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Case Laws
Showing 501 to 520 of 1266 Records
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2012 (10) TMI 775
Speculative loss - CIT(A) deleted the addition - Held that:- The genuineness of loss was never questioned by A.O., therefore, without going into the findings whether the loss was genuine or not, the case of the assessee is covered by the case of sister concerns M/s. Orient Overseas Pvt. Ltd. wherein under similar facts and circumstances, the ITAT had remitted the case back to the file of A.O. - in favour of revenue for statistical purposes.
Disallowance of interest being not incurred for the purpose of business and profession - CIT(A) deleted the addition - Held that:- On analysis of balance sheet, there does not seem to be any loans or advances which can be said to have been given out of borrowed funds. The non charging of interest from sister concerns is also covered by the decision of Hon'ble Apex Court in the case of SA Builders vs. CIT reported (2006 (12) TMI 82- SUPREME COURT OF INDIA ) wherein it was held that transfer of borrowed funds to a sister concern is to be seen from the point of view of commercial expediency and not from the point of view whether the amount was advanced for earning profit, thus no reason to interfere in the order of CIT (A) on this account - against revenue.
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2012 (10) TMI 774
Penalty u/s 271 AAA - search and seizure u/s.132 - Held that:- Under Section 132(4) unless the authorized officer puts a specific question with regard to the manner in which income has been derived, it is not expected from the person to make a statement in this regard and in case in the statement the manner in which income has been derived has not been stated but has been stated subsequently, that amounts to the compliance with Explanation 5(2) of the Income Tax Act, 1961 as decided in CIT vs. Mahendra C Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT]
Examining the statements recorded at the time of search u/s 132(4) came to a conclusion that the assessee was never asked about the manner in which the income was earned, nor that she was even asked to substantiate the manner in which undisclosed income was arrived - in favour of assessee.
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2012 (10) TMI 773
Tender Fees Expenses - Revenue v/s Capital - Held that:- The assessee has been submitting tender in its day-today business which are basically works contract on turn key basis. The assessee has procured orders for sale of its items manufactured. It has to fulfill the tenders floated by State Governments or Electricity Boards. It is not necessary that it will get the order. It does not create any new asset. It was incurred in connection with the integral part of profit earning process and not for acquisition of any asset, thus Revenue authority has failed to look into the true nature of the expenses - in favour of assessee.
Bank Guarantee & Loan Processing Charges - Held that:- Considering assessee's submission it can be concluded that loan was taken for working capital on perusal of the copies of invoices issued by various vendors as it reveals that the goods purchased by the assessee are insulator, panels etc. FAA fail to look into the fact that assessee is in the business of manufacture distributor transformers, HT cable box on job contract basis. It also constructs power houses and lays electrical lines. In connection with these operation, assessee has to purchase all these items. These items were consumed in the ultimate final product, which is the trading stock of the assessee - in favour of assessee.
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2012 (10) TMI 772
EPCG Scheme - Revenue contended that the Notification provides exemption to the spare parts for existing plant and machinery whereas as per the EPCG scheme under para 5.1A, spares including reconditioned spares, tools, spare refractories are covered and the Notification during the period in dispute provides exemption only to the spares and not to the catalysts hence the demand is rightly made. - Held that:- In the policy, the capital goods also include catalysts for initial charge and under the EPCG scheme for existing plant, the catalysts are separately mentioned in the spares. Catalysts and consumables are separately mentioned in para 5.1A of the Policy. The Notification in question provides exemption from payment of duty in respect of spares as well as consumables. Subsequently, the consumables were omitted for the benefit of the Notification. The applicant was declaring catalysts in the bills of entry and the same were cleared without any objection. In these circumstances, as the catalysts are separately mentioned in addition to consumables in the EPCG scheme for existing plant and also separately mentioned in the definition of capital goods under the policy, prima facie we find merit in the contention of the applicant on merits as well as on time bar. - stay granted.
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2012 (10) TMI 771
Penalty under Section 114(i) of the Customs Act - wrong provision of law has been quoted by the Revenue in the show-cause notice - non-mention of Section 113 in the show-cause notice would not per se invalidate the penalty imposed under Section 114 if the penalty is otherwise supported by the essential facts alleged and proved - no allegation of “fraudulent” export in the show-cause notice - show-cause notice did not allege the essential, and consequently the adjudicating authority could not hold any goods to be liable to confiscation in terms of Section 113 of the Act - nobody could have been held to have rendered the goods liable to confiscation so as to attract a penalty under Section 114 of the Act in the present case - question whether Section 114 of the Act could be invoked against the appellant did not arise in that case - in favor of assessee.
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2012 (10) TMI 770
Scheme of Amalgamation - Held that:- In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies, representation / reports filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court to the proposed Scheme of Amalgamation, there appears to be no hurdle to grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956.
Certified copy of the order be filed with the ROC within 30 days from the date of receipt of the same. The whole or part of the undertaking, the properties, rights and powers of Petitioner & also all the liabilities and duties be transferred to and vest in the Transferee Company without any further act or deed. All the Permanent employees of all the Transferor Companies shall become the employees of the Transferee Company without any break or interruption in their service & Petitioner shall stand dissolved without winding up. This order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law - the Petitioner Companies would voluntarily deposit a sum of Rs. 1,00,000/- with the Common Pool of the Official Liquidator within three weeks from today - Scheme of Amalgamation sanctioned.
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2012 (10) TMI 769
Demand of duty - Clearance without warehousing certificate – SCN has been issued for clandestinely removal of said goods with intent to evade payment of duty leviable thereon – Held that:- The jurisdictional officer in charge of the warehouse has duly signed the AR3-A and certified for having received the said goods and for having accounted for in the Bonded Register. Further the goods were cleared under valid CT-3 Certificate issued by the competent authority and the clearance of goods from EOU to another EOU, the Project Authority s certificate was also produced before the Adjudicating Authority and the same was also produced before Appellate Authority. On such a clinching evidence on receipt of goods at EOU and accepted by in-charge of the EOU, the Revenue’s appeal is devoid of merits as the grounds of appeal does not contradict the fact of signature of P.O. and nor it is claimed as forged. Appeal decides in favour of assessee
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2012 (10) TMI 768
Waiver of pre-deposit of Duty along with interest and penalty - appellant has under valued their finished products cleared from the factory premises by not following the procedure of provisions of Section 4A of the Central Excise Act - Held that:- As first appellate authority has dismissed/ rejected the appeals only for non compliance - pre-deposit of amount of Rs. 10 Lakhs is sufficient deposit to hear and dispose the appeals.Impugned orders is set aside and directed the first appellate authority to consider the appeals filed by the appellants on merits of the case and take up the matters for disposal after following the principles of natural justice and without insisting on further pre-deposit - Appeals are allowed by way of remand to the first appellate authority.
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2012 (10) TMI 767
Cenvat credit - show cause notice to point out that if the Mobile-phone was not installed in the registered premises, that became the reason for denial of Cenvat credit – Held that:- In the view of show cause notice, it is inconceivable how an input service wherever exists shall be reason to grant Cenvat credit - requirement of law is that such service must be relevant to manufacture or providing output service. That was not disputed in the show cause notice - waiver of pre-deposit allowed.
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2012 (10) TMI 766
Restoration of appeals - applicants have not complied with the order of pre-deposit – Held that:- Applications for restoration have been filed belatedly - applications for restoration are filed almost after four years after the appeals were dismissed by the Bench - there are series of decisions that indicate that restoration application should have been filed within three months from the date of dismissal of the appeal. In this case, it is not so - applications are dismissed
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2012 (10) TMI 765
Denial of CENVAT Credit of duty paid on capital goods - assessee contested against the denial as had filed the ST3 returns for the relevant period in November 2007 - no separate SCN issued - Held that:- In this case, after issue of Show Cause Notice, returns have been filed, credit has been shown and debits have been made. However, before the returns were filed, Show Cause Notice has already been issued and in reply to the Show Cause Notice, the respondent had already made the claim for CENVAT Credit of duty paid on capital goods which was required to be considered by the adjudicating authority. Thus just because the returns were filed subsequently, the requirement under the law for the adjudicating authority to consider availability of CENVAT Credit and allow the benefit of admissible CENVAT Credit while confirming the duty demand does not undergo a change
Issue of another Show Cause Notice to deny the CENVAT Credit would only open a line for another round of litigation without any corresponding benefit to either side. The defence regarding the admissibility of CENVAT Credit canvassed by the assessee was considered by adjudicating authority and while doing so, the admissibility/in-admissibility of CENVAT Credit to the respondent was considered. Therefore, it cannot be said that the principles of natural justice for denying the CENVAT Credit available to the respondent did not become available to them in the absence of Show Cause Notice after filing of ST-3 returns with regard to the CENVAT Credit. If a Show Cause Notice was to be issued and separate proceedings were to be initiated, the original adjudicating authority would not have allowed the appropriation and would not have allowed the benefit of credit itself since it would have been the subject matter of another litigation and thereby the respondent would have been required to make payment in cash and later on file refund claim resulting in further litigation regarding unjust enrichment and other aspects. Thus the arguments advanced that a separate Show Cause Notice should have been issued for dis-allowing the CENVAT Credit after the returns were filed, have no merit.
Once the claim that the CENVAT Credit was available and assessee's omission was only in following the procedure, his claim for the benefit of provisions relating to imposition of penalty under Section 80 of Finance Act, 1994 has to be considered favourably. Therefore, to the extent of availability of CENVAT Credit on capital goods to the respondent, penalty under Section 78 has to be waived - The benefit of payment of 25% of duty liability towards penalty subject to the condition that the entire amount of Service Tax liability, interest and penalty to the extent of 25% are discharged within one month from the date of communication of the order of the Tribunal, is extended.
Thus assessee has to pay total service tax by debiting CENVAT Credit on capital goods received subsequent to 10.09.2004 and by paying balance in cash with interest and 25% of Service Tax paid in cash towards penalty within 30 days of receipt of this order and in case of failure, pay penalty equal to the Service Tax payable in cash.
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2012 (10) TMI 764
Waiver of pre-deposit – Service tax, interest & duty - Appellants are not disputing the services rendered by them but disputing the amount of service tax liability worked out in the SCN - Disputing the service tax under the category of manpower for the technical labour supply – Appellants did not file any reply to the show cause notice due to ignorance of law – Held that:- As concluded from the fact of the case Service tax liability which has been admitted by the appellant, works approximately to Rs. 75 Lakhs and has already deposited an amount of Rs. 50 Lakhs after the adjudication order was passed. Therefore, another chance needs to be given to the appellants for presenting their case before the lower authorities. Direct to Deposit Rs. 30 lakhs to adjudicating authority. Appeals are allowed by way of remand
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2012 (10) TMI 763
Whether the non issuance of show cause notice can be held to be fatal to the Revenue’s case or the Revenue should be granted an opportunity to issue show cause notice – Held that:- Non issuance of show cause notice would not make the respondent automatically entitle to refund claim, without considering the merits of the case - issuance of show cause notice was the preliminary requirement - matter stands remanded to the lower authorities for observing such principles of natural justice
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2012 (10) TMI 762
Cenvat credit - commission paid to consignment agent – Held that:- Role of consignment agent attributing to the promotion of the sale. Once sale promotion falls within Rule 2 (l) of Cenvat Credit Rules 2004, admissibility of cenvat credit of the service tax paid in respect of such service availed is permissible - pre-deposit is waived
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2012 (10) TMI 761
Imposition of anti dumping duty on import of Diethyl Thio Phosphoryl Chloride - Personal hearing - natural justice – previous Designated Authority was changed – Held that:- Newly appointed Designated Authority cannot rely on in the hearing given by the previous officer holding the position of Designated Authority - since public hearing was granted by one Officer and the Final Findings were submitted by the another person, the entire procedure was in violation of the principles of natural justice. - In the result, by allowing this petition, the Final Findings dated 6th May 2010 issued by the Designated Authority and the Notification dated 7th July 2010 issued by the Union of India on the basis of such final findings, are set aside.
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2012 (10) TMI 760
Rectification of mistake - Self-contradictory order of CIT(A)'s - rejection of appeal by CIT(A) and giving directions given by the CIT(A) to AO - Held that:- When in the opinion of the CIT (A) the appeals are not maintainable against the order u/s 200A and the appeals have been dismissed by him as not maintainable, there is no question of giving effect to the order of CIT (A) that A.O.should give appeal effect to these orders within two months of the receipt of the order.
As in the grounds of appeal, the assessee has pointed out that there were certain mistakes committed by the A.O. while taking the view that there was delay in deposit of TDS where he submitted that there is no delay in the deposit of the TDS by the assessee. Thus in view of the above, the proper course for the assessee would have been to file the rectification petition under Section 154 requesting the AO to modify the order passed u/s 201(1A).
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2012 (10) TMI 759
Taxability of the assessee u/s 44D - charge on assessee having a PE in India - assessee contested to be held liable u/s 44BBB - Held that:- As per findings of the ITAT Delhi for AY 2004-05 and 2006-07 in assessee's own case that the assessee had a permanent establishment in India. Also that the business profits of the assessee from the supervision charges are in the nature of “Fees for technical services” (FTS) from rendering of supervision services in connection with the erection, testing and commissioning of the power project deserves to be upheld as there is no contrary view or judgment the assessee placed controverting the findings of the AO in this regard. Accordingly, the findings of the ld. AO that amount received by the assessee has to be taxed as business profits in terms of the provisions of Article 7 of the DTAA read with Section 44D and Section 115A are confirmed and upheld - decided in favour of the Revenue.
Interest u/s 234B - Held that:- It is noticed that the receipts of the assessee are liable for tax deduction under the provisions of section 195 & that M/s OHPC has deducted tax at source on the payments made to the assessee. Whether the Tax Deducted a Source has been correctly deducted or not is not the issue but the fact remains that the receipts of the assessee are liable to TDS and TDS has been done. In these circumstances interest under section 234B is not leviable on the assessee - in favour of the assessee.
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2012 (10) TMI 758
Liability towards service tax - CIT(A) deleted the disallowance - Held that:- payment of service tax was made by the assessee and the payments received by it from the banks and financial companies to whom the services were rendered by the assessee for which the assessee received the demand after the deduction of tax at source. The amount so received by the assessee was eligible to tax and the revenue authorities under Custom & Excise Act raised demand of tax as per provisions contained in Section 68 of the Finance Act, 1964. Also that AO has not brought any fact or evidence to substantiate the fact that the service tax payment made by the assessee was in nature of penalty - in favour of assessee.
Depreciation on UPS - @60% OR 15% - Held that:- AO has no reason to take a different stand for granting depreciation on computer UPS @ 15% because the computer UPS is also an inseparable peripheral to the computer which is eligible for 60% deprecation. Therefore, CIT(A) rightly allowed depreciation @60% and no reason to interfere with these findings - in favour of assessee.
Disallowance u/s 40A(9) - Held that:- The assessee company is continuously depositing employees’ share to Provident Fund (Account 10, Pension) from financial year 2004-05, 2005-06, 2006-07 and 2007-08. The DR did not dispute the fact that this payment has been complying the statutory requirements of the assessee and this kind of payment has not been disputed in the earlier years by the authorities below. Therefore, the findings of the AO cannot be sustained. CIT (A) rightly held that the demand was made on account of statutory liability of the assessee, therefore, the action of the Assessing Officer was misconceived - in favour of assessee.
Non deduction of TDS - advertisement and business promotion expenses - Held that:- The assessee company had given discount by its principal manufacturer during the financial year under consideration against the various promotional schemes and as per trading account submitted by the assessee before the authorities it is apparent that the assessee has shown purchases of vehicles after deducting the discount from the billing amount. But that the CIT (A) has not discussed and given a finding in this regard that how the discount given by the principal manufacturer by way of deducting the same in the sales bills raised against the assessee and the debit notes raised on assessee by the Principal (Manufacturer) to collect the payment made by principal manufacturer on account of advertisement and sales promotion expenses is co-related and deserves to be allowed as the expenditure incurred by the assessee - thus it is appropriate to restore this issued to the file of CIT(A) for adjudication - in favour of revenue for statistical purposes.
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2012 (10) TMI 757
Revenue v/s capital expenses - Vehicle running and maintenance, Traveling Conveyance, Depreciation on Car, Telephone expenses,Household expenses, Household expenses - Held that:- The assessee did not produce the relevant bills and vouchers before the AO or the CIT(A) nor could justify the expenses with any other material - He also did not deny that expenditure on Deck and fittings of speaker and Air Conditioners in car is capital in nature. Moreover, since personal use of cars and telephones by the assessee and her family members or staff has not been denied nor it was claimed that the assessee or her family members had any independent vehicles or telephones for personal use, thus disallowance of 1/4th of the expenses on running and maintenance of vehicles as also expenses on telephones/mobiles, in the light of provisions of sec. 38(2) is reasonable.
Regarding disallowance of expenses for want of relevant bills and vouchers & that books of account were not required to be rejected since trading results have nowhere been disputed by the AO or the CIT(A) estimated disallowance made by the AO has been found by the CIT(A) fair and reasonable - Also the addition on expenditure towards house hold expenses has been made by the AO, considering status of the assessee and totality of facts and circumstances and the said estimate has not been found unreasonable by CIT(A) while not an iota of evidence regarding sources of meeting household expenses nor even break up of expenses under broad heads has been brought to notice, thus addition made by the AO & upheld by CIT(A), is justified - against assessee.
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2012 (10) TMI 756
Deemed dividend u/s 2(22)(e) - disallowance of interest paid as borrowed funds has been advanced interest free for non-business purposes - Held that:- As is evident on perusal of the assessment order that the assessee pleaded before the AO that the loan was taken in the ordinary course of business & the AO rejected the submissions of the assessee on the ground that unsecured loans carried interest and obligation to repay, but the CIT(A) did not record any findings on this aspect nor is known as to whether or not any such plea as to whether or not funds were received in the ordinary course of business was taken before the CIT(A)- As it is well established that trading advances are not covered within the mischief of section 2(22)(e) it fair and appropriate to vacate the findings of learned CIT(A) and restore the matter to his file for deciding the issue afresh to pass a speaking order - in favour of assessee by way of remand.
Interest u/s 36(1)(iii) - Disallowance as commercial expediency of advancing interest free loans to the sister concerns not established - Held that:- If in the process of examination of claim for such a deduction, it transpires that the assessee had diverted certain funds to associates without any interest, there would be a very heavy onus on the assessee to be discharged before the AO to the effect that in spite of pending loans on which the assessee was incurring the liability to pay interest, still there was justification for diversion of funds to associate or sister concerns for non-business purposes - as complete facts are not available nor the assessee furnished date(s) of interest free advances or dates of borrowings and nor furnished any material, establishing commercial expediency in advancing aforesaid funds before the lower authorities and even before us, nor the ld. CIT(A) recorded any findings on these aspects, it is fair and appropriate to set aside the order of the CIT(A) and restore the issue back to his file for deciding the matter afresh - in favour of assessee by way of remand.
Disallowance u/s 14A - certain investments in shares out of funds borrowed or from its own sources - Held that:- As decided in Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax [2011 (11) TMI 267 - DELHI HIGH COURT] even where the assessee claims that no expenditure has been incurred in relation to income which does not form part of total income, AO will have to verify the correctness of such claim & if AO is satisfied with the claim of the assessee with regard to the expenditure or no expenditure, AO is to accept the claim of the assessee insofar as the quantum of disallowance under section 14A is concerned. In such eventuality, the assessing officer cannot embark upon a determination of the amount of expenditure for the purposes of section 14A(1). In case, the assessing officer is not, on the basis of objective criteria and after giving the assessee a reasonable opportunity, satisfied with the correctness of the claim of the assessee, he shall have to reject the claim and state the reasons for doing so. Having done so, AO will have to determine the amount of expenditure incurred in relation to income which does not form part of the total income on the basis of a reasonable and acceptable method of apportionment - thus set aside the order of the CIT(A) and restore back for deciding afresh in the light of aforesaid judicial pronouncements of Maxopp Investment Ltd.- in favour of assessee by way of remand.
Service charges - income from house property v/s business income - Held that:- It is apparent that facilities are inseparable part of tenancy since one cannot be enjoy the facilities without the tenancy. The prime object of the assessee under the two agreements was to let out the premises to the bank with additional right of continuous supply of electricity and water besides facilities for junction box/cables for telephone for which rent was being paid month by month. In view of the foregoing, especially when the assessee claimed that their claim had been accepted in the preceding years while there is no such finding in the impugned order nor the assessee placed any material, suggesting that ensuring continuous supply of electricity, water or facilities for junction box/cables for telephone to the tenants is business of the assessee it is fair and appropriate to set aside the order of the CIT(A) and restore the matter to his file for deciding the issue, afresh - in favour of assessee by way of remand.
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9911796707
