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Showing 81 to 100 of 1051 Records
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2013 (1) TMI 987
Issues Involved:
1. Legality of the order passed u/s 153C.
2. Determination and treatment of agricultural income.
3. Deduction u/s 24 for house property rental income.
4. Addition based on cash transactions and entries in books.
5. Treatment of income from truck operations u/s 44AE.
6. Calculation of long-term capital gains and application of section 112.
7. Acceptance of opening cash balance.
8. Credit for TDS and pre-paid taxes.
Summary of Judgment:
1. Legality of the order passed u/s 153C:
The assessee challenged the action u/s 153C, arguing that documents were impounded u/s 133A, making the action without jurisdiction. The Tribunal found no merit in this contention, stating that such a mistake is covered by section 292B, and dismissed the legal ground.
2. Determination and treatment of agricultural income:
The assessee claimed agricultural income, which was treated as income from other sources by the Assessing Officer. The Tribunal directed the Assessing Officer to allow agricultural income at Rs. 6,000 per bigha and compute the agricultural income accordingly, considering additional evidence filed before CIT(A).
3. Deduction u/s 24 for house property rental income:
The assessee's claim for deduction u/s 24 was initially rejected. The Tribunal restored the issue to the Assessing Officer for fresh consideration, directing to verify additional evidence and compute the rental income accordingly.
4. Addition based on cash transactions and entries in books:
For A.Y. 2007-08, an addition of Rs. 50,21,800 was made based on cash transactions. The Tribunal found that the amount received and paid cannot both be treated as income. It directed the Assessing Officer to restrict the addition to Rs. 16,02,200.
5. Treatment of income from truck operations u/s 44AE:
The assessee claimed income from truck operations u/s 44AE, which was rejected by the Assessing Officer. The Tribunal noted that the assessee was not the truck owner but hired trucks, thus section 44AE was not applicable. However, it directed the Assessing Officer to apply a NP rate of 5.5% instead of 8%.
6. Calculation of long-term capital gains and application of section 112:
The assessee's calculation of long-term capital gains was based on a fair market value of Rs. 100 per sq.ft. as on 1.4.1981, which was disputed by the Assessing Officer. The Tribunal found the assessee's valuation justified and deleted the addition. It also directed that the tax rate of 20% u/s 112 be applied.
7. Acceptance of opening cash balance:
The Assessing Officer's addition of Rs. 5,00,000 as unexplained opening cash balance was contested. The Tribunal found that the assessee could have such a balance considering his income sources and directed the deletion of the addition.
8. Credit for TDS and pre-paid taxes:
The Tribunal directed the Assessing Officer to give credit for TDS and pre-paid taxes against the tax payable after verifying the factual position.
Conclusion:
The appeals of the assessee were allowed in part, with directions for fresh consideration and verification of evidence by the Assessing Officer on various issues. The appeals of the Revenue were dismissed.
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2013 (1) TMI 986
Issues involved: Appeal against deletion of disallowance u/s 40(a)(ia) of the Income-tax Act for non-deduction of tax at source on royalty payments to a non-resident.
Summary:
Issue 1: Disallowance u/s 40(a)(ia) - Royalty payments to non-resident
The Revenue appealed against the deletion of a disallowance made by the Assessing Officer (A.O.) u/s 40(a)(ia) of the Income-tax Act for non-deduction of tax at source on payments to M/s Abaqus Inc., contending that the payments were royalty covered u/s 9(1)(vi) and tax should have been deducted u/s 195 since the recipient was a non-resident.
Issue 2: Precedent and Tribunal's ruling
The Appellant cited a precedent where a similar disallowance for the assessment year 2006-07 was deleted by the CIT(Appeals) and upheld by the Tribunal. The Departmental Representative (D.R.) acknowledged that the issue was in favor of the assessee based on the previous ruling.
Issue 3: Tribunal's analysis and decision
The Tribunal examined the nature of the payments to M/s Abaqus Inc. and found that they did not constitute royalty but were for the right to use copyrighted software, not the copyright itself. Despite the A.O.'s attempt to keep the disallowance alive, the Tribunal found no error in applying the previous ruling for the assessment year 2006-07 and ruled in favor of the assessee. As no higher authority order was presented to challenge the Tribunal's previous decision, the appeal filed by the Revenue was dismissed.
The judgment was pronounced on January 22, 2013, in Chennai.
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2013 (1) TMI 985
Issues involved: Appeal against order passed by CIT(Appeals) for assessment years 2002-03 to 2005-06, related to unexplained investment in immovable properties and construction of property at Katpadi, Vellore u/s 132 of the Income Tax Act, 1961.
Summary:
1. Background: A search and seizure operation revealed unexplained investment in properties and construction expenditure. Notice u/s 153A was issued, and assessments for 2002-03 to 2005-06 were completed. Discrepancies in cost of construction were noted.
2. Assessing Officer's Actions: Assessee offered income towards construction shortfall, but Assessing Officer referred the matter to DVO for estimation. DVO estimated construction cost higher than admitted by assessee. Assessing Officer adopted DVO's estimation for assessment.
3. CIT(Appeals) Decision: Assessee raised objections regarding DVO's estimation based on CPWD rates. CIT(Appeals) allowed deductions for adjustment to State PWD rates and self-supervision, reducing estimated construction cost.
4. Revenue's Appeal: Revenue challenged CIT(Appeals) decision, arguing against deductions granted and architectural features. Assessee supported CIT(Appeals) decision.
5. Tribunal's Decision: Tribunal found CIT(Appeals) deductions reasonable and justified. Revenue's appeal grounds dismissed.
6. Interest under section 234D: Issue arose regarding applicability of interest for assessment year 2003-04 u/s 234D. Tribunal reversed CIT(Appeals) decision based on High Court ruling, holding assessee liable for interest from the date of amended provision.
7. Final Verdict: Revenue's appeals for assessment years 2002-03 to 2005-06 dismissed, while appeal for 2003-04 partly allowed.
Conclusion: Tribunal upheld CIT(Appeals) decision on construction cost deductions but reversed CIT(Appeals) ruling on interest under section 234D based on High Court precedent.
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2013 (1) TMI 984
The Bombay High Court dismissed the appeal for Assessment Year 2005-2006 regarding the exclusion of expenses from export turnover while computing deduction under sections 10A & 10B of the IT Act 1961. The court upheld the decision in the case of Commissioner of IncomeTax v/s. Gem Plus Jewellery India Ltd., stating that the expenses should be excluded. The appeal was dismissed with no order as to costs.
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2013 (1) TMI 983
Issues involved: Appeal by Revenue against deletion of addition of audio right expenses as manufacturing expenses for A.Y. 2008-09.
Summary:
The Revenue appealed against the deletion of addition of Rs. 3,13,62,103/- made by the AO on account of audio right expenses treated as manufacturing expenses by the assessee for A.Y. 2008-09. The Ld. CIT(A) pointed out that the issue had been decided in favor of the assessee in earlier years by the Tribunal. The Ld. CIT(A) referred to previous decisions by ITAT 'E' and 'H' Bench for A.Y. 1990-91 to 2007-08, which held that such expenditures are of revenue nature. The Tribunal in ITA No. 599/Mum/09 had also previously ruled in favor of the assessee regarding the allowability of expenditure on purchase of audio rights treated as revenue expenditure. The Tribunal dismissed the Revenue's appeal as no distinguishing facts were presented by the Ld. Departmental Representative, thus following the previous decision. Consequently, the appeal filed by the Revenue was dismissed.
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2013 (1) TMI 982
Issues Involved:
1. Validity of reopening the assessment u/s 148.
2. Applicability of deemed dividend u/s 2(22)(e) for transactions dated 25.03.2006 and 31.03.2006.
3. Treatment of unexplained deposit of Rs. 3,80,000.
Summary:
1. Validity of Reopening the Assessment u/s 148:
The assessee did not press the grounds challenging the validity of reopening the assessment. Therefore, the issue of reopening was not contested further.
2. Applicability of Deemed Dividend u/s 2(22)(e):
- Transaction dated 25.03.2006: The assessee received a flat from the company, which the Assessing Officer treated as deemed dividend u/s 2(22)(e). The CIT(A) upheld this view, stating that the transaction was a credit facility due to the assessee being a Director, thus attracting the deemed dividend provision.
- Transaction dated 31.03.2006: The company debited Rs. 9,16,506 in the assessee's current account, representing a business loss borne by the assessee as a Director. The CIT(A) ruled this did not constitute deemed dividend as it did not provide any monetary benefit to the assessee. The Tribunal agreed, stating that neither transaction involved a loan or advance of a definite monetary sum, thus not satisfying the conditions of Sec. 2(22)(e).
3. Treatment of Unexplained Deposit of Rs. 3,80,000:
The CIT(A) added Rs. 3,80,000 as unexplained deposits in the assessee's income, as the assessee failed to explain the source of these funds. The Tribunal upheld this addition due to lack of evidence from the assessee.
Conclusion:
- The assessee's appeals (ITA Nos. 1300/Mds/12, 1301/Mds./12, 1302/Mds/12 & 1303/Mds./12) were partly allowed, deleting the additions under section 2(22)(e).
- The Revenue's appeals (ITA Nos. 1335/Mds/12 & 1337/Mds/12) were dismissed.
- The addition of Rs. 3,80,000 as unexplained deposits was confirmed.
Order Pronounced:
The order was pronounced on Wednesday, the 29th January, 2013 at Chennai.
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2013 (1) TMI 981
Supreme Court judgment in 2013 (1) TMI 981 - SC Order by Mr. H.L. Dattu and Mr. Ranjan Gogoi, JJ. Delay condoned. Appeals admitted.
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2013 (1) TMI 980
The High Court of Punjab and Haryana issued an order in ITA No. 50 of 2012, Commissioner of Income Tax-I, Ludhiana v. M/s Vardhman Holdings Ltd, Chandigarh Road, Ludhiana. Judges were Mr. Surya Kant and Mr. R.P. Nagrath. Advocates were Rajesh Katoch for the Appellant and Ms. Radhika Suri for the Respondent. The citation is 2013 (1) TMI 980.
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2013 (1) TMI 979
Issues Involved:
1. Quashing of the criminal complaint case No.819/2012 and the summoning order dated 12.07.2012.
2. Validity of the notice dated 27.04.2012 under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act).
3. Applicability of the judgment in MSR Leathers v. S. Palaniappan & Anr. and its impact on the case.
Summary:
Issue 1: Quashing of the criminal complaint case No.819/2012 and the summoning order dated 12.07.2012.
The Petitioner sought quashing of the criminal complaint case No.819/2012 and the summoning order dated 12.07.2012 passed by the Learned Metropolitan Magistrate (MM), Karkardooma Court, Delhi, u/s 482 of the Code of Criminal Procedure (Cr.P.C.).
Issue 2: Validity of the notice dated 27.04.2012 under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act).
The Respondent issued a handwritten notice dated 27.04.2012 demanding payment of the loan amount of Rs. 60 lacs along with interest. The Petitioner argued that the complaint was barred u/s 142(b) of the N.I. Act as it was not filed within one month after the expiry of 15 days of receipt of the notice dated 27.04.2012. The court examined whether the notice dated 27.04.2012 was a valid demand notice under Section 138 of the N.I. Act. It was concluded that the notice dated 27.04.2012 was indeed a valid demand notice, as it sufficiently informed the Petitioner about the dishonour of the cheques and demanded payment.
Issue 3: Applicability of the judgment in MSR Leathers v. S. Palaniappan & Anr. and its impact on the case.
The Petitioner argued that the subsequent notice dated 24.05.2012 did not give a fresh period of limitation to file a complaint on 05.07.2012. The Respondent relied on the judgment in MSR Leathers v. S. Palaniappan & Anr., which allows for successive notices and fresh causes of action. However, the court noted that the cheques were not presented again nor dishonoured before the issuance of the subsequent notice dated 24.05.2012. Therefore, the complaint filed on 05.07.2012 was barred under Section 142(b) of the N.I. Act.
Conclusion:
The court held that the notice dated 27.04.2012 was a valid demand notice under Section 138 of the N.I. Act. Since the complaint was not filed within the stipulated period after the expiry of 15 days from the receipt of this notice, it was barred under Section 142(b) of the N.I. Act. Consequently, the continuance of proceedings in the complaint case against the Petitioner would be an abuse of process of court. The complaint dated 05.07.2012 and the summoning order dated 12.07.2012 were quashed. The Petition was allowed, and pending applications were disposed of.
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2013 (1) TMI 978
Issues involved: Revision order u/s 263 of the Income Tax Act for AY 2000-01, discrepancy in purchase valuation, application of wrong conversion factor for dettol soap.
Revision Order u/s 263:
The appeal challenged the revision order by the CIT u/s 263 of the IT Act for AY 2000-01, focusing on discrepancies in purchase valuation. The CIT found a stock difference of 1737.45 mt ton unaccounted for in the assessment, directing the Assessing Officer to tax this value less 5% for breakerages. The CIT highlighted factual errors in quantitative figures of opening stock, purchases, and sales, indicating more sales quantity than available stock. The lack of inquiry by the Assessing Officer was deemed a clear case of non-application of mind, justifying the CIT's jurisdiction u/s 263.
Application of Wrong Conversion Factor:
The Hon'ble Supreme Court identified a mistake by the assessee in applying the wrong conversion factor for dettol soap, which was not communicated to the Assessing Officer. The Court remanded the matter for re-examination by the ITAT to determine the correct conversion factor applicable to the soap. The assessee acknowledged the mistake in stock details and accepted the need for examination. The ITAT directed the Assessing Officer to verify this aspect based on relevant records and submissions for a just resolution.
Conclusion:
The appeal was allowed for statistical purposes, emphasizing the need for a thorough examination of the conversion factor issue by the Assessing Officer. The judgment highlighted the importance of accurate valuation and application of correct factors in assessments to ensure fairness and compliance with tax laws.
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2013 (1) TMI 977
Issues involved:
The only issue in this appeal is the addition u/s.40A(2)(b) of Rs. 42,112/- for alleged excessive payment of interest by 3%.
Details of the Judgment:
Issue 1: Addition u/s.40A(2)(b) of Rs. 42,112/- for alleged excessive payment of interest by 3%
The assessee appealed against the order of the CIT(A)-XXI, dated 14.5.2010, regarding the addition under Section 40A(2)(b) of Rs. 42,112 for alleged excessive payment of interest by 3%. The counsel for the assessee argued that interest was paid at 15% per annum to creditors, while the Revenue allowed interest at 12% and added back the 3% difference under Section 40A(2)(b) of the Act. It was contended that the interest paid at 15% to two coparceners of the assessee-HUF was not excessive. The AO and CIT(A) supported the disallowance.
Upon review, it was observed that the disallowance was based solely on the interest paid to two coparceners at 15%, compared to 12% paid to other parties. Considering the prevailing interest rates during the relevant assessment year 2007-2008, the 15% interest to coparceners was deemed reasonable. The loans from coparceners were considered reliable, with a lower likelihood of immediate repayment and higher confidentiality. Consequently, it was concluded that invoking Section 40A(2)(b) was incorrect in this case. Thus, the addition of Rs. 42,112 was deleted, and the appeal of the assessee was allowed.
In conclusion, the appeal of the assessee was allowed, and the addition under Section 40A(2)(b) was deemed unwarranted.
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2013 (1) TMI 976
Issues involved:
The issues involved in this case are:
1. Interpretation of burden of proof regarding goods with foreign markings without valid documents under Section 123 of the Customs Act, 1962.
2. Validity of the Tribunal's decision in setting aside orders of the adjudicating authority and appellate authority.
3. Entitlement of the respondent to receive the value of goods as per mahazar report.
4. Confiscation of goods under Section 111 of the Customs Act, 1962, specifically under Section 111E.
5. Consideration of the meaning of actual import under Section 135 of the Customs Act, 1962.
6. Examination of the effect of presumption of culpable mental state under Section 138A of the Customs Act.
Interpretation of Burden of Proof:
The Tribunal allowed several appeals of the assessee based on the burden of proof being on the revenue to establish the foreign origin of seized goods. However, a previous judgment by the Court pointed out that the Tribunal's reasoning on this matter was fallacious and not in line with the law as laid down by the Apex Court. The appeal in question was allowed, emphasizing that the burden of proof was not on the revenue. The appellant's counsel argued that this view holds true.
Validity of Tribunal's Decision:
The appellant-revenue contended that the Tribunal erred in its decision, and the High Court agreed. The Court allowed the appeal, answering the questions raised in favor of the appellant-revenue. The Tribunal's order was set aside, and the orders of the original authority and the first appellate authority were restored.
Entitlement to Goods' Value and Confiscation:
The Tribunal's decision regarding the respondent's entitlement to the value of goods as shown in the mahazar report was also challenged. Additionally, the Tribunal's ruling on the confiscation of goods under Section 111 of the Customs Act, 1962, particularly under Section 111E, was disputed. The High Court did not find merit in the Tribunal's decisions on these matters.
Consideration of Legal Provisions:
The Tribunal's failure to consider the actual import of the meaning envisaged under Section 135 of the Customs Act, 1962, and the effect of the presumption of culpable mental state as per Section 138A of the Customs Act were also raised as issues. The High Court did not find the Tribunal's reasoning satisfactory on these legal provisions.
Conclusion:
In conclusion, the High Court allowed the appeal, set aside the Tribunal's order, and restored the orders of the original authority and the first appellate authority. The appellant-revenue was granted the right to recover any refunded amount due by the assessee based on the Tribunal's order.
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2013 (1) TMI 975
Issues involved: The judgment involves common issues raised by the Revenue against the orders passed by the Commissioner of Income-tax (Appeals) for the Assessment Years 2006-07 to 2011-12 in the case of the assessee.
Issues raised by the Revenue for the assessee, The Project Director, National Highway authority of India:
The Revenue challenged the findings of the Commissioner of Income Tax (Appeals) regarding the nature of the relationship between NHAI and the agency for toll fee collection, asserting the existence of a contract and disputing the characterization of the arrangement as mere outsourcing.
Issues raised by the Revenue for the assessee, The Project Director, Paradip Port Road Co. Ltd.:
The Revenue contested the CIT(A)'s conclusions regarding the role of the "collecting entity" in toll fee collection on behalf of the assessee, highlighting the existence of agreements and contracts between the parties, which they believed obligated the assessee to deduct TCS from the collecting entity.
Summary of Judgment:
The Tribunal considered the appeals and cross objections together, addressing the Revenue's contentions against the CIT(A)'s orders. The Revenue argued that the agreements between NHAI and the collecting entities constituted contracts obligating the assessees to deduct TCS. However, after examining the agreements and the nature of the arrangements, the Tribunal found that the assessees had not granted any rights or interests in the toll plazas to the collecting entities. Therefore, the Tribunal upheld the CIT(A)'s decision that the assessees were not required to collect TCS from the collecting agencies. The Tribunal determined that the arrangements were not contracts but rather outsourcing agreements for the collection of user fees, in line with the NHAI's management of toll plazas. Consequently, the Tribunal dismissed the Revenue's appeals and disposed of the assessees' cross objections in accordance with the CIT(A)'s orders.
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2013 (1) TMI 974
Issues involved: Validity of Gujarat National Law University Examination Rules, 2011 under Section 25 of the Gujarat National Law University Act, 2003.
Summary:
The High Court of Gujarat, in the case involving multiple appeals and civil applications, directed the appellant-University to file a supplementary affidavit regarding the Gujarat National Law University Examination Rules, 2011. The rules were to be disclosed as having been suggested by the Academic Council in accordance with Section 25 of the Gujarat National Law University Act, 2003. The Academic Council had made a specific resolution on July 17, 2011, which was later approved by the Executive Council of the University through a resolution on July 22, 2011.
The University was further instructed to provide the entire minutes of the resolutions passed by both the Executive Council and Academic Council of the Gujarat National Law University. Additionally, the University was required to submit the minutes of the General Council meeting held on January 21, 2012, demonstrating the approval of the Executive Council's resolution by the General Council on that date.
The Court set a deadline for the filing of the affidavit and specified that a copy should be provided to the advocate for the respondents. The matter was scheduled to be heard on January 23, 2013, at 11:00 a.m.
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2013 (1) TMI 973
Issues involved:
The judgment involves the interpretation of deduction under section 80IA of the Income Tax Act 1961 for a partnership firm engaged in civil constructions, contractors, engineers, and builders. The main issue is whether the firm qualifies as a developer to avail the deduction under section 80IA(4) of the Act.
Summary:
The assessee, a partnership firm engaged in civil constructions for Indian Railways, claimed a deduction under section 80IA of the Income Tax Act 1961. The Assessing Officer disallowed the claim, stating that the firm, being a contractor, did not qualify as a developer for the deduction. The CIT(A) upheld this decision, considering various case laws and legislative provisions. The firm contended that it satisfied the conditions under section 80IA(4) and should be eligible for the deduction.
Upon review, the Tribunal analyzed the statutory provisions of section 80IA, emphasizing the requirement for the assessee to meet all conditions specified under sub-section 4(1)(a), (b), or (c) to claim the deduction. The Tribunal noted that the firm, being a partnership, did not fall within the entities specified in the legislation. Despite the firm's argument citing the definition of "body" from the Law Lexicon, the Tribunal held that the firm's status did not align with the legislative mandate for claiming the deduction under section 80IA(4)(i) of the Act.
Regarding the judgments submitted by the firm's representative, the Tribunal found them irrelevant as the firm did not fulfill the conditions outlined in the statutory provision. Consequently, the Tribunal dismissed the firm's appeal, ruling it devoid of merits based on the failure to satisfy the applicability clause of section 80IA(4)(i) of the Act.
In conclusion, the Tribunal upheld the Assessing Officer's decision to disallow the deduction claim, emphasizing the necessity for the assessee to meet all statutory conditions to avail of the deduction under section 80IA. The appeal was dismissed on January 15, 2013, in Chennai.
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2013 (1) TMI 972
Issues involved: Appeal against denial of exemption u/s 11 of the Income Tax Act.
Summary:
The case involved an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) regarding the eligibility of the assessee for the benefit of sec.11 of the Income Tax Act. The assessee, an educational institution, had filed a return of income claiming exemption under sec.11. The assessment was reopened based on alleged violations of sec.13 of the Act, specifically related to investments made by the assessee. The Assessing Officer denied the exemption claimed under sec.11, leading to the appeal.
The Commissioner of Income Tax (Appeals) held that there was no violation of sec.13 by the assessee and that they were eligible for exemption under sec.11. The Tribunal rejected an adjournment petition and proceeded with the hearing, ultimately upholding the decision of the Commissioner of Income Tax (Appeals) based on previous rulings in the assessee's own case for the Asst. Year 2005-06. The Tribunal emphasized that the lease rental advances made by the trust were considered as an application of funds for pursuing the trust's charitable objects, not as investments. It was concluded that the trust had not violated any provisions of sec.11 or sec.13 of the Act, and therefore, was entitled to exemption under sec.11 for the relevant assessment year.
The Tribunal dismissed the appeal of the Department, confirming the order of the Commissioner of Income Tax (Appeals) and upholding the assessee's entitlement to exemption under sec.11 of the Income Tax Act for the assessment year in question.
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2013 (1) TMI 971
Issues involved: Appeal filed by revenue for assessment year 2006-07 regarding exemption u/s.54EC from short term capital gain on depreciable assets and interpretation of Section 50 for computation of capital gains.
Issue (a): The main issue is whether the ITAT was justified in allowing exemption u/s.54EC from short term capital gain on depreciable assets, even though Section 54EC provides exemption only for long term capital gain. The appellant argued that the exemption under Section 54EC is available only for long term capital gains, not short term capital gains.
Issue (b): Another issue is whether the ITAT was correct in not considering Section 50, which deals with the computation of capital gains for depreciable assets. Section 50 states that capital gains from the transfer of depreciable assets shall be treated as short term capital gains, thereby excluding the availability of exemption u/s.54EC, which is specifically for long term capital gains.
The Tribunal relied on a previous decision of the Court in the case of CIT V/s. M/s. ACE Builders Pvt. Ltd. to address the issues raised in the appeal. The Court found no reason to entertain the questions of law proposed by the appellant and dismissed the appeal without any costs.
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2013 (1) TMI 969
Issues involved: Appeal against Order-in-Original confirming service tax demand for Maintenance and Repair Service and Information Technology Software Service u/s 73, 75, and 78 of the Finance Act, 1994.
Maintenance and Repair Service and Information Technology Software Service: The appellant, engaged in providing IT solutions, procured standard software, supplied hardware, and developed customized software for clients. They argued that the services provided fall under information technology software services, for which they had paid service tax. The appellant had paid a significant sum towards service tax during the impugned period. They requested an opportunity to demonstrate the correct discharge of service tax liability.
Calculation of Service Tax Liability: The Tribunal observed that the impugned order did not clearly explain how the service tax demand was computed. It was noted that service tax liability would apply only to software developed as per customer specifications and supplied to clients. The Tribunal directed a re-examination of the matter, emphasizing the need to review agreements with clients, invoices, and payment records to determine the correct service tax liability. The appellant was instructed to cooperate with the department, provide all necessary documents, and appear before the adjudicating authority by a specified date.
Decision: The Tribunal allowed the appeal by remanding the matter for fresh consideration. The stay application was also disposed of. The appellant was directed to submit all relevant documentary evidence to support their claim of correctly discharging the service tax liability. The adjudicating authority was tasked with deciding the matter in accordance with the law after allowing the appellant to make submissions.
Note: The judgment was delivered by Hon'ble Shri P.R. Chandrasekharan, Member (Technical), and Hon'ble Shri Anil Choudhary, Member (Judicial).
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2013 (1) TMI 968
Excise Duty written off - Deduction u/s 37 - AO noted that some amount was written off by debiting the P&L account pertaining to Excise Duty. According to govt scheme, assessee opted to avail a route of exemption of excise duty. AO was not convinced and said that the impugned deduction is allowable against the future expenses, thus assessee was not entitled to write off the such amount in the year under consideration. - HELD THAT :- It is evident that the assessee has opted for the exemption route without availing excise duty as per the scheme of govt., therefore, unutilized excise duty as availed on the inputs, was written off in the regular books of accounts fully satisfying the conditions as laid down in s 37. Also, assessee has already surrendered its license under the Excise Act and opted for the exemption route and hence, there is no question of setting off the said expenditure in future. Thus, claim is allowed.
Decision in the cases of GIRDHAR FIBRES PVT. LTD. VERSUS ASSISTANT COMISSIONER OF INCOME TAX RANGE-1 SURAT [2012 (11) TMI 161 - ITAT, AHMEDABAD] and MOHAN SPG. MILLS VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-I, LUDHIANA [2013 (11) TMI 113 - ITAT CHANDIGARH], relied upon.
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2013 (1) TMI 967
Issues Involved:
1. Deletion of disallowance made u/s 36(1)(iii) of the IT Act.
2. Deletion of disallowance made u/s 14A read with Rule 8D of the IT Rules.
3. Disallowance of depreciation claimed on Power Evacuation Facility (PEF) and transmission lines used with wind Turbine Generator.
Summary:
Issue 1: Deletion of Disallowance u/s 36(1)(iii)
The Revenue appealed against the deletion of disallowance of Rs. 56,98,192/- made u/s 36(1)(iii) of the IT Act. The assessee had invested Rs. 4.75 crores in agricultural land, with Rs. 4.70 crores invested in preceding years and Rs. 5 lacs during the year under consideration. The Assessing Officer (AO) disallowed the interest, claiming the investment was for non-business purposes. The CIT (Appeals) found the investment was made out of the assessee's own funds, not borrowed funds, and deleted the disallowance. The Tribunal upheld this decision, citing the Hon'ble Supreme Court's ruling in Munjal Sales Corporation Vs. CIT, which reversed the Punjab & Haryana High Court's decision in a similar case.
Issue 2: Deletion of Disallowance u/s 14A read with Rule 8D
The Revenue challenged the deletion of Rs. 42,68,522/- disallowance made u/s 14A read with Rule 8D, while the assessee cross-appealed against the disallowance of Rs. 5 lacs. The assessee had shown total investments in shares and mutual funds and claimed the investments were made out of its own funds. The AO invoked Rule 8D and disallowed Rs. 47,68,522/-. The CIT (Appeals) found most investments were made out of own funds and reduced the disallowance to Rs. 5 lacs. The Tribunal found merit in the assessee's claim, noting that the investments were made out of own funds, and directed the AO to disallow Rs. 10,49,851/- as interest relatable to exempt income. The adhoc disallowance of Rs. 5 lacs by the CIT (Appeals) was found to be without merit and was dismissed.
Issue 3: Disallowance of Depreciation on PEF and Transmission Lines
The Revenue contested the CIT (Appeals)'s decision to allow 80% depreciation on PEF and transmission lines, which the AO had limited to 15%. The CIT (Appeals) found that PEF and transmission lines were integral to the windmill's operation, and ownership was transferred to the assessee. The Tribunal upheld this view, referencing decisions from various Tribunal Benches which held that such facilities are part of the windmill and eligible for higher depreciation.
Conclusion:
The Tribunal partly allowed the Revenue's appeal regarding disallowance u/s 14A read with Rule 8D and dismissed the appeal concerning disallowance u/s 36(1)(iii) and depreciation on PEF and transmission lines. The Cross Objection filed by the assessee was allowed.
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9911796707
