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Showing 461 to 480 of 1903 Records
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2015 (11) TMI 1443
Entitlement to deduction under S.54F - whether ‘a residential house’ stated in S.54/S.54F for allowing deduction means a single residential house or one consisting of multiple units - CIT(A) allowed claim - Held that:- Merely because a residential house consists of several independent residential units, deduction under S.54/S.54F could not disallowed. Respectfully following the decision of the Hon'ble jurisdictional High Court in the case of CIT V/s. Syed Ali Adil (2013 (6) TMI 278 - ANDHRA PRADESH HIGH COURT) as approved in the case of CIT V/s. Vittal Krishna Conjeevaram (2013 (12) TMI 1524 - ANDHRA PRADESH HIGH COURT) we have no option than to confirm the order of the CIT(A), which is in consonance with the principles laid down on the issue in dispute. - Decided against revenue.
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2015 (11) TMI 1442
Addition on interest paid on unsecured loans - CIT(A) deleted the addition - Held that:- CIT(A) had considered the letters issued by the creditors demanding interest and threatening withdrawal of money for coming to a conclusion that the interest payment was a genuine allowable, business expenditure. There is no dispute that 50% of the total interest outgo pertained to preceding year. Assessee has also not disputed the claim of the revenue that there was no contract with the creditors for payment of any interest. However, as per the assessee it had taken a decision during the relevant previous year, in the meeting of its Board of Directors held on 23-03-2010 to pay interest from 01-04-2008 at the rate of 7%. Assessment order states that assessee could not produce any evidence regarding any dispute that share holders/directors on the question of interest. No doubt, assessee is relying on a resolution of its Board of Directors for payment of interest. Nevertheless, we are of the opinion, that at least some of the records produced by the assessee before the CIT(A) were not before the AO. Just because AO was present at the time of proceedings before the CIT(A), we cannot say that requirements of Rule 46A of IT Rules stood satisfied. We are of the opinion that the issue therefore, requires a fresh look by the AO for verifying the allowability of the claim in accordance with law. We therefore, set aside the orders of the authorities below with regard to the allowance of interest back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of revenue for statistical purposes.
Disallowance of prior period expenditure - CIT(A) deleted the addition - Held that:- Grievance of the revenue is that the evidence produced by the assesssee before the CIT(A) were not before the AO. In our opinion, the question whether there was any dispute with regard to cam charges between the assessee and M/s Bharath Mall and such dispute, if it existed, whether settled, require a detailed analysis before coming to a conclusion regarding the allowability of the claim made by the assessee. Unless and until such an exercise is carried out, it cannot be ascertained whether the claim is one of prior period expenditure or business expenditure incurred during the relevant previous year. In such circumstances, we are of the opinion that this issue also requires a fresh look by the AO. We therefore, set aside the orders of the authorities below and remit the issue regarding allowance of prior period expenditure also back to the file of the AO for consideration afresh in accordance with law. - Decided in favour of revenue for statistical purposes.
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2015 (11) TMI 1441
Disallowance of proportionate interest - AO disallowed interest paid to HDFC Bank on car loan on the basis that the assessee had made huge interest free advances - Held that:- It is now a well established proposition of law that when assessee was having an adequate non-interest bearing fund, disallowance of interest paid on borrowed fund cannot be made since in such a case, there was no nexus between the advance given and borrowals made by the assessee. It is also not the case of the Assessing Officer that the loan was not taken for the business purposes. We thus while setting aside orders of the authorities below on the issue direct the Assessing Officer to delete the addition - Decided in favour of assessee.
Disallowance under sec. 14A read with Rule 8D - Held that:- Assessing Officer before invoking the provisions of Rule 8D has to record his satisfaction in terms of sub-section (2) of section 14A of the Act. In the present case, when the assessee himself had disallowed the expenditure incurred on the management of its portfolio for earning the dividend income, the Assessing Officer had to record his satisfaction first that the expenditure shown by the assessee for earning the dividend income was not satisfactory before invoking the provisions of section 14A of the Income-tax Act, 1961 read with Rule 8D of the I.T. Rules to make disallowance there under. In absence of the compliance of such mandatory requirement, the Assessing Officer was not justified in making the disallowanc under sec. 14A of the Act read with Rule 8D of the I.T. Rules. - Decided in favour of assessee.
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2015 (11) TMI 1440
Levy of penalty u/s 158BFA(2) - Held that:- When there is a bona fide surrender, undisclosed income is computed merely on the basis of such surrender, that too in the block period on lump sum basis, no penalty would be imposable u/s 158BFA(2) of the Act because there is no determination of undisclosed income by the assessee under clause (c) of Section 158BC which is the requirement for imposition of penalty. See CIT vs Harkaran Das Ved Pal [2008 (11) TMI 47 - HIGH COURT DELHI]
A bare perusal of seized material shows that no additional investment by the assessee in acquisition of property has been made suggesting the undisclosed income nor any further investigation has been made by the A.O. regarding concealed income. In other words, there is no independent material on the file except voluntary acceptance of the assessee as to the undisclosed income sufficient to proceed with the penalty proceedings. From the undisputed facts and circumstances of the case, it is proved that when the assessee has voluntarily accepted the undisclosed income bona-fidely for the purpose of buying peace of mind and to avoid protracted litigation, no independent determination of undisclosed income as per Section158BF(c) and Section 158BB(1) of the Act has been a made, there is no question of imposing penalty u/s 158BFA(2) of the Act. - Decided in favour of assessee.
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2015 (11) TMI 1439
Assessment under section 153C - Disallowance on account of administrative & other overheads - plea of the assessee was that for the year under consideration the return filed by the assessee having been deemed to be processed under section 143(1) of the Act, in the absence of any notice issued under section 148 of the Act it attained finality - Held that:- The return of income having been filed in 2011, proceedings have reached finality by 2013 on which date the officer, to whom the matters were transferred, had not initiated proceedings and thus the assessment can be said to have attained finality. Even otherwise it is not in dispute that there was no incriminating material found during the course of search in respect of the assessee herein and in fact no addition was made by AO on the strength of the documents seized, in this assessment year. Under identical circumstances the ITAT 'SMC' Bench - in the case of Empire Mall Ltd. (2015 (11) TMI 1358 - ITAT MUMBAI) wherein held that the proceedings initiated under section 153C are not valid and therefore the assessments made thereon were quashed. Consistent with the view taken by the ITAT in the aforecited cases I hold that the proceedings initiated under section 153C and the assessment made in the instant case is also not valid in as much as there is no incriminating material found during the course of search, pertaining to A.Y. 2011-12. Since the notice issued under section 153C is held to be invalid, the assessment made thereon has no legs to stand and therefore it is not necessary to deal with other disallowance. - Decided in favour of assessee
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2015 (11) TMI 1438
Capitalization of Insurance Expenses incurred in respect two new Cars - Held that:- Disallowance of Assessing Officer on the basis that it is capital expenditure because the same is required to be incurred before the new car can be used. Before CIT(A), reliance was placed by Learned A.R. of the assessee on a judgment of Hon'ble Andhra Pradesh High Court rendered in the case of Nathmal Bankatlal Parikh And Company vs. CIT, A.P.-III [ 1979 (8) TMI 46 - ANDHRA PRADESH High Court]. Learned CIT(A) has observed in Para 4.3 of his order that this judgment is distinguishable on facts but in our considered opinion, CIT(A) is not correct in saying so. In fact this is the ratio of this judgment of full Bench of Hon'ble Andhra Pradesh High Court that the question whether a particular expenditure is capital or revenue in nature is only relevant for the purpose of allowing a claim u/s 37(1) of the Act and for allowing the claim of deduction u/s 30 to 36, the condition whether the expenditure is capital or revenue in nature is immaterial. The deduction on account of insurance expenses is allowable u/s 31 of the Act. Therefore, for allowing the claim of insurance expenditure u/s 31 of the Act, this aspect is not relevant as to whether this is capital expenditure or not as per this judgment of Hon'ble Andhra Pradesh High Court. Respectfully following this judgment of Hon'ble Andhra Pradesh High Court, we hold that the disallowance made by the Assessing Officer and confirmed by CIT(A) on account of payment of insurance premium is not proper and justified. We, therefore, delete the same. - Decided in favour of assessee.
Addition in the value of closing stock - CIT(A) confirming the addition by discarding the recognized method of valuation of closing stock, namely, weighted average cost as consistently adopted by the assessee and accepted by the Department and by imposing the Fifo- Method of valuation of closing stock by the A.O. - Held that:- The addition made by the Assessing Officer is not justified because he cannot reject a recognized method of valuation of closing stock followed by the assessee and accepted by the Department in assessment year 1997-98 and 2004-05 as per assessment orders passed by the Assessing Officer in those years u/s 143(3) of the Act. The judgment of Hon'ble Rajasthan High Court cited by Learned A.R. of the assessee rendered in the case of CIT vs. Wolkem India Ltd. (2009 (1) TMI 241 - RAJASTHAN HIGH COURT) also supports this view of us because it was held by Hon'ble Rajasthan High Court in this case that if the method of valuation adopted by the assessee is a recognized method, it cannot be rejected on the ground that the net realizable value/market value has been determined on the basis of estimate. Respectfully following this judgment of Hon'ble Rajasthan High Court and in view of above discussion, we hold that the addition made by the Assessing Officer by rejecting the method of valuation of closing stock adopted by the assessee and by adopting FIFO method is not justified. We, therefore, delete the same.- Decided in favour of assessee.
Disallowance of claim of deduction U/s 80IB - Held that:- We find that as per the assessment order a clear finding has been given by the Assessing Officer that the assessee has not adduced any documentary evidence to show that the assessee is manufacturing or producing any article or thing. He has also observed that the assessee has employed its sister concern M/s Sunrise Tannery for tanning of raw hides to finished hides and manufacture of shoe upper on job basis as also purchase of finished hides and export thereof. He has also noted that as per schedule of fixed assets, there is shoe upper machine of ₹ 1,96,515/- and embossing plate of ₹ 4,26,293/- and wages paid are ₹ 2,25,497/-. He has also noted that the electric power expenses debited to manufacturing account relates to M/s Sunrise Tannery which is borne by the assessee. He has also given a finding that all the hides have been processed on job basis. Learned CIT(A) has also given a finding that no evidence have been brought on record to substantiate that manufacturing and production is undertaken by the assessee to justify its claim of deduction u/s 80IB of the Act. But in the present case, this is not coming out that the manufacturing was done by sister concern under direct supervision and control of the assessee because the assessee is not debiting any amount on account of salary being paid to any technical expert who can do this direct supervision and control of the manufacturing process being done by the sister concern. - Decided against assessee.
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2015 (11) TMI 1437
Penalty u/s 271(1)(c) - bogus liability - Applicability of Section 41(1) - Held that:- AO has questioned the genuineness of the liability and in absence of the requisite confirmation, has held the same to be a bogus liability. Where the liability itself has been held to be a bogus liability, where is the question of remission or cessation thereof. Thus, in the instant case, where the addition itself is doubtful under the provisions of section 41(1), the same cannot form the basis for levy of penalty. See COMMISSIONER OF INCOME TAX Versus BHOGILAL RAMJIBHAI ATARA[2014 (2) TMI 794 - GUJARAT HIGH COURT]. Thus we delete the penalty levied under section 271(1)(c)
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2015 (11) TMI 1436
Entitlement to deduction U/s 54 - CIT(A) allowed claim - Whether the appellant assessee could make a claim for deduction other than by filing a revised return? - Held that:- The ld CIT(A) has not provided any opportunity to the Assessing Officer as no details were submitted by the assessee during the assessment proceedings. Before us also no evidence has been placed. The assessee’s return is belated. The Assessing Officer is not supposed to entertain the deduction U/s 54F by relying on the decision of Hon’ble Supreme Court in the case of GOETZE (INDIA) LTD. v. COMMISSIONER OF INCOME-TAX [2006 (3) TMI 75 - SUPREME Court ] wherein held that the Assessing Officer cannot allow deduction claimed during the course of assessment proceedings, it can be claimed only in revised return filed before him. The assessee’s return was belated, which cannot be revised under the law. Therefore, the revenue’s appeal is set aside to the Assessing Officer and the Assessing Officer is directed to give reasonable opportunity of being heard and consider the above observation made by this Bench. - Decided in favour of revenue for statistical purposes only.
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2015 (11) TMI 1435
Addition on disclosed additional income - Held that:- For the total cash payment of ₹ 38 lac for first time, in reply to show cause notice, the assessee faintly urged that the statement by the director was not voluntary and sought to retract it. The tribunal refused to accept such retraction. Dismissing the assessee’s appeal, the Hon’ble High Court held that the tribunal was correct in adding back amount after adjusting expenditure. As the retraction in the extant case also came after a long time and further it is contrary to the evidence found at the time of survey, we, therefore, approve the view of the ld. CIT(A) in not accepting the retraction made by the assessee.
As regards the advance of ₹ 13 lac, the assessee filed a letter before the ld. CIT(A) from one Shri Mohammed Jamil, stated to be the owner of the said property. The ld. CIT(A) noticed that the receipt showed the name of Shri Amit Chauhan as the recipient and not Shri Mohammed Jamil. When this discrepancy was pointed out by the ld. CIT(A), the assessee could not explain anything. However, on a later date, an affidavit from Shri Amit Chauhan was filed denying the above transaction. Similarly, for ₹ 25 lac, the assessee filed a letter along with an affidavit in the name of Shri Atul Jain stating that he had not received the said amount from the assessee. In our considered opinion, these affidavits filed by the assessee before the ld. CIT(A) are self serving documents having no evidentiary value, when seen in the backdrop of the facts that the two documents evidencing the assessee having made payments of ₹ 25 lac and ₹ 13 lac were found from his own briefcase at the time of survey and he admitted that these represented payments made by him in cash out of commission income which was not recorded in the books of account.
Adverting to the facts of the instant case, we find that the assesee came out with some self serving affidavits for the first time at the stage of the first appeal. These affidavits in our considered opinion have been rightly jettisoned by the ld. CIT(A) as the averments in them run contrary to the evidence found at the time of survey, which evidence was accepted by the assessee as correct. No exception can be found from the impugned order sustaining the addition to the tune of ₹ 26,50,500/-. The same is, therefore, upheld. - Decided against assessee
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2015 (11) TMI 1434
Rejection of books of accounts - G.P. addition - sale of material treated as profit for working out the Gross Profit on contract receipts by AO - CIT(A) deleted part addition - Held that:- Held that:- CIT(Appeals) found that assessee had produced Hot Mix material from its plant for its contract work and the excess production was sold to outside parties leading to turnover of ₹ 43,06,319/- on this account. This finding of fact recorded by ld. CIT(Appeals) have not been rebutted through any material or evidence on record. It, therefore, stands established that amount of ₹ 43,06,319/- was the turnover and as such ld. CIT(Appeals) was justified in holding that it was not possible that there would be no cost of goods produced/sold as done by the Assessing Officer. It is well settled law that the turnover of the assessee could not represent the profit of the assessee. In the turnover of the assessee, only part amount is represented as income of the assessee. The cost of the material sold should have been deducted from the turnover in order to arrive at the profit of the assessee. The ld. CIT(Appeals), therefore, on the total turnover of ₹ 43,05,319/- of Hot Mix material correctly directed to apply profit rate for the purpose of making addition, therefore, rest of the addition of ₹ 39,61,815/- was rightly deleted. There is no error in the order of the ld. CIT(Appeals). - Decided against revenue.
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2015 (11) TMI 1433
Unaccounted form of land development expenses and excess cash in proceedings under section 143(3) - Held that:- Both the authorities below have strongly relied upon survey statement of assessee’s partner Shri Nitin Kopikar whilst making the impugned additions totaling to ₹ 26.23 lacs. There is no supportive material quoted either in the course of assessment or in lower appellate order. The latter order runs into 19th full fledged pages out of which pages 5 to 19 highlight lacks of evidence, any incriminating material, survey statement being obtained in coercion etc. The CIT(A) brushes all of them aside by a single stroke without adverting to the same. We opine in this factual backdrop that the lower appellant order is not a detailed and speaking one with reasons thereof. Coming to the Revenue’s submissions placing a strong reliance upon the tribunal’s decision in the connected group case, we notice that the said assessee had failed to produce the original retraction affidavit (supra) therein which led an adverse inference. The instant appeal does not raise any such issue. We feel in these peculiar circumstances that once the CIT(A) has not taken into account all of the assessee’s argument in affirming the Assessing Officer’s action making the impugned additions, the matter deserves another innings in lower appellant proceedings.The Ld. CIT(A) shall pass a detailed speaking order. - Decided in favour of assessee for statistical purpose.
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2015 (11) TMI 1432
Revision u/sec. 263 - contention of the assessee is that the CIT has not applied his mind and the show cause notice was prepared only by the ITO and the basic details as required are not available in the show cause notice - Held that:- Sec 263 allows CIT to call for and examine the records of any proceedings under the Income-tax Act, 1961, if he considers that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue, he may, after giving an opportunity to the assessee and after making such enquiry as he deems necessary, pass an order enhancing or modifying the assessment or cancelling the assessment. Therefore, what is required u/s 263 is an opportunity of being heard. Sec. 263 does not require the CIT to issue any show cause notice. Therefore, this Tribunal is of the considered opinion that even if there was any defect in the show cause notice that will not affect the consequential order passed by the CIT. This view of ours is fortified by the judgment of the Apex Court in CIT vs Electro House [1971 (9) TMI 10 - SUPREME Court ].- Decided against assessee
Claim of depreciation in respect of machinery purchased from Germany - CIT(A) directed AO to allow 50% claim - Held that:- As from the material available on record, it appears that the machinery was installed and put to use on 25.9.2010. The Customs Authorities inspected the usage and running of the machinery on 4.10.2010. When the Customs authorities inspected the machinery on 4.10.2010, it is obvious that the machinery should have been installed and ready for use before 4.10.2010. Therefore, this Tribunal is of the considered opinion that the machinery was in fact installed on 25.9.2010 and it is ready for use. Therefore, machinery was put to use for more than 180 days and the assessee is entitled for full depreciation. Hence, the CIT is not justified in directing the Assessing Officer to allow only 50% depreciation. Accordingly, the order of the CIT is set aside and the Assessing Officer is directed to allow full depreciation in respect of the machinery purchased from Germany.- Decided in favour of assessee
CIT to initiate penalty proceedings u/s 271(1)(c) - Held that:- The authorities under the Income-tax Act are empowered to perform judicial function. In other words, the authority concerned has to take an independent decision in respect of the case whether to initiate penalty u/s 271(1)(c) of the Act or not? Though the Assessing Officer is established under the provisions of the Income-tax Act, he is discharging a judicial function while initiating proceedings for levy of penalty. Therefore, no authority can direct the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) of the Act. The Assessing Officer is expected to take an independent decision. In the course of any proceedings before the CIT, he may initiate penalty proceedings and decide the same on his own. However, the CIT has no authority to direct the Assessing Officer to initiate penalty proceedings. The direction of the Administrative Commissioner to initiate penalty proceedings would amount to interference with judicial function of the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the CIT has exceeded his jurisdiction in directing the Assessing Officer to initiate penalty proceedings u/s 271(1)(c) of the Act. Accordingly, the order of the CIT is set aside and direction issued by the CIT to initiate penalty proceedings is quashed.- Decided in favour of assessee
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2015 (11) TMI 1431
Rectification of mistake - Held that:- The assessee is merely criticizing certain observations of the Tribunal in its order dated 31.7.2013 and the action of the Tribunal in not following the decisions cited by the assessee, but following certain other decisions. An overall reading of the order of this Tribunal dated 31.7.2013 clearly reflects the consideration of all the contentions of the parties, including the decisions relied upon by them. No specific mistake apparent from record which has crept into the order of the Tribunal, warranting rectification/recall, has been brought out by the assessee. By the elaborate contentions in the present application, assessee is merely seeking a review of our order dated 31.7.2013, by criticizing the action of the Tribunal in following of certain decisions and not following certain others, which is not permissible in these proceedings under S.254(2) of the Act, the scope of which is confined to mere rectification of obvious/patent mistakes apparent from record, which might have crept into an order of the Tribunal. In the absence of any such mistakes specifically pointed out by the assessee in the present application, the same is liable to be rejected as devoid of merit. We do so accordingly and reject the application of the assessee. - Decided against assessee.
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2015 (11) TMI 1430
100% EOU - duty payable on debonding - assessee had capitalized certain spare parts - revenue took the view that by this process, the value of the capital goods has increased and accordingly at the time of debonding, duty of ₹ 50,85,814/- should have been paid on this amount after 10% depreciation. - Interest u/s 28AB - Held that:- Even though spare parts have been capitalized, in our view once the spare parts have been used for replacement of the old and worn out machinery parts, the same become part of the machinery and they loose their separate identity. The use of these spare parts for replacing the old and worn out parts of the machinery would not increase the value of the machinery. At the time of debonding, the duty is payable on the value of the duty free raw materials and the depreciated value of the imported or indigenously procured capital goods and for this purpose, the value of the capital goods cannot be enhanced by the value of the spare parts used from time to time, even if the same have been capitalized. - at the time of debonding, the Jurisdictional Inspector, Central Excise, after checking their records and stock, had determined the appellants duty liability and had communicated the same under his letter dated 10/04/04 and at that time also he had checked the account of receipt and consumption of the imported as well as indigenously procured spare parts - appellant cannot be accused of suppressing the relevant information from the Department and, therefore, no justification for invoking the extended period under proviso to Section 28 (1) of the Customs Act, 1962 and, as such, the show cause notice dated 19.02.2009 is time barred. - impugned order is not sustainable on merits as well as on limitation. The same is set aside - Decided in favour of assessee.
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2015 (11) TMI 1429
Validity of reassessment proceedings - Whether the Tribunal was justified in upholding the reassessment orders when before issuing the notice in form ST-15, no reasons have been indicated/recorded by the Ld. VATO on the order sheet - Held that:- VATO was authorised to reopen the assessment, it is plain that the jurisdictional requirement under Section 24 (1) of the DSTA that reasons must be recorded by the VATO himself, as the officer issuing the notice of reassessment on the ground that there were “reasons to believe” that the whole or any part of the turnover of a dealer in respect of any period had escaped assessment to tax, was not complied with. All that was said by the VATO was that he was issuing notices for reopening of the assessment under Section 24 (1) DSTA “as per direction of higher authorities.” This is not a mere procedural irregularity that can be condoned by remanding the matter to the VATO for a fresh reassessment proceeding. It goes to the very root of the matter since what is sought to be done under Section 24 of the Act is to re-open an assessment. - Court concludes that in the present case the jurisdictional requirement of the VATO having to record the “reasons to believe” preceding the issuance of the show cause notice to the Assessee under Section 24 (1) DSTA was not complied with. Consequently, the entire re-assessment proceedings are bad in law. - Impugned order is set aside - Decided in favour of assessee.
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2015 (11) TMI 1428
Cancellation of registration - proof of address - petitioner contended that, there is no mandatory provision in the Tamil Nadu Value Added Tax Act, 2006 that the Petitioner has to produce no objection certificate from the landlord. - validity of Lease agreement produced - failed to produce the original agreement - Held that:- Petitioner was given sufficient opportunity of furnishing a representation, written submissions and being heard. However, there is no evidence produced by the Petitioner to show that they fulfilled their obligations under the said provisions of Act . As per the provisions of Section 39 of the Tamil Nadu Value Added Tax Act, 2006, for good and sufficient reasons, the authority, granting the certificate of registration, can cancel the registration certificate. According to the said provisions, the impugned order has been passed, on the reason that the original lease agreement was not produced, in order to verify the genuineness of the document in question. Further, all the above disputed facts, raised by the Petitioner and the 2nd Respondent, cannot be gone into in this Writ Petition. Since there are various disputes raised between the parties, the same can be agitated by the Petitioner before the Revisional Authority by filing a revision. - Decided against assessee.
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2015 (11) TMI 1427
Works contract activity or pure sales activity - printing annual report as per the specification - Exemption on the sales turnover - penalty under Section 12(3) of the Tamil Nadu General Sales Tax Act - Held that:- Assessee undertook the work of printing annual reports as per the instructions of the customers. The items were printed for their exclusive use on works contract basis. When the predominant intention is for printing annual report as per the specification given by the customer, it is, therefore, in the nature of works contract. Where the finished product supplied to a particular customer is not a commercial commodity in the sense that it cannot be sold in the market to any other person, the transaction is only a works contract. - work executed by the assessee related to printing of materials and such printed materials are meant for particular customers, who placed orders and it cannot be sold in the open market like any other goods. Going by the principle laid down in the above-said decision of the Apex Court [1988 (1) TMI 329 - SUPREME COURT OF INDIA], which was followed by this Court in the subsequent decisions, we have no hesitation in accepting the case of the assessee that the transaction in question does not call for any liabililty under the Act. As pointed out by the Apex Court, the mere fact that in the execution of the contract for work, the paper owned by the assessee stands transferred to the contractee incidentally would not lead to the inference that the transaction is only a sale and not a works contract. - Decided in favour of assessee.
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2015 (11) TMI 1426
Buy back arrangement - collaboration for profitable implementation - Appellant contended that as his buy-back from HSIDC, was a transfer of shares from a State level financial institution to a co-promoter of the Target Company, it was exempt under Regulation 10 - Tribunal dismissed the contention stating that the exemption under Regulation 10 was only with respect to making a public announcement and does not permit the Appellant from not disclosing the transaction for the purpose of calculating the minimum offer price - whether the transaction of buy-back of shares which transpired between the Appellant and HSIDC was required to be disclosed in the public announcement dated 24.4.1999
Held that:- It is evident from a reading of the Regulations 10, 11 and 12 the buy-back transaction between the Appellant and HSIDC was incapable of triggering Regulation 10, as the said transaction was protected by Regulation 3. However, the acquisition of the entire share capital of Garg by the Appellant attracted Regulation 10 as the acquisition was in excess of 15%. Further, as this transaction was between two promoters, it did not have the protection of Regulation 3. As required under Regulation 10, the Appellant did make a public announcement, but did not disclose its buy-back transaction with HSIDC. The Appellant has vainly and incorrectly attempted to justify his act of non-disclosure by stating that the transaction with HSIDC was protected by Regulation 3, which placed it beyond the ambit of Regulation 10, 11 and 12. In our view, Regulation 3 only protects a transaction between a co-promoter and a State financial institution to the extent that, as a consequence of such transaction a public announcement will not be required to be made as provided under Regulations 10, 11 and 12. However, it does not imply that the said transaction is to be protected from the rigours of other Regulations provided for under the Act. Thus, the transaction between the Appellant and HSIDC will have to be subject to Regulations 16 and 20, and the rate at which the Appellant bought back the shares from HSIDC had to be disclosed in the public announcement.
Find no force whatsoever in the contention of the Learned Counsel for the Appellant that the post-dated cheques forwarded to HSIDC enclosed with letter dated 15.4.1999 were given by way of a guarantee, especially in light of the fact that the same was denied by HSIDC in its letter to SEBI dated 11.1.2001, wherein HSIDC stated that the post-dated cheques had been issued in consideration of the buy-back of shares.
Cheques presented dishonoured on presentation - It has already been held beyond doubt that the post-dated cheques issued by the Appellant in favour of HSIDC were in consideration of the buy-back of the shares held by HSIDC in the Target Company. The Appellant had submitted that the cheques were post-dated because he was suffering from a liquidity crunch. In our view, the post-dated cheques amounted to a promise to pay and that promise would be fulfilled on the date mentioned on the cheque. Thus, this promise to pay amounted to a sale of shares/equity. The subsequent dishonouring of the post-dated cheque would have no bearing on the case. At the time of making the public announcement the Appellant had bought back the shares of HSIDC by making payment via the said post-dated cheques. Further, as the buy-back was in pursuance of an agreement, there was consensus ad idem. The Appellant has subsequently shirked his responsibility and has tried to slither away from honouring the agreement, which he cannot be allowed to gain from, as is established by the legal maxim commodum ex injuri su non habere debet.
As per Regulation 2 Clause (1) Sub-clause (a)- ‘acquisition’ means directly or indirectly acquiring or agreeing to acquire shares or voting rights in, or control over, a Target Company. This definition clarifies that an acquisition takes place the moment the acquirer decides or agrees to acquire, irrespective of the time when the transfer stands completed in all respects. The definition explicates that the actual transfer need not be contemporaneous with the intended transfer and can be in futuro.
Also the letter on which the Counsel for the Appellant had placed reliance to prove that there was no acquisition, is dated 9.12.1999, which was well after the public announcement dated 24.4.1999 where the Appellant was required to make disclosures in compliance with the Regulations. This clearly indicates, that at the date of making the public announcement the Appellant was under the impression that the acquisition has taken place.
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2015 (11) TMI 1425
Waiver of pre deposit - Mandatory pre deposit - Section 35F - Held that:- Supreme Court in the case of Hoosein Kasam Dada (India) Ltd. Vs. The State of Madhya Pradesh and Ors. [1953 (2) TMI 35 - SUPREME COURT OF INDIA] was considering the provisions of Central Provinces and Berar Sales Tax Act, 1947 - provisions of section 35F would not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of Finance Act 2014 was not made while amending the relevant provisions in the Sales Tax Act. In the absence of any specific provisions regarding applicability of the amendment to the cases pending before the date of amendment, Hon’ble Supreme Court considered the issue and interpreted the provisions.
In the present case, the legislative intention clearly comes out from that second proviso and the section is very clear and provides that the amendment would not apply only to the stay applications and appeals pending before any appellate authority which means that any stay applications/ appeals filed on or after 06.08.2014, the amended section would be applicable. - contention of both the appellants that they are not liable to make mandatory penalty of 7.5%/10% as directed in the provisions of Section 35F cannot be accepted. However in the interest of justice, both the appellants are required to be given time to make the payment - Decided partly in favour of assessee.
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2015 (11) TMI 1424
Levy of Penalty u/s 77 & 78 - - Site Preparation and clearance service - Assessee did not file ST-3 returns - Held that:- Service tax for the period of April, 2010 to September, 2010 was paid by the appellant alongwith interest on 14/3/2011 and intimated to the department by filing the ST 3 returns on the same day is not under dispute. Though the audit has pointed out the delay payment of service tax in the month of April 2011 but the appellant had deposited service tax admittedly without any contest much before the issuance of show cause notice. Therefore in my considered view the case of the appellant squarely covered under provision under Section 73(3) of Finance Act, 1994 - the appellant is entitle for waiver of penalty imposed under section 77 and 78, therefore the said penalties are dropped - Decided in favour of assessee.
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