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2011 (3) TMI 1804
Issues involved: Appeal against rejection of registration u/s 80G of the Income Tax Act, 1961 for a charitable trust.
Summary:
The appellant, a charitable trust, appealed against the rejection of registration u/s 80G of the Income Tax Act, 1961 by the ld. CIT-1. The trust had applied for exemption under section 80G(5) of the Act, but the CIT rejected the application citing failure to establish the genuineness of its activities. However, the same CIT had earlier granted registration under section 12AA to the trust, recognizing it as a charitable trust. The appellant argued that denying the benefit of exemption under section 80G(5) after granting registration under section 12AA is unjust. After considering the orders and relevant case law, the ITAT Agra held that since the CIT had already granted registration under section 12AA after verifying the trust's activities, it was improper to reject the application for exemption under section 80G(5). Citing a similar case from the Hon'ble Gujarat High Court, the ITAT directed the CIT-1, Agra to grant the appellant trust the benefit of exemption under section 80G(5) of the Act. Consequently, the appeal filed by the trust was allowed.
(Order pronounced in the open Court on 18.03.2011).
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2011 (3) TMI 1803
Applications for reopening/recalling of evidence - Powers of the trial court or the High court for exercise of discretion u/s 151 or Order 18 Rule 17 of the Code - when the arguments were in progress, the appellant filed two applications. The first application was filed u/s 151 of the Code with a prayer to reopen the evidence for the purpose of further cross-examination of Plaintiff (PW1) and the attesting witness (PW2). second application was filed under O18 R17 of the Code for recalling PWs.1 and 2 for further cross examination. it was necessary to reopen the evidence and further cross-examine PW1 and PW2 with reference to the said admissions (electronically recorded evidence) to demonstrate that the agreement of sale was only a security for the loan. It is stated that the Compact Disc containing the recording of the said conversations was produced along with the said applications. The respondent resisted the said applications. The trial court held that as the evidence of both parties was concluded and the arguments had also been heard in part, the applications were intended only to delay the matter. Therefore, dismissed and HC on the same reasons given by trial court dismissed the said application. The said order is challenged in these appeals by special leave.
HELD THAT:- The appellant - defendant has taken a consistent stand in his reply notice, written statement and evidence that the agreement of sale was executed to secure a loan of ₹ 150,000, as the respondent insisted upon execution and registration of such agreement. If after the completion of recording of evidence, PW1 and PW2 had admitted during conversations that the amount paid was not advance towards sale price, but only a loan and the agreement of sale was obtained to secure the loan, that would be material evidence which came into existence subsequent to the recording of the depositions, having a bearing on the decision and will also clarify the evidence already led on the issues. According to the appellant, the said evidence came into existence only on 27.10.2008 and 31.10.2008, and he prepared the applications and filed them at the earliest, that is on 11.11.2008. As defendant could not have produced this material earlier and if the said evidence, if found valid and admissible, would assist the court to consider the evidence in the correct perspective or to render justice, it was a fit case for exercising the discretion u/s 151 of the Code.
In view of the above, these appeals are allowed in part. The orders of the High Court and Trial Court dismissing u/s 151 of the Code are set aside. The orders are affirmed in regard to the dismissal under O18 R17 of the Code.
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2011 (3) TMI 1802
Issues involved: Appeal against deduction u/s 10B on export proceeds.
Summary:
The revenue appealed against the allowance of deduction u/s 10B on export proceeds of Rs. 36,13,485/-, citing a previous order against the assessee. The assessee's return declared income of Rs. 5,86,120/-, with assessment completed at Rs. 27,30,350/-. The claim of deduction u/s 10B was initially reduced due to delayed receipt of export proceeds in convertible foreign exchange. However, the CIT(A) reversed this decision, citing RBI circular No.91 and Section 155(11A) which allows for amendment of assessment orders in such cases. The appellant's unit being in a Special Economic Zone (SEZ) was a key factor in the decision, as per the circular allowing flexibility in realization of export proceeds. The appellant received the export proceeds in October 2005, making them eligible for deduction u/s 10B. The tribunal noted that Section 155(11A) provides for amending orders when income is subsequently received in convertible foreign exchange, supporting the allowance of deduction u/s 10B in this case.
The assessee did not attend the hearing, and the revenue could not identify any errors in the CIT(A)'s order. The tribunal observed that Section 155(11A) allows for modifying orders when sale proceeds are received after the prescribed time, indicating that correcting the deduction amount later would not be appropriate. Consequently, the tribunal upheld the CIT(A)'s decision to allow the deduction u/s 10B on the full export proceeds amount of Rs. 36,13,485/-. The appeal was dismissed, and the order was pronounced on 22.03.2011.
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2011 (3) TMI 1801
Issues Involved:
1. Whether it is mandatory for the Special Tribunal or the Special Court to call for a report of the Mandal Revenue Officer before taking cognizance of a case under the Andhra Pradesh Land Grabbing (Prohibition) Act, 1982.
2. Whether it is mandatory for the Special Tribunal or the Special Court to publish a notification in the Gazette notifying the fact of cognizance of a case under the Act.
Detailed Analysis:
Issue 1: Mandatory Report from Mandal Revenue Officer
The appellants argued that Sections 7A and 8 of the Andhra Pradesh Land Grabbing (Prohibition) Act do not mandate the Special Tribunal or Special Court to call for a report from the Mandal Revenue Officer before taking cognizance of a case. They contended that Rule 6(1) of the Andhra Pradesh Land Grabbing (Prohibition) Rules, 1988, which states that the Special Court or Tribunal "may" refer the application for local inspection or verification, indicates discretion rather than obligation.
The respondents, however, argued that the term "may" in Rule 6(1) should be interpreted as "shall," making it mandatory for the Special Tribunal or Special Court to call for the Mandal Revenue Officer's report. They relied on judicial precedents that suggest the word "may" can imply a mandatory requirement depending on the context.
Upon examining the context, the Supreme Court noted that the object of Rule 6 is to assist the Special Tribunal or Special Court in arriving at a correct decision. The Court held that if the truth of the statements made in the application can be ascertained through other means, such as oral and documentary evidence, it is not mandatory to refer the application to the Mandal Revenue Officer. Therefore, the Court concluded that there is no compelling duty on the Special Tribunal or Special Court to call for a report from the Mandal Revenue Officer.
Issue 2: Mandatory Gazette Notification
The appellants argued that the requirement to publish a notification in the Gazette under Rule 7 of the Rules and the proviso to Section 7A(4) and Section 8(6) of the Act should not be considered mandatory. They cited precedents where the word "shall" was interpreted as directory rather than mandatory.
The respondents countered that the publication of notice in the Gazette is mandatory to ensure that all interested parties are informed and can protect their interests. They argued that this requirement is in the public interest and cannot be waived.
The Supreme Court held that the publication of notice in the Gazette is indeed mandatory. The Court explained that the purpose of this requirement is to notify all persons who may have an interest in the land, thereby ensuring that they have an opportunity to appear before the Special Tribunal or Special Court to protect their interests. However, the Court also noted that if a person who claims title, ownership, or lawful possession of the land is already a party to the proceedings and has had the opportunity to participate, they cannot challenge the proceedings on the ground of non-compliance with the Gazette notification requirement.
Conclusion:
The Supreme Court allowed the appeals, set aside the High Court's orders, and remanded the matter back to the High Court for further consideration. The High Court was directed to determine whether a reference to the Mandal Revenue Officer was necessary to ascertain the truth of the statements made in the applications and to arrive at a just decision. The High Court was also instructed to consider the writ petitions on their merits. No costs were awarded.
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2011 (3) TMI 1800
Issues Involved:
The legality of provisional attachment orders passed by the Assistant Commissioner u/s 45 of the Gujarat Value Added Tax Act, 2003, and the communication dated 19.11.2010 challenging the same.
Factual Background:
An immovable property was purchased by the petitioner from a creditor bank directly in discharge of dues of the principal borrower, M/s. Hirak Biotech Limited. The property was put under provisional attachment by the Deputy Commissioner of Sales Tax due to outstanding Value Added Tax dues of approximately &8377; 2,40,09,444 from the Company. The petitioner challenged the provisional attachment orders and subsequent communication in the present petition.
Contentions Raised:
1) The power to order provisional attachment u/s 45 of the VAT Act vests with the Commissioner, not the Deputy Commissioner.
2) An order of provisional attachment can only be effective for one year, and no fresh order can be passed thereafter.
3) Lack of evidence to show that the Commissioner formed an opinion for the necessity of provisional attachment.
4) The petitioner is a purchaser of the property for value without notice.
Court's Analysis:
- The Court clarified that the Assistant Commissioner had the delegated power to pass provisional attachment orders.
- The Court found that assessment proceedings were pending when the provisional attachment order was passed.
- The contention that a provisional attachment can only last for one year was dismissed, stating that fresh orders can be passed if deemed necessary to safeguard the Revenue's interest.
- The Court differentiated the present case from the Division Bench judgment regarding priority of State dues, as the statutory provisions were different.
- The Court refrained from discussing the priority of State dues and other related aspects as they were not the issues in the present petition.
- After examining the validity of the provisional attachment order, the Court concluded that no case was made out and dismissed the petition.
Conclusion:
The petition challenging the provisional attachment orders and communication was dismissed based on the Court's analysis and conclusions similar to a previous order in a related case.
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2011 (3) TMI 1799
Issues involved:
The issues involved in this case are the regularization of a temporary employee in the U.P. State Services, alleged discrimination in regularization, and the legality of terminating the services of the employee.
Regularization of Temporary Employee:
The Respondent, holding a B.A.M.S. degree, was appointed under the Anshkalik Scheme but alleged that the State Government's actions were against the spirit of previous court decisions. The Respondent claimed entitlement to regularization based on satisfactory work performance and certificates from the Chief Medical Officer. The High Court had allowed a similar petition before, emphasizing violation of constitutional articles and directing consideration for regularization within six months.
Termination of Services and Representation:
The Respondent's services were terminated on 16.4.1991, leading to unsuccessful representations for regularization and wage parity. Despite a Special Leave Petition filed against the High Court's decision being dismissed, no regularization occurred post that dismissal.
Alleged Discrimination and Legal Stand:
The Respondent argued discrimination by citing instances of others being regularized. However, the counter affidavit stated the Respondent was a temporary employee and not in service after 16.4.1991. The High Court's decision in favor of the Respondent was appealed against, emphasizing the need for U.P. Public Service Commission's selection for regular appointments.
Judgment:
The Supreme Court, citing precedents, clarified that temporary employees have no automatic right to regularization. The Court highlighted that the High Court cannot regularize employees and emphasized the need for proper selection processes. The Court ruled in favor of the Appellant, setting aside the High Court's decision and dismissing the writ petition, with no costs imposed.
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2011 (3) TMI 1798
Issues Involved:
1. Whether the process of converting whole pulses into Dal constitutes "manufacturing" u/s 80IB(3)(ii) of the Income Tax Act.
2. Whether the assessee is entitled to deduction u/s 80IB(3)(ii) of the Income Tax Act.
Summary:
Issue 1: Whether the process of converting whole pulses into Dal constitutes "manufacturing" u/s 80IB(3)(ii) of the Income Tax Act.
The revenue argued that the assessee's activity of breaking whole pulses into pieces does not amount to manufacturing, as no new item or article comes into existence. They relied on various judicial precedents, including Acqua Minerals Private Limited v. DCIT and CIT v. Gem India Mfg. Co., to support their claim that no manufacturing is involved.
Conversely, the assessee contended that a highly specialized process with the aid of machinery is involved in converting whole pulses into Dal, resulting in a commercially new and distinct end product. The assessee cited several cases, including ITO v. Arihant Tiles & Marbles Private Limited and CIT v. Oracle Software India Limited, to argue that the process amounts to manufacturing.
The Tribunal analyzed the detailed manufacturing process, which includes mixing, grading, sorting, watering, oiling, drying, de-husking, splitting, polishing, and packing. The Tribunal concluded that the process results in a new and distinct commercial end product, thus constituting manufacturing.
Issue 2: Whether the assessee is entitled to deduction u/s 80IB(3)(ii) of the Income Tax Act.
The Tribunal noted that the assessee is a registered SSI Unit engaged in the manufacturing of different kinds of Dals with a significant annual manufacturing capacity. The Tribunal observed that the end product (Dal) is commercially different from the raw material (whole pulses), and the process involves systematic and organized activity with employer-employee cooperation.
The Tribunal referred to various judicial pronouncements, including CIT v. Oracle Software India Limited and CIT v. Emptee Poly Yarn P. Ltd., which supported the view that the assessee's activity amounts to manufacturing. The Tribunal concluded that the assessee is producing a new and distinct commercially end product from its raw material and is thus entitled to deduction u/s 80IB(3)(ii) of the Act.
Conclusion:
The Tribunal upheld the order of the learned CIT(A) and dismissed the revenue's appeal, affirming that the assessee is entitled to deduction u/s 80IB(3)(ii) of the Income Tax Act. The order was pronounced in open Court on 2nd March, 2011.
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2011 (3) TMI 1797
Entitlement to exemption u/s 011 - it is found that the assessee trust is established under the provisions of Major Port Trusts Act, 1963. It commenced its operations from 1st Nov., 1967.The service is for the national purpose of acting as a major port of India and helps in earning substantial export revenues necessary for the country and also in import of essential goods. Earlier to 2002, the assessee trust was availing of exemption in respect of its income u/s 010(20) being a 'local authority'. Later on due to insertion of an Explanation to s 010(20), the assessee was excluded from the definition of "local authority". Consequently, it was not entitled to exemption under the said section but the assessee was still entitled to exemption u/s 011 being a "charitable trust". The assessee obtained registration as charitable trust u/s 012A and accordingly registration was granted to it by the order of the CIT, Cuttack.
higher rate of depreciation - from the admitted facts and circumstances of the case, the fixed assets serve some special purpose of the working and thereby they are considered as "plant and machinery" in the working process of the assessee. This claim of the assessee is fortified by the decision of Hon'ble Supreme Court rendered in the case of CIT v. Dr. B. Venkata Rao [1999 (2) TMI 11 - SUPREME COURT], Chief CIT (Admn.) & Ors. v. Visveswarayya Iron & Steel Ltd. [1991 (9) TMI 21 - KARNATAKA HIGH COURT] and Kalinga Tubes Ltd. v. CIT [1973 (5) TMI 18 - ORISSA HIGH COURT]. In the light of the cases, the assessee's claim is substantiated and hence found entitled to higher rate of depreciation at 15 per cent on the fixed assets as claimed by the assessee.
revenue income of the assessee - Considering the issue of treatment of ₹ 42 crores being interest on investment on capital asset replacement reserve fund and on investment on development repayment of loan and contingency reserve fund, as income of the assessee. we are of the considered view that this is a diversion of the interest amounts at source and thereby the said interest amounts cannot be added to the revenue income of the assessee. Hence, the contention taken by the Department is not sustainable for legal scrutiny. Accordingly, the additions made by the Department are hereby directed to be deleted.
Disallowance of fund recognition - claim of the assessee of ₹ 40 crores and ₹ 2,22,524 to pension provision fund and contributory provident fund respectively, it is found that the disallowance was made on the ground that the "funds" were yet to be recognized by the CIT. the action of the CIT in granting the recognition to the said funds from 3rd Feb 2009 is unfounded and hence, it is to be recognized from the date of application made by the assessee. Consequently for the current period also the fund recognition is applicable. Accordingly, the disallowance made by the Department is not sustainable under law and it is hereby directed to be deleted.
In the result, the assessee's appeal is hereby allowed.
it is found that the AO has taken into consideration all the amounts and added back only those items where understatement of income has been reported by the C&AG of India. On perusal of the said report of C&AG of India, it is found that the AO has completely neglected those items where overstatement of income had been reported. Accordingly the AO's one-sided action is not sustainable under law. The learned CIT(A) having very same opinion has directed the deletion of the additions made by the AO. Hence, we are of the considered view that the action of the CIT(A) in doing so is not at all infirm in any way requiring intervention and the same is upheld finding the issue raised by the Department as devoid of merits.
In the result, the appeal of the Department is dismissed.
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2011 (3) TMI 1796
Issues Involved:
1. Violation of Regulation 7 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
2. Violation of Regulation 11(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.
Summary:
Issue 1: Violation of Regulation 7 of the Takeover Code
The appellants, promoters of Blue Coasts Hotels Limited, had pledged their shares as collateral security for loans taken by Morepen Laboratories Limited. Upon default, the banks invoked the pledges and transferred the shares to their demat accounts, becoming the beneficial owners. The Securities and Exchange Board of India (SEBI) contended that the appellants, upon reacquiring the shares after settling the loans, failed to disclose the acquisition as required by Regulation 7 of the takeover code. The adjudicating officer concluded that the appellants were under obligation to make the required disclosures to the company and stock exchanges, which they failed to do, thus violating Regulation 7(1) read with 7(2) of the takeover code.
Issue 2: Violation of Regulation 11(1) of the Takeover Code
The adjudicating officer also found that the appellants, upon reacquiring the shares from the banks, exceeded the threshold limit prescribed by Regulation 11(1) of the takeover code. This required them to make a public announcement to acquire further shares of the target company, which they did not do. The officer concluded that the appellants violated Regulation 11(1) by failing to make a public announcement in accordance with the regulations. Consequently, a monetary penalty of Rs. 3 lacs was imposed on each appellant, with Rs. 2 lacs for violating Regulation 11(1) and Rs. 1 lac for violating Regulation 7.
Conclusion:
The Tribunal upheld the adjudicating officer's findings, stating that the banks became beneficial owners upon invoking the pledge, and the appellants acquired the shares upon their transfer back, triggering the requirements of Regulations 7 and 11(1). The argument that the shares remained collateral security throughout was rejected, as it would circumvent the statutory provisions. The appeals were dismissed with no order as to costs.
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2011 (3) TMI 1795
Issues Involved:
The appeal filed by the Revenue against the order of the CIT(A)-IV, Kolkata for A.Yr. 2007-08.
Additions on Account of Interest, Bank Charges, Foreign Exchange Fluctuation Loss, and Profit on Conversion of Foreign Currency:
The AO disallowed various amounts including interest, bank charges, foreign exchange fluctuation loss, and profit on conversion of foreign currency. The AO's rationale was based on the nature of the business, details of transactions, and the belief that certain expenses were not related to the business activities. The CIT(A) deleted these additions after considering submissions and finding no evidence of non-business purposes for the expenses. The CIT(A) noted that bank charges were incurred for the company's export business, and interest payments were justified by the income earned. The CIT(A) also disagreed with the AO's view on foreign exchange losses, considering them as allowable deductions. The Tribunal upheld the CIT(A)'s decision, citing the Hon'ble Apex Court's ruling on exchange differences as allowable expenditures under section 37(1). Consequently, the appeal by the Revenue was dismissed.
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2011 (3) TMI 1794
Issues involved: Delay in filing review petition, maintainability of review petition after dismissal of special leave petition.
Delay in filing review petition: The Supreme Court condoned a delay of 71 days in filing a review petition before the High Court, stating that a liberal view should have been taken by the High Court. The Court emphasized that the review petition should have been decided on merits despite the delay.
Maintainability of review petition after dismissal of special leave petition: The Respondent argued that the review petition was not maintainable as the special leave petition filed in the Supreme Court had been dismissed. However, the Court rejected this argument, stating that the doctrine of merger applies when the Supreme Court dismisses a special leave petition with reasons, leading to the judgment of the lower court merging into the Supreme Court's order. In such cases, there can be no review of the lower court's judgment. Conversely, if a special leave petition is dismissed without reasons, the judgment of the lower court continues to exist and can be reviewed for errors apparent on the face of the record.
The Court clarified that a judgment which continues to exist can be reviewed, with the scope limited to errors apparent on the face of the record. It emphasized that the review petition is maintainable in such cases, even if the special leave petition had been dismissed.
In response to the argument that filing a review petition after the dismissal of a special leave petition would be an affront to the Supreme Court's order, the Court held that such observations cannot be treated as a precedent. It emphasized that a legal principle must be established for a decision to serve as a precedent. The Court asserted that a mere stray observation does not constitute a precedent.
The Court concluded by allowing the appeal, setting aside the High Court's order, condoning the delay in filing the review petition, and remanding the matter to the High Court for a decision on the review petition on merits in accordance with the law and after hearing all concerned parties.
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2011 (3) TMI 1793
Supreme Court granted leave and expedited the hearing in the case. (Citation: 2011 (3) TMI 1793 - SC Order)
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2011 (3) TMI 1792
Issues involved: Appeal against assessment order u/s 143(3) of the Income Tax Act, 1961 for A.Y. 2002-03. Addition of various sums to total income by the Income Tax Officer.
Summary:
Issue 1: Assessment Order u/s 143(3)
The appellant challenged the assessment order u/s 143(3) of the Income Tax Act, 1961, contending that the CIT(A) erred in confirming the order without considering the details and documents filed during the assessment proceedings.
Issue 2: Addition to Total Income
The Income Tax Officer added manufacturing expenses, share capital, unsecured loans, current liabilities, personal expenses, finance charges, administrative, selling & distribution expenses, and additions in fixed assets to the total income. The appellant argued that these additions were arbitrary and excessive.
Detailed Judgment:
The appellant, a company engaged in the pharmaceutical business, filed a return declaring a loss for A.Y. 2003-04. After scrutiny, the Income Tax Officer assessed the income at a higher amount due to lack of cooperation from the appellant in providing necessary details. The CIT(A) partially allowed the appeal, leading the appellant to file a second appeal before the ITAT.
Consequent to the ITAT's decision to set aside the assessment order, the AO re-assessed the income, adding various expenses and sums back to the declared loss. The appellant contended that it had maintained proper records, which were not considered by the lower authorities. The CIT(A) provided partial relief, prompting the appellant to appeal to the Tribunal.
The Tribunal noted that even in a best judgment assessment, the AO cannot adopt an arbitrary approach without proper records. The lower authorities were criticized for unjustifiably adding various expenses and sums to the income. The Tribunal found the assessment to be excessive, harsh, and arbitrary, ordering it to be set aside and re-assessed by the AO, with proper consideration of the appellant's records.
In conclusion, the appellant's appeal was allowed for statistical purposes, emphasizing the need for a fair and reasonable assessment process based on available records and legal requirements.
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2011 (3) TMI 1791
Issues Involved:
1. Recasting of Profit & Loss account and adoption of GP rate.
2. Addition under Section 69 of the IT Act for unexplained investment in excess stock.
3. Addition under Section 69C of the IT Act for discrepancy in closing balance with Unicorn Corporation.
Issue-Wise Detailed Analysis:
1. Recasting of Profit & Loss Account and Adoption of GP Rate:
The assessee contended that the CIT(A) erred in confirming the AO's order to recast the Profit & Loss account for the post-survey period by adopting a GP rate of 8.67%. The AO observed that the assessee had shown a GP rate of 73.45% before the survey and a loss of Rs. 6,02,012/- (negative GP rate of 48.06%) after the survey. The AO rejected the book results due to the absence of a stock register and discrepancies in the books of accounts. The CIT(A) upheld the rejection of the book results and directed the AO to adopt a GP rate of 8.67% for the post-survey period, considering the drastic fall in GP ratio as unexplained.
2. Addition Under Section 69 of the IT Act for Unexplained Investment in Excess Stock:
During a survey, the physical stock was found to be valued at Rs. 25,08,860/-, while the books reflected only Rs. 4,99,032/-. The assessee admitted the difference as unaccounted income and paid tax thereon. The AO added Rs. 21,71,063/- as unexplained investment under Section 69 of the IT Act. The CIT(A) upheld this addition, noting that the assessee did not maintain stock records and failed to provide a satisfactory explanation for the excess stock. The Tribunal found no infirmity in the CIT(A)'s decision, emphasizing the evidentiary value of the assessee's admission and subsequent payment of tax on the unaccounted income.
3. Addition Under Section 69C of the IT Act for Discrepancy in Closing Balance with Unicorn Corporation:
The AO noticed a discrepancy in the closing balance with Unicorn Corporation, where the assessee's books showed Rs. 20,144/- while Unicorn Corporation's books showed Rs. 3,500/-. The assessee explained that the difference was due to a disputed deposit with Bhutan Boards Products Ltd., but failed to provide documentary evidence. The CIT(A) upheld the addition of Rs. 23,614/- under Section 69C of the IT Act. The Tribunal admitted additional evidence (a credit note dated 4.8.1999) and remanded the matter to the CIT(A) for reconsideration in light of the new evidence.
Conclusion:
The Tribunal upheld the CIT(A)'s decisions on the recasting of the Profit & Loss account and the addition under Section 69 for unexplained investment in excess stock. However, it remanded the issue of the addition under Section 69C for discrepancy in closing balance with Unicorn Corporation to the CIT(A) for fresh consideration with the additional evidence provided by the assessee. The appeal was partly allowed for statistical purposes.
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2011 (3) TMI 1790
Issues involved: Appeal against penalty imposed u/s 271(1)(c) of the I.T. Act.
Summary:
The appeal was filed against the penalty imposed u/s 271(1)(c) of the I.T. Act. The assessee argued that the penalty was based on a disallowance u/s 40A(2)(b) and contended that no penalty should be levied as there was no concealment of income or furnishing of inaccurate particulars. The Tribunal considered the facts and legal precedents cited by both sides and concluded that the disallowance made u/s 40A(2)(b) did not warrant the imposition of a penalty u/s 271(1)(c) as there was no concealment or inaccurate particulars furnished by the assessee. The Tribunal allowed the appeal of the assessee.
The assessee, engaged in manufacturing, disclosed nil income in its return after setting off losses. The Assessing Officer completed the assessment at nil income, but made certain disallowances. The penalty was imposed during the pendency of the appeal before the Tribunal. The Tribunal noted that the disallowance u/s 40A(2)(b) did not indicate any concealment or furnishing of inaccurate particulars by the assessee. Citing legal precedents, the Tribunal held that mere disallowance of expenses does not attract penalty u/s 271(1)(c) if there is no concealment or inaccurate particulars furnished. The Tribunal emphasized that the genuineness of the expenditure was not in question, and the Assessing Officer's discretion in making the disallowance u/s 40A(2)(b) did not warrant a penalty. The Tribunal allowed the appeal of the assessee based on these findings.
In conclusion, the Tribunal allowed the appeal of the assessee against the penalty imposed u/s 271(1)(c) of the I.T. Act. The order was pronounced in the open court in the presence of representatives of both sides.
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2011 (3) TMI 1789
Issues involved: Stay of impugned order, commission of offence under Prevention of Money Laundering Act, extraordinary situation created by the order, detention for custodial interrogation.
In the judgment, the Supreme Court granted a stay of the operation of the impugned order passed by the Principal Judge, City Civil and Sessions Court and Special Court under the Prevention of Money Laundering Act, 2002. The Court found that the material on record prima facie disclosed the commission of an offence by the Respondent under the provisions of the Prevention of Money Laundering Act, 2002. The Court noted that the order passed by the Principal Judge created an extraordinary situation that could frustrate the ongoing investigation if allowed to stand, leading to the decision to interfere with the order at that stage. Due to the extraordinary circumstances and complexity of the issues involved, the Court authorized the detention of the Respondent for custodial interrogation by the authorities of the Enforcement Directorate for a period of four days.
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2011 (3) TMI 1788
Issues involved: Application of principle of unjust enrichment in case of refund of duty provisionally paid prior to 13.7.2006.
Judgment Summary:
The Gujarat High Court considered an appeal by the Revenue against a tribunal's decision, raising questions regarding the application of unjust enrichment in a refund case. The tribunal's ruling was based on a larger Bench judgment in the matter of Commissioner of Customs v. Hindustan Zinc Ltd. The High Court noted a similar issue in a previous case involving Hindalco Industries Ltd. The Court observed that the provisions of Section 27 of the Customs Act, 1962, dealing with refund of duty, cannot be applied to override Section 18 of the Act. The Court emphasized that the Revenue is obligated to make a refund without requiring a claim by the assessee if excess duty was paid during provisional assessment. This obligation existed until 12.7.2006. The Court dismissed the appeal, stating that the principles of unjust enrichment under Section 27 cannot be read into Section 18 without considering the amendment from 13.7.2006 onwards.
In subsequent cases, the Court reaffirmed this interpretation, leading to the conclusion that no substantial question of law arises for consideration. Therefore, the tax appeal was dismissed based on the established legal principles.
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2011 (3) TMI 1787
The Supreme Court allowed the appellant to withdraw the appeal and approach the High Court within six weeks. The appeal was filed against an order passed by CESTAT, which should have been filed before the High Court.
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2011 (3) TMI 1786
Issues involved:
The issues involved in the judgment are related to the refusal of granting a certificate u/s 197 of the Income Tax Act for deduction of tax at source at Nil rate, the completion of assessment for earlier years by the Revenue, and the plea of limitation in framing the order of assessment.
Refusal of Certificate u/s 197:
The petitioner sought relief through a writ petition to quash the impugned order refusing to grant a certificate u/s 197 of the Act for deduction of tax at source at Nil rate. The petitioner argued that the tax deducted at source is not payable, and they are entitled to a refund. The court noted that the view expressed under Section 197 is a prima facie opinion and should not affect the assessing officer during final assessment. The petitioner's grievance was that the Department was not granting relief under Section 197 while also not framing the order of assessment due to a plea of limitation.
Completion of Assessment:
The court directed that the order of assessment for the financial year 2008-09 must be passed by a specified date. The petitioner's counsel assured full cooperation for the assessment process to be completed. The court emphasized the importance of the assessing officer performing their duty to resolve the controversy regarding Tax Deducted at Source (TDS). The writ petition was disposed of with the mentioned directions, without any order as to costs.
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2011 (3) TMI 1785
Issues involved: Penalty for transport of goods without accounting at border checkpost.
Summary:
The judgment pertains to a penalty order confirmed by the Tribunal in a second appeal regarding the transport of goods from outside the State to Kerala through parcel service without accounting for the goods at the border checkpost. The petitioner's counsel argued that the goods, verified at the parcel office with a proper bill, were not declared at the border checkpost due to an omission by the truck driver. On the other hand, the Government Pleader contended that the goods were not declared at any internal checkposts after crossing the border, suggesting a likelihood of tax evasion. The Tribunal and lower authorities found that the failure to account for the goods at the checkpost by producing documents justified the penalty, which was upheld. The Revision Petition was dismissed, with the petitioner advised to contest the assessment challenge regarding the substantial addition to the turnover due to the penalty.
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9911796707
