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2011 (8) TMI 1338 - ITAT CUTTACK
... ... ... ... ..... quipments could be isolated for the purpose of putting them to use for the purpose of business of the assessee. We are unable to satisfy ourselves to this interpretation of the Assessing Officer insofar as these assets were used by the assessee for facilitating its employees who have been paid salary and have been granted deduction as salary. The assets have been put to use therefore cannot be held against the assessee in view of the fact that the Assessing Officer has not held the assessee not conducting any business when it allowed the loss as business loss. In view thereof, we are inclined to direct the Assessing Officer to delete the disallowance of travelling and conveyance amounting to ₹85,271, delete the disallowance of legal and professional charges of ₹6,43,057 and delete the disallowance amounting to ₹67,772 being depreciation on assets. 7. In the result, both the appeals filed by the assesse are allowed. PRONOUNCED IN OPEN COURT ON Dt. 12.08.2011.
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2011 (8) TMI 1337 - ITAT CHENNAI
... ... ... ... ..... nyakumari. If all these factors are taken into consideration, it is possible to come to a conclusion that the assessee-trust has not been avoiding registration on flimsy grounds. Assessee is going to earn nothing out of the delay. Therefore, in the facts and circumstances of the case, we are of the considered view that even the delay of 19 years could be seen as a very very inordinate delay, the gravity of the situation has been diluted by the circumstances explained by the assessee-trust. 6. Therefore, in the facts and circumstances of the case, and to fair and just, we are of the considered view that the assessee should be given registration retrospectively. Accordingly, we direct the Commissioner of Income-tax to grant the assessee registration retrospectively under sec.12AA of the Income-tax Act, 1961. 7. In result, this appeal filed by the assessee is allowed. Order pronounced in the open court at the time of hearing, on Thursday, the 18th day of August, 2011 at Chennai.
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2011 (8) TMI 1336 - ITAT JAIPUR
... ... ... ... ..... such FDRs is to be considered as income from business and this will be the set off against deduction of interest. In other words, no separate deduction in respect of interest on FDR to the extent of ₹ 6,36,341/- is to be made. Similarly the interest of ₹ 86,545/ in Bank of Baroda CC A/c is in respect of available of surplus funds for temporary period. Such funds are for the purpose of business and therefore, the interest of ₹ 86,545/- is also the business income. Thus the interest to the extent of ₹ 86,545 plus ₹ 6,36,341 ₹ 7,22,886/- will have to be considered as income under the head business. Moreover, the AO has accepted the interest receipts under P & L A/c of business and hence no double addition is warranted by treating interest receipts as Income from other sources. Hence, addition of ₹ 7,55,721/- is deleted. 4. In the result, the appeal of the assessee is allowed. . The order is pronounced in the open Court on 05-08-2011.
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2011 (8) TMI 1335 - ITAT CHENNAI
... ... ... ... ..... ion made u/s 40A(3) cannot be sustained and has been correctly deleted by the ld. CIT(A). The averment of Ground No.4.2 are very crude and general in nature and have no direct nexus with the facts of this case in view of our above finding. Consequently, the appeal of the Revenue for assessment year 2002-03 stands dismissed. 18. Now, coming to other assessment years 2003-04, 2004-05 and 2005-06, except for the sums added on account of gross profit, on account of unaccounted sales turnover; and addition made u/s 40A(3), the other facts, circumstances, evidence and submissions of the parties are exactly similar and identical. Therefore, with similar reasoning, we dismiss all the appeals of the Revenue and confirm the finding given by the ld. CIT(A) in his common order dated 21.9.2010. Accordingly, all the four appeals of the Revenue stand dismissed. 19. To summarize the result, all the four appeals of the Revenue stand dismissed. Order pronounced in the open court on 23.08.2011.
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2011 (8) TMI 1334 - KARNATAKA HIGH COURT
... ... ... ... ..... e of capital expenditure. They also have not allowed deduction in respect of office expenditure at thorangal village where steel plant has to come up and also the expenses incurred in respect of office at Bangalore. The reason being that business of lending money discounting of bills etc. are exclusively carried on in the corporate office at Bombay. Therefore the expense with reference to the said office has been given deduction to while computing the income of the assessee. The said amount also includes the interest paid to the persons who have advanced monet of debenture. 34. Therefore in the facts of this case we are satisfied that the finding recorded by the Tribunal, is on a proper appreciation of the material on record keeping in mind the law on the point and is just proper and does not call for any interference. Accordingly, the substantial question of law are answered in favour of the assessee and against the revenue. 35. Accordingly the appeal is dismissed. No Costs.
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2011 (8) TMI 1333 - DELHI HIGH COURT
... ... ... ... ..... t as framed casts obligation upon the PIO to ensure that the provisions of the Act are fully complied. Even otherwise, the settled position in law is that an officer entrusted with the duty is not to act mechanically. The Supreme Court as far back as in Secretary, Haila Kandi Bar Association Vs. State of Assam 1995 Supp. (3) SCC 736 reminded the high ranking officers generally, not to mechanically forward the information collected through subordinates. The RTI Act has placed confidence in the objectivity of a person appointed as the PIO and when the PIO mechanically forwards the report of his subordinates, he betrays a casual approach shaking the confidence placed in him and duties the probative value of his position and the report. 10. Thus no fault can be found with the order of the CIC apportioning the penalty of ₹ 25,000/- equally between the petitioner and the respondent no.4. 11. There is thus no merit in the petition; the same is dismissed. No order as to costs.
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2011 (8) TMI 1332 - SUPREME COURT
... ... ... ... ..... gets culminated into an order affecting right of the parties only when it is expressed in the name of the President or the Governor, as the case may be, and authenticated in the manner provided in Article 77(2) or Article 166(2). A noting or even a decision recorded in the file can always be reviewed/reversed/overruled or overturned and the court cannot take cognizance of the earlier noting or decision for exercise of the power of judicial review. State of Punjab v. Sodhi Sukhdev Singh AIR 1961 SC 493, Bachhittar Singh v. State of Punjab AIR 1963 SC 395, State of Bihar v. Kripalu Shankar (1987) 3 SCC 34, Rajasthan Housing Board v. Shri Kishan (1993) 2 SCC 84, Sethi Auto Service Station v. DDA (2009) 1 SCC 180 and Shanti Sports Club v. Union of India (2009) 15 SCC 705. 20. We, therefore, set aside the judgment of the High Court in Writ Petition No. 401 of 2002 expressing our strong disapproval. Appeal is, therefore, allowed with costs, which is quantified as ₹ 10,000/-.
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2011 (8) TMI 1331 - KARNATAKA HIGH COURT
Liability to Repay the loan - Jointly and Severally - “letter of comfort” is wrongly interpreted and treated as “letter of guarantee” - Appellant executed a “letter of comfort” as per exhibit P14 - Respondent No. 2 committed default and did not repay the amount as agreed - HELD THAT:- The apex court in the case of State of Maharashtra v. Dr. M.N Kaul [1967 (3) TMI 107 - SUPREME COURT], while dealing with the aspect of the enforceability of the guarantee has observed: ''That depends upon the terms under which the guarantor bound himself. Under the law he cannot be made liable for more than he has undertaken.''
It is clear that the contract of guarantee is a contract to perform the promise or discharge the liability of a third person in case of his default. If the entire document in question, i.e, exhibit P14 is read as a whole, the same nowhere reveals that the appellant has entered into a contract or an agreement with respondent No. 1 to discharge the liability of respondent No. 2 herein (principal debtor) in case of its default.
All through, respondent No. 1 as well as other parties including the appellant has understood the document exhibit P14 as a “letter of comfort”, plain and simple. In the cross-examination of PW1 witness for respondent No. 1), he has clearly admitted that the appellant has not undertaken under exhibit P14 that he would repay the amount in case respondents Nos. 2 to 4 herein commit default in payment of the loan. In the light of clear admission of PW1 and having regard to the language employed in exhibit P14, it is clear that the appellant has not undertaken that it would repay the loan amount in case of default by respondents Nos. 2 and 4 herein.
Definition of “letter of comfort”, as found in P. Ramanatha Aiyar's Advanced Law Lexicon, which reads thus: “Letter of comfort - A document that indicates one party's intention to try to ensure that another party complies with the terms of a financial transaction without guaranteeing performance in the event of default.”
Therefore, it is clear that the letter of comfort merely indicates the appellant's assurance that respondent No. 2 would comply the terms of a financial transaction without guaranteeing performance in the event of default.
Since we find that the appellant has not bound himself for repaying the loans due to first respondent corporation in the event of default by respondents Nos. 2 and 4, the impugned order in so far as it relates to fixing liability on appellant is liable to set aside. Accordingly, the same is set aside. Rest of the order passed against respondents Nos. 2 to 4 continues to remain.
Appeal is allowed-in-part accordingly.
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2011 (8) TMI 1330 - KARNATAKA HIGH COURT
... ... ... ... ..... ing the benefit of DEPB scheme, denying benefit to him under that scheme is illegal. Therefore, I do not see any justification in the orders passed either by the Original Authority or the Appellate Authority. Accordingly, they are liable to be quashed. Hence, I pass the following order - (i) Writ Petitions are allowed. (ii) The impugned orders passed by the Original Authority as well as the Appellate Authority are hereby set aside. (iii) A writ of mandamus is issued directing the respondents to accept the exports Affected by the petitioner directly or indirectly Cowards the fulfillment of export obligation under the impugned advance licencc as well as the benefit DEPB which he has already claimed against the said exports. (iv) Respondents care directed to forthwith restore the Import and Export Code of the petitioner and withdraw the cancellation of the Advance Licence. (v) All the amounts received in terms of the impugned orders shall be refunded to the petitioner forthwith.
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2011 (8) TMI 1329 - ITAT JAIPUR
... ... ... ... ..... oto in favour of the assessee by holding that no expenditure can be disallowed under section 40A(3) as assessee has not claimed any expenditure in its Profit & Loss account, therefore, we hold that even part disallowance cannot be made on account of payment made to the parties residing in Jaipur. Accordingly we delete the entire disallowance sustained by ld. CIT (A).’’ The ld. CIT(A) has confirmed the addition u/s 40A(3) to the extent of ₹ 3,42,60,562/-. The difference of ₹ 3,39,562/- is in respect of payment made to the Advocate or Deed Writer. 3.12 Since we have held after following the decision of Jaipur Bench in the case of M/s. Ace India Abodes Ltd. Vs. ACIT (supra) that provisions of Section 40A(3) are not applicable, therefore, the amount of ₹ 3,39,562/- cannot be disallowed u/s 40A(3). 4. In the result, the appeals of the assessee is allowed and that of the revenue is dismissed. The order is pronounced in the open Court on 26-08-2011.
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2011 (8) TMI 1328 - ITAT DELHI
... ... ... ... ..... a), it was held that the Tribunal had rightly, following “Lovely Exports”(supra), held that the assessee had discharged its onus and it was for the Department to take action against the creditor companies, since the assessee company had produced copies of bank accounts of the creditor company, their certificate of incorporation and also Income Tax returns filed by them before the AO; and that from these documents, the identity and genuineness of the company stood clearly established. 18. From the above, it is evident that the ld. CIT(A) has not committed any error whatsoever in deleting the addition made by the AO. The order of the CIT(A) is thus confirmed, rejecting the grievance sought to be raised by the Department, such grievance, to our mind, not having any force. 19. In the result, the appeal filed by the Department is dismissed, whereas the cross objections filed by the assessee are dismissed, as withdrawn. Order pronounced in the open court on 12..08.2011.
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2011 (8) TMI 1327 - ITAT VISAKHAPATNAM
... ... ... ... ..... s issue and thus the CIT is justified in setting aside the order as it is erroneous and prejudicial to the interest of the revenue. 14. Having heard the rival submissions and from a careful perusal of the orders of the lower authorities, we find that this issue was neither adjudicated in the assessment order nor any query was raised by the A.O. during the assessment proceedings. During the course of hearing, nothing has been placed on record to establish that this issue was ever examined by the assessing officer. We, therefore, of the view that there is no application of mind by the A.O. on this issue and the CIT has made out a case that by accepting the claim of the assessee the assessment order of the A.O. has become erroneous and prejudicial to the interest of the revenue. Since we do not find any infirmity in the order of the CIT in this regard, we confirm his order. 15. In the result, the appeal of the assessee is partly allowed. Pronounced in the open Court on 3.8.2011.
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2011 (8) TMI 1326 - HIGH COURT OF DELHI
... ... ... ... ..... Plaintiff has sought specifically and separately also made a prayer seeking a decree for rendition of accounts. It is obvious expectation that the actual damages may be much more. Moreover, once it is found that there is no assignment of the impugned version of the programme by the Plaintiff to the Defendant and the use of this programme by the Defendant amounts to violation of the Plaintiff's copyright, the irreparable loss/injuries would be suffered by the Plaintiff if the Defendant is not prevented from using this programme. 45. In view of this, other arguments advanced by the Learned Counsel for the Appellant need not even been addressed to as the present appeal warrants to be allowed on the aforesaid reasons. Accordingly, we set aside the impugned order passed by the learned Single Judge and direct that the injunction order dated 17th December, 2009 passed in this appeal shall operate during the pendency of the suit. 46. There shall, however, be no order as to costs.
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2011 (8) TMI 1325 - BOMBAY HIGH COURT
... ... ... ... ..... 996/-, Tainwala Chemicals and Plastics (India) Limited was a profit making company and there was no reason to believe that the said company would suffer losses in the near future. The market value of the shares on the date of investment were between ₹ 60/- to ₹ 80/- per share and on the date of conversion of naked convertible warrants, the share value had fallen to ₹ 14/- per share and as per the SEBI guidelines the shares were offered on the date of conversion at ₹ 72.70 per shares. In these circumstances, the assessee took a commercial decision to forgo the amount invested in naked convertible warrants than to invest further amount by subscribing to the shares at a price offered by the company. Consequently, no fault can be found with the decision of the ITAT in allowing the loss incurred by the assessee on forfeiture of the amounts invested by the assessee in naked convertible warrants. Accordingly, the appeal is dismissed with no order as to costs.
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2011 (8) TMI 1324 - CESTAT AHMEDABAD
... ... ... ... ..... b) of Customs Act, 1962. 2. After hearing both sides, we find that the issue involved in this case is regarding inclusion of NCCD for computation of Brand rate of Drawback on the goods exported. Any appeal against these orders of Commissioner (Appeals) on this issue does not lie before this Tribunal. In view of the above, all the Stay Petitions and appeals stand disposed off as not maintainable in terms of first proviso to Section 129A(1)(b) of Customs Act, 1962. Revenue may consider moving correct forum, if they are advised to do so. Stay Petitions also stand disposed of. (Dictated & Pronounced in Court)
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2011 (8) TMI 1323 - DELHI HIGH COURT
Levy and collection of cess - Labor cess - deduction of TDS - case of Respondent is that the date of the operation of the Cess Act and the Cess Rules in Delhi was 1st January 2002 and consequently the subject contract was not subject to the Cess Act and the Cess Rules - HELD THAT:- The Cess Act had statutory force and came into effect throughout India on 3rd November, 1995 and any circular or notice issued by any Government or any organization including the Appellant herein with respect to the date of its enforcement would have no meaning, inasmuch as, the Cess Act being a Central Act, the date of its enforceability could not be postponed or determined by any State Government or any other organization.
Finally, the Arbitral Awards and the impugned Orders are erroneous for the reason that they failed to take into consideration the aspect that the Appellant was liable to deduct at source cess at the notified rate from the bills for building and other construction works of the Respondent contractors from the date the Cess Act came into force i.e. 3rd November, 1995.
Appeal allowed.
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2011 (8) TMI 1322 - ITAT PUNE
Charitable Institution u/s 12A - Tax deduction on donations u/s 80G - Enquiry u/s 80G(5) - Assessee, charitable institution, applied for renewal of the recognition u/s 80G. CIT while examing the approval under section 80G, the assessee has been denied the exemption u/s 11 & 12 by the Assessing Office
HELD THAT:- In the case of SHIKSHAN PRASARAK MANDALI. VERSUS COMMISSIONER OF INCOME-TAX. [2008 (4) TMI 396 - ITAT PUNE-A], based on similar facts, CIT denied recognition under section 80G for the reason that the exemption under sections 11 & 12 had been denied to the assessee in the assessment proceedings. As per the Bench, such objection would not ipso facto militate against denial of recognition under section 80G as long as in principle and on a prima facie basis assessee complied with the conditions set out in section 80G(5)(i) to (v).
Having regard to the observations of the Hon’ble Gujarat High Court in the case of NN. DESAI CHARITABLE TRUST VERSUS COMMISSIONER OF INCOME-TAX [1999 (5) TMI 11 - GUJARAT HIGH COURT], it is clear that in so far as the relevance of 80G(5)(i) is concerned, it is to examine the eligibility of the assessee applicant to claim that its income is not liable to be included in the computation of total income. The Hon’ble High Court emphasized that for the purposes of enquiry under section 80G(5), it is to be seen whether the Trust is registered u/s 12 or not. It has been specifically observed that, “Once a trust is registered under section 12A, its income from property, which includes donations whether covered under section 11(1)(d) or u/s 12 such donations are deemed to be income from property, is not to be included in its total income u/s 11 or section 12.
In the present case, the objection raised by the CIT to deny the recognition u/s 80G is founded on irrelevant considerations by embarking upon an exercise which is only in the realm of assessment proceedings. Undeniably the assessee is registered u/s 12A and such registration continues.
In this view of the matter, in our view, the assessee fulfils the condition prescribed under clause (i) of section 80G(5). There being no other objection raised by the CIT, we therefore proceed on the basis that the assessee has fulfilled all the conditions prescribed under clauses (i) to (v) and is thus eligible for renewal of recognition u/s 80G(5) - Decision in favour of Assessee.
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2011 (8) TMI 1321 - ANDHRA PRADESH HIGH COURT
Taken-up Writ Petition - Misappropriation of public property - Seeking investigation by CBI - illegal gratification for exchange of official favours from the then Chief Minister - validity or genuineness of every investment and every business venture and to compare and verify as to whether the same is linked with any corresponding Quid Pro Quo benefit received by such investor from the State of Andhra Pradesh - seeking relief to call for and examine the records connected with three G.Os - HELD THAT:- Prima facie, it emerges from the record forming part of the writ petitions including pleadings of the parties that from May, 2004 onwards, respondent No.52 floated number of companies wherein Quid Pro Quo investments have been made out of the benefits received by the investors / beneficiaries from the decisions of the State Government in various forms like SEZs, irrigation contracts, relaxation/permission for real estate ventures, mines etc. besides payment of huge premium amounts paid in the shares and invested in the companies by such beneficiaries and the money so paid is nothing but corrupt money attracting Section 3 of the Prevention of Money Laundering Act, 2002. The investigation by the Income Tax authorities with respect to assessment orders of M/s. Jagathi Publications for the year 2008-09 shows huge unexplained cash credit. Similarly, huge escalated face value of shares to the extent of 35 times also was not accepted by the Income Tax authorities and respondent No.52 is directly or indirectly connected with some of the companies which are showing phenomenal growth and these facts make it necessary to ascertain the role of individuals/firms/public servants in the group companies of respondent No.52.
keeping in view the scope of the public interest litigation as settled by the decisions of the Supreme Court referred to above, we have confined ourselves to the considerations of prima facie satisfaction and regard being had to the manner in which the investments in the group companies of respondent No.52 have been made vis-à-vis the benefits and official favours received by the investors from the Government of Andhra Pradesh, prima facie we are satisfied that there are violations of the provisions of the Indian Penal Code, Prevention of Corruption Act, Prevention of Money Laundering Act apart from criminal conspiracies and commission of other related offences involving huge magnitude of investment by local and foreign companies, some located in tax haven countries, for which registration of a crime and investigation to remedy the public interest which has suffered, is just and necessary by a well-equipped and specialized agency, having expertise to handle such situations and has the credibility. Analysing as such, the most appropriate agency would be the CBI.
We have also made it clear in the judgment rendered in Writ Petition that the preliminary report was resealed after perusal and it shall remain sealed, among other things in view of the contention of some of the appearing learned counsel for the respondents that in case report of the CBI becomes public, their clients may have to face condemnation in the eyes of the public by unwarranted media publicity even before completion of the investigation. For the reasons mentioned in this paragraph, we have resealed the report.
Accordingly, Writ Petition are disposed of directing the Central Bureau of Investigation to register a crime and investigate into the accusations indicated hereinabove and other aspects relevant thereto and take the investigation to its logical end in accordance with law.
So far as the deficiencies in the affidavit and verification of the affidavit and the bonafides required of a petitioner, who approaches the Court in public interest, are concerned, the objections raised by the learned senior counsel appear to be tenable. The petitioner himself states in para 10 of the affidavit that he is aware of Taken-up Writ Petition pending before this Court. The basic contentions raised by him are already covered by the material produced in Taken-up Writ Petition as well as connected Writ Petition.
This writ petition is, therefore, only a reiteration of the self-same pleas and is based upon the downloaded documents from the internet. The present writ petition, therefore, does not satisfy the requirements as per rules of this Court for a public interest litigation and as such, is not entertainable, as the petitioner has failed to explain and substantiate the source and authenticity of the information relied upon. Even otherwise, the aspects sought to be contended in this writ petition are already under consideration in Takenup Writ Petition.
We, therefore, decline to entertain Writ Petition No.6979 of 2011 and it is accordingly dismissed
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2011 (8) TMI 1320 - ITAT KOLKATA
... ... ... ... ..... 315 (SC) and CIT vs. Karnal Co-operative Sugar Mills Ltd. 243 ITR 2 (SC) , which were followed by Hon’ble Delhi High Court in the cases of CIT vs. Koshika Telecom Ltd. 287 ITR 479 (Del) and in a recent decision in the case of CIT vs. Jaypee DSC Ventures Ltd. (2011) 335 ITR 132 (Del) , wherein it was held that deposits of margin money by the assessee with the banks was inextricably linked to the furnishing of the bank guarantee by the assessee and, therefore, income from interest on deposits constitutes business income and not income from other sources. Respectfully following the above decisions, we are of the view that interest income of ₹ 61,622/- is to be treated as icome rom business. Since we have already directed the A.O. to adopt the rate of net profit at 2% on gross contractual receipts of the assessee as its business income, in our opinion, no separate addition of ₹ 61,622/- is required. 7. In the result, the appeal of the assessee is partly allowed.
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2011 (8) TMI 1319 - ITAT HYDERABAD
... ... ... ... ..... rendered outside India becomes allowable expenditure and the same is outside rigors of section 40(a)(ia). In the instant case, the CIT(A) observed that the assessing officer had not been able to establish that there was specific intention of the payee to receive the payment within the territory of India, therefore, the CIT(A) rightly did not agree with the view taken by the assessing officer with regard to the addition made on this issue and the CIT(A) was justified in directing the assessing officer to delete the said addition. After considering the totality of facts and the circumstances of the case the order of the CIT(A) on this issue was not to be interfered with and, accordingly, the same was to be upheld.” 5. Respectfully following the above order of this Tribunal, we are inclined to decide the issue in favour of the assessee and against the Revenue. 6. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open Court 23. 8.2011
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