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Showing 61 to 80 of 1254 Records
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2014 (8) TMI 1197
Eligibility of sales tax exemption - sale of BOPP tapes and PVC adhesive tapes - applicability and scope of G.O.Ms. No.1772 (Revenue) dated 25-09-1958 - contention of the revenue, before the Tribunal, was that, in view of the addition of Entry 191 to the First Schedule, with effect from 15-02-1989, the earlier order of exemption in G.O.Ms. No.1772 (Revenue) dated 25-09-1958 ceased to remain in force; and the intention of the legislature was to bring adhesive tapes to tax.
HELD THAT:- The power to grant exemption from tax is referable to Section 9 of the Act. Section 9 empowers the State Government to notify exemptions from tax or interest and, under sub-Section (1) thereof, the State Government may, by notification in the Andhra Pradesh Gazette, make an exemption, in respect of any tax payable under the Act, on the sale or purchase of any specified class of goods. G.O.Ms. No.1772 (Revenue) dated 25-09-1958 was issued, in the exercise of the powers conferred under Section 9 (1) (i) of the Act, exempting "all kinds of tapes, nawars and laces" from tax - As an exemption notification was issued under Section 9 (1) of the Act, and was published in the A.P. Gazette, the order of exemption can only be rescinded or revoked by way of another notification published in the Andhra Pradesh Gazette. It is not in dispute that no notification was issued rescinding or revoking G.O.Ms. No.1772 (Revenue) dated 25-09-1958 after Entry 191 was added, to the First Schedule of the Act, by Act 4 of 1989 with effect from 15-02-1989.
Exercise of power under Section 40, to amend the schedules to the Act, is distinct from the exercise of power to grant exemption under Section 9 of the Act. The mere fact that power was exercised under Section 40 to add an Entry to the First Schedule did not, by itself and without anything more, result in the exemption order, issued under Section 9 of the Act, ceasing to remain in force. It is only on a notification being issued in the A.P. Gazette, canceling or rescinding the earlier notification granting exemption, would the said order of exemption stand revoked. The mere fact that Entry 191 was added to the First Schedule, with effect from 15-02-1989, would not automatically result in the respondent being denied the benefit of exemption under G.O.Ms. No.1772 (Revenue) dated 25-09-1958, in as much as the said order of exemption, passed by the Government under Section 9 (1) of the Act, was not rescinded or revoked by way of a notification in the A.P. Gazette even after Entry 191 was added to the First Schedule. As long as the order of exemption in G.O.Ms. No.1772 (Revenue) dated 25-09-1958 remained in force, the assessing authority could not have denied them the benefit of exemption - there are no error in the order of the Tribunal necessitating its Revision.
Tax revision dismissed.
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2014 (8) TMI 1196
Rectification of mistake u/s 254 - Entitlement for deduction u/s. 80IA denied - HELD THAT:- Tribunal has dismissed the assessee’s appeal [2010 (10) TMI 1206 - ITAT MUMBAI] by relying on the decision of Larger Third Member Bench in the case of B.T. Patil & Sons Belgaum Construction Private Ltd. [2013 (11) TMI 197 - ITAT PUNE]. This decision was subsequently recalled and was finally decided in favour of the assessee by relying on the decision of Hon’ble jurisdictional High Court in the case of CIT Vs. ABG Heavy Industries Ltd. [2010 (2) TMI 108 - BOMBAY HIGH COURT]. Thus, an apparent mistake has been crept in the order of Tribunal dated 27-10-2010, which is amenable to rectification u/s.254(2) - we recall the order passed by the Tribunal and direct the Registry to fix the appeal for hearing on merits. Registry is also directed to issue fresh notice to both the parties. Miscellaneous application filed by the assessee is allowed
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2014 (8) TMI 1195
Rectification of Mistake - errors apparent on the face of the record - sufficient reason present or not - HELD THAT:- In the present case, SAIL-BSP is a State embedded entity whose schedule is prepared by Chhattisgarh SLDC. However, the scheduling of NSPCL, being an ISGS is done by WRLDC. Therefore, WRLDC prepares schedule for whole Chhattisgarh and Chhattisgarh SLDC in turn prepares schedule for SAIL-BSP. Therefore, WRLDC applies zonal charges and losses as per Sharing Regulations. Further, as per implemented schedule available at SLDC Chhattisgarh web site, the drawal schedule of BSP is prepared considering CSPDCL as buyer of power from NSPCL and path of their power is shown as transmission system of WR and CSPTCL.
NSPCL-BSP-SAIL dedicated transmission lines are connecting two entities viz. NSPCL and SAIL-BSP in two different control areas coordinated respectively by WRLDC and SLDC, Chhattisgarh. If the petitioner’s contention is to be upheld, then NSPCL may have to dedicate one unit purely as captive plant to cater to the captive load of SAIL-BSP and it needs to be fully disconnected from the other unit having long term allocation to other beneficiaries. In that case, WRLDC will schedule only one unit of NSPCL and the other unit along with SAIL-BSP will be with the Chhattisgarh SLDC control area - there is no error of fact or law, apparent on the face of record.
Review petition dismissed.
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2014 (8) TMI 1194
Issue not raised by the assessee before the lower authorities - notice under section 153C r.w.s. 153A was issued in this case after expiry of two years from the date of search - HELD THAT:- We find that the issue raised by the assessee in this ground of the appeal being legal in nature, has to be admitted. However, this issue was not raised by the assessee before the AO and the CIT(A). Accordingly, we are of the view that it shall be in the interest of justice to restore this issue to the file of the AO with direction to decide about the legal issue regarding legality of the notice dated 13.6.2008 issued by the DCIT after allowing reasonable opportunity of hearing to the assessee.
Addition u/s 68 - HELD THAT:- We find that since the legal issue raised regarding legality of the notice dated 13.6.2008 has been restored to the file of the AO, it shall be justified to restore other issues raised of the appeal of the assessee to the file of the AO with direction to decide the same afresh in accordance with the law after allowing reasonable opportunity of hearing to the assessee - Decided in favour of assessee for statistical purpose.
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2014 (8) TMI 1193
Waiver of 20% of the interest demanded u/s 234B - delay in payment of the capital gain tax - assessee is a retired Scientist from the Indian Defence Organisation - Learned single Judge directed the assessee to pay 20% of the interest demanded as against 100% claimed by the Revenue - HELD THAT:- Assessee claimed exemption of payment from ‘Capital Gains Exemption Bonds’ by investment in the Government bonds. Though the amount was acknowledged, for want of Pan number, bonds were not issued. Though, he rectified the mistake, still he could not get the benefit. In the meanwhile, law was amended imposing limitation to the extent of only ₹ 50 Lakhs notified by way of a Notification, subsequently, by way of amendment about which the assessee was completely ignorant. After coming to know of the same, he hasdeposited ₹ 50 Lakhs and thereafter he has paid capital gain tax of the balance amount. The demand of interest is for the delay in payment of the capital gain tax.
The learned single Judge has carefully taken note of the facts and circumstances of the case, the statutory provisions, the Circulars issued and also the orders passed by the Authorities and was of the view that there was no intention to evade payment of tax. The delay is on account of bona fide mistake and therefore, he reduced the interest to 20%, thus, waiving 80% of the interest payable.
No justification to interfere with a well considered order passed by the learned single Judge. In that view of the matter, we do not see any merits in this appeal.
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2014 (8) TMI 1192
Allowability of foreign exchange loss - CIT(A) held that the unrealized foreign exchange loss had resulted on capital account - as per assessee ECB borrowings are on general account of expansion of three existing industrial unit and hence, the ECB borrowings are not on capital account - HELD THAT:- As during the assessment year 2009-10, the assessee company has claimed foreign exchange loss which consist of loss of reinstatement of outstanding liability on account of ECB loans in foreign currency and the same has been accepted by the department. It is also pertinent to mention that during the previous AYs from 2001-02 to 2006-07, the department has accepted the gain offered by the assessee as income on account of similar foreign exchange fluctuation.
When the facts are being, we do not find any justification on the part of the authorities below to disallow the loss claimed by the assessee during the year under consideration. AO is directed to verify the correct computation and allow the claim of the assessee accordingly. Appeal filed by the Assessee is treated as allowed.
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2014 (8) TMI 1191
Dishonor of Cheque - section 138 of NI Act - summon order - appellant though they were not directly involved nor dealt with the matter of the company, they were impleaded as accused in the petition under Section 138 Negotiable Instrument Act - HELD THAT:- It is clear that merely being a Director of a company is not sufficient to make the person liable under Section 141 of the Act, till it is shown that the said Director was in- charge of and responsible for the conduct of his business.
The Court below and the High Court erred in not appreciating the fact that the complainant in the mechanical way cited the names of the appellants which alleged to have been obtained from the website of the Ministry of Corporate Affairs and unnecessary dragged the appellants in litigation who were not directly charged or responsible for the company for the conduct of business. The requirement of Section 141 of the Negotiable Instrument Act is against the persons responsible for the conduct or business of the company at the relevant time. In absence of such allegation against the appellants, the complainant misused the mandate of Section 138 of the Negotiable Instrument Act.
Appeal allowed - decided in favor of appellant.
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2014 (8) TMI 1190
Deduction u/s 80IB(10) in respect of the Dharavi Project approved by SRA - Deduction denied as condition of size of the plot of land had not been fulfilled by appellant - Whether the proviso inserted in clause (b) to section 80IB(10) by the Finance (No.2) Act, 2004 and the subsequent notification No.67/2010 dated 3/8/2010 issued by CBDT notifying the SRA projects is clarificatory in nature and is retrospective in operation? - HELD THAT:- The Registrar (Judicial)/Registrar, High Court, Original Side, Bombay to ensure that the original record in relation to this Appeal is summoned from the Tribunal and offered for inspection of the parties.
This paper book is treated sufficient for the purpose of admission of this Appeal. However, the Registry must further ensure preparation of complete paper book in accordance with the Rules. The Registry in the first instance must send intimation of admission of this Appeal enclosing therewith a copy of this order so as to enable the Tribunal to act accordingly.
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2014 (8) TMI 1189
TDS u/s 194C - payment made to a resident for the services rendered - local agent of non-resident company has rendered services to the assessee - HELD THAT:- Agent of the foreign shipping company is only a conduit but the destination of the payment is the foreign shipping company and therefore, it is not liable to TDS provisions. Though the AO has observed that the local agent has rendered services to the assessee, his order is silent as to the nature of services rendered by the local agent of the foreign shipping company. The Board’s circular No.723 dated 19-91995,in force during the relevant assessment year, clearly provides that payments made to the shipping agent of non-resident ship-owners or charterers for carriage of passengers, etc., from the port in India is not liable for TDS u/s 194C and 195 of the Act. The Board’s circulars are binding on the Revenue authorities. Before disallowance u/s 40(a)(ia) of the Act, the AO ought to have examined and brought on record the nature of services rendered by the local agents of the non-resident company which he has failed to do so. Neither has the CIT(A) done this exercise. In view of the same, we deem it fit and proper to remit this issue to the file of the AO to re-consider the same in accordance with law and if it is found that the recipient of payment is only a local agent of the non-resident company and has not rendered any independent services but has received the payment on behalf of the non-resident company for the services rendered by the non-resident company, then no disallowance is required to be made. With these observations, the issue is remitted back to the AO for consideration in the light of our observations above. These grounds are accordingly allowed for statistical purposes.
Claim of bad debt - disallowance on the ground that the same has not been written off in the books of account of the assessee - HELD THAT:- We find that there is a finding of the AO which is not disputed by the assessee that the bad debts have not been written off in its books of account for the relevant assessment year. In view of the same, the said claim is not allowable and the AO has rightly disallowed the same and brought to tax. As regards the assessee’s prayer to give a direction that the same may be considered in the next assessment year, we are not inclined to accept this contention, as a direction can be given only for the issues arising in the assessment of income for the relevant assessment year and not to any earlier or subsequent assessment year. It is for the assessee to make a claim and the AO to consider such a claim, if made, during the assessment proceedings of the relevant assessment year. In view of the same, these grounds of appeal are dismissed.
Discrepancy in the valuation of closing stock both with regard to the quantum and the value as on 31-3-2005 - HELD THAT:- We find that the CIT(A) has also not verified the contention of the assessee and has merely confirmed the additions made on account of difference in the valuation of closing stock. We find that none of the authorities have, in fact, examined the contentions of the assessee and have not verified the explanation of the assessee with regard to the alleged discrepancies in the valuation of the closing stock. In view of the same, we are inclined to set aside the order of the CIT(A) as well as the order of the AO on this issue and remit the issue to the file of the AO for reconsideration in accordance with law. The AO shall allow the assessee to explain the discrepancies, if any, in the valuation of closing stock by giving a fair opportunity of hearing to the assessee. These grounds are thus allowed for statistical purposes.
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2014 (8) TMI 1188
Disallowance of remuneration - disallowance by invoking section 184(5) of IT Act, 1961, considering the firm as an Association of Persons (AOP) - HELD THAT:- There is no dispute that the assessee had not filed any return voluntarily, as prescribed u/s 139(1) of the IT Act, 1961 or belatedly or prescribed u/s 139(4) of the IT Act, 1961. The returns filed by the assessee were pursuant to notices issued u/s 148 of the IT Act, 1961.
Reading of sub-sec.1 of Sec.148 of the IT Act, 1961, clearly show that a return filed in pursuance of notice u/s 148 of the IT Act, 1961 is to be treated as a return required to be furnished u/s 139 of the It Act, 1961. Failure of an assessee to file the return u/s 139(1) of the IT Act, 1961 would give powers to the AO to issue a notice for filing return as set out in Sec.142(1) of the IT Act, 1961. Once an AO chose not to issue such notice but to proceed u/s148, the consequence mentioned therein has to follow.
Once a return has been filed by the assessee pursuant to a notice u/s 148 of the IT Act, 1961, the clause that would apply to him is clause(c ) of sub-sec.(1) of Sec.144 of the IT Act, 1961. He goes out of the ambit of clause(a). For applying clause(c ), it is necessary that assessee should have failed to comply with the terms of notice issued under sec.143(2) of the IT Act, 1961 - Thus, it is clear that there was no failure in complying with the notices issued u/s 143(2) of the IT Act, 1961. The result is that assessee could not have been fastened with the consequences that arise out of a best judgment assessment u/s 144 of the IT Act, 1961. It is not that section 184(5) come into operation whenever an assessment is made u/s 144.
The claim for deduction by way of payment of interest, salary, bonus, commission or remuneration to the partners could not have been disallowed. The disallowance of remuneration to partners for impugned assessment year therefore, stands deleted - Appeal of the assessee allowed in part.
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2014 (8) TMI 1187
Delay in filing appeal u/s. 248 extending upto 933 days - TDS on payments made to non-resident payees, and deposited the same in the State Exchequer - assessee approached the CIT(A) u/s 248 claiming that on the payments made to three non-resident payees, no tax was required to be deducted at source and CIT-A accepted the same - Indo-Thailand DTAA - HELD THAT:- Section 248 of the Act primarily deals with a situation where a person has deducted and paid tax to the Government, but thereafter denies his liability to deduct such tax. Thus, an appeal u/s 248 of the Act is preferred by a person only after he has actually paid the tax to the credit of the Central Government, whose liability he seeks to deny. In such a situation, where the bonafides of the assessee are not in challenge, the reasons advanced for the delay ought to be construed liberally. In conclusion, we hereby affirm the action of the CIT(A) condoning the delay in filing of the appeals before him. Thus, Revenue fails on this aspect.
TDS on payments made to non-resident payees - DTAA between Indo-Thailand - PE in India - In the present case, there is no material to suggest that the recipient concerns have a permanent establishment in India or that they were present in India for a period exceeding 183 days during the previous year relevant to the assessment year under consideration. In this context, learned counsel for the assessee furnished appropriate certificates from the three recipient concerns tabulating the period for which their representatives were present in India during the relevant period which show that the presence in India was for less than 183 days. Therefore, on this aspect also, we find no merit in the plea of the Revenue and the discussion made by the CIT(A) in para 3.8 of his order in this context is hereby affirmed.
As revenue CIT(A) has not considered the taxability of the impugned income as ‘business income’ under Article 7 of the DTAA - Article 7 of the DTAA deals with business profits to be considered for taxation. The said Article states that the income or profits of the enterprise of a contracting State shall be taxable only in that State unless the enterprise carries on business in the other contracting State through a Permanent Establishment (PE) situated therein. The taxability is only of so much income as is attributable to that PE for the sales in that other State of the goods or merchandise. In this context, having regard to the definition of PE provided in Article 5(2)(j) of the Indo-Thailand DTAA, we find that the three recipient concerns cannot be said to have any PE in India so as to bring the impugned income to tax as business profits in India as per Article 7 of the DTAA. Therefore, on this count also we find no reason to interfere with the conclusion of the CIT(A) to the effect that assessee was not required to deduct tax on payments to the three recipient concerns. - Decided in favour of assessee
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2014 (8) TMI 1186
TDS u/s 194J or 192 - payments made to the teachers on adhoc basis - default u/s 201(1)/201(1A) - HELD THAT:- Relationship between the management and teaching staff involved an obligation to obey orders in the work to be performed, the said relationship could not be called contract for service since the teaching staff had not undertaken to render any professional or technical service. As there was a contract of service between the assessee deductor and its teaching staff appointed on adhoc basis and the salary paid to them being below the taxable limit, does not warrant deduction of tax at source and such non deduction of tax at source does not invalidate the provisions of Act making the assessee liable for the demand raised under section 201(1)/201(1A)
We are in agreement with the observation of the CIT (Appeals) that merely because the assessee had not maintained separate books of account for financially added courses and self financing courses was not relevant, as there was no requirement under the Act and by not maintaining separate books of account, the nature of payment would not get changed. In view of the teaching staff being appointed on adhoc basis, for a short period, there was no entitlement for any other benefits like PF, Gratuit y, HRA, increment, etc.
Upholding the order of the CIT (Appeals), we hold that the Assessing Officer was not correct in treating the payments made to the teachers on adhoc basis as professional payments in line with the provisions of section 194J of the Act. The assessee is thus not in default and there is no merit in raising of demand under section 201(1) of the Act and charging of interest under section 201(1A) of the Act. The grounds of appeal raised by the Revenue are thus dismissed.
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2014 (8) TMI 1185
Penalty u/s 271D - contravention of the provisions of section 269SS - journal entries or cash loans - HELD THAT:- We find that the issue relating to justification for the penalties u/s 271D of the Act in identical facts and circumstances of the case has come up before the Tribunal in the case of assessee’s mother Smt. G. Venkata Lakshmi [2013 (7) TMI 1017 - ITAT HYDERABAD] and [2012 (11) TMI 1171 - ITAT HYDERABAD] wherein held there is no proof of receipt of such loan from the records and they were only found to be journal entries. The learned Tribunal, in our view, correctly observed that relying on an entry in the journal, no penalty proceedings can be initiated. Hence, it was sent for clarification whether actual flow of money did take place - Decided against revenue
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2014 (8) TMI 1184
Permanent injunction restraining the respondent, its agents, workmen or any person acting through or on behalf from interfering with the operations of the mining machinery deployed in the schedule property pending adjudication of the disputes - Whether this Court exercising jurisdiction under Article 227 of the Constitution of India ought to entertain this writ petition and if so, as to whether any relief ought to be granted to the petitioner herein?
HELD THAT:- This is a case where this Court ought to exercise its jurisdiction under Article 227 of the Constitution. The reasons for entertaining the writ petition would become clear when the impugned order is considered on merits.
From a reading of the impugned order it is clear that nowhere reasons have been recorded as to why the trial Court was of the opinion that injunction had to be granted in the form of a status quo order with regard to agreement between the parties dated11.12.2012 by dispensing with notice to opposite party i.e., petitioner herein before it concluded that non-grant of expert order of status quo would be defeated by delay if notice was to be ordered on the opposite party i.e., petitioner herein. In fact the impugned order records submission of applicant’s counsel before the trial Court, but in the absence of there being reasons as to why the expert order ought to have been allowed the impugned order is illegal and an arbitrary exercise of power by the learned trial Judge. In fact the impugned order is bald, laconic and bereft of any reason.
In fact on a reading of the impugned order itis noted that in the absence of there being any reasons assigned for dispensation of notice to the respondent before the trial Court coupled with a fact that no reasons have been assigned as to how the applicant before the trial Court had made out a prima facie case there is in effect and substance, violation of the principles of natural justice. Had the petitioner herein who is the respondent before the trial Court known the reasons as to why there was dispensation of notice to it and as to what the grave situation was that the matter required an expert order then possibly petitioner herein could not have approached this Court on that aspect. Also, if there were reasons assigned which were erroneous then possibly petitioner herein could have assailed that order by way of an appeal by contending that reasons were erroneous - But in this case the impugned order does not give any reason as to how prime facie case was made out by respondent herein or for that matter what the balance of convenience between the parties was.
The impugned order being bereft of reasons is liable to be quashed.
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2014 (8) TMI 1183
Revision u/s 263 - AO has not examined the issue as to whether these expenses pertaining to handling charges relatable to exempt income or taxable income - AO’s decision not to properly examine such expenses as above amounts to failure to examine the applicability of provisions of section 14A and has rendered the assessment erroneous and prejudicial to the interests of revenue - HELD THAT:- The total transport and handling charges appears in the accounts is inclusive of transport and service charges. The total handling charges appearing on expenditure side is the actual sum paid to various contractors (After considering the TDS). Thus, there is a direct nexus of expenditure incurred and income reflected in the accounts. Since this activity pertains to taxable income, the expenditure was deducted from transport and handling receipt. The expenditure and handling charges do not pertained to deriving any of the exempted income.
The various working submitted during the course of assessment have been verified by the concerned assessing Officer at relevant point of time and there is nothing on record to conclude that handling charges pertains to income from exempt activities as well as taxable activities. AO has passed the order after applying his mind to the facts of the case. In such a situation, the order of Assessing Officer cannot be said to be erroneous so as to prejudicial to the interests of revenue to invoke the provisions of section 263. So, the same is set aside. - Decided in favour of assessee.
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2014 (8) TMI 1182
Repair and maintenance service - Repair, maintenance or airworthiness of an aircraft - Liability of Service Tax - HELD THAT:- Though by amendment of the recent years, the right to practice law on the basis of the said qualification has been made subject to clearing /passing a Bar Exam to be held by the Bar Council of India , the same does not make the qualification of law not recognized by law. The recognition accorded by the Act, Rules and CAR supra to the Course Completion Certificate issued by the Institutes as the petitioner cannot be withered away or ignored merely because the same does not automatically allow the holder of such qualification to certify the repair, maintenance or airworthiness of an aircraft and for which authorization a further examination to be conducted by the DGCA has to be passed/cleared.
The Instruction aforesaid holding the petitioner to be assessable to Service Tax is contrary to Section 65(27)and the Notification dated 25th April, 2011.
Appeal dismissed.
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2014 (8) TMI 1181
Whether compliance of the provisions of Section 48 of the MCS Act, and Rule 48 (5) of MCS Rules, 1961 is mandatory for lending cooperative society before claiming protection/charge on immovable property of members? - HELD THAT:- Unless and until there is compliance of these two provisions, namely Section 48 and Rule 48 (5), the people at large cannot be expected to know about the charge, if any, on immovable property. In other words, if a society wants to claim protection or benefit of Section 48 of the MCS Act, the same can be obtained only from the date the charge is actually recorded in the record of rights and not otherwise - the provisions of Section 48 and Rule 48 (5) are mandatory in nature for a Cooperative Society if a cooperative society wants to claim benefit /protection of the said provisions - answered in affirmative.
Whether it was necessary/mandatory for the appellant/plaintiff to serve the notice u/s 164 of the MCS Act before filing RCS No. 87/2012? - HELD THAT:- The act of the society in mortgaging the suit property which was already sold to the appellant who was not even a member of the society cannot fall in the definition of Sec. 164 of the Act. Therefore, the provisions of Section 164 will have no application in addition because the plaintiff wants to exercise his independent civil right - the notice u/s 164 for filing the suit was not at all necessary - answered in negative.
Whether the appellant/ plaintiff having served the notice under section 164 of the Act were estopped in law in filing the suit before expiration of statutory period of two months contemplated by he said provision? - HELD THAT:- When notice u/s 164 of the MCS Act was not at all necessary before filing the suit in a civil court as held by me above, even if the respondents/plaintiffs, in fact, had given such notice but did not wait for two months, there cannot be any estoppel against law when the legal position that no such notice is necessary for filing the suit as a prerequisite to maintain the suit. Whether or not the plaintiffs had issued notice u/s 164 or he did not wait for the period of two months, would hence make no difference at all - When the law does not require issuance of notice u/s 164 of the MCS Act at all, to file the suit before expiry of the period would be of no consequence - answered in negative.
Whether for filing the suit u/s. 38 of the Specific Relief Act, prior notice u/s 164 of the MCS Act is mandatory? - HELD THAT:- The suit had nothing to do with the any legal act touching the business of society as stated in Section 164 of the Act. On the contrary, it is well-settled legal position that suit under section 38 of the Specific Relief Act for perpetual injunction is clearly out of the purview of such type of provisions - the suit u/s 38 filed by the appellant/plaintiff in this case was not required to be preceded by notice u/s 164 of the Act.
Application disposed off.
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2014 (8) TMI 1180
Addition on account of low G.P - assessee was not maintaining stock register - CIT-A deleted the addition - HELD THAT:- We find that the CIT(A) has given a finding that the sale prices are fixed for years whereas the prices of raw material are fluctuating. He has also given a finding that in such a business, small variation in gross profit is not a basis to make any addition. We also find that the gross profit rate of the assessee was 42.23% in the present year as against 46% in the preceding year. Hence, fall in gross profit is about 3.27% which is less than 10% gross profit rate declared by the assessee. Considering these facts, we do not find any reason to interfere in the order of CIT(A) on this issue. This ground of of Revenue is rejected.
TDS u/s 195 - Disallowance of commission to a non-resident for the technical services rendered - whether there is no explicit provision under the Act for making a payment to non-resident without deduction of tax at source? - HELD THAT:- We find that this issue regarding requirement of TDS out of payment of commission to a non-resident foreign agent for his services rendered outside India is squarely covered in favour of the assessee by a recent Tribunal decision rendered in the case of Asstt. CIT v. Lohia Starlinger Ltd. [2014 (10) TMI 700 - ITAT LUCKNOW] the second amendment cited by Revenue being insertion of explanation 2 to section 195(1) of the Act, has no relevance because in the present case, payer is already resident of India and therefore, already within the purview of section 195 (1) and there is no need in the present case to extend or broaden the scope of the term "any person responsible for paying to a non-resident" appearing in sub section 1 to section 195 of the Act. But the requirement that the payee is liable to tax in India in respect of the impugned payment has to be there to attract the provisions of section 195 (1) but in the present case, this aspect is covered in favour of the assessee and against the revenue by the judgment of Hon'ble Allahabad High Court in M/S MODEL EXIMS [2014 (6) TMI 290 - ALLAHABAD HIGH COURT] wherein held payment of commission to foreign agents did not entitle such foreign agents to pay tax in India and thus the TDS was not liable to be deducted u/s 195 of the Act - The disallowance made by AO u/s 40 (a) (i) for non-deduction of tax at source u/s 195 were not justified.
Disallowance of foreign travelling expenses - assessee was making foreign trips to destinations where actually no business activities are carried out - CIT-A deleted the addition partly - HELD THAT:- CIT(A) has examined the issue in detail and has given a finding that the assessee's business involves travelling outside India and visit to Europe and USA has been justified because exports were made by the assessee to these countries. He has also given a finding that the visit to UAE has not been substantiated for the purpose of business. He has confirmed the disallowance of ₹ 2 lac in respect to visit to UAE and in the facts and circumstances of the case and in view of this fact that learned DR of the revenue could not controvert these findings of CIT(A), we do not find any reason to interfere in the order of CIT(A) on this issue. This ground is rejected.
Disallowance of business promotion expense - assessee failed to explain the exigency of the expenses under this head during the course of assessment proceedings - CIT-A restricted the addition - HELD THAT:- finding of CIT(A) could not be controverted by Learned D.R. of the Revenue that as per the details of expenses, business promotion expenses mainly relate to booking of stalls. When the expenses on booking of stall is allowed to the extent of 80%, it cannot be said that the balance 20% for booking of stall is not for business purpose. There may be some expenses other than booking of stall also and in that respect, the CIT(A) has confirmed the disallowance of ₹ 10,000/-. Considering these facts, we do not find any reason to interfere in the order of CIT(A) on this issue. - Decided against revenue
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2014 (8) TMI 1179
Reference to Arbitration - Whether the disputes in a petition properly brought under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 can be referred to arbitration? - HELD THAT:- No, subject to the caveat that I have noted regarding a mala fide, vexatious or oppressive petition and one that is merely 'dressing up' to avoid an arbitration clause.
The disputes before the CLB were outside the purview of the arbitration agreement as they related to matters not covered by the SSD.
The appointment of an observer-cum-facilitator was entirely without warrant and served no effective purpose.
The impugned order is upheld only to the extent that it holds that disputes in a properly brought petition under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 are not referable to arbitration.
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2014 (8) TMI 1178
Disallowance of contribution to society - Addition u/s 40A - contribution was made by the assessee-company to a fund required to be set up by or under any other law for the time being in force - whether fund was constituted on bonafide for the welfare of its’ employees in smooth running of the business and hence the said contribution is to be allowed under section 37(1)? - HELD THAT:- Tribunal in assessee’s own case for assessment years 1990-92 and 1991-92 [2002 (9) TMI 254 - ITAT CALCUTTA-A] and [2013 (5) TMI 893 - ITAT KOLKATA] . Since we find the issues are covered by the order of the Tribunal in the case of the assessee itself as agreed to and thus, accepted by the department, these questions are not substantial questions of law to be adjudicated in appeal.
Payment of lump sum royalty - capital expenditure - HELD THAT:- Assessee did not derive any enduring benefit for payment of lump sum royalty as the agreement was for non-transferable license to manufacture licensed products in India.
appeal is admitted on question no. (iv) - Whether on the facts and in the circumstances of the case the Learned Tribunal erred in law and was not justified in law in giving direction to the Assessing Officer to allow depreciation on river bank embankment and that river bank embankment is to be treated as building ?
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