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Showing 41 to 60 of 1621 Records
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2016 (5) TMI 1588
Reopening of assessment u/s 147 - Eligible material for reopening proceedings - assessee had incurred expenditure on Roka and Engagement functions of her daughter out of his unexplained income and income has escaped assessment for the period relevant to the assessment year 2005-06 - HELD THAT:- Assessee had made complaint to the SSP of Police, Ludhiana regarding Roka and Engagement functions solemnized on 29.8.2004 and expenditure of Rs.7 lacs was incurred on these functions. This observation is factually incorrect and it cannot be said that the Assessing Officer has formed a prima-facie belief that income has escaped assessment.
In the instant case notice was issued to the assessee on ground that he had made the complaint to the SSP of Police, which is factually incorrect. In fact, the assessee did not make any complaint to the SSP, Ludhiana. Secondly, the Assessing Officer has mentioned in the reasons recorded that information was received from DDIT (Investigation)-III, Ludhiana that the assessee and his daughter Ms.Sarika Jain had spent approximately Rs.37 lacs on her engagement and marriage ceremony. It is brought to our notice that no addition has been made in the hands of Ms.Sarika Jain. On the contrary, Smt.Sarika Jain alleged in her complaint made with the Police that the assessee had spent an amount of Rs.7 lacs at the time of Roka and Engagement functions. It is also observed that in this case the information was provided by DDIT (Investigation)-III, Ludhiana on the basis of Police Report, wherein the daughter of the assessee alleged that a huge amount has been spent on marriage and Roka ceremony. The complaint was made by Ms.Sarika Jain against her husband and in-laws. Shri S.K. Maingi, learned counsel for the assessee submitted that the said complaint was made by Ms.Sarika Jain in order to fetch money from her husband and in-laws. This contention of the learned counsel for the assessee has some force, which can not be ignored.
Division Bench of this Tribunal in the case of Shri Subhash Chander Goel [2016 (2) TMI 78 - ITAT CHANDIGARH] relating to assessment year 2006-07 held that statement recorded by the police officer under section 161 of CrPc, 1983 is neither given on oath, nor it is tested by cross examination and, therefore, such a statement cannot be treated as substantive evidence to reopen the assessment proceedings. In the instant case, the Assessing Officer had not examined and corroborated the information received from DDIT (Investigation)-III, Ludhiana before recording his satisfaction of the escaped income and initiating the re-assessment proceedings. In my opinion, the Assessing Officer has thus acted on the basis of suspicion and he has also not applied his mind before recording the reasons for reopening of the assessment.
statement made by Ms.Sarika Jain under section 161 of CrPc cannot be treated as relevant material for reopening proceedings under section 147 of the Act. Thus reopening of the assessment was not valid under the law - Decided in favour of assessee.
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2016 (5) TMI 1587
Seeking reissuance of her daughter-petitioner No.2's passport without insisting upon her father's name being mentioned in the application - HELD THAT:- This Court is of the opinion that the respondents can insist upon the name of the biological father in the Passport only if it is a requirement in law, like standing instructions, manuals etc. In the absence of any provision making it mandatory to mention the name of one's biological father in the Passport, the respondents cannot insist upon the same - In the present case, there is no legal requirement for insisting upon the father's name. Respondents' reliance on Clause 4.5 of Chapter 8 of Passport Manual 2010 is misplaced as the said Chapter deals with "change in entries in passport." It does not pertain to entries to be made in the first instance. Consequently, Clause 4.5 of Chapter 8 is not applicable to the present case.
In fact, a Coordinate Bench of this Court in Ishmaan Vs. Regional Passport Office, [2011 (2) TMI 1611 - DELHI HIGH COURT] directed issuance of a passport to an applicant without mentioning her father's name on the ground that the instructions issued by the respondent itself permitted mentioning of only mother's name in the passport.
The fact that the respondents had on previous two occasions, in the year 2005 and 2011 issued Passport to petitioner No.2, without insisting on father's name, makes it evident that the said requirement is not a legal necessity, but only a procedural formality, which cannot be the basis of rejecting the petitioner No. 2's case. Consequently, it appears that legally and factually there is no impediment in issuing the Passport to the petitioner No.2, without mentioning her father's name.
The respondents are directed to modify their software and accept petitioner No.2's application and issue her a Passport without insisting upon mentioning her father's name. With the aforesaid direction, present petition and application stand disposed of.
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2016 (5) TMI 1586
Applicability of section 44BB - services provided by NRC’s (non resident company) to ONGC - TDS u/s 195 - CIT-A held that since the activity pertains to mining, it is out of the purview of section 9(1)(vii) of the Act - HELD THAT:- The issue is no more res integra. The Hon’ble Supreme Court in the case of Oil and Natural Gas Corporation Ltd. [2015 (7) TMI 91 - SUPREME COURT] the assesee’s own case, held that the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assesses or foreign companies under the said contracts is more appropriately assessable under the provisions of section 44BB and not section 44D of the Act. On the basis of the said conclusion reached by us, we allow the appeals under consideration by setting aside the orders of the High Court passed in each of the cases before it and restoring the view taken by the learned Appellate Commissioner as affirmed by the learned Tribunal. Appeal of revenue dismissed.
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2016 (5) TMI 1585
Addition based on income surrendered - addition on the basis of statement recorded of Mr. DN Taneja wherein he surrendered the said amount on company’s account to buy peace of mind - Addition based on third party - assessee’s submissions that addition cannot be made on the basis of the statement recorded of third party and without providing opportunity of cross examination of the witness to the assessee - HELD THAT:- Addition was made by the AO on the basis of statement recorded on 7.1.2009 of Mr. DN Taneja wherein he surrendered the said amount on company’s account to buy peace of mind, in doing so, he ignored the basic fact that Sh. DN Taneja had no locus standi with respect to the assessee company, as he was never a Director nor a share holder in the assessee company and thus no reliance could have been placed on such general statement and as such, the reasons recorded by the AO were merely based on suspicion, surmises and conjectures and are hence not sustainable in the eyes of law. We find considerable cogency in the Ld. Counsel of the assessee’s submissions that addition cannot be made on the basis of the statement recorded of third party and without providing opportunity of cross examination of the witness to the assessee, in view of the Hon’ble Delhi High Court decision in the case of CIT vs. Pradeep Kumar Gupta & Anr. [2006 (11) TMI 184 - DELHI HIGH COURT]
We are of the considered opinion that the addition made on the basis of the statement in the present case is not sustainable in the eyes of law, because the right of cross examination to the assessee was not provided, hence, we delete the addition made by the AO and confirmed by the Ld. CIT(A) and allow the Appeal of the Assessee.
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2016 (5) TMI 1584
TP Adjustment - payment of the group charges to its AE - whether the issue as to the payment on account of other group charges made by the assessee to its AE for services rendered was to be determined by the TPO/DRP or it was to be determined by the AO u/s 37 (1) - HELD THAT:- TPO goes to prove that the TPO has decided the issue as to making payment of the group charges to its AE for rendering services, such as, OTO and support and application work in respect of various projects for which tenders were submitted. TPO returned the categoric finding that assessee has failed to demonstrate “as to whether the services were claimed to have been rendered by its AE were actually received” and as such failed “the benefit test” applied by the TPO, which amounts to assuming the powers of AO.
Identical issue has come up before the Hon’ble jurisdictional High Court in judgment cited as Commissioner of Income-tax-I vs. Cushman and Wakefield (India) (P.) Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT]
TPO has exceeded his power by determining that the assessee has not received services from its AE, thus failed the benefit test and further held that the assessee had not furnished any evidence to any visit of the employee of its AE in connection with the services rendered entailing payment of group charges by the assessee. We are of the considered view that since the payment made by the assessee to its AE for services rendered was basically an expenditure incurred for the purposes of business, the same are to be determined u/s 37(1) of the Act, if allowable or not and this issue is in the exclusive domain of the AO to be determined.
Adverting to the assessment order passed by the AO which is in consonance with the direction issued by TPO/DRP vide which group charges have been treated as adjustment in the ALP - AO has neither examined nor returned any findings whatsoever if the payment made to the AE for availing services from its AE is an expenditure incurred for the purposes of business u/s 37 (1) rather passed the assessment order in mechanical manner in consonance with the directions issued by the TPO/DRP. Moreover, when the TPO has not disputed that the services were availed by the assessee from its AE, the question of determining the ALP of group charges to the tune of Rs.1,89,53,444/- does not arise because it was to be done by the AO only.
We are of the considered view that without entering into merits of the case, the matter is required to be restored to the AO to determine the issue as to the payment of group charges by the assessee to its AE afresh after providing an opportunity of being heard to the assessee in the light of the observations returned hereinbefore. Consequently, the present appeal filed by the assessee is hereby allowed for statistical purposes.
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2016 (5) TMI 1583
Dishonor of Cheque - comparison of handwriting of the applicant-accused by Handwriting Expert - requirement of stamping or not - Section 45 of the Evidence Act - HELD THAT:- I am at a complete loss to understand as to on what basis the learned Magistrate applied Section 20 of the Act. Section 20 speaks about a stamped, incomplete, inchoate instrument delivered to any person with prima facie authority to complete the instrument and encash the same. The learned Lahore High Court in A.R. Dower v. Sohan Lal [1937 (4) TMI 25 - LAHORE HIGH COURT] held that Section 20 relating to the encashability of the inchoate stamped instrument will not apply to the cheque as it does not require stamp.
Division Bench of the learned Kerala High Court in C.T. Joseph v. I.V. Philip [2001 (3) TMI 1081 - KERALA HIGH COURT] has observed that Section 20 of the Negotiable Instruments Act will not apply to the cheque as the same does not require any stamp under the Stamp Act and the aforesaid provision would apply to other incomplete, inchoate instruments which require stamp under the Stamp Act.
It was only if the Magistrate was of the opinion that the object of the petitioner in moving the application for comparison of the signatures was vexatious and had no relevance in the proceedings could he have refused the permission. But, once this was not the case, then I see no reason why the learned Magistrate ought not to have sent the documents for examination enabling the same to be compared by the Handwriting Expert which would facilitate in arriving at a correct decision - the petitioner cannot be convicted without an opportunity of being given a fair chance to present his evidence and if it is denied then there would be no "fair trial". After-all "fair trial" includes fair and proper opportunities allowed by law to prove the parties innocence. Adducing evidence in support of the defence is a valuable right.
The order passed by the learned Magistrate is not sustainable in the eyes of law and is accordingly set aside. Consequently, the application filed by the petitioner is allowed and the cheque in question is directed to be sent for comparison of the handwriting by the Handwriting Expert to be appointed by the learned trial Magistrate - Petition allowed.
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2016 (5) TMI 1582
Nature of land sold - Capital asset or agricultural land - Whether land disposed of by the assessee was agricultural land and situated beyond 8 KMs radius of the municipal limit? - HELD THAT:- The assessee filed the return of income and claimed that he sold two pieces of agricultural land for an amount, by two sale deeds registered in the office of the Sub- Registrar, Neelankarai. The assessee appears to have produced copies of chitta-adangal maintained by the State Government, to establish that the land sold by the assessee is agricultural land. The Assessing Officer accepted the claim of the assessee without any discussion in the assessment order. The copies of chittaadangal said to be filed before the Assessing Officer are not available in the file of this Tribunal. Therefore, we are unable to examine classification of the land by the State Government.
Without knowing the classification of the land, this Tribunal is of the considered opinion that the matter cannot be adjudicated at this stage. Therefore, the classification of the land has to be examined after referring to the adangal or Village Account No.2 maintained by the State Revenue Department. In the absence of copies of the extract of adangal, this Tribunal is of the considered opinion that the matter needs to be examined by the Assessing Officer for better appreciation of the facts. Therefore, this Tribunal do not find any merit in the appeal filed by the assessee.
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2016 (5) TMI 1581
Disallowance on account of Truck hire charges - expenditure incurred by the assessee on payment of truck hire charges was not fully verifiable - CIT-A deleted the addition - HELD THAT:- No specific or material defects were pointed out by the Assessing Officer in the vouchers maintained by the assessee in support of his claim for truck hire charges except that the said vouchers were self-made vouchers and the truck hire charges were paid by the assessee in cash. Keeping in view the nature of the business of the assessee, there was nothing unusual in making the payment of truck hire charges in cash through self-made vouchers so as to doubt the genuineness of the expenditure incurred by the assessee on truck hire charges.
In the case of Ranjit Singh Prem Singh Ahuja [2015 (7) TMI 152 - ITAT PUNE] a similar issue had come up for consideration before the Pune Bench of this Tribunal and the disallowance of 2% of transport expenses made by the Assessing Officer by raising trivial objection was held to be not sustainable by the Tribunal on the ground that no material discrepancy whatsoever had been pointed out by the Assessing Officer in the books of account and other record maintained by the assessee in support of its claim for transport expenses.
Ad hoc disallowance made by the Assessing Officer out of truck hire charges was not sustainable and the ld. CIT(Appeals) is fully justified in deleting the same - Decided against revenue.
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2016 (5) TMI 1580
Seeking release of detained petitioner - remand order - absence of cognizance of offence - section 167 of Cr.P.C. - Whether detention can be ordered by the court/Magistrate under section 167 Cr.P.C. without a report being filed before the court/Magistrate in terms of section 157 Cr.P.C.? - HELD THAT:- In the instant case, accused petitioner seems to have remained in custody for almost six days even prior to the report. After his arrest on 11.3.2016, he was produced for taking remand by the police on 12.3.2016 before the learned Magistrate. Initially, remand was given for two days followed by other order of remand for 14 days on 14.3.2016. The arrest as well as initial order of remand were without registration of an FIR. In our opinion, initial two orders for remand prior to registration of FIR are hit by section 167 Cr.P.C. - the question is accordingly answered in favour of the petitioner.
Whether remand for custody of the accused can be given without producing before the court below either physically or through video linkages? - HELD THAT:- An accused is required to be forwarded to the Magistrate for remand if the investigation is not completed within a period of 24 hours given under section 57 Cr.P.C. In that case, police officer making investigation shall forthwith transmit to the nearest Judicial Magistrate a copy of the entries in the diary prescribed relating to the case and shall at the same time forward the accused to such Magistrate. Sub-section (2) of section 167 Cr.P.C. provides that if an accused is forwarded to a Magistrate, whether he has or has no jurisdiction to try the case, may authorise detention of the accused for a term not exceeding 15 days in the whole and if such Magistrate has no jurisdiction to try the case or to commit it for trial, he may order to forward the accused to a Magistrate having jurisdiction. As per the provision aforesaid, for remand of the case, accused needs to be forwarded to the Magistrate.
The order for remand of custody of the accused is without even forwarding the accused to the Magistrate whether having or not having jurisdiction to try the offence. Thus the orders for remand of the accused petitioner without forwarding him to the Magistrate physically or through video linkages is illegal. The court below should not have passed an order under section 167 Cr.P.C. unless the accused is forwarded to him - the question is answered in favour of the petitioner.
Whether section 167 Cr.P.C. would apply after filing of the charge sheet and custody would be authorised subsequent to it without taking cognizance of the offence? - HELD THAT:- Section 309 Cr.P.C., no doubt, comes in operation on cognizance of offence or commencement of trial. The custody is authorised on cognizance of offence. We are not making reference of section 209 Cr.P.C. as it is not applicable in the case in hand. If sections 167 and 309 Cr.P.C. are read together and arranged in seriatim of events, it would become clear that section 167 Cr.P.C. would apply during the course of investigation and till filing of the charge sheet. The operation of section 167 Cr.P.C. would cease to exist after filing of the charge sheet. It is as per section 167 Cr.P.C. - Thus, it can safely be concluded that after the charge sheet/challan, section 167 Cr.P.C. ceases to apply.
Under what provision, custody can be authorised after filing of the charge sheet? - HELD THAT:- Reference of section 309 Cr.P.C. would be relevant. The custody after filing of the charge sheet is authorised under section 309 Cr.P.C.. It is, however, on taking cognizance of offence or commencement of trial. The provision of section 309 Cr.P.C. was made by the Legislature presuming that immediately on filing of the charge sheet, cognizance of offence would be taken or may be denied thus remand of custody should be allowed on cognizance of offence. The Legislature did not visualise the situation where there may be delay in taking cognizance of offence as it has happened in the present case in absence of sanction for prosecution.
The custody of the accused cannot be said to be illegal after filing of the charge sheet till cognizance of offence is taken. It is more so when it cannot be said that intervening period after filing of the charge sheet and till cognizance is taken, is due to lapse of the court or the police. The cognizance of offence could not be taken in absence of sanction for prosecution mandated by section 19 of the Act of 1988 - the question is accordingly answered against the accused petitioner.
An order for release of the accused petitioner cannot be made - petition dismissed.
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2016 (5) TMI 1579
Rejection of books of accounts u/s 145 - Addition of difference in valuation of closing stock of 4548.679 gms of gold jewellery and another addition being the value of diamond jewellery except the value of stone studded therein - HELD THAT:- As relying on case of Jagdish Chand [2003 (6) TMI 441 - ITAT CHANDIGARH] considering consistency of method of valuations and judicial decision the rejection of Books of account and the valuation of jewellery by the A.O. is held as not correct and the addition made by the AO is unsustainable in law and on facts - thus stating that the facts of the present case are identical to the facts of that case CIT (Appeals) was right in deleting the addition. - Decided in favour of assessee.
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2016 (5) TMI 1578
Disallowance of excess depreciation on Automated Teller Machines (ATM) by reclassifying as plant and machinery - CIT-A reclassifying ATMs as plant and machinery and restricting the depreciation to 15% - HELD THAT:- We are of the view that ATM itself has its own identity and can be used independently, but once it is connected with the computer, further information sought by the customers can also be processed. Therefore, it cannot be said to be part of a computer or computer - ATM is not eligible for higher rate of depreciation which is to be allowed to a computer. Only those devices which do not have its own identity or cannot be used independently without connecting to the computer can only be called as part of the computer for claiming higher rate of depreciation.
Hon'ble jurisdictional High Court in the case of Diebold Systems Pvt. Ltd. [2005 (1) TMI 652 - KARNATAKA HIGH COURT] has categorically held that ATM is an electronic device, which allows bank’s customers to make cash withdrawals, and check their account balances at any time without the need of human teller and once it is connected to a computer, that performs the tasks requested by the person using ATMs. Therefore, we are of the considered view that that ATM is neither a computer nor a part of the computer and hence higher rate of depreciation cannot be allowed to it. We therefore find no infirmity in the order of CIT(Appeals) in this regard and we confirm the same.
Higher rate of depreciation at 60% on UPS - HELD THAT:- Following the case of CIT v. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] held that depreciation on UPS was to be allowed @ 60%.
Disallowance of depreciation on account of non-furnishing of invoices/bills for purchase of fixed assets - HELD THAT:- We find that during the course of assessment proceedings, the AO has asked the assessee to produce the bills/invoices with regard to purchase of fixed assets on which depreciation was claimed. Whatever bills were produced before the AO, AO has examined the same and allowed depreciation thereon, but on certain assets assessee could not produce the invoices/bills to prove the ownership thereof. It is settled position of law that if anyone makes any claim, the onus is upon him to place relevant evidence in support of his claim, and if he fails to do so, adverse view can be taken against him. In light of this proposition of law, we are of the view that the AO has rightly disallowed depreciation with respect to those assets for which invoices of purchases were not filed to prove the ownership. Accordingly, we find no infirmity in the order of the CIT(Appeals) and we confirm the same.
Disallowance of certain payments after treating it to be penalty on account of infraction of law - HELD THAT:- As against certain disallowances, the nomenclatures was shown to be the penalties, but it is not clear whether penalties were paid on account of infraction of law. We are therefore of the view that the issue requires proper adjudication by the AO. We accordingly set aside the order of CIT(Appeals) in this regard and restore the matter to the file of AO with a direction to readjudicate the issue afresh, after affording opportunity of being heard to the assessee. If the AO finds that payments are compensatory in nature and not on account of infraction of law, no disallowance can be made. But if it is the penalty for infraction of law, disallowance is possible. Accordingly this ground is disposed of.
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2016 (5) TMI 1577
Penalty u/s 271(1)(c) - Defective notice - specific default/charge of the assessee - assessee submitted that the AO imposed penalty in a mechanical manner without due application of mind - HELD THAT:- The penalty is not imposable u/s 271(1)(c) of the Act for year under consideration and is liable to be quashed on the ground that the AO has failed to apply his mind before initiating the penalty proceedings and, therefore, the proceedings initiated are bad in law. As such, CIT(A) was not justified in sustaining the penalty imposed by the AO. Accordingly, the order of the ld. CIT(A) is set aside and penalty levied by the AO is cancelled. Appeal of assessee allowed.
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2016 (5) TMI 1576
Benefit of doctrine of mutuality - receipts from guest fees, income from hire of rooms, hire charges in respect of club lawn is to be considered exempt by following principal of mutuality - HELD THAT:- We find that the ld.CIT(A), following the Tribunal’s order in assessee’s own case in earlier years[2013 (1) TMI 1031 - ITAT AHMEDABAD] and [1987 (10) TMI 21 - GUJARAT HIGH COURT] held that the assessee was entitled for the benefit on the basis of doctrine of mutuality.
Revenue has not brought any contrary binding decision in its support nor has placed any material on record to demonstrate that the decisions of the Tribunal in assessee’s own case for AY 200-07 has been set aside by Hon’ble Jurisdictional High Court [1987 (10) TMI 21 - GUJARAT HIGH COURT]. - no reason to interfere with the order of the ld.CIT(A) and thus the ground of Revenue is dismissed.
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2016 (5) TMI 1575
Unexplained cash credits - absence of any nexus between the corresponding sales and the amounts in question - HELD THAT:- On verification of the ledger accounts of M/s. Sahara Minerals and of M/s. V.K. Minerals CIT(Appeals) found that sales made to the said two parties were duly accounted for and offered by the assessee as its income and since the amounts in question treated to be unexplained cash credits by the Assessing Officer were claimed to be received against the said sales, the ld. CIT(Appeals) held that such addition under section 68 to the extent of corresponding sales already declared by the assessee as income would result in double addition.
As already noted by us, this position was accepted even by the Assessing Officer also in the remand report submitted to the ld. CIT(Appeals). The ld. CIT(Appeals) thus allowed a relief to the assessee to the extent of ₹ 2,67,09,704/- being the amount already offered as income by the assessee in the form of sales and restricted the addition of ₹ 4,68,02,738/- made by the Assessing Officer under section 68 to the extent of ₹ 2,93,00,034/-. Having regard to all the facts and circumstances of the case, we find no infirmity in the impugned order of the ld. CIT(Appeals) giving this relief to the assessee and upholding his impugned order on this issue, we dismiss the appeal filed by the Revenue.
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2016 (5) TMI 1574
Rectification of mistake u/s 154 - Disallowing additional depreciation u/s. 32(iia) - assets used for less than 180 days - AO issued a rectification notice u/ s. 154 disallowing additional depreciation claimed - HELD THAT:- Section 32(1)(iia) of the Act provides that additional depreciation @ 20% shall be allowed to the assessee on the actual cost of new plant and machinery, which has been acquired after 31.03.2005. The second proviso to section 32 restricts depreciation allowance at 50% if the asset is used for less than 180 days in a previous year. There is no mention in section 32(1)(iia) that the 20% additional depreciation is allowable in first year only. Provisions of section 32(1)(iia) and second proviso to section 32 should be read and construed reasonably, liberally and purposefully. If the acquired asset is used for less than 180 days in year one than the allowable additional depreciation is restricted to 50% in the first year and balance 50% additional depreciation is allowable in subsequent year. There is no restriction vis-avis the number of assessment years over which the additional depreciation is to be allowed.
The issue under consideration is also squarely covered by the order of coordinate bench in the case of SIL Investment Ltd [2012 (6) TMI 83 - ITAT DELHI] wherein it was held that additional depreciation, which was restricted in the year of purchase to the extent of 50% on the plea of machinery having been put to use for a period of less than 180 days, the balance of additional depreciation is required to be allowed in the succeeding year. In view of the above, we do not find any merit for disallowing assessee’s claim for depreciation.
Nature of receipt - TUF subsidy received from Central Government under Technology Upgradation Fund Scheme (TUF) - Revenue or capital receipt - HELD THAT:- The assessee himself had offered the taxation for the said subsidy and the AO had assessed the same accordingly. It is not the case that the AO at the time of assessing income of the assessee had proceeded in violation of any statutory provision. If subsequently in a case law, the coordinate bench of the Tribunal has given a finding that such receipt is a capital receipt that cannot be form the basis to reopen/readjudicate the issue which has already attained finality. The assessee has neither agitated this issue on merits during the assessment proceedings nor by way of appeal before the CIT(A). Even the same cannot be considered as a mistake apparent on record u/s.154 proceedings, as the AO had assessed the income as offered by the assessee and while doing so he had not directly violated any statutory provision of the Act. Hence, it cannot be said to be any mistake apparent on record with regard to nature of TUF subsidy.
Merely because subsequently a coordinate bench of the Tribunal has taken some view with regard to nature of TUF subsidy in case of some other assessee that itself cannot be said to be sufficient ground to readjudicate or to reconsider the already concluded assessment. If such a course would be allowed to be adopted, then, it may give rise to a number of claims for readjudication of several already concluded cases and such course will be against the principle of finality of proceedings at one stage and would violate the object and purpose of the Indian Limitation Act, 1963. In view of this, we do not find that treatment of TUF subsidy offered by assessee and accepted by the AO as revenue receipt, under the facts and circumstances of this case, was a mistake apparent on record.
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2016 (5) TMI 1573
Suit for recovery of money - time limitation - identical orders of dismissal in limine, without even issuing the summons to the respondents/defendants - HELD THAT:- The limitation for a suit for price of goods sold and delivered by the appellant/plaintiff to the respondent/defendant in each of the suit from which these appeals arise, provided in Article 14 of the Schedule is three years. It was not the case of the appellant/plaintiff herein that the price was agreed to be paid after the expiry of fixed period of credit. The suits were admittedly instituted more than three years after the date of sale and delivery of goods. However the appellant/plaintiff sought to extend the period of limitation by relying upon the payments made by cheques which were dishonoured. The said cheques were of a date before the expiry of period of three years from the date of sale and delivery of goods but were not presented for payment immediately and when presented later, though within the period of their validity, were dishonoured. It is not the case that the cheques were ante-dated. The cheques though dishonoured are deemed to be payment within the meaning of Section 19.
Unlike the present case where the appellant/plaintiff, to bring the suit within limitation has to necessarily rely on Section 18 and/or 19 for extension of limitation, Steel Authority of India Ltd. [2007 (8) TMI 811 - DELHI HIGH COURT] was not concerned therewith; that was a case of a suit for recovery of amount which was subject matter of cheque simpliciter. Similarly, JHANG BIRADARI HOUSING RESIDENTS SOCIETY VERSUS BHARAT BHUSHAN SACHDEVA AND ORS. [2015 (8) TMI 1542 - DELHI HIGH COURT] was not a suit for recovery of money but a suit for declaration of title to immovable property and the period of limitation provided wherefore commences from the date when the right to sue first accrues,
The limitation for a suit for recovery of price of goods as the subject suits, does not commence from the date when the right to sue accrues but commences from the date of sale and delivery of goods and the extension of limitation by issuance of cheques which were dishonoured claimed by the appellant/plaintiff commences from the date when the acknowledgment was so signed and which can only be the date of the cheque and not the date of dishonour of cheque. To hold otherwise, would be doing violation to the language of Section 18.
Appeal dismissed.
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2016 (5) TMI 1572
Flood due to release of water in the dam - non-maintenance of particular level of water in the dam by the Respondents - Act of god or not - Whether the act of releasing the water from the dam would amount to negligence on the part of the Respondents or it was inevitable due to heavy rains and is to be treated as an 'act of God'? - entitlement to some compensation even in the absence of proof of actual/exact damage caused - HELD THAT:- There are two exceptions to the Rule of strict liability, which were recognized in Rylands v. Fletcher itself, viz.: (a) where it can be shown that the escape was owing to the Plaintiff's default, or (b) the escape was the consequence of vis major or the act of God. An act of God is that which is a direct, violent, sudden and irresistible act of nature as could not, by any amount of ability, have been foreseen, or if foreseen, could not by any amount of human care and skill have been resisted. Generally, those acts which are occasioned by the elementary forces of nature, unconnected with the agency of man or other cause will come under the category of acts of God. Examples are: storm, tempest, lightning, extraordinary fall of rain, extraordinary high tide, extraordinary severe frost, or a tidal bore which sweeps a ship in mid-water. What is important here is that it is not necessary that it should be unique or that it should happen for the first time. It is enough that it is extraordinary and such as could not reasonably be anticipated.
What needs to be examined is as to whether the damage to the property of the Appellant herein was the result of an inevitable accident or unavoidable accident which could not possibly be prevented by the exercise of ordinary care, caution and skill, i.e. it was an accident physically unavoidable? - HELD THAT:- Undoubtedly, it has come on record that the overflow of dam was occasioned by torrential and heavy rains. However, as pointed out above, the Appellants specifically pleaded that the Respondent authorities did not keep the level of water in the dam sufficiently low to take care of the ensuing monsoon rains. They have, thus, set up the case that there was a negligence on the part of the Respondents in not taking care of the forthcoming monsoon season and keeping the water level in the dam at sufficiently low level to absorb the rainfall which was going to rise the water level in the dam.
It is a matter of common knowledge that with advanced technology available with the Meteorological Department in the form of satellite signals etc, there is a possibility of precise prediction of the extant of rainfall in the monsoon season. In view of the principle laid down in Rylands v. Fletcher, onus was on the Respondents to discharge such a burden, and it has miserably failed to discharge the same. On that basis, we are constrained to hold that there is a negligence on the part of the Respondents which caused damage to the fields of the Appellants - In the instant case, it is found that the loss is not only on account of rain, though a part thereof can be attributed to the nature, but also due to the negligence on the part of the Respondent authorities in not taking due precautions in time which could have avoided some loss/damage, if not entirely. If damage has resulted from two or three causes, namely, from an act of God as well as a negligent act of a party, the award of damages can be apportioned to compensate only the injury that can be attributed to the negligent act of the Respondents.
The Appellants claimed damages to the tune of ₹ 21,50,000, for which no specific proof/evidence is given. At the same time, we find that one Mohemmed Ikbal Mohemmedalam Galivala, who is an agriculturist, had appeared as the Plaintiffs' witness and deposed that he was having the agriculture experience for the last 20 years, particularly experience of cultivation of boar as well as its profit and income - it is not in dispute that loss has occurred and, therefore, a reasonable compensation can still be awarded. Exercising the power under Article 142 of the Constitution, it is opined that ends of justice would be met in awarding damages to the tune of ₹ 5,00,000.
Appeal allowed - decided in favor of appellant.
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2016 (5) TMI 1571
Penalty u/s 271(1) - Search and seizure operation - Jewellery found in search - unexplained investment in jewellery - HELD THAT:- Addition sustained was an estimated one. It is well settled that if the addition is sustained on estimate basis it cannot be said that the assessee concealed the income or furnished inaccurate particulars of income in respect of the estimated addition. Therefore, the penalty was not leviable u/s 271(1)(c) - in the present case, the AO himself accepted the gold jewellery in which the diamond were studded to the extent of 700 gms out of the 793.600 gms jewellery found during the course of search and the ld. CIT(A) accepted the remaining jewellery of 93.600 gms against which the department had not preferred any appeal.
When the gold jewellery in which the diamonds were studded has been accepted by the department as the jewellery received at the time of marriage or other occasion, then, it cannot be said that the diamond studded in the said jewellery were out of the undisclosed income of the assessee. It is well settled that the assessment proceedings and the penalty are two different and distinct proceedings and that the addition made in the assessment may be relevant but not a conclusive proof of concealment of income or furnishing of inaccurate particulars of income. Therefore the impugned order passed by the ld. CIT(A) is set aside and the penalty sustained u/s 271(1)(c) of the Act is deleted.- Decided in favour of assessee.
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2016 (5) TMI 1570
Validity of assessment u/s 144 - assessee taken a ground that AO erred in passing the ex parte order without giving any sufficient opportunity to the assessee and wherein no notice u/s 144 or any show cause notice was served to the assessee before making such a huge addition - HELD THAT:- We find that ld. CIT(A) has confirmed all the additions except allowing deduction u/s 80C, relying on the remand report of AO. However, ld. counsel submits that facts needs to be remarshalled as assessee did not get sufficient opportunity to plead his case. Considering the entirety of facts, after going through the order of ld. CIT(A), in order to impart substantial justice to assessee, we restore the matter to the file of AO to pass the assessment order de novo, after providing reasonable opportunity of being heard. We order accordingly.
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2016 (5) TMI 1569
Revision u/s 263 by CIT - AO while completing the assessment proceeding did not make enquiries which he ought to have made - HELD THAT:- It is clear from the submissions and material available on record with regard to the sundry income credited in the profit and loss account the AO made the required inquiries. Though there is no specific reference by the AO on this aspect, yet the fact remains that the AO got the details of the sundry income and in the absence of any adverse observations in the order of AO it is to be presumed that he was satisfied that the income in question had nexus with the business of the assessee and therefore had to be recorded as income from business.
There cannot also be any dispute with regard to the fact that the income from sale of scrap, foreign exchange fluctuation gain are inextricably linked to the profession income and have to be regarded as income from profession.
With regard to the payment of service charges to Price Waterhouse Coopers again the required details were filed by the assessee and AO had raised specific queries on these charges. As pointed out by the learned counsel for the assessee similar charges had been allowed as deduction in the past. There was no reason for the AO to doubt the nexus of these expenses with the business of the assessee.
With regard to the payment of policy premium to cover the risk of damages owing to professional negligence it cannot be disputed that the same was in relation to the business of the assessee. It is no doubt true that the AO while completing the assessment did not make any specific inquiries with regard to this item of expenditure, the fact, however, remains that these expenses have direct nexus with the business of the assessee and had to be recorded as expenses wholly and exclusively incurred for the purpose of the business of the assessee.
Besides the above as rightly pointed out by the learned counsel for the assessee the CIT has not set out as to why this item of expenditure need to be investigated and as to what type of inquiry ought to have conducted by the AO. A mere observation that no proper details have been obtained, cannot be sufficient to come to a conclusion that the AO did not make proper and adequate inquiries which he ought to have made in the given facts and circumstances of this case.
In the conclusion we are of the view that none of the reasons set out by the CIT for invoking the jurisdiction u/s 263 of the Act are sustainable. The impugned order of the CIT-A has to be quashed for the reason that order of the AO sought to be revised in the impugned order was neither erroneous nor prejudicial to the interest of the revenue for the reason of any law of inquiry that the AO ought to have made in the given facts and circumstances of the case. We accordingly quash the order u/s 263 of the Act and allow the appeal of the assessee.
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