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Showing 61 to 80 of 1255 Records
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2015 (5) TMI 1206
Instruction to accept the defendants’ offer of payment alongwith interest - HELD THAT:- Defendants are directed to pay to plaintiff ₹ 4,00,00,000/- along with simple interest @ 12% per annum within twelve weeks. But, 25% of the principal sum, namely, ₹ 1,00,00,000/- shall be paid on or before 7th July, 2015. It is also agreed between the parties that in the event of default of payment of 25% of principal amount within the time stipulated here in above, the entire suit shall stand decreed.
The present suit is decreed in favour of the plaintiff.
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2015 (5) TMI 1205
Penalty u/s 271(1)(c) - additions/disallowances while completing the assessment order based on the comments/observation made by the special auditor and C&AG, that the FAA confirmed the additions/disallowances - HELD THAT:- AO had made additions/disallowances on four counts and first among them is about income accrued to the assessee on account of OWK Tunnel Project. The FAA found that because of the dispute going with the Govt. of AP the assessee was not sure as to how much additional compensation would be given to the sub contractor or when it would be paid. In these circumstances if the assessee had showed the income in the year of receipt it cannot be said that it had concealed its particulars of income. It is not the case of the AO that the assessee had not disclosed the fact of ongoing dispute with the AP Govt. or the fact that amount was to be paid to sub -contractor.
Income arising from the other projects had been shown by the assessee in the return so there was no justification of invoking the provisions of section 271(1)(c) - As far as the disallowance of certain item and capitalization of those expenses is concerned we are of the opinion that no concealment was involved in those transactions. The assessee had furnished all the details and claimed 100% depreciation as per the advice of the ICAI. The difference of opinion between the assessee and the AO about the allowability of the depreciation cannot and should not lead to levy of concealment penalty. Penalty could not be imposed, as a matter of course.
The assessee was truthful in submitting its return and making a claim for depreciation on its understanding of law. This was not a case of claim of depreciation on machinery which was not purchased. Courts are of the view that where basic information has been provided by the assessee then for a claim made by the assessee and disallowed by the AO penalty u/s.271(1) (c)cannot be levied. Here one more thing is to be remembered that the C&AG had dropped the comments made by it about the disputed amounts. Similarly on the issue of as to whether an expenditure is capital or revenue no concealment penalty can be levied.
No authority is required to support the view. Making additions or disallowing certain expenses during the assessment proceedings is totally different from invoking penal provisions. There is no provision in the Act of automatic levy of penalty for the additions/disallowances made. Penalty can be levied if it is established that the assessee had not disclosed necessary facts or that the explanation filed by it is not bona fide or plausible. We find that the FAA has given a clear finding of fact that there was no furnishing of inaccurate particulars that the explanation given by the assessee was bonafide.
As decided in RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c) A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. - Decided in favour of assessee
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2015 (5) TMI 1204
Characterization of income - profit from sale of land - assessee was engaged in the business of real estate development - whether asset referred was agricultural land? - As per DR there was no agricultural activity on the said land and assessee is in the real estate business individually or through companies - HELD THAT:- It is a fact that the assessee purchased a land in individual capacity from Shri Sitaram Meena and Shri Ramu Jat as agricultural land on agreement to sale. Thereafter the assessee had sold this land to GFFR on agreement to sale as per Section 2(47) of the Act. The NA was got done by GFFR in both the cases. Thereafter land was transferred to M/s Grass Field Fire Capital Developers Pvt. Ltd. The land was beyond 8 kms from the municipal limit which has not been controverted by the ld DR as well as by the ld Assessing Officer. The ld CIT(A) had given detailed findings on it. The assessee claimed this gain on transfer of these lands as exempted. As the use as per land revenue record was agricultural land. Thereafter GFFR has disclosed the income on transfer of this land to M/s Grass Field Fire Capital Developers Pvt. Ltd.. The assessee had purchased these lands for investment not for trading. The frequency of transactions showed that the assessee was not in trading of land. The land transaction of village Khatwad was not even pertained to year under consideration. Therefore, we confirm the order of the ld CIT(A). - Decided against revenue.
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2015 (5) TMI 1203
Forgery - cheating - Confirmation of the authenticity of documents submitted by the respondent - HELD THAT:- There is no legal infirmity in the same. Sitting in this jurisdiction after the dismissal of revision petition, there is no scope our interference unless the orders passed by the trial Court or revisional Court are perverse and against the law. No such material is available in this regard.
Petition dismissed.
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2015 (5) TMI 1202
Deduction u/s 80 HHC by excluding 90% net profit on account of hire of barge charges, Machinery and Shipping agency fees - HELD THAT:- Aforesaid question now stands concluded against the revenue and in favour of the assessee by the decision of the Supreme Court in ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax [2012 (2) TMI 101 - SUPREME COURT]
We must record the caveat put forth by Mr. Pardiwala, the learned counsel for the respondent that this agreement is without prejudice to the contentions taken in the appeal filed by the assessee for the assessment (Assessment Year 1996-1997) - Substantial question of law is answered in the affirmative i.e. in favour of the respondent – assessee and against the revenue.
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2015 (5) TMI 1201
Appointment of an Arbitrator - case of petitioner is that Petitioner was made to sign the supplementary agreement under duress and coercion - HELD THAT:- The Court is of the view that the above question whether the discharge certificate and supplementary agreement were signed by the Petitioner under duress, would require evidence to be led and is therefore required to be examined by the learned Arbitrator.
Appointment of an Arbitrator - HELD THAT:- It is seen that the Respondent forfeited its right under the arbitration clause since it failed to appoint an Arbitrator despite invocation of the arbitration clause by the Petitioner on 5th May 2014, followed by another letter dated 12th January 2015.
The Court appoints Mr. Ram Prakash, former District & Sessions Judge, Delhi, residing at B-52, Sector 49, Noida, District Gautam Budh Nagar, U.P.-201301 (Mob. No. 9990177710) as sole Arbitrator to adjudicate the disputes between the parties including their claims and counter-claims. The arbitration shall take place under the aegis of the Delhi International Arbitration Centre (DAC) - The fees of the learned Arbitrator will be in terms of the Delhi International Arbitration Centre Arbitration Proceedings (Arbitrators’ Fees) Rules.
Petition disposed off.
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2015 (5) TMI 1200
Reopening of assessment u/s 147 - rejection of claim of registration u/s 12AA - Validity of reasons to believe - HELD THAT:- In the reason recorded by the AO dt. 29th Jan., 2008 (for all the three assessment years) he has referred to the opening balance of the Trust fund at ₹ 15,92,245 which is the basis of formation of belief that a part of the above donation exceeding ₹ 1 lac, being the income as per s. 2(24)(iia) has escaped assessment; whereas the returns of income already stood filed as stated hereinabove with no donation exceeding ₹ 1 lac having escaped assessment demonstrating clearly that the very basis of forming the belief had no rational connection or relevant bearing on the formation of the belief. In other words, the belief entertained by the AO was not at all bona fide. In fact, the opinion formed is based on wrong and incorrect facts and suspicion.
AO proceeded for reopening of assessment on non-existent and factually incorrect reasons and he did not apply his mind prior to recording of reasons. In the reasons recorded by the AO, it is clearly stated that, "For the asst. yr. 2001-02, the assessee has not filed any income-tax return. Moreover, no returns for the asst. yrs. 2002-03 and 2003-04 have been filed." On the contrary, the AO himself has admitted in the assessment orders that the returns for all the three years under consideration were filed by the assessee. Not only this, even the learned CIT(A) has affirmed this fact. It is relevant to observe here that the reasons recorded for reopening of the assessments reproduced by the AO in the assessment order and by learned CIT(A) in para 3.1 of the impugned order are not the actual/original reasons recorded by the AO for reopening of the assessments.
These are the findings given by the learned CIT-I, Ludhiana for refusing to grant registration to the assessee trust. It is clear that both the authorities below have wrongly considered the findings given by the learned CIT-I, Ludhiana as reasons recorded for reopening of the assessments. Therefore, on this score alone, the reassessment orders are not sustainable. - Decided in favour of assessee
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2015 (5) TMI 1199
Proceedings u/s. 153C - Whether the addition made to the total income on account of income generated on sale of liquor not recorded in the books (suppressed sale of liquor) for A.Y. 07-08 can be sustained? - difference of opinion between the two Members constituting the Division Bench of ITAT, Cochin, the matter was referred to the Third Member by the Hon’ble President u/s. 255(4) - HELD THAT:- The Hon’ble Third member has agreed with the view taken by the Hon’ble Judicial Member in respect of both the questions referred above. Accordingly, as per the majority view, both the issues cited above are decided in favour of the assessee.
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2015 (5) TMI 1198
TP Adjustment - A.O. passed a draft assessment order - assessee filed objections before the Dispute Resolution Panel (D.R.P.). Thereafter the D.R.P. passed its order u/s 144C(5) of the Act. Thereafter the A.O. passed order u/s 143(3) read with section 144C - HELD THAT:- We find that the D.R.P. has not passed a speaking order in this case for both the A.Ys. The assessee has raised a number of contentions before the D.R.P. and none of these contentions were considered by the D.R.P.
Under these circumstances we have no other alternative but to remand the matter back to the file of the D.R.P., with a direction that D.R.P. shall pass a speaking order on each and every contention raised by the assessee. It shall also give its views on various case laws cited by the assessee. In the result both these appeals are set aside to the file of the A.O. and are treated as allowed for statistical purposes.
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2015 (5) TMI 1197
Depreciation to assessee trust - According to the Revenue, allowing capital expenditure at the time of acquisition of capital asset as application of income for charitable purpose and further allowing depreciation on the very same capital assets would amount to conferring double deduction - HELD THAT:- Hon’ble Supreme Court in the case of Escorts Ltd. [1992 (10) TMI 1 - SUPREME COURT] held that a trust claiming depreciation cannot be equated with a claim for double deduction. Hon'ble Karnataka High Court in the case of CIT v. Society of Sisters of Anne, [1983 (8) TMI 44 - KARNATAKA HIGH COURT] held that u/s. 11(1) of the Act, income has to be computed in normal commercial manner and the amount of depreciation debited in the books is deductible while computing such income. - Decided against revenue
Accumulation of 15% of the income u/s. 11(1)(a) - HELD THAT:- The delegated power of rule making given in section 11(2) is only for prescribing the manner of filing the application. The power does not include fixation of time limits. Delegated legislative powers are circumscribed by the statute delegating such powers and transgression thereof can render the rules beyond the scope of such delegation. Hence, we cannot fault the learned CIT(A) taking cognizance of the revised Form No.10A filed by the assessee. In any case, as observed by learned CIT(A) in the case of Bharath Kalyan Pratisthan [2007 (1) TMI 98 - DELHI HIGH COURT] as well as Bharat Krishak Samaj [2007 (8) TMI 8 - HIGH COURT,NEW DELHI] had held that details of purpose of accumulation was not a requirement that can be read into section 11(2). Revenue has not been able to bring before us any decision of Hon’ble jurisdictional High Court on this issue, and therefore, assessee has to be given the benefit of the decision in its favour, in preference to the decisions going against it
Accumulation of claim based on Form No.10 - In view of the acceptance of the claim for accumulation of claim based on Form No.10 and in view of the fact that 15% accumulation was disallowed by the AO only for the reason of rejection of accumulation of funds based on Form No.10, we are of the view that the CIT(A) was fully justified in allowing the claim of the Assessee for accumulation of 15% of the receipts.
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2015 (5) TMI 1196
Penalty u/s. 271(1)(b) - non-compliance of notice u/s 142(1) - HELD THAT:- We find that the Assessing Officer imposed the penalty u/s. 271(1)(b). However, it is not disputed that the assessment proceedings were initiated subsequently and the requisite details were filed as and when called for. The coordinate Bench-D Ahmedabad in the case of Swarnaben M. Khanna vs. D.C.I.T. [2009 (12) TMI 669 - ITAT AHMEDABAD] we hold that neither the A.O. nor the Ld. C.I.T.(A) has made out a case for sustaining the penalties. Accordingly, the penalties in all these assessment years for all the assessee are cancelled decided the issue in favour of the assessee has decided the issue in favour of the assessee and against the Revenue
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2015 (5) TMI 1195
Interim measure pending resolution of dispute in the pending arbitration proceedings - it was held in the case that if the appellant is permitted to prevent the respondent from working and as an alternative, the appellant secure any other party to carry out the work, it will cause irreparable injury to the respondent - HELD THAT:- There is no reason to entertain this Special Leave Petition - SLP dismissed.
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2015 (5) TMI 1194
Arbitral Award - Sub-contract - privity of contract - HELD THAT:- While the Award in the SIPCOT arbitration is not immediately an appellate subject herein, yet it is still part of the record and therefore merits our consideration. Until an order to the contrary be adduced before this Court, this Award must be assumed to be standing and valid. Its validity and legitimacy in law, insofar as it has depended on the earlier Award qua the adjudication of claims, would only be justifiable by the validity of the earlier Award in the Respondent’s favour. The earlier Award must, therefore, be presupposed to be valid, when the validity of the later Award has not been disproved or rebutted - the Award in favour of the Appellant is positively valid, and its unsettlement an uninviting prospect.
Law on subcontracts - Primary liability - employer liability - HELD THAT:- In the absence of covenant in the main contract to the contrary, the rules in relation to privity of contract will mean that the jural relationship between the employer and the main contractor on the one hand and between the sub-contractor and the main contractor on the other will be quite distinct and separate. No such clause to the contrary, existent in the main contract between Appellants and SIPCOT, has been highlighted before us by the Appellants, which would persuade us towards a deviation from the presumption of distinct and sole liability of the Appellant-Contractor as employer viz. a. viz. the Respondent-Sub Contractor.
The Appellant exercised care to make this concession by conjoining therewith its demand for adjustment in the Second Arbitration. To that extent the concession could be called a conditional one. At the heart of the concession however, the admission itself, taken alone, was not conditional. The Appellant thereby admitted an unconditional contractual liability on its part to pay the Respondent’s contractual claim, albeit dressing the same in the shroud of conditionality, by the expedient of making the concession dependent upon a consequent favourable outcome in the Second Arbitration.
We cannot subscribe to the argument on behalf of the Appellant that it was merely a Consultant and therefore could not be fastened with liability or was imperious to claims preferred by the Respondent for work contractually carried out, or, in respect of claims founded on the bedrock of quantum meruit.
Appeal dismissed.
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2015 (5) TMI 1193
Partners entitlement to higher remuneration on enhanced income - Estimation of income by allowing the remuneration to partners on the declared income during the survey operation - as per AO this income was from undisclosed sources over and above the business income for the particular year - HELD THAT:- The amount of ₹ 4 lacs disclosed during the course of survey was on the basis of excess stock found and loose papers relating to business found during survey operation. Thus, both these aspects on the basis of which disclosure was made were relating to the business of the assessee. Whatever income was declared was related to the business of the assessee and it was assessee’s business income. The assessee shall be entitled to pay remuneration to its partners as per clauses of partnership deed. Therefore, we allow this ground of appeal of the assessee.
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2015 (5) TMI 1192
Addition on account of suppressed sales and profit - material collected by Excise Department relied to make addition - CIT-A restricted of profit on suppressed sale @ 9% as against 25% as determined by AO - HELD THAT:- It is undisputed that Income Tax proceedings are arising from the rate of Excise Department and material collected during search proceedings culminated into issuance of show cause notice for recovery of unpaid Excise Department and penalty in given cases. Without prejudice to the finding of Custom, Excise Department, question before us is whether on mere show cause notice issued by Excise Department can be made basis of addition for the purpose of Income Tax Act.
Income Tax Officer has utilized the material collected by Excise Department including statement of petitioner and other relevant persons as discussed above and on the basis of same. He would have been justified in making addition for the purpose of Income Tax Department in present case by independent enquiries by concern Income Tax Authorities. No such exercise was undertaken by Income Tax Department at all.
AO has simply relied on show cause notice issued by Excise Department. Nowhere did he conclude that there was a large scale removal of goods without payment of tax under Income Tax Act. Merely because Excise Department issued show cause notice, that alone cannot be a ground to assume and conclude that there was evasion of Income Tax Act as well. It is not even the case of Department that such show cause notice proceeding has culminated into any final order against petitioner. This makes it clear that concern ITOhas acted upon in mechanical manner and passed order of assessment merely on premises of Excise Department issued show cause notice alleging large scale removal of goods - See FUTURA CERAMICS PVT. LIMITED VERSUS STATE OF GUJARAT THRO SECRETARY [2013 (11) TMI 1752 - GUJARAT HIGH COURT] - Decided in favour of assessee.
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2015 (5) TMI 1191
Revision u/s 263 - A.O. not made any addition with regard to unexplained sundry creditors/unsecured loans, as he had, rejecting the assessee’s books of account, estimated its assessee’s income invoking section 145(3) - A.Y. 2008-09 - HELD THAT:- No verification had been undertaken by the A.O. despite the fact that the balance of one creditor, M/s. Krishna Hardware, Katihar (outstanding at ₹ 50.46 lacs as at 31.03.2008), continues to remain unpaid, save to the extent of ₹ 10 lacs, even up to 26.07.2010, i.e., 2½ years after the end of the relevant financial year. The A.O. had taken the confirmations from the creditors at face value, without enquiring into the reasons as to why the balances continue to obtain even much after the end of the relevant year, i.e., considering that a normal transaction would get concluded much earlier, within a period of few days or at best a couple of months after the transaction. Similarly, Smt. Ramba Rai, wife of Lt. Shri Harendra Rai, is stated of having given a loan (unsecured) of ₹ 2,27,000/- to the assessee, which outstands as on 31.03.2008. The same, however, does not find reflection in the assessee’s balance sheet as at that date, while those that do (from five parties) are very old, so that the A.O. had failed to, and which he was duty bound to, carry verification as to the genuineness of those liabilities. A failure to make proper enquiry, called for under the circumstances, renders an order per se erroneous insofar as it is prejudicial to the interest of the Revenue.
Non inclusion of the income arising by way of miscellaneous sales and royalty - non-verification of unsecured loan/s -A.Y. 2009-10 - HELD THAT:- The rejection of the assessee’s accounts does not imply discarding all and every information therein or contents thereof. We have already clarified, on the basis of the decisions by the apex court, that estimation of profit upon rejection of the book results would not preclude addition in respect of unexplained credit/s appearing in those accounts, though there could be reasons for telescoping the two additions.
Similarly in Shyam Bihari vs. CIT [2012 (8) TMI 420 - PATNA HIGH COURT] has clarified for allowance of depreciation separately. True, the same is a statutory allowance, subject to being allowed even where no charge in its respect stands booked in accounts.Cost of acquisition or improvement of the relevant assets and, in turn, the WDV of the relevant block of assets, would only be in terms of the books of account. Why, profit, be it trading or net, is estimated normally on the basis of sales as reflected therein. We can multiply examples; the whole premise being of the assessment of income being on a reasonable and objective basis, taking into account all the relevant information. The royalty income and miscellaneous sales have nothing to do with the contract receipt, income from which activity is estimated in the main, nor any relationship therewith stands shown. The two represent sources of income separate and distinct from the construction business and, accordingly, there is no gainsaying that the same would also stands to be assessed. No enquiry in the matter having been made, the assessment order resultantly suffers from lack of enquiry and due application of mind.
We, accordingly, uphold the invocation of section 263 in the instant case. - Decided against assessee.
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2015 (5) TMI 1189
Purchase minimum energy from renewable sources - validity of the Rajasthan Electricity Regulatory Commission (Renewable Energy Obligation) Regulations, 2007 and Rajasthan Electricity Regulatory Commission (Renewable Energy Certificate and Renewable Purchase Obligation Compliance Framework) Regulations, 2010.
Whether the impugned Regulations imposing RE Obligation upon Captive Power Plants framed by the RERC in exercise of power Under Section 86(1)(e) of the Act of 2003, which provides for promotion, co-generation of electricity from renewal source of energy are ultra vires the provisions of the Act or repugnant to Article 14 and 19(1)(g) of the Constitution?
HELD THAT:- The purchase of nominal quantum of energy from renewable resources cannot adversely affect the cost effectiveness of the Captive Power Plant. Moreover, the object being reduction of pollution by promoting renewable source of energy, larger public interest must prevail over the interest of the industry herein which will in any case pass on the extra burden, if any, will be as part of the cost of its products and therefore, the same does not burden the Appellants - The provision of RE surcharge in the Statute is only meant for ensuring compliance with the requirement of consumption of the specified quantum of energy from renewable sources and the same is to be used in case of shortfall in compliance of RE obligation. The said provision does not amount to imposition of a pecuniary liability.
Article 51A(g) of the Constitution of India cast a fundamental duty on the citizen to protect and improve the natural environment. Considering the global warming, mandate of Articles 21 and 51A(g) of the Constitution, provisions for the Act of 2003, the National Electricity Policy of 2005 and the Tariff Policy of 2006 is in the larger public interest, Regulations have been framed by RERC imposing obligation upon captive power plants and open access consumers to purchase electricity from renewable sources. The RE obligation imposed upon captive power plants and open consumers through impugned Regulation cannot in any manner be said to be restrictive or violative of the fundamental rights conferred on the Appellants Under Articles 14 and 19(1)(g) of the Constitution of India.
The High Court has rightly upheld the validity of the impugned Regulation and we do not find any reason to interfere with the impugned judgment - Appeal dismissed.
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2015 (5) TMI 1188
Offence under PMLA - provisional attachment order - HELD THAT:- Recording the submissions made by the learned Additional Solicitor General of India, these writ petitions are closed with liberty to the petitioners to challenge the final order has been passed on 26.5.2015 by the Adjudicating Authority. passed by the Adjudicating authority in the manner known to law.
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2015 (5) TMI 1186
Reference of matter to DVO u/s.142A - AO has not rejected the books of account by pin pointing any defects in the books of account - HELD THAT:- In this case the assessee maintained books of accounts and duly furnished before the AO and he has not appreciated the same and only on presumption that cost of construction was very low, he referred the matter to DVO without properly rejecting the books of accounts maintained by the assessee.
Reference to DVO u/s.142A(3) could be made when books of accounts are rejected by pinpointing defect therein. In other words, if the books of accounts are found to be correct and complete in all respect and no defect is pointed out therein and the cost of construction of building is recorded therein, addition referred u/s.142A (2) is not appropriate.
Accordingly, we are of the considered view that in the present case when the AO has not rejected the books of account by pin pointing any defects in the books of account reference to the DVO is not valid and, therefore, DVO’s report could not be utilized for framing assessment even if such a report is considered to be obtained u/s.142A of the Act. Since reference to DVO being held as invalid, the assessment thereafter based on that DVO report also be invalid. - Decided in favour of assessee.
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2015 (5) TMI 1185
Maintainability of appeal before Tribunal - Tribunal under the Haryana Value Added Tax Act, 2003 has not yet been constituted - HELD THAT:- The appeal that had been filed by the petitioner cannot proceed at this stage. In lieu thereof, it is not possible for the petitioner to seek interim relief before the Tribunal.
Petition dismissed.
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