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Showing 41 to 60 of 782 Records
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2012 (4) TMI 804
Issues Involved:
1. Validity of the notice issued u/s 148 of the Income Tax Act, 1961.
2. Jurisdiction of the respondent to re-open the concluded assessment u/s 147 of the Act.
3. Alleged failure of the petitioner to disclose fully and truly all material facts necessary for the assessment.
Summary:
1. Validity of the notice issued u/s 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 1.3.2011 issued u/s 148 of the Act and the consequential order dated 25.11.2011 rejecting the objections raised by the petitioner. The petitioner argued that the re-opening of the assessment was a case of change of opinion on a concluded scrutiny assessment, contrary to the Supreme Court decision in CIT v. Kelvinator of India Ltd. The court noted that the reasons for re-opening did not indicate any fresh tangible material warranting such action.
2. Jurisdiction of the respondent to re-open the concluded assessment u/s 147 of the Act:
The petitioner contended that the respondent lacked jurisdiction to re-open the assessment as there was no failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment. The court observed that the respondent did not address the jurisdiction issue as a preliminary matter and proceeded with the re-assessment based on the explanation to Section 80-IB(10) introduced by the Finance Act, 2009, with retrospective effect from 1.4.2001.
3. Alleged failure of the petitioner to disclose fully and truly all material facts necessary for the assessment:
The petitioner argued that there was no failure to disclose material facts and that the re-opening was based on a mere change of opinion. The court found that the petitioner had submitted all relevant materials during the original assessment, and the respondent did not provide any new facts or reasons to justify the re-opening. The court relied on precedents, including the High Court of Gujarat's decision in Aayojan Developers v. ITO, which held that in the absence of failure to disclose material facts, the re-opening of assessment after four years is invalid.
Conclusion:
The court concluded that the assumption of jurisdiction by the respondent u/s 147 of the Act, after the expiry of four years from the end of the relevant assessment year, was illegal and invalid. Consequently, the proceedings initiated by the issuance of the impugned notice u/s 148 of the Act were unsustainable. The writ petition was allowed, and the connected miscellaneous petition was closed.
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2012 (4) TMI 803
Issues involved: The judgment addresses three grounds raised by the revenue, involving the deletion of additions made by the Assessing Officer (AO) u/s 40(a)(i), u/s 40(a)(ia), and u/s 14A of the Income Tax Act, 1961.
Ground No. 1 - u/s 40(a)(i):
The revenue challenged the deletion of an addition of Rs. 7,39,50,478 towards interest liability relating to M/s. Alimenta, Geneva, contending that the liability was contingent and fell under the provisions of Section 40(a)(i). The Tribunal upheld the CIT(A)'s decision based on previous orders favoring the assessee for other assessment years, emphasizing that the issue had been decided in favor of the assessee by the Tribunal and the operation of these orders had not been stayed by the High Court. Therefore, the Tribunal dismissed ground No. 1 in favor of the assessee.
Ground No. 2 - u/s 40(a)(ia):
The revenue disputed the deletion of an addition of Rs. 35,29,04,787 made by the AO u/s 40(a)(ia) concerning service charges, society charges, and commission paid to cooperative societies. The Tribunal referred to a decision by the Jaipur Tribunal, which clarified that the charges mentioned in the sale bills were not payments of commission as per Section 194H, thus no tax deduction was required. Relying on this decision, the Tribunal dismissed ground No. 2 in favor of the assessee.
Ground No. 3 - u/s 14A:
The AO disallowed Rs. 84,84,500 u/s 14A, alleging that the assessee deliberately did not claim deduction u/s 80P(2)(d) to avoid the applicability of section 14A. The Tribunal noted that the dividend income received was not excluded from the total income due to a loss in the gross total income, rendering the deduction u/s 80P(2)(d) unavailable. It interpreted the provision to require a positive exclusion of income from the total income, which was not the case here. Therefore, the Tribunal upheld the CIT(A)'s decision and dismissed ground No. 3 in favor of the assessee.
In conclusion, the Tribunal dismissed all three grounds raised by the revenue, upholding the decisions of the CIT(A) in favor of the assessee.
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2012 (4) TMI 802
Issues Involved:
1. Addition u/s 40(a)(ia) and eligibility for deduction u/s 80IC.
2. Treatment of interest income from FDRs as income from other sources.
3. Treatment of excise duty refund for deduction u/s 80IC.
4. Treatment of transport subsidy as income from other sources and eligibility for deduction u/s 80IC.
Summary:
1. Addition u/s 40(a)(ia) and eligibility for deduction u/s 80IC:
The assessee raised additional grounds concerning the partial confirmation of addition by CIT(A) u/s 40(a)(ia) and its eligibility for deduction u/s 80IC. The Tribunal observed that TDS was deducted and paid before the due date of filing the return u/s 139(1). The Tribunal relied on the Hon'ble Calcutta High Court's decision in CIT Vs. Virgin Creations, which held that the amendment by Finance Act, 2010 in section 40(a)(ia) is remedial and curative, thus applicable retrospectively. Consequently, the Tribunal allowed the assessee's claim, stating that the disallowance made by the A.O. and confirmed by CIT(A) is not sustainable.
2. Treatment of interest income from FDRs as income from other sources:
The assessee contested the CIT(A)'s decision to treat interest income from FDRs as income from other sources, thereby denying deduction u/s 80IC. The Tribunal upheld the CIT(A)'s decision, referencing the Hon'ble Supreme Court's ruling in Pandian Chemicals Ltd. Vs. CIT, which clarified that interest income cannot be treated as derived from industrial undertaking or business enterprises. Thus, this ground of appeal was dismissed.
3. Treatment of excise duty refund for deduction u/s 80IC:
The assessee challenged the exclusion of excise duty refund from business income for deduction u/s 80IC. The Tribunal found that the issue was covered in favor of the assessee by the Hon'ble Guwahati High Court's decision in CIT Vs. Meghalaya Steels Ltd., which held that excise duty refund has a direct nexus with the manufacturing activity and is eligible for deduction u/s 80IC. Therefore, this ground of the assessee's appeal was allowed.
4. Treatment of transport subsidy as income from other sources and eligibility for deduction u/s 80IC:
The assessee argued that transport subsidy should be considered as business income eligible for deduction u/s 80IC. However, the Tribunal referred to the Hon'ble Guwahati High Court's decision in Meghalaya Steels Ltd., which held that transport subsidy cannot be said to be derived from the industrial undertaking and is not eligible for deduction u/s 80IC. Consequently, this ground of the assessee's appeal was dismissed.
Conclusion:
The appeal of the assessee was partly allowed, with the Tribunal allowing the claim regarding the addition u/s 40(a)(ia) and excise duty refund, while dismissing the claims concerning interest income from FDRs and transport subsidy.
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2012 (4) TMI 801
Issues involved:
The judgment involves issues related to unexplained loans, bogus purchases, and penalty charges.
Unexplained loans:
The department appealed against the deletion of an addition of Rs. 32,10,000 made by the AO on account of unexplained loans from various parties. The CIT(A) deleted the amount based on the assessee's evidence, including bank statements and PAN numbers of loan creditors. The AO considered the loans as bogus due to discrepancies in addresses and missing income tax returns of the parties. The ITAT observed that the matter required reconsideration by the CIT(A) to establish the genuineness, creditworthiness, and identity of the loan creditors. The issue was restored to the file of the CIT(A) for fresh consideration.
Bogus purchases:
The AO made an addition of Rs. 82,95,347 for bogus purchases by the assessee. The CIT(A) deleted this addition, citing lack of opportunity for the assessee to address discrepancies in addresses of parties and payments made by account payee cheques. The ITAT set aside the CIT(A) order and restored the matter for fresh consideration, emphasizing the need for adequate opportunities for both sides.
Penalty charges:
The AO disallowed Rs. 42,03,426 claimed by the assessee as penalty charges on contract delays. The CIT(A) considered the payment as damages for breach of contract and allowed the deduction under section 37(1) of the Act. The ITAT upheld the CIT(A) decision, stating that the amount paid for breach of contractual obligation was an allowable deduction as business expenditure. The appeal was partly allowed for statistical purposes.
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2012 (4) TMI 800
Issues Involved:
1. Deletion of addition of Rs. 47,50,000/- as unexplained credit entries u/s 68 of the I.T. Act, 1961.
2. Deletion of disallowance of Rs. 10,54,199/- of interest claimed on the above credit entries.
3. Observations regarding the depositors' engagement in providing bogus entries.
4. Allegation that the amounts introduced as credit entries were the assessee's own unaccounted money.
Summary:
Issue 1: Deletion of Addition of Rs. 47,50,000/- as Unexplained Credit Entries u/s 68 of the I.T. Act, 1961
The Revenue appealed against the deletion of Rs. 47,50,000/- added u/s 68 as unexplained credit entries. The AO argued that the assessee introduced its own cash through the Ganga Ram Group, which was involved in providing loan entries for a consideration. The assessee provided evidence including account copies, bank statements, and confirmation letters from creditors. The CIT(A) deleted the addition, noting the absence of concrete evidence proving that the cash belonged to the assessee. The Tribunal upheld the CIT(A)'s decision, emphasizing that the identity, creditworthiness, and genuineness of the transactions were established, and the AO failed to disprove these facts.
Issue 2: Deletion of Disallowance of Rs. 10,54,199/- of Interest Claimed on the Above Credit Entries
The AO disallowed the interest claimed on the loans, which was also deleted by the CIT(A). The Tribunal supported this deletion, as the loans were deemed genuine and the interest paid was thus allowable.
Issue 3: Observations Regarding the Depositors' Engagement in Providing Bogus Entries
The AO claimed that the depositors admitted to providing bogus entries, but the CIT(A) found no evidence supporting this. The Tribunal agreed, noting that the AO did not summon the creditors despite the assessee's request, and no material evidence was presented to prove the transactions were bogus.
Issue 4: Allegation that the Amounts Introduced as Credit Entries were the Assessee's Own Unaccounted Money
The AO alleged that the credit entries were the assessee's unaccounted money routed through loan entries. The CIT(A) and the Tribunal found no concrete evidence to support this claim. The Tribunal emphasized that the AO did not provide any material to prove that the loans were not genuine and failed to examine the creditors despite the assessee's requests.
Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s deletion of the additions and disallowances, as the assessee had sufficiently proven the genuineness of the loans and the interest claimed. The order was pronounced in the open court.
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2012 (4) TMI 799
Issues Involved:
1. Quashing of the criminal complaint u/s 138 of the Negotiable Instruments Act.
2. Vicarious liability of directors u/s 141 of the Act.
3. Validity of the summoning order and proceedings arising therefrom.
Summary:
Issue 1: Quashing of the Criminal Complaint u/s 138 of the Negotiable Instruments Act
The petitioner sought quashing of the criminal complaint bearing CC No. 3864/11 u/s 138 of the Negotiable Instruments Act, the summoning order dated 01.03.2011, and all proceedings arising therefrom. The accused company had issued post-dated cheques to the complainant company, which were dishonoured due to "payment stopped by the Drawer." The complainant sent a demand notice, and upon non-payment, filed a complaint u/s 138 of the Act. The petitioners, who were directors of the accused company, invoked the power of the court u/s 482 CrPC to quash the complaint and related proceedings.
Issue 2: Vicarious Liability of Directors u/s 141 of the Act
The petitioners argued that they had ceased to be directors at the time of the alleged offence and thus could not be held vicariously liable. They contended that the dishonoured cheques were issued as security and not against any existing debt or liability. The court examined the requirements for vicarious liability u/s 141 of the Act, referencing the judgments in S.M.S Pharmaceuticals Ltd., N.K. Wahi, and N. Rangachari. It was held that a person can be held liable if they were in charge of and responsible for the conduct of the business of the company at the relevant time. The court found that petitioner no. 2 and 3 were directors at the time of the cheque issuance and had knowledge of the stop payment instructions, thus could be held vicariously liable. However, petitioner no. 1 had ceased to be a director well before the cheques were issued and thus could not be held liable.
Issue 3: Validity of the Summoning Order and Proceedings Arising Therefrom
The court noted that the complaint and demand notice contained specific averments that the petitioners were responsible for the conduct and affairs of the accused company. The court emphasized that at the summoning stage, it should not interfere unless there is gross irregularity causing miscarriage of justice. The summoning order against petitioner no. 1 was quashed due to lack of knowledge of the offence, while petitioner no. 2 and 3 were directed to present their defense before the Magistrate.
Conclusion:
The petition was partly allowed. The summoning order against petitioner no. 1 was quashed, while petitioner no. 2 and 3 were given the liberty to lead their defense evidence before the Magistrate.
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2012 (4) TMI 798
Issues involved: Appeal against orders of CIT(A) for assessment years 1996-97, 1997-98, and 2002-03 regarding interest u/s 244A on refunds.
Issue 1 - Interest u/s 244A on refunds:
The assessee claimed interest u/s 244A was not allowed till the issue of refund voucher. The ld. CIT(A) rejected the claim stating no provision in the Income-tax Act for such compensation. The assessee relied on Supreme Court decisions and a Tribunal order to support their claim. The ld. D.R. supported the CIT(A)'s decision. The Tribunal noted the A.O. did not grant interest u/s 244A till the refund issue/receipt date. Citing precedents, the Tribunal held the assessee was entitled to interest on the amounts of interest paid under sections 214 and/or 244, as well as interest on the principal amount. Following Supreme Court rulings, the Tribunal directed the A.O. to allow interest u/s 244A in accordance with the decisions. The appeals were allowed based on this reasoning.
This judgment highlights the entitlement of the assessee to interest u/s 244A on refunds, based on legal precedents and authoritative pronouncements, despite the initial rejection by the ld. CIT(A).
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2012 (4) TMI 797
Issues Involved:
1. Validity of the agreement between the parties.
2. Allegation of obtaining cheques under threat.
3. Non-joinder of the company as a necessary party to the proceedings.
Summary:
1. Validity of the Agreement:
The complainant produced the agreement (Ex. P151) which detailed the terms for the supply of beheaded and gutted "Rani fish" and was signed by the accused. This fact was undisputed in the oral evidence. The accused's letter (Ex. D5) also acknowledged the agreement, confirming the existence of a contractual relationship for the supply of fish.
2. Allegation of Obtaining Cheques Under Threat:
The accused admitted in cross-examination that the complainant was accompanied by only one person, contrary to the claim of being threatened by multiple individuals. The accused also acknowledged that the cheque (Ex. P1) was given by another director, Sushanth Welkar, who was not examined by the defense. The presence of multiple telephones in the office and the lack of immediate police complaint further weakened the accused's claim of duress. The evidence presented was insufficient to prove that the cheques were obtained under threat or duress.
3. Non-Joinder of the Company:
The revisionist argued that the complaint was not maintainable as the company was not made a party. However, the court referred to multiple precedents, including decisions from the Supreme Court and various High Courts, which established that a complaint against a director or person in charge of the company is maintainable even if the company itself is not arraigned as an accused. The court cited Section 141 of the Negotiable Instruments Act and similar provisions under other statutes, concluding that the prosecution of the company is not a sine qua non for prosecuting its directors.
Conclusion:
The court upheld the conviction and sentence ordered by the lower courts, finding no merit in the revision petition. The revision petition was dismissed with no costs.
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2012 (4) TMI 796
Issues Involved:
Revenue's appeal against deletion of penalties u/s. 271D and 271E for assessment years 1995-96 to 1997-98.
Summary:
Issue 1: Deletion of Penalties u/s. 271D and 271E
1. The Revenue appealed against the deletion of penalties u/s. 271D and 271E for the assessment years 1995-96 to 1997-98.
2. The penalties were imposed due to violations of sections 269SS and 269T of the Income Tax Act during block assessment proceedings.
3. The Assessing Officer (A.O.) observed that the assessee accepted loans and made cash repayments, contravening the aforementioned sections.
4. The assessee argued that the amounts received were booking advances for construction projects, not deposits or loans, and were treated as trade receipts in their books.
5. The A.O. maintained that penalties under sections 271D and 271E were independent of block assessment proceedings and upheld the penalties.
6. The CIT (A) later deleted the penalties, noting that the deposits were treated as income for taxation purposes, and thus, no penalties were warranted.
7. The Revenue challenged the CIT (A)'s decision, but the Tribunal upheld the deletion of penalties, agreeing that once the amounts were treated as income, they could not be considered as deposits for penalty purposes.
8. Consequently, the appeals of the Revenue were dismissed, and the penalties u/s. 271D and 271E were deleted.
This judgment clarifies the distinction between penalties for violations of sections 269SS and 269T and the treatment of amounts as income, ultimately leading to the deletion of penalties u/s. 271D and 271E.
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2012 (4) TMI 795
Issues involved: Application for renewal of exemption u/s 80G(5) of the Income Tax Act, 1961 rejected by the Director of Income Tax (Exemption), Ahmedabad.
Facts of the case: The assessee-trust applied for renewal of exemption u/s 80G(5) of the Act. The Director of Income Tax (Exemption), Ahmedabad noted advances made to three trusts without permission of the Charity Commissioner. The Chartered Accountant's audit report highlighted these advances and outstanding balances.
Contentions: The assessee explained that the advances were made for the trust's objects and were old transactions. They argued that 85% of the income was applied annually, preventing accumulation u/s 11(2). Regarding section 11(1) explanation, they claimed that the advances were not considered in income computation. The trust stated that the advances were made as per their resolution and would be recovered in due course.
Director's decision: The Director rejected the renewal application u/s 80G(5) due to advances made without Charity Commissioner's permission. The Director found deficiencies in the trust's activities, noting violations and lack of corrective actions. The Director was not convinced of the genuineness of the trust's activities, citing non-compliance with Rule 11AA of the IT Rules.
Appeal: The assessee-trust appealed the decision. The Tribunal found that all facts related to the issue were not presented. It was unclear if the advances were from the trust's corpus or donations received. The Tribunal questioned the necessity of Charity Commissioner's approval and remanded the matter back to the Director for fresh adjudication with all relevant material.
Conclusion: The appeal was allowed for statistical purposes, and the matter was sent back to the Director for further review with complete information.
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2012 (4) TMI 794
Issues involved: Registration of petitions as criminal misc. petitions instead of criminal writ petitions under Article 226 of the Constitution.
The petitioner argued that the matters were wrongly registered as criminal misc. petitions instead of criminal writ petitions as per Rule 315(h) of the Rajasthan High Court Rules, 1952. The petitioner cited judgments from Bombay High Court and Jharkhand High Court where criminal writ petitions were separately registered. The petitioner contended that confining the petition to Section 482 Cr.P.C. limits the jurisdiction of the High Court, whereas registering them as criminal writ petitions under Article 226/227 would provide wider jurisdiction to the High Court.
The learned Public Prosecutor agreed that if Rule 315(h) requires criminal writ petitions to be registered separately, there should be no impediment in directing the registry to do so. Section 482 of Cr.P.C. allows petitions to give effect to any order under the Code or to prevent abuse of process, while petitions under Article 226/227 may have wider ramifications beyond the state's territory. The Court held that since Rule 315(h) requires criminal writ petitions to be separately registered, the petitions should be registered as such, overruling the objection raised by the registry. The registry was directed to register the petitions separately as S.B. Criminal Writ Petitions and list them before the appropriate bench.
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2012 (4) TMI 793
Issues involved: Delay in framing charges, abuse of law in cross-examination, maintainability of writ petition under Article 32.
Issue 1: Delay in framing charges
The respondent got FIR registered against the petitioner, and a charge-sheet was filed more than three years later. Despite over five years passing since the charge-sheet, charges are yet to be framed by the Magistrate.
Issue 2: Abuse of law in cross-examination
The petitioner filed a complaint under Section 138 of the Negotiable Instruments Act, and the cross-examination by the respondent has been ongoing for more than five years. The petitioner alleges this prolonged cross-examination amounts to a gross abuse of law and violates fundamental rights under Articles 20(3) and 21 of the Constitution.
Issue 3: Maintainability of writ petition under Article 32
The court questioned the maintainability of the writ petition directly before the Supreme Court. The petitioner had also approached the High Court, and the matter was pending there. The court noted that the petitioner had alternative remedies available but still approached the Supreme Court under Article 32, which was considered a misuse of jurisdiction.
The court found that the petitioner had abused the process of law by approaching the Supreme Court under Article 32 despite alternative remedies being available and pending before the High Court. The petition was dismissed as devoid of merit, and the petitioner was directed to deposit costs of Rs. 20,000 with the Supreme Court Legal Services Authority within four weeks.
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2012 (4) TMI 792
Issues involved: Reclamation and Rehabilitation Plan, Mining in forest areas, Statutory clearances, Sale of iron ore, E-auction, Monitoring Committee, Central Empowered Committee report, Interlocutory applications
Reclamation and Rehabilitation Plan: The Supreme Court accepted the Recommendations made by the Central Empowered Committee in its Report dated 18th April, 2012, with a specific clarification that individual Reclamation and Rehabilitation report for each mining lease(s) would specify unbroken forest area. Mining in appropriate cases falling in Category 'A' was allowed, but it was directed that it should not extend to unbroken forest areas. The Ministry of Environment and Forests was directed to re-visit the statutory clearances earlier granted by it in the light of the Reclamation and Rehabilitation Plan.
Sale of iron ore: The Court permitted the sale of iron ore lying at various cancelled stockyards through E-auction by the Monitoring Committee. It was specified that the sale proceeds not found to be involved in any illegality would be reimbursed to the respective stockyards. The Report of the Central Empowered Committee dated 13th March, 2012, was accepted in respect of ML 2581 of M/s. SMIORE.
Interlocutory applications: The learned counsel appearing in I.A. Nos.47 and 48 requested that these interlocutory applications be dismissed as not pressed, and the Court ordered accordingly.
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2012 (4) TMI 791
Issues involved: The appeals filed by the assessee against three separate orders passed by the CIT (A) dated 16th December, 2011 for Assessment Years 2005-06, 2006-07 & 2007-08, involving the addition of undisclosed income.
Assessment Year 2005-06:
- The CIT (A) confirmed the addition of undisclosed income of Rs. 5,68,800.00.
- The appellant contended that the addition was made without proper consideration of facts and practicality of the case.
- The appellant argued that the disallowance was sustained without sufficient reason or material.
- The appellant claimed that the order was legally flawed, not based on facts, and against principles of natural justice.
- The appellant sought leave to modify grounds of appeal if necessary.
Assessment Year 2006-07 & 2007-08:
- The figures for these years were Rs. 68,50,000/- and Rs. 69,60,000/- respectively.
Key Details:
- The assessment orders were passed under Section 144 of the Act due to the assessee's failure to appear before the AO.
- Deposits in a bank account were treated as unexplained income, except for agricultural income admitted by the assessee.
- The CIT (A) upheld the additions made by the AO after considering additional evidences and a remand report.
- The assessee, represented by the AR, argued for another opportunity to present their case before the Assessing Officer.
- The AR requested the matter be restored to the CIT (A) for a fair hearing and submission of a revised remand report.
- The DR opposed granting further opportunities to the assessee, citing that sufficient chances had already been provided.
- The ITAT considered the submissions and directed the matter to be remitted to the CIT (A) for a fresh hearing, emphasizing the need for a reasonable and sufficient opportunity for the assessee to present their case.
- The appeals were allowed for statistical purposes, with no opinion expressed on the merits of the additions upheld by the CIT (A).
This judgment highlights the importance of providing adequate opportunities for parties to present their case and the need for fair and just proceedings in tax matters.
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2012 (4) TMI 790
Issues involved: Appeal against order quashing assessment order passed u/s 263/143(3) of the I.T. Act, 1961.
Summary:
The appeal by the Revenue challenged the order of the learned CIT(A)-XIII, New Delhi dated 16th November, 2011, which quashed the assessment order passed by the Assessing Officer u/s 263/143(3) of the I.T. Act, 1961. The ITAT in ITA No.678/Del/2010 had previously quashed the order passed u/s 263, leading to the CIT(A) quashing the subsequent assessment order dated 28.12.2010. The Revenue appealed this decision.
The Hon'ble Jurisdictional High Court, in ITA No.973/2011, directed the CIT to pass a fresh order u/s 263 after hearing the assessee. The High Court modified the ITAT's decision and set aside the matter back to the CIT for a fresh order u/s 263. As a result, the assessment order dated 28.12.2010 could not survive without the original order u/s 263 dated 31.12.2009. The learned CIT(A) was deemed justified in quashing the assessment order dated 28.12.2010. The Assessing Officer was given the liberty to pass a fresh assessment order in accordance with the law.
Ultimately, the appeal of the Revenue was dismissed, and the decision was pronounced in the open Court on 17th April, 2012.
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2012 (4) TMI 789
Issues involved: Appeal against common orders passed by CIT(A) for assessment years 2006-07, 2007-08 & 2008-09 regarding eligibility for deduction u/s 80IB for maintaining cold chain storage facility.
The assessee, a company providing cold storage chain facility for agricultural produce, offers various services like unloading, analysis, pre-cooling, drying, grading, badla movement, and stock maintenance. The facilities cater to products such as chillies, turmeric, tamarind, maize, jowar, paddy seed, and black gram. The company maintains records and registers to track the identity and location of stocks at different stages.
The Assessing Officer challenged the deduction claimed u/s 80IB, contending that the cold chain facility required transport services as well. The assessee argued that maintaining either storage or transport facility was sufficient for the deduction. Citing the definition of "cold chain facility" u/s 80IB(14)(aa), the assessee claimed entitlement to the deduction based on the storage facility being in place.
The Tribunal referred to a previous decision favoring the assessee for the assessment year 2005-06, where it was held that maintaining a cold chain storage facility made the assessee eligible for deduction u/s 80IB. The Tribunal upheld the CIT(A)'s decision based on the precedent set by the Agra Bench and the affirmation by the Allahabad High Court. Consequently, the Revenue's appeals were dismissed in line with the earlier ruling.
In conclusion, the Tribunal dismissed all three appeals filed by the Revenue, upholding the eligibility of the assessee for deduction u/s 80IB based on the maintenance of a cold chain storage facility.
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2012 (4) TMI 788
Issues involved: Conversion of commercial plot from leasehold to freehold, unearned increase demand, ownership transfer between related entities, validity of demand notice.
Issue 1: Conversion of commercial plot from leasehold to freehold and unearned increase demand
The first petitioner applied for the conversion of a commercial plot from leasehold to freehold. The respondent raised a demand for unearned increase and misuse charges, leading to a dispute over the payment. The petitioners argued that there was no effective transfer as the second petitioner was a wholly owned subsidiary of the first petitioner, and thus, unearned increase should not be levied. However, the respondent contended that the transfer of rights to a separate entity attracts the payment of unearned increase. The petitioners further emphasized that the de-merger order had finalized, and no new company was formed, citing a previous court decision to support their stance.
Issue 2: Ownership transfer between related entities and application of corporate veil
The petitioners asserted that both petitioner companies were part of the same group, controlled by the same management, and the second petitioner was almost fully owned by the first petitioner. They argued that there was no effective transfer of ownership, and the corporate veil should be lifted to show that the entities were not separate. The respondent, however, pointed to clauses in the lease deed and instructions, indicating that unearned increase is chargeable in cases where management remains the same despite the formation of a new entity. The respondent relied on a court decision to support the imposition of unearned increase in cases of merger or de-merger.
Issue 3: Validity of demand notice and application of lease agreement clauses
The court considered the clauses in the perpetual lease deed, which prohibited transfer without consent and stipulated the payment of unearned increase in case of transfer. It was emphasized that without mutation of the property in the name of the allottee, conversion from leasehold to freehold could not occur. The court held that the respondent's right to levy unearned increase could not be defeated by de-merger followed by further assignment or transfer without consent. Consequently, the demand notice and the notice were deemed valid, leading to the dismissal of the writ petition with costs.
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2012 (4) TMI 787
Issues involved: Difference of opinion between Members, loan to subsidiary company, order u/s 154, amortization of public issue expenses u/s 35(2), interest on bank deposit and RBI Bonds, levy of interest u/s 234B.
Loan to subsidiary company: The Learned Vice President found that the loan given to the subsidiary company for business necessity should be allowed as business expenditure u/s 37 of the Income-tax Act, concurring with the view of the Learned Judicial Member.
Order u/s 154: The Learned Vice President concurred with the view of the Learned Accountant Member regarding the order u/s 154, stating that the disallowance of the loan does not arise from this order.
Amortization of public issue expenses u/s 35(2): The order of the Commissioner of Income-tax(A) regarding the amortization of public issue expenses u/s 35(2) was confirmed.
Interest on bank deposit and RBI Bonds: Both original Members agreed that interest on bank deposit and RBI Bonds should be assessed as "Income from other sources," setting aside the order of the Commissioner of Income-tax(A) and allowing that of the assessing officer.
Levy of interest u/s 234B: The issue of levy of interest u/s 234B was set aside to the file of the Commissioner of Income-tax(A) for a decision in accordance with the law after affording an opportunity of hearing to both parties.
Result: Both the appeals of the revenue and the cross objections were partly allowed, with the order pronounced on April 27, 2012.
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2012 (4) TMI 786
Issues Involved:
1. Interpretation of Section 36 of the SARFAESI Act.
2. Whether the action of the respondent bank invoking the provisions of SARFAESI Act is barred by limitation.
Summary:
Issue 1: Interpretation of Section 36 of the SARFAESI Act
The appeal raises an important question of law regarding the interpretation of Section 36 of the SARFAESI Act, which states: "No secured creditor shall be entitled to take all or any of the measures under sub-section (4) of section 13, unless his claim in respect of financial asset is made within the period of limitation prescribed under the Limitation Act, 1963." The court examined whether the respondent bank's action of invoking SARFAESI Act by serving notice u/s 13(2) is barred by limitation.
Issue 2: Whether the action of the respondent bank invoking the provisions of SARFAESI Act is barred by limitation
The respondent bank had given loans to a partnership firm in 1981, with the appellant as one of the guarantors who provided security in the form of an equitable mortgage. The bank filed a suit for recovery in 1984, which is still pending. The SARFAESI Act, enacted in 2002, provides an additional remedy for financial institutions to recover debts. The bank served notice u/s 13(2) in 2003 and again in 2004, which the appellant contested as time-barred under Section 36 of the SARFAESI Act read with Article 62 of the Limitation Act.
The learned Single Judge dismissed the appellant's writ petition, stating that SARFAESI Act provides an additional remedy independent of other legal remedies. The Judge held that Section 36 requires a claim to be made within the limitation period but does not mandate that the notice u/s 13(2) must be issued within that period. The Judge relied on the Gujarat High Court's judgment in Ivee Injectaa Ltd. v. Junagadh Vibhagyiya Nagrik Sahakari Bank Ltd., which supported the view that SARFAESI Act remedies are independent and additional.
The appellant argued that the bank's failure to file a suit under Order XXXIV of CPC within the 12-year limitation period for enforcing payment of money secured by mortgage (Article 62) rendered the SARFAESI action time-barred. The appellant contended that the claim must be made under SARFAESI Act itself and not through other legal proceedings.
The court agreed with the appellant, stating that the SARFAESI Act provides a new means of enforcing a preexisting right. Since the right to file a suit or proceedings had extinguished, the SARFAESI Act could not revive this extinguished claim. The court distinguished the present case from Ivee Injectaa Ltd., where a mortgage suit was pending, thus keeping the claim alive.
The court concluded that the claim was barred u/s 36 of SARFAESI Act and quashed the impugned notices u/s 13(2) and 13(4) issued by the bank. The appeal was allowed with no order as to costs.
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2012 (4) TMI 785
Issues Involved:
1. Liability of the petitioner companies to pay electricity duty and surcharge.
2. Validity and retrospective application of Jharkhand Electricity Duty Amendment Act, 2011.
3. Status of Damodar Valley Corporation (DVC) as a licensee or assessee.
4. Authority of the State to recover electricity duty directly from consumers.
Summary:
1. Liability of the petitioner companies to pay electricity duty and surcharge:
The petitioner companies, including M/s Atibir Hi-Tech Pvt. Ltd., challenged the orders directing them to pay electricity duty and surcharge. The court considered definitions of 'consumer' and 'licensee' under the Bihar Electricity Duty Act, 1948, and relevant judgments. It was held that the petitioner companies, even if registered as assessees, are neither licensees nor liable to pay electricity duty and surcharge. The duty paid by the petitioner companies is not refundable. The Hon'ble Supreme Court remanded the matter for an authoritative judgment on the question of law.
2. Validity and retrospective application of Jharkhand Electricity Duty Amendment Act, 2011:
The amendment made various provisions effective retrospectively, causing all consumers to be liable to pay electricity duty directly to the State. The court found this amendment arbitrary, unworkable, and against public interest, leading to chaotic situations. The retrospective operation was declared ultravires and illegal. The court held that the amendment gives the State arbitrary power to demand duty from either the seller or consumer, which is unworkable.
3. Status of Damodar Valley Corporation (DVC) as a licensee or assessee:
DVC was not a licensee under the Bihar Electricity Duty Act, 1948, but was an assessee under Rule 2(b) of the Bihar Electricity Duty Rules, 1949. After the Electricity Act, 2003, DVC became a deemed licensee. The court held that DVC is liable to pay electricity duty and can recover it from its consumers under the terms of the agreement.
4. Authority of the State to recover electricity duty directly from consumers:
The court held that the State has no right to recover electricity duty directly from the consumers of DVC who obtain electricity for their own use. Any assessment or reassessment proceedings against these consumers were quashed. The court emphasized that the consumers are not assessees under the Act of 1948 or Rules of 1949.
Conclusion:
The court allowed the writ petitions, quashing the demands for electricity duty and surcharge against the petitioner companies. The retrospective application of the Jharkhand Electricity Duty Amendment Act, 2011, was declared illegal. The court affirmed that DVC is a deemed licensee and liable to pay electricity duty, but the State cannot directly recover the duty from DVC's consumers. The petitioners are not liable to pay surcharge to DVC.
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