|
Advanced Search Options
Case Laws
Showing 61 to 80 of 1003 Records
-
2013 (4) TMI 952
Issues Involved:
1. Determination of "just compensation" u/s 168 of the Motor Vehicles Act, 1988.
2. Addition to income for future prospects in case of self-employed or fixed salary individuals.
3. Competence of the Tribunal to award compensation exceeding the claim u/s 166 of the Motor Vehicles Act, 1988.
4. Revision of compensation under conventional heads like loss of consortium and funeral expenses.
Summary:
1. Determination of "just compensation" u/s 168 of the Motor Vehicles Act, 1988:
The Supreme Court emphasized that compensation must be "just" and "reasonable," as established in Nagappa v. Gurudayal Singh. The Claims Tribunal initially awarded Rs. 8,96,500 with 7.5% interest, which was later modified by the High Court to Rs. 10,17,000. The Supreme Court reiterated that "just compensation" should be fair and equitable, considering the facts and circumstances of each case.
2. Addition to income for future prospects in case of self-employed or fixed salary individuals:
Referring to Sarla Verma and Santosh Devi cases, the Court clarified that for self-employed or fixed salary individuals, an addition of 50% to the actual income should be made if the deceased was below 40 years. For those aged 40-50 years, the addition should be 30%, and for those aged 50-60 years, it should be 15%. The Court found the Tribunal's approach in Sarla Verma case to be too rigid and emphasized the need for a more flexible approach considering the rise in the cost of living.
3. Competence of the Tribunal to award compensation exceeding the claim u/s 166 of the Motor Vehicles Act, 1988:
The Court held that the Tribunal is empowered to award compensation exceeding the claim if it is "just," as per Section 168 of the Act. This principle was supported by previous decisions in Oriental Insurance Co. Ltd. v. Mohd. Nasir and Ningamma v. United India Insurance Co. Ltd. The Court stressed that the Tribunal's duty is to award fair and reasonable compensation, even if it exceeds the claimed amount.
4. Revision of compensation under conventional heads like loss of consortium and funeral expenses:
The Court revisited the practice of awarding compensation under conventional heads, noting that amounts fixed decades ago need to be revised due to inflation. It held that compensation for loss of consortium should be at least Rs. 1,00,000 and funeral expenses should be at least Rs. 25,000. The Court awarded a total compensation of Rs. 22,81,320, including Rs. 1,00,000 for loss of consortium, Rs. 1,00,000 for loss of care and guidance for minor children, and Rs. 25,000 for funeral expenses.
Conclusion:
The Supreme Court allowed the appeal, setting aside the impugned judgment and the Tribunal's award. The claimant was entitled to a total compensation of Rs. 22,81,320 with 7.5% interest from the date of filing the petition until realization. The Insurance Company was directed to pay 50% of the enhanced compensation to the widow and the balance amount to the minor children and the mother, with the minors' shares to be deposited in a nationalized bank until they attain majority. There was no order as to costs.
-
2013 (4) TMI 951
Issues Involved:
1. Suppression of theatre collections
2. Income from canteen receipts
3. Unexplained investment in construction of the theatre
4. Repayment of bank loan
5. Deemed profits u/s 28(iv)
6. Unexplained investment in jewellery
7. Education expenses of the assessee's daughter
Summary:
1. Suppression of Theatre Collections:
The common issue raised by the Revenue for the assessment years 2000-01 and 2001-02 pertains to the suppression of theatre collections. The CIT(A) allowed 40% of the suppressed receipts towards probable expenses, estimating 60% of the gross suppressed receipts as income liable to be taxed. The Tribunal modified the order of the CIT(A), allowing 50% of the unaccounted gross receipts towards expenditure on account of the distributor's share. Consequently, both appeals of the Revenue were dismissed, and the cross objections of the assessee were partly allowed.
2. Income from Canteen Receipts:
For the assessment year 2004-05, the Revenue challenged the CIT(A)'s estimation of gross collections from canteen receipts at Rs. 5,000 per day and the 50% share of the income attributed to the assessee. The Tribunal upheld the CIT(A)'s estimation but adjusted the gross margin on sales to 20%, resulting in the assessee's share being Rs. 1,82,500. This ground of appeal by the Revenue was dismissed, and the cross objection of the assessee was partly allowed.
3. Unexplained Investment in Construction of the Theatre:
The Revenue and the assessee both contested the CIT(A)'s decision regarding unexplained investment in the construction of Mahalakshmi theatre. The Tribunal directed the Assessing Officer to adopt the value as per the Registered Valuer's report, dismissing the Revenue's appeal and allowing the assessee's cross objection.
4. Repayment of Bank Loan:
The Revenue's appeal concerning the deletion of the addition made by the Assessing Officer for repayment of loans was dismissed. The CIT(A) had found that the assessee had provided sufficient details and confirmations from creditors, thus discharging his onus.
5. Deemed Profits u/s 28(iv):
The Revenue's appeal regarding deemed profits u/s 28(iv) amounting to Rs. 41,49,000 was allowed. The Tribunal found a direct nexus between the business of the assessee and the benefit derived from the allotment of shares at a concessional rate, making the benefit taxable under the provisions of Sec.28(iv).
6. Unexplained Investment in Jewellery:
For the assessment year 2006-07, the Revenue's appeal against the deletion of part of the addition for unexplained investment in jewellery was dismissed. The CIT(A) had confirmed part of the addition and allowed telescopy for the rest. The Tribunal upheld the CIT(A)'s detailed and reasoned order.
7. Education Expenses of the Assessee's Daughter:
The Revenue's appeal concerning the education expenses of the assessee's daughter amounting to Rs. 9,34,900 was dismissed. The Tribunal was satisfied with the assessee's explanation that the expenses were met from the sale of agricultural land and other income sources.
Conclusion:
The appeals of the Revenue in ITA Nos. 1978, 1979, 1981, and 1982/Mds./11 were dismissed, while the appeal in ITA No. 1980/Mds./11 was partly allowed. Cross Objection Nos. 85, 86, 88, 89, and 90/Mds/2011 were partly allowed, and C.O.No.87/Mds/2011 was dismissed.
-
2013 (4) TMI 950
Issues Involved:
1. Classification of income from the sale of land as Long Term Capital Gain or Business Income.
Summary:
Issue 1: Classification of Income from Sale of Land
The sole ground of appeal was whether the income from the sale of land should be classified as Long Term Capital Gain or Business Income. The Assessing Officer (A.O.) observed that the appellant sold several properties during the year, earning Rs. 60,30,012/-, which was shown under Long Term Capital Gain. The A.O. provided the appellant with an opportunity to explain why this income should not be treated as business income. After considering the appellant's reply, the A.O. concluded that the land transactions were characteristic of ordinary trading activities, involving purchasing agricultural land, converting it to non-agricultural land, developing it, and selling it in small pieces. The A.O. noted that the appellant was a well-known builder and continuously engaged in such transactions, indicating a business activity rather than an investment.
The Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the A.O.'s decision, stating that the appellant's activities were not isolated but part of a well-thought-out strategy to earn profits. The CIT(A) cited several legal precedents, including G. Venkataswami Naidu & Co. Vs. CIT 35 ITR 594 (SC), which held that transactions intended for resale at a profit are adventures in the nature of trade. The CIT(A) concluded that the income from the sale of plots was assessable under "Profits and gains of business or profession" u/s 2(13) of the Income Tax Act.
The appellant argued that the intention at the time of purchase was crucial and that the lands were initially purchased for agricultural purposes. The appellant also referenced previous ITAT decisions where similar transactions were treated as Long Term Capital Gain. However, the CIT(A) distinguished these cases based on the frequency and nature of transactions.
The ITAT upheld the CIT(A)'s decision, noting that the appellant's activities indicated a clear intention to trade in land rather than hold it as an investment. The ITAT referenced several Supreme Court decisions supporting the view that even a single transaction could be considered an adventure in the nature of trade if the intention was to make a profit by resale. The ITAT concluded that the appellant's activities were consistent with trading in land and dismissed the appeal.
Conclusion:
The ITAT confirmed that the income from the sale of land should be classified as Business Income, not Long Term Capital Gain, based on the appellant's consistent trading activities and intention to earn profits through land transactions. The appeal was dismissed.
-
2013 (4) TMI 949
Issues involved:
The appeal concerns the eligibility of lease rental income for deduction u/s 80IA of the Income Tax Act 1961.
Issue 1: Eligibility of lease rental income for deduction u/s 80IA
The Revenue's appeal challenges the CIT(A)'s decision allowing the lease rental income from providing built-up lab space for industrial use to be eligible for deduction u/s 80IA of the Act. The Revenue contends that the CIT(A) erred in this regard and seeks acceptance of the appeal.
The assessee argues that the issue is supported by case law, specifically referencing the decision of the Jurisdictional High Court in the case of CIT v. Elnet Technologies Ltd. The assessee maintains that the lease rental income qualifies for deduction u/s 80IA.
After considering the arguments and reviewing the assessment order and CIT(A)'s findings, it was established that the assessee, a company engaged in biotech park business, had claimed deduction u/s 80IA for various receipts including rent and other income. The Assessing Officer disallowed the claim, stating that the relief under section 80IA(4)(iii) applies only to business profits from the sale of built-up units, not rental income. Consequently, the Assessing Officer computed the assessee's income under different heads.
The CIT(A) ruled in favor of the assessee, stating that the activities of the assessee in providing infrastructure facilities for an industrial park qualify for deduction u/s 80IA(4)(iii). The interest income and other receipts were categorized under different heads. The Revenue, being dissatisfied, filed an appeal.
Upon careful consideration of the contentions and the facts presented, it was determined that the key question was whether the assessee, generating rental income through infrastructure provision in an industrial park, is eligible for deduction u/s 80IA(4)(iii). Citing the precedent set by the Jurisdictional High Court in CIT v. Elnet Technologies Ltd., where a similar issue was decided in favor of the assessee, the Tribunal found no distinguishing features or arguments from the Revenue to warrant a different outcome. Consequently, the Tribunal upheld the CIT(A)'s decision.
Therefore, the Revenue's appeal was dismissed, affirming the CIT(A)'s findings regarding the eligibility of lease rental income for deduction u/s 80IA.
-
2013 (4) TMI 948
Issues Involved:
1. Delay in lodging the FIR.
2. Evaluation of evidence and medical reports.
3. Reasoning and adherence to procedural requirements by the Trial Court and High Court.
4. Judicial insensitivity and perverse findings.
Summary:
1. Delay in lodging the FIR:
The Trial Court acquitted the Respondents-Accused citing an unexplained delay in lodging the FIR, which was filed three days after the incident. The Appellant provided a complete explanation for the delay, stating that she was unconscious and her statement was recorded on 9.2.1995 by Sub-Inspector Kabala Singh (PW-13).
2. Evaluation of evidence and medical reports:
The Trial Court noted the medical evidence provided by Dr. Tejwinder Singh (PW-1) and Dr. Karnail Kaur (PW-9), which indicated injuries consistent with the Appellant's allegations of rape and assault. Despite this, the Trial Court concluded there was no cogent evidence of rape by the accused, reasoning that it was improbable for a father and son to commit rape together.
3. Reasoning and adherence to procedural requirements by the Trial Court and High Court:
The Supreme Court found that the Trial Court failed to provide sound reasoning for the acquittal and did not adhere to the procedural requirements u/s 354 of the Code of Criminal Procedure. The judgment lacked proper evaluation of evidence and reasons for the conclusions. The High Court also failed to consider the gravity of the charges and was influenced by the State's failure to appeal the acquittal.
4. Judicial insensitivity and perverse findings:
The Supreme Court criticized the judicial insensitivity shown by both the Trial Court and the High Court. The Trial Court's view that a father and son cannot rape a victim together was deemed unreasonable and not a valid ground for acquittal. The judgments were labeled as perverse for ignoring relevant evidence and failing to provide a reasoned judgment.
Conclusion:
The Supreme Court allowed the appeal, set aside the judgments of the lower courts, and remanded the case to the Trial Court for fresh disposal. The Trial Court is directed to hear arguments from both sides, evaluate all evidence, and record findings in accordance with the law within three months. No observations made in this order should influence the Trial Court's decision on the merits of the case.
-
2013 (4) TMI 947
Issues involved: Disallowance of gratuity payment u/s 36(1)(v) of the Act.
Summary:
The appeal was filed against the CIT(A)'s order disallowing an amount towards gratuity payment to an employee. The Assessing Officer disallowed the claim as the contribution was not made to an approved fund. The CIT(A) upheld the disallowance stating that the payment was made directly to LIC. The assessee argued that the payment was made to an approved fund with LIC for the benefit of employees. The Departmental Representative contended that the deduction cannot be allowed as per section 36(1)(v) of the Act. The Tribunal noted that the assessee had an approved gratuity fund and regularly made payments to LIC for gratuity. Referring to a Supreme Court judgment, the Tribunal held that the contribution made to LIC for gratuity cannot be disallowed as the fund was created exclusively for employees' benefit. The Tribunal directed the Assessing Officer to allow the deduction, considering the consistency in previous assessments.
In conclusion, the appeal of the assessee was allowed, and the payment towards gratuity to LIC was deemed an allowable deduction.
-
2013 (4) TMI 946
Issues Involved:1. Validity of the MOEF's order rejecting Stage-II forest clearance. 2. Rights of Scheduled Tribes (STs) and Traditional Forest Dwellers (TFDs) under the Forest Rights Act. 3. Relationship between the Alumina Refinery Project and Bauxite Mining Project. 4. Role of Gram Sabha in determining forest rights and religious rights of STs and TFDs. Summary:1. Validity of the MOEF's Order Rejecting Stage-II Forest Clearance:Orissa Mining Corporation (OMC) approached the Supreme Court seeking a Writ of Certiorari to quash the MOEF's order dated 24.8.2010, which rejected the Stage-II forest clearance for the diversion of 660.749 hectares of forest land for mining bauxite ore. OMC contended that the order neutralized previous orders of the Supreme Court in the Vedanta and Sterlite cases. The Court examined the facts and previous judgments to evaluate the issues raised in the writ petition. 2. Rights of Scheduled Tribes (STs) and Traditional Forest Dwellers (TFDs) under the Forest Rights Act:The Forest Rights Act was enacted to recognize and vest forest rights in forest-dwelling STs and TFDs. The Act protects a wide range of rights, including customary rights, community rights, and religious rights. The Court emphasized that the Gram Sabha has the authority to determine the nature and extent of these rights. The Court directed the Gram Sabha to consider whether the proposed mining area would affect the religious rights of the STs and TFDs, especially their right to worship their deity, Niyam Raja. 3. Relationship between the Alumina Refinery Project and Bauxite Mining Project:The Court rejected the petitioner's assertion that the Alumina Refinery Project and the Bauxite Mining Project are separate and independent. The Court noted that the two projects are interdependent and inseparably linked, and any wrongdoing by the Alumina Refinery Project could reflect on the Bauxite Mining Project. However, the Court focused mainly on the rights of the STs and TFDs under the Forest Rights Act. 4. Role of Gram Sabha in Determining Forest Rights and Religious Rights of STs and TFDs:The Court highlighted the role of the Gram Sabha in safeguarding the customary and religious rights of the STs and TFDs under the Forest Rights Act. The Gram Sabha is empowered to determine the nature and extent of individual and community forest rights. The Court directed the State of Orissa to place the issues before the Gram Sabha, which would take a decision within three months and communicate it to the MOEF. The MOEF would then take a final decision on the grant of Stage-II clearance for the Bauxite Mining Project in light of the Gram Sabha's decision. Conclusion:The Court disposed of the writ petition with directions to the State of Orissa to place the issues before the Gram Sabha and to the MOEF to take a final decision based on the Gram Sabha's determination. The Court also advised the Alumina Refinery Project to rectify any alleged violations of the terms of the environmental clearance granted by the MOEF.
-
2013 (4) TMI 945
Issues Involved:
1. Jurisdiction of General Court Martial (GCM) over juvenile offences.
2. Validity of joint trial for offences committed before and after attaining majority.
3. Plea of juvenility raised at appellate stage.
4. Application of Army Rules and Juvenile Justice (Care & Protection of Children) Act, 2000 (JJ Act).
Summary:
1. Jurisdiction of GCM over juvenile offences:
The High Court of Delhi set aside the GCM's order, which awarded dismissal from service and 7 years rigorous imprisonment (RI) to the respondent, on the ground that under the JJ Act, the respondent could not be tried by GCM for offences committed when he was a juvenile. The High Court permitted a fresh GCM for offences committed after the respondent attained 18 years of age.
2. Validity of joint trial for offences committed before and after attaining majority:
The respondent was charged under various sections of the Army Act for offences including theft of ammunition and absence without leave. The High Court held that the joint trial of offences committed before and after attaining majority vitiated the GCM proceedings. However, the Supreme Court noted that the High Court did not consider the gravity of the charges and whether any prejudice was caused to the respondent. The Supreme Court emphasized that the trial by GCM remained partly valid for offences committed after the respondent turned 18, applying the principle of severability of offences.
3. Plea of juvenility raised at appellate stage:
The respondent did not raise the plea of juvenility during the GCM proceedings but did so in the writ petition before the High Court. The Supreme Court highlighted that the plea of juvenility can be raised at any stage, even post-conviction, and that the date of the commission of the offence is crucial. The Court cited precedents where convictions were maintained but sentences were set aside when juvenility was established.
4. Application of Army Rules and JJ Act:
The Supreme Court referred to relevant Army Rules, emphasizing that the accused must raise jurisdictional objections early. The Court criticized the High Court for not considering these rules and the scope of their application. The Supreme Court also noted that the respondent had pleaded guilty to all charges at a belated stage and that the GCM proceedings complied with procedural requirements. The Court concluded that the High Court should have mitigated the sentence rather than quashing the entire GCM proceedings.
Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the GCM's order of conviction. However, the sentence was reduced to five years, considering the totality of circumstances. The Court emphasized the importance of justice, noting that technicalities should not defeat substantial justice.
-
2013 (4) TMI 944
Issues Involved:
1. Validity of reopening assessment proceedings u/s 147.
2. Disallowance of expenses and additions u/s 40A(3).
3. Computation of income and benefit of expenditure incurred by the appellant.
4. Acceptance of fresh evidence without giving opportunity to the AO.
Summary:
Issue 1: Validity of Reopening Assessment Proceedings u/s 147
The Assessee challenged the reopening of assessment proceedings u/s 147 by issuing notice u/s 148. The Tribunal upheld the reopening, stating that the AO had jurisdiction to issue notice u/s 148 after recording reasons. The Tribunal confirmed the CIT(A)'s order, which held that the AO had bona fide reasons to believe that income chargeable to tax had escaped assessment, and thus, the reopening u/s 147 was valid.
Issue 2: Disallowance of Expenses and Additions u/s 40A(3)
For A.Y. 2005-06, the Revenue's appeal included multiple grounds of disallowance, such as cash payments in excess of Rs. 20,000/- u/s 40A(3), and various office, rent, printing, and salary expenses. The CIT(A) deleted these additions, stating that the appellant's transactions were sham and only accommodation entries. The Tribunal confirmed the CIT(A)'s order, agreeing that the disallowances were not warranted as the transactions were not genuine.
Issue 3: Computation of Income and Benefit of Expenditure Incurred by the Appellant
The CIT(A) directed the AO to compute the income at 0.25% of the turnover, which was upheld by the Tribunal. The Tribunal noted that the appellant was engaged in issuing bogus bills and earning commission, and thus, the income was correctly computed at 0.25% of the turnover. The Tribunal dismissed the Assessee's appeal regarding the benefit of expenditure, as the CIT(A) had already allowed the expenses claimed in the books of account.
Issue 4: Acceptance of Fresh Evidence Without Giving Opportunity to the AO
The Revenue contended that the CIT(A) erred in accepting fresh evidence without giving the AO an opportunity to examine it, as provided in Rule 46A of the I.T. Rules, 1962. The Tribunal did not specifically address this issue in detail but confirmed the CIT(A)'s order, which had deleted all the additions made by the AO.
Conclusion:
The Tribunal dismissed both the Assessee's and Revenue's appeals for A.Y. 2005-06 and 2006-07, confirming the CIT(A)'s orders. The reopening of assessment u/s 147 was held valid, and the computation of income at 0.25% of the turnover was upheld. The Tribunal also confirmed the deletion of various disallowances made by the AO.
-
2013 (4) TMI 943
Issues Involved:
1. Validity of the possession notice dated 20.09.2012.
2. Legality of the assignment of debt to respondent No.1.
3. Status of respondent No.1 as an agent and its implications on debt assignment.
Summary:
1. Validity of the Possession Notice Dated 20.09.2012:
The petitioner challenged the possession notice dated 20.09.2012 (P-19) issued consequent to the deed of assignment executed by a secured creditor in favor of respondent No.1 - Bank on 27.09.2007. The petitioner argued that respondent No.1 was not registered with the Reserve Bank of India as required u/s 3 in terms of Section 2(1)(z) and (za) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act), making the assignment of assets an offense u/s 29 of the Act. The court found no merit in the petition, stating that the assignment of debt is permissible u/s 130 of the Transfer of Property Act, 1882, and respondent No.1 is a Banking Company registered under the Banking Regulation Act, 1949 with the Reserve Bank of India.
2. Legality of the Assignment of Debt to Respondent No.1:
The petitioner contended that the assignment of debt to respondent No.1 was illegal as it was not registered with the RBI. The court disagreed, referencing the Supreme Court judgment in ICICI Bank Limited v. Official Liquidator of APS Star Industries Limited, (2010) 10 SCC 1, which upheld the legality of inter-bank assignment of debts. The court emphasized that the Banking Regulation Act, 1949, allows banks to transfer their assets, including debts, inter se, and such transfers are not prohibited under the Act. The court also noted that the guidelines issued by the RBI authorize banks to deal in NPAs to clean their balance sheets, which falls within the ambit of Section 21 read with Section 35-A of the Banking Regulation Act, 1949.
3. Status of Respondent No.1 as an Agent and Its Implications on Debt Assignment:
The petitioner argued that respondent No.1 was appointed as an agent and thus could not be assigned the debts. The court found this argument untenable, stating that there was no restriction in the loan documents prohibiting the assignment of debt to another banking company. The court noted that the petitioner and its group companies had approached respondent No.1 for assistance in raising funds and liquidating debts. Since there was no embargo on respondent No.1 acting in any other capacity, the assignment of debt by secured creditors to respondent No.1 did not suffer from any patent illegality. The court highlighted that the petitioner had initially submitted a settlement offer to respondent No.1, acknowledging its role in the debt assignment.
Conclusion:
The court dismissed the petition, upholding the validity of the possession notice and the legality of the debt assignment to respondent No.1. The court found no merit in the arguments presented by the petitioner regarding the registration status of respondent No.1 and its role as an agent.
-
2013 (4) TMI 942
The Supreme Court issued notice and permitted Dasti in addition to the ordinary process in connection with Special Leave Petition (Civil) No. 5547 of 2013 titled 'Union of India & Ors. v. Jatin Ahuja'.
-
2013 (4) TMI 941
Issues Involved:
The issue involved in this case is whether the activity of putting mushroom powder into gelatin capsules amounts to manufacturing activity for the purpose of claiming deduction under section 80-IB of the Income Tax Act, 1961.
Facts and Decision:
The assessee, a private limited company engaged in the sale of ayurvedic products, claimed a deduction under section 80-IB of the Act for filling raw material (powder) into gelatin capsules. The Assessing Officer rejected the claim, stating that this activity does not constitute manufacturing. The CIT(Appeals) upheld the decision. The Tribunal noted that in a previous case involving the same assessee, it was held that putting mushroom powder into capsules did not create a new or distinct product. The Tribunal concluded that the activity did not amount to manufacturing, thus denying the deduction under section 80-IB.
Interest Levy Dispute:
The assessee also contested the levy of interest under sections 234B and 234C of the Act. The assessee argued that the interest was not justified, citing a case law precedent. However, the Tribunal observed that the interest was charged by the Assessing Officer in the assessment order itself. Referring to a Supreme Court decision, the Tribunal held that the interest levied for defaults in tax payments was mandatory. As the assessing authority had specifically mentioned the interest charges, the case law cited by the assessee was deemed inapplicable. Consequently, the Tribunal dismissed the appeal challenging the interest levy.
In conclusion, the Tribunal upheld the decision to deny the deduction under section 80-IB for the activity of filling mushroom powder into gelatin capsules, as it did not constitute manufacturing. Additionally, the Tribunal dismissed the appeal regarding the levy of interest under sections 234B and 234C, citing the mandatory nature of such interest as per Supreme Court rulings.
-
2013 (4) TMI 940
Correct head of income - Income from sale of shares - capital gain or business income - HELD THAT:- The Tribunal being a fact finding body, it was not the case of the AO to form an opinion as to how to conduct the share business when the assessee is dealing in shares and held as investment in shares which holding is not disputed by the AO, in so far as, the shares were held for more than one year was acceptable to it. This was considered in the case of CIT vs Gopal Purohit by ITAT Mumbai [2010 (1) TMI 7 - BOMBAY HIGH COURT]
Even the shares purchased in the same year and sold cannot be considered for taxation as business in so far as the assessee had complied with various govt. regulations to hold the shares as per the guidelines of the SEBI cannot be thrust upon the assessee on the sole opinion of the AO to be rendered as business income.
The crux of the finding that the assets which have been held as investments have been sold on account of capital and not for business. We are inclined to hold the issue as covered in favour of the assessee, in so far as, the Revenue has not been able to bring out any controverting material which the ld. Counsel for the assessee has submitted that the case laws cited fairly cover the facts which the ld. CIT(A) accepted and allowed the assessee’s appeal who confirmed the returned income on sale of shares as for capital gains. The appeal of the revenue stands dismissed.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Revenue has not been able to controvert this fact in so far as the ld. CIT(A) in his order computed the exempted income for taxation u/s 14A of the Act by disallowing the expenditure thereto as per Rule 8D was on the basis of not claiming the expenditure but on the earning of income was misconstrued by him when he chose to consider half percentage of interest paid by the assessee to be considered for participating in the earning of exempted income. In this view of the matter enhancement by the ld. CIT(A) is restricted to ₹ 34,944/- in accordance with the said section. This ground raised by the assessee stands partly allowed.
Expenditure disallowed as the earning of sale of investment - whether such expenditure has been incurred for the business of the assessee? - HELD THAT:- assessee for this proposition submitted the balance sheet for impugned assessment years when the claim of the expenditure on dealing of the shares has been allowed and are part and parcel of the assessee’s business when it was nobodys finding that these expenses are not for the business of the assessee. The ld. Counsel for the assessee has submitted that it is a settled principle in so far as computing the capital gains is not to be considered in a confused manner no expenditure is claimed to reduce the capital gains for reducing the consideration. We do find the contention of the ld. Counsel for the assessee justifiable in so far as the Revenue has not controverted that the expenditure of the claim for the business of the assessee are only for the business of the assessee and has not been claimed as increase in the cost of shares sold as investment. In this view of the matter this ground of the assessee is allowed and the AO is directed to delete the addition
-
2013 (4) TMI 939
Issues involved: Appeal against deletion of addition of surplus income by Revenue, interpretation of charitable purposes u/s 2(15) of the Income-tax Act.
Issue 1: Deletion of addition of surplus income
The Revenue appealed against the deletion of an addition of Rs. 18,33 crores on account of surplus income by the ld. CIT(A). The assessee had declared income of Rs. 57,14,022 and shown excess income over expenditure of Rs. 13,52,87,764. The Assessing Officer noted discrepancies in the income computation, including interest accrued but not due for certain assessment years. The Assessing Officer assessed the income at Rs. 20,66,71,688, not treating the assessee board as a charitable institute. The ld. CIT allowed relief based on a Tribunal order, which the Revenue challenged. The Tribunal, in a previous order, held that the assessee should be treated as a charitable institute despite amendments in Section 2(15) expanding charitable activities. The Tribunal upheld the ld. CIT(A)'s order, deciding in favor of the assessee.
Issue 2: Interpretation of charitable purposes u/s 2(15)
The Revenue argued that the assessee, charging fees for services, did not qualify as a charitable institute under Section 2(15) due to engaging in business-like activities. The assessee contended that the Tribunal's previous order supported its charitable status. The Tribunal, referring to the specific provision in Section 2(15) regarding environmental preservation, ruled in favor of the assessee, stating that the assessee fell under this specific category and the residuary clause did not apply. The Tribunal emphasized that a special provision prevails over a general one, supporting the assessee's charitable status. The Tribunal upheld the ld. CIT(A)'s decision, dismissing the Revenue's appeal.
Separate Judgement:
No separate judgment was delivered by the judges in this case.
-
2013 (4) TMI 937
The Gujarat High Court in 2013 (4) TMI 937 granted installments for payment of tax dues to the petitioner as per representation. The petition was not pressed further and was disposed of. Notice was discharged.
-
2013 (4) TMI 936
Issues involved:
The judgment involves issues related to the eligibility of the appellant for exemption u/s 12AA of the Income Tax Act, 1961, diversion of funds to the infrastructure Development Fund, and the pending application for condonation of delay u/s 119(2) of the Act.
Issue 1: Eligibility for exemption u/s 12AA:
The appellant contended that the appellant authority was created for general public utility, which falls under the charitable object as per Section 2(15) of the Income Tax Act, 1961. The appellant had been granted exemption u/s 12AA by CIT Dehradun. The Tribunal noted that in previous assessment years, the issue of exemption was remitted to the AO for fresh adjudication based on the pending application for condonation of delay before the C.B.D.T. The Tribunal decided to set aside the matter to the file of the AO for re-examination and fresh decision on the issue of granting exemption from taxation of income, considering the outcome of the pending application for condonation of delay u/s 119(2) of the Act.
Issue 2: Characterization of the Appellant Authority:
The appellant argued that the Appellant Authority should be considered a charitable entity, while the CIT(A) held that it was a business entity earning profits and gains. The Tribunal, based on similar facts and circumstances in previous assessment years, decided to remit the case to the AO for fresh consideration. The Tribunal emphasized the importance of the pending application for condonation of delay before the C.B.D.T in determining the eligibility of the appellant for exemption from taxation.
Issue 3: Diversion of Funds to Infrastructure Development Fund:
The appellant contested the computation of income by the AO, arguing that the funds were diverted to the infrastructure Development Fund under an overriding title as per the express order of the State Government. The Tribunal, following the decision in previous assessment years, set aside the matter to the file of the AO for re-examination. The Tribunal directed the AO to decide the issue afresh, taking into account the outcome of the pending application for condonation of delay u/s 119(2) of the Act before the C.B.D.T.
In conclusion, the Tribunal allowed the grounds raised by the appellant for statistical purposes and directed that the appeals be allowed accordingly. The judgment highlighted the significance of the pending application for condonation of delay before the C.B.D.T in determining the eligibility of the appellant for exemption from taxation.
-
2013 (4) TMI 935
Issues Involved:
1. Addition of telephone expenses on account of personal use.
2. Transfer pricing adjustment.
Summary:
Issue 1: Addition of telephone expenses on account of personal use
The revenue challenged the deletion of Rs. 6,76,456/- out of telephone expenses by the Commissioner of Income Tax (Appeals). The Assessing Officer had disallowed 40% of the reimbursement of telephone expenses to employees, suspecting personal use. The Commissioner of Income Tax (Appeals) deleted this addition after examining the records and finding that only proportionate amounts were reimbursed for business purposes. The Tribunal upheld this decision, noting that the Commissioner of Income Tax (Appeals) had thoroughly examined the evidence and found no personal use by employees, who did not hold shares or managerial positions in the company.
Issue 2: Transfer pricing adjustment
The revenue contested the quashing of a Rs. 1,26,17,943/- adjustment made to the assessee's income on account of transfer pricing. The Transfer Pricing Officer (TPO) had determined the Arm's Length Price (ALP) using 102 comparables, resulting in a higher profit margin than the assessee's. The Commissioner of Income Tax (Appeals) deleted this adjustment, citing the absence of the list of comparables in the TPO's order and lack of opportunity for the assessee to object. The Tribunal found that the TPO had not explicitly rejected the assessee's comparables and had the jurisdiction to gather additional information. However, the Tribunal remanded the issue back to the Assessing Officer/TPO for fresh adjudication, ensuring the assessee's comparables are considered alongside any other proper comparables for determining the ALP.
Conclusion:
The appeal of the revenue was partly allowed for statistical purposes, with the issue of transfer pricing adjustment remanded for further examination. The Tribunal emphasized the need for a thorough review of comparables and adherence to procedural fairness in the determination of ALP.
-
2013 (4) TMI 934
Issues involved: Delay in filing appeal, computation of capital gains, deduction under Section 54 of Income-tax Act, 1961.
Delay in filing appeal: The appeal filed by the Revenue was directed against an order dated 18.10.2010 of Commissioner of Income Tax (Appeals), Tiruchirapalli. There was a delay of two days in filing the appeal, which was condoned and the appeal was admitted.
Computation of capital gains: The assessee sold a house property for &8377; 55 lakhs during the relevant assessment year. The long term capital gains worked out by the assessee was &8377; 31,49,300/-. The Assessing Officer reworked the capital gains based on the value of the property as on 1.4.1981, which was a point of contention between the Revenue and the assessee.
Deduction under Section 54: The assessee claimed exemption under Section 54 of the Act for the entire amount of capital gains. The Assessing Officer refused to allow the claim as the capital gain was deposited in the Capital gains Accounts Scheme after the last date for filing the return for the assessment year. The assessee argued that the delay in deposit was condoned by CBDT.
Judgment: The ITAT Chennai considered the issues raised by both parties. In terms of the deduction under Section 54, it was noted that the CBDT had condoned the delay in deposit made by the assessee in the Capital Gain Account. However, the main issue left was the fixation of fair market value as on 1.4.1981 for the property sold by the assessee.
The ITAT Chennai analyzed the valuation methods used by the assessee and the Assessing Officer. It was observed that the value declared by the assessee in the wealth-tax return for the property was &8377; 1,26,080/-, which was considered by the Assessing Officer. The ITAT Chennai held that the fair market value declared by the assessee for wealth-tax purposes should also be considered for income-tax purposes. Therefore, the order of the CIT(Appeals) directing adoption of a different value for computing capital gains was set aside, and the Assessing Officer's order was reinstated.
In conclusion, the appeal filed by the Revenue was partly allowed by the ITAT Chennai.
-
2013 (4) TMI 933
Issues involved: Appeal against order u/s 263 of the Income Tax Act, 1961.
Summary:
Issue 1: Communication of order under section 263:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax-X, Chennai u/s 263 of the Income Tax Act, 1961. The assessee contended that the order was never communicated to them, and they only became aware of it when served with a notice under section 143(2) read with section 263. The Assessing Officer provided a copy of the order to the assessee on 29.11.2012, which was beyond the prescribed period of limitation. The AR argued that the order was non-est in the eye of law due to being served beyond the limitation period.
Issue 2: Compliance with limitation period:
The Tribunal noted that the impugned order was allegedly passed on 26.03.2012 and dispatched on 28.03.2012, but the assessee claimed they never received it until 29.11.2012. The Tribunal highlighted the provisions of section 263(2) which require the order to be passed within two years from the end of the financial year in which the order sought to be revised was passed. As the order was communicated to the assessee beyond this period, the Tribunal found it to be beyond the limitation period.
Issue 3: Legal precedent and conclusion:
Referring to a judgement by the Hon'ble Kerala High Court, the Tribunal emphasized the importance of issuing orders within the prescribed period to make them complete and effective. Relying on legal precedent, the Tribunal held that the order under section 263 was beyond the limitation period and, therefore, set aside the impugned order and allowed the appeal of the assessee.
Conclusion:
The Tribunal allowed the appeal of the assessee, concluding that the order under section 263 was beyond the period of limitation and, therefore, set it aside.
This summary provides a detailed breakdown of the issues involved in the legal judgment, focusing on the communication of the order under section 263, compliance with the limitation period, legal precedent, and the ultimate conclusion reached by the Tribunal.
-
2013 (4) TMI 932
Issues Involved:1. Disallowance u/s 14A r.w. Rule 8D. Summary:Issue 1: Disallowance u/s 14A r.w. Rule 8DThe assessee appealed against the order of CIT(A)-9 Mumbai, which confirmed a disallowance of Rs. 34,69,832 u/s 14A r.w. Rule 8D, over and above the disallowance already made by the appellant of Rs. 4,98,010. The grounds of appeal were that the CIT(A) erred in confirming this disallowance and that it should be deleted. At the outset, it was submitted that for A.Y 2008-09, similar grounds were raised by the assessee, and the matter was restored to the file of AO by relying on another ITAT decision in the case of Ciba Research (India) Ltd. The Tribunal, in the assessee's own case for A.Y 2008-09, restored the issue to the file of AO with similar directions. The Tribunal reproduced the order for completeness, which involved a similar disallowance issue where the AO had disregarded the disallowance made by the assessee suo moto and computed a higher disallowance using Rule 8D. The Tribunal noted that the revenue authorities did not specify how the assessee's computation was incorrect before applying the prescribed formula. The Tribunal emphasized that the AO must show dissatisfaction with the assessee's computation before applying Rule 8D, as per the decision of the Hon'ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. The Tribunal found that the revenue authorities had applied the decision mechanically without addressing the assessee's arguments or specifying the reasons for rejecting the assessee's claims. The Tribunal referred to the principles established in the Godrej & Boyce case, which clarified that section 14A aims to prevent deductions of expenditure related to exempt income and that the AO must first determine the correctness of the assessee's claim regarding such expenditure. The Tribunal concluded that the revenue authorities erred in not recording specific dissatisfaction with the assessee's working and directed the AO to recompute the disallowance by applying Rule 8D and following the spirit of the Godrej & Boyce judgment. In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the AO to re-examine the disallowance issue. Order pronounced in the open court on 17/04/2013.
........
|
9911796707
