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Showing 501 to 520 of 782 Records
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2012 (4) TMI 339
Jurisdiction of High Court - Disputes between the parties pertain to the Board meetings dated 01st December, 2004 as well as 1st March, 2005, AGM dated 30th May, 2005, allegation of - siphoning off funds of appellant-company, allotment of 4250 shares by the Ajay Paliwal faction on 3rd February, 2005, alleged transfer of 5000 shares - held that:- It is clear that Section 10F permits an appeal to the High Court from an order of the CLB only on a question of law i.e. the CLB is the final authority on facts unless such findings are perverse, based on no evidence or are otherwise arbitrary. It is settled law that this Court while exercising its appellate jurisdiction under Section 10F of the Act does not entertain, review or reopen questions of fact save on the ground of perversity.
It is pertinent to mention that the Registrar of Companies had produced before this Court the original file maintained by it with regard to the appellant company. The said file contains only the Memorandum and Articles of Association of the appellant company as well as its certificate of incorporation. Consequently, this Court is of the opinion that both the parties have failed to prove the minutes of meeting dated 1st December, 2004. Accordingly, the allocation of additional shares and appointment of three additional Directors by both the appellants and respondents are set aside.
The appellants, who constitute a minority shareholding cannot abuse their majority on the Board by completely excluding the respondents from the affairs of the appellant-company and further by converting the majority shareholders into minority.
There is also no violation of principles of natural justice as allegation regarding siphoning off funds - except a bald denial of siphoning off funds, neither of the appellants gave any explanation in the CLB with regard to withdrawal of the said fund and/or their usage. Consequently, in the opinion of this Court, the CLB rightly concluded that the denial by the appellants of the allegation of siphoning off funds was bald, lacking in particulars and thus constituted an admission of siphoning off funds on their part.
The directions given by the CLB in sub-paras (ii), (iii), (iv), (v), (vi) and (viii) of para 34 of the impugned order are upheld. Instead of directions (i) and (vii) of para 34 of the impugned order, the appellants are directed to restore only the amount of Rs. 7.50 lacs siphoned off from the company's account forthwith. Further, the shareholding of the appellant company shall revert back as it stood as on 30th September, 2004
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2012 (4) TMI 338
Penalty u/s 271 - Whether the appellate authorities were right in holding that the imposition, of penalty by the assessing authority in exercise of power under Sec. 271 (1)(c) of the IT Act 1961 is after satisfying himself that the non-disclosure of income warrants imposition of penalty - held that:- the assessee had filed a return and had disclosed the income. However, later the assessee did file another return in response to the notice issued under Section 148 of the Act and in this return what had not been shown as income earlier but claimed as a cash credit was offered as income. The assessment was concluded on such premises. -In a situation where the assessee admits that a return which had been filed earlier did not disclose a true or full income, which is the case in the present situation, does not warrant proof or burden on the revenue to prove things, as it is well settled legal principle that any proof and manner of proof are all not required when there is an admission. Proof is required where it becomes a contentions issue and person asserting is required to make good his version. But in a situation where it is not contested, but admitted, production of proof is not necessary nor warranted in law. - both the appellate commissioner and the tribunal erred In setting aside the order of the assessing officer levying penalty - Decided against the assessee.
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2012 (4) TMI 337
Order of settlement commission - interest u/s 245D(4) and 245D(6) - held that:- As is evident from the aforesaid procedure laid down u/s 245D of the Act, once the application is admitted, the assessee is required to pay the additional demand on the basis of income disclosed in the application within 35 days of the order of the Commission u/s 245D(1) and in case the demand is not paid within the time allowed interest at prescribed rate is chargeable under 245D(2C). There is no material before us nor there is anything to suggest that in the order of the Settlement Commission that the assessee did not comply with aforesaid order u/s 245D(1) of the Act. Similarly, when the Settlement Commission passes final order under section 245D(4) of the Act, the tax payable in pursuance of such an order is required to be paid by the assessee within 35 days of the receipt of copy of the order and for failure to do so, the assessee is liable to pay interest at the prescribed rate under section 245D(6A). Thus the interest payable under sections 245D(2C) and 245D(6) are in different contexts and are levied independently.
Thus, the determination of income by the Settlement Commission is necessarily with reference to the income disclosed in the application filed under the said section in the prescribed form. Moreover, in terms of provisions of sec.245I of the Act, every order of settlement passed under sub-section (4) of section 245D is conclusive as to the matters stated therein and no matter covered by such order, save as otherwise provided in the Chapter XIXA, can be reopened in any proceeding under this Act or under any other law for the time being in force. - Decided in favor of assessee.
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2012 (4) TMI 336
Interest claim for deduction u/s. 24(b) in the computation of income from house property - Normal interest versus penal interest versus interest on interest - allowed at nil by the Revenue as the interest on unpaid capitalized interest is not envisaged for allowance u/s 24(b) – Held that:- the term 'interest' is defined comprehensively u/s. 2(28A) to include on any debt and, more importantly, the same is in respect of 'capital borrowed'. - The word 'capital' is wider in scope than the term 'money', and under appropriate circumstances, as the present one, include part of the debt that the seller, a financial institution, has agreed to extend, on charge of interest, to the assessee– purchaser.
The interest deductible is the actual interest payable by the assessee in respect of the capital borrowed, and not one which would have been payable under a different fact setting than the actual one. - the claim must be genuine and not a result of an artifice, arising as a device to inflate the interest expense with tax or other motivation.
There is no scope for bifurcating the interest into normal and penal components, as done by the Revenue. The agreement is clear. The capital is to be repaid as per a time schedule. If not paid thereat, additional interest would become chargeable for the period of default, i.e., till the payment of the installment. This would not be interest on interest, but a higher rate of interest on the capital borrowed and, thus, allowable u/s. 24(b) of the Act.
Interest at normal rate allowed - Interest at panel rate allowed - Interest on Interest is not allowed.
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2012 (4) TMI 335
Block assessment - Search and seizure - The main contention of the petitioner is that the Assessing Officer has illegally assumed jurisdiction under Section 153C read with Section 153A of the Act, that there was no undisclosed income to be assessed in the petitioner’s hands and therefore a writ of certiorari should issue to quash the proceedings as null and void. - held that:- Once Section 153A is found to be applicable, there will be only one assessment in respect of each of the six assessment years immediately preceding the assessment year - It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person - Even if they tend to act unreasonably or under misplaced enthusiasm, there are adequate safeguards which can be availed of by those persons - Writ petition dismissed
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2012 (4) TMI 334
Whether the standing charges payable under the agreement dated 23rd June, 2004 qualify and are eligible for deduction under Section 80 IC of the Income Tax Act, 1961 - The expression “derived from” in taxation laws means something which has direct or immediate nexus with the specified activity, which in the present case means manufacture or production of article or thing - In the present case, in view of words “derived from”, we have to look at the immediate source which has generated or resulted in the said receipt/income - The final conversion charge shall be re-determined based on discussions related to financing cost of equipment, power costs, actual capital cost based on speed of the machine, import duties, etc - The Fixed Charges are the same as defined in Standing Charges in Clause 12 above but the Return of Equity will be considered as 100% instead of 50% - In the present case, the standing charges were payable because Hindustan Lever Limited did not place purchase orders for the normative production possible - The standing charges obviously do not form part of the supply made and are not treated as sale consideration or the price of the goods on which excise duty or the sales tax etc. would be or is payable - Decided against the assessee
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2012 (4) TMI 333
Writ petition - The petitioner had entered into an agreement of purchase of the property dated 19th November, 1995 - The Appropriate Authority came to the conclusion that the land rate had to be computed on the basis of the FAR and adjustment of +35.71% was made on account of the said additional FAR - In the present case, after the order of acquisition dated 29th February, 1996 was passed, the Central Government paid an amount of Rs.42 lacs to the petitioner on 17th March, 1996 and Rs.2.37 crores to the respondent Nos. 3 and 4 on 22nd March, 1996 - It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction - The present writ petition was filed by the purchaser in end of May, 1996, more than two months after the cheques were received and encashed - The agreement to sell records that the conversion charges will be paid by the vendee, i.e., the petitioner. The petitioner had not incurred any such expenses after the agreement to sell dated 19th November, 1995. Form No. 37-I was filed on very next day, i.e., 20th November, 199 - Petition is dismissed
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2012 (4) TMI 332
Higher rate of depreciation on trucks – rectification of error - AO noticed in the return filed that the rate of depreciation claimed by the assessee on trucks at 40% was wrongly allowed as the assessee was not plying trucks owned by it on hire but was utilizing the trucks for its own purposes and hence rate of depreciation applicable was 25% - the Tribunal decided in favor of assessee - Held that:- the assessee was unable to demonstrate with reference to any material that the respondent-assessee was using the vehicles in a business of transportation of goods and the trucks owned by the assessee were being used for public carrier - the Tribunal was, thus, not justified in holding that the assessing officer had erroneously exercised jurisdiction under Section 154 of the Act substantial questions of law claimed above are, therefore, answered in favour of the revenue and against the assessee.
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2012 (4) TMI 331
An application filed with the Ministry of Commerce and Industries for registration of the industrial park under the Industrial Park Scheme, 2002 to avail of benefits/exemption under Section 80IA - petitioner was informed that the date of commencement of park was after 31st March, 2006, their application was not covered under the 2002, Scheme - the 2002 Scheme ended on 31st March, 2006 and the 2008, Scheme was notified on 8th January, 2008 and parks set up on or after 1st April, 2006 but not later than 31st March, 2009 were covered by the said scheme - the petitioner did not fulfil the requirements of 2008, Scheme on the minimum requirement of constructed area required and required minimum number of units - Held that:- when an application was filed on 23rd September, 2006, there was no scheme in place/operation, which had been framed and notified by the Central Government -The 2002, Scheme had lapsed as it was effective, notified and applicable upto 31st March, 2006 - with effect from 1st April, 2006 there was no scheme which had been framed and was gazetted. Therefore, no undertaking could take advantage or benefit of Section 80 IA(4)(iii) of the Act
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2012 (4) TMI 330
Appellate Authorities held that the MODVAT credit should not be added to the income as well as the value of the closing stock for the current assessment year as held by the Assessing Officer – CIT(A) assessing officer should not have rejected the method of accounting employed by the assessee, as it was a standard method of accounting and even as approved by the institute of Chartered Accountants in India and therefore this amount was directed to be deleted – Held that:- follow the view taken by the Income-tax Appellate Tribunal, Mumbai in the case of S.H. Kelkar & Co. Ltd. v. Dy. CIT (1992 - TMI - 58028 - ITAT BOMBAY-A ) and also in the case of Berger Paints India Ltd. v. Dy. CIT (1992 - TMI - 60611 - ITAT CALCUTTA-E ) the assessing officer was not justified in adding the amount on account of MODVAT etc., and therefore upheld the view of the appellate Commissioner and dismissed the appeal of the revenue - deem it proper to remand this matter to the assessing officer on this question, so that the assessee can make good its claim in terms of actual payment etc.
disallowance on the ground of obsolescence - the Appellate Authorities held that custom duty paid on goods claimed as irrecoverable and therefore the entire amount of Rs. 9,84,349/- should be allowed as an expenditure despite the assessee not establishing that this amount had become obsolete – Held that:- the understanding and the manner of working out of the extent of obsolescence by the appellate Commissioner was fully justified, having regard to the nature of the business the assessee carried on and the kind of product with which it is dealing with etc – against revenue.
Whether the Appellate Authorities were correct in holding that custom duty paid on software and expenses incurred on MRB items should be allowed in full and not at 50% as held by the Assessing Officer and since computer software would become obsolete despite the assessee not producing any proof to claim such obsolescence - Held that:- having regard to the fact that the products got obsolete fairly fast in comparison to the other products in other industry and more so even in the computer industry a software having comparatively lessor shelf life we do not propose to disturb the view taken by the appellate authorities - in favour of the assessee.
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2012 (4) TMI 329
Addition to the regular income as performance incentive received from employer claiming tax deducted at source - reason for the demand is non availability for TDS credit claim - same performance incentive was admitted both in the assessment year 2007-08 and 2008-09, whereas TDS credit is available only for the assessment year 2008-09 – appeal on ground that amount of performance incentive has been taxed twice by the Income Tax Department – assessee submitted that he had aggregated with salary amount, performance incentive of Rs. 4,28,750/- which was given by the said company to him in financial year 2007-08 relevant to the assessment year 2008-09, by mistake as shown in Form 16 issued by the said company – Held that:- If the Income-tax Act authorizes a designated authority to collect tax for State, the same Act always permits the said authority to rectify any proceedings, which has resulted in double taxation - the assessment of Rs. 4,28,750/- to income-tax for the assessment year 2007-08 is against law - direction to the assessing authority to delete the said amount from the assessment relating to the - the appeal of the assessee is to be allowed
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2012 (4) TMI 328
Overvaluation of the exported goods - Penalty - Regarding determination of present marketable value - CBEC Circular No.69/97-Cus. dated 08.12.97 - Para 3.b specifically talks about PMV and is up to 150% of AR 4 value no market enquiry requires to be caused but if it is more than 150% of AR 4 price, then market enquiry has to be caused. - held that:- The factual aspect of the purchase of CD ROMs from M/s. Padmini Polymers Ltd, at a price cannot be discarded by the Revenue simply for the reason that the said M/s. Padmini Polymers Ltd. had no domestic sale and even if there is any domestic sale, it was to the tune of just merely 0.5% of the total sales affected by them. It is undisputed that even the 0.5% of domestic sales which were affected by M/s. Padmini Polymers Ltd. were of the value which were the purchase price of M/s. Colourtex. If that be so, the quantum of local sale clearances cannot be determinative factor as to whether the purchase price of M/s. Colourtex of the CD ROMs is incorrect or otherwise.
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2012 (4) TMI 327
Non-compliance of pre-deposit order - SCN was issued – assessee contented that the amounts received were for procuring orders on behalf of their principals which did not constitute taxable service - appeal before the CESTAT – direction to the assessee to make pre-deposit of ₹ 30,00,000/- for entertaining the appeal - Held that:- contracts entered into by the assessee with various parties do not appear to be simply placing orders and earning commission - the credit notes clearly disclose that the Assessee has directly dealt with the goods in lifting providing of the vehicles and delivery of the goods - the decision of the Tribunal in directing the assessee to make predeposit of ₹ 30,00,000/- out of the demand of ₹ 91,07,006/- and dismissing the appeal for non compliance of the predeposit order cannot be faulted – against assessee.
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2012 (4) TMI 326
Co-operative Society rendering rent-a-cab service under the contract agreement - SCN was issued for the period from 1/4/2000 to 30/9/2004 for demand service tax with further penalty under section 75(A), 76, 77 and 78 – Held that:- the levy of service tax was w.e.f. 1/4/2000 on rent a cab service hence assessee may be unaware with regard to this new levy of tax - there was a confusion over applicability of this levy as appellant a cooperative society rendering under the Contract for many years - there were divergent views of different benches of Tribunal, which added appellant’s confusion - if the appellant had persuaded their right of reimbursement of payment of service tax with the ONGC by way of conciliation and arbitration that fact can not negate them the defense of bona fide belief of applicability of service tax - the appellants were unable to pay the amount on the ground of dispute with the ONGC though they were aware of the levy of service tax in absence of any fraud, misrepresentation, collusion or willful mis-statement or suppression, there is no justification in levying the penalty – in favour of assessee.
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2012 (4) TMI 325
Appellant in relation to respondent No.2 firm, brother of the appellant, moved application under the provisions of Right to Information Act, 2005 related to the returns filed with the Sales Tax Commissioner - CPIO and CIC refused to divulge the aforesaid information – Held that :- Section 8(1)(d) levies no obligation to give any citizen information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information - present appeal is nothing but misuse of the process of law and hereby dismiss with costs of Rs. 50,000/- and cost of Rs. 25,000/-imposed by the learned Single Judge.
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2012 (4) TMI 324
Validity of the order passed u/s 153A r.w.s 143(2) - Search and seizure - held that:- the warrant is issued in the name of the assessee and the address of the premises searched is also the official address of the assessee viz. E-127, Industrial Area, Bhiwadi. The panchnama is prepared for the search operation conducted at this premises and the name of the assessee very much appears in the panchnama. In view of these facts, it is clear that a valid search and seizure operation has been conducted u/s 132 and the order u/s 153A passed by the A.O is as per law. - it is not disputed by the assessee company that search warrant was not issued against the assessee company. A single search warrant can be issued in the name of number of concerns. Once search warrant has been issued then the AO is required to pass the assessment order u/s 153A read with Section 143(3) of the Act.
Tax evasion - Fluctuation of share price - Indo-Mauritius DTAA - held that:- The shareholders having the shares as on 17-07-2006 have offered the gain arising from sale of shares by treating the sale consideration at Rs. 318/- per share. Hence, it is not the case that there is a tax evasion. The entities which purchased the shares before 17-07-2006 and has offered the profit. It is not the case of the revenue that such entities have given back profit to the persons from whom such shares were purchased before 17-07-2006. Hence, it is not the case of tax evasion.
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2012 (4) TMI 323
Penalty u/s.271 (1)(c) - assessee, Gujarat State Road Transport Corporation engaged in the business of Mass Transport facilities and allied services - CIT (A) deleted the penalty in respect of loss of Rs. 33,55,15,227/- on the ground of bonafideness of the assessee, however, the CIT (A) confirmed the penalty u/s. 271(1)(c) of Rs. 2 crore as the assessee disclosed this amount of loss only in response to notice u/s. 148 and the assessee has failed to discharge the onus cast upon it within the meaning of Explanation-1 to section 271(1) (c) - In the assessment proceedings the AO while ascertaining the total income chargeable to tax would be in a position to detect the specific or definite particulars of income concealed or of which false particulars are furnished - The deemed concealment is provided in explanations often a question arose whether in cases where additions or disallowances made by the AO the penal provisions of section 271(1)(c) would attract - The essence of part B of the explanation is that the person must provide an explanation which is bona fide and he should substantiate that explanation by some evidence with him - Held that: when the assessee is able to offer reasonable explanation based on some evidence, the AO cannot invoke Part B of the explanation unless he has given finding based on some contradictory evidence to disapprove that explanation offered by the assessee - There is no finding of the AO based on some contradictory evidence to disapprove that explanation offered by the assessee was false or the assessee was not able to substantiate the explanation furnished or fails to prove that such explanation is not bona fide and that all the facts relating to the same and material to the computation of his total income has not been disclosed by him - Decided in favor of the assessee
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2012 (4) TMI 322
Deduction claim under section 80 IB - penalty order was issued under section 271(1)(c) - claim allowed by Tribunal - department appeal - Held that:- The Apex Court in the case of CIT vs. Reliance Petroleum Products (P) Ltd (2010 (3) TMI 80 - SUPREME COURT) has laid down that a mere making of a claim which is not sustainable in law, but itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee - there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false - no question of inviting the penalty under section 271(1)(c) of the Act - no error in the order of the Tribunal dismissing the appeal of the Department.
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2012 (4) TMI 321
Addition made in the income as an unexplained investment - AO noticing the valuation report from DVO made an addition – Held that:- the seller of the property was not called by the AO nor there was any material to come to a conclusion that the amount which has been added in the income was actually paid by the assessee - DVO's reported value as 17 lacs does not leads to the conclusion that unexplained consideration of Rs. 5 lacs was actually paid by the assessee -the burden is on the Department to show that the fair market value of the assets as on the date of purchase was more than the value declared by the assessee and that the amount paid has been understated and the assessee has actually paid more than what has been declared – in favour of assessee.
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2012 (4) TMI 319
Slump Sale - The contention of the petitioner is that the ‘transfer’ under the Scheme of Arrangement is not a sale under Section 50B of the Act. The Scheme of Arrangement was sanctioned by the High Court of Calcutta under Section 391 to 394 of the Companies Act, 1956 and is statutory in nature and character. It is pleaded that Section 50B of the Act has no applicability as the ‘transaction’ was under the Scheme of Arrangement and the same is not a ‘slump sale’ as contemplated under Section 2(42C) of the Act. - Held that:– The term ‘transfer’ is used in Section 2(42C) is with reference to the transaction in the nature of ‘slump sale’. Thus any type of “transfer” which is in nature of slump sale i.e. when lump sum consideration is paid without values being assigned to individual assets and liabilities are covered by the definition clause 2(42C) and then by Section 50B of the Act - decision of the Supreme Court in Vania Silk Mills (P) Ltd. Vs. CIT (1991 (8) TMI 2 - SUPREME Court) gave definition of “transfer” in Section 2(47) of the Act is inclusive, and therefore, extends to events and transactions which may not otherwise be “transfer” according to its ordinary, popular and natural sense.
The Act i.e. Income Tax Act, 1961 was enacted to tax the income or gains made by an assessee. The Companies Act, 1956, on the other hand serves, and is intended to serve a different purpose and, therefore, when a scheme under Sections 391-394 of the Companies Act, 1956 is sanctioned by the Court, it is treated as a binding statutory scheme because the scheme has to be implemented and enforced. This cannot, or is not, a ground to escape tax on ‘transfer’ of a capital asset under and as per provisions of the Act.
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