; 4,42,000/- per acre based on different auction sale Exhibit P-19.
- Appellant challenged the reliance on Exhibit P-19 and the deduction for development costs.
Issue 2: Proximity of Sale Transactions to Acquired Lands
- The Reference Court and High Court differed in their choice of auction sale transaction for valuation.
- The Supreme Court emphasized the importance of considering proximity and size of the sold plots in determining market value.
- Court justified reliance on Exhibit P-2 due to its proximity to acquired lands compared to Exhibit P-19.
Issue 3: Appropriate Deduction for Competitive-Hike in Auction Prices
- Courts discussed the impact of competitive bidding in auction sales on determining market value.
- Auction sales were considered less reliable due to competitive factors affecting prices.
- A deduction of 20% was applied to the auction price to offset competitive-hike for fair market value determination.
Issue 4: Consideration of Urban Development Potential
- The acquired lands were within municipal limits with urban development potential.
- Court applied a 40% deduction for cost of development, considering the lands' access to infrastructural facilities.
- The Reference Court's 53% deduction and the High Court's 33% deduction were deemed inappropriate.
Conclusion:
- The Supreme Court partially allowed the appeals, reducing the compensation from &8377; 4,42,875/- to &8377; 295,500/- per acre.
- The decision considered the proximity of sale transactions, appropriate deductions, and urban development potential of the acquired lands.
- Respondents were entitled to statutory benefits as previously awarded.
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2011 (1) TMI 1550
Issues involved:
1. Depreciation rate on computer software
2. Exclusion of export incentives from eligible profits for deduction u/s 80IB
Depreciation rate on computer software:
The assessee appealed against the CIT(A)'s order regarding the depreciation rate on computer software, claiming it should be allowed at 60% instead of 25%. The AO disallowed depreciation of Rs. 11,67,646/- as the software was purchased for Rs. 17,82,248/- and allowed depreciation at 25%, following the AY 2004-05 order. The ITAT considered a similar issue in AY 2004-05 and allowed the assessee's claim for depreciation at 60% based on the actual use of the software for business purposes, treating it as an intangible asset. Consequently, the ITAT directed the AO to allow depreciation at 60% as claimed, citing the decision in the case of Amway India Enterprises Vs. Dy. Commissioner of Income tax. Therefore, the appeal was partly allowed on this ground.
Exclusion of export incentives for deduction u/s 80IB:
The second ground of appeal was related to the exclusion of export incentives, like DEPB, from eligible profits for computing deduction u/s 80IB. The counsel for the assessee acknowledged that this issue was decided against the assessee by the Hon'ble Supreme Court in the case of Liberty India vs. CIT (2009) 317 ITR 218. As the issue was already settled against the assessee by the Supreme Court's decision, ground No. 2 was dismissed. Consequently, the appeal was partly allowed on the first ground but dismissed on the second ground.
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2011 (1) TMI 1549
Issues involved:
The legality of the show-cause notice issued u/s 13(i) of FEMA for alleged contravention of export realization provisions.
Judgment Details:
Issue 1: Jurisdiction of show-cause notice
- The show-cause notice alleged contravention of Sections 7 & 8 of FEMA regarding export realization.
- The contravention period was during FERA's enforcement, not FEMA's.
- Section 49(3) of FEMA prohibits taking cognizance of FERA offences after two years from FEMA's commencement.
- Offences under FERA continue to be governed by FERA post-repeal.
- The show-cause notice issued after the two-year limit is illegal.
- Citing the Apex Court's interpretation of "cognizance" in a similar case.
- Referring to a Delhi High Court judgment on a similar issue.
- Concluding that the show-cause notice lacks jurisdiction and legality.
Conclusion:
- The writ petition is allowed, quashing the show-cause notice and related proceedings.
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2011 (1) TMI 1548
Issues involved:
The judgment deals with the issue of extending the time for deposit of non-judicial stamps for engrossing the sale certificate in a civil case.
Summary:
1. The Civil Revision Petition was filed by the judgment debtors against the order in E.A. No. 886 of 2008 in E.P. No. 1097 of 2005 in O.S. No. 65 of 2003 seeking permission to deposit the cost of Non-Judicial Stamps for preparation of the sale certificate.
2. The auction purchaser, who bought the property at an auction, failed to deposit the registration fees on Non-Judicial Stamps. The judgment debtors filed an application to set aside the sale under Order XXI, Rule 89 of the Code of Civil Procedure. The auction purchaser filed for confirmation of the sale, but did not deposit the required stamps. The sale was confirmed before the stamps were deposited, raising questions about the validity of the sale.
3. Respondents contended that the application for extension of time was not maintainable as the decree was already satisfied outside the Court.
4. The Principal Junior Civil Judge allowed the petition to extend the time for deposit of the non-judicial stamps.
5. The judgment debtors appealed against this order.
6. The main issue was whether the lower Court's order to extend the time for depositing non-judicial stamps was legal and sustainable.
7. The Court found that the auction purchaser failed to comply with mandatory provisions regarding depositing the sale consideration and stamps, leading to the sale being considered a nullity.
8. Referring to relevant legal provisions and past judgments, the Court emphasized the mandatory nature of deposit requirements and the lack of power to extend the time for deposit.
9. The Court directed the revision petitioners to deposit deducted amounts with interest, and ordered the return of the remaining deposit and the value of the non-judicial stamps to the auction purchaser.
10. The Civil Revision Petition was allowed with no order as to costs.
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2011 (1) TMI 1547
Issues involved: Appeal against conviction u/s 15 of the Narcotic Drugs & Psychotropic Substances Act, 1985; Non-examination of independent witness; Ownership of the car; Signature on memo; Broken seal; Conscious possession; Compliance with Section 50 of the Act; Preparation of Central Forensic Science Laboratory form; Number of samples drawn; Quantity of contraband attributed.
Non-examination of independent witness:
- Accused claimed non-corroboration by independent witness Kaur Singh.
- Court held non-examination of Kaur Singh not fatal for prosecution as no enmity or suggestion of false implication was proven.
- Relied on Gurdip Singh's case to support the decision.
Ownership of the car:
- Defense argued doubt on prosecution story due to shops near recovery place and car ownership.
- Court found testimony of owner Devinder Kumar credible, supporting prosecution's narrative.
- Proximity of shops did not make non-joining of shopkeepers fatal for prosecution.
Signature on memo:
- Defense raised doubt on appellant's knowledge of Gurmukhi script.
- Court noted appellant's lack of objection earlier, dismissing this submission.
Broken seal:
- Defense claimed misuse due to broken seal of Station House Officer.
- Court found the readable seal not casting doubt on prosecution, emphasizing lack of evidence to prove false implication.
Conscious possession:
- Defense argued lack of proof of conscious possession by the accused.
- Court cited Supreme Court ruling shifting onus to accused to disprove possession of contraband.
Compliance with Section 50 of the Act:
- Defense alleged non-compliance in offering search before Gazetted Officer.
- Court distinguished the case from Man Bahadur's case, stating it was not a personal search scenario.
Preparation of Central Forensic Science Laboratory form:
- Defense pointed out missing form preparation at the spot.
- Court dismissed the doubt, noting other circumstances in Kaku Singh's case and lack of specific cross-examination on this point.
Number of samples drawn:
- Discrepancy in the number of samples drawn highlighted by the defense.
- Court clarified the discrepancy, emphasizing the deposition of two samples and two bags with the witness.
Quantity of contraband attributed:
- Defense argued against attributing full quantity to the accused.
- Court rejected the argument, stating commercial quantity possession cannot be divided for convenience.
Conclusion:
- No grounds for interference found, trial court's decision affirmed.
- Appeal dismissed for lack of merit, judgment to be sent for compliance.
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2011 (1) TMI 1546
Issues involved: Criminal contempt petition for disobedience of directions issued by Hon'ble Apex Court and order passed by Division Bench of Allahabad High Court.
Contempt of Court Act definitions: Civil contempt as willful disobedience to court orders, and criminal contempt as acts scandalizing the court, interfering with judicial proceedings, or obstructing justice.
Petitioner's grievance: Opposite party arrested petitioner in violation of court orders, detaining them illegally without following proper procedures.
Legal arguments: Notification making Section 506 IPC cognizable and non-bailable was challenged as illegal, as it was issued without proper authority to amend the Criminal Procedure Code.
Opposing views: State argued notification was valid, empowering State Government to make necessary changes for smooth administration, as upheld by Full Bench of Allahabad High Court.
Judgment: Full Bench decision prevails over Division Bench decision, no specific pleading of flouting Apex Court's directions, no grounds for contempt action against opposite party.
Conclusion: Failure to comply with court orders may lead to departmental action, but not necessarily contempt of court. Procedure for initiating contempt proceedings outlined in Contempt of Courts Act, no grounds for suo-moto action in this case, contempt petition dismissed.
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2011 (1) TMI 1545
Issues involved: Appeals by Revenue against deletion of penalty u/s.271C by CIT(A) for asstt. years 1997-98 to 1999-2000 based on limitation grounds.
Summary:
Issue 1: Penalty u/s.271C imposition based on failure to deduct tax at source
The Tribunal considered the appeals and cross objections arising from the CIT(A) orders deleting penalties u/s.271C for the years 1997-98 to 1999-2000. The penalties were imposed by the AO following a survey action u/s.133A and subsequent orders u/s. 201(1) and 201(1A). The assessee argued that the initiation of proceedings was beyond the 6-year limit. The Tribunal had previously observed the same in a related case. The CIT(A) deleted the penalties based on the Tribunal's decision to quash the orders u/s.201(1) and 201(1A) for those years, leading to the Revenue's appeals.
Issue 2: Legal interpretation of penalty u/s.271C
The Tribunal analyzed the provisions of sec. 271C, which penalizes failure to deduct tax at source. It noted that the penalty is imposed when there is a failure to deduct or pay tax, with the penalty amount equal to the tax not deducted or paid. The liability u/s.201(1) is a prerequisite for imposing the penalty u/s.271C. If the order creating the liability u/s.201(1) is set aside due to limitation, the assessee is not in default, and thus, no penalty u/s.271C can be imposed as there is no basis for it.
Issue 3: Effect of Tribunal's order on penalty imposition
The Tribunal observed that its order setting aside the u/s.201(1) and 201(1A) orders due to limitation meant the assessee was not in default regarding tax deduction or payment. Consequently, the imposition of penalty u/s.271C was unwarranted. The CIT(A) canceled the penalties based on this reasoning without delving into the merits of the case, leading to the upholding of the impugned order.
The cross objections by the assessee were deemed academic due to the decision on the Revenue's appeals. Ultimately, the appeals by the Revenue were dismissed, and the cross objections by the assessee were also dismissed as they had become infructuous.
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2011 (1) TMI 1544
Issues Involved:
1. Addition of Rs. 61.65 lakhs as undisclosed income.
2. Validity of retraction from the statement made u/s 132(4) of the Act.
3. Justification of the sources of cash payments for land purchase.
4. Chargeability of interest u/s 234A, 234B, and 234C of the Act.
Summary:
1. Addition of Rs. 61.65 lakhs as undisclosed income:
The primary grievance in this appeal is against the addition of Rs. 61.65 lakhs made by the Assessing Officer (AO) as undisclosed income based on a statement recorded u/s 132(4) of the Income Tax Act, 1961 during a search action. The AO noted that the assessee admitted to making cash payments of Rs. 70,11,000/- from undisclosed sources for the purchase of land, which was not declared in the return filed u/s 153A of the Act. The Commissioner of Income-tax (Appeals) [CIT(A)] upheld this addition, leading to the present appeal.
2. Validity of retraction from the statement made u/s 132(4) of the Act:
The assessee contended that the admission made during the search was due to peculiar circumstances, including ill-health and the demise of his wife, and that the cash payments were from known sources. However, the AO and CIT(A) rejected this retraction, considering it an afterthought to avoid taxes. The Tribunal found that the original admission was detailed and specific, and the subsequent retraction lacked credibility and supporting evidence.
3. Justification of the sources of cash payments for land purchase:
The assessee claimed that the cash payments were from withdrawals from M/s Luthra Construction and cash balance with his wife. However, the Tribunal noted that there was a significant gap between the availability of funds and the actual payments, and the assessee failed to provide concrete evidence linking the withdrawals to the payments. The CIT(A) also highlighted that the firm and the assessee are separate legal entities, and the transactions were not satisfactorily explained.
4. Chargeability of interest u/s 234A, 234B, and 234C of the Act:
The issue of interest chargeability u/s 234A, 234B, and 234C of the Act was deemed consequential and required no separate adjudication.
Conclusion:
The Tribunal upheld the addition of Rs. 61.65 lakhs as undisclosed income, affirming the CIT(A)'s order. The appeal of the assessee was dismissed. The judgment was pronounced in the open Court on January 31, 2011.
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2011 (1) TMI 1543
The Delhi High Court convicted the respondent for offenses under Section 7 of the Prevention of Corruption Act, 1988. The sentencing hearing is scheduled for 12th January, 2011, and the respondent must be present in court on that date.
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2011 (1) TMI 1542
Issues Involved:
1. Deduction u/s.80IB(10) on sale proceeds of stilt parking.
2. Allocation of expenses against income from Saki Naka project.
Issue 1: Deduction u/s.80IB(10) on sale proceeds of stilt parking:
The appeal by the revenue challenged the direction of the CIT(A) to allow deduction u/s.80IB(10) on the sale proceeds of stilt parking. The AO contended that the entire consideration received for stilt parking is not eligible for deduction u/s.80IB(10) as it is not considered part of residential premises. However, the CIT(A) held that stilt parking is integral to the housing project and approved by the competent authority, thus qualifying for the deduction. The Tribunal, based on previous rulings, upheld the CIT(A)'s decision, emphasizing that stilt parking is essential for residents and falls within the purview of sec.80-IB(10).
Issue 2: Allocation of expenses against income from Saki Naka project:
The second issue pertained to the allocation of expenses against income from the Saki Naka project. The AO observed that the assessee had debited expenses against income from the Saki Naka project, which is fully taxable, leading to a discrepancy in the allocation of expenses. However, the CIT(A) found that the AO's reallocation of expenses lacked concrete evidence and justification. The CIT(A) ruled in favor of the appellant, stating that separate accounts were maintained for each project, and the AO failed to identify any defects in the accounts. The Tribunal upheld the CIT(A)'s decision, emphasizing the separate maintenance of accounts and lack of evidence supporting the AO's reallocation of expenses.
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2011 (1) TMI 1541
Issues involved: Appeal against deletion of depreciation claimed on windmill for assessment year 2007-08 u/s 143(3) of the Income-tax Act, 1961.
The Revenue filed an appeal against the order of the Commissioner(Appeals)-III, Chennai, deleting the disallowance of depreciation claimed on a windmill amounting to &8377; 3,87,06,802. The Commissioner(Appeals) relied on a previous order of the ITAT in the assessee's case for the assessment year 2006-07. The Revenue contended that the Tribunal's order had not been accepted and was under appeal before the High Court u/s 260A of the Income-tax Act, 1961. However, as of now, the High Court has not reversed the Tribunal's order, making it binding on the Commissioner(Appeals) and the co-ordinate Bench.
In the absence of any reversal by the High Court, the Tribunal found that the appeal filed by the Revenue was not sustainable. The Tribunal pronounced the order on January 13, 2011, in Chennai.
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