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Showing 41 to 60 of 1327 Records
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2012 (11) TMI 1300
Issues involved: Appeal against deletion of addition on account of suppressed yield u/s 143(3) r.w.s. 254 of IT Act for A.Y. 2005-06.
Summary:
The appeal was filed by the Revenue challenging the deletion of an addition of Rs. 38,93,695 made by the Assessing Officer (AO) on account of suppressed yield for the assessment year 2005-06. The Tribunal noted that in a previous assessment year, the issue had been restored back to the AO by the ITAT "B" Bench Ahmedabad for deciding the estimation of profits after rejecting book results. The AO, in the impugned order, adopted the "yield method" to estimate income by comparing the yield of the assessee for the current year with past years. The AO concluded that the income should be estimated by applying the average yield of polished diamonds, with a 1% difference. However, the Commissioner of Income Tax (Appeals) held that the AO had exceeded jurisdiction by adopting the "yield method" instead of following the directions of the Tribunal to confront comparable cases before adopting the GP rate.
The Tribunal agreed with the CIT(A) that the AO had not followed the directions of the Tribunal given in the previous order. The Tribunal emphasized that the AO was expected to reassess the income as per the Tribunal's directions and proceed with the assessment within those parameters. By deviating from the prescribed method and adopting the "yield method," the AO exceeded its jurisdiction. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the decision of the CIT(A) to delete the addition on account of suppressed yield.
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2012 (11) TMI 1299
Deduction for Employment of New Employees u/s 80JJAA - Reopening of Assessment u/s 147 - A revised return was filed by assessee company where claim of deduction u/s 80JJAA was made and was duly allowed by AO. Matter was reopened after 4 years where the assessee was informed that during the previous year regular workmen totaling 53 were employed by it and since the number of regular workmen employed during the previous year was less than 10% of the existing number of workmen, no deduction was allowable in respect of additional wages paid to regular workmen u/s 80JJAA.
HELD THAT:- Reopening after four years is legal if the assessee had not provided all material facts along with return of income and or during assessment proceedings. Assessee, through audit report had tried to mislead the department by showing number of new regular workmen at 53. Reopening of assessment u/s 147 allowed.
Decision against assessee.
Decision in the case of HONDA SIEL POWER PRODUCTS LIMITED VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2011 (2) TMI 1184 - DELHI HIGH COURT], relied upon
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2012 (11) TMI 1298
Issues involved: Application for grant of patent, revocation of patent u/s 25(2) of the Patents Act, non-furnishing of recommendation of the Statutory Board u/s 25(4), violation of principles of natural justice.
Grant of Patent and Revocation: Sugen Inc. USA and Pharmacia and Upjohn Company USA filed an application for the grant of a patent, which was recommended for grant on 23.8.2007. Cipla Ltd. filed for revocation u/s 25(2) on 1.9.2008, leading to the revocation of the patent by the Controller on 24.9.2012. The main controversy arose due to the non-furnishing of the recommendation of the Statutory Board constituted u/s 25(4) to the parties.
Opposition Proceedings: Chapter V of the Patents Act, 1970 deals with Opposition Proceedings. Section 25(1) allows representation against the grant of a patent before it is granted, while sub-section (2) enables opposition within one year of the grant. The grounds for opposition are specified in clauses (a) to (k), with no other grounds permitted. Section 25(3)(b) deals with the constitution of the Opposition Board, which examines and submits recommendations to the Controller.
Role of Opposition Board: The Opposition Board is constituted as per Rule 56, which includes three members and conducts examination based on rules 57 to 60. Section 25(4) states that the Controller, after receiving the Board's recommendation, shall order to maintain, amend, or revoke the patent after hearing the patentee and opponent. Rule 62 outlines the procedure for the hearing and decision-making process by the Controller.
Violation of Natural Justice: The Supreme Court found that the Controller's order, which relied on the Opposition Board's recommendation without providing a copy to the parties, violated the principles of natural justice. As a result, the order was set aside, along with the High Court's orders. The Court emphasized the importance of parties having access to the Board's recommendations before the Controller's decision u/s 25(4).
Remittal and Directions: The Court directed the Controller to reconsider the matter after providing all parties with the Board's recommendation. The Controller was instructed to dispose of the matter within one month from the date of the Court's order. The Civil Appeal was disposed of without costs, clarifying that no opinion was expressed on the parties' contentions, leaving them to be decided by the Controller.
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2012 (11) TMI 1297
Issues involved: Interpretation of Section 2(22)(e) of the Income-tax Act, 1961 regarding deemed dividend in the case of a limited company receiving loans from a group concern with common shareholders.
Summary:
Issue 1: Deemed dividend under Section 2(22)(e)
The appellant, a limited company engaged in engineering consultancy, declared a loss in the assessment year and received loans from a group concern. The Assessing Officer treated the loan amount as deemed dividend under Section 2(22)(e) due to common shareholders in both companies. The CIT(Appeals) upheld this decision citing a precedent. However, the appellant argued that the decision referred to a partnership firm, not a limited company, and loans must be taken by a shareholder to attract Section 2(22)(e).
Issue 2: Interpretation of deemed dividend
The Tribunal noted that the appellant was not a shareholder in the concern from which it received loans, despite common shareholders. Referring to previous court decisions, the Tribunal emphasized that deemed dividend can only be taxed in the case of a shareholder. The Tribunal distinguished the present case from a partnership firm scenario and concluded that the appellant, not being a shareholder, should not be subject to the provisions of Section 2(22)(e).
Conclusion:
The Tribunal allowed the appeal, ruling that the addition made under Section 2(22)(e) in the hands of the appellant was not justified and therefore deleted. The decision was pronounced on November 7, 2012, in Chennai.
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2012 (11) TMI 1296
The Kerala High Court directed recovery proceedings against petitioners be kept in abeyance for two months, with the condition that if the liability is not settled within that time, the respondents can continue the recovery action.
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2012 (11) TMI 1295
Issues involved: Directors' personal liability for company's debt, challenge to revenue recovery action.
In the judgment, the court noted that the petitioners, who are Directors of a company, had given personal guarantee for the company's debt to the first respondent. The court acknowledged that the first respondent, being an institution u/s 71 of the Revenue Recovery Act, was entitled to recover its dues from the petitioners due to the company's default. Therefore, the court held that the revenue recovery proceedings initiated against the petitioners could not be interfered with.
However, the court also observed that the company and the Managing Directors had mortgaged movable properties. In light of this, the court directed that the movable properties belonging to the petitioners should be excluded from the recovery proceedings. The court further specified that these movable properties would only be proceeded against if the sale proceeds of other available properties were insufficient to satisfy the dues of the first respondent.
In conclusion, the writ petition challenging the revenue recovery action was disposed of with the above directions regarding the exclusion of the petitioners' movable properties from the recovery proceedings unless necessary.
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2012 (11) TMI 1294
The High Court of Kerala disposed of a writ petition challenging recovery proceedings initiated against guarantors of a loan availed by a company named Sanchesz Healthcare Pvt. Ltd. The court clarified that the proceedings against movable assets of guarantors will be kept in abeyance and pursued only if other assets are insufficient to recover the dues, based on a previous judgment. The writ petition was disposed of accordingly.
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2012 (11) TMI 1293
Issues Involved:
1. Inclusion of Ambattur Estate property in the suit schedule for partition.
2. Delay in filing the application for amendment of the plaint.
3. Applicability of the Benami Transactions (Prohibition) Act, 1988.
Summary:
Inclusion of Ambattur Estate property in the suit schedule for partition:
The appellant filed a Civil Suit in C.S.No.469 of 2008 for partition of a residential property. During the trial, the appellant sought to include Ambattur Estate property in the suit schedule, which was initially excluded due to a Will executed by the appellant's father. The first respondent opposed this inclusion, arguing that the property was already subject to another suit in C.S.No.1079 of 2009. The court found that all properties available for partition should be included in the suit to avoid partial partition and allowed the inclusion of Ambattur Estate property.
Delay in filing the application for amendment of the plaint:
The learned Single Judge dismissed the application for inclusion of Ambattur Estate property solely on the ground of delay. The appellant explained the delay, stating that the application was filed after the Will was contested and the Registry returned the initial amendment application. The court held that the delay was justified and that the inclusion of the property would not prejudice the respondents or delay the trial significantly.
Applicability of the Benami Transactions (Prohibition) Act, 1988:
The appellant contended that the residential property was purchased by his father in the name of the first respondent, making it a joint acquisition. The first respondent argued that the property was purchased with her own funds and was not a joint family property. The court noted that the issues related to the Benami Transactions (Prohibition) Act, 1988, were not relevant to the inclusion of Ambattur Estate property, as there was no dispute regarding its partition.
Conclusion:
The court set aside the order dated 13 September 2012 in Application No.3953 of 2012, allowing the inclusion of Ambattur Estate property in the suit schedule for partition. The Original Side Appeal was allowed, and the connected MP was closed with no costs.
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2012 (11) TMI 1292
The Supreme Court of India dismissed the Special Leave Petition as no grounds were found for interference with the impugned judgment. (2012 (11) TMI 1292 - SC)
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2012 (11) TMI 1291
Issues involved: Disallowance u/s 14A of the Act and disallowance of Bad Debts written off
For the issue of disallowance u/s 14A of the Act:
The assessee appealed against the disallowance of Rs. 76,84,919 u/s 14A of the Act, arguing that the expenses were incurred in the normal course of business. The AO added the amount based on Rule 8D of the IT Rules, 1962. The FAA upheld the disallowance. The AR contended that Rule 8D was not applicable for the assessment year 2006-07, citing a Bombay High Court decision. The ITAT, following the High Court's ruling in another case, reversed the FAA's order and remanded the matter to the AO for fresh proceedings. The ground was partly allowed in favor of the assessee.
For the issue of disallowance of Bad Debts written off:
The AO disallowed Rs. 55.05 lakhs as bad debts written off, stating that the debts were not written off as irrecoverable in the accounts. The FAA upheld part of the disallowance. The AR argued that the debts were written off and fulfilled the requirements of Section 36(1)(vii) of the Act. The ITAT agreed with the assessee, citing a Supreme Court judgment and holding that the debts were written off as irrecoverable in the accounts, thus allowing the claim. The ground was decided in favor of the assessee-company.
In conclusion, the appeal filed by the assessee was partly allowed, with the ITAT ruling in favor of the assessee on both issues.
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2012 (11) TMI 1290
Issues involved:
The judgment addresses the disallowance of expenses incurred on hiring transporters for carrying out material transportation due to non-deduction of tax at source u/s.194C.
Issue 1: Non-deduction of tax at source and existence of contract:
The appellant, a transport contractor, hired trucks from truck owners without any explicit contract, relying on Form 15-I declarations for non-deduction of tax at source. The Assessing Officer disallowed expenses under section 40(a)(ia) for not deducting tax from truck owners. The appellant argued that on receiving Form 15-I, tax deduction was not required, citing precedents from ITAT Ahmedabad and High Court of Gujarat. The appellant contended that no contract existed with truck owners, supported by decisions from ITAT Cuttack. The learned Counsel argued that non-deductible tax precludes disallowance u/s. 40(a)(ia), seeking deletion of the disallowance.
Issue 2: Interpretation of facts and applicability of legal provisions:
The learned Counsel contended that the Assessing Officer misinterpreted facts, emphasizing that the payment was for reimbursement of expenses, not against a contract. The learned CIT(A) was urged to consider the case law cited and the requirement of obtaining Form 15-I. The learned DR opposed, highlighting the significance of Form 15-I filing and the need for substantiation with Form 15-J. The Tribunal held that the disallowance u/s.40(a)(ia) was unwarranted, as non-deduction of tax at source did not make the appellant defaulting under section 201. The judgment emphasized that the law did not mandate tax deduction in absence of a contract, directing deletion of the disallowance.
Separate Judgment:
The Appellate Tribunal, comprising Hon'ble K.S.S.Prasad Rao and Hon'ble K.K.Gupta, allowed the appeal of the assessee, setting aside the disallowance of expenses incurred on hiring transporters due to non-deduction of tax at source u/s.194C.
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2012 (11) TMI 1289
Issues Involved:
1. Addition of Rs. 2,93,50,000/- in respect of Mutual Fund investments.
2. Non-reconciliation of professional fees.
3. Disallowance u/s 14A of the I.T. Act.
Summary:
1. Addition of Rs. 2,93,50,000/- in respect of Mutual Fund investments:
The assessee challenged the addition of Rs. 2,93,50,000/- made by the AO concerning Mutual Fund investments. The AO, based on AIR information, stated that the assessee made total investments amounting to Rs. 23,83,43,112/- and asked for reconciliation. The assessee provided bifurcation but failed to substantiate the investments with mutual fund statements. The AO added the entire amount as unexplained, but the CIT(A) reduced this to Rs. 2,93,50,000/- after partial reconciliation.
The Tribunal noted that investments where the assessee was the second holder and his mother the first holder should not be added to the assessee's income. Consequently, the Tribunal deleted the addition of Rs. 1,43,50,000/- but upheld the addition of Rs. 1,50,00,000/- due to lack of evidence.
2. Non-reconciliation of professional fees:
The AO added Rs. 59,28,900/- based on AIR information, stating that the assessee did not reconcile professional fees with bank statements. The CIT(A) confirmed part of this addition amounting to Rs. 22,47,900/-. The Tribunal observed that the professional fees declared by the assessee were significantly higher than the AIR information and that similar issues in previous years were resolved in favor of the assessee. Therefore, the Tribunal deleted the addition of Rs. 22,47,900/-.
3. Disallowance u/s 14A of the I.T. Act:
The AO disallowed Rs. 18,81,658/- u/s 14A r.w. Rule 8D, which was confirmed by the CIT(A). The Tribunal noted that Rule 8D was not applicable for the assessment year under consideration, as per the Bombay High Court's decision in Godrej & Boyce Mfg Co Ltd Vs DCIT (328 ITR 81). The Tribunal followed its earlier decision and restricted the disallowance to Rs. 50,000/-.
Conclusion:
The appeal was allowed in part, with the Tribunal deleting the addition related to Mutual Fund investments where the assessee was the second holder, deleting the non-reconciled professional fees addition, and restricting the disallowance u/s 14A to Rs. 50,000/-.
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2012 (11) TMI 1288
Issues involved: Challenge to order under Section 263 of the Income Tax Act and consequential re-assessment for the year 2001-02.
The appellant, a Society registered under the Karnataka Societies Registration Act, sought to set aside an order passed under Section 263 of the Income Tax Act and the consequential re-assessment for the year 2001-02. The appellant claimed to be a separate legal entity from another respondent Society and raised concerns about the impact of the income tax proceedings on a pending civil suit. The Single Judge dismissed the writ petition, stating that the appellant's legal status as a separate entity did not necessitate examination of the order against the other Society. The appellant appealed this decision, expressing apprehension that the income tax findings could prejudice their interests in the civil suit.
The High Court noted that the orders in question were passed in Mumbai concerning a respondent based in Mumbai, thus the High Court of Karnataka lacked territorial jurisdiction over the matter. Additionally, the Court emphasized that if the appellant is indeed a distinct entity from the other respondent Society, the orders pertaining to the latter would not bind the appellant. The Court highlighted that the civil court would not be unduly influenced by the income tax authorities' findings, especially since the matter was already before the Supreme Court. Consequently, the appeal was dismissed, finding no merit in the appellant's contentions.
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2012 (11) TMI 1287
Issues Involved:
1. Reopening of assessment proceedings u/s 147.
2. Addition of Rs. 73,69,973/- as deemed dividend u/s 2(22)(e).
3. Disallowance u/s 14A.
4. Addition of Rs. 9,42,00,000/- as unexplained cash credit u/s 68.
5. Disallowance of interest tax u/s 40(a)(ii).
6. Penalty u/s 271(1)(c).
Summary:
1. Reopening of Assessment Proceedings u/s 147:
The assessee's ground challenging the reopening of assessment proceedings u/s 147 was not pressed by the Ld. A.R. and hence, rejected as not pressed.
2. Addition of Rs. 73,69,973/- as Deemed Dividend u/s 2(22)(e):
The assessee contested the addition of Rs. 73,69,973/- as deemed dividend, arguing that the transactions were in the nature of a current account and not loans or advances. The Tribunal found that the transactions were indeed in the nature of a current account and not loans or advances, and therefore, the provisions of Section 2(22)(e) were not applicable. The addition was deleted.
3. Disallowance u/s 14A:
The AO disallowed Rs. 7,21,408/- u/s 14A, comprising Rs. 6,45,978/- as interest expenditure and Rs. 75,431/- as administrative/general expenses. The Tribunal found that the assessee had sufficient own funds, making the disallowance of interest expenditure unjustified. The disallowance of administrative/general expenses was deemed excessive and reduced to Rs. 25,000/-.
4. Addition of Rs. 9,42,00,000/- as Unexplained Cash Credit u/s 68:
The AO added Rs. 9,42,00,000/- as unexplained cash credit due to insufficient evidence of the creditor's identity and creditworthiness. The Tribunal noted that the assessee had not provided complete details and restored the matter to the AO for a fresh decision, allowing the assessee to furnish the necessary details.
5. Disallowance of Interest Tax u/s 40(a)(ii):
The assessee's ground regarding the disallowance of Rs. 2,36,225/- u/s 40(a)(ii) was not seriously argued. The Tribunal upheld the disallowance as the interest tax was not paid before the filing of the return of income.
6. Penalty u/s 271(1)(c):
The Tribunal found that since most of the additions were deleted and the remaining disallowances were either on an estimate basis or due to non-payment of interest tax before the due date, penalty u/s 271(1)(c) was not justified. The appeal of the revenue was dismissed.
Conclusion:
The assessee's appeal was partly allowed, and the revenue's appeal regarding the penalty was dismissed. The Tribunal provided detailed reasons for each decision, ensuring that the legal principles and factual findings were adequately addressed.
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2012 (11) TMI 1286
Issues Involved:1. Validity of the assessment of sale proceeds received on sale of lands. 2. Determination of the correct amount of sales proceeds pertaining to the relevant years. Summary:Issue 1: Validity of the assessment of sale proceeds received on sale of landsThe assessee, a local authority established under the Andhra Pradesh Urban Areas (Development) Act 1975 and registered as a charitable institution u/s 12AA of the Income Tax Act, filed returns declaring NIL income after claiming exemption u/s 11. The AO rejected the exemption claimed by the assessee u/s 11, invoking the proviso to sec. 2(15) of the Act, which states that the "advancement of any other object of general public utility" shall not be a charitable purpose if it involves trade, commerce, or business activities. The AO concluded that the assessee was indulging in commercial activities, including the sale of Government lands through public auction, and thus lost its charitable character. The AO assessed the net sale proceeds as the income of the assessee after deducting related expenses, amounting to Rs. 1002.11 crores for AY 2008-09 and Rs. 49.07 crores for AY 2009-10. The assessee contended that it acted as an agent of the Government of Andhra Pradesh for the sale of lands and remitted the funds to the Government Account, arguing that the sale proceeds should not be considered its income. The AO, however, concluded that the Government had alienated the lands in favor of the assessee, making it the absolute owner, and thus the sale proceeds should be considered its own receipts. The Tribunal noted the categorization of lands into two categories as per GOMS No.1401 dated 02-11-2007: (i) Government lands to be sold by auction by the District Collector through VUDA, with proceeds remitted to the Government Account, and (ii) Government lands alienated in favor of VUDA for development of townships for resource mobilization. The Tribunal held that the sale proceeds from lands in Category (i) cannot be treated as the income of the assessee, as it acted as an agent. However, there was confusion regarding lands in Category (ii), as both parties presented plausible interpretations of the term "resource mobilization." The Tribunal emphasized the need to ascertain the intention of the Government in categorizing the lands and directed the AO to re-examine the issue, considering additional documents and explanations from the assessee. The AO was instructed to decide the issue in accordance with the law. Issue 2: Determination of the correct amount of sales proceeds pertaining to the relevant yearsThe Ld D.R admitted that the gross amount of sales proceeds assessed by the AO for the two years under consideration included mistakes, such as the inclusion of sales proceeds pertaining to other years. The Tribunal set aside the issue of determining the correct amount of sales proceeds to the file of the AO for fresh examination. In conclusion, the Tribunal set aside the common order passed by Ld CIT(A) and restored the issues to the file of the AO for fresh examination, directing the AO to provide the assessee with an opportunity to present necessary documents and explanations. Both appeals of the assessee were treated as partly allowed. Pronounced accordingly on 09.11.2012.
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2012 (11) TMI 1285
Issues Involved:
The judgment involves issues related to the correctness of the order of the Commissioner of Income Tax (Appeals) III, Chennai u/s 143(3) of the Income Tax Act 1961. The main issues include the treatment of impairment loss on assets u/s 115JB, the status of the assessee as a sick industrial company affecting book profits u/s 115JB, and the taxability of remission of principal amount due to OTS.
Issue 1 - Impairment Loss on Assets u/s 115JB:
The assessee, a company engaged in manufacturing medical consumables, filed its return admitting income of NIL after setting off brought forward losses. During scrutiny, the Assessing Officer noted alteration in book profits by claiming impairment loss as expenditure to avoid taxes u/s 115JB. The assessee contended that being a sick industrial company, its book profits were not taxable under 115JB due to negative net worth. However, the Assessing Officer, after verifying the status of the case before BIFR, held that the assessee was no longer a sick undertaking and taxed the entire book profits. The CIT(A) considered the provisions of 115JB(2) Explanation 1 (vii) and held that the assessee's net worth was negative, thus reducing the profits for computing book profit. The Tribunal upheld the CIT(A)'s decision, stating that the assessee's claim was valid until its net worth equaled or exceeded accumulated losses.
Issue 2 - Status of Assessee as Sick Industrial Company u/s 115JB:
The Tribunal examined the statutory provisions of 115JB(2) Explanation 1 (vii) and found that the assessee's claim as a sick industry was rightly accepted by the CIT(A). The Tribunal emphasized that the SARFESI Act proceedings did not affect the status of a sick industry as per the Income Tax Act. It held that until the net worth of the sick industry equaled or exceeded accumulated losses, the relief under 115JB(2) Explanation 1 (vii) was applicable. Therefore, the Tribunal upheld the CIT(A)'s decision in favor of the assessee, rejecting the Revenue's appeal.
Issue 3 - Taxability of Remission of Principal Amount due to OTS:
The Revenue contended that the CIT(A) wrongly granted the assessee benefits of profits reduced under 115JB and remission of principal amount due to OTS after declaring it a sick unit. The Tribunal, having decided the main issue in favor of the assessee, found these grounds to be of academic significance. Consequently, the Tribunal upheld the CIT(A)'s order against the Revenue, dismissing the appeal.
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2012 (11) TMI 1284
Issues Involved:1. Deletion of addition on account of investment made outside books of account. 2. Deletion of addition on account of interest earned on money advanced outside the books of account. 3. Ownership and profit allocation of M/s. Mount Fragrances. 4. Clubbing of unaccounted income and allowing adjustment of excess surrender. Summary:Issue 1: Deletion of Addition on Account of Investment Made Outside Books of AccountThe revenue appealed against the deletion of an addition of Rs. 1.04 crore made by the Assessing Officer (A.O.) u/s 69 of the Income-tax Act, 1961, as undisclosed investment. This addition was based on entries in a diary found during a search at Shri Brij Mohan Gupta's premises. The CIT(A) deleted the addition, stating that the revenue could not collect sufficient evidence and the diary entries did not conclusively prove the assessee's involvement. The ITAT upheld the CIT(A)'s decision, citing similar cases where such additions were deleted due to lack of concrete evidence. Issue 2: Deletion of Addition on Account of Interest Earned on Money Advanced Outside the Books of AccountThe A.O. had also made an addition of Rs. 65,446 as estimated interest income on the undisclosed investment. The CIT(A) deleted this addition on the same grounds of insufficient evidence. The ITAT confirmed the CIT(A)'s order, noting that the revenue failed to establish a direct link between the diary entries and the assessee. Issue 3: Ownership and Profit Allocation of M/s. Mount FragrancesThe revenue challenged the deletion of an addition of Rs. 21,06,777, arguing that the assessee was the benami owner of M/s. Mount Fragrances. The CIT(A) had held that the assessee was only 75% owner based on various evidences, including sales-tax registration and import/export code. The ITAT upheld the CIT(A)'s decision, noting that the revenue had accepted similar findings in previous assessment years and had not provided sufficient evidence to prove 100% ownership. Issue 4: Clubbing of Unaccounted Income and Allowing Adjustment of Excess SurrenderThe revenue also contested the CIT(A)'s decision to allow the adjustment of excess surrender of Rs. 19 lakhs against unaccounted income. The CIT(A) had granted this benefit after examining the details of surrendered income and unrecorded sales. The ITAT found no error in the CIT(A)'s order, stating that the adjustment was justified and only telescoping benefit was granted. Conclusion:Both appeals by the revenue were dismissed, and the decisions of the CIT(A) were upheld by the ITAT, confirming the deletions and adjustments made in favor of the assessee. Decision pronounced in the open court on 23.11.2012.
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2012 (11) TMI 1283
Issues involved: Appeal u/s 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding the computation of deemed income u/s 115JA for the assessment year 1997-98.
Summary:
1. The revenue appealed against the Tribunal's decision to set aside the order of the Commissioner of Income Tax (Appeals) Ludhiana, deleting the addition made by the Assessing Officer in determining the deemed income u/s 115JA of the IT Act, based on the inclusion of expenses from earlier years in the book profit.
2. The company, as the assessee, filed its return of income for the assessment year 1997-98, declaring nil income after claiming business losses and unabsorbed depreciation from earlier years. The Assessing Officer framed the assessment under Section 143(3) of the Act, making certain additions, including adding lease rent for the assessment years 1995-96 and 1996-97 to compute the profit u/s 115JA. The Tribunal later decided in favor of the assessee, leading to the revenue's appeal.
3. The revenue argued that the lease rent expenses claimed by the assessee for the earlier years were inadmissible for calculating deemed income u/s 115JA. They contended that such expenses were not deductible under the Companies Act, and the Assessing Officer had the authority to recast the profit and loss account accordingly. Reference was made to a Kerala High Court judgment regarding the non-deductibility of prior period expenses in computing book profits u/s 115JA.
4. On the contrary, the assessee's counsel relied on a Supreme Court decision to argue against recasting the profit and loss account based on the Companies Act. They supported the Tribunal's decision in favor of the assessee.
5. The High Court found that the Tribunal's decision favoring the assessee based on the Supreme Court judgment was not applicable to the current case, where the lease rent expenses from earlier years were not covered under the Companies Act.
6. The Court emphasized that the Assessing Officer had the authority to verify if the profit in the profit and loss account complied with the Companies Act and adjust it accordingly. Since the claimed deduction was not covered by Section 115JA, the Tribunal's reliance on the Supreme Court judgment was deemed erroneous.
7. Referring to the Kerala High Court case, the Court highlighted the importance of starting with the profit available in the profit and loss account prepared as per the Companies Act, emphasizing the inadmissibility of deductions not covered by Section 115JA.
8. Ultimately, the substantial question of law was answered in favor of the revenue and against the assessee, leading to the allowance of the appeal.
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2012 (11) TMI 1282
Deduction for Co-operative Society u/s 80P(2)(a)(i) - Co-operative Bank or not - Assessee, a cooperative society derives income from providing credit facilities to its members only. They claimed deduction u/s 80P(2)(a)(i). Referring to the Banking Regulation Act, 1949 the AO held that the assessee fulfils all the criteria laid down in s. 5(ccv) and is consequently a primary cooperative bank, thus is not eligible for deduction u/s 80P(2)(a)(i). - HELD THAT:- Cooperative society is distinct and separate from the cooperative bank and cannot be said as a primary cooperative bank within the meaning of Banking Regulation Act, 1949. Therefore, the assessee, cooperative society is entitled to deduction u/s 80P(2)(a)(i) of the IT Act.
Decision in the case of INCOME TAX OFFICER, WARD -2 (4) , BEED VERSUS JAIN NAGARI SAHAKARI PAT SANSTHA LTD. [2012 (9) TMI 1174 - ITAT PUNE], relied upon.
Decision in favour of Assessee.
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2012 (11) TMI 1281
Issues Involved:
1. Ownership and legal rights of the Trustees.
2. Defendant's claim of being an heir and lawful occupant.
3. Admission of facts by the Defendant in another proceeding.
4. Application of Order 12 Rule 6 and Order 15 Rule 1 of the CPC.
Summary:
1. Ownership and Legal Rights of the Trustees:
The suit was filed by the Trustees of a Trust dated 28th June 1994, claiming ownership of Flat No. 7-C, Woodland Co-operative Housing Society Ltd., Mumbai, bequeathed to the Trust under a Will dated 5th July 1997. The Will, which has been probated, created a life interest for the deceased's wife, forbidding her from selling, transferring, or creating any third-party rights. The Plaintiffs sought a declaration that the Defendant had no right, title, or interest in the suit flat and was a trespasser, seeking recovery of possession and mesne profits.
2. Defendant's Claim of Being an Heir and Lawful Occupant:
The Defendant claimed to be the heir of the deceased, brought up and educated by the deceased and his wife as foster parents, and claimed lawful occupation of the suit flat. He filed another suit for a declaration of being the heir and sole owner of the suit flat. However, he did not challenge the Will or probate thereof. The Defendant also denied the Plaintiffs' status as trustees and ownership of the suit flat, despite admitting the deceased's ownership.
3. Admission of Facts by the Defendant in Another Proceeding:
The Defendant admitted in a criminal complaint filed in the Court of the Additional Chief Metropolitan Magistrate, Mumbai, that the suit flat was owned by the Trust and that he was not the owner. This admission contradicted his claims in the written statement. The Plaintiffs discovered this admission through an affidavit filed by the Defendant in another proceeding.
4. Application of Order 12 Rule 6 and Order 15 Rule 1 of the CPC:
The Court applied Order 12 Rule 6 of the CPC, which allows for judgment on admissions made in pleadings or otherwise, and Order 15 Rule 1, which allows for judgment when parties are not at issue on any question of law or fact. The Court found that the Defendant's admissions in the criminal complaint negated his denials in the suit, making further adjudication unnecessary. The Court granted the Plaintiffs' prayers (a) and (b) for declaration and recovery of possession based on the Defendant's admissions.
Conclusion:
The Court declared that the Defendant had no right, title, or interest in the suit flat and was in unlawful occupation as a trespasser. The Plaintiffs were granted recovery of possession. The Notice of Motion No. 1509 of 2011 taken out by the Defendant was dismissed as it did not survive in view of the decree passed.
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9911796707
