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Showing 441 to 460 of 941 Records

2008 (9) TMI 593

Capital gain - "Whether Tribunal was right in law in holding that the assessee is entitled to deduction u/s 54E in respect of the capital gain arising on the transfer of a capital asset on which depreciation has been allowed and which is deemed as short-term capital gain u/s 50 of the Income-tax Act, 1961 - Held that: the issue is squarely covered against the revenue and in favour of the assessee by judgment of this Court in Commissioner of Income Tax Vs. Ace Builders P.Ltd.[2005 -TMI - 9448 - BOMBAY High Court] - Decided in favour of assessee.
2008 (9) TMI 591

Allowance - Depreciation on furniture - Seller does not dispute that the respondent is entitled to claim depreciation under section 32 with regard to furniture acquired. - However, the dispute is with regard to valuation of the furniture - If that be so, the same cannot be a question of law.
Interest income of Rs. 45,59,163 as business income - the borrowing made by the appellant were very much part and parcel of the assessee's investment in acquiring the ship. Even the R.B.I.'s permission was obtained for the same and interest was acquired with regard to the unutilised portion of the said borrowing.
Interest attributable to earning of dividend income - computing the book profit - Net profit enhanced by the amount of interest and other expenses as no expenditure was attributable to earning of dividend income exempt u/s 10(33)- interest attributable to earning of dividend income exempt under section 10(33)- the Tribunal has clearly said that the said claim has been covered in view of the judgment of the hon'ble Supreme Court in the case of CIT v. Kwality Biscuits Ltd. reported in (2006 -TMI - 40378 - SUPREME Court) - Hence, the appeal is dismissed accordingly.
2008 (9) TMI 589

Set off and carry forward - Rectification of mistakes - There was no mistake apparent from the orders under section 143(1)(a)/143(3) warranting rectification of these orders and withdrawal of set-off of losses and depreciation pertaining to the earlier years allowed to the appellant through these orders - The very fact that the presumption of the appellant's business being closed was a debatable point, there was no mistake apparent from the records warranting rectification - he running of hotel was handed over by the court to the court receiver who was none but one of the directors of the company - The provisions of section 154 can be invoked only if there is a mistake either of a fact or law from the records - In this case, the first appellate authority/Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal have recorded concurrent findings of fact in respect of the issue as to whether the Assessing Officer was justified in invoking section 154 of the Act regarding rectification - Hence the appeals are dismissed
2008 (9) TMI 587

Penalty – Penalty on firm recovery from partner - penalty for failure to fulfill export obligation - opportunity of being heard - held that: - no need to issue show cause notice to every partner of the firm, but what is important is, if any partner failed to avail of the opportunity and if the adjudicating authority was constrained to observe that the petitioner-firm was only seeking adjournments and not availing the opportunity, it is definitely not a case of want of opportunity. Therefore, the ground of not providing opportunity does not sustain. - Under the partnership Act, it is the law that all the partners are liable for the liability of the firm and no partner can escape such liability on any technicalities.
2008 (9) TMI 585

Issues Involved:
1. Limitation for imposing penalty under section 271B.
2. Applicability of penalty under section 271A versus section 271B.
3. Reasonable cause for not auditing accounts under section 44AB.
4. Characterization of receipts from BPCL as commission or profit.
5. Applicability of precedent cases.

Detailed Analysis:

1. Limitation for Imposing Penalty under Section 271B:
The Tribunal held that the penalty for the assessment year 1991-92 was barred by limitation as per section 275(1)(c) of the Act. However, this finding was deemed erroneous. The court clarified that the period of limitation should be considered from the end of the financial year in which the proceedings for penalty initiation were completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or Appellate Tribunal is received by the Commissioner, whichever is later. The penalty order dated September 23, 2002, was within the permissible period, thus not barred by limitation.

2. Applicability of Penalty under Section 271A versus Section 271B:
The Tribunal's decision that only penalty under section 271A is applicable if no accounts are maintained, and not under section 271B, was reversed. The court noted that the assessee admitted to maintaining certain accounts such as party-wise registers for credit sales, pucca books of cash sales, and purchase registers. Hence, the requirement for auditing under section 44AB was applicable, making the imposition of penalty under section 271B justified.

3. Reasonable Cause for Not Auditing Accounts under Section 44AB:
The Tribunal accepted the assessee's claim of a bona fide impression that auditing was not required since the commission did not exceed forty lakhs. However, the court found this reasoning flawed, emphasizing that ignorance of the law is no excuse. Section 44AB mandates auditing if the turnover exceeds forty lakhs, regardless of the nature of receipts. The Tribunal's finding of reasonable cause was deemed perverse and arbitrary.

4. Characterization of Receipts from BPCL as Commission or Profit:
This issue was deemed irrelevant to the requirement under section 44AB. The court stated that whether the receipts were commission or profit did not affect the necessity for auditing when the turnover exceeds forty lakhs.

5. Applicability of Precedent Cases:
The Tribunal's reliance on the decision in H. Ajitbhai and Co. v. Asst. CIT was found to be contrary to the Madhya Pradesh High Court's decision in Bharat Construction Co. v. ITO. The court clarified that the Tribunal's interpretation was erroneous, and the correct legal position was that penalties under section 271B are applicable when accounts are maintained but not audited as required.

Conclusion:
The appeal was allowed, setting aside the Tribunal's order and restoring the order of the Commissioner of Income-tax (Appeals), Hubli. The court answered all substantial questions of law in favor of the Revenue, confirming the imposition of penalty under section 271B for failure to audit accounts as required under section 44AB.
2008 (9) TMI 583

Depreciation – Unabsorbed depreciation - Sub-section (2) of section 32, as it existed up to the assessment year 1996-97, provided that the unabsorbed depreciation of a year shall be added to the amount of the allowance for depreciation of the following previous year and deemed to be part of that allowance - unabsorbed depreciation allowance, if any, of the assessment year 1996-97 shall be added to the amount of the allow- ance for depreciation of assessment year 1997-98 and deemed to be part of the allowance for this year - limitation of eight years shall start from the assessment year 1997-98 - Tribunal has rightly come to the conclusion that the assessee is entitled to the unabsorbed depreciation brought forward as on April 1, 1997, and could be set off against the business profits
2008 (9) TMI 582

Reward to informer – information on misuse of exemption and fraud – quantum of award - Award equivalent to 20% of amount recovered - Held that: - reward amount has been sanctioned by the reward committee taking into account all factors including actual revenue realized by the Department – it will be open to the Appellant to institute appropriate proceedings in the civil court for that purpose - appeal is dismissed
2008 (9) TMI 581

Issues:
1. Exemption under section 10(29) of the Income-tax Act for income derived from letting out godowns and warehouses.
2. Addition of prior period expenses and bad debt write-off to taxable income.
3. Condonation of delay in appealing to the Income-tax Appellate Tribunal.
4. Requirement of clearance from the Committee on Disputes (CoD) for State-owned corporations to appeal against the Income-tax Department.

Exemption under section 10(29) of the Income-tax Act:
The appellant, a State-owned corporation, claimed exemption under section 10(29) for income derived from letting out godowns and warehouses for storage, processing, and marketing of commodities. The Assessing Officer added the supplementary storage claim and bad debt write-off amount to the taxable income, which was contested by the appellant. The Commissioner of Income-tax (Appeals) partially allowed the appeal, confirming the addition of prior period expenses but allowing the bad debts claim. The Commissioner held that the appellant follows the accrual system of accounting, and the amount under consideration had accrued in the current year, rejecting the appellant's contention that it pertained to earlier years.

Condonation of delay in appealing to the Income-tax Appellate Tribunal:
The appellant appealed to the Income-tax Appellate Tribunal with a delay of 109 days, citing the reason that it was awaiting confirmation from its chartered accountant. The Tribunal dismissed the appeal, not satisfied with the reason provided by the appellant. The appellant raised substantial questions of law regarding the Tribunal's rejection of the application for condonation of delay and not admitting the appeal for hearing on the merits.

Requirement of clearance from the Committee on Disputes (CoD):
The High Court highlighted the necessity for State-owned corporations to obtain clearance from the CoD before appealing against the Income-tax Department. Referring to the Supreme Court's directive in previous cases, the Court emphasized the formation of a committee comprising key officials to resolve intergovernmental disputes. The Court cited the obligation for courts and tribunals to demand clearance from the committee in cases involving governmental disputes, reiterating that proceedings cannot proceed without such clearance. The appellant's appeal was dismissed for lack of clearance from the CoD but was granted the liberty to move the Court after obtaining the required clearance.

This comprehensive analysis of the judgment from the Madras High Court addresses the issues related to exemption under the Income-tax Act, condonation of delay in appealing to the Tribunal, and the requirement of clearance from the CoD for State-owned corporations.
2008 (9) TMI 579

Cenvat/ Modvat Credit - company took the benefit on the basis of gate passes issued - original consignors were non-existing and bogus companies – Held that: - credit can only be claimed in respect of the good for which excise duty has already been paid - companies were fictitious - Gate passes were therefore also fictitious - No benefit of MODVAT on the basis of such fictitious entries could have been claimed by the petitioner
2008 (9) TMI 578

Restoration of the appeals - Commissioner of Central Excise imposed penalties - approach the Settlement Commission as per the provisions of Section 35PA of the Central Excise Act, 1944 - applications were rejected under sub-section (7) of Section 32F for non-cooperation by the applicants - cases were sent back to the Tribunal - if no application under Section 32E of the Act had been made - Held that: - applicants were pursuing the matter with their counsel and the counsel had returned the papers to them only in April, 2008 and they were all along under the impression that they could take steps for filing the ROA application at any point of time, as no period of limitation for filing a ROA application is prescribed under the Central Excise Act, 1944 - no statutory period of limitation prescribed for filing an application for restoration of an appeal which has been dismissed - accordingly dismiss the ROA applications
2008 (9) TMI 577

Optional Early Retirement Scheme floated by the Reserve Bank of India - assessee, claimed exemption under section 10(10C), out of the compensation received under the Scheme - Reserve Bank of India has not deducted the exemption claimed under section 10(10C) on the compensation received under "Optional Early Retirement Scheme", but it has duly deducted tax, treating this compen-sation as fully taxable and remitted to the Government account - Assessee claimed refund - Assessing Officer stated that the Scheme of Optional Early Retirement Scheme does not fulfill the conditions laid down under rule 2BA and hence, the ex gratia paid under the Scheme does not qualify for exemption under section 10(10C), rejected the claim of the assessee - Held that: - the monetary limit prescribed by the Central Board of Direct Taxes for filing appeals before the High Court and it does not also fall within the exceptions provided for filing appeal before the High Court, even where the tax effect is less than Rs. 2,00,000 under Circular F. No. 279/126/98-IT, dated March 27, 2000. Learned counsel appearing on either side fairly stated that the tax effect in all these cases worked out to less than Rs. 2 lakhs - if the tax effect is less than the one stated in the circular the Revenue need not agitate the issue on appeal and the circular is binding on them - appeal is dismissed
2008 (9) TMI 575

Waiver of pre-deposit - Appellant availed Cenvat/MODVAT credit of duty paid on a gear box used in their windmill - availed credit of the service tax incurred on maintenance and repairs of the windmill - the appellants had also taken credit of service tax incurred by it towards premia on workers' welfare policy as well as passengers carrying policy - authority demanded the inadmissible credit availed of duty paid on the gearbox and the service tax paid on the repairs and maintenance of the windmill under Rule 14 of CCR together with applicable interest - Held that: - Admissibility of credit relating to capital goods and services required for running the windmill whose output was available to run the assessee's factory cannot be ruled out without a debate - service tax paid on insurance premia cannot be treated as tax on a service used by PSPL in or in relation to the manufacture of final products and clearance of final products from the place of removal - waiver of predeposit and stay of recovery of the remaining amounts due from the appellant as per the impugned order till final disposal of this appeal
2008 (9) TMI 574

Non-payment of interest on the debt as condition for further proceedings for publication in the winding up process of the company - Held that:- Set aside the order of the company court and allow the appeals. It shall be open to the respondents to take independent action for recovery of interest by separate proceedings, if they are so advised by property instituted civil suits or other proceedings and it might be. Open to plead for exclusion of the time spent in the company court to save the bar of limitation
2008 (9) TMI 573

Winding up petition - Held that:- From the averments made by the parties in this case, it appears that there is a bona fide dispute with regard to the payment of the amount involved in the matter and under the agreement there is a clause for settlement of the dispute through arbitration. In view of the above mentioned facts and circumstances, this is not a fit case for admission.Therefore, the company petition is dismissed. However, this will not debar the petitioner to avail of any available remedy for the adjudication of the matter in accordance with law.
2008 (9) TMI 572

Winding up petition - non-payment of a sum of ₹ 2,94,60,698 with further interest at the rate of 18 per cent, per annum - Held that:- There is no merit in the contention on behalf of the company that the dispute raised by the company must be treated as bona fide because the company has filed the suit before the statutory notice was issued. Such a suit does not make the dispute bona fide only because it is filed before the statutory notice. It is necessary for the court to examine whether the defence to the company proceedings based on such a suit is substantial. Also it cannot be said that merely because the bank has filed proceedings for recovery under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, before the Debts Recover Tribunal, it cannot maintain the petition for winding up.
Thus the respondent-company is directed to deposit a sum of ₹ 2,94,60,698 within a period of eight weeks from today, failing which the company petition shall stand admitted and the petitioner shall advertise the petition in two local newspapers, viz., Free Press Journal, Maharashtra Times and in the Maharashtra Government Gazette. The petitioner shall deposit an amount of ₹ 10,000 with the Prothonotary and Senior Master towards the publication charges within three weeks from the date of default with an intimation to the Company Registrar, failing which the petition shall stand dismissed for non-prosecution.
2008 (9) TMI 571

Repayment of amount to corporation - Held that:- The apprehension expressed by the petitioner-society that on account of repayment to the first respondent, the depositors of the second respondent-bank would be denied the admitted amounts due to them appears to be without any basis in the light of the resources available to the second respondent-bank as explained in its counter-affidavit.
Hence, the repayment being made by the second respondent-bank to the first respondent-Corporation in accordance with section 21(2)(a) of the Act, read with regulation 22 cannot be found fault with and no mandamus as prayed for can be issued compelling the second respondent to act in contravention of the statute.
2008 (9) TMI 570

Winding up – Circumstances in which company may be wound up by Tribunal - Inherent Power of court - Held that:- Winding up order cannot be passed by this court, if the court is of the opinion that the company is in a position to pay off its debts and no other creditor has come up in support of the winding up. In the present case, both the secured creditors have supported the winding up and have vehemently opposed the revival of the company in the absence of any revival proposal. There is a1so no proposal by the ex-management of the company or the applicant-promoter as to how the company will be revived, the source of finances, the method and mode of resurrection or resuscitative measures initiated for survival of the company. In the absence of any such proposal or step, mere desire does not inspire confidence to stay or stall winding up and jeopardise the interest of secured creditors (public sector banks) and eventually the public interests.
2008 (9) TMI 569

Compromise and arrangement - application under Rule 9 of the Company (Court) Rules, 1959 for issue of directions to convene separate meetings of members, secured and unsecured creditors to consider revised scheme of compromise and arrangement - Held that:- Having heard the learned counsel for the applicants and on perusal of the entire application, it is ordered that the meetings of secured creditors, unsecured creditors and members i.e. shareholders of the applicant-company for the purpose of considering and if thought fit, approving with or without modifications, the scheme of arrangement aforesaid shall be convened as per the following decided schedule and directions.
2008 (9) TMI 568

Scheme of Demerger - Compromise and arrangement - Held that:- It is sufficient to state here that scheme does not violate any of the provisions of law and is not in violation of the public interest or the interest of the shareholders or creditors of the company. With regard to Accounting Standard-14 a statement was given in Delhi High Court that since the Transferor- Company will merge into Transferee-Company, the Accounting Standard-14 will be followed. In the present case there is no amalgamation but demerger of the business of the petitioner company with the Transferee-Company.
No objection has been filed to the scheme of demerger. The company petition is allowed. The scheme so far as it provides for demerger of the demerged company within the jurisdiction of this Court, is sanctioned with 1-10-2007 as appointed date. The effective date will be the date on which the order of this Court will be filed in the office of the Registrar of the Companies. The office will draw formal order within four weeks, to be filed with the Registrar of Companies within two weeks, thereafter. List of assets and liabilities of the demerged company will be made part of the scheme.
2008 (9) TMI 567

Winding up of the first respondent-company on "just and equitable grounds" - Held that:- As a result of the deadlock in the ownership and management of the first respondent, there has been continuous statutory non-compliance of the provisions of the Companies Act. Not only has the company failed to keep proper books of account under section 209(1) with respect to the monies received and spent, it has also failed to hold annual general meetings or to lay either before the board or the general body, as required under section 219(1), the balance-sheets and profit and loss account of the company for the past several years. Neither the balance-sheet and profit and loss account nor the report of the board have been prepared annually nor have copies thereof been filed with Registrar of Companies as stipulated under section 220(1). The first respondent has not even appointed auditors under section 224(1) let alone the auditors report being placed before the general body and kept open for inspection of its members. But for owning valuable landed property, the first respondent has not been carrying on any business for the past several years. The deadlock in ownership and management of the first respondent is complete and appears incapable of resolution, leaving no other recourse except for winding up proceedings to be initiated.