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2013 (5) TMI 1040
Issues involved: Validity of proceedings under Section 147 of the Income-tax Act, 1961 for assessment year 2001-02.
The judgment pertains to the assessment year 2001-02 and arises from a common order passed by the Tribunal. Initially, the Tribunal upheld the validity of proceedings under Section 147 of the Income-tax Act, 1961, and remanded the matter to the Assessing Officer. However, the High Court later set aside the Tribunal's order, declaring the proceedings under Section 147 to be invalid. Subsequently, the Assessing Officer framed assessments for both years, which were challenged by the assessee before the Commissioner of Income Tax (Appeals) and then the Income Tax Appellate Tribunal. The Tribunal allowed the appeals, considering the earlier invalidation of the Section 147 proceedings by the High Court and the dismissal of the Special Leave Petition by the Supreme Court against the High Court's decision.
The High Court affirmed the Tribunal's decision to allow the appeals filed by the assessee, as the issue of the validity of the Section 147 proceedings had been conclusively settled by the High Court and the Supreme Court. Since the earlier remand proceedings were based on the assumption of the validity of the Section 147 proceedings, which have now been deemed invalid, the remand proceedings hold no significance. Therefore, the High Court found no reason to interfere with the Tribunal's decision and dismissed the appeals, stating that no substantial question of law arises for consideration in this matter.
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2013 (5) TMI 1039
Issues involved:
The issue involved in the judgment is regarding the forfeiture of debentures by a company without notice to the petitioner, leading to a request for rectification of the register under section 111A of the Companies Act, 1956.
Details of the Judgment:
1. The petitioner filed two company petitions seeking rectification of the register under section 111A of the Companies Act, 1956, as the debentures in their name were forfeited by the respondent-company without notice. The jurisdiction to deal with this issue was determined to vest in the Company Law Board (CLB) under section 111, sub-section (4) of the Act.
2. The respondent-company forfeited the debentures of the petitioner due to non-payment, but the petitioner claimed to have received no prior notice. The debentures were supposed to be converted into shares, but instead, the company forfeited them and removed the petitioner's name from the register.
3. Section 111A empowers the tribunal to address issues requiring rectification of the register. The validity of the forfeiture needed to be determined before rectification could be made to the debentures' register.
4. The jurisdiction under sections 111 and 111A is limited to cases of refusal to register or rectify shares or debentures. The Tribunal's inherent jurisdiction cannot be expanded to cover issues of forfeiture or allotment. The civil court is competent to decide on the validity of forfeiture, as the CLB's jurisdiction is limited to transfer and transmission cases.
5. The civil court has overlapping jurisdiction with the CLB, and the issue of forfeiture falls within the former's purview. Since the matter is triable by the civil court, the petitioner was advised to approach the appropriate forum for resolution.
6. The petitions were disposed of, granting the petitioner liberty to seek redress in the civil court for the forfeiture issue. The CLB's jurisdiction was found to be limited to transfer and transmission cases, not issues of forfeiture.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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2013 (5) TMI 1038
Deduction u/s 54B - DR contended that the assessee is eligible for deduction if he has purchases the land for agricultural purpose within a period of two years after transfer of agricultural land - first objection raised by the ld. DR is concerned, the property was only transferred in December, 2008, therefore, the property purchased before that date is not eligible for claiming deduction under section 54B - HELD THAT:- This is only a hyper technical objection raised by the ld. DR, because, the assessee has received substantial amount from the purchaser before executing sale deed. So far as registration of the sale agreement is concerned, if both the parties proceeded to carry the execution of the sale as per the agreement whether it is registered agreement or not, there is no effect so far as transfer is concerned. Therefore, the case law relied on by the ld. DR is altogether on a different context and have no application to the fact of the present case. In view of the above, we find no infirmity in the order passed by the CIT(Appeals) and the ground raised by the Revenue is dismissed.
CIT(Appeals) directing the AO to give relief of 50% on the strength of fresh evidences produced - Production of Additional Evidence under Rule 46A - HELD THAT:- It amounts to violation of Rule 46A of the Income Tax Rules which elucidates that before any additional evidence is accepted, the other party has to be given an opportunity of hearing. Faced with this situation, we deem it appropriate that the matter requires re-examination by the AO. Accordingly, we restore the issue back to the file of the Assessing Officer, who shall pass a fresh order in accordance with law after affording adequate opportunity of hearing to the assessee.
Appeal of the Revenue is partly allowed for statistical purpose.
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2013 (5) TMI 1037
Issues involved:
Delay in filing appeal u/s. 263 of the Act and Jurisdiction of CIT u/s. 263 regarding deduction u/s. 80P(2)(a)(i) of the Act.
Delay in filing appeal u/s. 263 of the Act:
The appeal was filed by the assessee-society against the order of the Commissioner of Income-tax passed u/s. 263 of the Act after a delay of 245 days. The Chief Executive Officer of the assessee explained the reasons for the delay, stating a genuine belief that there was no need to challenge the CIT's order initially. The Tribunal, considering the circumstances, condoned the delay and proceeded with the appeal for adjudication.
Jurisdiction of CIT u/s. 263 regarding deduction u/s. 80P(2)(a)(i) of the Act:
The CIT invoked jurisdiction u/s. 263 based on the AO's failure to properly examine the deduction u/s. 80P(2)(a)(i) of the Act in the assessment order. The CIT contended that the AO did not assess whether the assessee fulfilled the conditions of a primary co-operative society as defined in the Banking Regulation Act, 1949. The CIT concluded that the order u/s. 143(3) of the Act was erroneous and prejudicial to revenue due to allowing the deduction u/s. 80P(2)(a)(i) incorrectly.
During the appeal, the assessee argued against the CIT's jurisdiction, emphasizing that the assessee was not a cooperative bank but a cooperative society providing credit facilities to members. The assessee highlighted the distinctions between a cooperative bank and society, citing relevant legal provisions. The Tribunal, after considering submissions from both sides and analyzing relevant precedents, concluded that the CIT was not justified in invoking section 263 of the Act. The appeal of the assessee was allowed, and the order u/s. 263 of the Act passed by the CIT was canceled.
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2013 (5) TMI 1036
Issues involved:
The judgment involves issues related to the replacement of machinery for assessment years 2005-06 and 2008-09, as well as the disallowance made under section 14A of the Income Tax Act.
Issue 1: Replacement of Machinery - Assessment Year 2005-06:
The appeals filed by the assessee against the orders of the ld. CIT(A)-I, Coimbatore, for the assessment years 2005-06 and 2008-09 pertain to the replacement of machinery. The Hon'ble Apex Court remitted the issue of replacement of machinery back to the file of the CIT(A) for consideration afresh.
The ld. CIT(A) relied on previous court decisions and held that replacement of machinery cannot be considered as revenue expenditure. However, a partial amount was allowed for assessment year 2008-09 for the replacement of a multi drum filter used in the humidification plant.
The assessee argued that there was no increase in production capacity due to the replacement of machinery and emphasized the non-enduring nature of the benefits derived. The CIT/DR supported the orders of the ld. CIT(A).
The Tribunal found that the replaced items were capitalized in the books of account and were not eligible for revenue expenditure. The Tribunal upheld the decision of the ld. CIT(A) that the expenditure claimed by the assessee for replacement of machinery could not be allowed as revenue outgo.
Issue 2: Disallowance u/s 14A - Assessment Year 2008-09:
The assessee received dividend income during the relevant year, including dividends from a subsidiary company. The Assessing Officer disallowed a portion of the dividend income under section 14A of the Act.
The ld. CIT(A) directed the Assessing Officer to re-work the disallowance excluding a specific amount from the total dividend received. The assessee contended that the Assessing Officer did not record satisfaction regarding the expenditure incurred for earning exempt income, which is a prerequisite for applying section 14A.
The Tribunal observed that there was no mention in the assessment order about the claim of the assessee regarding expenditure related to exempt income. While the ld. CIT(A) identified a portion of the dividend income that was not claimed as exempt income, the Tribunal decided to remit the issue back to the Assessing Officer for a fresh consideration in accordance with the law.
In conclusion, the appeal for assessment year 2005-06 was dismissed, while the appeal for assessment year 2008-09 was partly allowed for statistical purposes.
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2013 (5) TMI 1035
Issues Involved:
1. Interim relief u/O 39 Rule 1 & 2 CPC.
2. Specific performance of the Agreement.
3. Rights of a licensee u/s 64 of The Indian Easements Act, 1882.
4. Permission for letting out the suit property.
Summary:
Interim Relief u/O 39 Rule 1 & 2 CPC:
The plaintiff sought interim relief to restrain the defendant from obstructing access to the first floor of the property. The Court noted that the plaintiff was not in possession of the property at the time of filing the suit and had been deprived of its use for over one and a half years. The Court denied the interim mandatory relief, stating that granting such relief would effectively allow the plaintiff to use the property, which it was not using at the time of the suit's institution.
Specific Performance of the Agreement:
The plaintiff claimed specific performance of an Agreement dated 3rd August 2010, which allegedly granted the plaintiff the first option to purchase the property. The Court observed that the Agreement did not mention the price and was not between the plaintiff and the defendant no. 1, making it unenforceable. The Court also noted that the plaintiff had not sought relief of pre-emption but only specific performance.
Rights of a Licensee u/s 64 of The Indian Easements Act, 1882:
The plaintiff claimed permissive use and occupation of the first floor, arguing that it was a licensee. The Court referred to Section 64 of The Indian Easements Act, 1882, which limits the remedy of an evicted licensee to recovering compensation and not re-possession. The Court cited Supreme Court judgments affirming this interpretation and rejected the plaintiff's plea for re-possession.
Permission for Letting Out the Suit Property:
The defendant no. 2 sought permission to let out the property during the suit's pendency. The Court found this request reasonable, emphasizing that the property should not lie unused and deteriorate. The Court permitted the defendant no. 2 to let out the property for not more than three years, subject to Court approval of the Lease Agreement and conditions ensuring the tenant's eviction if the plaintiff succeeds in the suit.
Conclusion:
The Court made the earlier order directing all parties to maintain status quo absolute and allowed the defendant no. 2 to let out the property under specified conditions. The applications were disposed of, with all observations being prima facie and not affecting the final adjudication of the suit.
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2013 (5) TMI 1034
The Delhi High Court issued a notice in CM No. 5954/2013, with assessment proceedings allowed to continue but the order not to be implemented until further instructions. The case was to be renotified on 09.09.2013 for further proceedings.
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2013 (5) TMI 1033
Issues Involved:1. Disallowance of expenditure on improvement of flat. 2. Deletion of disallowance u/s 14A. 3. Deletion of addition u/s 68. Summary:Issue 1: Disallowance of expenditure on improvement of flatThe department challenged the CIT(A)'s order restricting the disallowance made on account of expenditure incurred on improvement of the flat to Rs. 1,20,000/-. The Assessing Officer (AO) disallowed Rs. 2,40,000/- claimed by the assessee for lack of supporting evidence. The CIT(A) allowed 50% of the expenditure as reasonable. The Tribunal upheld the CIT(A)'s decision, noting that the expenditure was recorded in the books of account impounded by the department, and thus could not be rejected outright. Issue 2: Deletion of disallowance u/s 14AThe AO disallowed Rs. 1,19,749/- u/s 14A, stating that the interest paid on loans was not related to income not includible in total income. The CIT(A) deleted the disallowance, holding that there was no nexus between the loans taken and the investments in shares, as the investments were made in earlier years. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not establish that investments in shares were made during the current year. Issue 3: Deletion of addition u/s 68The AO added Rs. 14,97,500/- u/s 68, questioning the genuineness and creditworthiness of loans received from two creditors. The CIT(A) deleted the addition, noting that the loans were received through banking channels and the creditors had sufficient sources, including chit auction proceeds. The Tribunal upheld the CIT(A)'s decision, stating that the assessee satisfactorily proved the identity, creditworthiness, and genuineness of the transactions. The AO's addition was based on doubts and suspicions without incriminating evidence. Conclusion:The appeal filed by the Revenue was dismissed, and the order of the CIT(A) was upheld on all grounds. Order pronounced in the open court on 3rd May, 2013.
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2013 (5) TMI 1032
Issues involved:
The judgment involves the consideration of whether the learned Magistrate was justified in directing the Police to investigate and submit a detailed report within one month under Section 156(3) of the Code of Criminal Procedure.
Brief facts:
The case involved a scheme by the Government of Maharashtra to provide land to individuals belonging to Scheduled Castes and neo-Buddhists who were below the poverty line. The appellants were accused of purchasing agricultural land under this scheme, leading to allegations of fraud and impersonation. Subsequently, a criminal complaint was filed against the appellants and others, resulting in the Magistrate directing police investigation under Section 156(3) of the Code.
Judgment details:
The Supreme Court examined the power of a Magistrate to order investigation under Section 156(3) of the Code before taking cognizance of an offense. Referring to relevant legal precedents, the Court emphasized that a Magistrate has the discretion to order police investigation if the facts alleged in a complaint disclose a cognizable offense and if such investigation would serve the interests of justice. The Court clarified that once a Magistrate takes cognizance of an offense, they must follow the procedures outlined in Chapter XV of the Code.
Conclusion:
After analyzing the facts of the case and the Magistrate's decision to order investigation under Section 156(3), the Supreme Court found that the Magistrate had not exceeded his power or violated any provisions of the Code. The Court affirmed that the Magistrate's actions were in line with the legal framework and upheld the High Court's decision to refuse to quash the prosecution. Consequently, the Court dismissed all the appeals, finding no merit in them.
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2013 (5) TMI 1031
Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the IT Act, 1961 by CIT (A) for assessment year 1992-93.
Facts: The assessee declared total income of Rs.NIL, but AO determined income at &8377; 77,06,610/- after noticing transfer of equity shares to Ameen Trading Corporation. AO held Long Term Capital Gains assessable to tax in 1992-93, with concealed income of &8377; 1,25,91,184/-. Penalty of &8377; 44,31,300/- u/s 271(1)(c) was levied by AO, which was deleted by CIT (A) based on ITAT's deletion of quantum additions in favor of the assessee.
CIT (A) Decision: CIT (A) deleted the penalty as the Tribunal had deleted the additions on merits, stating that no ground for penalty existed after ITAT's decision. Grounds raised by the revenue indicated relief to the assessee in quantum appeal, leading to the penalty cancellation.
Tribunal's Analysis: Tribunal noted that the additions were deleted by ITAT on merits, confirming relief to the assessee in the quantum appeal. As there was no dispute on the deletion of additions, the penalty u/s 271(1)(c) was deemed not sustainable. The order of CIT (A) was upheld, and the appeal by the Revenue was dismissed.
Conclusion: The Tribunal dismissed the appeal by the Revenue, upholding the deletion of penalty u/s 271(1)(c) by CIT (A) based on ITAT's decision to delete the quantum additions in favor of the assessee.
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2013 (5) TMI 1030
Issues Involved:
1. Refusal of registration u/s 12AA to the assessee trust.
2. Validity of amendments in the objects of the trust.
3. Classification of the trust as public or private.
4. Legality of the trust's expenditure on maintenance of property.
Summary:
1. Refusal of registration u/s 12AA:
The ld. CIT(A) refused registration u/s 12AA, citing that the trust is associated with a particular religion/community, attracting Section 13(1)(b). Additionally, the trust's activities did not align with its stated objects, and it was deemed a private trust due to having only one settler/trustee.
2. Validity of amendments in the objects of the trust:
The assessee trust argued that amendments to its objects were valid as they were registered with the Asstt. Commissioner, Devsthan Vibhag, Jaipur, under the Rajasthan Public Trust Act, 1959. The trust deed allowed trustees to alter rules with prior approval. The trust cited precedents from the Hon'ble Supreme Court and Rajasthan High Court to support the validity of amendments approved by competent authorities.
3. Classification of the trust as public or private:
The assessee contended that the trust is a public trust, as its benefits are available to the public without distinction of caste, community, or creed. The trust's objects, both original and amended, were for public welfare and not for any individual or group. The Tribunal agreed, noting that the trust's registration under the Rajasthan Public Trust Act, 1959, and its objects confirmed its status as a public charitable trust.
4. Legality of the trust's expenditure on maintenance of property:
The Tribunal found that the trust's activities, including the maintenance of temples, were charitable in nature. Even without written authorization, the maintenance and management of temples were deemed charitable activities. The Tribunal disagreed with the ld. CIT's view that maintaining temples according to specific rituals would make the trust's activities non-charitable.
Conclusion:
The Tribunal directed the ld. CIT to reconsider the matter afresh for granting registration u/s 12AA, concluding that the trust's objects and activities were charitable and aligned with the requirements for registration. The appeal of the assessee was allowed.
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2013 (5) TMI 1029
Issues involved: Appeal against CIT(A) order for assessment year 2005-2006.
Grounds of Appeal:
1. CIT(A) erred in giving notice of enhancement u/s.251(2) of the I.T. Act 1961 based on third party's order.
2. CIT(A) erred in enhancing addition based on illegal notice issued.
3. CIT(A) erred in directing AO to add deemed dividend from Mahavir Inductomelt Pvt. Ltd.
4. CIT(A) erred in confirming addition for alleged deemed dividend u/s.2(22)(e) from Mahavir Rolling Mills Ltd.
5. Appellant seeks leave to modify grounds of appeal.
Judgment Details:
The appellant's counsel argued that the case should be remanded to CIT(A) for a fresh order as certain pleas were not considered. The AO's failure to consider depreciation under income tax law and the commercial angle of loans were highlighted. The DR contended that while depreciation issue was not addressed, the commercial angle of loans was considered by CIT(A) based on AO's orders. After careful consideration, the Tribunal found that the appellant's pleas were not fully adjudicated by CIT(A). Therefore, in the interest of justice, the order was set aside with directions for a fresh order after allowing both parties a hearing to address and decide on the pending pleas.
Outcome:
The appeal of the assessee was allowed for statistical purposes, and the order was pronounced in Open Court.
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2013 (5) TMI 1028
Issues involved: Application for condonation of delay in filing revision petition u/s 5 of Limitation Act, challenge to order u/s 86 of Rajasthan Sales Tax Act, 1994, interpretation of provisions of Act of 1988, assessment of entry tax, interest, and penalty on motor vehicle, applicability of provisions of Act of 1954, classification of respondent as casual trader, time limit for assessment u/s 10B of Act of 1954.
Condensation of delay: The revision petition involved an application u/s 5 of the Limitation Act seeking condonation of delay in filing the petition, which was allowed based on reasons provided in the application.
Challenge to order: The revision petition was filed challenging the order passed by the Rajasthan Tax Board affirming the deletion of entry tax, interest, and penalty on a motor vehicle by the Deputy Commissioner (Appeals) under the Act of 1988.
Assessment of entry tax: The Assessing Officer imposed entry tax, interest, and penalty on a vehicle purchased by the respondent, holding them liable to pay under sections 3, 6, and 7 of the Act of 1988, despite the order being passed after the prescribed time limit of two years u/s 10B(1)(3) of the Act of 1954.
Interpretation of provisions: The petitioner argued that there was no time limit for passing an order under the Act of 1988, and even if there was a delay, it should have been decided on merits rather than a technical or legal ground alone.
Classification as casual trader: The respondent, being an individual not engaged in business, was classified as a casual trader falling under the definition of Section 2(ccc) of the Act of 1954, which was crucial in determining the applicability of assessment provisions.
Time limit for assessment: Sections 10A and 10B of the Act of 1954 provided special provisions for casual traders and time limits for assessment, emphasizing that assessments should be completed within two years of the transaction for casual traders like the respondent.
Conclusion: The Court upheld the decisions of the lower Appellate Authorities, dismissing the revision petition and stay application, emphasizing the need for careful scrutiny by the revenue department in cases with minimal tax effect to avoid unnecessary expenses and harassment to the assessee. The Court highlighted the importance of adhering to clear provisions of the law and avoiding meritless petitions involving insignificant amounts.
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2013 (5) TMI 1027
Issues Involved:1. Deletion of additions related to diamond tuition expenses and auditorium expenses. 2. Deletion of additions related to electric power expenses and electric bills. 3. Deletion of addition related to laser expenses. 4. Deletion of additions related to manufacturing expenses and labor expenses. 5. Upheld net profit estimation. Summary:Issue 1: Deletion of Additions Related to Diamond Tuition Expenses and Auditorium ExpensesThe revenue challenged the deletion of additions of Rs. 1,00,000/- and Rs. 10,000/- made by the Assessing Officer (AO) for diamond tuition and auditorium expenses respectively. The CIT(A) found that the payments were made through account payee cheques, duly reflected in the books of accounts, and were for training workers, which is a revenue expenditure u/s 37 of the I.T. Act, 1961. The Tribunal upheld the CIT(A)'s decision, noting that the AO's basis for disallowance, a decrease in turnover in the succeeding year, was not a valid reason. Issue 2: Deletion of Additions Related to Electric Power Expenses and Electric BillsThe revenue contested the deletion of additions of Rs. 48,48,440/- and Rs. 1,24,360/- for electric power expenses and electric bills. The CIT(A) found that the payments were proportionate to the premises used by the assessee, supported by proper bills, and related to business premises. The Tribunal upheld the CIT(A)'s decision, noting that the AO did not find any defects in the maintenance of books of accounts or any unsupported expenditure. Issue 3: Deletion of Addition Related to Laser ExpensesThe revenue appealed against the deletion of Rs. 10,00,000/- for laser expenses. The CIT(A) found that the payments were reflected in the regular books of accounts, supported by proper bills, and no defects were noted by the AO. The Tribunal upheld the CIT(A)'s decision, noting that the AO made a lump sum addition without valid reasons. Issue 4: Deletion of Additions Related to Manufacturing Expenses and Labor ExpensesThe revenue challenged the deletion of Rs. 1,50,00,000/- and Rs. 4,22,95,871/- for manufacturing and labor expenses. The CIT(A) found that the discrepancies noted by the AO were ill-founded, the yield was normal, and the assessee maintained regular books of accounts audited by Chartered Accountants. The CIT(A) directed the AO to estimate the income at 8% of the turnover, which the Tribunal upheld, noting that blind confirmation of additions would result in an unreasonable net profit rate. Issue 5: Upheld Net Profit EstimationThe assessee appealed against the CIT(A)'s decision to estimate net profit at 8% instead of the declared 7.13%. The Tribunal reduced the estimation to 7.5%, considering the facts and the CIT(A)'s observations. Conclusion:The appeal of the revenue was dismissed, and the appeal of the assessee was partly allowed. The Tribunal upheld the CIT(A)'s decisions on various deletions and adjusted the net profit estimation to 7.5%. Order pronounced in the open Court on 17-05-2013.
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2013 (5) TMI 1026
Issues involved: Appeal against deletion of addition made by AO u/s 41(1) of the IT Act for the assessment year 2007-08.
Facts of the case: The assessee, an individual and Managing Director of a company, filed income tax return for AY 2007-08 showing income from salary and loss from proprietary business. During assessment, AO observed outstanding sundry creditors from previous years and questioned the nature of these liabilities. Assessee explained that liabilities were continuously renewed and not ceased. AO, unable to trace creditors, treated outstanding amounts as cessation of liability u/s 41(1) and added to income.
Decision of CIT(A): CIT(A) allowed the appeal noting receipts from creditors and payment made by assessee to one of the creditors. CIT(A) held that without evidence of cessation of liability, AO's presumption was incorrect and deleted the addition.
Appellate Tribunal's Decision: The Tribunal upheld CIT(A)'s decision, stating that there can only be cessation of liability when the creditor gives up the claim or the assessee recognizes it. Assessee provided receipts as proof of payment, showing no cessation of liability. Tribunal noted previous case where similar addition u/s 41(1) was deleted. Revenue failed to provide evidence to rebut CIT(A)'s findings, leading to dismissal of the appeal.
Outcome: Revenue's appeal was dismissed, upholding CIT(A)'s decision to delete the addition made by AO u/s 41(1) of the IT Act for the assessment year 2007-08.
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2013 (5) TMI 1025
Issues Involved:
1. Validity of the Warrant of Authorization u/s 132 of the Income Tax Act, 1961.
2. Compliance with the requirements of section 132 of the Act.
3. Scope of judicial interference under Article 226 of the Constitution of India.
Summary:
1. Validity of the Warrant of Authorization u/s 132 of the Income Tax Act, 1961:
The petitioner challenged the issuance of the Warrant of Authorization dated 5-3-2010 by the first respondent u/s 132 of the Income Tax Act, 1961. The petitioner argued that the warrant was issued without any valid information or reason to believe that the petitioner had not disclosed or would not disclose relevant documents. The court found that the warrant was issued based on information related to another group (K.S Oil Group) and not the petitioner. The court concluded that there was no information or formation of opinion against the petitioner, making the authorization for search and seizure invalid.
2. Compliance with the requirements of section 132 of the Act:
The court examined whether the requirements of section 132 about information and formation of opinion were complied with. It was found that the Assistant Director of Income-tax (Investigation), Gwalior, considered information related to the K.S Oil Group but did not have any specific information about the petitioner. The court noted that the mere mention of the petitioner supplying electrical goods to K.S Oils Ltd. did not constitute valid information for issuing the warrant. The court held that the issuance of the authorization without proper information and formation of opinion was not in compliance with section 132 of the Act.
3. Scope of judicial interference under Article 226 of the Constitution of India:
The court reiterated that the power of search and seizure u/s 132 and the scope of interference in a writ petition under Article 226 have been examined by various courts. It was emphasized that the authority must have relevant material to form an opinion that action u/s 132 is justifiable. The court can interfere if there is no relevant material or if the authority acted in excess of its powers. In this case, the court found that there was no relevant material or formation of opinion against the petitioner, justifying interference under Article 226.
Conclusion:
The court allowed the petition, quashed the authorization for search and seizure, and directed the authorities to return the seized property to the petitioner. The court emphasized that the facts recorded did not constitute any information with a rational connection to the petitioner for forming a belief, which is a condition precedent for issuing a Warrant of Authorization for search and seizure.
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2013 (5) TMI 1024
Issues involved: Claim for depreciation on the cost of Elect. Yard Fencing and Preparation of Road for windmill installation.
Summary:
The Appellate Tribunal ITAT Pune, in a common order for 4 appeals related to the same group on similar issues, addressed the claim for depreciation by the assessee on the cost of Elect. Yard Fencing and Preparation of Road for windmill installation. The assessee contended that the depreciation should be allowed at 80%, while the CIT(A) restricted it to 10% on certain grounds. The Tribunal referred to a previous decision and held that foundation, civil, and electrical work were necessary for the windmill installation, allowing depreciation at 80% on electric yard fencing but justifying 10% on the approach road. Consequently, the Tribunal partly allowed the appeal, directing the Assessing Officer to allow 80% depreciation on electric yard fencing and 10% on the approach road. This decision was applied to all 4 appeals, resulting in them being partly allowed based on the same reasoning.
The decision was pronounced on May 29, 2013, by Shri Shailendra Kumar Yadav, Judicial Member, and Shri R.K. Panda, Accountant Member.
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2013 (5) TMI 1023
Issues Involved:
1. Rectification of Mistakes Apparent from Record u/s 254 of the Act.
2. Existence of Permanent Establishment (PE) in India.
3. Attribution of Revenues to PE.
4. Nature of Activities of Project Office.
Summary:
1. Rectification of Mistakes Apparent from Record u/s 254 of the Act:
The applicant sought rectification of certain claimed mistakes in the Tribunal's order, arguing that the order was not in conformity with the binding decision of the Hon'ble jurisdictional Uttarakhand High Court in CIT v. BKI/HAM V.O.F. c/o Arthur Anderson Co. The Tribunal acknowledged a clerical mistake in para No. 20 of its order, where the date "24th May, 2006" was incorrectly mentioned instead of "17th Nov., 2007." This mistake was rectified, but it was noted that this correction did not affect the Tribunal's findings on the issue.
2. Existence of Permanent Establishment (PE) in India:
The Tribunal had previously held that the applicant had a fixed place PE in India in the form of a project office. The applicant contended that the installation PE came into existence only after 17th Nov., 2007, when the jackets were brought to the offshore site for installation. The Tribunal found that the Mumbai project office of the assessee was opened on 24th May, 2006, and the PE of the assessee was existing in India at all points of time. The Tribunal rejected the applicant's contention, stating that the facts of the case were distinguishable from the cited case of BKI/HAM V.O.F. c/o Arthur Anderson & Co.
3. Attribution of Revenues to PE:
The applicant argued that the Tribunal's observation in para No. 64, which stated that the revenue recognized by the assessee related to hook up and commissioning, insurance, and pre-engineering surveys, was incorrect. The Tribunal clarified that this observation did not imply that the applicant had earned income from these activities during the relevant previous year. The Tribunal found no mistake in this para of the order.
4. Nature of Activities of Project Office:
The applicant contended that the Tribunal's observation in para No. 77, which stated that no material had been brought on record to prove that the activities of the project office were preparatory or auxiliary in nature, was incorrect. The Tribunal held that the material furnished by the assessee was not sufficient to show that its Mumbai office did not have any role to play in the execution of the contract. The Tribunal found no mistake in this para of the order.
Conclusion:
The Tribunal partly allowed the application, rectifying the clerical mistake in para No. 20 but found no other mistakes apparent from the record that warranted rectification u/s 254(2) of the Act.
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2013 (5) TMI 1022
Deduction u/s 80P(2)(a)(i) & 80P(4)-Intimation u/s 143(1) - Co-operative Credit Society - The A.O. was of the view that the assessee was neither a Primary agriculture Co-operative Society, nor was it entitled to the deduction according to Section 80P(2)(a)(i) of the IT Act, but was covered under the provisions of Section 80P(4). - HELD THAT:- The A.O’s. finding that in view of the amendment Act in Section 2(24) and 80P, the assessee was not eligible for deduction u/s.80P was not in accordance with law. - The assessee is not subject to Section 80P(4) (Cooperative Banks) and is also eligible for a deduction under Section 80P(2).
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2013 (5) TMI 1021
Issues Involved:
1. Maintainability of the writ petition due to availability of alternative remedy.
2. Prematurity of the writ petition.
3. Maintainability of the writ petition due to delay and laches.
4. Bar of res judicata.
5. Status of the area in question as reserved or non-reserved.
6. Preferential right under Section 11 of the MM(D&R) Act.
7. Validity of the recommendation made by the State Government under Section 11(5) of the MM(D&R) Act in favor of POSCO.
Summary:
Issue 1: Maintainability of the writ petition due to availability of alternative remedy
The High Court did not explicitly address this issue in its judgment.
Issue 2: Prematurity of the writ petition
The High Court ruled that the writ petition was not premature, stating that "the petitioner has approached this Court at a time when its right to be considered along with POSCO has been threatened to be infringed by the action of the State." The Supreme Court, however, found that the High Court erred in this determination, emphasizing that the State Government's recommendation was not a final decision and that the Central Government's approval was still pending.
Issue 3: Maintainability of the writ petition due to delay and laches
The High Court did not explicitly address this issue in its judgment.
Issue 4: Bar of res judicata
The High Court did not explicitly address this issue in its judgment.
Issue 5: Status of the area in question as reserved or non-reserved
The High Court did not explicitly address this issue in its judgment.
Issue 6: Preferential right under Section 11 of the MM(D&R) Act
The High Court held that Geomin Minerals & Marketing (P) Ltd. had a preferential right for the grant of license and lease under Section 11(2), (3), and (4) of the MM(D&R) Act. The Supreme Court, however, noted that the amended Section 11, effective from 20th December 1999, should apply, and that the Central Government should consider all applications simultaneously as per the amended provisions.
Issue 7: Validity of the recommendation made by the State Government under Section 11(5) of the MM(D&R) Act in favor of POSCO
The High Court found the recommendation invalid, stating that "special reasons" were not adequately recorded. The Supreme Court disagreed, noting that the State Government had conducted a thorough inter se merit evaluation and had validly invoked Section 11(5) for POSCO due to its significant merits, including advanced technology and substantial investment.
Conclusion:
The Supreme Court set aside the High Court's judgment, emphasizing that the High Court should not have interfered with the State Government's recommendation and that the matter should be decided by the Central Government. The case was remitted to the Central Government for consideration of approval under Section 5(1) of the MM(D&R) Act, taking into account the objections raised by the parties. The appeals were allowed with no order as to costs.
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