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Showing 61 to 80 of 1327 Records
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2012 (11) TMI 1280
Issues Involved:
1. Disallowance of bad debts u/s 36(1)(vii).
2. Addition on account of suppression of sale price of debentures.
Summary:
Issue 1: Disallowance of Bad Debts u/s 36(1)(vii)
The Assessing Officer (AO) disallowed the bad debt of Rs. 1,46,289/- written off by the assessee, stating that the statutory condition for admissibility of bad debt u/s 36(1)(vii) was not fulfilled. The AO cited the ITAT Delhi Bench-B decision in Dy. CIT vs. India Thermit Corpn. Ltd., emphasizing that the debt must be established as bad. The CIT(A) deleted this disallowance, noting that the amended section 36(1)(vii) allows for the deduction of bad debts written off as irrecoverable in the accounts. The Tribunal directed the AO to decide the matter afresh in light of the Supreme Court decision in T.R.F. Ltd. vs. CIT, after verifying whether the amount was ever offered as income.
Issue 2: Addition on Account of Suppression of Sale Price of Debentures
The AO added Rs. 14,14,06,326/- based on the difference between the estimated market value and the disclosed sale price of Arvind Mills Ltd. debentures. The AO doubted the genuineness of the contracts dated November 1993, suggesting the sales occurred in February 1994 when the market value was higher. The CIT(A) deleted this addition, accepting the assessee's claim that the transactions were genuine and conducted at arm's length. The CIT(A) also noted that the market value of the debentures on 31.3.1994 was Rs. 720 per debenture, close to the average price realized by the assessee. The Tribunal upheld the CIT(A)'s decision, referencing the Calcutta High Court decision in CIT vs. Smt. Nandini Nopany and the Gujarat High Court decision in Marghabhai Kishabhai Patel & Co., confirming that only real income can be taxed and there was no evidence of understatement of value or sham transactions.
Conclusion:
The Tribunal partly allowed the Revenue's appeal for statistical purposes, directing a fresh decision on the bad debt issue and upholding the deletion of the addition regarding the suppression of sale price of debentures.
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2012 (11) TMI 1279
Issues:
The appeal concerns the deduction u/s 80P of the Income Tax Act, 1961 amounting to Rs. 16,55,500/- allowed by the Ld. Commissioner of Income Tax (Appeals).
Details of the Judgment:
Issue 1: Eligibility for Deduction u/s 80P
The assessee, a Primary Agriculture Co-op Society Ltd., engaged in banking activities and providing credit facilities to its members, claimed deductions u/s 80P(2)(a)(i) and u/s 80P(2)(a)(iv). The Assessing Officer questioned the eligibility of the deductions based on the acceptance of deposits from non-members. However, the Ld. Commissioner of Income Tax (A) ruled in favor of the assessee, stating that acceptance of deposits from non-members does not impact the revenue generated from providing credit facilities and supplies to members. The Commissioner distinguished the case laws relied upon by the Assessing Officer and upheld the deductions claimed by the assessee.
Issue 2: Tribunal's Decision
The ITAT, Delhi considered the submissions and precedents cited by both parties. The Tribunal noted that the Assessing Officer's proposition that accepting deposits from non-members equates to providing banking facilities to non-members was not acceptable. It was established that the revenue generated by the assessee was primarily from providing credit facilities and supplies to its members, not from deposits. Referring to relevant provisions of section 80P(2)(ii), the Tribunal emphasized that the assessee fell within the category of carrying on the business of banking and providing credit facilities to its members, making it eligible for the deductions claimed. The Tribunal upheld the order of the Ld. Commissioner of Income Tax (A) based on the discussions and precedents, dismissing the appeal filed by the Revenue.
In conclusion, the ITAT upheld the Ld. Commissioner of Income Tax (A)'s decision, confirming the eligibility of the assessee for deductions u/s 80P.
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2012 (11) TMI 1278
Issues involved: Appeal challenging ITAT order on disallowance of repair and maintenance expenses and disallowance under Section 40A(3).
Issue A - Disallowance of repair and maintenance expenses:
The assessee appealed the ITAT order deleting the disallowance of Rs. 10,87,465 being 50% of repairs and maintenance. The Assessing Officer had disallowed the claim as no major repair work was substantiated, which was confirmed by CIT (A). However, the Tribunal noted the increase in repair expenses and reasons provided by the assessee, including damage to the hotel building, pest control, and waterproofing. The Tribunal held that the disallowance was unjustified, as the reasons for the increased expenses were valid and no law question arose. Thus, the Tribunal upheld the claim of the assessee.
Issue B - Disallowance under Section 40A(3):
The disallowance of Rs. 21,40,512 under Section 40A(3) was made by the Assessing Officer and confirmed by CIT (A). The Tribunal found that cash payments were recorded on the same day each month, indicating legitimate cash expenditures. It concluded that without evidence of cash payments exceeding Rs. 20,000 to a single person in a day, no disallowance under Section 40A(3) could be justified. Despite the destruction of petty cash records in a flood, substantial evidence in the form of books of account and tax audit reports supported the expenses. The Tribunal's decision was based on factual evidence, and no legal question arose, leading to the dismissal of the appeal.
In conclusion, the High Court dismissed the Tax Appeal based on the Tribunal's sound reasoning and factual findings for both issues.
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2012 (11) TMI 1277
Issues Involved: Denial of registration sought u/s 12AA of the Income-tax Act, 1961 to the assessee Trust based on religious nature and activities.
Summary:
The appeal was filed by the assessee Trust after being denied registration under Section 12AA of the Income-tax Act, 1961. The Trust, constituted by a deed dated 25.2.2008, applied for registration mentioning its nature as religious, charitable, and non-profitable. The Director of Income Tax (Exemptions) (DIT(E)) denied registration stating that a Trust with religious objects and activities was not eligible for registration u/s 12AA. The assessee contended that registration was available for both public religious and charitable Trusts. The DIT(E) and the assessee presented their arguments before the Appellate Tribunal.
Upon examination, the Tribunal noted Section 11(1)(a) of the Act which exempts income derived from property held for charitable or religious purposes from total income. The Tribunal observed that even if the Trust was solely religious, it would still be entitled to registration u/s 12AA. Referring to a High Court case, it was established that registration is available even if the Trust's objectives combine both charity and religion. The Tribunal found no evidence that the Trust was not genuine or its activities were not authentic. Consequently, the Tribunal quashed the DIT(E)'s order and directed the grant of registration to the assessee Trust u/s 12AA.
In conclusion, the appeal filed by the assessee Trust was allowed, and the order was pronounced in Chennai on the 7th of November.
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2012 (11) TMI 1276
The judgment was delivered by Hon'ble Mr. Justice Ajay Kumar Mittal and Hon'ble Mr. Justice Gurmeet Singh Sandhawalia of the Punjab and Haryana High Court in 2012 (11) TMI 1276. The Appellant was represented by Mr. K.L. Goyal, Sr. Advocate with Mr. Sandeep Goyal, Advocate, and the Respondent by Mr. Piyush Kant Jain, Addl.A.G.Pb. The order refers to CWP No.21083 of 2011 (Punjab State Power Supply Corporation Limited v. The State of Punjab and another).
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2012 (11) TMI 1275
Issues Involved:
1. Validity of the CIT(A)'s order.
2. Nature of the transaction as 'hire purchase' or 'lease' and depreciation disallowance.
3. Applicability of CBDT Circular No.2 dated February 9, 2001.
4. Exclusion of foreign currency expenditure from 'export turnover' for u/s 10A computation.
Summary:
Issue 1: Validity of the CIT(A)'s Order
The appellant argued that the CIT(A)'s order was erroneous in law and facts. However, the judgment does not provide specific details on this ground.
Issue 2: Nature of the Transaction and Depreciation Disallowance
The appellant contended that the transaction of giving assets on lease was not a 'hire purchase' but an operating lease, thus entitling them to claim depreciation. The AO disallowed the depreciation claimed on assets given on finance lease, a decision upheld by the CIT(A) who treated the transaction as a hire-purchase agreement. The Tribunal examined the lease agreement and supplementary schedules, determining that the transaction was indeed a finance lease. The Tribunal noted that the lessee bore all risks and rewards associated with the equipment, making the lessee the de facto owner. Consequently, depreciation was allowable to the lessee, not the lessor, in accordance with the Special Bench decision in Indus Ind Bank Ltd. vs. Addl. CIT.
Issue 3: Applicability of CBDT Circular No.2 of 2001
The appellant argued that CBDT Circular No.2 of 2001, which states that the lessor is entitled to depreciation, was binding. The Tribunal held that the circular was considered, but the terms of the contract determined ownership for depreciation purposes. The revenue did not contravene the circular as it examined the contract terms to ascertain ownership.
Issue 4: Exclusion of Foreign Currency Expenditure from Export Turnover
The appellant's alternate plea was that the exclusion of foreign currency expenditure from export turnover should also apply to total turnover for u/s 10A computation. The Tribunal, following the Karnataka High Court decision in CIT vs. Tata Elxsi Ltd. & Others, directed the AO to exclude the foreign currency expenditure from both export and total turnover for u/s 10A computation. This ground was rejected, but the alternate plea was allowed.
Conclusion:
The assessee's appeal was dismissed, with the Tribunal upholding the CIT(A)'s decision on the nature of the transaction and depreciation disallowance while allowing the alternate plea regarding the exclusion of foreign currency expenditure for u/s 10A computation.
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2012 (11) TMI 1274
Issues involved: Challenge to Tribunal's decision on availing modvat for furnace oil used in manufacturing goods on job work basis without payment of duty under Rule 57F(3).
Summary:
The Revenue challenged the Customs, Excise & Service Tax Appellate Tribunal's decision regarding availing modvat for furnace oil used in manufacturing goods on job work basis without duty payment. The substantial question of law framed was whether allowing modvat in such circumstances is lawful. The Revenue argued citing a Supreme Court decision and a previous judgment. Despite being served, the respondent did not appear. The High Court found the issue to be covered by the Supreme Court decision, emphasizing the principle that CENVAT credit for duty paid on inputs used in exempted final products is not allowable. The Court referred to specific provisions and observations from the Supreme Court decision to support its conclusion. As the issue was already settled by the Supreme Court, the High Court allowed the Revenue's appeal, answering the question in favor of the Revenue and reversing the Tribunal's decision.
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2012 (11) TMI 1273
Issues Involved:
1. Power to impound a passport.
2. Right to travel as a fundamental right.
3. Jurisdiction of Customs Officers and Courts under the Passports Act, 1967.
4. Distinction between seizure and impounding of documents.
Summary:
1. Power to Impound a Passport:
The primary issue was whether the Judicial Magistrate and Customs Officers have the authority to impound the passport of the Petitioner/Accused. The Court referred to the decision in *Suresh Nanda Vs. C.B.I* and held that "impounding of a passport can only be done by the passport authority u/s 10(3) of the Passports Act, 1967." The Court emphasized that neither the Investigation Officer nor the Court has the power to impound the passport pending investigation or trial.
2. Right to Travel as a Fundamental Right:
The Petitioner/Accused argued that the "Right of Travel to a foreign Country" is a fundamental right under Article 21 of the Constitution of India, which cannot be restricted except in accordance with the law. The Court acknowledged this argument, reinforcing that any restriction on this right must be legally justified.
3. Jurisdiction of Customs Officers and Courts under the Passports Act, 1967:
The Court noted that the Passports Act, 1967, is a special enactment that prevails over the general provisions of the Criminal Procedure Code. It was highlighted that "impounding of a passport cannot be done by the Court u/s 104 of the Cr.P.C., though it can impound any other document or thing." The Court also referred to various precedents, including *Veenita Gupta Vs. State* and *K.Parvathy Vs. The Senior Intelligence Officer*, which supported the view that only the passport authority has the power to impound a passport.
4. Distinction Between Seizure and Impounding of Documents:
The Court differentiated between the seizure and impounding of documents, stating that "a seizure is made at a particular moment when a person or authority takes into his possession some property which was earlier not in his possession." However, "if after seizing of a property or document the said property or document is retained for some period of time, then such retention amounts to impounding of the property or document." The Court concluded that in this case, the passport had been seized but not impounded, and thus, the Customs Authority should return the passport to the Petitioner.
Order:
The Court set aside the order of the Learned Judicial Magistrate No.I, Tiruchirapalli, and directed the Customs Authority to return the passport of the Petitioner within ten days. The Customs Authority was instructed to retain a duly attested photocopy of the passport for use as secondary evidence if necessary. The Petitioner was required to execute an adequate bond to the satisfaction of the Learned Magistrate and was prohibited from leaving the country without express permission from the Magistrate, which should be granted only after providing an opportunity for the Customs Authority to be heard. The Criminal Revision Petition was allowed, and the connected Miscellaneous Petition was closed.
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2012 (11) TMI 1272
Issues involved:
The judgment involves issues related to rejection of accounts u/s. 145(3) of the IT Act and the computation of income based on profit rate.
Rejection of accounts u/s. 145(3) of the IT Act:
The AO rejected the books of account of the assessee due to lack of supporting bills and vouchers for claimed expenditures, leading to estimation of income at a higher rate. The ld. CIT(A) found the rejection unjustified as no specific defects were mentioned in the audit report. However, since the assessee failed to produce complete bills and vouchers, the rejection was deemed justified. The Revenue appealed against the CIT(A)'s decision, which was allowed, restoring the AO's order.
Computation of income based on profit rate:
The AO applied a profit rate of 12.5% initially, which was reduced to 6% by the ld. CIT(A) considering the history of the assessee and comparable cases. The Revenue challenged the reduction, but the Tribunal upheld the CIT(A)'s decision, stating that the 6% profit rate was fair and reasonable given the lack of complete supporting documents. The Tribunal dismissed the Revenue's appeal and the assessee's cross-objection.
In conclusion, the departmental appeal was partly allowed, and the cross objection of the assessee was dismissed.
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2012 (11) TMI 1271
Issues involved:
The judgment deals with the deletion of penalty u/s.271(1)(c) by CIT(A)-II, Ahmedabad in three identical cases following a search u/s.132 conducted on 15.11.2006.
Issue 1 - Deletion of penalty u/s.271(1)(c):
The appeals of the Revenue involved the common issue of the deletion of penalty levied u/s.271(1)(c) by CIT(A)-II, Ahmedabad in three cases. The disclosed income was declared at the time of search, taxed as per the return, and taxes were paid. The contention was that since the disclosure was made u/s.132(4) of the IT Act, no penalty should be levied. However, the AO imposed penalties which were contested by the assessee.
Issue 2 - Applicability of Explanation-5 to Section 271(1)(c):
The assessee submitted before the ld.CIT(A) that the disclosed income was included in the return of income and taxes were paid before filing the return. The ld.CIT(A) allowed the appeal and deleted the penalty based on the conditions satisfied under clause (2) of Explanation 5 to Section 271(1)(c) of the IT Act.
Decision:
After considering the submissions and case laws, the Tribunal held that the assessee fulfilled all conditions for immunity against penalty as per Explanation-5 to Section 271(1)(c) of the IT Act. The Tribunal approved the cancellation of penalty by ld.CIT(A) as a correct view, dismissing the grounds raised by the Revenue Department. Consequently, all three appeals of the Revenue were dismissed.
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2012 (11) TMI 1270
Issues Involved:
1. Confirmation of disallowance u/s 14A r.w. Rule 8D.
2. Correctness of the computation of disallowance by the revenue authorities.
Summary:
1. Confirmation of disallowance u/s 14A r.w. Rule 8D:
The assessee, engaged in the business of manufacture and export, showed exempt dividend income of Rs. 65,93,178 and a disallowance of Rs. 35,63,498. The AO computed an additional disallowance of Rs. 28,31,068 u/s 14A r.w. Rule 8D, disregarding the assessee's suo moto disallowance. The CIT(A) sustained the AO's computation. The ITAT noted that the revenue authorities did not specify how the assessee's computation was incorrect and emphasized that the AO must show dissatisfaction with the assessee's computation before applying the prescribed formula.
2. Correctness of the computation of disallowance by the revenue authorities:
The ITAT referred to the decision of the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd., which mandates that the AO must first determine the correctness of the assessee's claim regarding the expenditure incurred in relation to exempt income. The ITAT observed that the revenue authorities failed to record specific dissatisfaction with the assessee's working. Consequently, the ITAT set aside the order of the CIT(A) and directed the AO to recompute the disallowance by applying Rule 8D and following the spirit of the judgment in Godrej & Boyce.
Conclusion:
The appeal filed by the assessee is allowed for statistical purposes, with the AO directed to recompute the disallowance in accordance with the prescribed rules and judicial precedents.
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2012 (11) TMI 1269
Issues involved: The judgment involves the claim of deduction u/s. 80IB(10) for a project where some flats exceeded the prescribed limit of 1500 sq.ft of built-up area, and the issue of allowing deduction u/s. 80IB in respect of profit from the sale of car parking area.
Claim of Deduction u/s. 80IB(10): The Revenue raised grounds challenging the allowance of deduction u/s. 80IB(10) for the project Purva Riviera due to flats exceeding 1500 sq.ft. The AO found violations based on various evidence including the sale brochure, statements of the director and site engineer, and physical measurements. The Ld. CIT(A) considered the appellant's submissions and held that the appellant had not violated the area restriction, allowing the deduction u/s. 80IB(10) based on judicial decisions cited by the appellant.
Reassessment by AO: The Tribunal found that both the AO and Ld. CIT(A) had violated principles of natural justice in their respective findings. The issue was restored to the AO for de novo assessment, directing physical verification of flats, contacting occupants, and considering pro-rata deduction if violations were found. The AO was instructed to afford the assessee a reasonable opportunity to be heard and present evidence.
Car Parking Area Deduction: Ground No. 6 related to allowing deduction u/s. 80IB for profit from the sale of car parking area. Citing a previous High Court decision, the Tribunal dismissed this ground, following the precedent that car parking space is integral to the housing project and eligible for deduction under section 80IB.
Conclusion: The appeals filed by the Revenue were partly allowed for statistical purposes, with the issue of deduction u/s. 80IB(10) remanded to the AO for reassessment. The Tribunal dismissed the ground related to deduction for profit from the sale of car parking area based on the precedent set by the High Court.
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2012 (11) TMI 1268
Issues involved: The judgment involves the disallowance of purchase and consumption of tools and instruments as revenue expenditure versus capital expenditure u/s 250 read with section 143(3) of the IT Act.
ITA No.2457/Ahd/2010 (Revenue's appeal for AY 2007-08): The revenue appealed against the deletion of addition made on account of disallowance of capital expenditure debited to P & L Account under the head 'purchases of tools and instruments'. The AO treated the purchase of tools and instruments as capital expenditure, disallowing it and adding it back to the income of the assessee. The CIT(A) directed the AO to delete the addition, considering the items as revenue expenditure. The Tribunal confirmed the CIT(A)'s decision based on previous decisions and dismissed the revenue's appeal.
ITA No.959/Ahd/2012 (Assessee's appeal in AY 2008-09): The assessee challenged the addition made by the AO for disallowing revenue expenses claimed in Profit & Loss a/c on account of consumption of tools and instruments. The CIT(A) confirmed the AO's action. However, following the decision in the revenue's appeal for AY 2007-08, the Tribunal held that the expenditure incurred on tools and instruments was revenue expenditure and deleted the additions made by the AO.
ITA No.1751/Ahd/2012 (Assessee's appeal for AY 2009-10): The assessee contested the disallowance of expenditure on purchase/consumption of tools and instruments, arguing that the expenses were written off and should be treated as revenue expenditure. The Tribunal, following the decision in the revenue's appeal for AY 2007-08, deleted the additions made by the AO for AY 2008-09 and 2009-10, considering the expenditure on tools and instruments as revenue expenditure.
In all three appeals, the Tribunal consistently held that the expenditure on purchase and consumption of tools and instruments should be treated as revenue expenditure, in line with previous decisions and the nature of the items involved.
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2012 (11) TMI 1267
Issues involved: Appeal against the order of the Commissioner of Income-tax (Appeals) regarding assessment year 2001-2002.
Grounds of Appeal:
1. Leasehold Repairs/Improvement: CIT(A) deleted addition of Rs. 1,69,246 incurred by the assessee.
2. Expenditure for Dividend Income: CIT(A) deleted Rs. 15,17,088 expenditure under section 14A of the I.T. Act.
3. Bad Debts: CIT(A) deleted Rs. 37,40,538 on account of bad debts.
4. Club Membership Fees: CIT(A) deleted Rs. 26,44,155 for club membership and other fees.
5. Expenses on Hire Charges: CIT(A) directed to allow expenses on hire charges against hire charges receipt before disallowing under clause (baa) of 80HHC.
Judgment Details:
- Grounds 1, 2, and 3 dismissed as similar issues were decided in another case.
- Ground 5 dismissed as it was identical to another issue.
- Ground 4, regarding club membership fee, was decided in favor of the assessee based on previous Tribunal decisions for similar reasons.
- Grounds 6 and 7 were of a general nature and required no adjudication.
- The appeal filed by the Revenue was dismissed, and the order was pronounced on November 26, 2012.
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2012 (11) TMI 1266
Issues Involved:
1. Disallowance of staff welfare and other expenses.
2. Addition u/s 145A.
3. Expenditure on improvement of leasehold properties.
4. Disallowance u/s 14A.
5. Disallowance of bad debts.
6. Disallowance of liquidated damages.
7. Deduction u/s 80HHC.
8. Revised deduction u/s 80HHC for computing book profit u/s 115JA.
Summary:
1. Disallowance of Staff Welfare and Other Expenses:
The CIT(A) deleted the disallowance of Rs. 14,97,379 out of staff welfare expenses and Rs. 6.03 lakhs out of other expenses. The Tribunal upheld this decision, noting that similar disallowances were deleted in the assessee's own case for previous years after verification by the Assessing Officer (A.O.). The Tribunal found no new facts to warrant interference with the CIT(A)'s findings. Ground no.1 was dismissed.
2. Addition u/s 145A:
The CIT(A) deleted the addition of Rs. 4,65,568 made by the A.O. u/s 145A. The Tribunal confirmed this, citing its earlier decision in the assessee's case for the assessment year 1999-2000, where it was held that adjustments required u/s 145A are revenue neutral. The Tribunal also referenced the Delhi High Court's decision in CIT v. Mahavir Aluminium Ltd. Ground no.2 was dismissed.
3. Expenditure on Improvement of Leasehold Properties:
The CIT(A) treated the expenditure of Rs. 1,25,37,044 on leasehold property improvements as revenue expenditure. The Tribunal upheld this, following its earlier decision in the assessee's case for the assessment year 1998-99, where such expenses were deemed revenue in nature. Ground no.3 was dismissed.
4. Disallowance u/s 14A:
The CIT(A) deleted the disallowance of Rs. 5 lakhs u/s 14A, as the investments were made from the company's own funds, not borrowed funds. The Tribunal upheld this, referencing the Bombay High Court's decision in CIT v. Reliance Utility and Power Ltd., which presumes investments are made from own funds unless proven otherwise. Ground no.4 was dismissed.
5. Disallowance of Bad Debts:
The CIT(A) deleted the disallowance of bad debts amounting to Rs. 10,97,891, noting that post-amendment to section 36(1)(vii), the condition for allowability is the actual write-off in the books. The Tribunal upheld this, citing the Supreme Court's decision in TRF Limited v. CIT. Ground no.5 was dismissed.
6. Disallowance of Liquidated Damages:
The CIT(A) deleted the disallowance of liquidated damages amounting to Rs. 13,17,110, as these were taken into income in earlier years. The Tribunal upheld this, following the Supreme Court's decision in TRF Limited v. CIT. Ground no.6 was dismissed.
7. Deduction u/s 80HHC:
The CIT(A) directed the A.O. to consider net receipts for various incomes while computing deduction u/s 80HHC. The Tribunal upheld this, referencing the Supreme Court's decision in ACG Associated Capsules Pvt. Ltd. and the Bombay High Court's decision in CIT v. United Riceland Ltd. Ground no.7 was dismissed.
8. Revised Deduction u/s 80HHC for Computing Book Profit u/s 115JA:
The CIT(A) directed the A.O. to consider the revised deduction u/s 80HHC for computing book profit u/s 115JA. The Tribunal confirmed this, noting that the issue was consequential to the other grounds, which were dismissed. Ground no.8 was dismissed.
Conclusion:
The appeal filed by the Revenue was dismissed. Order pronounced in the open Court on the 26th day of November, 2012.
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2012 (11) TMI 1265
Issues Involved:
1. Permissibility of alterations to vehicle bodies at variance with manufacturer's specifications.
2. Conflict between decisions in W.P.(C).No.29946 of 2006 and W.P.(C).No.8836 of 2007.
3. Validity of Transport Commissioner's Circular dated 28.9.2006.
4. Refusal of vehicle registration due to alterations.
5. Competence of Registering Authority to assess vehicle safety and road-worthiness.
Summary:
1. Permissibility of Alterations:
The primary issue is whether alterations to the vehicle body that deviate from the manufacturer's specifications in the "prototype test certification" are permissible. The judgment clarifies that while the M.V.Act and the C.M.V.Rules mandate prototype testing and certification, they do not prohibit alterations as long as the vehicle remains road-worthy and safe. Rule 126 of the C.M.V.Rules mandates prototype testing but does not restrict body construction to the prototype's exact measurements. Rule 93 of the C.M.V.Rules prescribes permissible dimensions, indicating that alterations within these limits are allowed.
2. Conflict Between Decisions:
The Division Bench addressed the conflict between the decisions in W.P.(C).No.29946 of 2006 and W.P.(C).No.8836 of 2007. The former allowed alterations with Registering Authority's certification, while the latter prohibited tampering with the prototype approved by ARAI. The Bench approved the decision in W.P.(C).No.29946 of 2006, emphasizing that alterations are not totally prohibited and must be assessed for safety and road-worthiness by the Registering Authority.
3. Validity of Transport Commissioner's Circular:
The Circular dated 28.9.2006, issued by the Transport Commissioner, reminded Registering Authorities of Section 52 of the M.V.Act, which prohibits alterations that deviate from the manufacturer's specifications. The judgment held that the Circular serves as a cautionary note but does not override the statutory provisions allowing alterations assessed for safety and road-worthiness by the Registering Authority.
4. Refusal of Vehicle Registration:
The petitions challenged the refusal of vehicle registration due to alterations. The judgment quashed the refusals, directing the Registering Authorities to consider the registration applications based on the principles outlined, ensuring the vehicles' safety and road-worthiness rather than mere dimensional conformity with the prototype.
5. Competence of Registering Authority:
The judgment affirmed the competence of the Registering Authority to assess the safety and road-worthiness of altered vehicles. It emphasized that the Registering Authority must inspect and certify the vehicle's fitness for use in public places, considering the statutory provisions and any specifications issued by the State or Regional Transport Authorities.
Conclusion:
The judgment quashed the impugned orders and directed the Registering Authorities to reconsider the registration applications, ensuring compliance with the statutory provisions and safety standards. The writ petitions were allowed with directions to complete the registration process within three months.
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2012 (11) TMI 1264
Issues Involved:
1. Net Profit Rate Application
2. Disallowance of Interest u/s 40A(2)(a)
3. Adhoc Disallowance of Expenses
4. Addition u/s 68 for Unexplained Cash Credits
Summary:
1. Net Profit Rate Application:
The Revenue's appeal contested the CIT(A)'s direction to apply a net profit rate of 2% instead of 6.5% as determined by the Assessing Officer (AO). The AO had rejected the books of account u/s 145 due to defects and estimated the profit at 6.5%, resulting in an additional profit of Rs. 12,58,049/-. The CIT(A) confirmed the rejection of books but reduced the net profit rate to 2% based on past history and comparable cases, providing relief of Rs. 10,71,399/- out of the total addition.
2. Disallowance of Interest u/s 40A(2)(a):
The AO disallowed Rs. 58,977/- as interest payment under section 40A(2)(a). The CIT(A) agreed in principle but held that no separate addition was warranted since the sustained addition of Rs. 1,86,650/- covered this disallowance.
3. Adhoc Disallowance of Expenses:
The AO made adhoc disallowances totaling Rs. 81,352/- for telephone, vehicle expenses, and depreciation. The CIT(A) reduced this disallowance to 10% of the expenses, amounting to Rs. 40,676/-, but noted that no relief would be provided in the assessed income as these disallowances were covered within the net profit rate addition.
4. Addition u/s 68 for Unexplained Cash Credits:
The AO added Rs. 8,25,000/- u/s 68 due to unverified loans from various depositors, who did not respond to summons and had insufficient bank balances before issuing cheques to the assessee. The CIT(A) deleted the addition, stating that the AO cannot ask for the source of the source and that addition u/s 68 cannot be made after rejecting the books of account. However, the ITAT disagreed, citing Supreme Court and jurisdictional High Court judgments, and restored the AO's addition for Rs. 5,75,000/- while upholding the CIT(A)'s deletion of Rs. 2,50,000/- for other creditors with sufficient funds.
Conclusion:
The ITAT upheld the CIT(A)'s application of a 2% net profit rate but restored the AO's addition of Rs. 5,75,000/- u/s 68 for unexplained cash credits, providing partial relief to the Revenue.
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2012 (11) TMI 1262
Issues involved:
The issues involved in this case are related to the addition made by the Assessing Officer under Section 40-A (3) of the Income-tax Act, 1961, regarding the payment made for the purchase of land in an open auction held by the High Court of Judicature at Bombay.
Facts:
The respondent - assessee purchased a land for Rs. 3.5 crores in an open auction held by the High Court of Judicature at Bombay. The Assessing Officer made an addition of Rs. 70,00,000/- being 20% of the total payment of Rs. 3.5 crores, alleging that the payment was made in cash due to lack of details in the conveyance deed and absence of relevant bank account information.
Decision:
The Commissioner of Income-tax (Appeal) allowed the appeal of the assessee and deleted the disallowance made under Section 40-A (3) of the Act. The CIT (Appeal) considered that the entire payment of Rs. 3.5 crores was made through Pay Orders and Drafts from bank accounts of M/s. Zoom Developers Private Limited on behalf of the assessee. The Tribunal affirmed this view, stating that the payment was made through different bank accounts and the land was purchased through an open auction by the High Court of Bombay.
Judgement:
After considering the submissions and reviewing the orders passed by the Tribunal, the High Court found no substantial question of law involved in the matter. The Court concluded that the findings of the CIT (Appeal) and the Tribunal were factual and based on the available material. Therefore, the appeal was dismissed as it lacked merit.
Separate Judgement:
No separate judgement was delivered by the judges in this case.
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2012 (11) TMI 1261
Unexplained Cash Credits u/s 68 - Assessee had taken loan from few firms which were not found genuine by AO as those firms were allegedly involved in providing bogus entries. - HELD THAT: - Merely because there was a search in aforementioned companies, no inference regarding giving of bogus entries could be drawn. - During search, there is no admission by the assessee therein that they were involved giving bogus/accommodation entries - Findings recorded by the AO is not correct and can not be relied upon.
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2012 (11) TMI 1260
Issues involved: The issues involved in this judgment are related to the deduction claimed u/s 80IA of the Income Tax Act and the disallowance of expenses on account of telephone and travel expenses.
Deduction u/s 80IA:
The assessee, engaged in the business of Travel and telecommunication services, claimed a deduction u/s 80IA in the return of income. The Assessing Officer (A.O.) denied the deduction stating that the assessee did not qualify the basic conditions laid down u/s 80IA. The CIT (A) granted partial relief to the assessee, allowing the deduction. The Revenue appealed against this decision. The Tribunal upheld the order of the CIT (A) based on consistent views taken in earlier years by the Tribunal, stating that the assessee was providing basic telecommunication services and hence entitled to the deduction u/s 80IA.
Disallowance of Expenses:
The A.O. made a lump sum disallowance out of telephone and travel expenses, suspecting personal use in incurring these expenses. The CIT (A) restricted the disallowance to a lower amount after considering the explanation offered by the assessee. The Revenue appealed against this order. The Tribunal found that the A.O. made the disallowance on an adhoc basis without specific instances of personal expenses being pointed out. As the Revenue failed to prove that the expenses were personal in nature, the Tribunal upheld the order of the CIT (A) and dismissed the appeal of the Revenue.
In conclusion, the Tribunal upheld the deduction u/s 80IA for the assessee based on consistent views taken in earlier years and dismissed the Revenue's appeal regarding the disallowance of expenses, as the Revenue failed to prove personal nature of the expenses.
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