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Showing 421 to 440 of 782 Records
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2012 (4) TMI 420
Addition made on loan amount disclosed in the cash flow statement - Tribunal reversing the order of the first appellate authority and confirming that of the Assessing Officer – Held that:- The mere production of confirmation letters does not discharge the liability of the assessee to offer satisfactory explanation for the loan receipts - the production of such material cannot lead either to a conclusion that the Assessing Officer has to discredit the same or call for further details in the event of non-satisfaction –assessee contented with the production of confirmation letters without any further material regarding the identity, status or capacity of the creditors or even the dates on which the said loans were said to be made - against assessee.
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2012 (4) TMI 419
Reopening - Validity of notice - proposal to withdraw the benefit of deduction u/s 80IA - held that:- only on scrutiny assessment the total income of the petitioner was determined after allowing deductions under section 80-IA(4)(iii) and section 80-IA(10) - the notice for reopening within the period of four years from the end of the relevant assessment year is not found sustainable.
It is also required to be noted that while disposing of the objections, it was harped upon the Assessing Officer that the mandated condition for availing of the benefit under section 80-IA(4)(iii) was to have an industrial park notified by the Central Board of Direct Taxes and the factum of not possessing the Central Board of Direct Taxes notification was not brought on the record by the assessee. This failure also attributed to the assessee-company for not disclosing fully and truly. This very basis ; as mentioned hereinabove, is not sustainable in wake of clear direction by this Bench to the Union of India for issuance of such notification and this very edifice on which this re-opening is based has been demolished.
Notice for reopening; even though issued within four years from the end of the relevant assessment year and in spite of the Assessing Officer having wide powers under section 147 of the Act (in the post-amendment period - with effect from 1st April, 1989) overwhelmingly, the factual matrix and the decision of this court would not permit such a notice to continue, and resultantly, the impugned notice dated October 1, 2009, issued under section 148 of the Income-tax Act, 1961, and all consequential proceedings are hereby set-aside and are quashed.
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2012 (4) TMI 418
Block assessment - Penalty u/s 158BFA - whether mandatory or discretionary - power of AO - held that:- It is true that Section 273B of the Act which provides that penalty shall not be imposed in certain cases on the assessee proving that there was reasonable cause for failure to pay tax refers to several provisions such as Section 271, 271A, etc., makes no mention of Section 158BFA(2). This still does not mean that penalty under Section 158BFA (2) is mandatory. - penalty under Section 158BFA (2) is not mandatory.
Power of the Tribunal to delete the penalty - Tribunal interfered with the penalty on the ground which was not permissible. Additions made on the basis of estimation may be one of the grounds on which discretion not to impose penalty may be exercised. However, in absence of any requirement to prove concealment or furnishing of inaccurate particulars found in Section 271 [1](c) of the Act cannot form the sole basis to delete penalty imposed by the Assessing Officer and confirmed by Commissioner [Appeals] - Held that: Tribunal committed a grave error in interfering with the penalties imposed by the Assessing Officer and confirmed by the CIT [A] on the grounds mentioned in the order. - Decided in favor of the revenue
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2012 (4) TMI 417
Deduction u/s 54 and 54-F - Reopening - assessment u/s 147 - held that:- the reopening was definitely valid since the No Objection Certificate from Appropriate Authority issued on 21.02.2000 was never brought to the notice of Assessing Officer by the assessee during the course of original assessment proceedings.
Regarding eligibility of exemption u/s 54 and 54F - held that:- The original agreement of sale of the Chennai property was made on 28-6-1996. Based on that agreement, NOC from the Appropriate Authority was obtained on 8-10-1996. Thereafter a supplementary agreement was executed on 6-2-1998 in order to accommodate the actual extent of the landed property arrived at on re-measurement.
When the sequences of events are considered in a wholesome manner, it is evident that the possession of the property was handed over to the buyers and the consideration was paid by the buyers on 28-11-1999 itself. This giving away of the possession of the properties to the buyers against receipt of the consideration of the transaction, has satisfied the requirements of "transfer" within the meaning of section 2(47) of the Income-tax Act, 1961 and within the meaning of section 53A of the Transfer of Property Act.
It is to be seen that the NOC issued on 21-2-2000 relates back to 8-10-1996 and as such reinforces the fact of transfer of the property on 28-11-1999, when the possession was handed over to the buyers. In these circumstances, as far as this case is concerned, therefore, there is complete compatibility between the application of section 2(47) of the Income-tax Act, 1961 with section 53A of the Transfer of Property Act and Chapter XX-C of the Income-tax Act, 1961.
Investment made by the assessee on 9.12.1998 in the residential property was well within the time period mentioned for availing deduction under Section 54 / 54F of the Act. - Decided in favor of assessee.
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2012 (4) TMI 416
Depreciation on intangible assets - AO disallowed the depreciation - various assets including integrated software - During the survey, it was found by the survey team that these assets were not there in the premises and if the appellant had any objection regarding the list of the assets in the survey report, the same has to be objected there itself and ought to have corrected - AO denied claim of the assessee because no fixed assets register was maintained by the assessee but same was produced before the AO subsequently - held that:- Merely because the parties who had supplied assets to the assessee have not responded to the notice of the AO may not be a ground for denying claim of the assessee on tangible assets - the material supplied by the assessee is not examined in detail and complete details of the assets are recorded in the report of valuation prepared prior to the survey at the instance of IDBI, therefore, we are of the view the matter as regards depreciation on tangible assets requires reconsideration at the level of the AO
Regarding deduction u/s 80HHC and 80 IA - Held that: assessee made a claim of deduction under these provisions when income is computed at profit. The learned CIT(A), therefore, rightly directed the AO to consider this issue particularly when the assessee fulfilled conditions under these provisions. The learned CIT(A) merely directed the AO to allow the claim of the assessee as per law
Regarding bad debts u/s 36 (1) (vii) - Held that: debts having been written off in the books of accounts in the year under consideration, the claim of bad debts is allowable to the assessee - Appeal is allowed
Disallowance of insurance expense - AO rejected the claim of the assessee because the insurance cover was taken for loss of production and expected profit whereas insurance expenses were debited on estimate basis relating to destruction of machinery, building, raw material and finished goods. - held that:- Once assessee has shown income on account of insurance receipts out of the same incident and claimed expenses out of the same incident relating thereto, the claim of the assessee should have been appreciated and considered for both i.e. income and the expenditure on account of insurance. Similarly, assessee shall have to satisfy the AO as to how expenses have been claimed and should have filed the supporting evidences. - matter remanded back.
Regarding disallowance to the extent of 25% on disallowance of Rs.3,08,17,231/- made by the AO on account of nongenuine purchases - arned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that search was carried out by central excise department on 15-02-2002 which is prior to the start of the financial year relevant to the assessment year under appeal 2003-04 - It is not in dispute that search was carried out by central excise department prior to start of the financial year in appeal. The financial year starts from 01-04-2002 and would end on 31-03-2003 for assessment year 2003-04 under appeal - In the absence of any material on record against the assessee, we do not find any justification to sustain even part addition against the assessee - Decided in favor of the assessee
Disallowance of various expenses - assessee Company filed return of income in response to notice u/s 148 of the IT Act and has made additional claims on these expenses. Such claims were not made in the original return of income. - held that:- the proceedings u/s 147 are meant for the benefit of revenue and not for assessee, the assessee cannot be permitted to convert the re-assessment proceedings into an appeal or revision in disguise and sick leave in respect of items earlier rejected or claim relief in respect of items not claimed in the original assessment proceedings, unless relatable to escaped income.
Regarding addition of Rs.10,55,53,967/- u/s 36(1) (iii) - It was submitted before the learned CIT(A) that the AO did not issue any show cause notice on this issue and that all the advances were made for business purposes either for purchase of materials or plant and machinery - The learned Counsel for the assessee submitted that the entire disallowance has been made by the AO purely on estimate basis without establishing any nexus between the funds borrowed and advances granted - It was submitted that recently the Hon’ble Supreme Court has held that in case of loans to associate concerns and/or outside parties, commercial expediency from the businessman’s point of view has to be taken into consideration and while doing so, revenue cannot sit in the arm-chair of the assessee - Held that: the assessee is having sufficient own funds, therefore, there is no question of diversion of interest-bearing funds for giving loans and advances - Decided in favor of the assessee
Regarding addition on account of loss on sale of raw materials of Rs.2,69,86,470 - After verification of the evidences produced by the assessee the AO had come to the conclusion that the loss claimed in respect of such sales of raw material is fictitious and therefore, the same has been disallowed and as per the clear finding in the assessment order, the AO stated that the addition made be confirmed - learned Counsel for the assessee also submitted that huge volumes of additional evidences are in order and the AO did not find any mistake in the same and hence, he has not commented on any of them - Held that: CIT(A) considering the details furnished found that the assessee has suffered loss and such findings of the learned CIT(A) have not been rebutted through any evidence or material on record - Appeal is dismissed
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2012 (4) TMI 415
Denial of waiver of interest, levied under Section 234A, B and C of the Income Tax Act – Held that:- there is no provision in the Act, providing for waiver of such interest – notification dated 23.05.1996 provides the circumstances in which such waiver is permissible which says that where the return of income could not be filed by the assessee due to unavoidable circumstances and it was later filed voluntarily without detection by the Assessing Officer - no details thereof have been furnished by assessee and this factual issue was not established before the 1st respondent - denial of the request for waiver of interest cannot be said to be against the provisions of the notification – against assessee.
Request for waiver of interest levied under Section 220(2) – Held that:- Apart from the pleading that the non-payment of tax was due to reasons beyond the control of the assessee, the assessee has not established this factual question - the ingredients of the other conditions specified in Section 220(2)(a) also are not established – against assessee.
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2012 (4) TMI 414
Import of old, used and discarded rubber tyres – Department enhanced value of tyres, imposition of redemption fine in lieu of confiscation and penalty as the tyres imported were in sound condition, hence usable after working, proceedings initiated - Tribunal called for revision of classification as only a small quantity of 3,142 tyres was found to be in good condition and not on entire consignment – Held that:- Since a small quantity of less than 10% has been found to be usable, it cannot be said that the appellants have intentionally mis-declared the classification - what has been purchased apparently is a stocklot and in such purchase, some good quality tyres would always be found - redemption fine in lieu of confiscation on the ground of mis-declaration of classification also cannot be upheld and no penalty under Customs Act - remand the matter to the original adjudicating authority who shall decide the duty payable on 3142 tyres - once it has been held that the value arrived at on the basis of opinion of the re-traders, cannot be accepted and the valuation has not been done in accordance with the valuation rules, the Department cannot proceed to revise the value - Commissioner is directed to re-consider the issue
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2012 (4) TMI 413
Setting aside of the order contending that the complaint was filed on 7th May, 2002 whereas as per Section 468 Cr.P.C. cognizance on the complaint of the Respondent could have been taken latest by 10th April, 2000 as allegedly the wrong statement was signed on 11th April, 1997 – Held that:- The allegations in the complaint relate not only to the prospectus but also of filing balance-sheet as on 31st March, 2000 and 31st March, 2001 showing diversion of funds being advances recoverable without any explanation in the balance-sheet - the complaint clearly stated all the mis-statements made in each financial year - the date of knowledge is upto the financial year 31st March, 2000 and 31st March, 2001 regarding diversion of funds and the complaint was filed on 7th May, 2002 the complaint was not barred by limitation - the limitation arises from the date of knowledge of the offense committed - petition dismissed.
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2012 (4) TMI 412
Shortages of raw material and finished goods noticed at Factory premises - Director of the company present at the time of stock checking accepted the shortages - further follow-up statements of the director admitted the illicit clearances of the finished goods and raw materials - confirmation of demand of duty, interest thereof and equal amount of penalty on the assessee-appellant, and penalty imposed on the individual appellant Rs.50,000/- Held that:- the statement of director present at the time of stock checking clearly indicates that clandestine removal of the raw materials as well as the finished goods have taken place and the amount for the same received in cash, thus the lower authorities were correct in coming to the conclusion that the appellant is liable to discharge duty liability on such clandestinely removed goods - benefit of Section 11AC to the appellant company is correct, legal and does not suffer from any infirmity - penalty imposed on the individual appellant, i.e Director Rs.50,000/- is reduced to Rs.25,000/-
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2012 (4) TMI 411
Whether equivalent amount of penalty needs to be imposed on the appellant under the provisions of Section 11AC - the appellant has accepted the duty liability on the goods captivity consumed and discharged the same prior to issuance of Show Cause Notice – Held that:- Assessee has complied with the first proviso of Section 11AC by paying the amount prior to the raising of demand is eligible for the provisions of Section 11AC which talks about the discharge of 25% of duty liability as penalty if it is paid within 30 days from the date of the order of the Tribunal –as decided in case of CCE, Ahmedabad Vs. Akash Fashion Prints Pvt. Ltd. (2009 - TMI - 33022 - GUJARAT HIGH COURT) – in favour of assesee.
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2012 (4) TMI 410
Rejecting the refund claim filed by the assessee for refund of duty paid and not collected from their purchasers - the refund claim has arisen on the ground that the appellant was not supposed to discharge duty liability on the medicines which were cleared from the factory premises as they were exempted – Held that:-Chartered Accountant’s certificate concluding that there was non-passing of the incidence of duty to the buyer is produced for first time - this certificate was not produced before lower authorities the same needs to be considered which is first defense of the appellant - set aside the orders of lower authorities and remand the matter back to re-consider the issue afresh in the light of the certificate issued.
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2012 (4) TMI 409
Denying Cenvat Credit availed in respect of goods transport services for transportation of empty container to factory for stuffing of export final products and re-transportation to the port of the export - imposing the interest and penalty on the appellant – Held that:- The appellant is liable for availment of CENVAT Credit in respect of freight charges paid by the appellant for bringing in the empty containers as held in CCE, Jaipur vs. Nitin Spinners Ltd.( 2009 - TMI - 76078 - CESTAT, NEW DELHI) stating that containers are used for packing the final products thus can be treated as inputs used by the manufacturer in or in relation to the manufacture of final products - Notification no. 18/2009-ST dated 07.07.2009 exempts the taxable service received by an exporter in respect of the transport of goods from place of removal to port of export therefore,appellant is entitled to avail credit of Service Tax in respect of these charges also – in favour of assessee
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2012 (4) TMI 408
Whether the cables which were cleared in running length of 25 and 100 meters can be considered as parts, components or assembly of automobile – Application for waiver of pre-deposit of duty interest and penalty - Held that:- The cables manufactured and cleared in running length cannot be considered as parts of battle tanks and not eligible for benefit of notification which grants exemption from payment of duty to parts of battle tanks – decided in case of Incab Industries vs. CCE (2000 -TMI - 50339 - CEGAT, EASTERN BENCH, KOLKATA) - the amount already deposited is sufficient for hearing of the appeal - Pre-deposit of the balance of duty, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal - in favour of assessee.
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2012 (4) TMI 407
Eligibility of the respondent for refund under Notification No.41/2007-ST, dt.06.10.2007 - Commissioner (Appeals) has allowed the refund claim in respect of Service Tax paid on Port services, Terminal Handling Charges, CHA services, GTA services, Wharfage charges – Held that:- The services such as Stevedoring, transporting the cargo after unloading from the vessel, are covered under the Port service - once the Service Tax was paid under the category of Port service, at the end of the receiver of the service the eligibility for the credit cannot be questioned - the decisions in the case of Western Agencies Pvt.Ltd. Vs CCE Chennai (2011 - TMI - 206087 - CESTAT, CHENNAI - LB), covers the services in respect of which the refunds have been claimed by the respondents - as regards CHA service and GTA service it is clear that the respondents are eligible for CENVAT Credit upto the place of removal and in the case of export on FOB basis, the place of removal has to be taken as Port – against revenue.
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2012 (4) TMI 406
Penalty u/s 76 on delayed payment of Service Tax – Held that:- No penalty can be imposed if the Service Tax liability and interest thereof stand deposited under the Section 73(3) - Show Cause Notice even for penalty cannot be issued if Service Tax liability and interest thereof has been met – decided case Krishna Security & Detective Services Vs CST (2011 - TMI - 211577 - CESTAT, AHMEDABAD) – against revenue.
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2012 (4) TMI 405
Service Tax liability under the reverse charge mechanism – Held that:- As the provisions of Section 66A of Finance Act, 1994 were brought into play w.e.f. 18.04.2006 no liability arises of payment of service tax - the issue is no more res-integra - as decided by Hon'ble Supreme Court in the case of Indian National Shipowners Association Vs UoI (2010 - TMI - 78723 - Supreme Court of India) – in favour of assessee.
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2012 (4) TMI 404
Setting aside the penalties under Section 76 & 77 by first appellate authority – Held that: - For the period October 2004 to March 2006 photocopies of the Service Tax returns filed have been produced depicting that it has been filed with Superintendent of Service Tax, Range Gandhidham - the same has been filed in time and hence no penalty can be imposed under Section 77 - For Quarter July 2006 to September 2006 Form ST-3 return produced by the assessee specifically indicating the taxable service rendered from said Quarter is ‘Nil’ - if there are no services rendered during the relevant period there cannot be any demand of Service Tax liability and consequently no delayed payment – against revenue
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2012 (4) TMI 403
Revenue expenditure u/s 37(1) - Deletion of the addition made by the AO on account of commission claimed on payment to various agents in respect of sale of machinery – Revenue contested that seven buyers had stated categorically in their written responses that in the transactions of purchase made by them of the web offset printing machines from the assessee, no commission agent was involved – Held that:- For AY 2005-06 any amount paid by way of commission to persons in respect of these seven buyers cannot be regarded as business expenditure and the same would not be allowable as Revenue expenditure under Section 37(1) but as far as the other payments by way of commission are concerned, there is no evidence which has been produced by the Revenue – partly allowed in favour of revenue.
Assessment Year 2006-07 – Held that:- No evidence from any of the buyers indicating that there was no commission agent between them and the assessee company - there is no material on record nor is there any other evidence which the Revenue could produce to indicate that the commission paid to the commission agent was not genuine – against revenue.
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2012 (4) TMI 402
Invoking the provisions of section 50B to sale of assets of the M Seal Division of the Appellant - assessee contented that it was an itemized sale - Slump sale – Held that:- A close analysis of the agreement and the deeds entered into by the appellant with PIL confirms that the business as a whole was sold and not an itemized sale of assets - Directors' report and Auditors' report also talk about 'sale of business' - the business of Sealants and Adhesives of assessee includes all the processes from manufacturing to marketing and as per the ‘Agreement to Grant’ Appellant had agreed to sell/transfer and assign all rights, benefits, titles, interests of any nature in relation thereto 'business of Sealants and Adhesives', thus leading to sale of entire business – as a result of the nine agreements/ deeds entered with PIL business of Sealants and Adhesives carried out by the Appellant had gone to PIL irrevocably - agreements/deeds entered in to by both the parties prove that they are part of the one transaction only and to considered as ‘ slump sale' – against assessee.
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2012 (4) TMI 401
Rejection of claim of exemption under section 54– assessee submitted that non compliance with the provisions of section 54 within the time prescribed was for reasons beyond her control as the money which was blocked by her by paying advances to procure the property was not realized within the time - Held that: - Payment of advance and return of the same are all matters of normal commercial agreements and cannot act as supervening impossibilities - two out of the three persons to whom advances were made are assessee’s own sons to whom she handed over the money who enjoyed it for long time - these events do not lead to supervening impossibilities to constructed the residential property beyond three years of the prescribed time limit – against assessee.
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