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2013 (11) TMI 1764
Seeking grant of regular bail - offences punishable u/s 9A, 25A and 29 of Narcotic Drugs and Psychotropic Substances Act, 1985 ('NDPS' Act) - recovered and seized 100 kgs of Pseudoephedrine - controlled substance as defined u/s 2(vii) (d) of the NDPS Act - HELD THAT:- It was fairly conceded by learned counsel for the respondent that bar of Section 37 of the NDPS Act is not attracted in the present case since as per the prosecution 100 kgs of Pseudoephedrine was recovered which is a controlled substance. Pseudoephedrine is not a narcotics drug as envisaged under Section 2 (vii) (a) of the Act.
Keeping in view the totality of facts and circumstances of the case, coupled with the fact that the petitioner is in custody since 15th December, 2011, he is admitted to bail on his furnishing personal bond in the sum of ₹ 50,000/- with one surety in the like amount to the satisfaction of the concerned Trial Court. Petitioner shall deposit his passport, if any, with the Trial Court and shall not leave the country without the permission of the concerned Trial Court. He is further directed to furnish his current address to DRI and in case of any change in address, DRI be informed immediately.
The application stands disposed of in the above terms.
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2013 (11) TMI 1763
Issues Involved: The judgment involves the reopening of assessment u/s 147 of the Act, violation of principles of natural justice in framing the assessment, addition of undisclosed investment amount, and observation by Ld. CIT(A) regarding action u/s 148 of the Act.
Reopening of Assessment u/s 147:
The Assessee challenged the reopening of assessment u/s 147, contending that there was no valid reason recorded by the Assessing Officer to believe that income had escaped assessment. The Assessing Officer was criticized for initiating proceedings without jurisdiction and in violation of the law.
Violation of Principles of Natural Justice:
The Assessee raised concerns about the assessment u/s 143(3)/147, alleging a gross violation of natural justice. It was argued that the Assessing Officer selectively relied on a part of the statement without providing the entire statement to the appellant, rendering the assessment void ab initio.
Addition of Undisclosed Investment Amount:
The main issue pressed in the case was the addition of Rs. 41,00,400/- as an undisclosed income investment. The Assessing Officer inferred that the Assessee had purchased a plot for Rs. 60,40,800/-, with a portion paid in cash. Despite the Assessee's explanations, the Assessing Officer added the cash amount to the undisclosed income.
Observation Regarding Action u/s 148:
Ld. CIT(A) observed that the Assessing Officer might consider action u/s 148 in the hands of another individual on a protective basis concerning the alleged undisclosed investment amount. The Assessee argued that such actions were arbitrary, unlawful, and unjust.
Judgment Details:
During a search u/s 132 of the I.T. Act, documents related to the sale of industrial plots were found, leading to the allegation of an undisclosed investment. The Assessing Officer concluded that the Assessee had paid Rs. 41,00,400/- in cash for purchasing a plot, based on seized documents. Despite the Assessee's reconciliation of payments, the Assessing Officer added the cash amount to the undisclosed income.
The Assessee's appeal to Ld. CIT(A) was unsuccessful, leading to the appeal before the tribunal. The tribunal considered similar cases where additions based on seized documents were dismissed. It was highlighted that the seized documents did not conclusively prove on-money transactions, as they were not in the handwriting of the parties involved and lacked essential details.
Relying on precedents and legal principles, the tribunal set aside the orders of the authorities below and decided the issue in favor of the Assessee. The judgment emphasized the lack of concrete evidence linking the Assessee to the alleged undisclosed investment, leading to the allowance of the appeal.
This summary provides a detailed overview of the issues involved in the legal judgment, highlighting the arguments presented by the parties and the tribunal's decision based on legal precedents and principles.
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2013 (11) TMI 1762
Issues involved: The judgment involves appeals against the orders of the ld.CIT (A)-V Baroda regarding the claim of deduction u/s.80-IB(10) of the Act for two different Assessees, M/s. Sagar Associates and M/s. Sagar Builders for Asst. Year 2005-06.
Issue 1: Nature of Business Activity
The ld.CIT (A)-V, Baroda held that the appellant is not a Builder and Developer assuming entrepreneurial risk, but rather a Works Contractor. The appellant's contention of being a Builder and Developer for claiming deduction u/s.80IB(10) was rejected based on the execution of sale deeds of incomplete houses and construction agreements. The appellant's profit was deemed ineligible for the deduction u/s.80IB(10).
Issue 2: Claim of Deduction u/s.80IB(10)
The ld.CIT(A)-V, Baroda disallowed the appellant's claim of deduction u/s.80IB(10) amounting to Rs. 83,185, despite the appellant fulfilling all conditions for the claim. The denial was based on the separate sale of plots and completion of construction work, rendering the appellant ineligible for the deduction.
Issue 3: Tribunal Decisions
The appellant relied on tribunal decisions, including DCIT vs. SMR Builders (P.) Ltd., M/s. Vardhman Builders and Developers vs. ITO, and Raghava Estates Vs. Dy.CIT. The Tribunal noted that a similar issue was decided in favor of the assessee in the case of Satsang Developers vs. ACIT, and decided the present appeals in favor of the assessee based on the precedent and other tribunal decisions cited.
In conclusion, the Tribunal allowed both appeals of the assessees based on the precedent set in similar cases and the reliance on tribunal decisions supporting the assessee's claim for deduction u/s.80IB(10).
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2013 (11) TMI 1761
Issues involved: The only issue in this appeal is against the order of CIT(A) regarding the value adopted by Stamp Valuation Authority and the failure to refer the matter to the Valuation Officer despite objection from the assessee.
Details of the Judgment:
1. Issue 1 - Stamp Valuation Authority's Value Adoption:
The appeal by the assessee is against the order of CIT(A) in respect to the value adopted by the Stamp Valuation Authority without referring the same to the valuation officer as provided u/s 50C of the Income-tax Act, 1961. The AO took the value adopted by the Stamp Valuation Authority as deemed value for the purpose of computation of Long Term Capital Gains. CIT(A) confirmed the action of AO, upholding the application of section 50C. The assessee contended that the market value of the property should be taken at a lower amount while computing the long term capital gain. The Coordinate Bench decision in a similar case held that the consideration received on account of surrender of leasehold rights is not subject to section 50C of the Act. Accordingly, the appeal of the assessee was allowed.
2. Issue 2 - Failure to Refer to Valuation Officer:
The second ground raised by the assessee was that the AO failed to refer the matter to the Valuation Officer. However, the CIT(A) found no legal infirmity in the AO's order and upheld the application of section 50C. The Coordinate Bench decision supported the assessee's contention that the consideration received on surrender of leasehold rights is not taxable under section 50C. Consequently, the appeal of the assessee was allowed.
In conclusion, the Appellate Tribunal ITAT KOLKATA allowed the appeal of the assessee based on the grounds related to the Stamp Valuation Authority's value adoption and the failure to refer the matter to the Valuation Officer. The judgment highlighted the distinction between ownership rights and tenancy rights in determining the tax implications of property transactions.
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2013 (11) TMI 1760
Issues involved: Writ petition seeking Certiorarified Mandamus, interim order restraining payment, interpretation of agreements, rights of the bank and parties, modification of Tribunal's order.
Interpretation of agreements: The petitioner argued that the Hypothecation Agreement and Power of Attorney restricted the mortgage to certain projects only, limiting the bank's recovery rights. The bank contended that the issue should be resolved based on documents and submissions by the parties involved.
Interim order and Tribunal's power: The Tribunal passed an interim order restraining the sixth respondent from making payments to the petitioner without further direction. The Court discussed the power of Tribunals to issue ex parte orders to protect the interests of parties, citing a Supreme Court decision.
Amount due and modification of order: The sixth respondent stated the total amount held up, including security deposits and pending bills. The Court noted that the actual amount payable is yet to be determined. To safeguard both parties' interests, the Court directed the sixth respondent to deposit a specified amount from released funds, allowing the petitioner to pursue defense and modify the Tribunal's order accordingly.
Final directives and future proceedings: The Court clarified that it did not express an opinion on the merits of the claims but modified the Tribunal's order to prevent complete blockage of funds. Parties were directed to present relevant records for final orders, with the Tribunal instructed to expedite the process. The bank was given the option to seek modification of the garnishee order based on their claims, allowing defendants to raise objections.
This writ petition was disposed of with the above directions, emphasizing the need for prompt resolution and leaving room for further actions by the parties involved.
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2013 (11) TMI 1758
Issues involved: Appeal against rejection of application for approval u/s 80G(5) of the Income-tax Act, 1961.
Summary:
The appeal was filed by the assessee-trust against the order of the Commissioner of Income-tax, Rajkot rejecting their application for approval u/s 80G(5) of the Income-tax Act. The Commissioner rejected the application citing the trust's failure to meet the expenditure requirement as per sec 80G(5) of the Act. The assessee contended that the trust deserved recognition u/s 80G(5) and challenged the Commissioner's decision on various grounds. During the hearing, the Authorized Representative for the assessee-trust argued that the trust had met the expenditure criteria in the subsequent year, citing relevant case laws to support their claim.
The Tribunal considered the arguments and referred to a judgment of the Punjab & Haryana High Court, which stated that the object of the trust should be examined at the time of granting approval for exemption u/s 80G, and the application of funds could be assessed during the framing of the assessment. The Tribunal found that the only reason for rejection given by the Commissioner was the trust's failure to meet the expenditure requirement. Following the High Court's judgment, the Tribunal set aside the Commissioner's order and directed the grant of recognition u/s 80G(5) to the assessee-trust.
In conclusion, the appeal of the assessee was allowed, and the Tribunal ordered the grant of recognition u/s 80G(5) to the trust as applied for.
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2013 (11) TMI 1757
Search & seizure operation was conducted - Direction for treating interest income as business income and resultantly allowing deduction under section 80IB - Deduction u/s 80IB allowed in entirety in original assessment - The ld. CIT(Appeals) held that no addition could be made under section 153A where regular assessments have been completed - no incriminating material was found in the course of search & seizure operation - the AO is not competent to disallow the amount of deduction? - HELD THAT - the original assessment in this case was completed under section 143(3) in which deduct ion was allowed in entirety under sect ion 80IB of the Act inter alia on the amount of interest income. It is also undisputed that no incriminating material was found during the course of search casting doubt about the allowability or otherwise of such deduction under sect ion 80IB. This fact has been fairly admitted by ld. D.R. during the course of proceedings before us as well.
The Mumbai Bench of the Tribunal in the case of ACIT vs. Pratibha Industries (2013) 141 ITD 151 (Mum.) has held, inter alia, that having done original assessment u/s 143(3), if no incriminating material is found during the course of search, then it is not permissible to make any addition in the assessment under section 153A pursuant to search action.
The Special Bench of the Tribunal in the case of All Cargo Global Logistics Limited vs. DCIT (2012) 137 ITD 217 (SB)(Mum.) has also held to the same extent. In view of the foregoing discussion, we are of the considered opinion that no exception can be found to the view taken by CIT(Appeals) for deciding this issue in assessee’s favour.
Before parting with this matter, we want to make it clear that our decision is based in the backdrop of the facts that the deduct ion under section 80IB could not have been tinkered with because no incriminating material was found during the course of search on this issue when original assessment granting deduct ion on this issue was completed under sect ion 143(3). We have not expressed any opinion on the merits of the case about the allowability or otherwise of deduct ion under section 80IB on interest income arising in the present facts and circumstances.
In the result, the appeal filed by the Revenue stands dismissed.
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2013 (11) TMI 1756
Issues Involved:
1. Legality and validity of the transfer order u/s 127 of the IT Act, 1961.
2. Adequacy of reasons provided for the transfer.
3. Compliance with principles of natural justice.
4. Jurisdiction and authority of the CIT, Ujjain.
Summary:
1. Legality and Validity of the Transfer Order u/s 127 of the IT Act, 1961:
The petitioners challenged the order dated 31st May 2013, passed by the CIT, Ujjain, directing the transfer of their assessment cases from Ratlam to Indore. The respondents argued that the order was issued under s. 127 of the IT Act after issuing proper show-cause notices and providing opportunities for hearing. The court found that the CIT, Ujjain, acted within his jurisdiction and followed due process, making the transfer order legally valid.
2. Adequacy of Reasons Provided for the Transfer:
The petitioners contended that the reasons for the transfer were cryptic and insufficient. The respondents stated that the transfer was for "administrative convenience and facilitating coordinated investigation in the group cases with reference to interlinked documents/transactions." The court held that the reasons provided were adequate and specific, emphasizing that coordinated investigation and administrative convenience are valid grounds for transfer under s. 127.
3. Compliance with Principles of Natural Justice:
The petitioners argued that the transfer order violated principles of natural justice as proper reasons were not recorded, and they were not given a fair hearing. The court noted that exhaustive show-cause notices were issued, and the petitioners were given opportunities to respond. The final order addressed the objections raised by the petitioners, demonstrating compliance with natural justice principles.
4. Jurisdiction and Authority of the CIT, Ujjain:
The petitioners questioned the jurisdiction of the CIT, Ujjain, to pass the transfer order, especially since an earlier order had centralized the cases at Ratlam. The court clarified that the CIT, Ujjain, had the authority to pass the transfer order under s. 127, and the earlier centralization did not bar the issuance of a new order. The court also noted that the transfer was necessary for effective and coordinated investigation, which justified the exercise of jurisdiction by the CIT, Ujjain.
Conclusion:
The court dismissed the writ petition, upholding the transfer order dated 31st May 2013, passed by the CIT, Ujjain, under s. 127 of the IT Act, 1961. The court found that the transfer was legally valid, adequately reasoned, compliant with principles of natural justice, and within the jurisdiction of the CIT, Ujjain. No order as to costs.
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2013 (11) TMI 1755
The Delhi High Court dismissed the writ petition as withdrawn without expressing an opinion on appeal maintainability. The interim order granted on 7th May, 2013 will continue for one week.
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2013 (11) TMI 1754
Validity of Sanction order passed by competent authority at stage of inquiry or at pretrial stage for Prosecution - CBI manual - Disproportionate assets by Finance officials - Money laundering - The Appellant, CBI registered a preliminary enquiry against the Respondent for disproportionate assets. After conclusion of the preliminary enquiry, a regular case was registered. During the course of investigation, it came to light that disproportionate assets was 7615.45 times of his known sources of income. It further surfaced that the Respondent was involved in money laundering; and for channelising his ill-gotten wealth, had established a number of companies wherein his family members were the founding Directors. The Central Vigilance Commission after examining the said case advised the Ministry of Finance to grant sanction for prosecution. Hence, the sanction order was issued under the seal and signature of the Under Secretary (V and L), Ministry of Finance.
HELD THAT:- The stage of examining the validity of sanction is during the trial and court do not propose to say that the validity should be examined during the stage of inquiry or at pretrial stage. It is to be kept in mind that sanction lifts the bar for prosecution. Therefore, it is not an acrimonious exercise but a solemn and sacrosanct act which affords protection to the government servant against frivolous prosecution. Further, it is a weapon to discourage vexatious prosecution and is a safeguard for the innocent, though not a shield for the guilty. If the sanction order on its face indicates that all relevant material i.e. FIR, disclosure statements, recovery memos, draft charge sheet and other materials on record were placed before the sanctioning authority and if it is further discernible from the recital of the sanction order that the sanctioning authority perused all the material, an inference may be drawn that the sanction had been granted in accordance with law.
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2013 (11) TMI 1753
The Supreme Court of India issued an order on 28.10.2013 directing the Sahara Group of Companies to not dispose of any assets and the alleged contemnors to not leave the country without court permission. The case is listed for further arguments on 11.12.2013 at 2:00 P.M.
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2013 (11) TMI 1752
Issues involved:
The petition challenges a show-cause notice and an order of reassessment u/s 35(1) of the Gujarat Value Added Tax Act, 2003, directing payment of a balance tax amount. The main issue is the validity of the reassessment based solely on a show-cause notice from the Central Excise Department without further inquiry.
Facts and Decision:
The petitioner, a VAT-registered dealer, filed returns for 2007-08 and paid tax. A notice was issued indicating possible tax evasion, leading to a reassessment order for a higher tax amount. The petitioner challenged this order, citing a previous court decision setting aside a similar reassessment based only on an excise department notice. The court noted that the reassessment was solely on the excise notice, without independent inquiry. Quoting the previous decision, the court emphasized that reliance on the excise notice alone was insufficient to justify tax additions under the VAT Act. Consequently, the reassessment order was quashed, with liberty for a fresh assessment if permissible under the law.
Conclusion:
The High Court quashed the impugned reassessment order, emphasizing the need for independent inquiry before making tax additions based on external notices. The court reserved liberty for a lawful reassessment with full opportunity for the petitioner, without affecting proceedings under the Central Excise Act. The rule was made absolute with no costs awarded.
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2013 (11) TMI 1751
Issues Involved:
1. Addition of Rs. 2.42 crores by AO and enhancement to Rs. 3.00 crores by CIT(A) as unexplained investment.
2. Confirmation of addition by CIT(A) and enhancement of the addition.
3. Levy of interest u/s 234A, 234B, and 234C of the IT Act.
Summary:
Issue 1: Addition of Rs. 2.42 crores by AO and enhancement to Rs. 3.00 crores by CIT(A) as unexplained investment
The Assessee, a partner in M/s SVK Sri Sitharamanjaneya Constructions (SVK SSC) and M/s SVK Projects, was subjected to a search and seizure operation u/s 132(1) of the IT Act. During the proceedings, it was found that the Assessee had invested Rs. 3,58,90,000 on behalf of M/s SVK. The AO added Rs. 2.42 crores as unexplained investment u/s 69 of the IT Act, citing lack of documentary evidence for the cash advances claimed by the Assessee. The CIT(A) enhanced this addition to Rs. 3.00 crores, stating that the Assessee failed to explain the source of the cash investment made on 30.12.2006.
Issue 2: Confirmation of addition by CIT(A) and enhancement of the addition
The CIT(A) rejected the Assessee's explanation and enhanced the addition made by the AO. The CIT(A) noted that the Assessee admitted to the cash investment of Rs. 3,00,00,000 and failed to provide credible evidence for the source of this investment. The CIT(A) also alleged that the Assessee fabricated the kutcha cash book to explain the investment.
Issue 3: Levy of interest u/s 234A, 234B, and 234C of the IT Act
The CIT(A) confirmed the levy of interest u/s 234A, 234B, and 234C of the IT Act.
Judgment:
The Tribunal found that the AO and CIT(A) wrongly considered the entire investment as unexplained in the hands of the Assessee. It was established that M/s SVK Projects existed prior to the search and had received funds from various parties, which were then invested in M/s SVK SSC. The Tribunal noted that the ledger account pertained to M/s SVK Projects and not the Assessee individually. The Tribunal deleted the addition of Rs. 2.42 crores and the enhancement of Rs. 58,00,000 by the CIT(A), stating that the amounts should not be added in the hands of the Assessee. The appeal of the Assessee was allowed, and the additions made by the AO and CIT(A) were deleted. The Tribunal also observed that if there were any doubts about the sources, the revenue could inquire into M/s SVK Projects, but this was not a direction. The appeal was pronounced in the open court on 29th November 2013.
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2013 (11) TMI 1750
Issues involved:
The petition seeks quashing of a criminal complaint and an impugned order for the offence of defamation against the petitioner, who is the Director of the respondent-accused companies.
Judgment Details:
1. The petitioner argued that no offence is made out against her as she did not get the alleged defamatory articles published nor made any statements. It was contended that vicarious liability cannot be imposed without attributing a specific role or overt act to the petitioner.
2. The petitioner also pointed out that she was not nominated u/s 305 of Cr.P.C., emphasizing that only a nominated person can be prosecuted. It was asserted that summoning an accused for a criminal offence is a serious matter and the trial court erred in not considering this vital aspect.
3. On the contrary, the respondent argued that cognizance is taken of the offence and not the offender, citing relevant legal precedents. It was contended that Section 305 of Cr.P.C. does not bar summoning a principal officer of the accused company.
4. The court observed that at the stage of framing notice u/s 251 of Cr.P.C., it is crucial to determine if a prima facie case exists to continue the proceedings. The complaint indicated that the accused companies are prosecuted through a common principal officer or a nominated person u/s 305 of Cr.P.C.
5. The court held that the option to nominate a person u/s 305 of Cr.P.C. lies with the respondent-accused companies, and in their absence, prosecution through the petitioner cannot be faulted. The trial court is expected to apply its mind to decide if a prima facie case exists against each accused.
6. Citing relevant legal observations, the court emphasized the duty of the trial court to carefully consider the allegations and evidence before proceeding. It was noted that objections regarding jurisdiction should be raised before the trial court, and the court should decide on jurisdiction before proceeding further.
7. The court clarified that while summoning orders cannot be recalled, proceedings can be dropped against an accused at the stage of framing notice u/s 251 of Cr.P.C. if a prima facie case is not established.
8. The petition was disposed of with liberty for the petitioner to raise her pleas before the trial court. The trial court was directed to pass a reasoned order on the point of notice u/s 251 of Cr.P.C., and the personal appearance of the petitioner was dispensed with until the hearing is concluded, provided she is represented by counsel without seeking adjournment.
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2013 (11) TMI 1749
Issues involved: Quashing of impugned order summoning the petitioner as accused under Section 138 of The Negotiable Instruments Act, 1881.
Summary:
In the case before the Delhi High Court, the petitioner sought the quashing of the order summoning them as an accused under Section 138 of The Negotiable Instruments Act, 1881. The petitioner's counsel argued that there were no specific averments against the petitioner in the complaint regarding their role in the company's business conduct, and that the cheque in question was not signed by the petitioner. It was highlighted that the Notice under Section 251 of the Criminal Procedure Code (Cr.P.C.) had not yet been framed in the complaint case. Referring to the Supreme Court's decisions in Bhushan Kumar and Krishan Kumar, the Court emphasized the trial court's duty to consider the allegations and evidence before framing charges. The Court refrained from commenting on the merits of the case, allowing the petitioner to raise their arguments before the trial court during the framing of Notice under Section 251 of the Cr.P.C.
The Court, guided by the Supreme Court's precedents, disposed of the petition and application without prejudicing either party. It granted liberty to the petitioner to present their arguments before the trial court during the framing of Notice under Section 251 of the Cr.P.C. If the trial court decides to drop the proceedings against the petitioner, the Court clarified that the Apex Court's decision in Adalat Prasad Vs. Rooplal Jindal and Ors. would not hinder such a decision. The petitioner's personal appearance before the trial court was not mandated until the framing of Notice under Section 251 of the Cr.P.C., provided they were represented by counsel who did not seek adjournment on their behalf. If the trial court chooses to frame Notice under Section 251 of the Cr.P.C., the petitioner would have the liberty to avail of legal remedies available.
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2013 (11) TMI 1748
Issues Involved:
1. Addition of Rs. 50,000 for AY 2001-02.
2. Addition of Rs. 1.50 lakh for PTP Nagar Property for AY 2002-03.
3. Addition of Rs. 6.00 lakh for Benz Car for AY 2002-03.
4. Addition of Rs. 20,30,376 for bank deposits for AY 2002-03.
5. Addition of Rs. 10.00 lakh for Anakulam Estate for AY 2003-04.
6. Addition of Rs. 50.00 lakh for peak credit in banks for AY 2004-05.
7. Addition of Rs. 22,33,416 for peak credit in banks for AY 2005-06.
8. Addition of Rs. 12.88 crore for commission income for AY 2006-07.
9. Addition of Rs. 2.93 crore for peak credit in banks for AY 2006-07.
10. Disallowance of Rs. 35.00 lakh professional charges for AY 2007-08.
11. Addition of Rs. 53.00 lakh for premium income for AY 2007-08.
12. Addition of Rs. 40.00 lakh for unexplained investment for AY 2007-08.
13. Addition of Rs. 2.77 crore for peak credit in banks for AY 2007-08.
Summary:
1. Addition of Rs. 50,000 for AY 2001-02:
The assessee challenged the addition of Rs. 50,000 confirmed by Ld CIT(A). The Ld CIT(A) found that the agreement between the assessee and his wife did not show any consideration of Rs. 4.50 lakh. The AO's observation was not correct. The Ld CIT(A) granted relief of Rs. 4.00 lakh and confirmed Rs. 50,000. The Tribunal found no justification in confirming the addition of Rs. 50,000 and directed the AO to delete the addition.
2. Addition of Rs. 1.50 lakh for PTP Nagar Property for AY 2002-03:
The assessee explained the sources for Rs. 19.00 lakh investment in PTP Nagar Property. The AO added Rs. 13.00 lakh as unexplained investment. The Ld CIT(A) granted set off of Rs. 10.50 lakh and confirmed Rs. 1.50 lakh. The Tribunal found that the assessee used the refund of Rs. 4.50 lakh from Smt. Mary Mathew for the payment and directed the AO to delete the entire addition of Rs. 13.00 lakh.
3. Addition of Rs. 6.00 lakh for Benz Car for AY 2002-03:
The AO added Rs. 6.00 lakh for the purchase of Benz Car. The Ld CIT(A) deleted the addition as there was no evidence that the car was purchased during the year. The Tribunal upheld the deletion.
4. Addition of Rs. 20,30,376 for bank deposits for AY 2002-03:
The AO added Rs. 35.45 lakh for unexplained bank deposits. The Ld CIT(A) deleted Rs. 11.00 lakh and confirmed Rs. 20,30,376. The Tribunal found that the deposits represented real estate transactions and directed the AO to delete the entire addition of Rs. 35.45 lakh.
5. Addition of Rs. 10.00 lakh for Anakulam Estate for AY 2003-04:
The AO computed the profit on sale of Anakulam Estate at Rs. 38.59 lakh. The Ld CIT(A) determined the profit at Rs. 10.00 lakh after considering the land used for internal roads. The Tribunal upheld the decision of Ld CIT(A).
6. Addition of Rs. 50.00 lakh for peak credit in banks for AY 2004-05:
The AO added Rs. 98.65 lakh as peak credit balance. The Ld CIT(A) determined the income at Rs. 50.00 lakh. The Tribunal found that the deposits represented real estate transactions and directed the AO to delete the entire addition.
7. Addition of Rs. 22,33,416 for peak credit in banks for AY 2005-06:
The AO added Rs. 85.77 lakh as peak credit balance. The Ld CIT(A) determined the income at Rs. 22,33,416. The Tribunal found that the deposits represented real estate transactions and directed the AO to delete the entire addition.
8. Addition of Rs. 12.88 crore for commission income for AY 2006-07:
The AO assessed Rs. 12.88 crore as commission income. The Ld CIT(A) found that the assessee received Rs. 4.88 crore and paid Rs. 2.09 crore for labour settlement. The Tribunal upheld the decision of Ld CIT(A).
9. Addition of Rs. 2.93 crore for peak credit in banks for AY 2006-07:
The AO added Rs. 2.93 crore as peak credit balance. The Ld CIT(A) deleted the addition. The Tribunal upheld the deletion.
10. Disallowance of Rs. 35.00 lakh professional charges for AY 2007-08:
The AO disallowed Rs. 35.00 lakh paid to Markose & Markose. The Ld CIT(A) deleted the disallowance. The Tribunal upheld the deletion.
11. Addition of Rs. 53.00 lakh for premium income for AY 2007-08:
The AO added Rs. 53.00 lakh based on a receipt. The Ld CIT(A) found the revocation agreement valid and deleted the addition. The Tribunal upheld the deletion.
12. Addition of Rs. 40.00 lakh for unexplained investment for AY 2007-08:
The AO added Rs. 40.00 lakh for unexplained investment. The Ld CIT(A) found sufficient funds available and deleted the addition. The Tribunal upheld the deletion.
13. Addition of Rs. 2.77 crore for peak credit in banks for AY 2007-08:
The AO added Rs. 2.77 crore as peak credit balance. The Ld CIT(A) deleted the addition. The Tribunal upheld the deletion.
Conclusion:
The Tribunal dismissed the appeal for AY 2003-04 and allowed all other appeals filed by the assessee. The appeal for AY 2006-07 was partly allowed, and all other appeals of the revenue were dismissed.
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2013 (11) TMI 1747
Issues Involved:
1. Applicability of Order 2 Rule 2 of the Code of Civil Procedure.
2. Whether the second suit was barred by Order 2 Rule 2.
3. Scope and interpretation of Order 2 Rule 2.
Summary:
1. Applicability of Order 2 Rule 2 of the Code of Civil Procedure:
The case concerns the applicability of Order 2 Rule 2 of the Code of Civil Procedure in respect of two suits filed by the Respondent. The first suit (Original Suit No. 1145 of 2003) was filed for recovery of an amount of Rs. 44,30,994 against the Appellant bank and its officers. The second suit (Suit No. 288/03/04 of 2003) was filed for claiming damages of Rs. 3,09,000/- against the bank and its officers for withdrawing credit facilities.
2. Whether the second suit was barred by Order 2 Rule 2:
The bank and its officers filed an application u/r 7 Rule 11 Code of Civil Procedure in the second suit for rejection of the plaint on the ground that it was barred by Order 2 Rule 2. The District Court concluded that the cause of action in both suits was the same and the relief sought in the second suit could have been claimed in the first suit. Therefore, the application was allowed, and the plaint was rejected. The High Court, however, reversed this decision, holding that the causes of action in the two suits were different. The Supreme Court examined whether the High Court correctly applied the legal principles.
3. Scope and interpretation of Order 2 Rule 2:
Order 2 Rule 2 mandates that every suit shall include the whole of the claim arising out of the same cause of action. If a Plaintiff omits to sue or intentionally relinquishes any portion of his claim, he cannot sue for the omitted portion later. The Supreme Court reiterated that if the cause of action is the same, the Plaintiff must place all claims before the Court in one suit to avoid vexing the Defendant twice for the same cause. The Court reviewed the plaints and found that the facts on which the second suit was based existed at the time of filing the first suit. No fresh cause of action arose between the two suits. Therefore, the Respondent could have sought the reliefs claimed in the second suit in the first suit itself.
Conclusion:
The Supreme Court held that the Respondent had omitted certain reliefs available at the time of filing the first suit and, after relinquishing the same, could not file a separate suit. The High Court erred in reversing the District Court's order. The appeals were allowed, and the High Court's judgment was set aside. There was no order as to costs.
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2013 (11) TMI 1746
Issues involved: Appeal against order of CIT(A)-II, Kanpur for assessment year 2007-2008 regarding deduction u/s 80IB and section 2(22)(e) of the Income Tax Act.
Deduction u/s 80IB:
The Revenue appealed against the order directing the Assessing Officer to allow deduction u/s 80IB without appreciating the facts. The Tribunal noted that the assessee started manufacturing activities in March 2006, making them eligible for the deduction. The facts remained consistent, as confirmed by the CIT(A) for the present year. Referring to previous years' decisions, the Tribunal found no reason to take a contrary view and upheld the CIT(A)'s order, rejecting the Revenue's ground.
Section 2(22)(e) - Deemed Dividend:
The Revenue challenged the direction to allow deduction u/s 2(22)(e) without appreciating the facts. The Tribunal examined the companies' main objects and found that although they could invest surplus funds, they were not primarily engaged in money lending. The exception clause of section 2(22)(e) was analyzed, concluding that the loans were not given in the ordinary course of business of the companies. The Tribunal disagreed with the CIT(A) and sided with the Assessing Officer, citing a Tribunal decision to support their interpretation. Consequently, the Revenue's appeal was partly allowed.
In conclusion, the Tribunal upheld the deduction u/s 80IB but reversed the decision on section 2(22)(e), ruling in favor of the Revenue on the latter issue.
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2013 (11) TMI 1745
Determination of a project as "Housing project" u/s-80-IB(10) - Approval of Project and Completion date as per Sec-80-IB(10) - Project undertaken a "works contract" - Undertaken "Contract risk" or "Investment risk" - HELD THAT:- the project was considered to be an housing project, which is within the ambit of section 80IB(10) of the Act. Therefore, Court did not find any infirmity in the order of the ld. CIT(Appeals) on this issue and the ground raised by the Revenue stands dismissed.
The method adopted by the assessee is according to his business convenience and in our opinion, the housing project is on the size of plot of land having more than 1 acre and therefore, on this account, the benefit available under section 80IB(10) cannot be denied and the ld. CIT(Appeals), after discussing in detail has held that the housing project constructed by the assessee is in 1 acre of land and we find no reason to interfere with the order of the ld. CIT(Appeals). Accordingly, the issue raised by the Revenue stands dismissed.
The project executed by the assessee was not of the nature of works contract and the assessee undertook investment risk.
The ownership is not an essential condition to get the benefit under section 80IB(10). In this case, the assessee being a developer as well as builder is entitled for deduction under section 80IB(10) of the Act.
The decision in this case of CIT v. Vandana Properties [2012 (4) TMI 54 - BOMBAY HIGH COURT] CTR 258 & CIT v. Sanghvi and Doshi Enterprise 255 CTR (Mad) 156 [2012 (12) TMI 84 - MADRAS HIGH COURT] were followed.
In the result, the appeal filed by the Revenue and the Cross Objection filed by the assessee are dismissed.
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2013 (11) TMI 1744
Issues Involved:
1. Deletion of addition made on account of denial of relief u/s 54F.
2. Non-production of documentary evidence for construction of a new house.
3. Interpretation of the conditions laid down u/s 54F.
Summary:
1. Deletion of addition made on account of denial of relief u/s 54F:
The revenue appealed against the CIT(A)'s order deleting the addition of Rs. 46,66,562/- made by the AO on account of denial of relief u/s 54F. The AO had rejected the assessee's claim for deduction u/s 54F on the grounds that the assessee did not complete the construction of the residential house within three years from the date of sale of the property. The CIT(A) allowed the assessee's claim, citing the Karnataka High Court's decision in CIT v. Sambandam Udaykumar, which held that the completion of construction or occupation is not a requirement for claiming deduction u/s 54F, as long as the capital gain has been invested in the construction of a residential house.
2. Non-production of documentary evidence for construction of a new house:
The AO contended that the assessee failed to produce documentary evidence to show that there was a construction of a new house. The assessee's husband, in his statement recorded u/s 131, admitted that due to financial constraints, the construction could not be completed within the stipulated period. However, the CIT(A) accepted the assessee's evidence of progress in construction and photographs, and held that the assessee had commenced construction within the stipulated period, thus entitling her to the benefit of section 54F.
3. Interpretation of the conditions laid down u/s 54F:
The Tribunal upheld the CIT(A)'s order, agreeing that the essence of section 54F is whether the capital gain has been invested in constructing a residential house. The Tribunal noted that the assessee had invested the entire capital gain in purchasing the plot and had commenced construction within the stipulated period. The Tribunal emphasized that the Karnataka High Court's decision in Sambandam Udaykumar supports a liberal interpretation of section 54F, allowing the benefit even if the construction is not complete in all respects within the stipulated period. Consequently, the Tribunal dismissed the revenue's appeal and confirmed the CIT(A)'s order allowing the deduction u/s 54F.
Conclusion:
The appeal by the revenue was dismissed, and the order of the CIT(A) allowing the assessee's claim for deduction u/s 54F was confirmed. The Tribunal emphasized the liberal interpretation of section 54F, focusing on the investment of capital gain in the construction of a residential house rather than the completion of construction within the stipulated period.
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