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Showing 401 to 420 of 924 Records
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2011 (9) TMI 859
Waiver of pre deposit - Cenvat / MODVAT Credit - Removal of capital goods after use - Method of calculation of depreciation - Held that:- Rule 3(5) required a manufacturer to pay an amount equal to the Cenvat credit demand on the capital goods reduced by 2.5% for each quarter of a year - any prima facie reasons to support the above observations of Commissioner (Appeals). There is nothing in the un-amended Rule 3(5) indicating that straight line method is not required to be accepted - Merely because such straight line method has been specifically mentioned in the subsequent Rule 3(5), it does not mean that the earlier rule was to the contrary, in the absence of the same. In fact, in our views, such subsequent amendment supports, the appellant’s stand that such reduction was required to be done only on straight line method, as intended by the legislation and clarified subsequently by amendment in the law - As also on the issue of revenue neutrality in as much as the capital goods were cleared by the appellant to their sister concern only, who had availed the benefit of the credit of the duty paid by the appellant - Stay granted.
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2011 (9) TMI 858
Reversal of credit - Inputs destroyed by fire - Availemt of MODVAT Credit - Held that:- Adjudicating Authority has referred to the amended provision of Rule 3(5B) and Rule 3(5C) of Cenvat Credit Rules, 2004, which require an assessee to pay back the amount of Cenvat Credit in case of destruction of inputs in fire or where the inputs are written off. Admittedly the said provisions were introduced w.e.f. 11-5-2007 and 7-9-2007, whereas the fire broke in the appellant’s factory on 7-5-2007. As such, the said relied upon provisions were not available on the date of fire and destruction of the inputs. In such a scenario, the law declared by the Larger Bench in the case of Grasim Industries v. CCE, Indore (2006 (8) TMI 69 - CESTAT,NEW DELHI) would be fully applicable to the facts of the case - Stay granted.
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2011 (9) TMI 857
Waiver of pre deposit - Duty in respect of soap stock, gums, waxes and fatty acids - exemption Notification No. 89/95-C.E., dated 18-5-1995 - Held that:- Commissioner has already decided an identical dispute in favour of the assessee and Tribunal has not granted stay against the said order, we deem it fit to hold that the appellant has prima facie case in his favour - Decided in favour of assessee.
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2011 (9) TMI 856
Waiver of pre-deposit and stay of recovery - Duty demand on dumpers manufactured and supplied by the assessee to a construction company for execution of a World Bank-funded project - Bar of limitation - Held that:- at the time of clearance of the goods, the appellant was eligible for exemption under Notification No. 108/95-C.E., ibid. The assessee, apparently, had no doubt regarding their eligibility. The show-cause notice was issued in the light of the aforesaid amendment brought to the said notification on 1-3-2008. This show-cause notice, however, did not allege that the withdrawal/diversion of the dumpers by the construction company upon completion of the project was with the knowledge or consent of the assessee. The only allegation in the show-cause notice was to the effect that the assessee should have taken necessary steps to ensure that the dumpers were not diverted/withdrawn from the project site upon completion of the project. We are afraid, this allegation would not constitute any of the grounds/ingredients embodied in the proviso to Section 11A(1) of the Central Excise Act for invocation of the extended period of limitation. Prima facie, the demand of duty is time-barred. In this view of the matter, we grant waiver of pre-deposit and stay of recovery in respect of the dues adjudged against the appellant - Decided in favour of assessee.
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2011 (9) TMI 855
Review Application - Held that:- As the larger Bench has specifically over ruled the judgment dated 18.12.2007 passed in the present case, the present petition deserves to be decided in terms of the decision taken by the larger Bench.The Writ Petition is allowed. The impugned notices dated 23.10.2007 and 17.11.2007, Annexures 12 & 14 to the Writ Petition are hereby quashed. The Assessing Authority will decide the proceedings afresh in accordance with the law laid down by the larger Bench referred to above ignoring the view taken in the Circular dated 25.01.2003 and the directions contained therein.
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2011 (9) TMI 854
Whether the Indian Courts would have jurisdiction to entertain an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, against an interim order passed by the Arbitral Tribunal with its seat in Singapore?
Whether the “law of arbitration” would be the International Arbitration Act, 2002, of Singapore; and (iii) whether the “Curial law” would be the laws of Singapore?
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2011 (9) TMI 853
Whether the National Commission under the CP Act has the jurisdiction to entertain and decide a complaint filed by the consignor claiming compensation for deficiency of service by the carrier, in view of the provisions of the CA Act and the Warsaw Convention. Or whether domestic laws can be added to or substituted for the provisions of the conventions?
Whether the appellant can be directed to compensate the consignor for deficiency of service in the facts and circumstances of the case?
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2011 (9) TMI 852
Payment of service tax on Import of services – reverse charge method – utilization of cenvat credit – order of the tribunal sustained in which it was held that prior to 19.4.2006 recipient of services who was liable to pay service tax was entitled to avail cenvat credit for the purpose of making payment of service tax on import of services
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2011 (9) TMI 851
Issues Involved:
1. Treatment of know-how fees as capital or revenue expenditure.
2. Invocation of section 40A(2)(b) regarding royalty payments.
3. Classification of repair expenses as capital or revenue expenditure.
4. Taxability of interest on income-tax refund.
5. Classification of software expenses as capital or revenue expenditure.
6. Deductibility of bad debts written off.
7. Charging of interest under sections 234B and 234D.
8. Deductibility of lease rental payments.
9. Classification of technical know-how fees.
10. Classification of building repair expenses.
11. Classification of operating and license fees for software.
Detailed Analysis:
1. Treatment of Know-How Fees as Capital or Revenue Expenditure:
The assessee claimed that the payment of Rs. 43.10 lakhs for know-how fees should be treated as revenue expenditure. The Assessing Officer (AO) and the Commissioner of Income-tax (Appeals) [CIT(A)] treated it as capital expenditure, citing it provided an enduring benefit. The ITAT held that the know-how was not an asset of the assessee but a limited right to use, and thus, the payment should be treated as revenue expenditure. The related TDS of Rs. 4.90 lakhs was also treated as revenue expenditure.
2. Invocation of Section 40A(2)(b) Regarding Royalty Payments:
The CIT(A) invoked section 40A(2)(b) to disallow Rs. 278.78 lakhs of royalty payments, considering them excessive. The ITAT found that the royalty rates were within the limits approved by the Government of India and SIA. The matter was remanded to the AO for a fresh assessment of the reasonableness of the payments.
3. Classification of Repair Expenses as Capital or Revenue Expenditure:
The AO treated Rs. 46,58,516 and Rs. 2,28,55,484 of repair expenses as capital expenditure. The CIT(A) upheld this view, noting the lack of detailed evidence from the assessee. The ITAT remanded the issue back to the AO for a fresh assessment, allowing the assessee to furnish necessary details to substantiate the nature of the expenses.
4. Taxability of Interest on Income-Tax Refund:
The assessee contested the inclusion of Rs. 34.41 lakhs of interest on income-tax refund in its income. The ITAT upheld the taxability of this interest, referencing the Special Bench decision in Avada Trading Co. P. Ltd. v. Asst. CIT.
5. Classification of Software Expenses as Capital or Revenue Expenditure:
The AO and CIT(A) treated Rs. 26,95,590 spent on software as capital expenditure. The ITAT, following precedents, held that such expenses were revenue in nature, as they were recurring and necessary for business operations.
6. Deductibility of Bad Debts Written Off:
The AO disallowed Rs. 7,13,677 of bad debts written off, stating mere book entry was insufficient. The ITAT allowed the claim, citing the Supreme Court decision in T. R. F. Ltd. v. CIT, which held that writing off in the books was sufficient for deduction.
7. Charging of Interest Under Sections 234B and 234D:
The ITAT noted that the charging of interest under sections 234B and 234D was consequential and upheld the AO's action.
8. Deductibility of Lease Rental Payments:
The AO disallowed Rs. 30.96 lakhs of lease rental payments as pre-paid expenses. The CIT(A) allowed the claim based on past history. The ITAT, referencing the Special Bench decision in Deputy CIT v. FAG Bearings India Ltd., upheld the disallowance but allowed the deduction in the relevant year.
9. Classification of Technical Know-How Fees:
The CIT(A) reduced the disallowance of Rs. 5,66,10,000 to Rs. 43,10,000, treating the remaining as revenue expenditure. The ITAT upheld this view, confirming that the payments were for the use of know-how and not for acquiring an asset.
10. Classification of Building Repair Expenses:
The AO treated Rs. 27,60,840 of building repairs as capital expenditure. The CIT(A) allowed part of it as revenue expenditure. The ITAT confirmed that such expenses were current repairs and allowable as revenue expenditure.
11. Classification of Operating and License Fees for Software:
The AO treated Rs. 83,14,354 paid for SAP R3 software as capital expenditure. The CIT(A) allowed the claim, treating it as revenue expenditure. The ITAT upheld this view, noting that the payments were for monthly usage and did not create an enduring asset.
Conclusion:
The ITAT provided a comprehensive analysis, distinguishing between capital and revenue expenditures based on the nature and purpose of the payments, and remanded certain issues for fresh consideration by the AO, ensuring that the assessee was given an opportunity to provide necessary evidence. The judgment emphasized the importance of the factual context and legal precedents in determining the nature of expenses for tax purposes.
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2011 (9) TMI 850
Issues Involved:
1. Whether the addition of Rs. 10,79,00,000 as unaccounted income from the sale of land should be upheld.
2. Whether the memorandum of understanding (MOU) constituted a legally binding agreement for the sale of land.
3. Whether the possession of the land was transferred to the buyer.
4. Whether the income from the alleged sale accrued to the assessee under the mercantile system of accounting.
Issue-wise Detailed Analysis:
1. Addition of Rs. 10,79,00,000 as Unaccounted Income:
The Assessing Officer (AO) added Rs. 10.79 crores to the assessee's income based on a seized document (A-186) and a statement from a director admitting receipt of Rs. 21 lakhs. The AO argued that the evidentiary value of the seized documents was unquestionable and the onus was on the assessee to disprove them, which the assessee failed to do. The AO also noted that the assessee's transactions were mostly in cash and could not be verified due to non-cooperation. The Commissioner of Income-tax (Appeals) upheld this addition, stating that the sale was confirmed by the director's statement and the terms of the MOU.
2. Legality of the Memorandum of Understanding (MOU):
The assessee argued that the MOU dated May 27, 2004, was not a registered agreement but merely a memorandum subject to several conditions. The MOU stipulated payment terms over three years and required the vendor to obtain various clearances. The assessee contended that the deal was canceled, and the Rs. 21 lakhs received was returned. The Tribunal observed that the MOU was not a legally enforceable document for transferring immovable property as it was not registered and did not transfer title or ownership.
3. Transfer of Possession:
The Tribunal found that there was no evidence of possession being transferred to the buyer, Kartik J. Patel. The property remained with the assessee, as evidenced by attachment orders from the Tax Recovery Officer. The Tribunal noted that the Revenue Department did not examine Kartik J. Patel, who allegedly paid the substantial amount. The Tribunal concluded that the possession of the property was not handed over, and the Rs. 21 lakhs received was returned the next day.
4. Accrual of Income under Mercantile System:
The Tribunal discussed the applicability of section 5 of the Income-tax Act, which states that income is taxable when it accrues or arises. The Tribunal emphasized that an enforceable legal right to receive income must exist for it to be taxable. Since the MOU did not result in a transfer of property and the conditions were not fulfilled, the income did not accrue to the assessee. The Tribunal held that the provisions of section 2(47) read with section 53A of the Transfer of Property Act were not met, and therefore, the transfer did not occur.
Conclusion:
The Tribunal concluded that the total consideration of Rs. 10.79 crores did not accrue to the assessee as the MOU was not a binding agreement, the possession was not transferred, and the Rs. 21 lakhs received was returned. The Tribunal allowed the appeal, exonerating the assessee from the levy of tax on the alleged unaccounted income.
Order:
In the result, the appeal of the assessee is allowed. Order signed, dated, and pronounced in the court on September 30, 2011.
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2011 (9) TMI 849
Issues Involved:
1. Validity and jurisdiction of the order under section 263 of the Income-tax Act, 1961.
2. Nature of the income received by the assessee.
3. Existence of a permanent establishment (PE) in India.
4. Application of mind and enquiry by the Assessing Officer (AO).
Issue-wise Detailed Analysis:
1. Validity and Jurisdiction of the Order under Section 263:
The assessee contended that the order passed by the Director of Income-tax (DIT) under section 263 was invalid, illegal, and without jurisdiction as the conditions for invoking revisional jurisdiction were not fulfilled. The DIT invoked section 263, arguing that the AO's order was erroneous and prejudicial to the interests of the Revenue. The Tribunal upheld the DIT's order, stating that the AO failed to make necessary enquiries and apply his mind to the issues involved, making the order erroneous and prejudicial to the Revenue.
2. Nature of the Income Received by the Assessee:
The assessee, a non-resident company, received Rs. 5,60,01,600 for providing designs and engineering drawings for the SVBT project. The AO accepted the assessee's claim that this income was not taxable in India as it was business income and the assessee did not have a PE in India. However, the DIT argued that the AO did not properly examine whether the income was in the nature of "royalty" under article 12 of the Indo-Thai treaty. The Tribunal agreed with the DIT, noting that the AO did not investigate the nature of the income or consider the previous order under section 195(2) which treated the income as royalty.
3. Existence of a Permanent Establishment in India:
The assessee claimed it did not have a PE in India, and therefore, its income was not taxable in India. The AO accepted this claim without proper enquiry. The DIT pointed out that the AO did not examine the details of the work done, the locations where the work was performed, or whether the assessee's personnel visited India, which could indicate the existence of a PE. The Tribunal supported the DIT's view, emphasizing that the AO did not conduct any enquiry to ascertain the existence of a PE.
4. Application of Mind and Enquiry by the Assessing Officer:
The DIT argued that the AO accepted the assessee's return without proper enquiry or application of mind, especially considering the previous order under section 195(2) which treated the income as royalty. The Tribunal found that the AO did not make necessary enquiries or examine relevant documents and details, such as the agreement between the assessee and PBIPL, the nature of the work done, and the visits by the assessee's personnel to India. The Tribunal concluded that the AO's order was passed without application of mind and proper enquiry, justifying the DIT's invocation of section 263.
Conclusion:
The Tribunal upheld the DIT's order under section 263, setting aside the AO's assessment and directing a fresh assessment after conducting proper enquiries. The appeal of the assessee was dismissed.
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2011 (9) TMI 848
Taxability in assessment year - Held that:- The statement given by Mr. Taurani has no evidentiary value due to so many contradictions and cannot be accepted as a valid proof especially in the absence of any corroborative evidence. Further, when Mr. Taurani has stated that the amount has been paid in the year 1996 or 1999 and when the Department has no evidence that the money has not been received in the year 1996, there is no basis to conclude that the amount has been received in the year 1999. In this regard, we find force in the submission of learned counsel for the assessee that since the assessment year prior to 1999-2000 had become time barred, therefore, this is the only reason for the Revenue to contend that the payment in question was made during the previous year relevant to the assessment year 1999-2000. In view of the detailed reasons given above we hold that the amount cannot be taxed in the impugned assessment year. Since we have decided the issue on merit, the legal ground challenging the validity of the reassessment becomes academic in nature. In the result, appeal filed by the assessee is allowed.
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2011 (9) TMI 847
Money Laundering - Offence punishable under Section 4 of the Prevention of Money Laundering Act, 2002 - search in the premises owned and/or possessed by the Respondent No.1 - documents which were recovered by the Income Tax Department - Respondent No.1, Shri Hassan Ali Khan, used the different passports which he had acquired by submitting false documents, to open bank accounts in foreign countries to engage in the laundering of tainted money – transfer of the huge sums from one bank to another was one of the methods adopted by persons involved in money-laundering to cover the trail of the monies which were the proceeds of crime - Held that:- Having a foreign bank account and also having sizeable amounts of money deposited therein does not ipso facto indicate the commission of an offence under the PML Act, 2002. However, deposit of US$ 700,000 in the Barclays Bank account of the Respondent No.1 has not been denied. On the other hand, the allegation is that the said amount was the proceeds of the sale of diamond jewellery which is alleged to have been stolen from the collection of the Nizam of Hyderabad - total income of the Respondent No.1 for the assessment years 2001-02 to 2007-08 has been assessed at ₹ 110,412,68,85,303/- by the Income Tax Department and in terms of Section 24 of the PML Act, the Respondent No.1 had not been able to establish that the same were neither the proceeds of crime nor untainted property - Bombay High Court had granted bail to the Respondent No.1 on an incorrect interpretation of the law and the said order granting bail was, therefore, liable to be set aside - Order granting bail set aside
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2011 (9) TMI 845
Writ petition – whether Rule 9(3)(b) of Chartered Accountants Rules, 2007 ultra vires as the said Rule transgresses and supplants section 21A(4) of the Chartered Accountants Act, 1949 – Held that:- Section 21(4) stipulates that the Disciplinary Directorate shall follow the procedure as they may be specified. The procedure is specified in Rules including the impugned Rule 9(3)(b). Director (Discipline) functions as the Secretary of the Board of Discipline. in case Director (Discipline) gives a closure report on the basis of his or her opinion that there is no prima facie case, the Board of Discipline/Disciplinary Committee must accept that opinion and the only option to the Board of Discipline is to advise the Director (Discipline) to investigate the matter further. The provisions do not postulate finality to the prima facie opinion of the Director (Discipline). On the other hand, Director (Discipline) is the Secretary of the Board. The final determination whether or not a member is guilty of professional or other misconduct in the First Schedule or the Second Schedule, is decided by the Board of Discipline or the Disciplinary Committee. Board is not bound in all cases of disagreement to refer for reinvestigation. Rule 9(3)(b) is procedural and states how the steps should be taken and, therefore, it would be an anathema to the basic conception of statutory interpretation that section 9(3)(b) transgresses or encroaches upon the power conferred under section 21A(4). writ petition stands disposed of.
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2011 (9) TMI 844
Rectification of share register for the disputed 200 shares - the petitioner-company lost the above share certificates in transit on 12th November, 1995. Since the petitioner lost the share certificates, it wrote a letter dated 14th November, 1995 (Annexure 4) to R-1-company along with a photocopy of first information report ('FIR') lodged by the petitioner in the nearby police station requesting R-1-company not to transfer the said shares to any one in case anybody approaches for the transfer of the same. Responding to the same, R-1-company informed the petitioner on 5th January, 1996 (Annexure 5) that R-1-company has received the share transfer deed duly executed by R-3 in favour of R-4 of share certificate No.1216215 of 100 shares bearing distinctive No.130558868-967 and further stated that R-1 would transfer the same in favour of R-4 in case the petitioner fails to produce the stay order from court of law from transferring the same.
The suit filed by the petitioner was dismissed on merits. It is the petitioner who moved civil suit before the civil court seeking reliefs on the self-same cause of action wherein it did not withdraw the suit stating that CLB has jurisdiction over the matter. It was not even taken as an issue in the judgment passed by the civil court. Since the issue has been already tried and adjudicated by a civil court in the suit supra between the same parties on the same cause of action the present petition is hit by res judicata as the petitioner is re-agitating over the self-same cause of action before this CLB on the ground that the CLB has the jurisdiction to try this case. - petition dismissed.
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2011 (9) TMI 843
Allegation of oppression and mismanagement under section 397/398 of the Companies Act, 1956 - family dispute - held that:- these being family Companies being managed by the brothers in accordance with the family settlement, adherence to which has not been disputed, it is noted that by levelling allegations and counter-allegations by manipulating records by holding meetings without quorum both parties have endeavoured to gain control of the management of the companies and have acted in breach of fiduciary duties.
The respondents have been involved in continuous acts of oppression against the petitioners and the present petitions deserve to be allowed in favour of the petitioners. Status quo ante is hereby restored setting aside the appointments of Sandeep Mittal, Nippun Mittal, Sameer Mittal and Naveen Mittal as directors. P-2 continues to be a director on the Board. All statements/statutory forms filed in this regard with the RoC are held to be invalid, all resolutions passed, in Board meetings/AGM/EGM are hereby cancelled.
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2011 (9) TMI 842
Oppression and mismanagement – Memorandum of Understanding was entered into between WBIDC and the Chatterjee Petrochem (Mauritius) Company - It was decided that both WBIDC and CP (M) C that in case of disinvestment by WBIDC, the disinvested shares would be offered to CP (M) C – violation of condition - HPL had approved the issuance and allotment of equity shares worth ₹ 150 crores at par to Indian Oil Corporation (IOC) - Company would continue to retain its private character and the Chatterjee group would have control over its management, such promises, although, reduced into writing in the form of agreements, not only remained unfulfilled, but even the character of the Company was altered with the transfer and sale of 150 million shares by the Company in favour of IOC - despite having transferred 155 million shares in favour of CP (I) PL, and having received the full price therefor, the Company had not registered the same in the Company's Register of Share-holders, thereby depriving the Chatterjee Group from exercising its right to vote in respect of the said shares - transferring 150 million shares in favour of IOC, the character of the Company was altered from a Private Company into a Government Company and also reduced the Chatterjee Group to a minority – Held that:- failure of WBIDC and GoWB to register the 155 million shares transferred to CP (I) PL could not, strictly speaking, be taken to be failure on the part of the Company, but it was the failure of one of the parties to a private arrangement to abide by its commitments. The remedy in such a case was not under Section 397 of the Companies Act. No acts of oppression had been made out against the Company. Directions given to WBIDC and GoWB to transfer 520 million shares held by them in HPL to the Chatterjee Group
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2011 (9) TMI 841
Amalgamation – sanction of scheme of amalgamation – company should file its Balance sheet, and profit and Loss account for the financial year 30.9.2011 before the scheme being put into operation - accounts of the petitioner company for the period 1.10.2010 to 30.9.2011 has not been audited, not approved by the Board of directors of the petitioner company, its shareholders, its creditors etc. – Held that:- proposed scheme was to be sanctioned subject to condition that audited accounts for period 1-10-2011 to 30-9-2011 would be filed with Regional Director.
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2011 (9) TMI 840
Writ petition - petition claimed payment of the monies spent by him in television show "Kaun Banega Crorepati-2 (KBC)" - petitioner had spent large sums of monies in his attempt to participate in the said show but had not been able to - organizers of the show were duping the participants of crores of rupees and indulging in foul play – Held that:- CCI (Competition Commission of India) dismissed complaint holding that allegations of petitioner were to be tested in light of opposite party being in a dominant position and, thus, discriminating in selection of contestants for participation in programme/show and adopting unfair means therein; however, on basis of viewership ratings, it was found that share of viewers of said television show was not so much for which it could be said that show was in a dominating position - therefore, petition against impugned order was to be dismissed
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2011 (9) TMI 839
Petition seeking winding up of a company - creditor as well as shareholder / contributor of the company - held that:- no purpose is going to be served to continue the Company since the objects for which it was incorporated has substantially failed and it is impossible for the Company to carry out business of the Company in view of differences between the Directors and total lack of management who have lost their confidence in each others and the differences have reached to the extent that there is every possibility of more litigations cropping up between them. - winding up order issued.
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