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Showing 41 to 60 of 2015 Records
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2018 (12) TMI 1977
Non perusal of appeal by assessee - notice of hearing was duly served on the assessee, but none appeared on the said date nor was an application filed for adjournment - HELD THAT:- As held in the case of B.N. Bhttachargee & Anr. [1979 (5) TMI 4 - SUPREME COURT] that appeal does not mean only filing of memo of appeal but also pursuing it effectively. In cases where the assessee does not want to pursue the appeal, Court/Tribunal have inherent power to dismiss the appeal for non-prosecution as held in the case of M/s Chemipol Vs. Union of India [2009 (9) TMI 177 - BOMBAY HIGH COURT].
Therefore, respectfully following decision and also of the Tribunal in the case of Multiplan (India) Ltd., [1991 (5) TMI 120 - ITAT DELHI-D] and Late Tukojirao Holkar [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT] we dismiss the appeal of the assessee for want of prosecution.
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2018 (12) TMI 1976
Nature of receipt - Refund of excise duty claimed from DGFT - Business receipt or capital gain - whether is not income under Section 5 read with Section 28(iii)(b) in the hands of Assessee Company as held by ITAT? - HELD THAT:- The issue raised in the present appeal by Revenue which relates to assessment year 2011-12 is covered against them by decision of MAITHON POWER LTD. [2015 (7) TMI 784 - DELHI HIGH COURT] as held refund or drawback would go to ultimately reduce the cost of the project and had therefore to be treated as a capital receipt.
This being the accepted and admitted position, no substantial question of law arises for consideration before this Court.
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2018 (12) TMI 1975
Reopening of assessment u/s 147 - notice beyond a period of four years - long term capital gain on listed securities and claimed exemption under section 10(38) - Assessee submitted that in the absence of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, the assumption of jurisdiction on the part of the AO is invalid - Also AO has proceeded on a factually incorrect premise insofar as the value of Alpha Graphics Scrip is concerned as well as on the incorrect premise that no scrutiny assessment was made in the year under consideration.
HELD THAT:- Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 5th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further with the assessment; he, however, shall not pass the final order without the permission of this court.
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2018 (12) TMI 1974
Rectification u/s 154 - disagreement with the determination of book profit made by the assessee under Section 115JB - book profit u/s 115JB determined at amount as against NIL determined by the assessee - dHELD THAT:- When the assessee carried the matter in appeal before the CIT(A), he assailed the action of the AO on points of law as also on facts. In particular, assessee pointed out that the necessary computation of book profit u/s 115JB was duly available in Form 29B at the time of assessment before the AO and in terms thereof, no liability arose.
Therefore, if AO was to take a different view, the same could not be done by invoking Sec. 154 of the Act, which permitted the AO merely to rectify apparent mistakes. Points of difference between computation of book profit made by the Assessing Officer and that by the assessee were such, which involved debatable issues, and thus was outside the purview of Sec. 154 of the Act.
So far as the assessee was concerned, it had cleared its stand which was very much before the Assessing Officer when he passed the original assessment order. Thus, the error of assessee not having declared its manner of computation of book profit under Section 115JB of the Act is not something which is reflected by the record.
No doubt, the CIT(A) is justified in referring to the amendment made by the Finance (No. 2) Act, 2009 prescribing that Provision for bad and doubtful debt is not deductible for computing book profit, yet that is not the basis on which the Assessing Officer invoked the jurisdiction under Section 154 of the Act. Secondly, even if this aspect of the matter is held in favour of the Revenue, yet the other two aspects brought out by the assessee before the CIT(A), namely, non-consideration of prior period items of expenses and non-consideration of adjustment for lower of depreciation or loss, are issues which are well supported and consistent with the requirement of Sec. 115JB of the Act; and, the same have been unjustly denied by the lower authorities. If these aspects are kept in mind, the determination of book profit made by the Assessing Officer under Section 115JB of the Act is clearly untenable.Appeal of the assessee is allowed.
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2018 (12) TMI 1973
Capital gain computation - application of Section 50C by AO for the purpose of the valuation of the land assessee has got interest in the said property to the extent of 1/12th as been acquired as executor of will of her mother - assessee had not taken full value of consideration as per Section 50C resulting in to short disclosure of LTCG HELD - THAT:- As conveyance deed as executed between the vendors and THPCL was inextricably linked with Sale Agreement dated 10/03/1971. The purchaser had acquired certain rights in the said property in the year 1971 when the possession was also handed over by the seller acting for himself as well for other owners. In other words, the seller had already transferred certain rights out of bundle of rights in the said property in favor of the purchaser in the year 1971 by entering into sale agreement as well as by handing over the possession of the property.
Therefore, the assessee had inherited only the remaining rights in the aforesaid property and not an absolute owner of the property. The conveyance deed was one of the right attached to the property which has been transferred by the assessee in favor of the purchaser against certain consideration and therefore, the same could not be attributed towards sale of land as concluded by lower authorities. Assessee had received compensation against sale of residuary rights in the said property. This being the case, the provisions of Section 50C had no applicability to the facts of the case.
Having reached aforesaid conclusion, we are of the considered opinion that the cost of acquisition of the said right in the hand of the assessee was to be taken as Nil since the property under question was acquired by the owner way back in 1966 and the same was sold by the owner in the year 1971 and it was that time when the benefit of cost of acquisition was available to the seller.
We hold that the LTCG earned by the assessee during the year being net sale consideration received by the assessee upon conveyance. The benefit of cost of acquisition was not available to the assessee. The Ld. AO is directed to recompute the income of the assessee in terms of our above order.
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2018 (12) TMI 1972
Validity of assessment order - disallowance of input tax credit on the purchase of certain inputs during the financial years 2011-12 and 2012-13, up to December 2012 - main thrust of the argument of Mr. S. Ravi, learned senior counsel appearing for the petitioner is that what was done by the petitioner was only a sale in the course of Inter State Trade and Commerce and that by ignoring the fact that the sale was made in-transit, the 3rd respondent levied VAT.
HELD THAT:- A serious error of law was committed by the Assessing Authority in thinking that in respect of a works contract, the property in goods cannot pass by transfer of documents of title to the goods, but can pass only when goods are incorporated. There is no basis for such a presumption. The conclusion drawn by the Assessing Officer that the provisions of Section 3(b) and Section 6(2) of the Central Sales Tax Act, 1956 will not apply to inter-State works contract sales, is also contrary to the decision of the Supreme Court in 20TH CENTURY FINANCE CORPN. LTD. AND ANOTHER VERSUS STATE OF MAHARSHTRA [2000 (5) TMI 980 - SUPREME COURT].
Section 3 of the Central Sales Tax Act, 1956 indicates two situations in which sale or purchase of goods will be deemed to take place in the course of inter-State trade or commerce. The first situation is where the movement of goods takes place from one State to another. The second is where a sale or purchase is effected by a transfer of documents of title to the goods during the movement from one State to another - Similarly, sub-section (2) of Section 6 of the Central Sales Tax Act, 1956 makes it clear that where a sale of any goods in the course of inter-State trade or commerce is effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement, effected to a registered dealer, shall be exempt from tax, if the goods are of the description referred to in Section 8(3). This exemption is subject to the registered dealer effecting the sale, fulfilling certain conditions contained in the proviso thereto.
Thus, the conclusion of the Assessing Authority that a works contract carried out on turnkey basis is not covered by Section 3(b) and Section 6(2) of the Central Sales Tax Act, 1956, is completely wrong.
It is clear from the decision of the Supreme Court in 20th Century Finance Corporation that the works contracts are also subject to the provisions of Sections 3 and 6 of the Central Sales Tax Act, 1956. In fact, the definition of the expression “works contract” was inserted in Section 2(ja) of the Central Sales Tax Act, 1956, by way of Amendment Act No.18/2005. Once a sale is deemed to take place even in a works contract, in respect of the goods involved in the execution of the works contract, there is no escape from the conclusion that the same will also be subject to the provisions of the Central Sales Tax Act, 1956.
Holding that the provisions of Section 6(2) will prevail over Section 6(1), this Court held that all subsequent sale of goods during their movement from one State to another are exempt from tax and that the object was to avoid cascading effect of multiple taxation. Unfortunately, this aspect was not appreciated by the Assessing Officer. In fact, the decision in Larsen and Toubro Ltd., was actually misread by the Assessing Authority.
Merely because invoices were drawn on Gujarat State Petroleum Corporation, it could not have been presumed that there were two independent sales. What the Assessing Authority ought to have seen in the ultimate analysis was that there were only three parties viz., (i) Gujarat State Petroleum Corporation, who was the end user, (ii) the petitioner who was the contractor who procured the material and (iii) the suppliers of materials. The internal arrangement that the petitioner and Gujarat State Petroleum Corporation had as between themselves, could not be interpreted to mean that there were two different sales - therefore, it is clear that the Assessing Authority committed a serious error in law in thinking that there cannot be a sale in transit in respect of works contracts and that Sections 3 and 6 of the Central Sales Tax Act, 1956, may not apply to a works contract. Even in respect of a works contract, a sale in the course of inter-State trade or commerce can take place in transit, by transfer of documents of title. Since the Assessing Authority thought that it was not possible, it was clearly in error on a most important issue of law. Hence, the impugned order is liable to be set aside.
Petition allowed.
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2018 (12) TMI 1971
Levy of GST / import duty goods purchase from Duty free shops - shops situated before immigration clearance by a passenger - Exemption on sale of cosmetic products, perfumes etc. to the International passenger - refund of any input tax paid on input supplies and input services - it was held by Bombay High Court in A1 CUISINES PRIVATE LIMITED VERSUS UNION OF INDIA, AND STATE OF MAHARASHTRA, [2018 (12) TMI 1278 - BOMBAY HIGH COURT], that The Central Government holds that the transactions effected at the duty free shops at the arrival or departure of the International Airports in India might have taken place within the geographic territory of India, but for the purposes of levy of Customs Duties or any other taxes, the area of duty free shops shall be deemed to be the area beyond the customs frontiers of India.
HELD THAT:- The SLP is dismissed.
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2018 (12) TMI 1970
Recovery of outstanding dues alongwith interest - demand of interest after 120 days - Order XXXVII Rule 2 of the Code of Civil Procedure 1908 - HELD THAT:- It is not disputed even in the Affidavit in Reply to the Summons for Judgment that the parties did have, and indeed continue to have, business dealings. The 1st Defendant is a partnership firm that does business in offset printing. Defendants Nos. 2 and 3 are partners of the 1st Defendant. The Plaintif periodically supplied diferent types of papers, cards and other material to the 1st Defendant. The business and commercial relationship was of considerable longevity and continued for over two decades. The 1st Defendant purchased art paper, bond paper, card paper and so on from the Plaintif. Some of these requests were oral or telephonic but in this case that is not an issue that would arise because the Defendants do not dispute the existence of this business relationship or the supplies made to the 1st Defendant - Payments from the 1st Defendant were not on a back-to-back basis with the invoices. From September 2016 to February 2017, the Plaintif’s lawyers demanded payment from the Defendants. The Plaintif received about Rs.9 lakhs in that period (the correspondence inadvertently mentioned a slightly lower figure of Rs.7.5 lakhs but that furnishes no defence). The aggregate amount, according to the Plaintif, due to it on 3rd February 2017 was Rs.1,78,08,676/-. The Plaintif sent the Defendants a legal notice demanding payment and, in default, threatened recovery proceedings.
The Writ of Summons having been served, the Defendants entered appearance. The Plaintif then filed present Summons for Judgment to which there is an Affidavit in Reply and an Affidavit in Rejoinder. The Affidavit in Reply says very many things, non of them persuasive. The oral submissions have been advisedly more subtle, and the argument before me today is that while the business relationship is not in dispute the Defendants do dispute that all 140 invoices are unpaid - What the Defendants are unable to show is that any payments were made in respect of any particular invoice. The law in this regard is well settled. If a party makes payment to his creditor against a specified bill and that payment is accepted it can only be applied towards satisfaction of the claim under that bill. If no particular invoice is specified, the creditor is entitled to apply the payment to the earliest unpaid bill. This hardly admits of any dispute, especially in the commercial division of a High Court in the commercial capital of the country and I do not propose to spend any more time in addressing this.
The Plaintiff has claimed interest after 120 days - HELD THAT:- The Defendants were entitled to at least 450 days’ credit and, having regard to their relationship, over 800 days’ credit. This is why I said the submission was fantastic. I do not believe that there is a single commercial entity in this city who (being of sound mind) would aford anybody 450 days’ credit let alone 800 days’ (over two years) credit. If no credit period is specified, a reasonable period will be taken. That may be 30 days, 60 days or, as in this case, 120 days. In no case is 450 days or 800 days a commercially reasonable period. The argument is actually against the Defendants because if the invoice does not specify a credit period, then it clearly means that the invoice is payable on presentation, and then there is no credit period whatsoever. There is no warrant in law to demand any minimum credit period absent a specific contract to the contrary. The result is that the Plaintif has possibly made a lower claim in interest by granting 120 days rather than computing interest from the date of invoice. The Defendants cannot demand that that claim be reduced even further by insisting on an interest-free credit period stretching into years on end for each invoice.
As an exceptional case an order of conditional deposit today is considered for one reason only and that is because the parties have had a business relationship stretching back several decades and will give the Defendants, therefore, an opportunity to secure the Plaintif’s claim as a condition precedent to being able to defend the suit. In default, and on obtaining a non-deposit certificate, the Plaintifs would be entitled to apply for an ex parte decree.
The Defendants will deposit the amount of Rs.2,64,19,454.56 with the Prothonotary and Senior Master on or before 18th January 2019. Upon that deposit being made, the Defendants will be entitled to leave to defend and will then file their Written Statements on or before 22nd February 2019 - The suit will be listed for framing issues thereafter on 1st March 2019.
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2018 (12) TMI 1969
Recruitment to the posts of Commercial Tax Officer and Account Officer, Class-II - ineligibility on the ground that S.S.C.E. credit certificate was not produced - HELD THAT:- The arena of facts and the rival case, leads to suggest that the case of the respondents that S.S.C.E. certificate was not sent by the petitioner, was beset with a serious dispute. It was the specific case of the petitioner that through R.P.A.D. post, while sending the application, the S.S.C.E. credit certificate was sent along with the other documents. Respondent No.2 took a stance that the same was not received and treated the petitioner to be ineligible for the purpose of interview, after permitting the petitioner to participate in the process by taking main written examination. Even on demurer, what turns out is the alleged non-sending of S.S.C.E. certificate along with the application. However, the existence of S.S.C.E. certificate at the material time, that is sending of the application and other documents, and the availability of such certificate with the petitioner was not in dispute.
It leaves no reason for doubt that the petitioner did have the S.S.C.E. Certificate indicating the age proof and on the basis of such availability, he made the application. The application form was sent online and non-producing the Certificate along with the on-line application was a sheer omission. The petitioner did produce the Certificate which was already in existence at the time of written examination. The petitioner was permitted in the written examination - Law conceives a clear differentiation between illegality and irregularity. This nice distinction brings home the case of the petitioner. An illegality is something which amounts to substantial failure in compliance of requirement. It denotes such breach of rule or requirement which alters the position of a party in terms of his right or obligation. Illegality denotes a complete defect in the jurisdiction or proceedings. Illegality is properly predictable in its radical defects.
A Certificate already in existence and the factum of birth date on the basis of such Certificate being indisputable, when bona fide omitted to send along with the on-line application by a candidate whose such application was accepted and who has subsequently participated in the stages of selection process, could not be allowed to be prejudiced on the ground of inadvertent non-sending of the Certificate, produced later before the rights and obligations underwent change, more particularly when no other adverse or accentuating aspects override. The defect incurred on part of the petitioner-candidate could be categorised as procedural irregularity so as not to disentitle him in participating in the further process of selection, and not rendering him as ineligible if he is otherwise eligible to be appointed.
The action and decision of respondent No.2 – Gujarat Public Service Commission in treating the petitioner – Rajapara Savan Jagdishbhai as ineligible in the result dated 20th November, 2017 is set aside - Petition allowed.
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2018 (12) TMI 1968
Initiation of provisions u/s 153C - absence of the satisfaction recorded by the A.O. of the searched person - HELD THAT:- Satisfaction of the A.O. of the searched person is a sine-qua-non to the effect that “(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned belongs to; or (b) any books of accounts or documents, seized or requisitioned pertains or pertain to, for any information contained thereto, relates to a person other than person referred to in sub section 153A of the Act.
Admittedly, in the present case, no satisfaction note by the A.O. of the searched person is furnished by revenue, despite categorical directions given by this Tribunal. However, a satisfaction note in the case of assessee has been furnished by the revenue - Ld. CIT(DR) fairly conceded the fact that despite various reminders, the satisfaction note by A.O. of searched person i.e. M/s. Phoenix Devcons Pvt. Ltd., 434, Orbit Mall, Indore is not made available.
The revenue has not brought to our notice any other binding precedent by the Hon'ble Supreme Court or the Hon'ble jurisdictional High Court. We therefore, respectfully following the Hon'ble High Court of Madhya Pradesh in the case of CIT Vs. Mechmen 11-C [2015 (7) TMI 538 - MADHYA PRADESH HIGH COURT] hold that the proceedings u/s 153C of the Act is not validly initiated and is contrary to settled position of law and the same is therefore hereby quashed. Assessee appeal allowed.
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2018 (12) TMI 1967
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied with as discussed in detail in the case of ECL FINANCE LIMITED VERSUS DIGAMBER BUILDCON PVT LTD [2018 (11) TMI 1741 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI] are complied with where it was held that It is evident from the record that the application has been filed on the Performa prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete.
A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the petition has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that amount was duly disbursed and a default has occurred. The petition under sub section 2 of Section 7 is complete as no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the petition warrant admission.
Petition admitted - moratorium declared.
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2018 (12) TMI 1966
Robbery - white colour Hundai Verna Car - cash - corroboration of facts - It is contended that Appellant has financial stringency - HELD THAT:- Court has to consider the circumstances of the case, nature of offence and character of the offender while exercising the power which is discretionary. Powers under Section 4 of the Probation of Offenders Act vest with the Court when any person is found guilty of the offence committed, not punishable with death or imprisonment for life. This power can be exercised by the Court even at appellate or Revisional stage.
Though the Appellant has been convicted under Sections 411 and 482 of the IPC but in the facts and circumstances of the present case and after considering the nature of the offence, the character of the offender, the report of the Probationary Officer, the Appellant herein leading a disciplined life on the reformed path and the Appellant having a fixed place of abode, this is a fit case for extending the benefit of Section 4 of Probation of Offenders Act to the Appellant.
While confirming the conviction of appellant under Section 411 and 482 of IPC, it is directed that he be released on probation on entering into a bond, within a period of two weeks from today, in the sum of Rs. 10,000/- with one surety of like amount, before the concerned trial Court, for keeping peace and good behaviour for a period of one year. In case Appellant does not maintain good conduct during the period of probation then he shall be liable to undergo the substantive sentence as awarded by the Trial Court - Appeal disposed off.
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2018 (12) TMI 1965
TDS u/s 195 - payment made to BASF SE, Germany, is in the nature of fees for technical services and further direction to deduct tax at source @ 10% on gross basis - assessee, an Indian company, is part of BASF Group of companies having its Headquarters in Germany and the holding company of the entire group is BASF SE, Germany - HELD THAT:- Before concluding that the remittances are in the nature of fees for technical services and chargeable to tax at the hands of the recipient in India, all necessary and relevant documents including the cost sharing agreement, the auditor’s report as well as other additional evidences filed by the assessee before us needs to be properly analysed and examined. Further, contention of learned Sr. Counsel that BASF SE having not rendered any services to the assessee, payment made cannot be treated as fees for technical services as per Explanation–2 to section 9(1)(vii) has not been considered by the Departmental Authorities both factually and legally.
The contention of the assessee that when another Indian company of BASF group, a party to the same cost sharing agreement has been issued a no deduction certificate under section 195(2) why a differential treatment should be meted out to the assessee also needs to be considered with proper reasoning.
Since, the aforesaid aspects have not been considered by the Departmental Authorities and many of the documentary evidences were furnished for the first time before us by way of additional evidences and were not before the Departmental Authorities, though we are of the opinion that the additional evidences furnished by the assessee require to be admitted as they will have a crucial bearing for deciding the issue, however, to afford a fair opportunity to the Department to examine such documents, we are inclined to restore the issues raised in the aforesaid grounds to the Assessing Officer for de novo adjudication after due opportunity of being heard to the assessee. While doing so, the Assessing Officer must consider the ratio laid down in the decisions to be cited before him - Assessee’s appeals are allowed for statistical purposes.
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2018 (12) TMI 1964
Reopening of assessment u/s 147 - Deduction u/s 80IA(4) - application under rule 27 of ITAT Rules vide letter contending the validity of the reopening u/s 147 - HELD THAT:- There was an amendment under the Act by the Finance Act 2009 with retrospective effect from 01.04.2000. AO was of the view that the assessee who is acting as a work contractor is not entitled to the benefit of deduction u/s 80IA(4) - Accordingly, the AO on the basis of such retrospective amendment reopened the case of the assessee under section 147 - The reason for the reopening has already been discussed in the preceding paragraph.
It is settled law that reopening of the assessment under section 147 of the Act cannot be done on account of retrospective amendment in view of the judgment of Hon’ble Gujarat High Court in the case of Sadbhav Engineering Ltd. [2014 (6) TMI 296 - GUJARAT HIGH COURT]
The principles laid down by the Hon’ble Gujarat High Court as discussed above are squarely applicable to the facts of the present case on hand. Therefore respectfully following the same we are not inclined to uphold the reassessment proceedings under section 147 of the Act. Thus we hold that the order framed under section 147 of the Act is not sustainable in the given facts and circumstances.
The assessee succeeds on the technical ground raised by it in the application filed under rule 27 of ITAT rules. Thus we are not inclined to decide the issue on the grounds raised by the Revenue on merit. Hence the ground of appeal of the Revenue is dismissed.
Eligible for deduction u/s 80IA(4) - As there is no ambiguity that the issue whether the assessee is acting as developer or works contractor has already been decided by the Tribunal in the own case of the assessee for the assessment year 2007-08 after considering explanation added in subsection 13 to section 80IA(4) of the Act which has already been discussed in the preceding paragraph. Therefore we are of the view that the impugned issue stands decided in favor of the assessee.
There was no change in the facts and circumstances in the case of the assessee in the year under consideration. Therefore in our considered view, the principle of consistency will be applied in the case on hand as held by the Hon’ble Supreme Court in the case of Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT]
We hold that the assessee is very much eligible for deduction u/s 80IA(4) of the Act. Accordingly, we set aside the order of the CIT-A and direct the AO to delete the addition made by him by making the disallowance under section 80IA(4) of the Act. Thus, the ground of appeal of the assessee is allowed.
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2018 (12) TMI 1963
Addition on deemed income from house property lying in stock in trade - unsold flats and shops in stock in trade - HELD THAT:- It is an undisputed fact the assessee has shown the properties as stock in trade in the books of accounts. The shops and flats sold by the assessee were assessed under head income from business. There were certain unsold flats and shops in stock in trade which the AO treated the property assessable under the head Income from House Property and computed notional annual netting value on such unsold flats placing reliance in the case of Ansal Housing Finance & Leasing Co. Ltd.[2012 (11) TMI 323 - DELHI HIGH COURT]
The Hon'ble Gujarat High Court in the case of Neha Builders Pvt. Ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT]considered the question whether the rental income received from any property in the construction business can be claimed under the head ‘income from property’ even though the said property was included in the closing stock. The Hon'ble Gujarat High Court held that if the business of the assessee is to construct the property and sell it or to construct and let out the same, then that would be the business and the business stocks, which may include movable and immovable, would be taken to be stock in trade and any income derived from such stocks cannot be termed as income from house property.
As in the case of Runwal Builders Pvt. Ltd. [2018 (2) TMI 1707 - ITAT MUMBAI] has considered similar issue as to whether the unsold property which is held as stock in trade by the assessee can be assessed under the head ‘income from house property’ by notionally computing the annual letting value from such property and the Coordinate Bench considering the decision of Ansal Housing Finance & Leasing Co. Ltd. (supra) which the AO relied upon and the decision of the Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd. [2015 (5) TMI 46 - SUPREME COURT] held that unsold flats which are in stock in trade should be assessed under the head ‘business income’ and there is no justification in estimating rental income from those flats are notionally computing annual letting value under Section 23.
We are of the considered opinion that provisions of section 23 of the Act are not applicable in the case of the assessee. Accordingly, the AO is directed to delete the addition made by estimating letting value of the flats u/s.23.
Disallowance of interest payment - AO found that the assessee could not furnish any details regarding the interest expenses - HELD THAT:- We find that the assessee has sufficient capitals to invest in non-business investment, therefore disallowance of interest expenditure made by the AO is without any basis in the light of decision of Jurisdiction High Court of Gujarat in the case of Nirma Credit and Capital Pvt. Ltd.[2017 (9) TMI 485 - GUJARAT HIGH COURT] accordingly disallowance of interest is deleted. Appeal of the assessee is allowed.
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2018 (12) TMI 1962
Bogus LTCG - onus to prove - bogus share transactions - whether transaction of sale of shares by the assessee was duly backed up by material/evidence including contract notes, de-mat statement, bank account reflecting transactions, the shares having been sold on the online platform of the stock exchange and each trade of sale of shares were having unique trade number and trade time? - HELD THAT:- AO has not brought anything on record to show that assessee or the broker on instruction from assessee took part in or entered into transactions in scrips with the intention to artificially raise or depress the price and thereby automatically induced the innocent investors in the market to buy/sell their stock. It is not the case of the AO that assessee or broker as per instruction from assessee has manipulated the prices of the scrip.
Even the market regular SEBI has not made any such specific finding in its report against the assessee. In any case, if the AO had any adverse material against the assessee, he was duty bound to furnish a copy to assessee and granted her an opportunity to rebut the same and also provided an opportunity to cross examine if the material adverse to assessee is used against the assessee to draw adverse inference.
We also note that the coordinate benches in the case of Gautam Pincha [2018 (10) TMI 1969 - ITAT KOLKATA] have upheld the assessee’s claim of LTCG on purchase and sale of shares of M/s. NCL Research & Financial Services Ltd. for AY 2014- 15, as in the instant case before us.
So respectfully following the aforesaid decision and also taking note of the documents filed before us from which we note that assessee has discharged its onus to prove the genuineness of the transaction by filing the contract note of Purchase through registered broker of Bombay Stock Exchange and transaction happened through banking transaction
Coordinate bench of this Tribunal in the case of Prakash Chand Bhutoria [2018 (7) TMI 46 - ITAT KOLKATA] upheld the assessee’s claim of LTCG on sale of shares as in the instant case before us so respectfully following the decision and also taking note of the documents filed before us from which we note that assessee has discharged its onus to prove the genuineness of the transaction of the purchase of shares by filing the share certificate along with share transfer advice and the purchases having taken place through bank transaction and later bonus share allotment letter - The addition based on a common/general report of DIT (Inv.) and there is nothing in the report specifically against the assessee, cannot be the basis for making the addition or draw adverse inference against the assessee. So the action of AO/Ld. CIT(A) cannot be sustained and therefore, the claim of exempt income on LTCG on sale of scrips of M/s. NCL has to be allowed and, therefore, the addition on this issue is directed to be deleted. Appeal of assessee allowed.
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2018 (12) TMI 1961
Exemption u/s 11 - claim of the assessee for set off and carry forward of deficit of earlier years - HELD THAT:- is covered by virtue of Judgment in case of CIT (Exemptions) v/s. Subros Educational Society [2018 (4) TMI 1622 - SC ORDER]. This question is also, therefore, not entertained. Appeal is dismissed.
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2018 (12) TMI 1960
Bogus Long Term Capital Gains (LTCG) - unexplained cash credits u/s 68 - HELD THAT:- The assessee's paper book comprising of all details of its LTCG, copy of its bill in connection with purchase of shares of M/s Surabhi Chemicals & Investments Ltd. and Panchshul Marketing Ltd, bank statement. The said latter entities amalgamated regarding merger with M/s Kailash Auto Finance, contract notes in respect of sale of share of M/s Surabhi Chemicals & Investments Ltd.
Similar contract notes regarding M/s Kailash Auto shares sold, bank statement reflecting payment receipts alongwith corresponding demat statements stand perused. Mr. Choudhury relies on hon'ble apex court's decision in Sumati Dayal [1995 (3) TMI 3 - SUPREME COURT] and Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] that the assessee's explanation in the corresponding backdrop of facts pin-pointing suspicious circumstances has been rightly rejected in both the lower proceedings. It is vehemently argued that assessee has taken LTCG entry in collusion with dubious entry operators. We find no merit in any of these arguments. The fact that remains right from assessment till date is that no such entry operator has named the assessee in any of his such statement nor the Revenue has filed any such evidence to this effect.
We adopt the above detailed reasoning mutatis mutandis to delete the impugned sec. 68 addition of bogus LTCG. - Appeal of assessee allowed.
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2018 (12) TMI 1959
Seeking condonation of delay of 2590 days in filing the application seeking restoration - only ground which has been urged for seeking condonation of delay is that the counsel appearing in the matter was elevated as a Judge of this Court and the department was not aware about the peculiar circumstances - HELD THAT:- This averment is not bonafide as on account of the fact that the appellant cannot be compared to an illiterate litigant as cases of the appellant are looked after by the law department with law officers who monitors the cases.
The LPA was filed in the year 2003. Thereafter, it was listed from time to time. Thus, in view of the settled principle of law, it is not satisfying with the explanation rendered by the applicant either in terms of seeking restoration of the appeal or condonation in filing the application for restoration.
There are no ground to allow the present applications. Both the applications are thus dismissed.
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2018 (12) TMI 1958
Revision u/s 263 - Revision based on the basis of audit objection - assessee had claimed deduction of interest on housing loan and assessee had also taken interest free deposits over and above the rental income - HELD THAT:- We find that on identical issue in the case of Inderchand Amarchand Chopda [2011 (10) TMI 772 - ITAT PUNE], the Co-ordinate Bench of the Tribunal after relying on the decision in the case of B & A Plantation & Industries Ltd. [2006 (12) TMI 101 - GAUHATI HIGH COURT] has held that when PCIT assumed jurisdiction u/s 263 to give effect to the audit objection, the assumption of jurisdiction to be not valid.
On the merits of considering the interest free deposits for determining A.L.V. we find in the case of CIT Vs. Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] has held that the notional rent on security deposits cannot be taken into account for determination of Annual Letting Value. Similar view has also been taken in the case of CIT Vs. J K Investors (Bombay) Ltd. [2000 (6) TMI 9 - BOMBAY HIGH COURT]
We further find that no addition on 9 the issue on which the present proceedings u/s 263 has been initiated, has been made by the AO in the assessment order passed u/s 143(3) for A.Y. 2010-11 and for subsequent assessment orders i.e., A.Y. 2012-13, and 2014-15. Here, it would be relevant to point out that the order for A.Y. 2014-15 was passed u/s 143(3) of the Act on 27.02.2014 which was much after the order passed by PCIT u/s 263 for A.Y. 2011-12.
Before us, Revenue has not placed any material on record to demonstrate that the view taken by the AO while framing the assessment u/s 143(3) of the Act was an impermissible view or was upon erroneous application of legal principles necessitating the exercising of revisionary powers u/s 263 - the cases laws relied upon by D.R. are distinguishable on facts and are not applicable to the present facts.
We are of the view that in the present case, PCIT was not justified in resorting to revisionary powers u/s 263. - We therefore set aside the order and thus, the ground of the assessee is allowed.
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