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Case Laws
Showing 441 to 460 of 748 Records
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2009 (9) TMI 633
Scrutiny - Revision - Revenue or capital expenditure - Solitary objection of the Commissioner related to the expenditure on tools and dies aggregating to Rs. 10,56,69,367, which was claimed as revenue expenditure and was allowed as such - The Commissioner of Income-tax opined that die costing over Rs. 2 crores was not a small item and its life span was not a few days, but still a year, but could even be more - the tools and dies had a very short span of life and it could produce up to maximum one lakh permissible shorts and have to be replaced thereafter to retain accuracy, as explained by the assessee before the Commissioner of Income-tax duly noted by the Commissioner of Income-tax in his order whether the expenditure incurred by the assessee in the replacement of dies and tools is to be treated as revenue expenditure or not - The assessee had also explained that since these parts are manufactured for the automobile industry, which have to work on complete accuracy at high speed for a longer period, replacement of these parts at short intervals becomes imperative to retain accuracy - Decided in the favour of the assessee
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2009 (9) TMI 632
Disallowance - Income escaping assessment - Assessing Officer completed the assessment vide order dated March 23, 2004 denying the deduction claimed by the assessee under section 36(1)(viii) of the Act - Admittedly, notice under section 148 of the Act was issued after the expiry of four years - The finding of the Tribunal has not been disputed by raising any question and during the course of the argument by the learned counsel for the appellant - While in the present case, complete details were furnished along with the return and during the course of the assessment proceedings and after an application of mind, the deduction under section 36(1)(viii) of the Act was allowed - the notice was issued after four years, therefore, the proceeding was barred by time and the Tribunal has rightly held so - Appeal is dismissed
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2009 (9) TMI 629
Assessment – Status of Firm – Certificate copy of partnership deed to be furnished if assessment was claimed in status of firm for an assessment year commencing from 1993-94, irrespective of whether assessee was assessed as firm up to 1993-94 – Mandatory requirement - if the assessee had not, in fact, produced the certified copy of the deed of partnership when the assessment was taken by the officer, then the assessee is not entitled to assessment in the status as a firm
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2009 (9) TMI 627
Method of accounting - Percentage completion method Vs. completed contract method - The assessee is following consistently a method of accounting to declare the profit on project completion method as the assessee can account for the receipt as and when the registration takes place - When the assessee company is required to follow the Accounting Standard as prescribed by ICAI, then naturally it has to take into account the replies given by the Institute for the expert committee on the queries raised by the companies - The appellant undertakes construction activity for those persons to whom it intends to sell the super-built area along with undivided share of land in a project which it is developing as a developer - the assessee has changed the method of accounting from project completion method to percentage completion method in the subsequent year - it is held that in case the revised AS-7 is to be applied then the opening inventories are also to be valued as per revised AS-7 though we are holding that revised AS-7 is not applicable in the case of the assessee - When the guidance note provided that revised AS-7 is applicable to real estate developers, the assessee has itself changed the method of accounting - Appeal is allowed by way of direction to AO to adopt project completion method Regarding business income or house property - As per the lease agreement, the assessee agreed to create a lease in favour of the tenant in respect of the premises, which is part of the building known as 'The Forum - The person concerned taking the property cannot use for any business except for the specified business - the assessee company is not only managing the property but is also providing common services and common area - assessee is getting composite lease rent payable for all the services under Group-I, Under Group-I, there are nine types of services - held that the rent relating to the building is to be taxed under the head 'Income from house property - In the result, the appeal is partly allowed
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2009 (9) TMI 625
Cross-examination of co-noticees - during the span of 11 years 9 notices were sent to the petitioner - Held that: - Since conduct of the appellant shows that he was avoiding notices and not remaining present before the forum, question of allowing cross-examination of co-noticees does not arise. - Appeal dismissed
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2009 (9) TMI 623
Exemption – Newly established undertaking in free trade zone (FTP) – Change in shareholding in newly established company - Explanation 1 to section 10A(9) of the Income-tax Act, 1961 was at all applicable - appellant-company has issued shares without voting rights - original promoters, continue to hold shares of the appellant-company carrying not less than 51 per cent. Of the voting power even after change in shareholding resulted in their having less than 50 per cent. Of the shares – assessee entitled to deduction under section 10A (1) of the Act. Where the words used are “has made, has ceased, has failed and has become”, they were found to be words which can be understood as happening both prior and after coming into force of the statute, as it was understood from the words “if a person has been convicted” to include anterior conviction. In Explanation 1, the present tense is used with an injunction that the shares “are not beneficially held by the persons who hold the shares in company”. The present tense cannot be assumed to describe the status of the shareholder as the owner, but the status of the shares which are beneficially held. On this interpretation the language of the section can only be understood to describe "the date on which the undertaking was set up" as applicable only for those who are setting up the undertaking after the new provision, so that in case of others, the date has to be understood at best, as on April 1, 2000, the date on which the law was brought in the statute.
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2009 (9) TMI 621
Additions Under s. 68 - Addition of Rs. 1,17,33,280 as unexplained cash credit - The issue is squarely covered by the decision of the Tribunal in the case of Rajat Ispat (P) Ltd. wherein the Tribunal has followed the decision of the Hon'ble Supreme Court in COMMR.OF INCOME TAX VERSUS M/S LOVELY EXPORTS(PVT)LTD. (2008 -TMI - 76942 - SUPREME COURT OF INDIA)as well as the decision of the Hon'ble jurisdictional High Court in the case of Vyankateshwar Ispat (P) Ltd - Revenue's appeal stands dismissed.
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2009 (9) TMI 619
AS-7 – Construction Contract - Method of accounting - The Hon'ble Supreme Court in the case of CIT vs. Hyundai Heavy Industries Co. Ltd. (2007 -TMI - 6562 - SUPREME Court), had held that percentage of completion method prescribed in AS-7 was appropriate for construction contract spread over several years, hence, method of accounting followed by the assessee was correct - The mobilization advance received by the assessee, then it is merely in the nature of advance till rendering of services when the same is being adjusted from the running bills by the payer, hence, the whole mobilization advance cannot be treated as income, though the payer deducted tax at source; as such, the payer is bound to deduct tax at the stage of payment or credit in the account of payee, whichever is earlier - Revenue's appeal stands dismissed.
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2009 (9) TMI 617
Disallowance of agricultural income - the assessee filed three lease deeds evidencing the fact that the assessee had taken agricultural lands on lease - . The AO, therefore, came to the conclusion that the sale bills produced by the assessee were prima facie fictitious - The learned counsel for the assessee, on the other hand, relied on the order of the CIT(A) and submitted that there was nothing on record before the AO to come to a conclusion that 50 per cent of the agricultural income declared by the assessee was fictitious - When the transaction is done through intermediary, the assessee, as a seller cannot be held responsible for the defect in the receipt obtained from the purchaser through intermediary - In the case of Shiv Prakash vs. CIT the Hon'ble Jammu and Kashmir High Court – It was held that the order of the CIT(A) does not call for any interference - The same is confirmed and these appeals of the Revenue are dismissed Interest - wherein there is no ground of appeal regarding charging of interest under ss. 234A, 234B and 234C - The request of the learned counsel for the assessee is accordingly rejected
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2009 (9) TMI 616
Amount of DEPB/duty drawback credited to P&L a/c - assessees claimed exemption under s. 10BA of IT Act on the amount of increased profits by the amount received on account of DEPB/duty drawback credited to the P&L a/c, treating the same to be profits and gains derived by an industrial undertaking from the export out of India of eligible articles or things - AO denied exemption under s. 10BA of IT Act on the ground that the benefits constitute export incentives and that they did not represent profits derived from industrial undertaking of export - duty drawback, DEPB benefits, rebates etc. cannot be credited against the cost of manufacture of goods debited in the P&L a/c for purposes of ss. 80-IA/80-IB - amount of DEPB benefits/duty drawback receipts do not form profits and gains derived by an industrial undertaking from the export out of India of eligible articles or things and as such the same shall not be allowed to be deducted from the total income of the assessee for the purposes of s. 10BA of IT Act Excess of Insurance charges - CIT(A) treated the excess of receipt of insurance charges as profits and gains derived by an industrial undertaking from the export - charges as such are not on account of export of goods outside India but are the reimbursement of expenses incurred within India - same do not partake the receipt of sale of eligible articles or things as are described under s. 10BA and as such exemption under s. 10BA of IT Act cannot be granted in the light of ratio laid down by Hon'ble apex Court in Liberty India vs. CIT (2009 -TMI - 34471 - SUPREME COURT )- decision of CIT(A), set aside. Addition made for want of availability of quantitative details - no justification in the action of assessing authority in making addition as such without bringing any valid or independent material on record to suggest income not recorded in the books of account. Dis-allowance of Rs. 2,74,642 made on account of personal and other expenses - the expenses having been laid for the business purpose of the assessee, disallowance so deleted calls for no interference. Addition of Rs. 20,85,813 in terms of provisions of s. 2(22)(e) - Deemed dividend - In this case the authorities below did not examine the fact as to whether the appellant is a shareholder of the two companies namely, M/s V.J. Home Studio (P) Ltd. and M/s Via Jodhpur Art (P) Ltd. and as to how the judgment rendered in the case of Hotel Hilltop (2008 - TMI - 33813 - RAJASTHAN HIGH COURT) would be applicable. The applicability or non-applicability of provisions of s. 2(22)(e) of IT Act has also not been examined with reference to relevant provisions of law as such before holding that the AO is not justified in treating the amount as deemed dividend
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2009 (9) TMI 615
Search and Seizure – penalty - before proceeding against any person other than the searched person under s. 158BD of IT Act, the law requires that a satisfaction to the effect that the documents found as a result of search give rise to undisclosed income of any other person other than the searched person, is required to be reached in the case of a person searched under s. 132 of IT Act - In the present case in appeal, no such satisfaction is found reached or recorded in the case of searched person - a notice under s. 158BC of IT Act which is also a condition essential for proceeding against such person has also not been met out though the condition of handing over of the seized documents can be deemed to have been satisfied as the AO of both the persons is of the same officer - preconditions of invoking jurisdiction under s. 158BD of IT Act are not satisfied, the notice so issued under s. 158BD of IT Act on the strength of which assessment of undisclosed income of the appellant has been made, quashed - penalty under s. 158BFA not leviable – Appeal allowed
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2009 (9) TMI 614
Additional Ground - It is well-known that there is no prescribed proforma to raise an additional ground. There is no specific procedure to be followed to raise an additional ground. What all is required is that the appellant needs to take leave of the Tribunal before raising additional ground and the Tribunal needs to give an opportunity of being heard to the affected party. Even oral plea can also be made for raising an additional ground and the Tribunal may, in appropriate cases consider such oral pleas. In the present case, there is a written petition which clearly signifies the cry of the petitioner from the rooftop to admit additional ground. The learned JM has altogether ignored this cry by not referring to p. 1 of the petition in his order and which the learned AM has referred to in his order. Moreover, the ground sought to be raised is not altogether a new ground but it arises from the order of the CIT(A). It also does not require any fresh investigation into the facts of the case. It is clearly a legal ground which the learned AM has rightly admitted. Mentioning of wrong income-tax appeal number on the petition is also not fatal to the admission of the additional ground. Disallowance of gross interest received from banks on deposits for securing export credit facilities - assessee made deposits in compliance of a direction issued by the banker who has extended credit facilities to them and in respect of deposits interest income was earned - appellant challenges the levy of interest under s. 234B in respect of the computation of deduction under s. 80HHC, by setting off the loss against export incentive, as per proviso to s. 80HHC(3) with retrospective effect from 1st April, 1992, since the law fastens an additional tax liability, which was not comprehended at the time of filing of the returns of income." - additional ground raised in view of the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT - Bench did hear the parties on the merits of the issue, it was subject to the admission of additional ground - before granting relief, decision on the admission of additional ground was necessary - now restored back to the regular Bench to give effect to the majority opinion - to decide the issue relating to levy of interest under s. 234D on merits
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2009 (9) TMI 613
Change of Opinion - reassessment – Whether CIT(A) erred in deleting the addition on account of investment ill purchase of stock and credit entry arrived at during the course of survey proceedings and post - survey proceedings ignoring the fact that the assessee failed to get it verified by holding that the addition was made solely and exclusively on the basis of loose papers - Books of account and other documents including loose papers pertaining to the year under consideration were found and impounded - impounded books contain cash book, ledger, journal, Gadda nook, debit and credit vouchers, loose papers, gate register, press register, stock register, purchase and sale bills which were test checked - It was, held in CIT vs. Eicher Ltd. (2007 -TMI - 2063 - HIGH COURT , DELHI) that if the AO while passing original assessment order, chose not to give any finding in this regard that could not give him or his successor in office a reason to reopen the assessment of the assessee or to contend that because the facts were not considered in the assessment order a full and true disclosure was not made - reassessment was not permissible – Revenue’s appeal dismissed
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2009 (9) TMI 612
Penalty - cenvat credit - liability and quantum of duty payable on the goods – licence obtained but instead of manufacturing, petitioner purchased goods from open market, supplied them to purchase under fake invoices and availed cenvat credit - absence of any adjudication and imposition of duty – Held that: - invoice is prepared indicating value of duty, the person preparing the invoice accepts that quantum of duty leviable on goods and when there is no dispute on quantum and leviability of goods, there is no question of adjudication and imposition of duty by the department – no extra ordinary and equitable writ jurisdiction in favour of the petitioner
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2009 (9) TMI 611
The Appellate Tribunal CESTAT, Bangalore rejected the Revenue's stay petition regarding a demand of Service Tax under Notification No. 32/2004-S.T. The demand was vacated as the service was provided by lorry owners, not a goods transport agency. The Tribunal found no merit in the Revenue's petition and rejected it.
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2009 (9) TMI 610
GTA –Waiver of pre-deposit - pre-deposit waived – abetment - CBEC clarified that the benefit could be allowed on production of consignment notes carrying evidence of the GTA not having availed Cenvat credit - notification does not require any such condition to be fulfilled for the appellants to qualify for the benefit - authority had not verified if the transporter had actually not availed Cenvat credit and had gone by the declaration furnished - pre-deposit waived
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2009 (9) TMI 609
Waiver of pre-deposit - Tour Operators Service - demand of service tax is on the amount, received by them as rental for their buses – appellant sstated that they are paying Service tax under the head "Rent-a-Cab Service" - no change of definition of tour operators when the "Rent-a-Cab Service" was introduced for the purpose of levy of Service tax on 1-6-07 – Held that: - it was not correct on the part of the Department to levy Service tax from the appellant under the head "Tour Operators Service" for the period prior to 1-6-07 - an amount of Rs. 1.00 lakh was deposited by the assessee with the lower appellate authority - waiver of pre-deposit – appeal disposed of accordingly
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2009 (9) TMI 608
Interest on borrowed capital - interest paid by the assessee was at a higher rate and investment made in a sister concern gave lower income - relationship between different concerns, where a transaction which is patently imprudent, takes place, the taxing authority should examine the question of business expediency – Tribunal failing to apply test of commercial expediency – Matter referred to a larger Bench
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2009 (9) TMI 607
Waiver of pre-deposit - non-payment of Service tax - appellant not taken registration - providing the taxable service of maintenance and repairs, cleaning and man power supply – service tax paid before issuance of SCN - penalty equal to 25% of the duty had not been given – Held that: - they would be entitled for reduced penalty under Section 78 - On payment of this amount, pre-deposit of remaining amount of penalty would stand waived for hearing of this appeal
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2009 (9) TMI 606
Duty liability – relinquishment of title of the imported goods - Company relinquish title without demur - auction was held and the goods were purchased back from the auction purchaser by the petitioner - goods have not only lost its character as ‘imported goods’ but the petitioner-Company had also lost their character as an ‘importer’ in respect of these imported goods - auction purchaser is son-in-law of the petitioner and the petitioner-Company had purchased it from him would pale into insignificance - Customs Department has allowed the auction of warehoused goods after deducting the warehouse charges and duty etc. then the goods have come in the hands of auction purchaser in accordance with law - Company, not exigible to Custom Duty as the goods had been auctioned after obtaining permission from the proper officer
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