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Showing 441 to 460 of 628 Records
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2011 (12) TMI 353
Application for stay - Officers of the anti-evasion unit attached to Pune Central Excise visited the premises of the appellant in January 2008 and carried out a search - It was found that the appellant had also engaged in the working (on labour charge basis) on the materials supplied by the customers. It was further found that the appellant provided supervision, guidance for construction of greenhouse and carried out erection work as per the request of the clients - . The activity carried out by the appellant consisted of sale of materials in some cases, sale of materials and construction of greenhouse at the site to whom the material is sold, construction of greenhouse at the site with materials procured by the clients from the suppliers other than the appellant and maintenance of greenhouse - Held that: the appellant is supplying various raw materials for the construction of greenhouse on payment of sales tax. These materials are procured by the appellant from the market and is not manufactured by the appellant - Once the greenhouse comes into existence, it is attached to the earth/foundation and becomes immovable goods and hence it cannot be said that the appellant has manufactured an excisable goods at the site - By merely supplying materials for the greenhouse, there is no evidence on record to show that what has been supplied is a greenhouse - unconditional waiver of pre-deposit granted.
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2011 (12) TMI 352
Smuggling of heroine - One of the samples was submitted to the Deputy Chief Chemist, New Custom House, Mumbai along with test memo dated 07.05.2002 and another sample was forwarded to the Forensic Science Laboratory, Kalina, Mumbai for its analysis. The report from both of them confirmed that the samples contained heroin - The provisions of Section 42 of the NDPS Act about recording of information were not strictly followed nor the Intelligence Officer Rosario was examined to prove that such intelligence was received in respect of the present accused appellant - The learned Counsel for the appellant contended that the Intelligence Officer Rosario was not examined by the prosecution, and therefore, it has failed to prove the receipt of the intelligence - The air ticket purchased by the accused from Kenya Airways with two boarding passes were recovered from her and the evidence also shows that the baggage claim tags were found affixed on her air ticket - Held that: prosecution has proved satisfactorily and beyond any reasonable doubt that the accused was in possession of 5.400 kg. heroin kept in two separate polythene bags, which were concealed in the false bottom of the two suitcases which she had checked-in as her baggage with the Kenya Airways - it is clear that the accused was in possession of commercial quantity of heroin and she was trying to export the same. Therefore, she was rightly convicted of the offences under Section 21(c) and Section 23 r/w. Section 28 of the NDPS Act It is settled position of law that a confessional statement before the officers of NCB or Revenue Intelligence under Section 67 of the NDPS Act is not hit by Sections 25 or 26 of the Evidence Act and is admissible but it is necessary to scrutinize the same strictly though the Court may act upon it if it is satisfied about its absolute truth but at the same time it is held unsafe to rely on the confessional statement without some corroboration - learned Counsel for the appellant contends that the appellant is a woman and in jail since 2002. The learned trial Court has awarded rigorous imprisonment of one year in default to pay fine on each count - Appeal is partly allowed
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2011 (12) TMI 351
Disallowance of license and technology fees - Revenue or capital expenditure - assessee was a joint venture formed between Burlington Mills Inc., USA (BMI) and Mafatlal Industries Ltd. (MFI) and known as Mafatlal Burlington Industries Ltd for manufacture of certain special form of denim fabrics - assessee, entered into the License and Technical Assistance Agreement dated 13.06.1996, separately with BMI and MIL to provide for licensing of technical information and trade mark to the assessee on payment of license and technology fees @ 4% of the sales to each of them in respect of sales made through them - AO observed that, in the relevant years, there was no reimbursement of expenses for deployment of personnel of both the companies for providing any technical assistance and, therefore, the entire payments in the form of license and technical fees had to be considered for the use of trade mark or technical information - AO concluded that the technical information was a capital asset acquired by the assessee with the right to use in perpetuity and the royalty paid @ 2% of net sales was capital in nature - license and technical co-operation agreement only grant the license to the assessee to use the trade mark as well as the technical information owned by BMI and MIL - High Court of Bombay in the case of Genon Norton Metal Diamond Dies Ltd. (1983 -TMI - 26281 - BOMBAY High Court) - Decided in favor of the assessee Regarding book profit u/s. 115JB - The dispute is regarding the allowability of deduction on account of profit eligible for deduction u/s.80HHC while computing the book profit u/s. 115 JB under the provision of Clause (iv) of Explanation 1 of Section 115JB(2) - Held that: there being no eligible profit of business for the purpose of deduction u/s.80HHC, the claim of deduction of the assessee has been rightly disallowed by the AO - Decided against the assessee
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2011 (12) TMI 350
Deduction u/s 80HHC - assessee has entered into an agreement with the Yanbu Cement Company Ltd to offer technical knowhow for the operation, maintenance and efficient working of their cement plants - It is the claim of the assessee that the receipt is nothing but income arising in the course of main business, hence to be considered as 'profits of the business' for the purpose of deduction under section 80HHC - Even though the assessee claims that it is operational income to be considered as 'profits of business', these receipts have no direct relationship with the assessee's claim under section 80HHC on export of goods - Considering that assessee originally excluded the same and only contested before the ITAT as additional ground - Decided against the assessee Regarding deduction u/s 80I - assessee included miscellaneous receipts as profit and gains of business while computing deduction under section 80I in respect of Madukarai Unit - learned counsel fairly submitted that the assessee was not in a position to correlate the amounts received as rent from outside parties as recovery of the amounts paid and other receipts, details of which are not available at present - Assessee could not relate the receipt of the above income to the industrial unit for claim of deduction under section 80I - Decided against the assessee
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2011 (12) TMI 349
Addition of Rs.33,84,090/- on account of interest on investment made in shares of M/s Mitra Fidelity Ltd at Rs.2,25,60,603/- during the year - Assessing Officer found that assessee made an investment of Rs.3,61,83,093/- in a group company M/S Mitra Fidelity Ltd and as assessee claimed interest on borrowed funds, he proportionately disallowed interest to the tune of Rs.54,77,464/- calculated at 15% on the entire investment - the transaction is of trading nature, there is no need to disallow any interest as the purchases were made in the course of business activity of assessee - Decided in favor of the assessee by way of direction to AO to allow the interest Regarding disallowance of interest at 18% in respect of premium on debentures - The ground raised by the Revenue is also misleading in the sense that the contention is to restrict the amount on the reason that the debentures were not redeemed in the later year and the debenture premium was not offered for taxation by the other company - As rightly held by the CIT (A) the NCDs were issued in the financial year 2001- 02 @ 18%. Interests are being allowed in the earlier 2 years. This being 3rd year there is no reason for disallowing part of amount - Ground is rejected Regarding disallowance of loss invoking the provisions of Explanation to section 73 - CIT (A) considered the facts of the claim and gave finding that the Assessing Officer lacks basic knowledge of accounting in considering the diminution in value of stock as speculation loss and further considered that there is profit in transactions, therefore, provisions of speculation loss does not arise under section 73 - As seen from the paper book placed on record, assessee has not claimed any diminution value in the year, whereas it is a negative debit to the expenditure a/c thereby increasing the profit in the Profit and Loss A/c. As seen from the details on record, there was a diminution of value in earlier year to the extent of Rs.3,57,53,239/- out of the gross value in the balance sheet - Decided in favor of the assessee
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2011 (12) TMI 348
Validity of reopening - Disallowance under section 40(a)(ia) - Assessing Officer was of the view that the asses-see has not complied with the provisions of section 194C of the Act and the deduction of expenses to the extent of Rs.1,04,54,670 was not allowable under section 40(a)(ia) - The contention of the assessee was dismissed initially by the Assessing Officer on the ground .that for reopening of the assessment there is no need for gathering any new material and the case of the assessee has been reopened after re-examining, the records and on detection of the fact that excess deduction had been allowed to the assessee - the arguments were found to be convincing that before the amendment made by the Finance (No. 2) Act, 2004 which has specifically brought the amendment with effect from October 1, 2004 and before that the assessee had made the payments each below Rs.20,000 there was no violation of section 194C - Held that: Assessing Officer is not justified in holding the deduction of tax at source for the payments made of Rs.1,04,54,670 and further not justified in making the addition of the said amount - Decided in favor of the assessee
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2011 (12) TMI 347
Whether CIT(A) erred in holding that the conditions prescribed in section 47 (xiv) are satisfied - It is further observed that as on 31st March 2005, there is a succession of the proprietorship business in to a corporate entity Krystal Colloids Private Limited, whereby the assessee had assigned running business of M/s. Krystal Colloids sole proprietary concern as a going concern to Krystal Colloids Private Limited - The assessee submitted that some of these bank accounts were continued to ensure that the various refunds, remittance, etc. receivable from one or more government departments, debtors, etc. be directly credited to the respective accounts which were already disclosed to the respective authorities, debtors, etc - Under the Agreement of Assignment, the assets and liabilities were to be transferred at book values. However in respect of these Intangible Assets the same have been transferred to the limited company at the revalued amounts being the book values - in the present case, it cannot be held that he has received consideration or benefit indirectly other than by way of allotment of shares, only because higher number of shares have been allotted due to revaluation - Decided in favor of the assessee
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2011 (12) TMI 346
Taxability of project - relevant assessment year - held that:- Once the income from the project is taxed, the Assessee will have no occasion to claim expenses relating to that project in a later assessment year. In this regard, we also find that the CIT(A) has accepted that fact that the Assessee has got his share of flats in Building No.1 and one flat in Building No.2 also and both have been sold and the sale proceeds shown in the profit and Loss account. As far as Building No.2 is concerned, the Assessee no longer has any interest in the same. It is for M/S.Audumber Construction Co. to complete Building No.2 and deal with it. The Assessee has nothing to do with that building. In that view of the matter, we hold that income from the project, as far as the Assessee is concerned, has to be assessed in this assessment year viz., AY 05-06 on a substantive basis, by treating the project, as far as the Assessee is concerned, as complete.
Expenditure on account of providing alternate accommodation to tenants of the old building - outstanding liability - The AO was of the view that what the assessee is doing not the estimation of profit but the estimation of expenses. The liability was not even an ascertained liability but only estimation. - AO rejected the books of accounts - held that:- in respect of providing alternate accommodation, it is for the Assessee to choose the manner in which it gives the old occupants of the land, alternate accommodation. The AO cannot sit in judgment over the business decision of the Assessee and say that the Assessee should have given alternate accommodation to the old occupants of the land only from his share of built up area received from the subdeveloper. - The AO will examine the expenses and on the Assessee showing correlation of the actual expenses with the expenses actually claimed by way of provision during the previous year, the AO will allowe them as deduction. - Matter remanded back to AO.
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2011 (12) TMI 345
Addition - Survey party recorded two important findings of fact that-(i) physical stock found was in excess of book stock by an amount of ₹ 1,44,25,183/-; and (ii) cash found was short of the cash as per cash book by an amount of ₹ 80,31,100 - the assessee has taken up shifting stands in various times and, therefore, there is reason to come to the conclusion that the assessee tried to foreclose enquiry by making confession at the time of survey - statement u/s 133A is not on oath and the section does not provide that it can be used for the purpose of the Act - The officers have been advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or what is not likely to be disclosed before the revenue - assessee has displayed low tax morality, that cannot be a ground for sustaining an addition, which inference is otherwise not deductible under the law - Decided in favor of the assessee Regarding addition u/s 68 - it is mentioned that ostensibly the addition made by invoking the provision contained in section 41(1) as the provision contained in section 68 is not applicable for the simple reason that these credits were not made for the first time in this year in the books of account - The facts submitted by the ld. counsel regarding the credits being old and their not being written off in the books of account stand undisputed - the provision contained in section 41(1) is also not applicable - Decided in favor of the assessee Regarding addition of ₹ 2,17,11,006 on account of employees' contributions to provident fund and the ESI - during the year the assessee had inter-alia deducted an amount of ₹ 2,17,11,006/- from the salaries paid to the employees. However, the amounts were not credited to respective accounts of the employees before the due date defined u/s 36(1)(va) - Supreme Court in the case of Alom Extrusions Ltd (2009 (11) TMI 27 - SUPREME COURT) - Held that: if the amount is not deductible u/s 36(1)(va), it is deductible u/s 43B - Decided in favor of the assessee Regarding addition of ₹ 20.00 in respect of diversion of interest-bearing funds to its subsidiary company - the assessee advanced monies to the sister concern free of interest. The monies were advanced from a current account in which only sales proceeds were credited - The claim of the assessee is that such advances arising out of this account had no nexus with the borrowings which were credited in another account - the main account and the account from which advances have been made will have to be seen cumulatively for arriving at a decision as to whether any own money was available for making advances as aforesaid - As no attempt has been made to find out the nexus between borrowing and lending - Decided in favor of the assessee by way of remand to AO
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2011 (12) TMI 344
Whether the commercial asset used by the assessee substantially and partly given on lease are not business assets and thus includible into the 'net wealth' u/s 2(ea) of the Wealth tax Act - The assessee in its grounds of appeal has challenged the order of the CWT(A) in confirming the action of the A.O. in holding that the commercial asset used by the assessee substantially and partly given on lease are not business assets and thus includible into the 'net wealth' u/s 2(ea) - Since the assessee in the instant case has let out a part of its business premises and since the assessee is not in the business of letting out properties, therefore, the said property, in our opinion, is not exempt either u/s. 2(ea)(i)(3) or 2(ea)(i)(5) of the Wealth Tax Act - Appeals are dismissed
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2011 (12) TMI 341
The trial Court granted the bail holding that it was not commercial quantity of opium because the morphine contained in the total substance was 1537 gm. - Held that :- The Ministry of Finance, Department of Revenue, in the Central Government had issued Notification dated 19.10.2001 prescribing the small quantity means 5 gm or less than 5 gm while the commercial quantity is more than 250 gm in respect of heroin, morphine, and opium derivatives - offence pertains to the possession and transportation of opium, which is the commercial quantity and is punishable under Section 17(c) with rigorous imprisonment which shall not be less than 10 years but which may extend to 20 years and also with fine which shall not be less than one lakh but which may extend to 2 lakh rupees. The offence is non-bailable - the order passed by the learned Special Judge granting bail to the accused persons stands set aside and cancelled. Accused persons be taken in custody.
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2011 (12) TMI 339
DTAA between India and USA - Disallowance - Deduction u/s 80HHE - In respect of the same assessee arising in ITA.No.3232/2005 and by order dated 4.11.2011 has been answered against the assessee and in favour of the revenue
Regarding deduction u/s 40(a)(i) - The material on record would clearly show that the question about non-deduction under Section 195 of the Act in respect of the payments made in a sum of Rs. 17,35,363/-to Powersolve Corporation USA was raised by the first appellate authority and a show cause notice was also issued to the assessee - the material on record would clearly show that the said payment of Rs. 17,35,363/- paid to the Powersolve Corporation USA was for the services rendered abroad to their office in USA, which is a permanent establishment in DTAA and hence there is no liability to tax in India and even as per the DTAA tax was paid in USA and no amount out of the said payment was chargeable to tax in India and wherefore, the question of applying Explanation relied upon by the learned Counsel appearing for the appellant would not arise - Decided in favor of the assessee
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2011 (12) TMI 338
Deduction u/s 80-IB and under s. 10BA - Held that: the decision of the Tribunal in the case of the assessee for the earlier years in holding that the assessee is engaged in the manufacturing activity and, therefore, entitled to deduction under s. 80-IB of the IT Act 1961 has been accepted by the Revenue in the earlier years - Appeal is dismissed
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2011 (12) TMI 337
Additional evidence - Rule 46A of the Income Tax Rules, 1962 - Revised return - assessee was constructing a commercial complex and showed work-in-progress at Rs. 85,18,056/- in the revised return of income as against 'Nil' work-in-progress shown in the original return of income - The learned counsel appearing for the appellant submitted that in view of the provisions of Rule 46A of the Income Tax Rules, 1961 (hereinafter called the 'Rules'), no additional documents can be produced by the assessee as of right and reasons have to be assigned by the Appellate Authority for permitting the assessee to produce the additional documents - The material on record would clearly show that the Assessing Officer had the benefit of looking into the books of account maintained by the assessee - it is clear that before the ITAT, no ground was raised regarding reception of additional evidence by the First Appellate Authority in contravention of Rule 46A of Rules and in any view of the matter, we hold that the first appellate authority was justified in relying upon the material produced and there is no violation of Rule 46A of the Rules and accordingly, answer the said question of law against the revenue and in favour of the assessee.
Regarding addition u/s 40(A)(3) - assessee has been described as a family trust which is engaged in putting up commercial construction and that as observed by the Assessing Officer, certain agreements have been entered into for selling portion of the premises and even according to the submission of learned counsel appearing for the respondent, the property has now been leased and assessee was receiving rent and therefore, building was not being constructed for personal use and the obligation under Section 40(A)(3) of the Act could not said to have been absolved in respect of the assessee - Decided in favor of revenue.
Regarding undisclosed income - There was an error in writing the account, the same has been rectified and return has been filed in the year 2001 and the same has been accepted by the Appellate Authorities and therefore, finding of the appellate authorities deleting the additions of undisclosed income - Decided in favor of the assessee
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2011 (12) TMI 336
Income escaping assessment - TDS - Purchase of raw material - disallowance - held that:- the assessee contended that the provisions of Section 195 of the Act (for deduction of tax at source) are not applicable, when no part of payment made to non-resident is chargeable to tax in India - assessment is sought to be reopened within a period of 4 years from the end of relevant assessment year- the basic requirement for reopening the assessment that the Assessing Officer has to have reason to believe that the income chargeable to tax has escaped assessment, would continue to apply-both the petitions are allowed and Notices impugned are quashed.
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2011 (12) TMI 335
Re-assessment proceedings - Conveyance expense and Incentive bonus disallowed - Held That:- It is reimbursement of expenses incurred by the Development Officer in performance of duties of office of employment, which has been made to the assessee, such reimbursement of incentive bonus falls squarely within the requirements of the CBDT letter dated 12.03.1997 (supra). In assessee own case relief had been granted in earlier years. Thus decided in favour of assessee.
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2011 (12) TMI 334
Penalty Proceedings - Assesse Co-operative Society - sugar factory for benefit of tribal population - Deposits with bank with not to be withdrawn without prior approvals - Income not shown in return, penalty levied - Held That:- We find that the nationalised banks have made TDS on the amount of the interest accrued on the capital contribution of the government and the TDS certificates were filed by the assessee along with its return of income and therefore it could not be said that the material facts relevant for its assessment were not disclosed by the assessee before the AO at the stage of the assessment itself. In our considered view no prudent person can try to conceal the income or file inaccurate particulars thereof, regarding which, the complete details are filed with the AO at the assessment stage in the form of TDS certificates. This conduct of the assessee takes away the case of the assessee from the rigorous of penal provisions of section 271(1)(c) of the Act.
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2011 (12) TMI 333
Legal Heir - unexplained investment - liability - held that:- Tribunal was of the opinion that when the documents were clearly indicative of the fact that the amount was given as loan by Shri Bhanuvijaysingh, and therefore, it upheld the addition made by the Assessing Officer. Clarifying further that the liability to pay the tax would only to be extent of assets of the appellant. Because, by that time, Shri Bhanuvijaysing had already passed away and he was being represented by his legal heir-present appellant. - Decided against the assessee.
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2011 (12) TMI 331
Fringe benefit tax on 'actual' contribution by the assessee on behalf of employees - Held That:- Revenue's action in bringing the amount of undischarged liability towards contribution (Rs. 2558.01 lakhs), discharged on April 3, 2006, to tax for the relevant year, i.e., A.Y. 2006-07 is justified. Reliance placed on CIT v. Ajay Forgings (P.) Ltd (2002 - TMI - 12511 - CALCUTTA High Court),
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2011 (12) TMI 330
Contingent Liability - provision for post-sale customer service – Whether it should be allowed as an expenditure despite the same have not been incurred by the assessee during the current assessment year - Held that:- Order was passed by the Tribunal on September 9, 2005. Therefore, the benefit of the decision of the hon'ble Supreme Court in Rotork Controls India P. Ltd.'s case [2009 (5) TMI 16 - SUPREME COURT OF INDIA] was not available to the Tribunal - In the said decision, the hon'ble Supreme Court has laid down the conditions which are required to be satisfied for making claim in respect of post-sale customer service and has laid down the principles pertaining to the same - SC has stated that in each case all the conditions to be satisfied are to be considered - Appeal disposed of accordingly in the light of the principles laid down in Rotork Controls India P. Ltd.'s case and the matter is remanded to the Tribunal to pass fresh orders in accordance with law on the said question.
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