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2008 (9) TMI 989
Issues Involved:
1. Applicability of Section 56 of the Foreign Exchange Regulations Act, 1973 for non-compliance of summons under Section 40(3).
2. Whether the petitioner's responses to summons constituted compliance or evasion.
3. Admissibility of further summons issued after the filing of the complaint.
4. Consideration of quashing the proceedings based on the facts and law.
Issue-wise Detailed Analysis:
1. Applicability of Section 56 of the Foreign Exchange Regulations Act, 1973 for non-compliance of summons under Section 40(3):
The petitioner argued that Section 56 of the Act, which deals with offences involving specific amounts or values, should not apply to non-compliance with summons under Section 40(3) since it cannot be computed in terms of value or amount. The court referred to the Supreme Court's judgment in "Enforcement Directorate and another v. M.Samba Siva Rao and others" (AIR 2000 SC 2128), which held that non-compliance with summons under Section 40 falls within the purview of Section 56. The court concluded that Section 56 applies even if no amount or value is involved in the contravention.
2. Whether the petitioner's responses to summons constituted compliance or evasion:
The petitioner contended that she had responded to the summons by seeking time due to health issues and had provided necessary documents like her passport and bank statements. The court examined the complaint and found that the petitioner had consistently sought time to appear due to illness and had submitted medical certificates. The court noted that the petitioner had not refused or disobeyed the summons but had shown her willingness to cooperate. Therefore, the court determined that there was no prima facie case of refusal or disobedience of the summons.
3. Admissibility of further summons issued after the filing of the complaint:
The respondent issued further summons after filing the complaint, which the petitioner complied with by appearing before the authorities, leading to her arrest and judicial custody. The court found merit in the petitioner's argument that the issuance of further summons and her compliance could be seen as condonation of any earlier non-appearance. The court referenced the Supreme Court's decision in a similar case, where the question of law was kept open due to the petitioner's subsequent compliance.
4. Consideration of quashing the proceedings based on the facts and law:
The court referred to the guidelines for quashing proceedings established by the Supreme Court in "State of Haryana and Others V. Bhajan Lal and Others" (1992 Supp (1) SCC 335). It found that the allegations in the complaint did not constitute an offence under Section 40(3) of the Act and continuing the proceedings would amount to an abuse of the process of the court. Despite the trial having commenced, the court held that it could exercise its inherent power under Section 482 Cr.P.C. to secure the ends of justice and prevent abuse of the court's process.
Conclusion:
The court quashed the proceedings pending against the petitioner in E.O.C.C.No.70 of 1996, finding that the petitioner's responses to the summons did not constitute non-compliance, and the subsequent summons and compliance indicated condonation of any earlier non-appearance. The court emphasized the importance of preventing abuse of the judicial process and ensuring justice.
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2008 (9) TMI 988
Issues involved: Dispute over valuation of shares, oppression, and mismanagement u/s 397 and 398 of the Companies Act, 1956.
Summary:
The Supreme Court heard appeals related to a dispute between a shareholder-director holding 40% shares and other shareholders-directors holding 60% shares in a company. The appellant alleged oppression and mismanagement and filed a petition u/s 397 and 398 of the Companies Act, 1956. The Company Law Board (Board) gave an option to the appellant to sell his shares to the other shareholders at a price determined by a valuer. After valuation, the Board directed the other shareholders to purchase the appellant's shares at a specified price. However, the appellant did not receive any payment as per the Board's order.
The High Court set aside the valuation due to bias and ordered revaluation as of a later date. It also held that the appellant is entitled to remuneration and perquisites until the date of share valuation. Dissatisfied with the High Court's order, both parties filed appeals before the Supreme Court.
The appellant argued for a change in valuation date due to subsequent events, including the sale of company assets by the other shareholders. The respondents did not dispute the change in circumstances but attributed it to natural events and business decisions. The Supreme Court, considering the changed circumstances, set aside the previous orders and remanded the matter to the Board for fresh consideration, taking into account all events up to the present date.
The appellant was permitted to raise the issue of salary and perquisites from a specific date before the Board. Both parties agreed to appear before the Board for further proceedings without additional notice, emphasizing the need for expeditious resolution of the matter. The Supreme Court allowed the appeals in part, leaving all contentions open for reconsideration by the Board.
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2008 (9) TMI 987
Issues involved: Appeal against penalty imposed under section 271(1)(c) of the Income-tax Act, 1961.
Issue 1:
The appeal raised substantial questions regarding the penalty imposed under section 271(1)(c) of the Act, confirmed by the ld. CIT(A).
For the assessment year 1990-91, a penalty of Rs. 1,38,454 was levied on the assessee, which was upheld by the Commissioner. However, the Tribunal noted that the Commissioner did not establish that the assessee failed to disclose all facts for income computation. The addition to income was based on an estimate without concrete evidence of fraud or wilful neglect in disclosing accurate income particulars.
Issue 2:
The Court referred to a previous judgment in CIT v. M.M. Rice Mills [2002] 253 ITR 17, emphasizing that mere adjustments to income do not automatically imply fraudulent intent or wilful neglect. The judgment highlighted that discrepancies in accounting methods do not necessarily indicate a failure to report correct income through fraudulent means.
The Court found no fault in the Tribunal's decision, stating that the cited judgment directly applied to the current case. Consequently, the proposed questions were deemed irrelevant, leading to the dismissal of the appeal without costs.
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2008 (9) TMI 986
Issues Involved:
1. Assumption of jurisdiction by the Commissioner u/s 263 of the Income-tax Act, 1961.
2. Validity of invoking section 263 by the Commissioner.
3. Quantum of exclusion under clause (iv) of the Explanation below section 115JB(2).
Summary:
Issue 1: Assumption of jurisdiction by the Commissioner u/s 263 of the Income-tax Act, 1961
The appeals pertain to the assumption of jurisdiction by the Commissioner u/s 263 of the Income-tax Act, 1961. The Commissioner issued a show-cause notice stating that the Assessing Officer (AO) wrongly reduced the total amount of export profits of business while computing Book Profits u/s 115JB, leading to an under-assessment of taxable income by Rs. 30,89,072.
Issue 2: Validity of invoking section 263 by the Commissioner
The assessee contended that the Commissioner failed to justify how the AO's order was erroneous and prejudicial to the interests of the revenue. The assessee referenced the judgments in Malabar Industrial Co. Ltd. v. CIT and CIT v. Gabriel India Ltd., arguing that the AO's order represented a possible view supported by judicial decisions. The Commissioner, however, did not provide any judicial order to support his contrary interpretation. The Tribunal found that the AO's view was a possible view and that the Commissioner's invocation of section 263 was unjustified.
Issue 3: Quantum of exclusion under clause (iv) of the Explanation below section 115JB(2)
The controversy centered on the amount to be reduced from the net profit shown in the Profit and Loss Account to compute 'Book Profits' u/s 115JB. The assessee excluded Rs. 61,78,144, which was accepted by the AO. The Commissioner argued that only 50% of the profits, as per section 80HHC(1B), should be excluded, amounting to Rs. 30,89,072. The Tribunal noted that the AO's computation was in line with the decisions in Dy. CIT v. Syncome Formulations (I) Ltd. and Asstt. CIT v. Ajanta Pharma Ltd., which supported the assessee's view.
Conclusion:
The Tribunal concluded that the Commissioner's assumption of jurisdiction u/s 263 was invalid as the AO's order was a possible view supported by judicial precedents. The order of the Commissioner was set aside, and the assessment framed by the AO was restored. The appeals of the assessee were allowed.
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2008 (9) TMI 985
The Delhi High Court rejected the application of an informer seeking intervention in an appeal under Section 260A of the Income Tax Act, 1961, stating that the informer is neither a necessary nor a proper party in the case. The informer was advised to seek other legal avenues for grievances. The application was dismissed.
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2008 (9) TMI 984
Maintainability of appeal - Dispute in the present case in between the revenue on the one side and M/s. Indian Rare Earth Ltd., a public sector undertaking wholly owned by the Government of India on the other side - Held that: - the matter was referred to the Committee on Disputes as to whether revenue should pursue this appeal or not, the said Committee has declined permission to CBEC to pursue this appeal before this Court.
Appeal cannot be continued and is dismissed.
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2008 (9) TMI 983
Issues involved: Ownership of containers, auction of goods, directions for handling hazardous materials, distribution of auction proceeds.
Ownership of containers: The petitioner, as the agent of the shipping line, claims ownership of the containers on behalf of the shipping line. Owners of goods in the containers, except one respondent, have been proceeded ex parte.
Auction of goods: Interim directions are given for auctioning the contents of the containers, except for one container with hazardous materials. After the auction, successful parties will receive the goods, and containers will be returned to the shipping line upon fulfilling certain conditions.
Directions for handling hazardous materials: Specific directions are provided for a container reportedly containing hazardous materials, in line with a Supreme Court order. Another container not with the respondent is mentioned separately.
Distribution of auction proceeds: The proceeds from the auction will first cover auction expenses, then customs duty payable to the respondent, and the balance will be retained as demurrage/ground rent. Any excess amount will be deposited in a fixed deposit with a specified bank.
Conclusion: The writ petition is satisfied regarding most containers, with only one aspect pending for further directions. The case is set for renotification for directions on a specified date.
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2008 (9) TMI 982
Issues involved: Appeal u/s 260A of the Income-Tax Act for the assessment year 1996-97 regarding exemptions under section 10A, R&D expenses, and royalty expenses.
Exemptions under section 10A: The Revenue filed a Tax Appeal questioning the Appellate Tribunal's decision to delete additions made on accounts of exemptions under section 10A. The High Court admitted the appeal, considering it a substantial question of law, similar to another pending case.
R&D Expenses: Another issue raised was the deletion of additions made on accounts of R&D expenses by the CIT(A), which the Appellate Tribunal upheld. The High Court admitted this issue as a substantial question of law, similar to a previous case involving the same matter.
Royalty Expenses: The appeal also questioned the deletion of additions made on accounts of royalty expenses by the CIT(A), which the Appellate Tribunal confirmed. However, the High Court refused to formulate this as a substantial question of law based on previous decisions.
The High Court admitted the appeal based on the substantial questions of law related to exemptions under section 10A and R&D expenses. The Court directed the other party to be notified and allowed for the filing of additional documents within three months.
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2008 (9) TMI 981
Issues involved: Appeal against order u/s 143(3) for AY 2003-04 regarding deduction of interest expenses.
Summary:
The only issue in this appeal was the deduction claim of interest expenses amounting to Rs. 15,66,172 by the assessee, a land development company. The Assessing Officer disallowed the expenses treating them as prior period expenses, citing a reference to a relevant case law. The CIT(A) upheld this decision, stating that the resolution passed by the company's Board of Directors cannot override the provisions of section 145 of the Income-tax Act. The CIT(A) emphasized that the liability to pay interest must accrue in the relevant year, not in prior years. The assessee contended that the interest liability arose in the current year as per the resolution passed by the Board of Directors, following the mercantile system of accounting. After considering both parties' arguments and reviewing the facts, it was established that the interest liability crystallized when the agreement was canceled and the decision to refund the earnest money with interest was made. As per the mercantile system, the liability to pay interest accrued in the current year and was allowable as a deduction. Consequently, the ITAT allowed the appeal, directing the Assessing Officer to modify the assessment order accordingly.
This decision was pronounced on 5-9-2008.
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2008 (9) TMI 980
Issues involved: Land ceiling proceeding reopened u/s 45-B of Bihar Land Reforms Act, 1961 without notice to land-holder; Validity of subsequent orders passed by revenue authorities questioned.
Summary:
Issue 1: Reopening of Land Ceiling Proceeding u/s 45-B without Notice:
The case involved a land ceiling proceeding that was reopened u/s 45-B of the Bihar Land Reforms Act, 1961 without giving any notice to the land-holder, Sarju Madhav Rastogi. The Collector's order to reopen the proceeding was challenged as illegal due to lack of notice.
Issue 2: Validity of Subsequent Orders:
Subsequent to the reopening, the land-holder was shown to hold surplus land, leading to a series of orders by the revenue authorities. The heirs of Sarju Madhav Rastogi contested the legality of these orders, arguing that the initial reopening order without notice rendered all subsequent orders illegal and unsustainable.
In the High Court, one judge opined that the land-holder's participation in the proceeding after reopening precluded challenging the validity of the Collector's order. Another judge agreed but emphasized the importance of notice in reopening proceedings. However, the High Court upheld the subsequent orders despite the illegal reopening order.
The Supreme Court disagreed with the High Court's decision, highlighting that the land-holder's participation did not cure the illegality of the reopening order. The Court noted that the subsequent orders were unsustainable as they were made against a deceased person without involving his heirs. Therefore, the judgment and orders of the revenue authorities were deemed unsustainable in law, and were set aside.
The Court clarified that its decision did not prevent the State Government from reexamining the case records and taking appropriate action u/s 45-B of the Act if warranted by the evidence.
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2008 (9) TMI 979
The Supreme Court dismissed the Civil Appeal after condoning the delay. (Citation: 2008 (9) TMI 979 - SC)
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2008 (9) TMI 978
Issues Involved:
1. Genuineness of the Sale Deeds.
2. Bias in the enquiry conducted by the District Registrar.
3. Jurisdiction of the High Court to order an enquiry.
4. Impact of the civil suit dismissal on the writ petition.
Summary:
1. Genuineness of the Sale Deeds:
The controversy arose from two conveyances registered on 14.3.1989, both recorded as Deed No.3203 of 1989 in Book No.1, Volume No.75. The respondent No.1 alleged that his genuine deed had been replaced with a forged deed of the appellant. The District Registrar, South 24 Parganas, conducted an enquiry and found the respondent No.1's deed to be genuine. The appellant challenged this finding, arguing that the enquiry was biased and did not consider the genuineness of his deed.
2. Bias in the Enquiry Conducted by the District Registrar:
The appellant contended that the District Registrar, who lodged the complaint, should not have conducted the enquiry as he was biased. The High Court's direction to the same officer to conduct the enquiry was challenged on the grounds of prejudice and bias. The Supreme Court agreed that the District Registrar, having already formed an opinion, should not have been entrusted with the enquiry.
3. Jurisdiction of the High Court to Order an Enquiry:
The respondent No.1 argued that the High Court, under Article 226 of the Constitution, was competent to order an enquiry to ascertain the facts. The Supreme Court upheld this view, stating that the High Court's direction for a fact-finding enquiry was within its jurisdiction and could not be challenged on the ground that the Registration Act did not provide for such an enquiry.
4. Impact of the Civil Suit Dismissal on the Writ Petition:
The appellant argued that the dismissal of the civil suit filed by Dipankar Dey, on behalf of the appellant's vendor's daughter, precluded any further enquiry into the genuineness of his deed. The Supreme Court rejected this argument, noting that the suit's dismissal did not resolve the issue of the deed's genuineness, which remained to be decided.
Conclusion:
The Supreme Court allowed the appeal in part, directing the Inspector General of Registration, West Bengal, to conduct a separate enquiry into the genuineness of the appellant's document. The appellant was instructed to appear before the Inspector General on 20th October, 2008. If the Inspector General found the appellant's deed to be genuine, necessary steps were to be taken to correct any errors in the registration records. If the deed was found not to be genuine, the enquiry would be closed, and the District Registrar would proceed as per the High Court's order. There was no order as to costs.
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2008 (9) TMI 977
Issues Involved:1. Determination of Market Rate 2. Statutory Benefits under Sections 23(1-A), 23(2), and 28 of the Land Acquisition Act 3. Compensation for Acquisition of Trees and Tube-wells Detailed Analysis:1. Determination of Market Rate:The appeals concern the determination of the market rate for lands acquired in three villages: Mundera, Neem Sarai, and Chak Maida Patti. The Special Land Acquisition Officer (SLAO) had set varying rates for different villages, and the Reference Court adjusted these rates. For village Mundera, the SLAO set the rate at Rs. 2400/- per bigha, which was later revised by the Reference Court to Rs. 4000/- per bigha or Rs. 40/- per sq. meter. In Neem Sarai, the SLAO used a belting system with rates ranging from Rs. 10,169.49 to Rs. 20,338.98 per bigha, but the Reference Court set a uniform rate of Rs. 20,338.98 per bigha. For Chak Maida Patti, the Reference Court set rates of Rs. 20,000/-, Rs. 15,000/-, and Rs. 10,000/- per bigha, based on the location and quality of the land. The court concluded that the Reference Court erred in using circle rates under the Stamp Act to determine market rates, as these are meant for stamp duty purposes and not for land acquisition compensation. The court decided to uniformly fix the market rate at Rs. 20,338.98 per bigha for all three villages, considering the proximity and similar potential of the lands. 2. Statutory Benefits:The statutory benefits under the Land Acquisition Amendment Act No.68 of 1984 were also addressed. The amendments introduced Section 23(1-A) for additional compensation at 12% per annum, increased solatium under Section 23(2) to 30%, and enhanced interest rates under Section 28. The court clarified that these benefits apply depending on the dates of the Collector's and Reference Court's awards. If the Collector's award was before 30-4-1982 but the Reference Court's award was after, the claimant is entitled to benefits under Sections 23(2) and 28 but not under Section 23(1-A). The court also noted that these benefits could be granted in appeals filed by the acquiring body, even if the claimants had not filed separate appeals or cross-objections. 3. Compensation for Acquisition of Trees and Tube-wells:In specific appeals, compensation for the acquisition of trees and tube-wells was also addressed. For example, in First Appeal No.1156 of 1990, the claimant was awarded Rs. 5000/- for a well, and in First Appeal No.219 of 1988, the claimant was awarded Rs. 10,000/- for a tube-well and Rs. 5000/- for an orchard. Conclusion:The court decided the appeals as follows: - First Appeal No.1156 of 1990: Allowed; market rate set at Rs. 20,338.98 per bigha, Rs. 5000/- for the well, and benefits under Sections 23(2) and 28. - First Appeal Nos.392 of 1983 and 391 of 1983: Allowed; market rate reduced to Rs. 20,338.98 per bigha, and benefits under Sections 23(2) and 28. - First Appeal Nos.364 of 1998, 1163 of 1988, 771 of 1989, 313 of 1993, 197 of 1996, and 126 of 1991: Dismissed. - First Appeal No.207 of 1996: Allowed; claimant not entitled to Section 23(1-A) benefits. - First Appeal No.212 of 1996: Allowed; market rate reduced to Rs. 20,338.98 per bigha. - First Appeal No.219 of 1988: Allowed; Rs. 10,000/- for tube-well, Rs. 5000/- for orchard, and benefits under Sections 23(2) and 28. - First Appeal No.35 of 1983: Allowed; market rate set at Rs. 20,338.98 per bigha, and benefits under Sections 23(2) and 28. - First Appeal Nos.73 of 1983, 74 of 1983, 383 of 1983, 389 of 1983, 390 of 1983, 393 of 1983, 178 of 1984, 179 of 1984, and (138) of 1991: Dismissed; Reference Court's award modified to include benefits under Sections 23(2) and 28. Parties were ordered to bear their own costs in all the First Appeals.
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2008 (9) TMI 976
Issues Involved:
1. Disallowance of deduction u/s 80-IB of the IT Act.
2. Jurisdiction of the AO in disallowing the deduction on export incentives.
Summary:
Issue 1: Disallowance of Deduction u/s 80-IB of the IT Act
The appellant challenged the CIT(A)'s order confirming the disallowance of deduction u/s 80-IB, arguing that the AO should have decided based on the Tribunal's order. The Tribunal had previously set aside the CIT(A)'s order and directed the AO to redecide the issue in light of its directions for earlier assessment years (1991-92 to 1993-94). The AO, in compliance, denied the deduction due to the appellant's failure to furnish necessary details and also on the ground that export incentives were not income derived from the industrial undertaking, as per the judgment in Liberty India Ltd. vs. CIT.
Issue 2: Jurisdiction of the AO in Disallowing Deduction on Export Incentives
The appellant contended that the AO exceeded his jurisdiction by disallowing the deduction on export incentives, which was not part of the original assessment or Tribunal's directions. The CIT(A) upheld the AO's action, citing the binding nature of the jurisdictional High Court's judgment in Liberty India Ltd. The Tribunal, however, concluded that the AO acted beyond his jurisdiction by introducing a new ground for disallowance in the remand proceedings, which were limited to the original subject matter of appeal. The Tribunal emphasized that the AO's powers in remand proceedings are confined to the directions given by the Tribunal and cannot extend to new issues not previously addressed.
Conclusion:
The Tribunal set aside the CIT(A)'s order and directed the AO to delete the disallowance of deduction u/s 80-IB on the income from export incentives, as it was beyond the scope of the AO's jurisdiction in the remand proceedings. The appeal of the assessee was allowed.
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2008 (9) TMI 975
Issues Involved:
1. Eligibility for deduction under section 80HHC for exports made from a third country.
2. Disallowance of Rs. 41,55,712 under section 40(a)(i) for non-deduction of tax at source on technical service charges.
Issue-wise Detailed Analysis:
1. Eligibility for Deduction under Section 80HHC for Exports Made from a Third Country:
The primary issue revolves around whether the assessee is eligible for a deduction under section 80HHC for goods exported from the USA to Bangladesh, bypassing India. The Assessing Officer (A.O.) disallowed the deduction, arguing that the goods must be exported from India to qualify under section 80HHC. The CIT(A) allowed the deduction, emphasizing that the main objective of section 80HHC is to augment foreign exchange, which the assessee achieved.
The CIT(A) relied on precedents like the Bombay High Court's decision in Bombay Burma Trading Corporation and the ITAT Mumbai's decision in S.M. Energy Teknik and Electronics Ltd., which supported the view that physical export from India is not a necessity for claiming deductions under section 80HHC.
However, the revenue argued that the deduction under section 80HHC is strictly for exports out of India, as per the definition provided in the Income-tax Act and the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act). The revenue cited various judgments including Sanjeev Malhotra vs. CIT and Laxmi Industries vs. CIT, which upheld the requirement of physical export from India.
The Tribunal, agreeing with the revenue, held that the term "export out of India" necessitates the goods leaving Indian territory. Since the goods in question never entered or left India, the transaction did not qualify as "export out of India." Thus, the assessee was not entitled to the deduction under section 80HHC. The Tribunal preferred to follow the High Court decisions over the ITAT decisions, setting aside the CIT(A)'s order and restoring the A.O.'s decision.
2. Disallowance of Rs. 41,55,712 under Section 40(a)(i) for Non-Deduction of Tax at Source on Technical Service Charges:
The second issue concerns the disallowance of Rs. 41,55,712 by the A.O. under section 40(a)(i) due to non-deduction of tax at source on payments made for technical service charges. The assessee argued that the payments were for training services provided outside India by foreign companies without a permanent establishment in India, thus not taxable in India under Article 7 of the DTAA between India and Germany.
The CIT(A) accepted the assessee's argument, noting that the payments were not for technical services as defined under section 9(1)(vii) but for training personnel to use imported products. The Tribunal upheld the CIT(A)'s decision, referencing the ITAT Delhi's ruling in DCIT vs. Parasrampuria Synthetics Ltd., which distinguished between rendering services using technical knowledge and charging fees for technical services.
The Tribunal concluded that since the payments were for training services and not for technical services as per the definition in section 9(1)(vii), the provisions of section 40(a)(i) were not applicable. Therefore, the disallowance was rightly deleted by the CIT(A).
Conclusion:
The appeal was partly allowed. The Tribunal denied the deduction under section 80HHC for exports from a third country but upheld the deletion of the disallowance under section 40(a)(i) for technical service charges.
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2008 (9) TMI 974
Issues Involved:
1. Jurisdiction of respondent No. 3 to issue notice u/s 59 of the VAT Act, 2003.
2. Interpretation of "tax payable" under the Scheme of 2003.
3. Legality of the impugned order dated May 15, 2008.
Summary:
Jurisdiction of respondent No. 3 to issue notice u/s 59 of the VAT Act, 2003:
The petitioner challenged the jurisdiction of respondent No. 3 to issue notice u/s 59 of the VAT Act, 2003, arguing that section 17 of the VAT Act does not confer the authority to initiate proceedings for review. The court found that section 59 was improperly invoked by respondent No. 3, as the correct procedure under clause 11 of the Scheme of 2003 was not followed. The court emphasized that any dispute regarding the interpretation of the Scheme should be referred to the Finance Department of the State Government.
Interpretation of "tax payable" under the Scheme of 2003:
The petitioner argued that the term "tax payable" in clause 7(1)(b) of the Scheme of 2003 should include input-tax credit, meaning the tax payable stands deposited after adjustment of input-tax credit. The court noted that the respondent's interpretation of "net tax payable" was incorrect and a misreading of the Scheme. The court highlighted that the Scheme's intention was to promote industrial growth, and the interpretation by respondent No. 3 was contrary to this objective.
Legality of the impugned order dated May 15, 2008:
The court found that the impugned order dated May 15, 2008, was passed without jurisdiction and in violation of the principles of natural justice, as no opportunity of hearing was afforded to the petitioner. The court held that the order was ex facie illegal and contrary to the provisions of the Scheme of 2003 and the Rajasthan VAT Act, 2003. The court emphasized that the power of review must be expressly provided by law, and in the absence of such provision, the order dated August 4, 2007, could not be reviewed. The court quashed the impugned order and restored the order dated August 4, 2007.
Conclusion:
The court quashed the impugned order dated May 15, 2008, and restored the order dated August 4, 2007, granting interest subsidy to the petitioner. The court emphasized the need for adherence to the correct legal provisions and procedures, and the importance of promoting industrial growth in the State of Rajasthan. There was no order as to costs.
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2008 (9) TMI 973
Issues Involved:
1. Condonation of Delay
2. Revision of Order u/s 263
3. Erroneous and Prejudicial to Revenue
4. Jurisdiction of Director of IT (Exemptions)
Summary:
Condonation of Delay:
The assessee filed an appeal against the order u/s 263 belatedly, citing unawareness of legal provisions. The Tribunal condoned the delay, noting that the appellant acted promptly upon receiving proper legal advice and was dependent on his counsel for taxation matters.
Revision of Order u/s 263:
The assessee contended that the noting in the order-sheet dropping action u/s 147 is not an order capable of revision u/s 263. The Tribunal held that the Director of IT (Exemptions) is authorized to revise an order where the AO dropped the proceedings, referencing the case of Esthuri Aswathiah vs. ITO.
Erroneous and Prejudicial to Revenue:
The AO dropped the proceedings u/s 147 after examining the submissions and considering the reply from the Dy. Director of IT (Exemptions), Mumbai. The Director of IT (Exemptions) considered the AO's order erroneous and prejudicial to the interest of Revenue due to the lack of proper explanation for the opening balance. The Tribunal found that the AO applied his mind based on the facts and concluded that no income had escaped assessment for the asst. yr. 1997-98. The Tribunal referenced the case of Malabar Industrial Co. Ltd. vs. CIT and held that the AO's view was one of the possible views, thus action u/s 263 could not be upheld. The order of the Director of IT (Exemptions) u/s 263 was cancelled.
Jurisdiction of Director of IT (Exemptions):
The appellant argued that the Director of IT (Exemptions) did not have the jurisdiction to pass an order u/s 263. The Tribunal noted a Notification dated 14th Sept., 2001, which directed the Director of IT (Exemptions), Bangalore, to perform all functions of CIT. Hence, the Tribunal held that the Director of IT (Exemptions) had the jurisdiction to pass the order u/s 263.
Conclusion:
The Tribunal cancelled the order u/s 263 and partly allowed the appeal.
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2008 (9) TMI 972
Issues:
The judgment involves a challenge to assessment orders dated 14.03.2007 and 1.12.2005 for the assessment year 2003-2004, alleging arbitrariness and illegality, and seeking fresh assessment.
Assessment Year 2003-2004:
The petitioner, a company under the Indian Companies Act, filed a return of loss for the assessment year 2003-04. The assessing authority added an amount as undisclosed cash credit liable for taxation, leading to an appeal and subsequent revision petition under Section 264 of the Income Tax Act. The revision petition was dismissed, prompting the filing of the present writ petition.
Grounds of Challenge:
The petitioner contested the assessment on two main grounds. Firstly, it was argued that significant additions were made based on concessions from a Chartered Accountant not authorized to represent the assessee. Secondly, it was contended that the Assessing Officer erred in not accepting that a bank loan was discharged through funds transferred from family members, despite evidence of their financial standing.
Judicial Analysis:
The court noted that no power of attorney was executed for the Chartered Accountant to represent the assessee before the Assessing Officer. However, a power of attorney was executed for representation before the Commissioner of Income Tax. The authorities independently found that the income was not disclosed, leading to the addition in assessment. The court upheld the revisional authority's decision to reject the contention regarding representation.
Investigation Findings:
Regarding the bank loan discharge through family funds, it was revealed that crop loans were raised in the names of planters within the family circle, with transactions pointing to a fraudulent practice of name lending. Despite claims of funds transfer from these accounts, investigations showed discrepancies in account holders' tax returns and the petitioner's records. The revisional authority justified upholding the assessment order based on these findings.
Conclusion:
The court found no merit in the petitioner's arguments and dismissed the writ petition, affirming the assessment order for the assessment year 2003-2004.
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2008 (9) TMI 971
Issues involved: Appeal against the order passed by the Income-tax Appellate Tribunal confirming the order regarding case credit under Section 68 of the Income-tax Act for the assessment year 1998-99.
The judgment addresses the appeal filed by the assessee against the order passed by the Income-tax Appellate Tribunal, Bangalore Bench, confirming the order related to case credit under Section 68 of the Income-tax Act for the assessment year 1998-99. The key issues raised include whether the sale transaction declared in the regular returns is taxable under Section 68, and whether the goods sold under the transactions are the same as those declared under the Voluntary Declaration of Income Scheme 1997. The Court noted that similar substantial questions of law were addressed in a previous case and proceeded to answer the questions affirmatively based on the findings in the earlier case. Consequently, the Court allowed the appeal, set aside the Tribunal's order, and remitted the matter to the assessing officer for fresh orders in line with the observations made in the judgment.
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2008 (9) TMI 970
Issues involved: Appeal against order passed by income tax Appellate Tribunal confirming unexplained investment under section 69 of the Income tax Act 1961 for assessment year 1998-99.
The appeal was filed by the assessee against the order passed by the income tax Appellate Tribunal, Bangalore Bench 'C', confirming the unexplained investment under section 69 of the Income tax Act 1961 for the assessment year 1998-99. The substantial questions of law raised in this appeal were whether the sale transactions declared in the regular returns were taxable under section 69 of the Income tax Act, and whether the goods sold under these transactions were the same goods declared under the Voluntary Declaration of Income Scheme 1997. The court noted that an identical case had been decided earlier on similar facts and law, and based on that decision, answered the substantial question of law in favor of the assessee. Consequently, the appeal was allowed, and the order passed by the income tax Appellate Tribunal was set aside. The matter was remitted to the Assessing Officer for fresh orders in accordance with the observations made in the judgment.
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