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Showing 61 to 80 of 1070 Records

• 2013 (5) TMI 1020
  
  Issues Involved:
  
  1. Computation of deduction u/s 10A.
  2. Validity of revised return filed by the assessee.
  3. Allowance of deduction u/s 10A on transfer pricing adjustment.
  
  Summary:
  
  1. Computation of Deduction u/s 10A:
  
  The primary issue raised by both the revenue and the assessee pertains to the computation of deduction u/s 10A. The revenue contested the CIT(A)'s direction to recompute the deduction allowable u/s 10A after reducing certain expenditures from both export turnover and total turnover. The revenue argued that there is no provision in section 10A requiring such expenses to be reduced from total turnover. The assessee argued that the expenditures should not be reduced from export turnover as they were not incurred in providing technical services outside India. The Tribunal held that the expenses referred to cannot be said to be incurred outside India for rendering technical services, following the decision in the assessee's own case for previous years. Consequently, the Tribunal upheld the CIT(A)'s order, directing the AO to exclude the link charges and other expenses from both export turnover and total turnover, following the decision of the Hon'ble High Court of Karnataka in Tata Elxsi Ltd. (349 ITR 98).
  
  2. Validity of Revised Return:
  
  The assessee filed a revised return declaring a loss, which was not accepted by the AO on the grounds that it was filed beyond the time limit prescribed u/s 139(3). The CIT(A) upheld the AO's decision, declaring the revised return invalid. However, the Tribunal held that the revised return filed within the time permitted u/s 139(5) is valid, following the Tribunal's own decision in the assessee's case for A.Y. 2004-05 and the decision of the ITAT Mumbai in Mr. Ramesh R. Shah v. ACIT. The Tribunal concluded that the revised return is valid and the assessee is entitled to the benefit of carry forward of loss declared in the revised return.
  
  3. Deduction u/s 10A on Transfer Pricing Adjustment:
  
  The revenue challenged the CIT(A)'s direction to recompute the deduction u/s 10A after including the transfer price adjustment in the business income. The AO had denied the deduction on the grounds of the first proviso to section 92C(4), which prohibits deductions u/s 10A in respect of income enhanced after computation of income under this subsection. The Tribunal, following its own decision in the assessee's case for previous years, held that deduction u/s 10A is allowable on the transfer pricing adjustment, provided it does not enhance the returned income. Therefore, the Tribunal dismissed the revenue's grounds on this issue.
  
  Conclusion:
  
  The appeal by the assessee was partly allowed, while the appeal by the revenue was dismissed. The Tribunal upheld the CIT(A)'s directions on the computation of deduction u/s 10A and the validity of the revised return. Additionally, the Tribunal confirmed that deduction u/s 10A is allowable on transfer pricing adjustments, provided it does not enhance the returned income.

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• 2013 (5) TMI 1019
  
  Issues Involved:
  1. Deletion of addition on account of provision for bad and doubtful debt.
  2. Disallowance of prior period expenditure.
  3. Addition on account of salary payment to employees to maintain records of employees trust.
  4. Disallowance out of depreciation.
  5. Deletion of addition on account of miscellaneous expenditure and repair & maintenance.
  6. Disallowance out of interest expenditure u/s 43B.
  7. Disallowance of TDS on installation, commission, and erection.
  8. Disallowance of prior period expenses.
  
  Summary:
  
  1. Deletion of addition on account of provision for bad and doubtful debt:
  The assessee claimed a provision for bad and doubtful debts amounting to Rs. 14,43,84,206/-. The A.O. disallowed this under section 36(1)(vii) of the Income Tax Act, 1961, as it was only a provision made in the books. The CIT(A) deleted the addition, but the ITAT sent the issue back to the CIT(A) for verification of whether the bad debt amount was written off as irrecoverable in the accounts of the assessee, referencing the TRF Limited vs. CIT case.
  
  2. Disallowance of prior period expenditure:
  The assessee claimed prior period expenditure amounting to Rs. 1,02,59,311/-. The A.O. disallowed it as it was not related to the year under consideration. The CIT(A) deleted the addition, but the ITAT sent the issue back to the CIT(A) for a fresh decision after verifying the allowability under section 35D of the Act.
  
  3. Addition on account of salary payment to employees to maintain records of employees trust:
  The A.O. disallowed Rs. 18,11,180/- claimed for maintaining records of employees' PF/Gratuity/Trust, as a separate trust was already made. The CIT(A) deleted the addition, stating the expenses were incurred wholly and exclusively for the assessee's business. The ITAT confirmed the CIT(A)'s order.
  
  4. Disallowance out of depreciation:
  The A.O. disallowed Rs. 69,55,61,698/- out of total depreciation claimed, as the assets transferred under the scheme were not identifiable or being used. The CIT(A) deleted the addition, referencing earlier years' decisions where similar disallowances were deleted and confirmed by the ITAT. The ITAT confirmed the CIT(A)'s order.
  
  5. Deletion of addition on account of miscellaneous expenditure and repair & maintenance:
  The A.O. disallowed 5% of miscellaneous expenditure and repair & maintenance expenses, amounting to Rs. 16,37,269/- and Rs. 4,46,32,848/- respectively, as they were not verifiable. The CIT(A) deleted the additions, stating there was no provision for disallowance on the ground of non-verifiability and no finding that the expenditure was not incurred for business purposes. The ITAT confirmed the CIT(A)'s order.
  
  6. Disallowance out of interest expenditure u/s 43B:
  The A.O. disallowed Rs. 22,51,93,495/- out of interest expenditure claimed under section 43B, as the assessee failed to furnish proof of payment before filing the return. The CIT(A) deleted the addition, accepting the assessee's contention that the interest payable was adjusted against the subsidy received from the U.P. Government. The ITAT confirmed the CIT(A)'s order, referencing judgments from the Rajasthan and Gujarat High Courts.
  
  7. Disallowance of TDS on installation, commission, and erection:
  The A.O. disallowed Rs. 12,19,547/- for non-deduction of TDS on installation, commission, and erection. The CIT(A) deleted the addition, directing the A.O. to verify the tax challan as the amount was deposited in April 2009. The ITAT confirmed the CIT(A)'s order.
  
  8. Disallowance of prior period expenses:
  The A.O. disallowed Rs. 71,75,671/- on account of prior period expenses. The CIT(A) deleted the addition, but the ITAT sent the issue back to the CIT(A) for a fresh decision with identical directions as in the case of A.Y. 2007-08.
  
  Conclusion:
  - ITA No.228/A/2011 for A.Y. 2007-08 is partly allowed for statistical purposes.
  - ITA No.229/A/2011 for A.Y. 2008-09 is dismissed.
  - ITA No.272/A/2012 for A.Y. 2009-10 is partly allowed for statistical purposes.

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• 2013 (5) TMI 1018
  
  Issues involved:
  The judgment involves issues related to the computation of deduction u/s 10B of the Income Tax Act, 1961 and the disallowance of expenditure u/s 14A r.w.r. 8D of Income Tax Rules, 1962.
  
  Computation of deduction u/s 10B:
  The assessee, a company engaged in manufacturing, processing, and exporting, filed its return declaring income as Nil, claiming deduction u/s 10B. The Assessing Officer made additions/disallowances, including deduction claimed u/s 10B. The CIT(A) partly allowed the appeal, citing the decision of the Special Bench of the Tribunal in a specific case. The Tribunal dismissed the Revenue's appeal, stating that expenses excluded from export turnover should also be excluded from total turnover for computing deduction u/s 10B.
  
  Disallowance of expenditure u/s 14A:
  The Assessing Officer disallowed an amount u/s 14A using Rule 8D, considering interest expenditure and average value of investments. The CIT(A) confirmed the disallowance, stating the interest had a nexus with investments. The Tribunal upheld the disallowance of interest u/s 14A but reduced the amount from &8377; 69,17,637 to &8377; 55.00 Lakhs, as Rule 8D was not applicable for the relevant assessment year. The appeal of the Revenue was dismissed, and the appeal of the assessee was partly allowed.
  
  Separate Judgement by Judges:
  No separate judgment was delivered by the judges in this case.

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• 2013 (5) TMI 1017
  
  Issues involved: Revenue's appeal and assessee's cross objection against CIT(A)-XXIV, New Delhi's order dated 21-6-2012 relating to assessment year 2009-10.
  
  Issue 1 - Disallowance of commission paid:
  The assessing officer disallowed commission payment of Rs. 16,80,000 to sub-agents, suspecting it to be bogus. However, CIT(A) deleted the addition citing evidence provided by the assessee, including names of recipients, ITR acknowledgements, and bank statements. The AO's suspicion was deemed unsubstantiated as no evidence was presented to prove the allegations. The Revenue contended that mere filing of income-tax returns does not establish the genuineness of the payment. The burden to prove the genuineness and business expediency of the expenditure was not met by the assessee, according to the Revenue.
  
  Issue 2 - Addition u/s 69A of the I.T. Act 1961:
  The appellant challenged the addition of Rs. 7,81,585 due to a difference in gross earnings vis-a-vis the amount appearing in AIR, attributing it to a debit note for service tax. The CIT(A) accepted the explanation provided by the appellant, noting that service tax returns were filed and challans for amounts paid were submitted. The Revenue argued that the service tax payment difference was not adequately explained by the assessee, relying on a judgment of the Delhi High Court.
  
  Judgment:
  The ITAT upheld the CIT(A)'s decision to delete both additions. Regarding the commission payment, the ITAT found that the assessee had discharged the burden of establishing the genuineness and business expediency of the expenses, as evidenced by audited books, banking transactions, agreements, and TDS deductions. The inability to physically produce sub-agents did not undermine the evidence provided. Similarly, the difference in service tax payment was adequately explained and reconciled by the assessee, as accepted by the CIT(A). The ITAT dismissed both the revenue's appeal and the assessee's cross-objection.

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• 2013 (5) TMI 1016
  
  Issues involved: Challenge to pre-deposit requirement for Tax Appeal, inability to sell property due to attachment by Excise Department.
  
  Issue 1: Challenge to pre-deposit requirement for Tax Appeal
  The petitioners challenged the pre-deposit requirement for their Tax Appeal, which was dismissed by the Tribunal due to their inability to satisfy the requirement. The petitioner had previously filed a Special Civil Application challenging the pre-deposit condition, which was disposed of without altering the requirement but granting time until a specified date to comply. The petitioners were unable to sell their immovable property due to an attachment by the Excise Department, hindering their ability to make the pre-deposit. The Court explored the possibility of allowing the sale of the property for this purpose, but the petitioners were unable to find a buyer due to the attachment.
  
  Issue 2: Inability to sell property due to attachment by Excise Department
  The petitioners' factory premises were under attachment by the Excise Department, preventing them from disposing of the property to meet the pre-deposit requirement. Despite efforts to find a buyer, the petitioners were unsuccessful due to the attachment. Consequently, the Court extended the time for satisfying the pre-deposit requirement until a specified date, allowing the petitioners to approach the Court again if they find a buyer within the extended period. The Court disposed of the petition with these directions, providing the petitioners with an opportunity to comply with the pre-deposit requirement and proceed with their Tax Appeal if the amount is deposited within the extended timeframe.

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• 2013 (5) TMI 1015
  

  Whether in the facts and circumstances of the case the appellant has been rightly convicted for the capital offence and if not whether the act attributed to him would constitute a lesser offence like culpable homicide not amounting to murder punishable under Section 304 Part I or II of the I.P.C - HELD THAT:- The incident was witnessed by the wife of the deceased and one other who was also present in the field nearby at the time of the occurrence. Two days after the occurrence when the condition of the deceased became precarious, wife filed a complaint at the Police Station on the basis whereby u/s 326, 504 and 323 read with Section 34 of the I.P.C was registered by the police. Investigation of the case was taken up by Police Sub Inspector who recorded the panchnama of the scene of the crime and arrested the accused persons. The deceased eventually succumbed to his injuries whereupon Section 302 read with Section 34 of the I.P.C. was added to the case.

  Whether the appellant has been rightly convicted for the offence of murder or if the act attributed to him would constitute a lesser offence like culpable homicide not amounting to murder. - HELD THAT:- According to the facts of the case, the nature of the simple injury inflicted by the accused, the part of the body on which it was inflicted, the weapon used to inflict the same and the circumstances in which the injury was inflicted do not suggest that the appellant had the intention to kill the deceased. All that can be said is that the appellant had the knowledge that the injury inflicted by him was likely to cause the death of the deceased. The case would, therefore, more appropriately fall under Section 304 Part II of the IPC.

  Court allow this appeal but only to the extent that instead of Section 302 IPC the appellant shall stand convicted for the offence of culpable homicide not amounting to murder punishable under Section 304 Part II IPC and sentenced to undergo rigorous imprisonment for a period of five years. The fine imposed upon the appellant and the default sentence awarded to him shall remain unaltered.

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• 2013 (5) TMI 1014
  
  Issues involved: Assessment of taxable turnover based on discrepancy in stock without quantification during survey under U.P. Trade Tax Act, 1948 for the assessment year 2004-05.
  
  Assessment based on unquantified stock during survey:
  The revisionist challenged the assessment of taxable turnover by the authorities solely on the basis of a discrepancy in stock found during a survey, where the stock was not quantified. The assessing authority alleged suppression of sales and purchases due to the variance between actual stock and stock register. However, the tribunal found that the stock was not measured or quantified during the survey. As a result, it was deemed inappropriate to disregard the stock registers without actual quantification during the survey. The tribunal concluded that without quantification, it was impossible to determine if the stock in the books was accurate. Consequently, the assessment made on the basis of the unquantified survey report was deemed erroneous, leading to the setting aside of the impugned orders dated 30.3.2006, 4.8.2006, and 22.5.2007.
  
  Conclusion:
  The High Court allowed the revision, emphasizing that the assessment of taxable turnover cannot be solely based on an unquantified stock during a survey, as it is crucial to have accurate quantification to determine the accuracy of stock registers. The tribunal's decision to uphold the assessment was deemed a manifest error of law, leading to the setting aside of the impugned orders.

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• 2013 (5) TMI 1013
  
  Issues Involved:
  1. Rejection of application u/s. 12AA of the IT Act.
  2. Examination of the genuineness of the objects and activities of the assessee society.
  3. Procedural lapses in the decision-making by the CIT.
  
  Summary:
  
  1. Rejection of application u/s. 12AA of the IT Act:
  The appeal is directed against the order of the CIT-II, Agra, dated 21/27.07.2011, which rejected the application u/s. 12AA of the IT Act. The CIT found that the assessee society, which intended to run a school as a franchisee of M/s. Zee Learn Ltd., was not formed for charitable purposes but was rather running a commercial venture.
  
  2. Examination of the genuineness of the objects and activities of the assessee society:
  The assessee society, registered under the Societies Act, aimed to provide educational activities and had started educational activities in F.Y. 2011-12. The CIT did not dispute the educational nature of the society's objects but rejected the application based on the commercial nature of M/s. Zee Learn Ltd. The Tribunal noted that the genuineness of the objects, being educational, should be the focus at the stage of registration, not the activities, which had not yet commenced. The Tribunal cited the Hon'ble Allahabad High Court's decision in Hardayal Charitable and Educational Trust vs. CIT-II, Agra, which held that at the stage of grant of registration, the genuineness of the objects has to be tested, not the activities.
  
  3. Procedural lapses in the decision-making by the CIT:
  The Tribunal observed that the CIT-II, Agra, acted on a draft order prepared by the ITO (Tech.) without conducting an independent examination of the case. This approach was deemed impermissible under the law. The Tribunal referred to its earlier decisions in similar cases, which emphasized the need for the CIT to personally satisfy himself about the genuineness of the activities and objects of the assessee institution. The Tribunal found that the CIT's reliance on the ITO (Tech.)'s draft order and the lack of adverse material against the assessee were procedural lapses.
  
  Conclusion:
  The Tribunal set aside the impugned order dated 21/27.07.2011 and directed the CIT-II, Agra, to grant registration to the assessee u/s. 12AA of the IT Act from the date of filing of the application. The registration was to be granted within one month from the receipt of the Tribunal's order. The appeal of the assessee was allowed.

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• 2013 (5) TMI 1012
  
  Issues Involved:
  
  1. Reckless and negligent driving causing death.
  2. Employment status of the driver at the time of the accident.
  3. Insurance Company's liability.
  4. Entitlement and calculation of compensation.
  5. Deductions from compensation.
  
  Summary:

  The present appeal challenges the judgment of the Rajasthan High Court, Jaipur Bench, which upheld the compensation awarded by the Motor Accident Claims Tribunal, Jaipur.

  Issue 1: Reckless and Negligent Driving

  The Tribunal affirmed that the reckless and negligent driving of Jeep No. RJ 10C 0833 caused the accident resulting in the death of Sajjan Singh Shekhawat. This finding was upheld by the High Court.

  Issue 2: Employment Status of the Driver

  The Tribunal confirmed that the driver was employed by the non-applicant No. 2 at the time of the accident, a finding that was also upheld by the High Court.

  Issue 3: Insurance Company's Liability

  The Insurance Company claimed that the vehicle owner violated the conditions of the Insurance Policy. However, the Tribunal found the Insurance Company liable, and this was upheld by the High Court.

  Issue 4: Entitlement and Calculation of Compensation

  The Tribunal awarded a total compensation of Rs. 14,93,700/-. The High Court, despite noticing errors in the calculation, upheld this amount. The Supreme Court, however, found that the Tribunal and High Court failed to ensure just and fair compensation. It ruled that Provident Fund, Pension, and Insurance should not be deducted from the actual salary of the victim for calculating compensation. It also held that income tax should not be deducted in the absence of evidence that the employer failed to deduct TDS. The Supreme Court determined the fair compensation to be Rs. 29,73,000/-.

  Issue 5: Deductions from Compensation

  The Supreme Court held that Provident Fund, Pension, and Insurance do not come within the periphery of the Motor Vehicles Act to be termed as "Pecuniary Advantage" liable for deduction. It also ruled that the salary receivable by the claimant on compassionate appointment is not a "Pecuniary Advantage" liable for deduction. Regarding income tax, the Court presumed that the employer had deducted TDS from the salary unless proven otherwise.

  Conclusion:

  The Supreme Court modified the award to Rs. 29,73,000/- with a 12% interest rate from the date of the petition until payment. The Insurance Company was directed to pay the total award with interest minus any amount already paid within three months. The compensation was to be distributed among the appellants with specific directions for investment in fixed deposits for the daughter's education and marriage.

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• 2013 (5) TMI 1011
  
  Issues involved: Challenge to order u/s 260A of Income Tax Act, 1961 relating to assessment year 2000-01.
  
  Issue 1: Royalty Payment
  The main issue was whether the payment of Royalty of Rs. 10,36,05,000 should be treated as revenue expenditure or capital expenditure. The Income-tax Appellate Tribunal and Commissioner of Income-tax (Appeals) treated it as revenue expenditure, contrary to the Assessing Officer's view. This issue is framed as a substantial question of law for determination by the court.
  
  Issue 2: Restructuring Fee
  The question was whether the amount of Rs. 50,00,000 for restructuring fee should be considered as Revenue expenditure or capital expenditure. This issue had already been decided in favor of the assessee in a previous case, CIT v. Gujarat Guardian Ltd.: 177 Taxman 434(Del).
  
  Issue 3: License Fee/Integration Charges
  The issue revolved around the treatment of Rs. 6,61,212 for license fee/integration charges as revenue expenditure or capital expenditure. This matter was also settled in favor of the assessee by the decision in CIT v. M/s Asahi India Safety Glass Ltd.: 346 ITR 329 (Del).
  
  Issue 4: Provisions for Warranty Claim
  The question was whether the addition of Rs. 41,54,000 made by the Assessing Officer in respect of provisions for warranty claim should be deleted. This issue was resolved in favor of the assessee based on the Supreme Court decision in Rotork Controls India (P) Ltd. v. CIT: 314 ITR 62 (SC).
  
  The appeal was admitted specifically for the first issue. The parties were allowed to file additional documents within three months if they were part of the record before the Tribunal. The case was listed for further proceedings.

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• 2013 (5) TMI 1010
  
  Issues Involved:
  1. Delay in filing the appeal.
  2. Entitlement to deduction u/s 80P of the Income-tax Act, 1961.
  3. Validity of the CIT's exercise of power u/s 263 of the Act.
  4. Alternative claim for deduction u/s 57(iii) of the Act.
  
  Summary:
  
  1. Delay in filing the appeal:
  The assessee filed the appeal with a delay of 14 days, justified by the Chairman's affidavit citing personal reasons. The Tribunal condoned the delay, considering it a reasonable cause.
  
  2. Entitlement to deduction u/s 80P of the Income-tax Act, 1961:
  The assessee, a credit co-operative society, claimed a deduction of Rs. 5,94,879 u/s 80P, which included Rs. 2,43,342 as interest earned from bank deposits. The AO initially denied this deduction, treating the interest as taxable under "Income from Other Sources" u/s 56, following the Supreme Court's decision in Totgars Co-operative Sale Society Ltd. vs. ITO. However, upon revision u/s 264, the AO allowed the deduction u/s 80P(2)(a)(i), considering the society's activities and the nature of transactions.
  
  3. Validity of the CIT's exercise of power u/s 263 of the Act:
  The CIT invoked u/s 263, deeming the AO's order erroneous and prejudicial to the revenue, as it failed to apply the Supreme Court's decision in Totgars. The Tribunal upheld the CIT's action, stating that the interest income from bank deposits did not have a direct nexus with the society's business of providing credit facilities to its members. The Tribunal emphasized that the AO's view was unsustainable in light of the Supreme Court's ruling.
  
  4. Alternative claim for deduction u/s 57(iii) of the Act:
  The assessee's alternative claim for deduction of interest paid to depositors u/s 57(iii) was rejected. The Tribunal held that the deposits collected from members were for providing credit, not for earning interest from bank deposits. Thus, the interest income was independent of the deposits collected, and the claim could not be accepted.
  
  Conclusion:
  The Tribunal dismissed the appeal, affirming the CIT's order u/s 263 and rejecting the alternative claim for deduction u/s 57(iii). The decision was pronounced in the open court on May 10, 2013.

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• 2013 (5) TMI 1008
  
  Issues involved: Disallowance u/s.40(a)(ia) of the Income-tax Act and addition of income in A.Y. 2008-09.
  
  Disallowance u/s.40(a)(ia): The appellant, engaged in manufacturing and sale of automotive parts, rented premises from its sister company and entered into a leave and license agreement. Tax was deducted in March 2008 and deposited before the due date. The ITAT Mumbai's decision in a similar case was cited, emphasizing that if tax is deducted in the last month of the previous year and paid before the due date for filing returns, it should be allowed as a deduction. The tribunal held that the conditions for deductibility are prescribed under section 40(a)(ia) itself, and the provisions of Chapter XVII are relevant only for ascertaining the deductibility of tax at source. As the assessee complied with the main provisions of the law, the claim for deduction was allowed, and the appeal was decided in favor of the assessee.
  
  Addition of income in A.Y. 2008-09: The Assessing Officer added an amount related to extra freight and packing charges as income for A.Y. 2008-09, which the assessee claimed pertained to F.Y. 2007-08 and was compensated by Tata Motors. The ITAT Pune accepted the assessee's contention that the income accrued in A.Y. 2009-10, when negotiations with Tata Motors were finalized. Citing the case of E.D. Sasson, which defines the terms 'accrue' and 'arise,' the tribunal concluded that the income was rightly offered to tax in A.Y. 2009-10. The order of the Ld. CIT(A) deleting the addition was confirmed, and the revenue's appeal was dismissed.
  
  Judgment: The ITAT Pune upheld the decision of the Ld. CIT(A) in both issues, confirming the allowance of deduction u/s.40(a)(ia) and the deletion of the addition of income in A.Y. 2008-09. The appeal by the revenue was dismissed on 30-05-2013.

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• 2013 (5) TMI 1007
  
  Issues involved: Appeal by Revenue against CIT(A) order regarding deduction under section 80IB of the Income-tax Act, 1961.
  
  Summary:
  
  Issue 1: Deduction under section 80IB
  The appeal was filed by the Revenue against the CIT(A) order directing the Assessing Officer to restrict the deduction under section 80IB of the Income-tax Act. The assessee, engaged in the business of photographic films, claimed a deduction of &8377; 86,50,402 under section 80IB, which was disallowed by the Assessing Officer. The CIT(A) examined the issue in light of the judgment of the Hon'ble Apex Court in India Cine Agencies vs. CIT [2009] 308 ITR 98, where it was held that the conversion of jumbo rolls of photographic films into small flats and rolls amounts to manufacturing eligible for deduction under section 80IA of the Act. The CIT(A) allowed relief to the assessee but restricted the deduction to profits earned on manufacturing done in March 2006 only, resulting in an addition of &8377; 4,17,987. The Tribunal confirmed the CIT(A) order, stating that the issue was adjudicated in accordance with the judgment of the Hon'ble Apex Court.
  
  Decision:
  The appeal of the Revenue was dismissed, and the order was pronounced in the open court on 28/05/2013.

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• 2013 (5) TMI 1006
  
  Issues involved: The judgment involves the following issues:
  1. Deletion of addition on account of technical know-how and royalty paid by the assessee to Honda Motor Co. Ltd.
  2. Dealing with the addition under Section 43B of the Income-tax Act, 1961.
  3. Deletion of addition on account of provisions for warranty and sales services.
  4. Deletion of addition of export commission paid to Honda Motor Co. Japan.
  5. Deletion of disallowance made by the AO on cost of air tickets and other travel expenses for foreign technicians.
  
  Deletion of addition on account of technical know-how and royalty paid by the assessee to Honda Motor Co. Ltd.: The Income Tax Appellate Tribunal was questioned on the correctness in law and facts regarding the deletion of the addition on account of technical know-how and royalty paid by the assessee to Honda Motor Co. Ltd. The issue was considered as a substantial question of law. The Tribunal's decision was challenged, and the matter was admitted for further consideration.
  
  Dealing with the addition under Section 43B of the Income-tax Act, 1961: The Income Tax Appellate Tribunal's decision on the addition under Section 43B of the Income-tax Act, 1961 was discussed. It was noted that this issue was already covered in favor of the respondent/assessee by a previous decision of the Supreme Court. Therefore, this question did not require further consideration.
  
  Deletion of addition on account of provisions for warranty and sales services: The issue of deletion of addition on account of provisions for warranty and sales services was examined. It was observed that this matter was also settled in favor of the assessee by a Supreme Court decision. Hence, this question did not pose any further challenge.
  
  Deletion of addition of export commission paid to Honda Motor Co. Japan: The deletion of the addition of export commission paid to Honda Motor Co. Japan was considered. It was determined that this issue involved pure questions of fact without any legal implications. Therefore, while admitting the appeal, a specific substantial question of law was identified for further consideration.
  
  Deletion of disallowance on travel expenses for foreign technicians: The deletion of disallowance made by the Assessing Officer on the cost of air tickets and other travel expenses for foreign technicians was reviewed. It was found that this issue also pertained to factual matters without any legal question. The appeal was accepted, and a significant legal question was framed for deliberation.
  
  Conclusion: The High Court addressed various issues related to additions and deletions in the assessment of the assessee. Specific legal questions were identified for further consideration, while some matters were deemed settled based on previous judicial decisions. The appeal was admitted for detailed examination, and the parties were given the opportunity to submit additional documents within a specified timeframe.

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• 2013 (5) TMI 1005
  
  Issues involved: Appeal against order u/s. 143(3) of the Income-tax Act, 1961 for Assessment Year 2004-05, condonation of delay in filing appeal, addition of cash credit u/s. 68 on sale of shares.
  
  Condonation of Delay:
  The appeal of revenue was time-barred by 3 days, and a condonation petition was filed. The delay was condoned as the assessee did not object, and the appeal was admitted for hearing.
  
  Addition of Cash Credit u/s. 68:
  The revenue raised grounds related to the addition of cash credit u/s. 68 on the sale of shares worth Rs. 17,14,240. The AO treated the gains as unexplained cash credit due to the broker's suspension for share manipulation. However, the CIT(A) directed to treat the profit as Long Term Capital Gain (LTCG) based on supporting documents and precedents.
  
  Arguments and Decision:
  The revenue argued that the transactions were fraudulent, but the assessee provided evidence of purchase and sale of shares through registered brokers. The Assessing Officer's decision was based on presumptions without evidence contrary to the transactions. The CIT(A) followed the decision of the Calcutta High Court and granted relief based on substantiated documents. The Tribunal upheld the CIT(A)'s decision, citing the assessee's substantiation of the share transactions with necessary documents and the Calcutta High Court's precedent.
  
  Conclusion:
  The appeal of revenue was dismissed, and the Tribunal found the CIT(A)'s decision on the issue of addition of cash credit u/s. 68 to be appropriate and in line with legal precedents.

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• 2013 (5) TMI 1004
  
  Issues Involved:
  1. Whether the High Court was justified in staying the proceedings in the civil suit till the decision in the criminal case.
  
  Summary:
  
  Issue 1: Justification of High Court's Stay on Civil Suit Proceedings

  The short question for consideration in this appeal by special leave is whether High Court was justified in staying the proceedings in civil suit till the decision in criminal case.

  The Appellant filed an FIR against Respondent Nos. 1 to 4 for offences u/s 420, 467, 468, and 120B IPC, alleging execution of a false, forged, and fabricated will. Based on this will, Respondents obtained a mutation order. A challan was filed, and the trial is ongoing.

  The Appellant also filed a civil suit for declaration of title, perpetual injunction, and possession, referencing the forged will. The trial court framed issues based on pleadings. Respondents filed an application u/s 10 read with Section 151, CPC, for staying the civil suit proceedings during the pendency of the criminal case, which was dismissed by the Additional District Judge.

  Respondents challenged this dismissal in the High Court under Article 227 of the Constitution. The High Court stayed the civil suit proceedings till the decision of the criminal case, leading to the present appeal.

  The Supreme Court referred to the Constitution Bench decision in M.S. Sheriff v. State of Madras AIR 1954 SC 397, which stated that no hard and fast rule exists regarding staying civil or criminal proceedings. The possibility of conflicting decisions is not a relevant consideration; embarrassment to the accused is. The Court emphasized that criminal matters should generally be given precedence but noted exceptions based on specific case circumstances.

  In Karam Chand Ganga Prasad v. Union of India 1970 (3) SCC 694, it was observed that civil court decisions are binding on criminal courts, but the converse is not true. This principle was confined to the facts of that case in K.G. Premshanker v. Inspector of Police (2002) 8 SCC 87.

  In V.M. Shah v. State of Maharashtra (1995) 5 SCC 767, the Court held that civil court findings take precedence over criminal court findings in certain contexts. However, this was not considered good law in K.G. Premshanker.

  In State of Rajasthan v. Kalyan Sundaram Cement Industries (1996) 3 SCC 87, it was settled that criminal matters' pendency does not impede civil suits, and civil suits are rarely stayed for criminal cases.

  In K.G. Premshanker, the Court noted that judgments in civil proceedings are relevant if conditions of Sections 40 to 43 of the Evidence Act are satisfied but are not conclusive except as provided in Section 41.

  The Supreme Court concluded that the High Court was not justified in staying the civil suit proceedings. Conflicting decisions are not a relevant consideration, and there is no likelihood of embarrassment to the Respondents as they had already filed their written statement in the civil suit. The civil court's findings will not prejudice the Respondents' defense in the criminal proceedings.

  For the above reasons, the appeal is allowed. The impugned order dated 24.11.2008 passed by the Division Bench of the Madhya Pradesh High Court is set aside. The proceedings in the civil suit shall now proceed further in accordance with law. The parties shall bear their own costs.

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• 2013 (5) TMI 1003
  
  Issues Involved:
  1. Non-adjudication of all grounds of appeal by CIT(A).
  2. Validity of notice issued u/s 148.
  3. Denial of benefits u/s 11 and 12 due to non-registration u/s 12A(a) r.w.s. 12AA.
  4. Non-admission of evidences by CIT(A).
  5. Incorrect computation of income and tax liability.
  
  Summary:
  
  1. Non-adjudication of all grounds of appeal by CIT(A):
  The appellant argued that CIT(A) did not adjudicate all grounds of appeal distinctly and separately. The CIT(A) summarized the grounds as a single effective ground against treating the assessee trust as non-registered and denying benefits u/s 11 of the IT Act.
  
  2. Validity of notice issued u/s 148:
  The appellant contended that the notice issued u/s 148 was invalid. The Tribunal noted that the trust had been filing its returns for over 20 years and was registered under the Bombay Public Trust Act, 1950. The trust claimed it had lost its original registration certificate and had applied for a duplicate, which was not accepted by CIT. The Tribunal found no merit in the appellant's claim regarding the invalidity of the notice u/s 148.
  
  3. Denial of benefits u/s 11 and 12 due to non-registration u/s 12A(a) r.w.s. 12AA:
  The Tribunal observed that the trust was granted registration w.e.f. 1-4-2005 by CIT u/s 12AA(1)(b)(1). The trust claimed it was registered in 1975, but the certificate was lost. The Tribunal noted that the trust had been assessed to Income Tax for more than 20 years, and deductions u/s 11 and 12 were granted in past assessments (A.Y. 1982-83 and 1984-85). The Tribunal concluded that the trust should be considered registered u/s 12A for the years under appeal, as the Revenue could not provide evidence to the contrary.
  
  4. Non-admission of evidences by CIT(A):
  The appellant argued that CIT(A) did not admit or consider the evidences produced during the proceedings. The Tribunal noted that the trust had made efforts to obtain the 12A certificate and had filed an application u/s 7(1) of the Right to Information Act, 2005. The response from CPIO indicated that the records were weeded out and not traceable. The Tribunal found that the non-availability of records with the Revenue should not penalize the assessee.
  
  5. Incorrect computation of income and tax liability:
  The appellant disputed the assessed income of Rs. 8,53,766/-, arguing it was a total of expenditure and not income. The Tribunal found that the trust should be considered registered u/s 12A for the years under appeal, and the computation of income filed by the trust should be accepted.
  
  Conclusion:
  The Tribunal allowed the appeals, considering the trust to be registered u/s 12A for all the assessment years under appeal, and directed that the computation filed by the trust be accepted. The order was pronounced in Open Court on 10-05-2013.

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• 2013 (5) TMI 1002
  
  Issues involved: Revenue's appeal against deletion of addition of on money receipts for assessment years 2003-04, 2004-05, and 2006-07.
  
  Assessment Year 2003-04:
  The assessing officer found that the assessee received on money of Rs. 16,46,970 over and above disclosed income. The gross receipt was taxed as income, leading to an addition of Rs. 8,95,300. The assessee argued that only net income should be taxed, citing various authorities. The CIT(A) considered seized documents showing expenses and ruled that only reasonable profit earned on on-money receipts should be taxed. Following a Tribunal decision, 15% of the on-money receipts were subject to tax, resulting in an addition of Rs. 1,47,150.
  
  Assessment Year 2004-05:
  Similar to 2003-04, the assessing officer added Rs. 4,70,970 to the income based on on-money receipts. The CIT(A) upheld the addition of Rs. 72,000, applying the 15% profit rule from the Tribunal decision.
  
  Assessment Year 2006-07:
  For this year, an addition of Rs. 1,66,500 was made to the income by the assessing officer. The CIT(A) sustained an addition of Rs. 27,750, following the 15% profit rule from the Tribunal decision.
  
  The CIT(A) considered seized documents showing expenses and ruled that only reasonable profit earned on on-money receipts should be taxed. Following a Tribunal decision, 15% of the on-money receipts were subject to tax, resulting in specific additions for each assessment year. The Revenue's appeals were dismissed, upholding the CIT(A)'s order based on the Tribunal decision.

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• 2013 (5) TMI 1001
  
  Issues involved: Appointment of arbitrator, arbitrability of disputes, territorial jurisdiction waiver.
  
  Appointment of Arbitrator: In a case where there was a valid arbitration agreement between the parties and disputes covered under it, the Court appointed Ms. Rajlakshmi Rao, a former Member of National Consumer Disputes Redressal Commission, as the sole Arbitrator to adjudicate the disputes.
  
  Arbitrability of Disputes: The respondent raised an objection that the disputes were not arbitrable. The Court directed the respondent to raise this objection before the appointed arbitrator for consideration.
  
  Territorial Jurisdiction Waiver: The respondent's counsel waived the objection of territorial jurisdiction subject to the order not being treated as a precedent. The petitioner's counsel had no objection to this waiver.
  
  The order specified that it was passed in the peculiar facts and circumstances of the case and should not be treated as a precedent. The fees of the Arbitrator would be governed by the Delhi High Court Arbitration Centre (Administration Costs and Arbitrators' Fees) Rules. The petition was disposed of accordingly, and a copy of the order was to be sent to the appointed Arbitrator.

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• 2013 (5) TMI 1000
  
  Issues involved: Quashment of order directing deposit of amount by petitioner u/s 129 E of the Act.
  
  The High Court of Madhya Pradesh heard a case where the petitioner sought quashment of an order directing them to deposit Rs. 10 Lacs, passed by the appellate Tribunal. The petitioner's counsel argued that the liability before the Tribunal amounted to approximately Rs. 69 Lacs, but due to the industry being closed and declared sick and registered before the BIFR, no amount was deposited. The counsel requested the petition to be allowed and the impugned order set aside. On the other hand, the respondent's counsel opposed the prayer and requested dismissal of the petition.
  
  The Court noted that Section 129 E of the Act deals with industries facing undue hardship, which was not considered by the appellate authority while passing the order. In light of the circumstances, the petition was disposed of with a direction for the petitioner to file a fresh application before the authority. The authority was instructed to decide on the application considering the provisions of Section 129-E after providing an opportunity of hearing to the petitioner.
  
  The Court specifically directed the petitioner to submit the application within four weeks. Until a decision is made, the interim order passed by the Court would continue in effect. With these directions, the petition was disposed of by the High Court of Madhya Pradesh.

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