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Showing 61 to 80 of 1287 Records
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2014 (11) TMI 1233
Accrual of income - claim of deduction of the amounts retained by its clients as per the contracts - According to the assessee, as the amounts were not received, they cannot be considered as part of income for the impugned assessment year - HELD THAT:- The original authority, while considering the decision of this Court in Commissioner of Income Tax v. Ignifluid Boilers (P) Ltd.,. [2006 (1) TMI 76 - MADRAS HIGH COURT] was of the view that since the issue was pending before the Supreme Court and that such a claim is of recurring nature, declined to extend the benefit to the assessee. The Commissioner of Income Tax (Appeals), however, laying emphasis on the decision of this Court in Ignifluid Boilers (P) Ltd., case (supra), allowed the appeal of the assessee and the department's appeal before the Tribunal was dismissed holding that the decision of the jurisdictional High Court is binding on the Tribunal and therefore there was no reason to differ with the findings of the Commissioner of Income Tax (Appeals). The said order of the Tribunal is under challenge before us.
When the matter was taken up for admission, the learned counsel for the appellant fairly pointed out that the Special Leave Petition preferred by the department in Ignifluid Boilers (P) Ltd., case was dismissed by the Supreme Court [2006 (7) TMI 726 - SC ORDER]
Since the issue raised in this appeal had already been decided against the department as Commissioner of Income Tax v. M/s Ignified Boilers India Ltd.(Supra) and in Commissioner of Income Tax v. East Coast Constructions & Industries Limited [2006 (12) TMI 574 - SC ORDER] no question of law arises for consideration.
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2014 (11) TMI 1232
Deduction under Section 43B - interest amount paid from the Over Draft or Cash Credit Account towards the liability of term loan - Explanation 3C and 3D to Section 43B specifically deems that the interest paid from loan or borrowing and loan or advance as not to have been actually paid - HELD THAT:- The department declined to grant the benefit of deduction on interest paid primarily on the plea that the amount has not been actually paid and transfer of amount from one account to another account cannot be treated as paid. However, the Tribunal repelled the said plea by interpreting Section 43B of the Act and held that overdraft/cash credit accounts are not similar to loan accounts. The Tribunal further observed that the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and, therefore, set aside the disallowance made under Section 43B of the Act.
A bare reading of Explanations 3C and 3D to Section 43B of the Act provides an answer to the problem by making it clear that where interest amount has not been converted into loan or borrowing (or) loan or advance, as the case may be, there is no question of denying the benefit of deduction. In the case on hand, the interest amount has been actually paid by the assessee through Overdraft/Cash Credit account and the same has not been converted into loan or borrowing (or) loan or advance, as the case may be.
Decided in favour of the assessee.
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2014 (11) TMI 1231
Disallowance of deduction u/s 10B on miscellaneous income earned by the assessee from sale of scrap - Whether CIT(A) has erred in holding the miscellaneous income earned from sale of scrap as main business activity - HELD THAT:- It is not the case of AO that these incomes are assessable under some other head of income and not as income from business. Under these circumstances, we are of the considered opinion that the order of the first appellate authority has to be upheld by applying the decision of the special bench of the Tribunal in the case of Maral Overseas Ld. [2012 (4) TMI 345 - ITAT INDORE] where it is held that in the case of Liberty India 2009 (8) TMI 63 - SUPREME COURT the Hon’ble Supreme Court has dealt with the provisions of section 80IA/80IB of the Act and not section 10B where a formula has been prescribed u/s 10B(4), the application of which would result in arriving at the figure of profits and gains that are to be considered as derived by the 100% EOU, for the purpose of computing exemption u/s 10B (1) Thus a disallowance on the ground that a particular income is not derived from the business is bad in law as the same does not confirm to the formula prescribed under the Act.
CIT(A) admitting an additional claim of the assessee - assessee has made a claim u/s 10B in the return of income - HELD THAT:- It is only a case where the claim u/s 10B was sought to be recomputed. It is not a fresh claim and hence in our view the judgment of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. [2006 (3) TMI 75 - SUPREME COURT] does not apply.
Be it as it may, this is a legal ground and all the facts relatable to this ground are on record. Thus in view of the decision of Hon’ble Supreme Court in the case of NTPC Ltd. [1996 (12) TMI 7 - SUPREME COURT] we do not find any infirmity in the action of the first appellate authority. As far as computation of relief u/s 10B is concerned the Ld. DR could not not controvert the factual finding of the Ld. CIT(A) and hence the same is upheld. Hence these two ground Nos. 3 & 4 are dismissed.
Disallowance of interest on interest free loan advanced to a subsidiary company - HELD THAT:- Factual position is that the assessee had purchased shares of a subsidiary company for the purpose of having control over it. The amount in question is investment made and not a loan advanced. As there is no interest free loan given we uphold the findings in para 5.2 of the CIT(A) order and dismiss ground No. 1 of the revenue.
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2014 (11) TMI 1230
Area Based Exemption - Northeastern/Backward region - substantial expansion or not - doctrine of promissory estoppel - benefit of N/N. 39/2001-CE dated 31-07-2001 - Irregular availment of CENVAT Credit - Bogus Sale - it is argued that in respect of North-eastern area, there is not even a single case of detection of fraudulent availment of benefit - HELD THAT:- The percentage of excise duty paid in the exempted areas is highest when compared to similar industries in the area where there is no exemption as per the PLA. The difference in percentage is shown so high that sometimes it is three times higher the duty is paid in the areas where exemption is granted. Such a collection of revenue was found to be on account of the reasons that bogus production, overvaluation, procurement of raw material without invoice etc. Keeping in view of the recommendations found in the report, the Cabinet found that grant of indiscriminate exemption will lead to misuse. In order to prevent such malpractice, the formula of value addition has been introduced in granting partial concessions to the industries, which enjoy exemptions under Section 5A of the Act of 1944.
The State does not dispute the Industrial Policies of 1997 and 2007 and also the grant of concession pursuant to the said notifications. However, the dispute revolves round the justification for issuing the modified notifications, in question. It is to be seen whether any superior public interest is evident, which prompted the Government to issue the modified notifications - The instances of misuse noticed in the inquiry are hardly consists of about 41 cases and most of the cases, as per Annexure-A, are still under adjudication, it is not finally decided whether the industries concerned in the Northeastern region are guilty of any misuse. The argument that because of the misuse, the concession had to be withdrawn does not ap pear to be tenable, on deeper scrutiny of the materials placed before the Court. It is not as if that the State and the Department does not have any mechanism or machinery for detecting malpractice of bogus production by diligent periodical inspection.
Where the goods do not carry MRP, with reference to the marginal cost and the prevalent market price of similar goods in comparison to the market price of similar goods, the malpractice of over valuation can be detected at the time of refund.
Import of goods from the sister unit s from some other area to the exempted area - HELD THAT:- The same could also be easily detected because, under the VAT Act, the transit permits have to be taken if false transit permit has been taken for transfer of consignment from one unit to the sister unit in the exempted area, in such cases, it could be easily detected as a case of malpractice. That apart, the transit of goods is well regulated under the VAT Act, and the transit passes, documents of title of goods consigned have to be taken and that at every check post, there would be a check. It is not that easy for an industrialist to flout the law and import the goods for the purpose of evading Central Excise duty as alleged.
The scheme of the policy and the notifications insist that there should be payment of the excise duty and thereafter, they should apply for refund. The Department, at the time of refund, can very well thoroughly scrutinize all these aspects regarding misuse and malpractice alleged. Therefore, the allegation that for the instances of malpractice stated above, there has to be a partial withdrawal of concessions, does not appear to be justifiable ground.
Application of the doctrine of promissory estoppel - HELD THAT:- It is almost a well settled principle of law that the State has failed to show any prejudice to the superior public interest and that there is also no contra legislation in this regard. The respondents and the petitioners have all set up industries allured by the promise of tax concessions and made substantially investments. The setting up of an industry and commencement of production requires a thorough compliance of formalities and check up by every Department. The industries, in question, have complied with all the requirements of law and have set up industries and all of them have started production. The allegation of misuse, if really a genuine ground, it would have come to the notice of the Department much earlier before the declaration of the second Industrial Policy in the year 2007, the modified notifications are brought into force within a short span of time. If really there is any infringement or misuse or malpractice, the State would have given serious attention and would not have issued the second Industrial Policy of 2007 in haste.
The industries, in question, have complied with all the requirements of law and have set up industries and all of them have started production. The allegation of misuse, if really a genuine ground, it would have come to the notice of the Department much earlier before the declaration of the second Industrial Policy in the year 2007, the modified notifications are brought into force within a short span of time. If really there is any infringement or misuse or malpractice, the State would have given serious attention and would not have issued the second Industrial Policy of 2007 in haste. Within a span of a year after the issuance of notification of Industrial Policy of 2007, the change in the stand to withdraw the concessions does not appear to be sound and prop er and the grounds made out are so feeble and fragile which do not offer a concrete objective material for this Court to believe that really superior public interest prompted the issuance of modified notifications.
There are no reason to interfere with the order of learned Single Judge - petition allowed.
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2014 (11) TMI 1229
Order-ex-parte passed by FAA - non-compliance to notices - AR submitted that the assessee was shifting its addresses very frequently and there was a possibility that the notice served to the old address of the assessee might have been refused to be accepted - HELD THAT:- In the appellate proceedings, we notice that the ld. CIT(A) has issued notices on six occasions. On three occasions, even though the notices were served, yet no one attended before CIT(A). On one occasion, notice was not accepted by the assessee. These facts show that the callous attitude and carelessness on the part of the assessee cannot be altogether ruled out. At the same time, we notice that the taxing authorities have passed the impugned orders without hearing the assessee. The ld. AR now assures that the assessee would extend full cooperation and furnish all the facts relating to the issue.
In the interest of justice, we find some justification in the plea put forth by the assessee - The said request of the assessee can be accepted on certain terms only. Accordingly, we impose a cost of ₹ 5,000/- (Rupees five thousand ) upon the assessee and direct it to pay the same to the account of Income Tax department in the same manner as the appeal fee is paid.
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2014 (11) TMI 1228
Penalty u/s 271(1)(c) - Disallowance of expenses - HELD THAT:- Addition has been made purely on estimate without reference to any clinching evidence/material being on record and therefore, the penalty is not sustainable. This finding of CIT(A) could not be controverted by Revenue. We also find that in the penalty order also, it is noted by the AO that 25% disallowance was made out of various expenses - in the penalty order that the CIT(A), Kanpur after considering the facts of the case has restricted the disallowance to 5% of direct expenses which was worked out at ₹ 16 lac. This goes to show that the penalty was imposed only on ad hoc disallowance.
This is by now a settled position of law that on ad hoc and estimated disallowance/addition, without bringing any clinching material on record suggesting concealment of income or furnishing of inaccurate particulars of income, imposition of penalty u/s 271(1)(c) is not justified. - Decided in favour of assessee.
Rejection of books of accounts - net profit @8.28% of the training fee received by the assessee - HELD THAT:- Rejection of books of account is not proper then he can examine the allowability of various expenses claimed by the assessee under various heads as noted by the AO the assessment order particularly in view of this fact that the amount of income and expenditure along with net profit as per return filed by the assessee and as per revised return filed by the assessee are different.
In the revised return, the assessee has declared extra income on account of training fees and similarly has claimed extra expenses under the head direct training expenses. This is also seen that in the original return of income filed by the assessee, deduction was claimed on account of depreciation and in the revised return, no deduction was claimed under the head depreciation.
It is also seen that in the assessment order, it is noted by the AO that as per the submission of the assessee, some bills and vouchers are not readily available and they are misplaced and cannot be produced. Hence, even if it is held that books of account are not rejected then also, the allowability of expenses has to be examined. CIT(A) should pass necessary order as per law as per above discussion after providing reasonable opportunity of being heard to both the sides.
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2014 (11) TMI 1227
Deduction u/s 80IA(4)(iii) in respect of income derived by it from the industrial park - specific condition in the notification pertaining to the assessee regarding the number of units was not fulfilled - Whether it is open to the Tribunal to rely upon rule 18C of the Rules and certain provisions from the Industrial Park Scheme, 2002 as laying down the condition construction of the minimum no. of units should be completed before deduction could be claimed under section 80IA(4)(iii) of the Act, when no such condition exists in the said section? - HELD THAT:- Allowability of deduction u/s. 80IA(4)(iii) of the I.T. Act has been decided against the assessee by the Tribunal in assessee’s own case for A.Y. 2003-04. In view of the order of the Tribunal in assessee’s own case, the grounds raised by the Revenue are allowed.
On further appeal by the assessee, the Hon’ble High Court has already admitted the 3 substantial questions of law which are already mentioned at para 5 above. Therefore, in view of the declaration u/s.158A(1) filed by the assessee in Form No.8, we direct the Assessing Officer to amend the order if the issue is decided in favour of the assessee by the order of the higher authorities at a later date.
Grounds raised by the Revenue are accordingly allowed.
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2014 (11) TMI 1226
Reopening of assessment - Disallowance u/s 10A - business of development of computer software and export - assessee was running the activities since 1993 under SSI unit and hence the undertaking is not newly established undertaking as registered by Section 10A - Claim accepted earlier but withdrawn in subsequent assessment years - HELD THAT:- We find the claim of deduction u/s.10A was also allowed by the Revenue in summary assessment for the A.Y. 2004-05 and there was no scrutiny assessment u/s.143(3). There is also no dispute to the fact that after completion of the assessment for the impugned assessment year on 21-02-2013 the AO had reopened the assessments for A.Yrs. 2006-07, 2007-08 & 2008-09 by issuing notice u/s.148 on 25-032013 for all the three years. From the reasons recorded for issue of notice u/s.148 we find the reasons for such re-opening was on the basis of the finding of the AO for A.Y. 2010-11. However, we find the AO vide order dated 28-03-2014 has dropped such 147 proceedings for the above 3 years.
Identical orders have been passed for A.Yrs. 2007-08 & 2008-09.
From the above chronology of events, it is crystal clear that the claim of deduction u/s.10A of the assessee from A.Yrs. 2004-05 to 2009-10 have been allowed.
Whether after allowing the deduction for 6 years can the AO deny the benefit of deduction u/s.10A in the 7th year, i.e. for the impugned assessment year? - We find an identical issue had come up before the Hon’ble Bombay High Court in the case of Western Outdoor Interactive Pvt. Ltd [2012 (8) TMI 709 - BOMBAY HIGH COURT] held that unless deduction allowed u/s.10A for the first assessment year is withdrawn, denial of exemption u/s.10A for subsequent years is impermissible.
Thus claim of deduction u/s.10A cannot be denied to the assessee for the A.Y. 2010-11 since such deduction has been allowed to the assessee from A.Yrs. 2004-05 to 2009-10 - Decided in favour of assessee.
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2014 (11) TMI 1225
Penalty 271(1)(c) - Defective notice - Difference of income declared in return under Section 153A and original return - HELD THAT:- As relying on case of Manjunatha Cotton and Ginning Factory and others [2013 (7) TMI 620 - KARNATAKA HIGH COURT] the defective notice resulted in principles of natural justice being suffered and based on such proceedings, no penalty could be imposed on the assessee. Therefore, the entire proceedings initiated would become without jurisdiction. Consequently, the order passed would become invalid and is liable to be set aside. Therefore, as the notice issued in the instant case initiating penalty proceedings is not in accordance with law, order passed in such proceedings is void - Decided in favour of assessee.
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2014 (11) TMI 1224
Refund of the tax paid in pursuance of the declaration filed u/s 158BC - entitled to claim the entire refund of taxes paid on the undisclosed income declared m the return of income filed by the assessee - Whether the Tribunal was correct in holding that the assessee would be entitled to claim the entire refund of taxes paid on the undisclosed income declared in the return of income filed by the assessee of ₹ 83 lakhs and the admitted tax paid along with the return of ₹ 14,50,000/- and the balance after assessment, since the assessment order was set aside by ignoring the principle that the amount admitted in the return of income cannot be refunded? - HELD THAT:- Proviso (b) to section 240 is also declaratory. It seeks to clarify the law so as to remove doubts leading to the courts giving conflicting decisions, and in several cases directing the revenue to refund the entire amount of income-tax paid by the assessee where the revenue was not in a position to frame a fresh assessment, Being clarificatory in nature it must be held to be retrospective, in the facts and circumstances of the case. It is well settled that the legislature may pass a declaratory Act to set aside what the legislature deems to have been a judicial error in the interpretation of statute. It only seeks to clear a meaning of a provision of the principal Act and make explicit that which was already implicit.
Where the assessment is annulled, the refund shall become due only In respect of the amount, if any, paid in excess of the tax chargeable on the total income return by the aesessee. Therefore, it necessarily follows that there should be return filed by the assessee showing his total income and paying tax. Thereafter, if the Assessing Officer were to make any addition and pass an assessment older and if that assessment is annulled, then, what is annulled is not the entire liability to pay tax. What is annulled is only additional tax foisted on the assessee by virtue of the assessment order in which event the tax refundable is only additional tax paid in pursuance of the assessment order and not the tax paid as per the returns. The returns filed was in pursuance of the notice issued under Section 158BC and it is not voluntary act.
Whether the assessee files a NIL return or files a return showing a particular undisclosed income and pays tax, if the entire proceedings initiated is found to be without jurisdiction, the return filed becomes without jurisdiction and the order passed thereon also becomes without jurisdiction, in which event there is no liability to pay tax at all. Merely because the return was filed in pursuance of the said notice, it cannot be said that the assessee has filed a return showing his total income. The effect of setting aside the assessment order passed under Chapter XIV B is that there is no liability to pay tax insofar as the assessee is concerned. If any tax is collected in pursuance of such Cider, the entire tax becomes liable to be refunded. That is what the Tribunal has exactly held. - Decided against revenue.
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2014 (11) TMI 1223
Disallowance of telephone expenses - assessee non furnishing telephone wise amount of claim and the places where telephones were installed - personal expenditure - HELD THAT:- We find that the assessee before the AO could not furnish any details of expenses, neither with regard to purpose for which the telephone was used and where such telephones were installed. In such a case, personal user by the partners cannot be ruled out.
There cannot be any precedence on factual matter, when in A.Y. 2004-05, the Ld.CIT(A) has deleted the disallowance on the ground that there was no basis of ad hoc disallowance by the AO. It was in this background the Tribunal had deleted the said addition. The learned counsel was unable to furnish the details or point out that on similar reasons disallowance was made in the earlier years. Thus looking to the facts of the case, we are of the opinion that this matter should go back to the file of the AO to examine this issue afresh - Decided in favour of assessee for statistical purpose.
Disallowance of business promotion expenses being 20% - AO disallowed said expenses on ad hoc basis on the ground that these expenses pertain to expenditure incurred on hotels and clubs and similar disallowance in the pased were made - Assessee submitted a very important fact and distinguishing feature in this year is that, assessee has paid Fringe Benefit Tax on payments relating to business promotion, therefore to the proportion of FBT paid, no disallowance should be made - HELD THAT:- We agree with the contention of the learned counsel that, if the assessee has paid FBT on the said amount then no disallowance is called for. However, in order to verify, this contention the matter is restored to the file to the AO, to see whether, any FBT has been paid on the amount debited for business promotion expenses. In case FBT has been paid then no disallowance should be made on such payment. Accordingly, ground no. 2 is partly allowed.
Disallowance u/s 14A read with rule 8D - HELD THAT:- So far as assessee’s contention that no interest should be disallowed as the investments have been made from surplus and were made prior to the loan taken from the bank, have not been examined either by the AO or by the Ld.CIT(A). This contention of the assessee should be examined by the AO. Further we agree with the contention of the learned counsel that, so far as investment in debentures and mutual funds which are debt oriented, the same should be excluded while taking the average investment for the purpose of disallowance under clause (iii) of rule 8D (2). Only average investment made in the shares should be taken into account. We direct the AO to compute the disallowance under clause (iii) of rule 8D (2) only on average investment made in shares. Thus the entire issue of disallowance u/s 14A is restored back to the file of the AO to examine the issue of interest and indirect expenses as per directions given above. - Decided partly in favour of assessee for statistical purposes.
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2014 (11) TMI 1222
Deemed dividend u/s.2(22)(e) - assessee was in receipt of the amount from M/s JMD Marketing Pvt. Ltd. as loan - HELD THAT:- We found that similar issue has been considered by the Hon’ble Punjab and Haryana High Court in the case of Shri Suraj Dev Dada [2014 (5) TMI 625 - PUNJAB & HARYANA HIGH COURT] wherein it was held that assessee having running account with the company, the provisions of Section 2(22)(e) were not attracted as this provisions was inserted to stop the misuse by the assessee by taking the funds out of the company by way of loans advances instead of dividends and thereby avoid tax.
Applying the proposition of law as discussed above to the facts of the present case, we found that assessee was having debit balance only for 17 days out of 365 days. On all other dates, assessee was having credit balance and peak of such credit. It is also a matter of record that assessee has not charged any interest in respect of temporary advance given to the company. Accordingly, we do not find any merit in the action of the lower authorities for bringing such transaction in the net of the Section 2(22)(e) of the Act. - Appeal filed by the assessee is allowed.
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2014 (11) TMI 1221
Bad debts claimed/advances written off - A.O. disallowed on the reason that evidence was not provided to show why the advances/ bad debts had been written off - CIT-A deleted the addition - HELD THAT:- It is not a case where assessee has not furnished the details before A.O. However, A.O. disallowed on the reason that assessee has not justified why the amounts are written off. Ld. CIT(A) examined the details and found that most of them are advances in the course of business paid over to more than 200 people and since the amounts are written off in the books of accounts they are eligible for deduction. Both on facts as well as on law, order of CIT(A) is to be upheld. There is no merit in Revenue grounds.
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2014 (11) TMI 1220
Registration u/s 12A denied - denied the benefit of registration u/s.12A on the ground that some of the objects are not charitable in nature and mainly intended for the benefit of a particular religious community - HELD THAT:- We find the Hon’ble Supreme Court in the case of CIT Vs. Andhra Chamber of Commerce [1986 (3) TMI 1 - SUPREME COURT] has held that an object beneficial to a section of the public is an object of general public utility. The expression “General Public Utility”, however, is not restricted to objects beneficial to the whole of mankind. To serve a charitable purpose, it is not necessary that the object should be to benefit the whole of mankind or even for persons living in a particular country or province. It is sufficient if the intention is to benefit a section of the public as distinct from specific individuals.
We in the case of CIT Vs. Chandra Charitable Trust [2006 (7) TMI 96 - HIGH COURT , GUJARAT] has held that if the objects of the assessee trust are not only to propagate Jainism or help and assist maintenance of temple, Sadhus, Sadhvis, Shraviks and Shravaks and other goals are also set out in the trust deed, the trust is a charitable as well as a religious trust and section 13(1)(b) would not be applicable.
We are of the considered opinion that the assessee trust is entitled to registration u/s.12A of the I.T. Act. We therefore set aside the order of the CIT and direct him to grant registration u/s.12A of the I.T. Act to the assessee trust. Grounds raised by the assessee are accordingly allowed.
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2014 (11) TMI 1219
Restraint on defendant from using the trade mark "LIPU" or any other mark which is similar to it - case of plaintiff is that the sewing machines were imported by them from China, the mark on the machines or in any packaging material relating to them, would normally be the mark of the exporter or manufacturer - HELD THAT:- Having regard to the fact that the invoices were raised by the Chinese manufacturers and that the manufacturing activity had taken place in China, it is very difficult to believe that the trade mark "LIPU" was coined by the plaintiffs and supplied by them to the manufacturers who affixed it on the goods. Particularly when the documents of the plaintiffs depict the plaintiffs to be ordinary retailers in the Central Kolkata District.
The brand "LIPU", if it is to belong to anyone belongs to the Chinese exporter and manufacturer and certainly not to the plaintiffs or the defendant Upto now the plaintiffs have been able to show nothing to establish that the mark has become so identified with them in this country that the people of this country identify it as belonging to them and not to the Chinese manufacturer - What emerges from this is that although both the parties claim to have used "LIPU" for a considerable period of time, the concern to get the mark registered has occurred very recently, in both. The plaintiffs' right to exclusive use of the mark 'LIPU' is not established at this stage. The parties can wait till the outcome of the trial, when the rights of the parties will be finally determined.
There are no justification for passing any interim order restraining the defendant from using the said mark. The prayer for an injunction is refused - application disposed off.
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2014 (11) TMI 1218
Revision u/s 263 - CIT in restricting the partners’ remuneration u/s 40(b) by not treating the surrendered amount as business income - disallowance out of claimed remuneration made deserves to be deleted - HELD THAT:- We find that, in the instant case, CIT(A) vide its order dated 21.10.2010 has already decided the issue which was considered by the CIT in the impugned order purportedly passed u/s 263 - As the order of the AO had already merged with the order of the CIT(A) in respect of the issue of head under which income disclosed in the course of the survey is assessable and consequently allowance of remuneration to partners, in our considered view, the CIT had no justification to decide the very same issue again u/s 263 of the Act. Therefore, the impugned order passed u/s 263 is bad in law and without jurisdiction. We, therefore, cancel the impugned order passed u/s 263 of the Act and allow the appeal of the assessee.
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2014 (11) TMI 1217
Deductible revenue expenditure u/s 37(i) - repairing of the furnace - HELD THAT:- Expenses in question incurred by the assessee on dismantling the old furnace and construction of a new furnace are clearly capital in nature, which is not supported by the factual matrix.
The Apex Court in "CIT VS. SARAVANA SPINNING MILLS P. LTD. [2007 (8) TMI 16 - SUPREME COURT] wherein, the Apex Court held that to decide the applicability of section 31(i) the test is not whether the expenditure is revenue or capital in nature, which test has been wrongly applied by the High Court, but whether, the expenditure is "current repairs". The Apex Court, further, held that the basic test to find out as to what would constitute current repairs is that the expenditure must have been incurred to "reserve and maintain" an already existing asset and the object of the expenditure must not be to bring a new asset into existence or to obtain a new advantage. We are, hence, of the opinion that the present appeal deserves to be allowed. In view of the above discussion, the decision relied on by Mrs. Bhatt in "BRITANNIA INDUSTRIES LTD. VS. CIT & ANR." [2005 (10) TMI 30 - SUPREME COURT] shall not apply to the facts of the case on hand. Present appeal is allowed.
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2014 (11) TMI 1215
Refund claim - reselling the goods back to the high sea sellers - HELD THAT:- Identical issue decided in the case of COMMISSIONER OF CUSTOMS, AHMEDABAD VERSUS M.B. ENTERPRISE [2015 (12) TMI 578 - CESTAT AHMEDABAD] where it was held that there is no condition under N/N. 102/2007-Cus that SAD duty should be initially paid through cash. It has been correctly agitated by the respondents in the cross objections that a right given under an exemption notification can not be taken away by the issue of Departmental Circulars.
There is no reason to deviate from such a view already taken - appeal dismissed - decided against Revenue.
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2014 (11) TMI 1214
Correct head of income - Rental income from letting out of warehouses/godowns - business income or income from house property - HELD THAT:- As decided in own case [2014 (11) TMI 895 - GUJARAT HIGH COURT] Rental income from letting out of warehouses/godowns together with various services rendered to the occupant did not constitute a business activity of the appellant and as such the income arising therefrom was not assessable under sec. 28 of the Income-tax Act, 1961 as business income. We, therefore, answer the questions raised in the present appeal in the affirmative - Decided in favour of the revenue and against the assessee.
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2014 (11) TMI 1213
Rejection of books of account u/s 145(3) - GP estimation - HELD THAT:- The assessee’s turnover increased substantially compared to immediate preceding year. The G.P. has gone down slightly whatever discrepancies pointed out by the learned Assessing Officer without quoting Section 145(3) of the Act are sufficient to reject the book result in case of civil contractor. The various courts held that procedural lapse does not allow to assessee to get benefit on account of default of any procedure. However, the estimation made by the learned CIT(A) appears to higher side as he applied the previous year G.P. rate in current year, therefore, in the interest of justice, we apply 6.5% G.P. rate on total sales as against confirmed by the learned CIT(A) @ 6.79%. Accordingly, the assessee gets relief partly. The Assessing Officer is directed to calculate the income @ 6.5% G.P..
Non-payment of TDS amount - addition u/s 40(a)(ia) - HELD THAT:- The Hon’ble Rajasthan High Court in the case of CIT Vs. Udaipur Dugdh Udpadak Sahkari Sangh Ltd [2014 (8) TMI 677 - RAJASTHAN HIGH held that TDS was deducted and paid before the due date of return is allowable U/s 40(a)(ia) of the Act, Therefore, we delete the addition confirmed by the learned CIT(A)
Characterization of income - Agricultural income or income from other sources - HELD THAT:- The assessee has furnished the relevant agricultural record as well as crop grown on agricultural land. The land belongs to the family members, which was later on gifted to him by his father. It is immaterial whether the assessee has shown any agricultural income or not as it is facts that agricultural income mostly depended on nature. Further the learned Assessing Officer has not discharged his onus to disprove the evidences filed by the assessee, therefore, we delete the addition and Assessing Officer is directed to treat the agricultural income as such. Accordingly, we allow this ground in favour of the assessee and against the revenue.
Addition for household expenses - HELD THAT:- D.R. had not controverted the findings given by the learned CIT(A) and the Assessing Officer also has not brought on record any adverse material that the assessee incurred more than expenses on household withdrawals except made addition on surmises and conjectures, which is not permitted under the law. Therefore, we confirm the order of the learned CIT(A) on this ground.
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