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Showing 61 to 80 of 1599 Records
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2013 (10) TMI 1541
Issues involved:
1. Disallowance of expenses on account of articles presented to doctors.
2. Allocation of expenses as HO and unit eligible for claim of deduction u/s 80IC.
Issue 1: Disallowance of expenses on account of articles presented to doctors:
- The appeal pertains to the disallowance of expenses of Rs. 21,40,123/- on account of articles presented to doctors.
- The coordinate Bench of the ITAT had sustained the disallowance at 15% due to unverifiable and unavoidable elements in the expenses.
- The order directed the AO to consider the allowability of the expenses under section 37 of the Act after necessary verification.
- The issue was restored to the AO for verification in assessment years 2001-02, 2002-03 & 2008-09.
- The order of the CIT(A) was set aside, and the issue was restored to the AO for further consideration.
Issue 2: Allocation of expenses as HO and unit eligible for claim of deduction u/s 80IC:
- The AO allocated certain expenses resulting in the reduction of profit claimed for deduction u/s 80IC for the Baddi unit.
- The CIT(A) deleted the allocation based on the decision of his predecessor in assessment year 2007-08 and the orders of the ITAT.
- The department appealed before the ITAT against the deletion of the allocation made by the AO.
- The DR argued for the allocation of expenses to the Baddi unit based on turnover proportion.
- The AR contended that the issue had attained finality at the CIT(A) stage and was covered by previous decisions.
- The ITAT found discrepancies in the allocation made by the assessee and the AO, especially regarding R&D expenses and depreciation.
- The issue was restored to the AO for verification of expenses allocability based on maintained books for HO and Baddi unit.
In conclusion, the ITAT allowed the appeal filed by the department for statistical purposes, directing further verification and consideration of expenses allocation by the AO for both the issues raised in the appeal.
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2013 (10) TMI 1540
Issues Involved:
1. Addition made by the Assessing Officer (AO) when no incriminating material was found during the search.
2. Addition u/s 2(22)(e) on account of deemed dividend.
3. Addition on account of benefit/perquisite u/s 2(24)(iv).
4. Penalty levied u/s 271(1)(c).
Summary:
1. Addition made by the AO when no incriminating material was found during the search:
The assessee argued that no incriminating material was found during the search conducted u/s 132(1) on 16.9.2005, and hence, no addition should be made u/s 153A. The AO made additions based on loans received from Mechman Motors Private Limited u/s 2(22)(e) and notional interest u/s 2(24)(iv). The assessee relied on the Hon'ble Rajasthan High Court decision in Jai Steels (India) 259 CTR 281, which states that no addition u/s 153A should be made without incriminating material. The Tribunal agreed, stating that the assessments or reassessments should be based on incriminating material found during the search.
2. Addition u/s 2(22)(e) on account of deemed dividend:
The AO made additions u/s 2(22)(e) for loans received from Mechman Motors Private Limited, considering them as deemed dividends. The assessee contended that the advances were for business purposes, supported by an MOU, and not for personal benefit. The Tribunal referred to the Hon'ble Calcutta High Court decision in Pradip Kumar Malhotra vs. CIT, which held that advances given for business considerations do not qualify as deemed dividends. The Tribunal found that the advances were for business purposes and not gratuitous, thus not attracting the provisions of Section 2(22)(e).
3. Addition on account of benefit/perquisite u/s 2(24)(iv):
The AO made additions for notional interest on loans as benefit/perquisite u/s 2(24)(iv). The CIT(A) reduced the addition to 10% of the loan amount. The Tribunal upheld the CIT(A)'s decision for the assessment years 2003-04 and 2004-05, as no agreement was there for using the loan for business purposes. However, for the assessment years 2005-06 and 2006-07, the Tribunal found that the advances were for business purposes, and no benefit or perquisite was received by the assessee, thus deleting the addition.
4. Penalty levied u/s 271(1)(c):
The AO levied penalties u/s 271(1)(c) for the assessment years 2005-06 and 2006-07. The CIT(A) deleted the penalties, stating that the additions were based on estimates and not on any incriminating evidence. The Tribunal agreed, noting that penalty proceedings are distinct from assessment proceedings and require conclusive proof of concealment. The Tribunal upheld the CIT(A)'s decision to delete the penalties, as the additions were based on estimates and the assessee provided bona fide explanations.
Conclusion:
The Tribunal dismissed the appeals for the assessment years 2003-04 and 2004-05, while allowing the appeals for the assessment years 2005-06 and 2006-07 in part. The additions u/s 2(24)(iv) and 2(22)(e) were deleted for the latter years, and the penalties u/s 271(1)(c) were also canceled.
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2013 (10) TMI 1539
Issues Involved:
The judgment involves the imposition of a monetary penalty under section 15HA of the Securities and Exchange Board of India Act, 1992, based on an enquiry conducted under Rule 5 of the Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995. The key issues revolve around alleged trading irregularities, including synchronized trading, in the equity shares of a company during a specific investigation period.
Details of the Judgment:
1. The appellant challenged the order imposing a penalty of Rs. 4 lakh under section 15HA of the Act. The investigation period spanned eight months, during which the appellant traded for a short period, contributing 0.89 percent to the total traded volume.
2. The respondent alleged that the appellant, along with a group of clients and brokers, traded significantly in the company's shares on multiple days. The appellant was accused of being involved in synchronized trading, leading to the creation of trading volumes.
3. The appellant denied collusion with other parties, emphasizing that the trading volume was minimal and without any proven nexus. He also raised concerns about the delay in initiating disciplinary proceedings, which impacted the availability of relevant documents.
4. The Tribunal scrutinized the evidence and found no conclusive proof of the appellant's involvement in manipulating the market equilibrium through synchronized trading. The appellant's trading activity, though minor, did not establish a violation of relevant regulations.
5. The Tribunal referenced previous judgments to highlight that synchronized trading, in itself, is not illegal unless it aims to manipulate the market or create false volumes. Without concrete evidence linking the appellant to such activities, the penalty imposed could not be sustained.
6. Citing precedents, the Tribunal emphasized that synchronization of trades is not inherently illegal and must involve a mischievous intent among parties to be objectionable. Lack of clear evidence of connivance led to the quashing of the impugned order.
7. The judgment reiterated that synchronized trading, without evidence of wrongdoing, does not constitute a violation. The appeal was allowed, and the impugned order was set aside with no costs imposed.
Separate Judgment:
No separate judgment was delivered by the judges in this case.
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2013 (10) TMI 1538
Issues involved: Interpretation of Section 80IB(10) of the Income Tax Act, 1961 regarding deduction and requirement of Project Completion Certificate.
Interpretation of Section 80IB(10): The appeal questioned whether the Tribunal was correct in allowing deduction under Section 80IB to the respondent without fulfilling the basic condition of completing the project on a minimum one-acre plot of land. The Tribunal, considering the section as a whole and CBDT instruction No.4 of 2009, clarified that the Project Completion Certificate is not necessary for claiming the benefit under the section. The deduction can be claimed on a year-to-year basis even without the Certificate, as long as the conditions are met. The Tribunal emphasized that if the project completion time limit is not adhered to, deductions granted earlier should be withdrawn.
Requirement of Project Completion Certificate: Another issue raised was whether the respondent was entitled to deduction under Section 80IB(10) despite not producing the Project Completion Certificate as required by the statute. The Tribunal's decision was based on the understanding that the Certificate is not mandatory for granting deductions under the section. The Tribunal's interpretation was supported by the CBDT instruction, which allowed for deductions based on yearly profits from partial project completion without insisting on the Certificate.
Conclusion: The High Court, led by the Chief Justice Sri Kalyan Jyoti Sengupta, upheld the Tribunal's decision, stating that the Completion Certificate was not a prerequisite for availing deductions under Section 80IB(10). The Court found no legal basis to challenge the Tribunal's ruling and dismissed the appeal accordingly.
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2013 (10) TMI 1537
The Supreme Court of India in 2013 (10) TMI 1537 - SC Order, with Hon'ble Mr. Justice H.L. Dattu and Hon'ble Mr. Justice Pinaki Chandra Ghose presiding, condoned delay in filing S.L.P. and granted leave. Petitioner represented by Mr. Hrishikesh Baruah, Adv., and others, while Respondent represented by Mr. Jagjit Singh Chhabra, Adv., and others.
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2013 (10) TMI 1536
Issues involved: Application for holding a meeting of creditors and shareholders for approving a scheme of compromise or arrangement in a company under liquidation.
Summary:
The High Court of Gujarat heard an application registered as Company Application No.109 of 2012, where the applicant requested a meeting to be held for considering and approving a scheme of compromise or arrangement between the company and its creditors and shareholders. The company was under liquidation, with an order for winding up passed in 1999. The Official Liquidator reported that sale committee meetings had been held, and attempts to sell land were made. The applicants had paid off most creditors but debts of two creditors remained outstanding. However, no specific scheme of compromise was presented. The Court noted that without a formal scheme of compromise, the application could not be considered at that stage and thus disposed of it. The applicants were given the liberty to submit an appropriate scheme for compromise, which would be reviewed in accordance with the law and the Companies Act, with all relevant parties being heard before any orders were passed. The application was disposed of with this clarification.
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2013 (10) TMI 1535
Issues Involved:
1. Disallowance of rural development expenditure.
2. Disallowance of depreciation on roll over charges.
3. Depreciation on goodwill.
4. Buy-back of shares expenses.
5. Debenture issue expenditure.
6. Deduction u/s 36(1)(iii) for interest on loans.
7. Addition u/s 40A(9).
8. Addition u/s 14A.
9. Premium on pre-redemption of debentures.
10. Expenditure on acquisition of marketing and technical know-how.
11. Deduction u/s 80HHC under MAT provisions.
12. Interest charged u/s 234D.
Summary:
Assessment Year 2000-01:
1. Disallowance of Rural Development Expenditure:
The ITAT allowed the expenditure of Rs. 5,85,508/- incurred on rural development, following the precedent set in earlier years.
2. Disallowance of Depreciation on Roll Over Charges:
The issue became infructuous as the expenditure was allowed as revenue expenditure in earlier cases; hence, the ground was rejected.
3. Depreciation on Goodwill:
The ITAT directed the AO to allow the claim of depreciation on goodwill acquired from Madura Garments, following the Supreme Court decision in CIT vs Smifs Securities Ltd.
4. Buy-Back of Shares Expenses:
The ITAT directed the AO to allow the entire expenditure of Rs. 98,69,185/- incurred on buy-back of shares as revenue expenditure, following the Bombay High Court decision in CIT vs Hindalco Industries Ltd.
5. Debenture Issue Expenditure:
The alternative grounds became infructuous as the expenses were allowed as revenue expenditure and under section 35D in earlier years. Hence, the ground was rejected.
6. Deduction u/s 36(1)(iii) for Interest on Loans:
The ground was rejected as the issue was allowed under section 36(1)(iii) in earlier years.
Additional Ground:
The ITAT admitted the additional ground regarding the exclusion of sales tax exemption benefit from taxable profits and directed the AO to adjudicate the issue as per law.
Department's Appeal:
7. Addition u/s 40A(9):
The ITAT sustained the CIT(A)'s order allowing the expenditure of Rs. 16,66,132/- paid to schools, following the precedent in earlier years.
8. Addition u/s 14A:
The ITAT accepted the disallowance made by the AO at 1% of exempt income.
9. Premium on Pre-Redemption of Debentures:
The ITAT sustained the CIT(A)'s order allowing the entire expenditure, following the decision in ACIT vs Grind Well Norton Ltd.
10. Expenditure on Acquisition of Marketing and Technical Know-How:
The ITAT sustained the CIT(A)'s order allowing the expenditure as revenue expenditure.
11. Buy-Back of Shares Expenses:
The ITAT rejected the department's ground, following its own decision in ITA No. 5421/Mum/2005.
Assessment Year 2001-02:
12. Disallowance of Rural Development Expenditure:
The ITAT allowed the expenditure of Rs. 5,72,764/- incurred on rural development, following its own decision in ITA No. 5421/Mum/2005.
13. Disallowance of Depreciation on Roll Over Charges:
The ground was rejected as the expenditure was allowed as revenue expenditure in earlier cases.
14. Deduction u/s 80HHC on MAT Provisions:
The ITAT set aside the CIT(A)'s order and directed the AO to recompute the deduction under section 80HHC under MAT provisions as per the Supreme Court decision in CIT vs Bhari Information Tech. Systems Pvt. Ltd.
15. Interest Charged u/s 234D:
The ITAT directed the AO to recompute the interest as per law.
16. Debenture Issue Expenditure:
The ground was rejected as the expenses were allowed as revenue expenditure and under section 35D in earlier years.
17. Depreciation on Interest Capitalization on Loan:
The ground was rejected as the issue was allowed under section 36(1)(iii) in earlier years.
Additional Grounds:
18. Deduction u/s 80HHC from Book Profits:
The ITAT restored the issue to the AO for fresh adjudication, following the precedent in earlier years.
19. Computation of Deduction u/s 80HHC for MAT Provisions:
The ITAT refrained from admitting the ground as it did not emanate from the impugned order.
Department's Appeal:
20. Addition u/s 14A:
The ITAT sustained the disallowance made by the AO at Rs. 4,56,257/-.
21. Deduction u/s 80HHC as per Section 115JB:
The ITAT sustained the CIT(A)'s order allowing the deduction, following the decision in Shirke Construction.
Conclusion:
- Assessee's appeals in ITA 5421/Mum/2005 and ITA 5422/Mum/2005 are partly allowed.
- Revenue's appeals in ITA 5561/Mum/2005 and ITA 5530/Mum/2005 are partly allowed.
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2013 (10) TMI 1534
Issues involved: Challenge to order of attachment of Cash Credit Account u/s 226(3) of Income Tax Act, 1961 and direction for expeditious disposal of appeal u/s 220(6).
Judgment Summary:
Issue 1: Order of attachment of Cash Credit Account u/s 226(3)
The petitioner challenged the order of attachment of Cash Credit Account by the authorities u/s 226(3) of the Income Tax Act, 1961. The petitioner argued that the account had not been utilized yet and relied on a judgment of the Madras High Court. The respondent authorities contended that the attachment was permissible as per the provisions of the Act. The High Court deliberated on whether an order of attachment of a Cash Credit Account could be passed u/s 226(3) of the Act. It was noted that the petitioner had not sought a stay of demand or approached the Assessing Authority as a non-defaulter. The Court referred to the Madras High Court judgment which emphasized the need for a debtor-creditor relationship for attachment under u/s 226(3). The Court concluded that the Cash Credit Account, being a facility provided by the bank, could not be attached as the bank did not become a debtor. The impugned order of attachment was quashed and set aside.
Issue 2: Direction for expeditious disposal of appeal u/s 220(6)
The High Court directed the Appellate Authority to expedite the disposal of the appeal pending before them, emphasizing on timely resolution without unnecessary adjournments. The petitioner, who expressed willingness to pay the assessed amount in instalments, was permitted to do so without prejudice and subject to the appeal outcome. The writ petition was disposed of with no order as to costs.
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2013 (10) TMI 1533
Issues involved: Appeal against the deletion of provision for warranty in the assessment for AY 2006-07.
Summary:
The appeal was filed by the Revenue against the deletion of a provision for warranty in the assessment for AY 2006-07. The Assessing Officer disallowed the provision for warranty and added it to the total income of the assessee, based on the contention that it was a contingent liability. However, the CIT(A) directed the Assessing Officer to delete the addition, citing the decision of the Hon'ble Supreme Court in the case of Rotork Controls India P. Ltd. The CIT(A) found that the provision for warranty was justified as it was calculated on a scientific basis and had been reversed in the subsequent year. The Revenue challenged this decision before the ITAT.
The Departmental Representative argued that the CIT(A) had given full relief to the assessee, contrary to previous years where only partial relief was granted. On the other hand, the Counsel for the assessee justified the deletion of the addition, stating that the provision had been reversed in the following year and actual expenses were higher. The ITAT considered the arguments, reviewed the orders of the Assessing Officer and the CIT(A), and found that the provision for warranty was justified. The ITAT upheld the decision of the CIT(A) to delete the addition, as the provision had been reversed in the subsequent year and actual expenses exceeded the provision amount. The appeal filed by the Revenue was dismissed, and the decision of the CIT(A) was upheld based on the principles established in the case of Rotork Controls India P. Ltd.
In conclusion, the ITAT upheld the decision of the CIT(A) to delete the addition of the provision for warranty, based on the scientific calculation and subsequent reversal of the provision in the following year, in line with the principles laid down by the Hon'ble Supreme Court.
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2013 (10) TMI 1532
Issues Involved:
1. Violation of principles of natural justice.
2. Delay in passing the impugned order.
3. Relationship between broker and client.
4. Evidence of synchronized circular trades.
5. Impact of the appellant's overall turnover on penalty imposition.
Summary:
Violation of Principles of Natural Justice:
The appellant argued that the impugned order violated principles of natural justice as the entire investigation report was not furnished, and there was no opportunity to examine the client Mr. Heerachand Salecha. The Tribunal found no merit in these contentions, stating that the documents relied upon by SEBI were supplied to the appellant and that the appellant did not demonstrate how the non-furnishing of the entire report caused prejudice. Furthermore, the Tribunal noted that the appellant's own trading records established the facts, making the examination of Heerachand Salecha unnecessary.
Delay in Passing the Impugned Order:
The appellant contended that the order was passed after an inordinate delay of 12 years, contrary to Regulation 28(2) of the Intermediaries Regulations. The Tribunal acknowledged the delay but held that it did not justify quashing the order. The Tribunal emphasized that a person who has violated SEBI regulations cannot escape liability merely due to the delay in the proceedings.
Relationship Between Broker and Client:
The appellant claimed that there was no relationship beyond that of a broker-client and thus should not be held liable for the client's manipulative trades. The Tribunal rejected this argument, noting that the appellant's trading pattern demonstrated a nexus with the client and other brokers within the group, indicating coordinated manipulative activities.
Evidence of Synchronized Circular Trades:
The Tribunal reviewed the evidence and found that the appellant engaged in synchronized circular trades, creating artificial volumes in the market. The Tribunal cited instances where trades were matched within seconds, indicating pre-arranged trading patterns. The Tribunal concluded that the appellant was part of a group executing circular trades to manipulate the price of the SIL scrip.
Impact of the Appellant's Overall Turnover on Penalty Imposition:
The appellant argued that the turnover in the SIL scrip was minuscule compared to its overall turnover, suggesting that the penalty was unwarranted. The Tribunal dismissed this argument, stating that penalties for violating SEBI regulations are not contingent on the violator's total turnover. The Tribunal held that even if the turnover in the specific scrip was small, the appellant must face penalties for the violations.
Conclusion:
The Tribunal dismissed the appeal, upholding the SEBI order prohibiting the appellant from taking up any new assignments for two weeks. The Tribunal found no merit in the appellant's contentions regarding natural justice, delay, broker-client relationship, and the impact of overall turnover on penalty imposition.
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2013 (10) TMI 1531
Issues involved: Refusal of registration u/s 12AA of the Act to the assessee claiming to be an educational trust.
Summary:
The appeal was against the Administrative Commissioner's order denying registration u/s 12AA of the Act to the assessee trust. The assessee claimed to be an educational trust established for educating tribal people by understanding their lifestyle and translating religious books into their language. The dispute arose as to whether the trust should be considered an educational or religious trust.
The ld.representative for the assessee argued that the trust's main objective was educational, focusing on promoting literacy among tribal people through translating religious texts. On the other hand, the ld.DR contended that the trust primarily aimed at propagating the Christian religion, not conducting educational activities as defined u/s 2(15) of the Act.
The Tribunal referred to previous judgments, including the Apex Court's decision in Sole Trustee, Loka Shikshana Trust v. CIT, which emphasized that education should involve systematic instruction through normal schooling. It was highlighted that mere coaching classes or translating religious texts did not qualify as education u/s 2(15) of the Act.
Considering the arguments and precedents, the Tribunal concluded that the trust's activities did not align with the definition of education under the Act. It was noted that the trust's main objective was to promote the Christian religion, and no substantial educational activities were conducted. As the trust did not apply for registration as a religious trust u/s 12AA, the Tribunal upheld the denial of registration as an educational trust.
In conclusion, the appeal by the assessee was dismissed, affirming the order of the Administrative Commissioner refusing registration u/s 12AA of the Act.
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2013 (10) TMI 1530
Issues Involved:
1. Non-compliance with directions u/s 144A.
2. Addition u/s 68 on account of unexplained credits.
3. Disallowance u/s 40A(3) for cash payments.
4. Addition of deemed dividend u/s 2(22)(e).
Summary:
1. Non-compliance with Directions u/s 144A:
The CIT(A) observed that the directions given by the Addl. CIT were examined and adjudicated by the Assessing Officer (AO). The CIT(A) held that procedural irregularities could not annul the assessment order, thus rejecting the assessee's contention to annul the assessment.
2. Addition u/s 68 on Account of Unexplained Credits:
The AO made an addition of Rs. 18,68,90,938/- due to discrepancies in sundry creditors. The CIT(A) observed that the purchases were made through commission agents and the appellant could not furnish complete addresses of the creditors. The CIT(A) found that the AO's estimation was arbitrary and reduced the addition to Rs. 8,87,03,901/- based on a reasonable credit period of 3 months. The ITAT upheld the CIT(A)'s decision but further reduced the addition by disallowing 20% of the sustained amount, thus partly allowing the assessee's appeal.
3. Disallowance u/s 40A(3) for Cash Payments:
The AO made a disallowance of Rs. 71,28,196/- for cash payments exceeding the limit prescribed u/s 40A(3). The CIT(A) confirmed this disallowance as the appellant could not prove that payments were made to agriculturists. The ITAT remanded this issue back to the AO for reconsideration. Additionally, the CIT(A) deleted a disallowance of Rs. 4,10,21,320/- made u/s 40A(3) on the ground that once an addition is made u/s 68/69, further disallowance u/s 40A(3) would result in double addition. The ITAT upheld this deletion.
4. Addition of Deemed Dividend u/s 2(22)(e):
The AO made an addition of Rs. 12,47,20,000/- as deemed dividend. The CIT(A) deleted this addition following the decision in the case of Star Flexi Pack Industries and the Special Bench decision in Bhaumik Colour P. Ltd., which held that deemed dividend can only be assessed in the hands of a registered shareholder. The ITAT upheld the CIT(A)'s decision, noting that the appellant was not a registered shareholder of Ghodawat Industries Pvt. Ltd.
Conclusion:
The ITAT dismissed the revenue's appeal and partly allowed the assessee's appeal, directing specific reconsiderations and upholding the CIT(A)'s decisions on various issues.
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2013 (10) TMI 1529
Issues involved: Appeal against judgment and decree for possession, use, and occupation charges u/s 1087/2008, applicability of Delhi Land Reforms Act, 1954, jurisdiction of Civil Court.
Judgment Details:
1. The appeal challenged a judgment and decree for possession, use, and occupation charges issued by the Addl. District Judge, Central-14 Delhi. The appellant was required to deposit the decretal amount towards mesne profits and maintain status quo pending appeal.
2. The appellant argued that the suit for possession was related to agricultural land governed by the Delhi Land Reforms Act, 1954, and thus not maintainable before the Civil Court. The appeal process faced delays due to default appearances and restoration applications.
3. The respondent's counsel highlighted that the suit was for recovery of possession of agricultural land, subject to the Reforms Act, and that bhumidari rights declaration falls under the Revenue Assistant's jurisdiction.
4. The appellant's counsel contended that the property was part of an unauthorized colony over agricultural land, suggesting the Reforms Act may not apply. Precedents were cited to support the argument against readily inferring exclusion of Civil Court jurisdiction.
5. The respondent claimed possession of agricultural land and demolition of unauthorized construction in the plaint. However, the Trial Court failed to frame an issue on the jurisdictional aspect, prompting further inquiry.
6. An additional issue was framed to determine whether the Civil Court's jurisdiction for possession relief was barred by Section 185 of the Delhi Land Reforms Act, 1954. The matter was remanded to the Trial Court for evidence collection and decision within six months.
7. Liberty was granted to the respondent to amend the plaint limited to the jurisdictional aspect, with specific timelines for filing and response. The parties were directed to appear before the Addl. District Judge, Central-14 on a specified date for further proceedings.
8. The appellant was instructed to continue depositing the required amount pending the Trial Court's findings. The appeal was to be listed post receipt of the Trial Court's findings with reasons.
This summary provides a detailed overview of the judgment's key points and the legal issues involved in the case.
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2013 (10) TMI 1528
The High Court of Punjab and Haryana dismissed the petition as withdrawn with liberty to challenge the vires of Section 62(5) of the Punjab Value Added Tax Act, 2005. The order was given by Hon'ble Mr. Justice Rajive Bhalla and Hon'ble Mr. Justice Dr. Bharat Bhushan Parsoon.
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2013 (10) TMI 1527
Issues involved: Contempt of court, submission of original title deeds of unencumbered properties to SEBI, permission to leave the country.
Contempt of Court: Mr. C.A. Sundaram, representing respondent No.5, informed the court about a letter from the Managing Director and CEO of PNB Investment Services Limited. The letter stated that the alleged contemnors are willing to provide SEBI with original title deeds of unencumbered properties valued at Rs. 20,000 crores within three weeks. SEBI will review the documents and respond, with the court considering the matter further at the next hearing. Until SEBI is satisfied with the submission, the respondents are prohibited from leaving the country without the court's permission.
Submission of Title Deeds to SEBI: The alleged contemnors, as per the submission made by Mr. Sundaram, have agreed to present the original title deeds of unencumbered properties worth Rs. 20,000 crores to SEBI within three weeks. This submission is subject to SEBI's evaluation and response, which will be reviewed by the court in the upcoming hearing scheduled for November 20, 2013, at 2:00 p.m.
Permission to Leave the Country: The court has directed that the alleged contemnors (respondents) are not allowed to leave the country without the court's permission until SEBI is content with the submission of the original title deeds and valuation reports of the properties. The next hearing on this matter is set for November 20, 2013, at 2:00 p.m.
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2013 (10) TMI 1526
The Supreme Court of India dismissed the Special Leave Petition in the case. The judges were Dr. B.S. Chauhan and Mr. S.A. Bobde. Petitioner's counsel was Mr. A. Raghunath, and respondent's counsels were Mr. V. Shekhar, Ms. Shalini Kumar, Mr. Rahyul Kaushik, Mr. Piyush Jain, Ms. Ashly Cherian, Mr. B.V. Balaram Das.
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2013 (10) TMI 1525
Gold jewellery found short during the course of search - Assessing Officer made addition to the income of the appellant - Correct disclosure given by assessee in wealth tax return details and VDIS certificate - HELD THAT - CIT(A) deleted the addition made on account of gold jewellery. The difference in nature of gold jewellery may be taken different shape as per the ladies requirement in the family which is normally happen in the Indian family. Decision in favor of assessee.
Diamond jewellery was found excess during the course of search - Assessing Officer made addition to the income of the appellant - HELD THAT - The appellant’s explanation of trying to explain the excess diamond through difference of gold item found in excess as per declaration as stated above cannot be accepted in absence of any such documentary evidence for doing so by the appellant.
Addition made by AO on finding excess cash seized at the time of search - HELD THAT - assessee was having more cash as per day-to-day cash books maintained by him, as compared to cash found during course of search. The CIT(A) had also recorded categorical finding to the effect that cash disclosed in the cash book maintained by assessee and his family members were higher than cash found during course of search. Nothing was brought on record by Department to controvert the findings recorded by CIT(A). Accordingly, we do not find any reason to interfere in the findings of CIT(A). CIT(A) deleted the addition. Decision in favor of assessee.
The appeal filed by the Department in I.T.A.No. 455/Ind/2013 is less than monetary limit fixed by C.B.D.T. Circular No. 3/2011 dated 9.2.2011 for filing appeal by the Department. Since the tax effect was less than ₹ 3 lakhs even as per C.B.D.T. Circular dated 9.2.2011, the Department should not have filed the appeal before the Tribunal.
In the result, appeals filed by the Revenue are dismissed, whereas the appeals filed by the assessee are allowed.
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2013 (10) TMI 1524
Issues involved:
The judgment involves appeals arising from assessment orders for the years 1999-2000 and 2001-2002, concerning the entitlement of the assessee under Section 10(23C)(vi) of the Income Tax Act and the alleged violation of Section 11(5) of the Act.
Issue 1: Entitlement under Section 10(23C)(vi) of the Act
The assessee, a charitable society running an educational institution, applied for approval under Section 10(23C)(vi) of the Act and was granted approval subject to certain conditions by the Central Board of Direct Taxes. The Assessing Officer, despite the approval, denied the exemption citing investments made in violation of conditions. The Tribunal held that the Assessing Authority must first inform the prescribed authority of any contravention before denying the exemption. The Tribunal also found that the contribution to the chit fund did not violate the provisions of Section 11(5) of the Act. Consequently, the Tribunal allowed the appeal and set aside the Assessing Authority's order. The Revenue appealed against this decision.
Issue 2: Interpretation of Proviso to Section 143(3) of the Act
The dispute centered on the proviso to Section 143(3) inserted by the Finance Act, 2002, effective from 1.4.2003. The Revenue argued that the Assessing Authority had the jurisdiction to deny exemption if the assessee breached conditions prior to this amendment. Conversely, the assessee contended that the proviso is procedural and applies to all assessments post 1.4.2003. The Tribunal held that the proviso is mandatory, requiring the Assessing Officer to inform the prescribed authority of any contravention before denying exemption. The Tribunal's decision was upheld, emphasizing that without complying with this provision, the Assessing Authority lacks jurisdiction to re-open assessments.
Judgment:
Regarding Issue 1, the Tribunal's decision was upheld, stating that the Assessing Authority must follow the mandatory provisions of the proviso to Section 143(3) before denying exemption. The argument that prior to 1.4.2003, the Assessing Authority had the power to deny exemption without a specific provision for withdrawal was dismissed. Issue 1 was decided in favor of the assessee.
On Issue 2, in light of the finding on Issue 1, the second substantial question of law was left open for future consideration. Consequently, both appeals were dismissed.
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2013 (10) TMI 1523
Issues Involved:
1. Treatment of Short Term Capital Gain (STCG) as Business Income.
2. Determination of whether the activity amounts to trade or investment.
3. Entitlement to claim the benefit of Security Transaction Tax (STT).
4. Adjustment of D-mat charges.
Summary:
1. Treatment of Short Term Capital Gain (STCG) as Business Income:
The primary issue in the appeal was the treatment of STCG arising from the sale of shares by the Revenue as business income. The assessee argued that they had been an investor for several years, with income under the head 'capital gains' assessed as such in previous and subsequent years. The Department, however, contended that the speculative income earned by the assessee involved the same scrips for which STCG was claimed, indicating a business activity rather than an investment.
2. Determination of whether the activity amounts to trade or investment:
The Tribunal noted that the issue revolved around whether the activity constituted a trade or investment, which is a question of fact. The law in the matter, as recounted from various judicial precedents, emphasizes the intention behind the purchase and the conduct of the assessee. The Tribunal observed that the assessee had disclosed and the Revenue had accepted the income on shares held for more than one year as LTCG, indicating an investment behavior. However, the balance transactions, involving 133 trades in 102 scrips, were found to reflect a regular, systematic, and organized trading activity, thus constituting a business.
3. Entitlement to claim the benefit of Security Transaction Tax (STT):
The Tribunal directed that the assessee shall be entitled to claim the benefit of STT to the extent it relates to business income, with the onus to establish the claim resting on the assessee.
4. Adjustment of D-mat charges:
The Tribunal also directed that D-mat charges, to the extent they relate to shares confirmed as capital assets, should be adjusted against the cost thereof.
Decision:
The Tribunal affirmed the findings of the first appellate authority, holding that the transactions constituted business activity. However, they directed modifications in the computation of business income, restricting it to shares other than those carried over as capital assets as on 01.04.2007. The assessee's appeal was partly allowed.
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2013 (10) TMI 1522
Issues Involved:1. Legality of additions made u/s 68 for cash deposits in bank accounts. 2. Determination of commission income and its appropriate rate. 3. Whether assessments should be made collectively for the group or individually for each entity. 4. Taxation of circular transactions and layering of accounts. Summary:1. Legality of Additions Made u/s 68 for Cash Deposits in Bank Accounts: The Tribunal examined the modus operandi of Mr. Tarun Goyal, who created multiple companies to provide accommodation entries. The AO made additions on account of unexplained credits being cash deposits u/s 68. The Tribunal held that each company, being a separate juristic person, must explain the credits in its books. The argument that all additions should be made only in the hands of Mr. Tarun Goyal was rejected. However, the Tribunal agreed that only the peak unexplained credit should be taxed after eliminating circular transactions to avoid multiple taxation of the same amount. 2. Determination of Commission Income and Its Appropriate Rate: Mr. Tarun Goyal admitted to earning commission on accommodation entries. The AO adopted a commission rate of 2.25%, which the assessee contested as excessive, arguing for a rate of 0.25%. The Tribunal directed the AO to determine the commission income based on the quantum of cash received and deposited, considering the material on record and precedents, and to bring the same to tax. 3. Whether Assessments Should Be Made Collectively for the Group or Individually for Each Entity: The Tribunal rejected the assessee's request to frame a single assessment for all entities, stating that each company must be assessed individually. However, it emphasized that the totality of circumstances should be considered, and the correct income should be determined by taxing only the peak credit after eliminating circular transactions. 4. Taxation of Circular Transactions and Layering of Accounts: The Tribunal acknowledged that Mr. Tarun Goyal's modus operandi involved layering of accounts, resulting in multiple transfers of the same amount. It held that only the first point of cash deposit should be taxed, and subsequent transfers should be treated as explained credits to avoid multiple taxation. The burden of proof lies on the assessee to demonstrate the chain of transactions and the calculation of peak unexplained credit. Conclusion: The Tribunal set aside all appeals to the AO for fresh adjudication, directing the AO to restrict additions to the peak unexplained credit after eliminating circular transactions, determine the appropriate commission rate, and ensure no multiple taxation of the same amount. The burden of proof remains on the assessee to explain each credit in the books of each entity. Order pronounced in the open Court on 18/10/2013.
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