|
Advanced Search Options
Case Laws
Showing 501 to 520 of 1251 Records
-
2012 (12) TMI 752
Sale of land – Long Term Capital Gains - Whether repayment of the mortgage debt created by the assessee, is an expenditure incurred in connection with the transfer of mortgaged asset allowable under section 48(i) - Held that:- As decided in Salay Mohamad Ibrahim Sait Versus Income-Tax Officer And Another [1994 (5) TMI 18 - KERALA HIGH COURT] the amounts spent for discharge of the mortgage is not liable to be deducted in the computation of capital gains under section 48 of the Act.
Assessee is not entitled to the deduction of the expenditure incurred to remove encumbrance created by the assessee himself - CIT(A) has fell in error in allowing the appeal of the assessee and in coming to the conclusion that transfer of property has taken place way back in the financial year 1988-89. Moreover, it was the liability of the assessee to redeem the mortgage. The assessee cannot claim the redemption amount as deduction under the unambiguous provisions of section 48 to arrive at the capital gains - Impugned order of the CIT(A) is set aside and allow the appeal of the Revenue - appeal of Revenue is allowed.
-
2012 (12) TMI 751
Additions on account of unexplained investment on construction of house - deduction of Cost of construction incurred by the tenant - internal decoration of the building was carried out by the tenant - Held that:- CIT(A) found that, the quality of material used was not of very high quality and he personally supervised the construction and taken care to purchase the material in person. - After considering the argument of the assessee, it is reasonable to allow 15% relief towards purchase of materials and self supervision. - The amount spent by the tenants was worked out at Rs. 7,39,850/-. This was not given credit by the Assessing Officer. It is common practice now a days to do internal work like decoration, furnishings, etc. by the corporate tenants to improve the ambience of the building.
The order passed by the CIT(A) is a well-reasoned and detailed order giving valid reasons for partly allowing the appeal of the assessee. - Revenue's appeal dismissed.
-
2012 (12) TMI 750
Interest Income – Business Income v/s Income from Other Sources – Held that:- There is no direct nexus between interest income and income derived out of exports therefore, the lower authorities are justified in treating the interest income as income from other sources - This common ground is accordingly dismissed.
Rent received from its employees against allotting them dwelling units – Held that:- Nature of the recovery made from the employees is that the recovery goes to reduce the staff welfare expenses in the hands of the assessee-company. The rent recovery made from the employees is not an independent income or a different source of income. The assessee is providing residential quarters to the employees against which a nominal rent is recovered from them. The recovery ultimately reduces the cost in the hands of the assessee. Therefore, the recovery is in the nature of business income. This is because it reduces the business expenditure - rent recoveries as business income in the hands of the assessee company – in favour of assessee.
Recovery of pay for notice period and other recoveries from employees for certain facilities like telephone calls and similar utilities,these recoveries are in the nature of business income are to be treated as business income in the hands of the assessee - appeals filed by assessee are partly successful.
Deduction of expenditure incurred in foreign exchange from total turnover profits from business – Held that:- As the export sales are more than 75% of total sales. CIT(A) has failed to appreciate that after the amendment to section 10B with effect from 1-4-2001, the eligible deduction would be profit proportionate to the export turnover upon total turnover. The CIT(A) has rightly held in favour of the assessee because the provision for full exemption was omitted from the statute book only with effect from the assessment year 2002-03. Therefore, the provision does not apply to the impugned assessment year 2001-02 - This issue is accordingly decided against the Revenue.
Depreciation allowance – Held that:- Issue is remitted back to the AO for adjudicating the issue after examining the relevant materials afresh. The issue is remanded back to the Assessing Officer - In result,appeals filed by the assessee are partly allowed.
-
2012 (12) TMI 749
Brokerage Expenses – adoption of Fair Market Value - reference u/s 142A - Held that:- Assessee has filed his objection on 16.12.2009 alongwith documents which were forwarded by the AO to AVO, who has given revised report dated 23.12.2009, which was not confronted to the assessee, which is contrary to the provisions of section 142A AO is duty bound to give assessee an opportunity of being heard such report and making such assessment meaning thereby before completion of the assessment, the AO has to give an opportunity of being heard to the assessee, which has not been granted to the assessee and is contrary to the provisions of section 142A. In the interest of justice, order passed by first appellate authority is not according to law - impugned order deserves to be cancelled, same is cancelled and set aside the issue to the file of AO to decide the issue in dispute afresh in accordance with law after giving opportunity of being heard to the assessee for substantiating the claim and dispute especially on the objections filed by the assessee - AO has to decide the same after providing sufficient opportunity to the assessee before completion of the assessment - appeal of assessee is allowed for statistical purposes.
-
2012 (12) TMI 748
Eligibility of deduction u/s. 80IC(2) - Initial Assessment Year - Held that:- Accepting to the issue that commercial production and not trial production determines the beginning of manufacture or production of articles or things. However, when actual production has began and sales has also been effected of manufactured goods and there is no sales return, that such production is still a trial production just because the consent order from the Pollution Control Board, Assam has not been received to begin the manufacture or produce any articles or things or commences operation as required u/s. 80IC is unsustainable.
The facts in the present case clearly show that the assessee has began to manufacture the calcinated petroleum coke using the raw material of petroleum coke before 31-3-06 and the sale of finished products would clearly establishes the commencement of operation. In the circumstances, ‘initial assessment year’ for the assessee to claim deduction u/s. 80IC(2) is the year 31-3-96 relevant to the AY 1996-97.
Coming to the claim of the assessee that it has capitalized the expenditure till 18-9-96 and the same has also been accepted by the revenue, not convinced by the said claim as nothing stopped the assessee from claiming expenditure thereto as a revenue expenditure. There is no assessment order for the AY 1996-97 or 1997-98 specifically accepting the claim of the assessee.
Further, there is also no scrutiny assessment order accepting the claim of the assessee that the initial AY in the case of the assessee for claiming of deduction u/s. 80IC is the AY 1997-98. In the circumstances the initial assessment year for the assessee for claiming of deduction u/s. 80IC(2) is held as the assessment year 1996-97. Consequently, the assessee would not be entitled to claim of deduction u/s.80IC(2) for the impugned AY 2006-07. In the circumstances, the finding of CIT(A) stands reversed and that of the AO restored - in favour of revenue.
-
2012 (12) TMI 747
Unexplained Cash Credits – Held that:- The assessee had provided complete addresses of all the persons from whom the assessee had received the advances. The explanation of the assessee that advance so received was for the purpose of purchase of gold jewellery having been purchased for few of the persons have been debited to their accounts and rest of the persons because of the price rise in the gold, the gold could not be purchased and the amount was returned up to 31.03.2006. During the remand proceedings, the AO chose to examine 19 persons out of which 3 persons had expired for which the relevant documents to confirm the advance were submitted, is not under dispute. As regards the rest of 16 persons, they were examined and had confirmed that the said advance was given by the assessee. This is also not under dispute. The assessee out of Annexure-B chose to file confirmations of 23 persons, which were filed is not under dispute.
Thus when the AO was in the possession of complete addresses of each every depositors, it was the duty of the AO to call for the information, confirm or examine them to find out the identity, creditworthiness and genuineness of the transaction. But the AO chose not to act and use powers vested with him u/s 131 or u/s 133 (6). When the assessee had discharged the onus of proving identity, creditworthiness and genuineness of the transactions, there is no reason of making any addition on account of unexplained cash credits, which in fact, are the trade creditors. AO directed to delete all the additions - in favour of assessee.
-
2012 (12) TMI 746
Re opening of assessment – Held that:- Once the notice under section 142(1) had been issued, the machinery for assessment was already set in motion for the words in section 142(1) for the purpose of making assessment under this Act, the AO was required to complete the assessment u/s 143(3) without issue of notice u/s 148, on or before the expiry of period ending on 31.12.2008 under section 143(3). Though assessment has been made in the present case on 26.12.2008 – with out issuing notice under section 143(2). At the same time, the AO cannot enter into jurisdiction for reassessment u/s 147/ 148 when there was time left for completion of assessment under section 143(3) for which notice under section 142(1) had already been issued and the assessment proceedings had already been started.
Therefore, the notice issued u/s 148 by the AO was bad in law and therefore, assessment so framed was bad in law and therefore, assessment so framed is quashed - in favour of assessee.
-
2012 (12) TMI 745
Unexplained Opening Capital Balance – Held that:- Except in respect of FDs with M/s. Duncan Industries and cash in hand, all other investments have been substantiated and also accepted by the AO. The assessee brought evidence to show that FDs with M/s.Duncan Industries Limited were made before 1-4-09 and consequently, it is not liable to be treated an unexplained expenditure/investment and the addition of Rs.4,05,000/- on a/c of FDs with M/s. Duncan Industries Ltd stands deleted for the AY 2000-01 under appeal - assessee’s appeal is allowed.
Unaccounted Cash - in - hand - Held that:- Holding of cash of Rs.3,03,000/- from the date of creation of the will of assessee’s Mother till 31-3-99 has been produced and will is also not a registered will no evidence whatsoever has been placed to substantiate the claim - claim amount of Rs.3,79,685.89 including the cash of Rs.3,03,000/- does not find any merit - in the circumstances, the addition of Rs.7,84,685.89 stands reduced to Rs.3,79,685.89.
Disallowance of business loss and interest on bank O/D – Held that:- Assessee has not placed any evidence to substantiate his claim as shown in the trading and P & L account in these circumstances, thus disallowance of business loss as made by the AO and confirmed by the CIT (A) does not call for any interference - against assessee.
Disallowance of bank interest on O/D - Held that:- Assessee has converted the FDs into MIS with West Bengal State Co-operative Bank Ltd. As the assessee has not been able to substantiate the use of the O/D for business, finding of the AO in disallowing the same and as confirmed by CIT (Appeals) is on right footing and does not call for any interference- against assessee.
Legal expenses – Disallowance as not shown in the original return - Held that:- A perusal at the assessee’s paper book copy of the bill shows that a bill from the advocate has been placed by the assessee detailing the expenditure and that has not been examined by the Assessing Officer. In the circumstances issue is restored the file of AO after granting adequate opportunity of hearing to the assessee to substantiate his claim - in favour of assessee for substantial purposes.
Payment made to Land Broker - Held that:- Assessing Officer has not disputed the existence of agreement or veracity of agreement. The agreement having been accepted, the expenditure incurred by the assessee on account of agreement is liable to be allowed - AO directed to delete the disallowance being the amount paid to the land broker while computing the long-term capital gains - in favour of assessee.
-
2012 (12) TMI 744
Trading Additions – rejecting of books of accounts - Held that:- The stock is valued on physical verification by the management adopted in the earlier years and has been accepted by the department consistently and there is no change in the method of accounting. In this regard, there is nothing shown by the assessee before any authorities that why the stock register of one thousand items or above cannot be maintained or not possible to be maintained. Therefore, when closing stock and opening stock are valued on the estimated basis, having no relevance with the quantitative details of purchases and sales, then any figure as estimated by the management is on adhoc figure of closing stock and therefore, directly effects the Gross Profit of the assessee and the profits deduced cannot be said to be accurate. In the facts and circumstances of the present case, no infirmity in the order of the A.O. who has rightly invoked the provisions of section 145(3) in rejecting the books of account - in favour of revenue.
Estimation of income - Held that:- There was fluctuation in the exchange rate, increase in the cost of manufactured items and other over head expenses and the assessee has discarded the export of high value items which attributed to GP rate in the earlier years at 60-62% as compared to the GP rate of 22-24% on regular items. These aspects were not taken into consideration by the AO. The estimates by the AO cannot be on surmises and conjectures. There has to be some material on record to make such estimation. The case of its Sister concern is quite distinguishable on the facts as that in that case, the assessee had been declaring GP rate of about 58% in the preceding three years whereas the assessee had declared 39% during the assessment year 2004-05 and 31.11% in the assessment year 2005-06. Therefore, the percentage of G.P. rate declared in the case of Sister concern is quite different in the preceding years to that of the assessee in the preceding years as has been accepted by the department - thus even if the books having been rejected, no addition is called for - in favour of assessee.
-
2012 (12) TMI 743
Penalty levied u/s 117 of Rs. 1,00,000/- - Non approval of the Commissioner of Customs for management, operation and maintenance of warehousing facilities - Held that:- Section 117 of Customs Act 1962 provided for a penalty not exceeding Rs. 10,000/- during the relevant period when offence was committed. The amount of Rs. 10,000/- (not Rs. 1,00,000/-) is not the minimum or is a mandatory penalty. It is the maximum limit for imposition of penalty.
Although the law had been violated but the intention was not malafide - mens rea is not required for imposition of penalty u/s 117 thus this is a case wherein a nominal penalty is required to be imposed and not the maximum penalty - penalty of Rs. 1,000/- would meet the ends of justice - in favour of assessee as directed.
-
2012 (12) TMI 742
Quashing and setting aside of appointment of Member/Acting Chairman of BIFR - whether the impugned order dated 31.10.2011 and the approval of the ACC i.e. instead of 3 years up to age of 65 years is valid or not - Held that:- Respondent No. 4 Member/Acting Chairman of BIFR was appointed as Member of BIFR vide Notification dated 20-10-2008 and following old practice it was inadvertently specified in said Notification that respondent No. 4 was appointed for a period of 3 years w.e.f. date of assumption of charge, and as per said Notification, his tenure would come to an end on 13-10-2011. Vide impugned Notification dated 31-10-2011, respondents modified earlier Notification and made it applicable till respondent No. 4 attained age of 65 years, i.e., 9-1-2013 or till abolition of BIFR or until further orders, whichever event occurs earliest - It is not in dispute that as per Section 6 of SICA, the Chairman and Member shall hold an Office not exceeding 5 years or till he or she attains the age of 65 years - no merit in the instant petition.
As per Section 6 of the SICA, the member/Chairman can hold an office for a period of not exceeding 5 years or till he or she attains the age of 65 years.ACC is the competent authority, who has to take decision out of the proposal made by the concerned Ministry. In the present case, note prepared by the Secretariat of ACC and proposal sent by the Ministry were put up before the ACC. After perusing the same, the ACC approved the appointment of respondent no. 4 till he attains the age of 65 years or till abolition of BIFR or until further orders, whichever event occurs the earliest. Undisputedly, as per past practice the tenure of the members have been 3 years. However, the ACC has not done anything contrary to the Act or contrary to the proposal sent by the Ministry. The ACC simply ignored the term of 3 years and rest of the proposal has been approved as it is. The ACC is not bound to take decision, as it is, the proposal placed before it. It being the competent authority empowered to take any decision permissible in law.
-
2012 (12) TMI 741
Denial of Cenvat Credit - input service distributor - services of M/s. Ernst & Young Pvt. Ltd. were used for the project of Certified Emission Reduction Sale of Carbon - Held that:- The services availed from M/s. Ernst & Young Pvt. Ltd., were admittedly for modernisation of the power plant of the appellant. Such power plant is used for manufacture of paper which is liable to Central Excise. In addition, if the appellant, by way of entering into an agreement with the England based company gets profit by way of earning carbon credit, it cannot be held that said services of M/s. Ernst & Young Pvt. Ltd., were for the purpose of earning the credit.
Show cause notice itself admits the factum that the consultancy service provided by M/s. Ernst & Young Pvt. Ltd., to the appellants was to facilitate them in installing projects of high technical equipments to the power plant in which fossil fuel like rich husk are used which reduces carbon emission. They again submitted that installing projects of high technical equipment is nothing but Modernisation of a factory and as per Cenvat credit Rules, 2004, services used in relation to modernisation are eligible for Cenvat credit. Admittedly, the main activity of the appellant is to manufacture paper for which electricity is used from captive power plant & as the paper being manufactured by them is leviable to excise duty no reason to deny the benefit of Cenvat credit availed on the said services - in favour of assessee.
-
2012 (12) TMI 740
Cenvat Credit denied - Non mentioning or incorrect address of the appellants on the invoices - Held that:- As Services availed were for sales promotion and those were rightly availed by appellant, distantly located units of the appellant availed the benefit of cenvat credit in a distributed fashion which is otherwise guarded by Revenue by a centralised registration process. No doubt, mere submission of document shall not ipso facto grant relief to claimant but once the facts and circumstances of the case bring out the identity of the receipient of service, denial of cenvat credit may cause absurdity and when claim is otherwise permissible - Cenvat Credit allowed - in favour of assessee.
Transportation of staff by bus - Held that:- In absence of evidence whether Transport facility is used either for manufacture or in relation to manufacture or providing output service, thus in absence of nexus and integrity, the appellant fails to succeed - Cenvat Credit disallowed - against assessee.
-
2012 (12) TMI 739
SSI exemption under Notification No.1/93-CE - denial of exemption as goods selling under brand name belonging to another person - whether just by adding the word "Dugar" before the word "Tetenal" and using the brand name "Dugar Tetenal" on the goods would disentitle the respondent company for the benefit of SSI exemption - Held that:- As decided in CCE, Trichy Vs. Rukmani Pakkwell Traders 2004 (2) TMI 69 - SUPREME COURT OF INDIA] that use of part of brand name or trade name of another person, so long as it indicates a connection in the course of trade, would be sufficient to disentitle the person for the SSI exemption.
As it is not disputed that the word "Tetenal" used along with the "Dugar" on the goods manufactured by the respondent company is the brand name of M/s. Tetenal Vertribs GmBH, Germany, with whom the respondent had technical collaboration and as such, the word "Tetenal" indicates a connection in the course of trade with M/s.Tetenal Vertribs GmBH, Germany. We, therefore, hold that the impugned order extending the benefit of SSI exemption under Notification No.1/93-CE to the respondent company in respect of the goods cleared with the brand name "Dugar Tetenal" is not sustainable and is liable to be set aside - in favour of Revenue.
-
2012 (12) TMI 738
Rectification of mistake - Held that:- There is no dispute of availment of credit of duty paid by the current appellant, by their sister unit to whom the goods were cleared. The assessee having paid the duty liability before issuance of Show Cause Notice and there being no malafide attached to such under-valuation, the interest liability confirmed by the lower authorities needs to be set aside - final Order needs rectification - nin favour of Assessee.
-
2012 (12) TMI 737
Royalty and fees for technical services - whether taxable on receipt basis ? - Held that:- As under Article IIXA of the DTA Treaty with the Federal Germany Republic as per Notification dated 26th August 1985 the assessment of royalty or any fees for technical services should be made in the year in which the amounts are received and not otherwise - ITAT in holding that royalty and fees for technical services should be taxed on receipt basis cannot be faulted - in favour of assessee.
Levy of interest u/s 234B - Held that:- As decided in DIT (INTERNATIONAL TAXATION) Versus NGC NETWORK ASIA LLC [2009 (1) TMI 174 - BOMBAY HIGH COURT] when a duty is cast on the payer to pay the tax at source, on failure, no interest can be imposed on the payee-assesses - in favour of assessee.
-
2012 (12) TMI 736
Good Transport Agency - demand of service tax - The appellant is engaged, in manufacturing Read Mix Concrete ("RMC" for short). They had hired "Transits Mixers", that is, vehicles specially designed for carryings RMC from place of manufacture to place of delivery of the goods. The vehicles were provided by the owners to the appellant for their use as per terms of a contract. The appellant paid consideration to the vehicle owners which involved certain payments on monthly basis and certain payments based on the number of kilometres run. Revenue demanded tax on the consideration paid by the appellant to the vehicle owners, considering it as a consideration for services of "Goods Transport Agency"
Held that:- The agreement does not demonstrate that the operator has any special rights or responsibility about the goods as is the case of goods entrusted to a Goods Transport Agency. This obviates the need to issue consignment notes which normally is a document of title for the goods when it is in the custody of the transporter. There is one clause to the effect that the operator will obtain proper receipts from customers after the goods are delivered. Thus by itself cannot make the contract to be that of "Goods Transport Agency" as defined in section 65 (50) (b) of Finance Act, 1994. When consignment notes are not issued by the operator they cannot be considered as a "Goods Transport Agency". The mere fact that the operator is doing activity of transportation cannot make the operator a "Goods Transport Agency". So the operators in this case cannot be considered as "Goods Transport Agencies".
This issue is already examined by the Andhra Pradesh High Court in the case of G.S. Lamba and Sons Versus State of Andhra Pradesh (2011 (1) TMI 1196 - ANDHRA PRADESH HIGH COURT) though in the context of State Sales Tax. The Court has held that this type of contract is one for transfer of right to use the vehicle rather than for providing service of transportation - in favour of assessee.
-
2012 (12) TMI 735
Pre-deposit of Rs.3 Crores to hear the appeal on merits - Whether the word “roads” would include within it “runways” at airports - Held that:- Runways at the airports are species of the genus “road”. Therefore, the runways should also normally receive the same treatment as roads for service tax purpose. Prima facie the case of the appellant is a very arguable case. However, in the order of the Tribunal dated 30/7/2012 there is no consideration of the issue even for the purposes of taking a prima facie view.
Set aside the order of the Tribunal dated 30/7/2012 demanding, interest or penalty for pre deposit and direct the Tribunal to hear the appellant's appeal on merits as the amount involved in the appeal is over Rs.10 crores the Tribunal directed to hear the appellant's appeal on merits itself at the earliest within a period of three months from today.
-
2012 (12) TMI 734
Payment of service tax by using cenvat credit instead of cash - Held that:- As decided in CCE, CHANDIGARH Versus M/s NAHAR INDUSTRIAL ENTERPRISES LTD and Others [2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT] & para 2.4.2 of CBEC's Excise Manual of Supplementary Instructions shows that there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services - in favour of assessee.
-
2012 (12) TMI 733
Jurisdiction power u/s 263 by CIT(A) - set off of unabsorbed depreciation allowance brought forward from Assessment Year 1998-99 - Held that:- Section 263 of the Income-tax Act seeks to remove the prejudice caused to the revenue by the erroneous order passed by the Assessing Officer. There is no enquiry by the AO whatsoever on the issue in dispute. He just accepted the claim of set off of earlier year unabsorbed depreciation in the assessment year under consideration. Being so, the CIT assumed jurisdiction u/s. 263.
Thus it is to be opined that subject matter of the revision is pending before the Special Bench for adjudication and the AO passed the assessment order without an iota of discussion on the issue of whatsoever as such the CIT exercised his powers u/s. 263 to revise the order of AO which was in conformity with the order of the Special Bench and invoking the provisions of section 263 is justified.
Set off of unabsorbed depreciation allowances carried forward from assessment year 1996-97 and 1998-99 against income relating to assessment year 2007-08 - This issue is covered against the assessee by the order of the Special Bench in the case of DCIT Versus Times Guaranty Ltd. [2010 (6) TMI 516 - ITAT, MUMBAI] wherein held that unabsorbed depreciation relating to assessment years 1997-98 to 1999-2000 is to be dealt with in accordance with the provisions of section 32(2) as applicable to assessment year 1997-98 to 1999-2000 and, therefore, assessee cannot claim set off of unabsorbed depreciation relating to assessment year 1997-98 to 1999-2000 under any head of income other than “income from business or profession” in assessment years 2003-04 and 2004-05 - issue is decided against the assessee.
when there are several decisions of non-jurisdictional High Courts expressing contrary views, the Tribunal is free to choose to adopt that view which appeals to it. For this purpose, we place reliance on the order of the Special Bench in the case of Kanel Oil & Export Industries Ltd. vs. JCIT, (2009 (8) TMI 806 - ITAT AHMEDABAD-C).
Settlement of dues with Stressed Assts Stabilisation Fund IDBI - Held that:- Perusuing the material on record & going through the impugned assessment order there is no discussion in the assessment order on the impugned issue. There is no enquiry on this issue. The order is erroneous and prejudicial to the interest of revenue as discussed in earlier paras of this order. Accordingly the order of the CIT(A) confirmed.
............
|
9911796707
