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Showing 441 to 460 of 2133 Records
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2018 (2) TMI 1694
Revision u/s 263 - as during assessment proceedings AO did enquire about the disallowance u/s 14A - Held that:- Order passed by Ld. CIT is not sustainable in view of the fact that AO has already examined this aspect and has already made a disallowance. The provisions of section 263 are not applicable in a case where the AO had examined a particular issue and had taken a plausible view. Moreover, we find that it is an admitted fact that assessee had not received any exempt income during the year.
The Hon'ble Delhi High Court in the case of CIT Vs. DLF Ltd. [2012 (9) TMI 626 - DELHI HIGH COURT] while deciding the appeal filed by revenue against the Tribunal order, quashing the order u/s 263 has again held that where there is no exempt income, no disallowance can be made u/s 14A of the Act. In this case, the assessee had even received some exempt income also even then the Hon'ble Court held that the disallowance u/s 14A was a debatable issue and therefore the view taken by the Assessing Officer was sustainable one and therefore section 263 was not applicable - Decided in favour of assessee.
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2018 (2) TMI 1693
Deemed income u/s 56(2) - consideration for issue of shares that exceeds the face value of such shares - redeemable non-cumulative preference shares (RNCPS) - fair market value - Liquidity crunch leading to default in contractual obligation by the assessee in the future years - Held that:- The argument of the assessee that RNCPS is a quasi-debt and that it was not the intention of the legislature to bring such instruments within the ambit of this Section, is devoid of merit. - RNCPS cannot be excluded from the ambit of Section 56(2)(viib) of the Act.
When the assessee’s outflow by way of dividend is 0.1 per cent on RNCPS, the requirement of having huge cash inflows does not arise specifically when the assessee is an investment company. The contention of the assessee that the current market value of its investments in equity shares of M/s.Manga Fincorp Ltd. is ₹ 595.76 Crores and that he can, any day sell these investment and redeem the preference shares amounting to ₹ 41 Crores only, has force and the conclusion of the Assessing Officer on the issue of liquidity, possible cash crunch resulting in reduction of credit rating etc. is wrong on facts and hence devoid of merit. Thus this finding of the Assessing Officer and arguments of the ld. DR, is rejected.
AO has taken contradictory stand on this issue. On the one hand he held that the assessee is a possible defaulter and on the other hand determined the premium chargeable on RCPS at ₹ 1,270/- per share of ₹ 10/-. There is no gain saying that a defaulter cannot command a premium on its shares. In fact from an investors perspective, no investment would be made in such cases. In this case an unrelated 3rd partly also invested. It can be assumed that such investments are done after due diligence. Hence this contention of the assessee is accepted.
Whether while determining the rate of return Income Tax payable has to be factored or not? - Investor, when he has to make a choice as to whether he should invest in a debt instrument or in equity shares, the tax factor is necessarily considered, as what is crucial is the take home return on investment. Growth in value of investments, safety and other factors are also the basis of decision making. Dividend on equity shares does not attract any tax and whereas interest on debt instruments and even interest on fixed deposits, do attract Income Tax. Thus, the arguments that Income Tax should not be factored while considering the rate of return from debt instruments while comparing the same with the rate of return on equity instruments is devoid of merit. In our view, tax has to be factored while determining the net rate of return on investments.
Whether home loan interest rate has to be taken for the purpose of bench marking, we are of the view that it would not be correct to do so on the facts of this case. Home loans can be given by Banks and other NBFCs which are in the business of giving loans and advances and which have taken regulatory approvals to do so. Home loans are generally secured loans.
A choice of investment can be a fixed deposit or bonds issued by the Government or the Reserve Bank of India or debentures issued by various companies, when the investor seeks to invest in debt instruments. In equity shares or preference shares etc. in case he chooses to invest in equity. Thus taking home loan interest rates for the purpose of bench marking, in our view is highly erroneous as the investor has no choice or possibility of advancing housing loan.
Rate of return that has to be bench marked in this case - the discount factor arrived at by the Assessing Officer, in our view is not based on relevant material. The objections of the Assessing Officer to valuers report are devoid of merit as pointed out by us in the earlier paragraphs of this order. The ld. CIT(A)’s view is an ad-hoc view and has to be necessarily rejected. We also give weightage to the fact that an unrelated independent investor has invested in these RNCPS on the terms and conditions, at this Fair Market Value of ₹ 2,000/- per share. Thus this rate of ₹ 2,000/- per share is the Arms’ Length Price, on the facts of this case. Hence, we have to hold that these RNCPS, were issued at a fair market value. Hence we uphold the fair market value determined by the valuer and vacate the valuation arrived at by the Assessing Officer as well as the ld. CIT(A). Thus the addition made u/s 56(2)(viib).
Disallowance u/s 14A - Held that:- AO has recorded a specific finding that he is not satisfied with the correctness of the claim of the assessee on the disallowance u/s 14A of the Act. Thus, this argument of the assessee that no satisfaction is recorded by the Assessing Officer in not factually correct. Hence this argument of the ld. Counsel for the assessee is rejected. We find that the ld. CIT(A) has set aside the issue of qualification of disallowance u/s 14A to the Assessing Officer, with certain directions. The Ld. CIT(A) has no power to set aside any issue or the appeal itself after the amendment to Section 251 of the Act, w.e.f. 01/06/2001. In any event, the issue has to be considered afresh by the Assessing Officer as all relevant factors have not been considered as pointed out by the ld. CIT(A). No expenditure was allowed against earning of interest income.
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2018 (2) TMI 1692
Eligibility for exemption u/s 11 and 12 - Educational institution - charging fees from the students - CIT(A) observed that assessee is not eligible for exemption u/ss.11 and 12, once the provision of Section 10(23C)(iv) and (v) are applicable - According to CIT(A), since sources of income are students, therefore, students cannot be reckoned as ‘property held under the trust’ and activity of imparting education also cannot be reckoned as property. - Held that:- Legislature did not intend to Rule out Section 11 when exemption was claimable under specific provision of Section 10. See CIT vs. Bar Council of Maharashtra, (1981 (4) TMI 8 - SUPREME Court).
Section 11(1)(d) refers to voluntary contribution received by the charitable trust which forms part of the corpus which legislature has considered to be capital receipt not chargeable to tax. Section 11 refers to voluntary contribution other than the ones falling u/s. 11(1)(d) thereby treating it as property held under the trust. Further, Section 11 envisages that revenue consideration shall be deemed to be income derived from property held under the Trust. CIT (A) was incorrect in law in holding that contribution received by way of fees from the beneficiaries is not an income from the property held under the trust.
The assessee school has been charging fees only from its students and there is no capitation fee at all. Such fees have been charged from the students for the running of the school and has been applied for its dominant purpose/object of carrying out educational activity.
In this case one of the main objection raised on behalf of the department was that said Board was not entitled for the benefit of Section 11 as it was not a trust under the ‘Public Trust Act’ and therefore, it was not entitled to claim registration u/s. 12A. Since it was not held under the trust therefore, it is not entitled for exemption u/s. 11(1)(a).
The assessee society which has been registered under ‘Registration of Societies Act, 1860’ with the sole object of providing education and has a legal obligation for applying its income for such charitable purpose, then for the purpose of Section 11 it has to be treated as trust and income derived from carrying out such obligation has to be reckoned as income derived from property under the trust and therefore, on the ground also as raked by the CIT (A), exemption u/s.11 cannot be denied. Accordingly, we hold that none of the observations and the finding of the CIT(A) are sustainable and the grounds taken and the reasoning given by him to deny the benefit/exemption u/s.11 to the assessee cannot be upheld either in law or on facts.
Accordingly the entire receipts which has been taxed under the head ‘income from other sources’ is set aside and we direct the AO to grant exemption u/s.11 as per the income and expenditure account submitted by the assessee. - Decided in favour of assessee.
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2018 (2) TMI 1691
Additions made in pursuance of Sec. 153A - Held that:- Since there is no incriminating material unearthed during search in respect of the concluded assessments, no addition/disallowance could be made by the AO for AYs 2009-10, 2010-11, 2011-12 and 2013-14. Therefore, the addition/disallowance made in impugned assessments for the AYs 2009-10, 2010-11, 2011-12 and 2013-14 are ordered to be deleted.
Also as assessee has already made claims arising from BIFR order in the regular appeals before Ld.CITA) from the completed original assessment already made before search, because BIFR order dated 04.09.2012 was received later on i.e. after the original assessment was completed u/s 143(3) of the Act in certain years. The appellate proceedings before the Ld. CIT(A) from original assessments is a continuation of the assessment proceeding itself and the assessee can make a fresh claim before the Tribunal/Ld.CIT(A).
Thus direct deletion of additions made in pursuance of Sec. 153A proceedings in these assessment years. Consequently, pending assessment proceedings before AO on the date of search, got abated and sec. 153A proceedings against the assessee is valid in respect of AYs. 2012-13 and 2014-15 and scrutiny assessment for AY 2015-16 u/s. 143(3) of the Act is valid
Aggregation of WDV of block of assets - Held that:- Since the assets of M/s.MSL after amalgamation have become assets of assessee company by operation of Law it falls in to the “Block of assets” of the assessee company from 01.04.2009 and though such assets, non-functional, yet they cannot be segregated and depreciation has to be allowed taking the first year as AY 2010-11 onwards and WDV to be calculated for AY 2012-13 as discussed above and we order the AO to calculate the WDV accordingly and allow the same in accordance to law. Grounds 6, 7 and 8 for AY 2012-13 are therefore stands allowed.
Disallowing the claim of assessee in respect to brought forward loss and claim of allowance of unabsorbed depreciation in the light of BIFR sanctioned scheme - Held that:- So far as former objection is concerned, the same is factual and AO is directed to allow the claim after considering the availability of losses for the instant year subject to the claims made in the preceding year in the light of the observations and decision given in the preceding paras. However as regards the latter is concerned, the fact that losses claimed and allowed in the instant year may or may not result in taxable income in succeeding years does not change the legal effect of a claim in the instant year. Since we have already held that the claim in the instant year is maintainable, the issue of taxability of said claim in any subsequent year doesn’t arise. We therefore reject the contention of the Revenue in not allowing the losses fully and also the taxability of the sum in subsequent year. We therefore, also reject the aforesaid objection of the AO.
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2018 (2) TMI 1690
Assessment on the basis of the voluntary statement - Surrender u/s 132(4) - retraction of statement - Held that:- Surrender made by the assessee is not supported by any incriminating material or evidence unearthed during the course of search or has been found during the course of the assessment proceedings. Accordingly the revenue’s appeal is dismissed.
Jewellery found from the residence and was found from the locker - addition to income - Held that:- A document was found from the possession of the assessee which clearly shows a receipt of sum of ₹ 5 lacs in cash towards the purchase of the property. The assessee’s submission is that the property dealer had given a proposal to the assessee for the purchase of said plot and the signed receipt in cash by the purchaser was given as a matter of practice. Since assessee did not like the location, therefore, he declined to purchase the same. Such an explanation is neither corroborated by any evidence nor any confirmation by the said broker. Once a document has been found from the possession of the assessee then there is a presumption u/s 292C r.w.s. 132(4A) that it belongs to the assessee and onus is very heavy upon the assessee to show that the income/ expenditure mentioned in such document does not pertain to the assessee. Here in this case there is a clear cut receipt of payment of cash of ₹ 5 lacs which assessee has failed to rebut by adducing any proper evidence and therefore, finding given by the Ld. CIT (A) is confirmed. - Decided against assessee.
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2018 (2) TMI 1689
Provisional release of vessel - Sagar Fortune - whether condition imposed by the Ld. Commissioner i.e. bank guarantee of 30% of the estimated value is reasonable or harsh? - Held that: - bank guarantee should cover entire differential duty, redemption fine and penalties - In the present case, value of the goods estimated by the customs authority is ₹ 41.45 crore, accordingly differential duty amount (after payment of duty on the declared value) come to ₹ 3.62 crores.
By taking this differential duty, the total amount as per the guidelines given in para 2.2 of Circular dated 16-8-2017 should be approximately not more than ₹ 10 Crores.
Appeal disposed off.
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2018 (2) TMI 1688
Rectification of mistake - the main ground for rectification of the order raised by the Ld. Counsel is that the case is mainly based on the panchnama drawn at the premises of Shri Bhumish Shah and the documents recovered thereunder - Held that: - The present case in on valuation and tribunal passed order not only on the basis of panchnama alone but relying on various other materials such as statements of various persons and other facts, therefore merely on the basis of Commissioner’s order dated 28.04.2005 that too in different case of Shri Bhumish Shah, the order passed by this tribunal will not become incorrect.
There is no error apparent on record, in the order dated 13.2.2015 passed by this Tribunal - ROM application dismissed.
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2018 (2) TMI 1687
Penalties u/s 112 of CA, 1962 - case of Revenue is that the appellants were involved in sale of liquor to the domestic passengers, the conditions of licence have been violated - Held that: - Since the department has not specifically brought on any evidence against the appellants for improper importation of the goods or violation of the conditions of licence issued to M/s. Alpha, the penalties imposed against them u/s 112 of the Act cannot be sustained for judicial scrutiny - penalty set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1686
Penalty u/s 112(a) of the CA - allegation against the appellant is that they had colluded/ connived with the shipper in bringing Arecanut Betelnut Splits to India - Held that: - Since both the authorities below had categorically recorded a finding that the appellant had neither connived nor colluded with the shipper or the importer in getting the cargo imported, therefore, imposition of penalty u/s 112(a) of the CA 1962 is unwarranted - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1685
Valuation of export goods - It appeared to revenue that the market value of the consignment was inflated by the exporter - Held that: - the market enquiry of the value of goods was conducted in India whereas the goods were consigned for Dubai and the value said goods would fetch in Dubai was not enquired - since the export proceeds have been realized the declared value is found to be correct - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1684
Scheme of merger - commencing of meetings - discretion to the NCLT with regard to calling of meetings - Held that:- When it is a question of merger and the provisions require and give discretion to the NCLT with regard to calling of meetings, it is a discretion to be exercised judiciously by NCLT. NCLT is duty bound to follow procedure laid down by law. The NCLT recorded reasons why it finds that calling of the meetings is necessary and we do not find that the reasons recorded are arbitrary. The Law provides and the NCLT has exercised discretion that the meetings are required to be called. We do not wish to substitute our discretion over the discretion exercised by the NCLT. We do not find any substance in the appeal. The appeal is rejected.
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2018 (2) TMI 1683
Oppression and mismanagement - Whether the Petitioners are entitled to file this Company petition? - Petitioners contention that no notice of EGM was served on them for passing special resolution relating to the business items mentioned supra and the allotment of shares - Held that:- Sending of notice of EGM by ordinary post is a proper compliance of section 53(1) of the Companies Act, 1956 and the Petitioners’ contention that there is no proper service of notice to them cannot hold water and there is no irregularity in the conduct of the EGM. Further it is to be noted that P2 is holding only 4.88% of the shareholding and it is a foregone conclusion that even if he has attended the meeting the resolutions would have been through despite his presence in view of his 4.88% shareholding.
The company has raised funds for the purpose of this expansion plans only and the further issue of capital, issue of debentures etc. are justified and the contention of the Petitioner that the company is creating some false and fictitious expansion and diversification plan to entice R22 which is a subsidiary of a public sector enterprise is totally unfounded and misconceived.
The Petitioners stated that in the Balance Sheet of the company for the year ended 31-3-2010, there are violation of Sections 217(l)(b), 217(l)(c), 217(2A), 211(3A), 211 and 211(1) for which the Respondents suitably explained that none of the Section have been violated by the Company. However, violation of certain sections of the Companies Act, 1956 cannot become a ground to convert such violation in an act of oppression and mismanagement under sections 397-398 of the Companies Act against these Petitioners, hence this allegation also falls to the ground.
Further for invoking the equitable jurisdiction of this Tribunal under sections 397-398, the Petitioners have not made out a case that the company’s affairs are being conducted in a manner prejudicial to public interest or in a manner oppressive to the Petitioners, and there being no ground for commanding it for winding up of the company, there could not be any occasion to look into as to whether wind up of the company would unfairly prejudice such member or members but that otherwise the facts would justify winding up of the Company. In the facts and circumstances of this case, the allegation of oppression and mismanagement by the Petitioners fails.
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2018 (2) TMI 1682
Order of seizure in terms of provisions of Section 37A(1) of FEMA - foreign exchange worth USD 352258.25 suspected to be held outside India in contravention of Section 4 of FEMA - Held that:- The petitioner filed an additional affidavit dated 08.01.2018 placing certain factual details regarding the amount, which was lying in the foreign Bank account in 2002. Along with the additional affidavit, the petitioner has enclosed copy of the letters of HSBC dated 07.03.2016, 25.11.2014, enclosing the information regarding transfer of the petitioner s banking operation etc. In the light of the material, which has been placed before this Court, it would be necessary for the competent authority to consider the same as it may impact the proceedings by going to the root of the matter. However, I do not wish to express anything on the merits of the matter except to state that the petitioner should be afforded one more opportunity and place their objections to the confirmation of the order of seizure before the competent authority.
So far as the order of seizure is concerned, the petitioner cannot be stated to be aggrieved by such an order of seizure, as no amount has been withdrawn from the petitioner s Bank account. Since the order of seizure has already been confirmed by the order passed by the first respondent, the question of interfering with the same at this juncture does not arise.
Writ Petition is allowed and the impugned order passed by the competent authority is set aside and the matter is remanded to the competent authority for fresh consideration
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2018 (2) TMI 1681
Business Support Services - testing and analysis of newly developed drugs on human participants - The claims of the appellant are that these are clinical trial operations, exempted from service tax in terms of N/N. 11/2007-ST dated 01/03/2007 - Held that:- The appellant are directly engaged in the activities of conducting clinical trial studies. They did obtain no objection approval from the concerned drug authorities in India.
These services are in fact provided in terms of agreement with M/s Merck, USA who paid the consideration in convertible foreign exchange. The beneficiary of service as per the terms of the agreement is M/s Merck, USA - it is clear that these services are for delivery and consumption of an entity located outside India.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1680
Business Auxiliary Services - consideration received as a percentage of commission for the services rendered to ICICI Bank - Revenue entertained a view that the appellants provided taxable service under the category of Business Auxiliary Service during the period 01/07/2003 to 31/03/2005 - Held that: - we have no doubt that the appellant did market the services provided by the client bank. It will not be correct to state that the appellant only provided operational assistance in such marketing. No such words were used in the terms of the agreement and in fact the agreement directly refers to the appellant as a service provider “to mark its products (ICICI Bank)” - the appellants are in fact engaged in promotion and marketing activity of the financial products of the client bank.
Time limitation - penalty - Held that: - due to non-payment of tax and non-filing of returns, the Original Authority held against the appellant both on limitation and penalties - time limitation not invocable.
Appeal allowed in part.
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2018 (2) TMI 1679
Levy of service tax - Debit entries made in the books for deployment of Officers - Revenue entertained a view that the appellant is liable to Service Tax on such consideration, on reverse charge basis in terms of Section 66A of the Finance Act, 1994 under the category of ‘manpower recruitment or supply agency service’ - Held that: - the appellant has not received any service to be taxed in the present situation. The debit entries are for maintaining complete financial transaction on behalf of SNC, Canada - it is clear that SNC, Canada cannot be categorized as a manpower recruitment or supply agency while involving deputing their own staff to execute their own contract in India - liability set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1678
CENVAT credit - service tax paid on installation and commissioning services provided by various service providers at the site on installation of their DG sets - Held that: - in appellant's own case the Division Bench of the Ahmedabad Tribunal in M/s. Veena Industries Limited Versus Commissioner of Central Excise & S.T., Vapi [2016 (1) TMI 161 - CESTAT AHMEDABAD] has taken the view that the appellant is entitled to avail credit of service tax paid by their sub-contractor treating the same as input service.
In the instant case, it is undisputed that the appellant is a provider of taxable service and have provided the same. They are utilising the input service provided by sub-contractors, while providing their output service. Therefore, it is abundantly clear that they are eligible to take cenvat credit of the service tax paid on the input service provided by the sub-contractors - credit allowed.
Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1677
Refund claim - Section 102(2) of FA 2016 - denial on the ground that refund would result in double benefit to the appellant - Held that: - it is difficult to appreciate how double benefit of the refund allowed u/s 102(2) of Finance Act, 2016 would accrue to the appellant once the amount paid by utilizing CENVAT credit if now refunded to their CENVAT credit account only - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 1676
CENVAT credit - whether the appellant as a service provider, is required to discharge duty/ revers the Cenvat credit on the used capital goods cleared as scrap, during the period 2009-2010 to 2013-2014? - Held that: - appellant had undisputedly cleared scrap of the capital goods used in providing output service during the period 2009-2010 to 2013-2014. Admittedly, the relevant Rule 3(5A) of CCR-2004 has been amended in 2012 and 2013. Prior to amendment to the said Rule effective from 01.4.2012, no liability could be fastened on the scrap of used capital goods by a manufacture or output service provider and after 27.9.2013 when the used capital goods were cleared as scrap, the liability to discharge duty was restricted to manufacturer and not service provider. However during the intervening period i.e. from March to 27.9.2013, the output appellant-service provider was required to pay duty on the transaction value of the scrap of used capital goods - the Appellant is not required to discharge duty on the scrap of capital goods except for the period from March to 27.09.2013.
Penalty - Held that: - appellant being a PSU and frequent changes in law resulted in to non-payment of duty during the relevant period which was later paid before issuance of notice, in my opinion, imposition of penalty is unjustified.
Appeal allowed in part.
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2018 (2) TMI 1675
Restoration of appeal - Condonation of delay - Held that: - Before you doubt the bonafides of a litigant and term the version as insufficient for condoning the delay, a Court of law like a Tribunal must find out from its own record atleast any contrary version of the Revenue. If there is no version of the Revenue contravening this factual position, or is any conduct attributable as negligent can be culled out during the course of the proceedings otherwise, then, the Tribunal in its over enthusiasm, and possibly obsessed by disposal mania, decide appeals pending before it in this casual and light hearted manner. Courts of Law are not set up for mere disposal of cases. Courts of Law are established for adjudication of cases, particularly appeals so as to render justice to parties in accordance with law.
Appeal restored to its file for adjudication - petition allowed.
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