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2013 (10) TMI 1561
Trade Union Registration obtained by fraud or mistake - Minimum Number of Workers required for Registration - Powers of Registrar to Cancel Registration - The petitioner received a certificate of registration under Trade Union Regulations, 1927.Soon thereafter, 88 workers of the 4th respondent submitted individual letters informing the 3rd respondent that they were not the members of the Union, their I.D. Cards and other documents were obtained without their knowledge and were used for the purpose of registration of the Trade Union. The 4th respondent submitted representations to the Management that they had no knowledge of the registration of the Union by the so called office bearers, which needed urgent enquiry to ascertain the real facts; and a proper enquiry should be made regarding membership of the petitioner Union, and their registration cancelled.
HELD THAT:- The petitioner's Certificate of Registration was cancelled, is set aside. Sec.9A of the Act relates to the minimum requirement of membership of a Trade Union and, thereunder, a registered Trade Union of workmen shall at all times continue to have not less than ten per cent, or one hundred of the workmen. Sec.10 of the Act relates to cancellation of registration and, thereunder, a certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar. As the petitioner Union was neither put on notice nor were they informed of the proposal to cancel their registration under Sect.10(b) of the Act, the requirement of affording the petitioner Union a reasonable opportunity to show cause, as stipulated under the proviso to Section 10 of the Act, cannot be said to have been complied with.
Sec.4(1) of the Act obligated the Registrar to ascertain whether the Petitioner-Union had the minimum required strength of 10% of the workmen, or 100 workers, in the establishment of the 4th respondent on the date of its registration. He ought to have verified whether the 88 workmen, who submitted a representation to him, were never the member of the Petitioner Union, and registration of the Union was obtained by fraud; or they had disassociated themselves from the petitioner Union between the date of the submission of the application and the date of registration of the Union.
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2013 (10) TMI 1560
Issues involved: Petitioners branded as wilful defaulters without following RBI Master Circular procedure.
Summary:
The petitioners were informed of the bank's intention to label them as wilful defaulters and were given an opportunity to represent their case before the Grievance Redressal Committee. The petitioners questioned the basis of the decision and did not avail themselves of the opportunities to be represented before the Committee. The Committee ultimately rejected the petitioners' representation.
The petitioners argued that the initial process did not adhere to the Master Circular, rendering subsequent steps irrelevant. The bank contended that the petitioners did not address the charges of wilful default but only questioned the procedure followed by the bank.
The Master Circular distinguishes between a defaulter and a wilful defaulter, emphasizing the need for bad motive or fraudulent conduct for the latter classification. Being labeled a wilful defaulter has serious consequences, leading to commercial ostracisation.
The Court found that there was no evidence of wilful default by the petitioners and that the decision-making process did not comply with the Master Circular requirements. The Grievance Redressal Committee did not have sufficient evidence to classify the petitioners as wilful defaulters.
The Court allowed the petition, setting aside the decisions of the Grievance Redressal Committee and the screening committee of the bank. The bank was directed to start the process afresh in accordance with the law and pay costs to the petitioners. Certified copies of the order were to be provided to the parties upon request.
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2013 (10) TMI 1559
Issues involved: Petition seeking direction for consideration of representation and mandamus for attested copy of assignment agreement.
Summary:
The petitioner approached the Karnataka High Court seeking a direction for respondent No.1 to consider a representation dated 27.04.2011 and to provide an attested copy of an alleged assignment agreement dated 03.05.2011. The petitioner had availed loans from respondent No.1-Bank, and proceedings were initiated before the Debt Recovery Tribunal resulting in a recovery certificate being granted. Respondent No.2 is the assignee of the debt from respondent No.1. The petitioner's prayers in the petition were directed towards respondent No.1, but considering the assignment to respondent No.2, the issues needed to be evaluated in that context. The petitioner had produced communications exchanged with respondent No.2, indicating a need for negotiation with them. The court noted that the prayers in the petition had become irrelevant due to the assignment to respondent No.2.
The petitioner requested time to pay the agreed amount to respondent No.2 for settlement, but respondent No.2 highlighted the delay in payment despite previous indications and requests for extension. The court observed that since the petitioner had not shown good faith by making any payments as per the communications, there was no basis for extending the time for payment. However, the court acknowledged the possibility of settlement based on correspondences between the parties and allowed the petitioner to make substantial payments to respondent No.2 and request for additional time to pay the remaining balance, subject to respondent No.2's consideration.
The petition was disposed of with liberty granted to the petitioner to make substantial payments to respondent No.2 and request for further time to pay the balance amount, leaving the decision on such representation to respondent No.2. Consequently, the application filed in IA.No.1/2013 was also disposed of in light of the main petition's disposal.
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2013 (10) TMI 1558
The High Court of Delhi disposed of the writ petition, treating it as a representation to be handled by authorities within three weeks without expressing any opinion on the merits of the claim.
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2013 (10) TMI 1557
Issues Involved:
1. Whether the suit is barred by limitation.
2. Whether the provisions of Order 7 Rule 11 CPC are applicable.
3. Whether the plaintiff has knowledge of the alleged fraud and the right to sue.
Summary:
Issue 1: Whether the suit is barred by limitation.
The defendant No. 4 filed an application u/O 7 R 11 CPC seeking dismissal of the suit as barred by law, contending that the suit is hit by Article 56 of Schedule 1 read with Section 3 of the Limitation Act. The plaintiff sought a decree of declaration, possession, and permanent injunction regarding a flat, alleging fraud by defendant No. 2 and collusion with other defendants. The court noted that the plaintiff had knowledge of the alleged fraud and the infringement of her rights by 1993-1996, as evidenced by various communications and legal notices sent to DDA. The court held that the suit, filed in 2011, is barred by limitation u/s 3 of the Limitation Act, as the plaintiff was obliged to take steps within three years from the date when the right to sue first accrued.
Issue 2: Whether the provisions of Order 7 Rule 11 CPC are applicable.
The court emphasized that for the purpose of considering an application under Order 7 Rule 11 CPC, only the averments in the plaint and the accompanying documents are to be looked at. The court referred to judgments like Khatri Hotels Private Ltd. & Anr. Vs. Union of India and Anr., and Hardesh Ores Pvt. Ltd. Vs. M/s. Hede and Company, which clarified that the limitation period begins from the date when the right to sue first accrues. The court concluded that the plaintiff's suit is barred by law as per Order 7 Rule 11(d) CPC.
Issue 3: Whether the plaintiff has knowledge of the alleged fraud and the right to sue.
The court examined the plaint and accompanying documents, which showed that the plaintiff had knowledge of the alleged fraud and the actions of defendants No. 2 and 3 by 1993-1996. The court noted that the plaintiff was aware of the possession and sale of the flat by defendant No. 2 to defendant No. 3 and the subsequent application for conversion to freehold. The court held that the plaintiff's right to sue first accrued during this period, and the suit filed in 2011 is hopelessly barred by limitation.
Conclusion:
The court allowed the application of defendant No. 4 and dismissed the suit as barred by limitation. The court also noted that the plaintiff's attempt to claim fraud and draft the plaint in a manner to camouflage the real cause of action was a misuse of law, rendering the plaint vexatious and meritless. All other pending applications were disposed of accordingly.
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2013 (10) TMI 1556
Issues Involved:
1. Non-compliance of Section 3(3) of the Kerala Anti-Social Activities (Prevention) Act, 2007.
2. Non-furnishing of vital documents to the detenu.
3. Delay in execution of the detention order.
4. Gravity of offences justifying preventive detention.
Summary:
Non-compliance of Section 3(3) of the Act:
The petitioner contended that the 2nd respondent did not report the matter to the Government forthwith as required u/s 3(3) of the Act. However, it was established that the report was made on 29/01/2013, the same date as the issuance of the detention order, thus complying with the statutory requirement. The court found no merit in the contention of non-compliance.
Non-furnishing of Vital Documents:
The petitioner argued that the detenu was not provided with the report dated 08/01/2013, which was crucial for making an effective representation u/s Article 22(5) of the Constitution. The court, referencing the Apex Court's principles, concluded that the report was merely for narration of facts and not grounds for detention. Therefore, its non-supply did not prejudice the detenu's right to make an effective representation.
Delay in Execution of the Detention Order:
The petitioner claimed that the delay in executing the detention order (issued on 29/01/2013 and executed on 03/05/2013) rendered the detention illegal. The court examined the explanation provided by the 3rd respondent, which detailed efforts to arrest the detenu who evaded arrest by escaping through the river. The court found the explanation satisfactory and held that the delay was justified and did not invalidate the detention order.
Gravity of Offences Justifying Preventive Detention:
The petitioner contended that the offences were not grave enough to justify preventive detention and that the detaining authority wrongly proceeded as though the detenu was the sole accused. The court clarified that the offences charged against the detenu, including depredation of the environment, were covered under the definition of 'goonda' u/s 2(j) and 'depredator of environment' u/s 2(g) of the Act. The court concluded that the offences were indeed grave, justifying the preventive detention.
Conclusion:
The writ petition was dismissed as the court found no substance in any of the contentions raised by the petitioner.
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2013 (10) TMI 1555
Issues involved: Appeal against order u/s 263 of the Income Tax Act for assessment year 2008-09.
Summary:
The appellant, an HUF, filed its return for the assessment year admitting total income. The Assessing Officer accepted the net capital gains working and completed the assessment. Subsequently, the Commissioner of Income Tax issued a notice u/s 263, stating the assessment order was erroneous and prejudicial to the interest of Revenue regarding the claim of exemption u/s 54F. The appellant did not appear for the hearing, and the CIT directed the AO to pass a fresh order. The appellant appealed to the Tribunal, arguing that the order u/s 263 was bad in law as the father of the HUF was not assessed to tax. The Tribunal set aside the CIT's order, remitting the matter back for fresh consideration, emphasizing the need for the appellant to provide an explanation. The decision in Addl.CIT v. Durgamma was also to be considered.
In conclusion, the appeal of the assessee was allowed for statistical purposes.
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2013 (10) TMI 1554
Issues involved:
The issues involved in the judgment are related to the demand and levy of cost recovery charges, computation of charges, adjustment of overpayment, consideration of applications for renewal of license, and the deployment of customs officials.
Demand and Levy of Cost Recovery Charges:
The petitioner sought a writ for a declaration that the demand for cost recovery charges should only be for the days officials are deployed actually and rendering services, as opposed to a wholesale demand. The court passed an interim order allowing the collection of charges only for officials actually deployed for customs duty.
Computation and Adjustment of Charges:
The petitioner requested a writ to direct the respondent to compute and work out the cost recovery charges in accordance with specific documents and to adjust any overpayment against future demands. The court directed the respondent to recalculate the amount based on the actual deployment of officers and consider any excess payment made by the petitioner.
Consideration of Renewal Application:
The petitioner filed an application for renewal of a license, which was subject to the requirement of a bank guarantee and payment of cost recovery charges. The court ordered that the renewal application should be considered within one month, subject to the satisfaction of any liability by the petitioner.
Deployment of Customs Officials:
The court was presented with details of the deployment of customs officials over specific periods. The respondents agreed to recalculate the charges based on the actual deployment of officers and to place a fresh demand accordingly. The court directed the third respondent to reevaluate the amount and consider any excess payment made by the petitioner, with a final decision to be made within two months.
Conclusion:
The court disposed of both writ petitions, with directions for the recalculation of cost recovery charges, consideration of the renewal application, and adjustment of any excess payments. The liability, if any, was to be refixed after hearing the petitioner, with a timeline for compliance set by the court to ensure prompt resolution of the issues at hand.
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2013 (10) TMI 1553
Issues Involved:
1. Applicability of Section 11 of the Karnataka Value Added Tax Act, 2003.
2. Entitlement of the appellant-unit to benefits under Section 20(2) of the Act.
3. Compliance with Rule 130-A(1) of KVAT Rules, 2005.
4. Eligibility for refund of tax on inputs as per Section 20(2) read with Rule 130-A.
5. Grounds for remanding the case to the AA for examining the nexus between inputs purchased and the activities of the appellant-unit.
6. Final order.
Summary:
Issue 1: Applicability of Section 11 of the Act
The Tribunal determined that Section 20(2) of the Karnataka Value Added Tax Act, 2003 is a 'Stand Alone' provision independent of Section 11. The appellant-unit, engaged in Information Technology Enabled Services (ITES) and Software Development, falls outside the ambit of Section 11. The AA's invocation of Section 11(a)(3) to deny the refund claim was incorrect. Section 20(2) provides for refund of input tax to SEZ Units without the conditions stipulated in Section 11.
Issue 2: Entitlement to Benefits under Section 20(2)
The appellant-unit, recognized as a SEZ Unit by the Development Commissioner, is entitled to the benefits under Section 20(2) of the Act. The SEZ Act, 2005, which overrides other laws, supports this entitlement. The Tribunal emphasized that Section 20(2) does not require the SEZ Units to be engaged in activities involving 'goods' as output.
Issue 3: Compliance with Rule 130-A(1) of KVAT Rules
The appellant-unit satisfies the conditions under Rule 130-A(1)(b) and (c) of KVAT Rules, 2005. The unit is engaged in Software Development/Software Application Management and operates within the processing area of the SEZ. The Tribunal analyzed various expressions like 'manufacture', 'production', 'processing', etc., concluding that the appellant's activities fall within these definitions.
Issue 4: Eligibility for Refund of Tax on Inputs
The appellant-unit is eligible for a refund of tax paid on inputs used in its business activities. The Tribunal noted that the definition of 'input' under Section 2(19) of the Act includes goods used for any business purpose. The appellant's activities in Software Development/Software Application Management qualify for the refund under Section 20(2) read with Rule 130-A.
Issue 5: Grounds for Remanding the Case
The Tribunal remanded the case to the AA for the limited purpose of quantifying the refund amount. The appellant must provide a detailed statement of purchases and their purposes as required under Rule 130-A(3). The AA is to verify the nexus between the inputs purchased and the appellant's business activities before granting the refund.
Final Order
1. All thirty-one appeals are allowed.
2. The appellant-unit is eligible for a refund of tax paid on inputs used in its business activities as per Section 20(2) and Rule 130-A(1).
3. The impugned orders of the FAA are set aside.
4. The reassessment orders of the AA are set aside, and the matter is remitted to the AA for quantifying the refund amount.
5. The appellant is directed to submit the statement of purchases for the refund claim.
6. The Registrar of the Tribunal is directed to comply with Regulation 53(b) of Chapter IX of Karnataka Appellate Tribunal Regulations, 1979.
7. The Office is directed to send back the lower authorities' records within 15 days.
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2013 (10) TMI 1552
Issues involved: Appeal against order of CIT-10, Mumbai u/s 263 of the Income Tax Act, 1961.
Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal by the assessee against the order of CIT-10, Mumbai u/s 263 of the Income Tax Act. The assessee contended that the assessment order was not erroneous or prejudicial to the revenue's interest. The CIT set aside the assessment order u/s 143(3) and directed a fresh assessment regarding the treatment of short term capital gains as business income. The assessee argued that the income from sale of shares should be considered as capital gains, not business income. The Tribunal analyzed the case in light of the legal provisions and previous court decisions.
The Tribunal observed that for the CIT to exercise jurisdiction u/s 263, the AO's order must be both erroneous and prejudicial to revenue's interests. The AO had conducted necessary enquiries and accepted the assessee's explanation regarding capital gains. The Tribunal emphasized that the CIT cannot impose his view on the AO's decision merely to increase tax revenue. Referring to the decision in Malabar Industrial Co. Ltd. Vs. CIT, the Tribunal concluded that the AO's decision, even if one of the possible views, was permissible in law. Therefore, the Tribunal set aside the CIT's order and upheld the AO's assessment.
In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the CIT's order u/s 263 was not justified based on the facts and legal principles involved.
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2013 (10) TMI 1551
Issues involved: Appeal against the order of the Commissioner of Income Tax-II, Madurai u/s.263 of the Income Tax Act, 1961 for AY 2008-09.
Summary:
1. The assessee, engaged in processing Gherkins, onions, and other vegetables, filed its return for AY 2008-09 declaring income as 'NIL' under normal provisions. The case was reopened u/s.147 on the issue of deduction u/s.10B. The Assessing Officer observed that the assessee opted out of deduction u/s.10B for AY 2008-09 to claim benefits under another scheme. The income was computed u/s.115JB. The CIT issued a show cause notice u/s.263 citing discrepancies in the assessment.
2. The CIT directed the Assessing Officer to redo the assessment based on the show cause notice. The assessee contended that it did not claim deduction u/s.10B for AY 2008-09, and all relevant documents were submitted during assessment. The Revenue argued that the Assessing Officer did not delve into details of the accounts. The CIT's order was supported by legal judgments.
3. The Tribunal found that the assessee did not claim deduction u/s.10B for AY 2008-09 as per the assessment order. The CIT's reasons for review regarding expenditure verification and balance sheet items were deemed non-specific and lacking basis. Legal precedents cited by the Revenue were deemed inapplicable. The Tribunal set aside the CIT's order, stating it was non-speaking and lacked valid reasons, thereby allowing the assessee's appeal.
Judgment: The impugned order was set aside, and the appeal of the assessee was allowed.
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2013 (10) TMI 1550
Issues involved: Cross appeals against the order of Ld. CIT(A), Valsad dated 21-07-2010.
Reopening of assessment: The assessee challenged the reopening of assessment on the grounds that no new material had come before the assessing officer, no income had escaped assessment, and the assessing officer had not passed a speaking order disposing off objections filed against reopening. The Tribunal admitted this additional ground for adjudication, noting that it was a legal ground requiring no investigation of fact. The matter was sent back to the file of AO for fresh adjudication in accordance with the procedure laid down by the Hon'ble Apex Court and jurisdictional High Court decisions. The additional ground was disposed of based on previous Tribunal decisions and relevant legal precedents.
Other grounds raised: In light of the decision regarding the additional ground, the other grounds raised in the appeals of both the assessee and revenue were deemed infructuous and did not require adjudication at that stage. Both appeals were allowed for statistical purposes.
Conclusion: Both appeals filed by the assessee and revenue were allowed for statistical purposes based on the decision regarding the additional ground challenging the reopening of assessment. The Tribunal directed the matter to be sent back to the assessing officer for fresh adjudication in accordance with legal procedures and precedents cited.
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2013 (10) TMI 1549
Issues involved: Appeal against rejection of depreciation claim by charitable institution under sec.11(1) of Income-tax Act, 1961.
Assessment Year 2009-10:
The Revenue appealed against the Commissioner of Income-tax(Appeals)-I's order rejecting the depreciation claim of a charitable institution under sec.11(1) as it was considered a double deduction, having already been treated as application of funds for charitable purposes.
First Appeal Decision:
The Commissioner of Income tax (Appeals) allowed the depreciation claim, citing judgments from Punjab & Haryana High Court and Income-tax Appellate Tribunal, Chennai Benches. The Revenue contested, stating matters were under appeal at the Hon'ble Madras High Court.
Tribunal Decision:
The Tribunal upheld the Commissioner's decision, noting no contrary decision from the Jurisdictional High Court. Citing CIT vs. Vegetable Products Ltd., it held in favor of the assessee, dismissing the Revenue's appeal.
This judgment highlights the interpretation of law regarding depreciation claims by charitable institutions and the precedence of favorable court decisions in such matters.
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2013 (10) TMI 1548
Issues involved:
The issues involved in this judgment are the treatment of amount received from developers for redevelopment, chargeability of interest under sections 234A, 234B, and 234C of the Income-tax Act, 1961, and the applicability of judicial pronouncements in determining tax liability.
Treatment of amount received from developers for redevelopment:
The appellant, an individual, received an amount from a developer for agreeing to redevelopment and alleviating hardship. The Assessing Officer (AO) determined this amount as taxable income from Other Sources. The First Appellate Authority (FAA) upheld this decision, stating that the amount was taxable under the Income from Other Sources head as per section 56 of the Act. However, the Authorized Representative (AR) argued that the receipt was of capital nature, citing various judicial precedents. The ITAT found in favor of the assessee, following previous decisions that held amounts received on transfer of FSI-TDR are not taxable under any head of income. The ITAT concluded that as there was no cost of acquisition for the asset transferred, there was no liability to capital gains, thereby allowing the appeal.
Chargeability of interest under sections 234A, 234B, and 234C:
The issue of charging interest under sections 234A, 234B, and 234C was also addressed in the judgment. The ITAT considered this issue consequential and allowed the ground filed by the assessee for statistical purposes. Consequently, the appeal filed by the assessee was allowed.
This judgment highlights the importance of considering the nature of receipts in determining tax liability and the relevance of judicial precedents in interpreting tax laws.
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2013 (10) TMI 1547
Issues involved: Contempt of court for violation of High Court's order dated 18.08.2011 regarding Final Development Plan 2025-AD for Gurgaon-Manesar Urban Complex.
Summary:
The Respondent filed a Public Interest Litigation challenging the Final Development Plan for Gurgaon-Manesar Urban Complex, alleging violation of Zoning Regulations. High Court issued an interim order on 18.08.2011 maintaining status quo on allotments. The Appellant, Director General of Town & Country Planning, granted a license for a Residential Plotted Colony on 28.12.2011, leading to a contempt proceeding. The High Court found the Appellant guilty of contempt for violating the order by granting the license. The Appellant contended that no violation occurred as no allotments were made and explained the different treatment for plotted colonies. The High Court held that the order imposed a comprehensive embargo on all licenses, leading to the contempt finding.
The Supreme Court considered the terms of the High Court's order, the responses, and subsequent facts. It emphasized that contempt charges require clear and unambiguous orders, with defiance apparent on the face of the action. The Court noted that the High Court's order did not explicitly prohibit licenses under the Haryana Act of 1975. The Appellant had tendered an unqualified and unconditional apology, which should be accepted if made bona fide. The Supreme Court also highlighted that the writ petition challenging the development plan was dismissed and had attained finality in law. Consequently, the Supreme Court set aside the High Court's order of 23.07.2012 and allowed the appeal.
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2013 (10) TMI 1546
Issues Involved:
1. Deduction towards Employee's Contribution of PF/ESI.
2. Deletion of addition u/s.2(22)(e) on account of received loan/advance.
3. Deletion of addition u/s.2(22)(e) on account of accumulated profits.
4. Disallowance u/s.14A r.w.r.8D.
5. Interest disallowance.
Summary:
Issue 1: Deduction towards Employee's Contribution of PF/ESI
The Revenue challenged the CIT(A)'s decision allowing a deduction of Rs. 5,16,132/- for Employee's Contribution of PF/ESI deposited after the due date. The Tribunal upheld the CIT(A)'s decision, referencing various judicial pronouncements favoring the assessee, including decisions from the ITAT Ahmedabad and the Hon'ble Gujarat High Court.
Issue 2: Deletion of addition u/s.2(22)(e) on account of received loan/advance
The Revenue contested the deletion of Rs. 26 lacs added u/s.2(22)(e) for loans/advances received. The Tribunal upheld the CIT(A)'s decision, noting that the assessee was not a registered shareholder in the lender company, thus the provisions of section 2(22)(e) were not applicable. The decision was supported by the Special Bench of ITAT Mumbai in ACIT vs. Bhaumik Colour Pvt.Ltd.
Issue 3: Deletion of addition u/s.2(22)(e) on account of accumulated profits
The Revenue disputed the deletion of Rs. 12,21,393/- added u/s.2(22)(e) due to accumulated profits. The Tribunal upheld the CIT(A)'s finding that there were no accumulated profits in the lender company, thus no amount could be considered u/s.2(22)(e). The CIT(A)'s decision was not countered by any contrary material from the Revenue.
Issue 4: Disallowance u/s.14A r.w.r.8D
The assessee's cross-objection challenged the disallowance of Rs. 12,33,628/- u/s.14A r.w.r.8D. The Tribunal found that the assessee did not earn any exempt income during the year, referencing the Hon'ble Punjab & Haryana High Court's decision in CIT vs. Winsome Textile Industries Ltd., which held that section 14A could not apply if no exempt income was claimed. The Tribunal directed the AO to delete the addition.
Issue 5: Interest disallowance
The assessee contested the CIT(A)'s direction to the AO to work out interest disallowable from the total addition of Rs. 3,94,950/-. The Tribunal found that the assessee had sufficient interest-free funds and referenced the ITAT Ahmedabad's decision in Torrent Financiers, which held that if interest-free funds exceed non-business advances, no interest disallowance is warranted. The Tribunal directed the AO to delete the addition.
Conclusion:
The Tribunal dismissed the Revenue's appeal and allowed the assessee's cross-objection, upholding the CIT(A)'s decisions on all contested issues.
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2013 (10) TMI 1545
Issues involved: Interpretation of substantial question of law raised in the appeal, application of Section 260(1A) of the Income Tax Act, 1961.
Interpretation of substantial question of law: The appellant's counsel acknowledged that the issue raised in the present appeal aligns with a previous court order dated 17-11-2009 in a similar case involving M/s. Prestige Estates Projects (P) Ltd. vs. The Assistant Commissioner of Income Tax. The matter had been escalated to the Supreme Court via SLP (Civil) No.7721/2010, where expedited hearing was granted without a stay. The appellant requested the court to await the Supreme Court's final decision before the Assessing Officer takes any consequential action.
Application of Section 260(1A) of the Income Tax Act, 1961: Considering the precedent set by the court's judgment in ITA No.105/2009, the substantial question of law in the current appeal is resolved in favor of the Revenue and against the assessee. Consequently, the court directed the Assessing Officer to defer passing any consequential orders as per Section 260(1A) until the Supreme Court concludes the SLP related to the earlier judgment. However, the Assessing Officer is permitted to collect any outstanding taxes from the assessee during this period.
Conclusion: The court disposed of the appeal with the instruction for the Assessing Officer to await the Supreme Court's decision before taking further action, in line with Section 260(1A) of the Income Tax Act, 1961.
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2013 (10) TMI 1544
Issues involved: Appeal by revenue against CIT(A) order deleting disallowances for bad debt and capital gains u/s 50C for assessment year 2007-08.
Bad Debt Issue:
The revenue objected to deletion of disallowance of bad debt written off amounting to Rs. 28,49,068. The CIT(A) found the amount grouped under recoverable amount from a specific entity in the balance sheet. Relying on a Bombay High Court case, the CIT(A) ordered deletion of the disallowance. The AR cited the same legal position, and the Tribunal upheld the CIT(A) decision based on the High Court judgment.
Capital Gains Issue:
The revenue challenged the higher computation of capital gains income u/s 50C, based on sales consideration. The CIT(A) deleted the additions under this head, citing a tribunal case that held section 50C not applicable to leasehold rights transfer. The AR referenced the same tribunal case, emphasizing that lease rights are distinct from 'land or building or both,' thus section 50C does not apply. The Tribunal upheld the CIT(A) decision based on the legal position established by the tribunal case.
In conclusion, the Tribunal dismissed the revenue's appeal based on the findings related to bad debt and capital gains issues.
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2013 (10) TMI 1543
Issues involved: Challenge against penalty imposed u/s 271(1)(C) and its reduction to &8377; 57,890/- u/s 271 AAA of the Income Tax Act.
Summary:
The appellant, a partnership firm in the business of Garments, challenged the penalty imposed u/s 271(1)(C) for assessment year 2008-09. The appellant contended that the penalty order was passed without jurisdiction as the AO issued notice u/s 271(1)(C) where there was no provision to do so. The appellant argued that the AO did not find any adverse findings during the search operation or assessment proceedings, and the penalty initiation was invalid from the beginning. The appellant also raised concerns about the CIT (Appeals) dismissing certain grounds without considering them, which went against the principles of natural justice.
During the proceedings, the AR of the assessee sought quashment of the penalty, while the DR supported the order of the CIT (A) and argued that the penalty should be confirmed. The Tribunal noted that penalty provisions of section 271AAA were applicable during the search period, but the AO initiated penalty proceedings u/s 271(1)(C), which was not permissible under the law. The Tribunal highlighted the distinction between the provisions of section 271AAA and section 271(1)(C), emphasizing that only the AO could impose penalty u/s 271AAA. Therefore, the conversion of penalty by the CIT (A) into section 271AAA was not justified.
Consequently, the Tribunal allowed the appeal of the assessee, vacating the penalty imposed u/s 271(1)(C) and its conversion to section 271AAA. The penalty was reduced to &8377; 57,890/- in favor of the assessee.
Judgment delivered by: SHRI U.B.S. BEDI, JUDICIAL MEMBER And SHRI T.S. KAPOOR, ACCOUNTANT MEMBER
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2013 (10) TMI 1542
Issues Involved:
1. Tax treatment of income from exercising stock options.
2. Eligibility for deduction u/s 54F of the Act.
3. Levy of interest u/s 234B of the Act.
4. Imposition of penalty u/s 271(1)(c) of the Act.
Summary:
1. Tax Treatment of Income from Exercising Stock Options:
The primary issue was whether the income from exercising stock options should be treated as 'Income from Salary' or 'Long Term Capital Gains'. The assessee, a software engineer, received stock options from SIRF, USA while serving as an independent consultant. The Assessing Officer (AO) treated the difference between the market price and exercise price on the date of exercise as 'Income from Salary' and the difference between the sale price and market price on the date of exercise as 'Short Term Capital Gains'. The Tribunal upheld the AO's view, stating that the benefit arising from exercising stock options should be treated as part of the salary income, as the stock options were granted in recognition of services rendered. The Tribunal emphasized that the stock options could not be transferred and their exercise did not constitute a transfer of a capital asset, thus rejecting the assessee's claim of long-term capital gains.
2. Eligibility for Deduction u/s 54F of the Act:
The assessee claimed a deduction u/s 54F of the Act on the grounds that the income from exercising stock options was long-term capital gains. The AO and CIT(A) denied this deduction, as the income was treated as salary and short-term capital gains. The Tribunal upheld this decision, stating that the deduction u/s 54F is only available if the gain is considered long-term capital gain, which was not the case here.
3. Levy of Interest u/s 234B of the Act:
The CIT(A) directed the AO not to levy interest u/s 234B of the Act on the income attributable to the benefits from stock options, as the responsibility to deduct tax at source falls on the employer. The Tribunal upheld this decision, noting that the employer, SIRF, USA, was responsible for deducting tax at source, and the assessee could not be penalized for the employer's failure to do so.
4. Imposition of Penalty u/s 271(1)(c) of the Act:
The AO imposed a penalty u/s 271(1)(c) of the Act on the grounds that the assessee misrepresented the nature of the income and claimed a wrong deduction u/s 54F. The CIT(A) canceled the penalty, stating that the assessee's claim was based on a bona fide belief and different interpretations of the law. The Tribunal upheld the CIT(A)'s decision, noting that the law regarding the taxation of ESOPs was in a fluid state, and the assessee had disclosed all relevant facts and acted in good faith. The Tribunal concluded that the assessee was not guilty of furnishing inaccurate particulars of income.
Conclusion:
All appeals were dismissed, and the orders of the CIT(A) were upheld, confirming the treatment of income from stock options as salary, denying the deduction u/s 54F, and canceling the penalty u/s 271(1)(c).
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