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Showing 421 to 440 of 1271 Records
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2015 (6) TMI 857
Application for winding up - Default in repayment of debt - Held that:- The law is well-settled that the jurisdiction under section 432 of the Act is a special jurisdiction conferred only on the High Courts. One of the grounds for ordering winding up 433(e) read with section 434(1)(a) of the Act.
It is the specific case of the petitioner that cheque bearing No. 944769 was issued in the name of M. Venkat Rao for ₹ 8,60,03,488 towards the bills payable to the petitioner and that the same was dishonoured. When the petitioner has caused legal notice issued to M. Venkat Rao on November 23, 2009, in this regard, a reply notice was issued both on behalf of M. Venkat Rao and also the respondent. This reply notice is significant for it contains a clear and categorical admission of liability and the intention of the respondent to settle the bills of the petitioner.
With regard to the cheque, the stand of the respondent is brazenly inconsistent. Having claimed that the cheque leaves were stolen by the managing director of the petitioner in reply to its notice dated December 29, 2009, in its counter-affidavit the respondent has abandoned the said stand and admitted that the cheques were issued to the petitioner by M. Venkat Rao, the erstwhile proprietary concern. In the face of this admission that the cheque was issued by M. Venkat Rao and the same was dishonoured, the burden heavily lies on the respondent to explain the circumstances under which the cheque was issued. The statement of account dated April 30, 2008, which was not controverted by the respondent by any contemporaneous correspondence coupled with the fact that M. Venkat Rao, the erstwhile proprietary concern, has issued the cheque which was admittedly dishonoured, would prima facie prove the debt of the petitioner owed by the respondent.
In the light of the legal position discussed and the finding that the respondent has admitted its liability to pay the bills to the petitioner rendered above, the mere pendency of arbitration proceedings does not constitute a ground to reject the petition for winding up. The company petition is therefore admitted.
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2015 (6) TMI 856
Eligibility to claim exemption u/s 11 denied - assessee has advanced a sum of ₹ 47.71 lakhs to a sister-Trust so diverted by the assessee is liable to be taxed as income of the assessee as held by AO - Held that:- the assessing officer has failed to refer to any of the provisions of the Act, under which he is forming such an opinion, i.e., he has not shown as to how the assessee has violated any of the provisions of the Act, which would warrant rejection of claim of exemption made u/s 10(23C)(iiiad) of the Act. On the contrary, the contention of the assessee is that the amount so advanced to another educational institution falls within its object of the assessee society. The said contention of Ld A.R could not be rebutted by the revenue. Hence the said reasoning given by the assessing officer also fails.
Thus the assessing officer has brought to tax the amount of ₹ 47,71,058/- in the hands of the assessee without the authority of law. Accordingly, we are of the view that the Ld CIT(Appeals) was not justified in confirming the assessment of the above said amount. Hence, we are unable to sustain the order of Ld CIT(Appeals) on this issue. Accordingly, we set aside the order of Ld CIT(Appeals) and direct the Assessing Officer to delete the assessment of ₹ 47,71,058/- referred above. - Decided in favour of assessee.
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2015 (6) TMI 855
Reopening of assessment - disallowance under Section 14A - Held that:- In the present case the reasons for re-opening indicate that the re-opening has been initiated on two grounds namely disallowance u/s. 14A and on account of non addition of FBT to determine the book profit for the purpose of computing tax u/s. 115JB. With respect to the disallowance u/s. 14A we find that A.O at para 5 of the original assessment order passed on 26.12.2008 after considering the submissions of the Assessee had come to the conclusion that as against nil expenses said to have been incurred by Assessee and therefore no disallowance u/s. 14A, A.O worked out the disallowance u/s. 14A at ₹ 1.43 crores.
Thus it can be seen that the A.O in the course of original proceedings and on the basis of submissions made by the Assessee had formed an opinion about the disallowance to be made u/s. 14A and had accordingly made the disallowance and in such a situation the reopening on account of disallowance u/s. 14A would be in our view a case of change of opinion. With respect to the addition of FBT to book profit, we find that CBDT in Circular No. 8/05 dated 29.08.2005 has opined that FBT is allowable deduction in computation of book profit u/s. 115JB and in such a situation in the present case, it cannot be said that the assessee’s action in not adding the FBT to book profit has resulted into escapement of income. Further, before us Revenue has not brought any material on record to demonstrate that the aforesaid Circular issued by CBDT has been withdrawn by the appropriate authorities. Thus in the present case, the re-opening is not permissible as per law. - Decided in favour of assessee.
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2015 (6) TMI 854
Disallowance 40(a)(ia) - non-deduction of TDS - whether the appellant assessee could make a claim for deduction other than by filing a revised return? - Held that:- From the decision of Hon'ble Supreme Court in the case of Goetez (India) Ltd.,[2006 (3) TMI 75 - SUPREME Court] it is clear that the deduction can be made before AO by way of revised return and not otherwise but this does not apply to the powers of Income Tax Appellate Tribunal u/s. 254 of the Act as is clarified by Hon'ble Apex Court in this very judgment. Hence, on the facts of the present case before us the assessee's claim is legally sustainable on facts of the case and now we direct the AO to allow the same but after verification of dates of payments of TDS. - Decided in favour of assessee.
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2015 (6) TMI 853
Penalty u/s 271(1)(c) - assessee accepted that he had furnished inaccurate particulars of income u/s 80IB of the Act and withdraw the claim - Held that:- The assessee has withdrawn its claim of deduction filed u/s 80IB of the Act at the very outset of assessment proceedings prior to issuance of notice u/s 142(1) of the Act and the reason as explained by the assessee was that their claim was valid but as they are not in possession of excise certificate indicating date of commencement of business, therefore, they agreed for addition in this regard.
As relying on CIT vs Reliance Petroproducts Ltd.(2010 (3) TMI 80 - SUPREME COURT) wherein their Lordships held that merely because the claim of the assessee was not accepted or not found to be acceptable by the revenue authorities, that by itself would not attract penalty u/s 271(1)(c) of the Act. In the present case, we disagree with the conclusion of the AO that the assessee had furnished either inaccurate particulars of income or submitted wrong statement of its income during assessment proceedings and as we have noted above the assessee withdrew its claim of deduction us/ 80IB of the Act before initiation of assessment proceedings. Therefore, we approve the conclusion of the CIT(A) deleting the penalty - Decided in favour of assessee.
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2015 (6) TMI 852
Revision u/s 263 - CIT(A) direction to AO to recompute the deduction allowable under S.10B, after excluding other income from the profit of the business - Held that:- In the present case, the other income in the question earned by the assessee was treated by the Assessing Officer as business income of the assessee and this position is not disputed even by the learned Commissioner in his impugned order passed under S.263. This being so and keeping in view the ratio of the judicial pronouncements discussed in Sterling Foods (1999 (4) TMI 1 - SUPREME Court ), Mysodet (P) Ltd. V/s. CIT [2008 (9) TMI 7 - SUPREME COURT ] & Maral Overseas Ltd [2012 (4) TMI 345 - ITAT INDORE] we hold that the other income in question received by the assessee, which was assessed to tax under the head 'profits and gains of business or profession', is not liable to be excluded from the profits of the business of the eligible undertaking for the purposes of computing deduction under S10B of the Act, as per the formula given in sub-section (4) of that section. There was thus no error in the order of the Assessing Officer passed under S.143(3) on this issue, as alleged by the learned Commissioner, calling for any revision under S.263. We, therefore, set aside the impugned order of the learned Commissioner of Income-tax passed under S.263 and restore that of the Assessing Officer. - Decided in favour of assessee.
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2015 (6) TMI 851
Reopening of assessment - while calculating deduction allowable under section 80HHC the turnover of 80IB unit was not included which resulted into under assessment of income - Held that:- Since we have upheld that the first contention that the total turnover would include turnover of 80IB unit, hence, the AO had reasons to believe that the income of the assessee had escaped assessment, hence, reopening of the assessment is held to be valid. - Decided against assessee.
Reducing the receipts of DEPB from deduction claimed under section 80IB - computation of deduction under section 80HHC and chargeability of income in relation to export incentives received by the assessee in the form of DEPB - Held that:- The cost of customs duty is neutralized under the DEPB scheme, by granting a duty credit against the export product and this credit can be utilised for paying customs duty on any item which is freely importable. DEPB is 'cash assistance' receivable by a person against exports under the scheme of the Government of India and falls under Section 28(iiib) of the Act. Accordingly, DEPB is chargeable to income tax under the head 'Profits and Gains of Business or Profession' even before it is transferred by the taxpayer. Under Section 28(iiid) of the Act, any profit on transfer of DEPB is chargeable to income tax under the head 'Profits and Gains of Business or Profession' as an item separate from cash assistance under Section 28(iiib) of the Act. The face value of the DEPB will fall under Section 28(iiib) of the Act, the difference between the sale value and the face value of the DEPB will fall under Section 28(iiid) of the Act. The cost of acquiring DEPB is not nil because the person acquires it by paying customs duty on the import content of the export product and the DEPB which accrues to a person against exports has a cost element in it. Accordingly, we direct the Assessing Officer to make assessment a fresh on this issue in view of the law laid down by Hon'ble Bombay High Court in the case of Vijaya Silk House (2012 (9) TMI 263 - BOMBAY HIGH COURT ) and further, if need be, as per the law laid down by Hon'ble Supreme Court in the case of Topman Exports (2012 (2) TMI 100 - SUPREME COURT OF INDIA ). - Decided in favour of assessee for statistical purposes.
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2015 (6) TMI 850
Disallowance of sales-tax liability u/s.43B - CIT(A) deleted the disallowance - Held that:- Ministry of Law has opined that if the State Governments make an amendment in the Sales Tax Act to the effect the sales tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of section 43B. This circular has been explained by the Tribunal in the case of Morvi Horologial Industries v. ITO (1990 (9) TMI 121 - ITAT AHMEDABAD-C), CIT v. K.N.Oil Industries (1996 (7) TMI 101 - MADHYA PRADESH High Court) and CIT v. Gujarat Polyerete Pvt. Ltd. (1999 (3) TMI 17 - SUPREME Court) Reading of these decisions suggests that provisions of Circular No.496 would apply only if a State Government had amended its Sales Tax Act to provide that the sales tax that the deferred under an incentive scheme framed by it would be treated as actually paid, so as to meet the requirements of section 43B of the Income-tax Act.
The facts undisputed are that the assessee is having manufacturing unit in Karnataka. Karanataka Government had amended the Sales Tax Act for providing deferment of the Sales Tax liability and to treat the said sales tax collected as loan for use of the assessee Company, CIT(A) is perfectly justified in deleting the addition on account of deferment of sales tax. - Decided against revenue.
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2015 (6) TMI 849
Challenge to the re-opening of assessment - Held that:- In the present case, on examination of the reasons given for reopening of the impugned assessment, the allegation of the AO was not that the assessee had not made true and complete disclosure or that the AO had come across certain material facts which were not filed at the time of filing of the return. But the reason assigned was that there was wrong claim of cost of acquisition in respect of the Long Term Capital Gain disclosed by the assessee. Due to this distinction, the decision of Sun Pharmaceuticals Industries [2012 (10) TMI 403 - Gujarat High Court] is not applicable on the facts of this appeal. Same ratio of judgments of Vipin Kumar P. Khandcliya [2013 (1) TMI 19 - GUJARAT HIGH COURT] and Dish man Pharmaceuticals and Chemicals [2012 (9) TMI 58 - Gujarat High Court] are not applicable here. Since the reopening of the assessment itself held as bad in law, therefore, rest of the grounds on merits need not to be adjudicated upon. - Decided partly in favour of assessee.
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2015 (6) TMI 848
Bogus capital gain returned - CIT(A) charged the same as unexplained cash credit on the grounds that the capital gains the appellant neither satisfactorily explained the purchases of shares nor the sales thereof - Held that:- We first agree with the submissions of the DR that since the assessee changed his stand from LTCG to normal gain in itself would amount to incriminating. This is so, because, the assessee was forced to change his statement and claim in the return, after the search. This can only mean that what has been claimed in the ROI was not the complete truth. In such a circumstance, we reject the additional ground.
Coming to the original GOA, though we appreciate the amount of spade work that the revenue authorities did to come to certain conclusion, but on the other hand, nowhere in either of revenue authorities orders, do we find the negation of the details and evidences filed by the assessee, so that the revenue authorities could clinch the initiative. We find that the certificates of brokers, i.e. Action Financial Services (India) Ltd. and District Securities Pvt. Ltd. along with complete details have not been considered in completeness. We find that the references were made, to those documents, which were at the disadvantage to the assessee.In such a circumstance, we are of the opinion that the case needs fresh adjudication.
- Decided in favour of assessee for statistical purposes.
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2015 (6) TMI 847
Reopening of the assessment u/s. 147 - addition being interest income accrued on fixed deposits and addition being expenditure on capital spares consumed being capital in nature - Held that:- AO has no fresh material to form his opinion regarding escapement of assessment and he has also ot found any tangible material to record the reasons for reopening of the assessment of the assessee. It is merely a change of opinion which is not permissible under the law as well as according to the various decisions rendered by the Hon’ble Supreme Court of India in the case of CIT vs. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA ] and in the case of CIT vs. Foramer France (2003 (1) TMI 101 - SUPREME Court) and Sita World Travels (India) Ltd. vs. CIT (2004 (5) TMI 23 - DELHI High Court ) - Decided in favour of assessee.
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2015 (6) TMI 846
Undervaluation of shares - CIT(A) deleted addition out of short term capital gains on sale of 17500 shares Minda HUF Ltd. on the ground that the difference cannot be brought to tax unless. there is documentary evidence that there has been understatement of consideration - adoption of fair value of shares of Minda HUF Ltd. against the sale consideration - Held that:-CIT(A) decided the issue in dispute by respectfully following the order in the case of CIT v. Sivakami Co. P. Ltd. [1986 (3) TMI 2 - SUPREME Court] and has rightly held that in the case of the assessee, the Revenue has made no attempt to establish that there was any understatement though it might be that shares were sold at an under value. He has also held that even if for the sake of argument, it is accepted that market price of the assessee was different from the sale consideration, the difference cannot be brought to tax unless there is documentary evidence that there has been understatement of consideration. - Decided in favour of assessee.
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2015 (6) TMI 845
Estimation of income - rejection of books of accounts - income earned by the assessee by indulging in providing accommodation entries of purchase and sale of goods - CIT(A) has confirmed the assessment at 1% of the aggregate of the purchase and sales for the year - Held that:- The assessee has, apart from making bald statements, not advanced any material or set up any case to exhibit or show that the estimation at 1% of the aggregate of purchases and sales for the year is not reasonable or is excessive, which, for the foregoing reasons, we find it as not. We are conscious that the assessee has shown to have been allowed quality rebate by its supplier/s, effectively reducing the trading loss claimed by it. That, however, would have no bearing or impact in-as-much as the loss or its quantum is not in issue; the quality rebate being not a factor for VAT credit. Rather, the assessee stands to gain directly, i.e., to the extent of VAT credit, in case of ‘loss’ in-as-much as its stands to be allowed credit on its purchases, which are therefore higher than the sale value, on which VAT credit would stand to be passed on by it, and which also explains, or perhaps so, the reason for the unsubstantiated and unexplained trading loss being regularly booked by the assessee in its’ accounts.
Finally, as regards the assessee’s plea for being allowed expenses some expenses would inevitably be incurred, we consider it proper that the same be allowed; reasonableness being the essence of any assessment, on an ad hoc, estimate basis, at ₹ 1 lac and ₹ 1.20 lacs for A.Y. 2007-08 and 2009-10 respectively, so as to cover all sundry expenses that may be incurred in the activity of raising bills. Before parting, we may also add that the assessee’s assessment u/s.23(5) of MVAT, 2002 dated 22.03.2013 for the financial year 2008-09 (copy of the order on record, at PB pgs. 3-7) shows the assessment of tax payable under the said Act at ₹ 15,98,735/-. The same, though allowable, being a tax, its deductibility would be subject to section 43B. - Decided partly in favour of assessee.
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2015 (6) TMI 844
Computation of capital gains - co-owners - Addition on account of cost of improvement - CIT(A) deleted addition - Held that:- On the transfer of his 1/5th share in the total area of land, what the assessee actually transferred was not only the lesser area under his exclusive ownership, but also the common area on which he had joint ownership rights. Sale consideration amounting to ₹ 27 crore received by the assessee is in respect of higher area of 44 Bighas, 15 Biswas and 4 Biswans. It is not the case of the Revenue that the assessee transferred his entire 1/5th share in the agricultural land and received ₹ 27 crore in respect of lesser area and some other amount of consideration for the remaining area which was commonly used. When there is a sale of the assessee’s 1/5th share in total land area covering both the exclusive ownership/possession as well as the joint ownership/possession, the cost should also be taken for the both, including that of joint ownership.
It is impermissible to take full value of consideration for the higher area and cost of acquisition for the lesser area. Insofar as the mention of a lesser area in the Registered valuer’s report and Court decree is concerned, we find the Registered sale deed to be a more authentic document evidencing the details of the property transferred with the relevant khasra nos. etc. We, therefore, prefer to go with the Registered sale deed in preference to the other documents in so far as the question of determining the assessee’s share in land is concerned. If we so proceed by taking the higher area of the land transferred, the assessee’s claim for deduction for increase in the indexed cost of acquisition by a further sum of ₹ 38.76 lac merits acceptance. We countenance the impugned order on this issue - Decided against revenue.
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2015 (6) TMI 843
Validity of assessment u/s 143 - whether notice u/s 143(2) having been served beyond the limitation period? - Held that:- Since notice under section 143(2) of the Act was not validly issued upon the assessee within the prescribed period, the Assessing Officer could not assume jurisdiction to frame the assessment under section 143(3) of the Act. Therefore, the assessment framed consequent to the invalid assumption of jurisdiction is not sustainable in the eyes of law. We accordingly annul the assessment and delete the additions made by the Assessing Officer - Decided in favour of assessee.
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2015 (6) TMI 842
Disallowance made on account of bad debt written off account - CIT(A) allowed part claim - Held that:- No infirmity in the order of the ld.CIT(A) as he has given a finding on fact that the condition has envisaged u/s.36(1)(vii) of the Act is not complied with by the assessee and the finding of the ld.CIT(A) on fact is not controverted by the assessee by placing any material contrary on record suggesting that the conditions for ‘writing off’ has been fulfilled. Therefore, in our considered view, the judgement of of TRF Ltd. vs. CIT (2010 (2) TMI 211 - SUPREME COURT) as relied upon by the ld.counsel for the assessee would not help to the assessee. Under these facts, we see no reason to take a different view than taken by the ld.CIT(A). - Decided against assessee.
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2015 (6) TMI 841
Addition u/s 68 - Held that:- The assessee deposited cash totaling ₹ 2,55,000/- in her bank account, which she claims to be out of her savings and also partly out of agricultural produce. Our attention was drawn to the cash flow statement furnished by the assessee in which, even the expenditure relating to agricultural activities was debited. In the totality of the above said facts and circumstances, we delete the addition of ₹ 2,55,000/- being the amount raised by the assessee from her savings and partly out of agricultural proceeds. Accordingly, we direct the Assessing Officer to delete the addition of ₹ 2,55,000/- made under section 68 of the Act. - Decided in favour of assessee.
Indexation of the cost of acquisition of the assets sold - Held that:- he contention of the assessee was that it had initially purchased the land along with a small built up area in financial year 1999-2000 and had constructed building in financial year 1995-96. We find that the necessary details in this regard are not available on record and hence, it needs to be verified. Accordingly, we direct the Assessing Officer to carry out the verification exercise and compute the long term capital gain by adopting the cost of acquisition relatable to the acquisition i.e. the cost of land with built up area in financial year 1999-2000 and the additional cost of construction in the financial year 1995-96. - Decided in favour of assessee for statistical purposes.
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2015 (6) TMI 840
Depreciation on computer peripherals and accessories - 60% or 25% - Held that:- The issue has been settled by the Hon'ble Delhi Tribunal in the case of Expeditors International India (P) Ltd. vs Addl. CIT [2008 (8) TMI 399 - ITAT DELHI-F ], wherein it has been held that the peripherals such as printers, scanners, NT server, etc. form integral part of the computer and the same, therefore, are eligible for depreciation at a higher rate as applicable to a computer @ 60%.- Decided in favour of assessee.
Expenses incurred on advertisement - Treated as capital in nature by AO being 30% of ₹ 26,56,245/- as it would give enduring benefit to the assessee - CIT(A) deleted the disallowance - Held that:- There was no infirmity in the order of the CIT(A), who relied on the ratios laid down by the Hon’ble Supreme Court in the cases of Empire Jute Co. Ltd. vs CIT [1980 (5) TMI 1 - SUPREME Court] and Alembic Chemicals Works Company Ltd. vs CIT, [1989 (3) TMI 5 - SUPREME Court] - Decided in favour of assessee.
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2015 (6) TMI 839
Penalty u/s 271(1)(c) - disallowance of alleged fictitious payment of commission to various persons - Held that:- , it cannot be conclusively said that the employees of the assessee-company had arranged such accommodation entry and assessee was in dark up to the time when A.O. cornered the assessee. Rather the assessee was trying to justify by falling uncorroborated confirmations. Even if it is presumed that these employees were involved for such a bogus claim of fictitious payments, then the assessee was very well aware much before the scrutiny proceedings and at that time it should have come with a clean hand before the department. Under these facts and circumstances, we hold that the levy of penalty on the disallowance of ₹ 11 lakh has rightly been confirmed by the CIT(A). However it is noted that the A.O. has levied penalty of more than 200% of the tax sought to be evaded which in our opinion should be restricted to 100%. Accordingly, we hold that penalty should be levied at 100% of the tax sought to be evaded, which comes to ₹ 3,70,260. Thus, the penalty is reduced from ₹ 7,50,000 to ₹ 3,70,260 - Decided partly in favour of assessee.
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2015 (6) TMI 838
Jurisdiction of the Assessing Officer under Section 153A - addition on deemed dividend u/s 2(22)(e) - Held that:- On the facts of the case, as pointed out by the learned CIT(A), the details of loans / advances were not directly reflected in the assessee's individual books of accounts and therefore it can be inferred that this issue came to light only pursuant to search action and therefore it is not incorrect to state that this issue came to light/arose on account of the search action under Section 132 of the Act. In this view of the matter, respectfully following the decision of the Hon'ble Karnataka High Court in the case of Canara Housing Development Co. (2014 (8) TMI 642 - KARNATAKA HIGH COURT), we concur with and uphold the finding of the CIT(A) that the Assessing Officer had validly invoked the jurisdiction under Section 153A of the Act. - Decided in favour of revenue.
Addition towards Deemed Dividend - Held that:- In terms of section 2(22) (e) of the Act, dividend includes any payment by a company of any sum by way of advance or loan to a shareholder; being a person who is the beneficial owner of shareholding of not less than 10% of the voting power or to any concern in which such shareholder is a member / partner and in which he has a substantial interest or any payment by any such company on behalf of any such shareholder. A plain reading of this section would seem to indicate that the payment of loan / advance should be to the shareholder, to come under the purview of deemed dividend. From the shareholding pattern, as recorded in the order of assessment, it appears that CPIPL is not a shareholder of CPPL. It is not clear as to how the Assessing Officer determined the applicability of the provisions of section 2(22) (e) of the Act to the facts of the case on hand. Also if additional evidence submitted to substantiate the assessee’s claim, it would be in the interest of equity and justice if the additional evidence is admitted and adjudicated, particularly when the addition is made because the assessee did not submit evidence to substantiate his claim. Thus we deem it fit to remand the matter back to the file of the Assessing Officer for de novo examination of this issue - Decided in favour of assessee for statistical purposes.
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