Home Case Index All Cases Income Tax Section Wise 2010 2010 (3) This

Law	-- All -- GST Income Tax Benami Property Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA Law of Competition PMLA Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws
Court	-- Any -- Supreme Court SC Orders / Highlights High Court Appellate Tribunal Tribunal Appellate authority for Advance Ruling Advance Ruling Authority National Financial Reporting Authority Competition Commission of India ANTI-PROFITEERING AUTHORITY Commission Central Government Board DISTRICT/ SESSIONS Court Commissioner / Appellate Authority Other
Citation	--Year-- 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1964 1963 1962 1961 1960 1959 1958 1957 1956 1955 1954 1953 1952 1951 1950 Upto 1949 - -Volume- 1 2 3 4 5 6 7 8 9 10 11 12 -
Landmark	Nil - N/A Referred in >= 2 Cases Referred in >= 4 Cases Referred in >= 5 Cases Referred in >= 10 Cases Referred in >= 15 Cases Referred in >= 25 Cases Referred in >= 50 Cases Referred in >= 100 Cases
Order by	TMI Citation Date of Decision

Advanced Search Options

Case Laws

Showing 81 to 100 of 858 Records

• 2010 (3) TMI 1211
  
  Issues Involved:
  The issues involved in this case are:
  1. Whether the contract for purchasing lands from sites attracts provisions of Section 194C and 201(1) of the Income Tax Act, and if interest under Section 201(1A) is leviable.
  2. Whether the agreement for purchasing sites amounts to a contract under Section 194C of the Act.
  
  Judgment Details:
  1. The revenue appealed against the orders of the Income Tax Appellate Tribunal, challenging the applicability of tax deduction at source under Section 194C and 201(1) of the Act in a contract for purchasing lands from sites. The Tribunal held that the contract between the assessee and Mr. Lakshman did not attract these provisions. The High Court noted that the assessee had only agreed to purchase sites from a vendor, and if any advance sale consideration was paid, the assessee was not required to deduct tax at source. The responsibility for tax payment lay with the seller. The Court ruled in favor of the assessee, dismissing the appeal.
  
  2. The Tribunal also considered whether the agreement between the assessee and Mr. Lakshman constituted a contract under Section 194C of the Act. It was argued that since Mr. Lakshman was providing completed sites to the assessee, it did not amount to a contract for execution of work. The Court's decision in this regard was not explicitly mentioned in the summary provided.

  ---

• 2010 (3) TMI 1210
  
  Issues Involved:
  1. Inconsistency in judicial views regarding the applicable remission policy.
  2. Determination of the relevant date for the remission policy: date of conviction or date of consideration.
  3. The scope and application of the clemency power under Articles 72 and 161 of the Constitution.
  
  Detailed Analysis:
  
  1. Inconsistency in Judicial Views:
  The Supreme Court identified an inconsistency in its previous judgments regarding the remission policy applicable to life convicts. The conflict arose between the judgment in State of Haryana & Ors. v. Balwan (AIR 1999 SC 3333) and the judgments in State of Haryana v. Mahender Singh & Ors. (2007) 13 SCC 606 and State of Haryana v. Bhup Singh (AIR 2009 SC 1252). The former suggested considering the remission policy on the date the convict's case is put before the Governor under Article 161, while the latter two judgments emphasized the policy prevailing at the time of conviction.
  
  2. Relevant Date for Remission Policy:
  The core issue was whether the remission policy applicable should be the one existing on the date of the convict's conviction or the one prevailing at the time of consideration for pre-mature release. The respondent was convicted on 20.05.1999, and the policy in existence at that time was dated 04.02.1993. The High Court ruled that the respondent's case should be considered based on the policy existing at the time of his conviction, not the subsequent policy introduced on 13.08.2008.
  
  3. Scope and Application of Clemency Power:
  The Supreme Court examined the clemency powers under Articles 72 and 161 of the Constitution, which allow the President and Governors to grant pardons, reprieves, respites, or remissions of punishment. The Court emphasized that these powers are absolute and cannot be restricted by statutory provisions like Sections 432, 433, and 433-A of the Cr.P.C. The Court noted that the clemency power should be exercised cautiously and in appropriate cases, balancing public welfare and the rehabilitation of the convict.
  
  Judgment Summary:
  The Supreme Court affirmed the High Court's decision that the respondent's case for pre-mature release should be considered based on the remission policy prevailing at the time of his conviction (04.02.1993). The Court highlighted that the clemency power under Articles 72 and 161 remains unfettered and can be exercised even if the convict does not meet the criteria of the current remission policy. The Court directed the State Government to calculate the respondent's sentence for remission purposes as per the policy dated 04.02.1993, considering the respondent had already served more than 14 years of actual imprisonment by 12.02.2009.

  ---

• 2010 (3) TMI 1209
  

  Validity of Central Electricity Regulatory Commission (Fixation of Trading Margin) Regulations, 2006 framed in exercise of power conferred u/s 178 of the 2003 Act - Jurisdiction of Appellate Tribunal u/s 111 - Doctrine and jurisprudence of delegated legislation - Whether the Tribunal has jurisdiction to decide the question as to the validity of the Regulations framed by the Central Commission? - HELD THAT:- We find that the Electricity (Amendment) Act, 2003 (No.57 of 2003) was brought into force by notification dated 27.1.2004. That, notification was issued u/s 1(2) of the Electricity (Amendment) Act, 2003 (No.57 of 2003). If one reads Section 1(2) of Electricity (Amendment) Act, 2003 (No.57 of 2003) with Notification dated 27.1.2004 issued u/s 1(2) of the amended Act, 2003, it becomes clear that on coming into force of the Electricity (Amendment) Act, 2003 (No.57 of 2003) all provisions amended by it also came into force. Hence, there was no requirement for a further notification u/s 1(3), consequently, Section 121 in its amended form came into force with effect from 27.1.2004.

  Summary of Our Findings:- (i) In the hierarchy of regulatory powers and functions under the 2003 Act, Section 178, which deals with making of regulations by the Central Commission, under the authority of subordinate legislation, is wider than Section 79(1) of the 2003 Act, which enumerates the regulatory functions of the Central Commission, in specified areas, to be discharged by Orders (decisions).

  (ii) A regulation u/s 178, as a part of regulatory framework, intervenes and even overrides the existing contracts between the regulated entities inasmuch as it casts a statutory obligation on the regulated entities to align their existing and future contracts with the said regulations.

  (iii) A regulation u/s 178 is made under the authority of delegated legislation and consequently its validity can be tested only in judicial review proceedings before the courts and not by way of appeal before the Appellate Tribunal for Electricity u/s 111 of the said Act.

  (iv) Section 121 of the 2003 Act does not confer power of judicial review on the Appellate Tribunal. The words "orders", "instructions" or "directions" in Section 121 do not confer power of judicial review in the Appellate Tribunal for Electricity. In this judgment, we do not wish to analyse the English authorities as we find from those authorities that in certain cases in England the power of judicial review is expressly conferred on the Tribunals constituted under the Act. In the present 2003 Act, the power of judicial review of the validity of the Regulations made u/s 178 is not conferred on the Appellate Tribunal for Electricity.

  (v) If a dispute arises in adjudication on interpretation of a regulation made u/s 178, an appeal would certainly lie before the Appellate Tribunal u/s 111, however, no appeal to the Appellate Tribunal shall lie on the validity of a regulation made u/s 178.

  (vi) Applying the principle of "generality versus enumeration", it would be open to the Central Commission to make a regulation on any residuary item u/s 178(1) r/w Section 178(2)(ze). Accordingly, we hold that the CERC was empowered to cap the trading margin under the authority of delegated legislation u/s 178 vide the impugned notification dated 23.1.2006.

  (vii) Section 121, as amended by Electricity (Amendment) Act 57 of 2003, came into force with effect from 27.1.2004.

  Consequently, there is no merit in the contention advanced that the said section is not yet been brought into force.

  Conclusion: - The Appellate Tribunal for Electricity has no jurisdiction to decide the validity of the Regulations framed by the Central Electricity Regulatory Commission u/s 178 of the Electricity Act, 2003. The validity of the Regulations may, however, be challenged by seeking judicial review under Article 226 of the Constitution of India.

  Our summary of findings and answer to the reference are with reference to the provisions of the Electricity Act, 2003. They shall not be construed as a general principle of law to be applied to Appellate Tribunals vis-`-vis Regulatory Commissions under other enactments. In particular, we make it clear that the decision may not be taken as expression of any view in regard to the powers of Securities Appellate Tribunal vis-`-vis Securities and Exchange Board of India under the Securities and Exchange Board of India Act, 1992 or with reference to the Telecom Disputes Settlements and Appellate Tribunal vis-`-vis Telecom Regulatory Authority of India under the Telecom Regulatory Authority of India Act, 1997.

  Thus, we dismiss these appeals as having no merit with no order as to costs.

  ---

• 2010 (3) TMI 1208
  
  Issues involved: Determination of whether share transactions should be treated as business income or capital gains for assessment year 2004-05.
  
  Department's Ground of Appeal:
  The department challenged the CIT(A)'s decision regarding the treatment of share transactions as "business income" based on the repetitive nature of the transactions and the intention to earn a profit, citing a relevant decision of the ITAT, Ahmedabad Bench.
  
  Assessment by AO:
  The AO observed frequent transactions of shares and categorized them based on the average holding period into three classifications. Transactions with an average holding period up to six months were treated as business income, while those held for more than six months were considered short-term capital gains. The AO also allowed a deduction for shares held for business purposes.
  
  Assessee's Appeal:
  The assessee contended that the AO did not consider various criteria outlined by the CBDT, including the source of funds, infrastructure, treatment of shares in the books, purchase/sales ratio, dividend income, and the nature of other business activities. The assessee, a Doctor by profession, argued that lack of time for share market analysis indicated an investment intent, supported by the source of funds and dividend income.
  
  CIT(A)'s Decision:
  After reviewing the submissions and evidence, the CIT(A) found the AO's classification unjustifiable and contrary to CBDT guidelines. Considering the overall purpose of the share transactions, the CIT(A) agreed with the assessee that the transactions were for investment, not business income. The CIT(A) directed the AO to treat the transactions as capital gains, leading to the department's appeal before the Tribunal.
  
  Tribunal's Decision:
  After hearing arguments from both sides, the Tribunal found no merit in the department's appeal. The Tribunal upheld the CIT(A)'s decision, emphasizing that the findings were based on facts and CBDT guidelines. The Tribunal confirmed the order to treat the share transactions as capital gains, dismissing the department's appeal.
  
  Conclusion:
  The Tribunal upheld the CIT(A)'s decision to treat the share transactions as capital gains, rejecting the department's appeal. The order was pronounced on March 18, 2010.

  ---

• 2010 (3) TMI 1207
  
  Issues Involved:
  
  1. Jurisdiction of the High Court under Article 227 of the Constitution.
  2. Interpretation and application of Section 47-A of the Haryana Amendment to Stamp Act.
  3. Validity of the sale deed and the evasion of stamp duty.
  
  Summary:
  
  1. Jurisdiction of the High Court under Article 227 of the Constitution:
  
  The High Court set aside the concurrent findings of the lower courts while exercising its extraordinary jurisdiction under Article 227 of the Constitution. The Supreme Court emphasized that the jurisdiction conferred under Article 227 is limited to ensuring that the courts below function within the bounds of their authority and not to correct errors of fact or law. The High Court's interference with the findings of fact was deemed unsustainable as it exceeded its limited jurisdiction.
  
  2. Interpretation and application of Section 47-A of the Haryana Amendment to Stamp Act:
  
  Section 47-A of the Haryana Amendment to Stamp Act deals with under-valued instruments. The District Collector, Faridabad, determined that the sale deed was under-valued and directed the respondent to pay the deficient stamp duty. The High Court erroneously presumed the genuineness of the sale price based on the decree for specific performance, which was not in consonance with the notified circle rates. The Supreme Court held that the interpretation of Section 47-A must align with the circle rates to prevent evasion of stamp duty.
  
  3. Validity of the sale deed and the evasion of stamp duty:
  
  The sale deed for the commercial plot was executed for a consideration significantly lower than the circle rate, indicating an attempt to evade stamp duty. The District Collector's order, which was upheld by the Commissioner, directed the respondent to pay the balance stamp duty. The High Court's observation that the authenticity of the decree and the sale price cannot be questioned was found to be flawed. The Supreme Court restored the order of the District Collector, emphasizing that the sale deed must reflect the true value as per the circle rates to ensure proper stamp duty payment.
  
  Conclusion:
  
  The Supreme Court set aside the High Court's judgment, restored the order of the District Collector, and directed the respondent to pay the balance stamp duty within four weeks. The appeal was allowed, and the parties were directed to bear their respective costs.

  ---

• 2010 (3) TMI 1206
  
  Issues involved: The judgment involves the disallowance of warranty provision expenses treated as contingent liability.
  
  Issue 1: Disallowance of warranty provision expenses
  
  The Assessing Officer (AO) disallowed a sum of &8377; 1,83,15,989/- after reducing the actual expenses of &8377; 48,67,564/- relatable to sales of the current year, stating that the warranty provision made in the accounts was contingent and not allowable as an ascertained liability. The AO concluded that the actual liability would only be allowed upon crystallization in the year under consideration. The appellant contended that excess warranty provision written back in the accounts for earlier years were not eliminated, leading to double addition. The ld. CIT(A) upheld the AO's decision based on consistency with previous decisions. However, the ld. CIT(A) allowed expenses actually incurred during the year but charged to the provision account, to be treated as current year expenses. The appellant appealed against these findings.
  
  Issue 2: Appeal and Decision
  
  The ITAT, in line with a previous order in the assessee's own case, allowed the claim of provision for warranty expenses. The ITAT noted that the provision was made based on technical evaluation and past experience, and that warranty was integral to the sale price of the product. Referring to the decision of the Hon'ble Supreme Court in Rotork Controls India P Ltd. vs. CIT, the ITAT emphasized the conditions for recognizing a provision as a liability. The ITAT found that the warranty expenses were allowable as they were based on reliable estimates and past events, and that the AO had previously allowed similar claims. Therefore, the ITAT allowed the claim of the assessee for deduction of provision for warranty expenses for the relevant assessment years. No additional grounds were raised, and the appeal was allowed.
  
  This summary provides a detailed overview of the judgment, highlighting the issues involved and the comprehensive details of the decision for each issue.

  ---

• 2010 (3) TMI 1205
  
  Issues Involved: Appeal against cancellation of penalty u/s 271(1)(c) for non-taxation of transfer funds received from members.
  
  Issue 1: Taxability of transfer funds
  
  The assessee received an amount on transfer of flats, credited to Building Heavy-Repair Fund, not offered to tax under principle of mutuality. AO brought the amount to tax, leading to penalty proceedings u/s 271(1)(c). Assessee believed funds exempt under mutuality principle, with necessary expenditure on Repair Funds deductible. CIT(A) deleted penalty, citing appellant's bona fide belief supported by legal opinions and accounting standards compliance. Tribunal confirmed addition to tax, but appellant's voluntary return filing and disclosure of contributions supported belief in mutuality principle. High Court's recent decision in favor of non-taxability further justified belief. Tribunal held no penalty warranted due to genuine belief, rejecting Revenue's appeal.
  
  Outcome: Appeal of the Revenue dismissed by ITAT Mumbai, upholding CIT(A)'s deletion of penalty u/s 271(1)(c) based on appellant's genuine belief in non-taxability of transfer funds under mutuality principle.

  ---

• 2010 (3) TMI 1204
  
  Issues Involved:
  1. Confirmation of addition on account of interest against interest-free advances to M/s. Shivarpan Sales (P) Ltd.
  2. Confirmation of addition on account of interest against interest-free advances to Smt. Kalpana Pandey, Sri Kartick Pandey, and M/s. Greenland Enclave (P) Ltd.
  3. Confirmation of disallowance of interest expenditure on account of advance made to Shri Jaideep Khaitan.
  4. Confirmation of addition as deemed dividend u/s 2(22)(e) of the Income-tax Act, 1961.
  
  Summary:
  
  Issue 1: Interest-Free Advances to M/s. Shivarpan Sales (P) Ltd.
  The assessee disputed the addition of Rs. 30,105 made by the Assessing Officer (AO) on account of interest against interest-free advances to M/s. Shivarpan Sales (P) Ltd. The AO disallowed the interest, stating that the advances were made from interest-bearing loans without business exigency. The CIT(A) confirmed the AO's action. The Tribunal observed that part of the loan was given out of non-interest-bearing funds and directed the AO to disallow interest only on the portion of the advance made from interest-bearing funds. Ground No.2 of the appeal was allowed in part.
  
  Issue 2: Interest-Free Advances to Smt. Kalpana Pandey, Sri Kartick Pandey, and M/s. Greenland Enclave (P) Ltd.
  The assessee disputed the addition of Rs. 50,698 on account of interest against interest-free advances to the aforementioned individuals and entity. The AO disallowed the interest, stating that the advances were made from interest-bearing loans. The CIT(A) confirmed the AO's action. The Tribunal confirmed the disallowance for advances to Smt. Kalpana Pandey and Sri Kartick Pandey but directed the AO to disallow interest only on the portion of the advance to M/s. Greenland Enclave (P) Ltd. made from interest-bearing funds. Ground No.3 of the appeal was allowed in part.
  
  Issue 3: Disallowance of Interest Expenditure on Advance to Shri Jaideep Khaitan
  The assessee disputed the disallowance of Rs. 2,37,452 out of interest expenditure on account of an advance made to Shri Jaideep Khaitan. The AO disallowed the interest, stating that the advance was made from interest-bearing funds without business purposes. The CIT(A) confirmed the AO's action. The Tribunal upheld the CIT(A)'s order and rejected ground No.4 of the appeal.
  
  Issue 4: Addition as Deemed Dividend u/s 2(22)(e)
  The assessee disputed the addition of Rs. 89,41,505 as deemed dividend u/s 2(22)(e). The AO considered loans from associate concerns as deemed dividends. The CIT(A) deleted the addition of Rs. 2,36,50,000 from M/s. Tanuj Holdings Pvt. Ltd., recognizing it as an NBFC. The CIT(A) limited the addition from M/s. Tolly Nirman Pvt. Ltd. to Rs. 8,41,566 and from M/s. Prasad Group Resources Pvt. Ltd. to Rs. 89,41,505. The Tribunal held that the principal business of M/s. Prasad Group Resources Pvt. Ltd. was granting loans and advances, thus not attracting the provisions of Section 2(22)(e). Ground No.5 of the appeal was allowed.
  
  Conclusion:
  The appeal was allowed in part, with specific directions to the AO regarding the disallowance of interest and the treatment of deemed dividends.

  ---

• 2010 (3) TMI 1203
  
  The Appellate Tribunal CESTAT, Chennai dismissed the appeals regarding payment of interest on amounts received through supplementary invoices, citing the Hon'ble Supreme Court's decision in the case of CCE, Pune Vs. SKF India Ltd. 2009 (239) ELT 385 (SC). The requirement of pre-deposit was waived in both cases.

  ---

• 2010 (3) TMI 1202
  
  Issues Involved:
  1. Legality of conviction u/s 302 read with Section 34 IPC.
  2. Validity of the First Information Report (FIR).
  3. Presence and participation of the accused at the crime scene.
  4. Common intention and pre-concerted meeting of minds.
  5. Authenticity of the FIR written by P.W. 1.
  
  Summary:
  
  1. Legality of Conviction u/s 302 read with Section 34 IPC:
  The appellants were convicted and sentenced under Section 302 read with Section 34 IPC by the trial court, which was upheld by the High Court. The Supreme Court examined whether the appellants shared a common intention to commit the murder and found that the evidence established their active participation in the crime.
  
  2. Validity of the First Information Report (FIR):
  The defense argued that there were two separate FIRs, one by the Assistant Station Master and another by P.W. 1. The Court analyzed the records and concluded that the message by the Assistant Station Master was cryptic and did not qualify as an FIR. The actual FIR was the one submitted by P.W. 1 at 5.15 p.m.
  
  3. Presence and Participation of the Accused at the Crime Scene:
  The Court found that P.W. 1 and P.W. 3 were natural witnesses as they had traveled with the deceased and witnessed the incident. P.W. 4 also corroborated their presence. The evidence showed that the appellants accosted the deceased with pistols and dragged him to the place where he was shot.
  
  4. Common Intention and Pre-concerted Meeting of Minds:
  The Court held that the appellants had a pre-concerted mind and common intention to commit the murder. The act of dragging the deceased to the place where he was shot demonstrated their active participation in furtherance of the common intention.
  
  5. Authenticity of the FIR Written by P.W. 1:
  The defense claimed that the FIR by P.W. 1 was written by the police or at their dictation. The Court found no evidence to support this claim. P.W. 1's testimony that he wrote the FIR in his own handwriting was accepted as credible.
  
  Conclusion:
  The Supreme Court dismissed the appeals, affirming the conviction and sentence of the appellants u/s 302 read with Section 34 IPC, finding no merit in the arguments presented by the defense. The records were ordered to be transmitted immediately.

  ---

• 2010 (3) TMI 1201
  
  Issues Involved:
  1. Entitlement to exemption u/s 10(23C)(iiiad) of the Income-tax Act, 1961.
  2. Allowability of depreciation on school building.
  3. Taxability of fees collected as building fund.
  4. Validity of proceedings initiated u/s 148 of the I.T. Act, 1961.
  5. Levy of interest u/s 234A, 234B, and 234C of the Act.
  
  Summary:
  
  1. Entitlement to Exemption u/s 10(23C)(iiiad):
  The primary issue was whether the assessee society was entitled to exemption u/s 10(23C)(iiiad) of the Income-tax Act, 1961. The Tribunal noted that the assessee society was registered under the Societies Registration Act and was running a school. The Assessing Officer denied the exemption on the grounds that the land on which the school was constructed was not owned by the society but taken on an oral lease from the principal's sons, and the principal was paid a salary of Rs. 10,000 per month, which was seen as a pecuniary benefit. The Tribunal found that the land was later gifted to the society through a registered gift deed and that the lease rent paid was reasonable. It held that the salary paid to the principal was not excessive. Therefore, the Tribunal concluded that the assessee society was entitled to exemption u/s 10(23C)(iiiad) as its annual receipts were below Rs. 1 crore.
  
  2. Allowability of Depreciation on School Building:
  The Tribunal did not delve into the issue of depreciation on the school building since it had already decided that the assessee was entitled to exemption u/s 10(23C)(iiiad).
  
  3. Taxability of Fees Collected as Building Fund:
  The Tribunal addressed the argument that the fees collected as a building fund were taxable. It noted that the CIT(A) had found that the building fund was essentially an admission fee, and this finding was not challenged by the Revenue. The Tribunal held that the amounts collected as building fund were not capitation fees and thus upheld the CIT(A)'s decision.
  
  4. Validity of Proceedings Initiated u/s 148:
  The assessee raised issues regarding the validity of proceedings initiated u/s 148, arguing that the proceedings were bad in law due to non-communication of reasons for reopening and the fact that the notice was issued by one officer while the assessment was completed by another. These grounds were not pressed by the assessee's counsel and were thus rejected by the Tribunal.
  
  5. Levy of Interest u/s 234A, 234B, and 234C:
  The Tribunal noted that the levy of interest u/s 234A, 234B, and 234C was consequential in nature and directed accordingly.
  
  Conclusion:
  The Tribunal partly allowed the appeals, holding that the assessee society was entitled to exemption u/s 10(23C)(iiiad) for the relevant assessment years. Other grounds not pressed by the assessee were rejected. The decisions rendered for the assessment year 2002-03 were applied to the other assessment years under appeal.

  ---

• 2010 (3) TMI 1200
  

  Claim of the State Government - Entitled to Recover the amount - company under liquidation - HELD THAT:- In our opinion, the learned single Judge clearly erred in holding that though Section 529A of the Companies Act operates, Section 38C of the Sales-tax Act also operates. If Section 529A which is the Central Enactment giving priority to the secured creditors and workers operates in relation to a property of the company, then provisions of Section 38C giving priority to the State Government will not operate in relation to that property. It is further to be seen here that if Section 38C does not operate in relation to a property of the Company because of operation of Section 529A, then by operation of the provisions of the Maharashtra Land Revenue Code, there is no change brought about in the situation. In our opinion, the provisions of Section 169 of the Maharashtra Land Revenue Code makes the position absolutely clear.

  The above observations make it clear that by operation of Section 529-A, priority is given to the dues of the secured creditors and workers over State first statutory charge. In this view of the matter, therefore, in our opinion, the learned single Judge was not justified in holding that dues of the State Government are recoverable pari pasu with the dues of the Appellant.

  In the result, therefore, both the Appeals succeed and are allowed. The order of the learned single Judge in Company Application No.540 of 2002 and Company Application No.101 of 2002 is set aside. No order as to costs.

  ---

• 2010 (3) TMI 1199
  
  Issues Involved:
  1. Disallowance of several expenditures like salary, air fares, visa charges, and medical expenses.
  2. Application of Section 44C of the Income Tax Act.
  3. Disallowance of various expenses reimbursed to the sub-contractor.
  4. Validity and applicability of Section 271(1)(c) penalty proceedings.
  5. Treatment of expenditure on temporary structures as capital or revenue in nature.
  
  Detailed Analysis:
  
  1. Disallowance of Several Expenditures:
  - Facts and Arguments: The assessee, a non-resident company, incurred expenses on expatriate personnel for a project in Gujarat. The Assessing Officer (AO) disallowed these expenses, arguing they were the responsibility of the sub-contractor.
  - Findings: The ITAT found that the assessee was still responsible for the overall execution and supervision of the project, despite subcontracting parts of it. The expenses were incurred wholly and exclusively for the business. The ITAT allowed 5% of the salary expenses and related costs as deductible.
  - Conclusion: The expenses were necessary for the business and partially allowed as deductions.
  
  2. Application of Section 44C:
  - Facts and Arguments: The AO applied Section 44C, limiting the deduction of head office expenses, arguing that these were incurred outside India.
  - Findings: The ITAT held that the expenses were specific to the Dahej project and not general administrative expenses. Therefore, Section 44C was not applicable.
  - Conclusion: The expenses were project-specific and not subject to the limitations of Section 44C.
  
  3. Disallowance of Various Expenses Reimbursed to the Sub-Contractor:
  - Facts and Arguments: The AO disallowed expenses reimbursed to the sub-contractor, arguing they were the sub-contractor's responsibility.
  - Findings: The ITAT found that the expenses were necessary for the project and incurred by the assessee. The disallowance was not justified.
  - Conclusion: The expenses were legitimate business expenses and allowed as deductions.
  
  4. Validity and Applicability of Section 271(1)(c) Penalty Proceedings:
  - Facts and Arguments: The AO initiated penalty proceedings under Section 271(1)(c) for concealment of income and furnishing inaccurate particulars.
  - Findings: The ITAT noted that the penalty order was passed beyond the time prescribed under Section 275. The penalty proceedings were dropped earlier, and no fresh proceedings were initiated in the subsequent assessment order.
  - Conclusion: The penalty order was void ab initio and canceled.
  
  5. Treatment of Expenditure on Temporary Structures:
  - Facts and Arguments: The assessee incurred expenses on temporary structures at the project site. The AO treated these as capital expenditure, allowing depreciation at a lower rate.
  - Findings: The ITAT found that the structures were temporary and necessary for the business. The expenditure was revenue in nature.
  - Conclusion: The expenditure was allowed as revenue expenditure, and the entire addition was deleted.
  
  Summary:
  The ITAT Ahmedabad dealt with cross appeals involving multiple issues related to the disallowance of business expenses, application of Section 44C, and the validity of penalty proceedings under Section 271(1)(c). The tribunal found that the expenses were necessary for the business and incurred wholly and exclusively for the project, thus allowing them as deductions. The penalty proceedings were found to be void due to procedural lapses and the time-barred nature of the penalty order. The expenditure on temporary structures was considered revenue in nature and allowed as a deduction. The appeals were decided in favor of the assessee, with the departmental appeals being dismissed.

  ---

• 2010 (3) TMI 1198
  
  The Supreme Court of India granted permission to file additional documents, expedited the hearing, and directed the petitioner to deposit Rs. 50 crores by 31st March 2010. The petitioner must implement the impugned judgment for the future period until the matter is finally disposed of.

  ---

• 2010 (3) TMI 1197
  
  Issues Involved: The issues involved in the judgment are the applicability of proviso to Section 11AC of the Central Excise Act, 1944 and the penalty imposed on the Director.
  
  Applicability of Proviso to Section 11AC:
  The appellants challenged the order of the Tribunal, which was remanded by the Hon'ble Gujarat High Court for fresh orders considering the applicability of the proviso to Section 11AC. The learned advocate argued that the option to pay duty, interest, and 25% of the duty amount towards penalty within 30 days was not given by the lower authorities. It was acknowledged by the learned DR that such an option should have been provided as per the proviso to Section 11AC. Citing precedents, including the case of M/s. Swati Chemicals Industries & Others and the decision of the Hon'ble Gujarat High Court in the case of CCE Ahmedabad vs. M/s. Akash Fashion Prints Pvt. Limited, the Tribunal granted the appellants the option to deposit the required amounts within 30 days from the receipt of the order. Failure to comply would result in the appellants being liable to pay 100% of the duty demand towards penalty.
  
  Penalty Imposed on Director:
  The Tribunal determined that since Section 11AC of the Central Excise Act, 1944 was not applicable, there was no need to reconsider the issue of the penalty imposed on the Director. This decision was made based on the specific legal provisions and considerations related to the case.
  
  Separate Judgement by Judges: No separate judgment was delivered by the judges in this case.

  ---

• 2010 (3) TMI 1196
  
  Issues Involved:
  1. Validity of reopening of assessment u/s 147.
  2. Computation of book profit u/s 115JB.
  3. Imposition of interest u/s 234D.
  4. Addition of notional expenses for earning dividend income to book profits u/s 115JB.
  
  Summary:
  
  1. Validity of Reopening of Assessment u/s 147:
  The assessee challenged the reopening of assessment, arguing that it was based on a mere change of opinion without any new material. The Tribunal agreed, citing the jurisdictional High Court's decision in Asian Paints Ltd. vs. DCIT, which held that reopening based on a change of opinion is not permissible. The Tribunal noted that the AO had originally computed both the income under normal provisions and book profits u/s 115JB, and no new information had come to light to justify reopening. Consequently, the reassessment was quashed as it was based on a fresh application of mind to the same set of facts.
  
  2. Computation of Book Profit u/s 115JB:
  The Tribunal addressed several grounds related to the computation of book profits:
  - The AO's addition of assets written off and debited to the profit and loss account was contested. The Tribunal held that the write-off of an asset does not fall within the adjustments contemplated in the Explanation to section 115JB.
  - The issue of starting point of computation of book profits was decided in favor of the assessee, referencing decisions in M.S. Estates Pvt. Ltd. vs. DCIT and Gulf Oil Corporation Ltd. vs. ACIT.
  - The Tribunal also noted that the retrospective amendment to section 115JB by Finance Act, 2009, did not apply to the assessee's case as it referred to a provision for diminution in the value of any asset, not the actual write-off.
  
  3. Imposition of Interest u/s 234D:
  The Tribunal upheld the CIT(A)'s decision that the provisions of section 234D could not be applied as the refund was granted prior to the insertion of section 234D w.e.f. 01.06.2003. This was supported by the Special Bench decision in ITO vs. Ekata Promoters.
  
  4. Addition of Notional Expenses for Earning Dividend Income to Book Profits u/s 115JB:
  The Tribunal agreed with the assessee that the AO's addition of notional expenses for earning dividend income to book profits was not justified. The first appellate authority had deleted a similar adjustment in the original assessment, and the Revenue had not appealed against it, thus the issue had attained finality.
  
  Conclusion:
  The Tribunal allowed the assessee's appeal, quashing the reassessment order as it was based on a change of opinion without new material. Consequently, the Revenue's appeal was dismissed.

  ---

• 2010 (3) TMI 1195
  
  Issues Involved:
  1. Validity of initiation of proceedings u/s 147.
  2. Legality of the consequent re-assessment order.
  3. Justification of additions made by the AO.
  
  Summary:
  
  1. Validity of initiation of proceedings u/s 147:
  The assessee, a cine artist, filed a revised return claiming estimated expenses at 30% of professional receipts, which was later withdrawn. The AO initiated proceedings u/s 147, suspecting expenses were incurred from undisclosed sources. The ld. CIT(A) annulled the assessment, stating there was no failure on the part of the assessee and the reassessment was based on a change of opinion. The Tribunal upheld this view, noting no new material justified the AO's belief that income had escaped assessment, and the initiation of reassessment proceedings was merely on a change of opinion.
  
  2. Legality of the consequent re-assessment order:
  The AO's re-assessment included disallowance of motor car expenses and unexplained expenditure u/s 69C. The Tribunal found no material indicating the assessee's failure to disclose necessary facts, and the AO's actions were deemed a roving enquiry, not permissible under section 147. The Tribunal referenced the Supreme Court's decision in CIT vs. Kelvinator of India Ltd., emphasizing that reassessment must be based on tangible material and not a mere change of opinion.
  
  3. Justification of additions made by the AO:
  The Tribunal noted that the original assessment u/s 143(3) had already considered the disallowance of 30% expenses, which the assessee had withdrawn. There was no evidence of expenses being met from undisclosed sources. The Tribunal cited previous decisions, including ACIT vs. Smt. Jaya Bachchan, where similar reassessment proceedings were annulled due to lack of new material and being based on a change of opinion.
  
  Conclusion:
  The Tribunal upheld the ld. CIT(A)'s decision to annul the assessment, rejecting the revenue's appeal and confirming that the AO was not justified in initiating proceedings u/s 147. The re-assessment was deemed illegal, bad in law, and void. The revenue's appeal was dismissed.

  ---

• 2010 (3) TMI 1194
  
  Issues:
  1. Rejection of rectification application by the Commissioner of Service Tax.
  2. Challenge of the rectification rejection order by the petitioner.
  3. Arguments regarding dismissal of appeal and lack of reasons in the rectification rejection order.
  4. Need for a detailed order in dismissing rectification applications.
  5. Grounds for rejection of the rectification application by the Commissioner.
  6. Consideration of the petition as an abuse of the legal process.
  
  Analysis:
  
  1. The petitioner challenged the order of the Commissioner of Service Tax, New Delhi, rejecting the rectification application. The petitioner failed to comply with the pre-deposit order of rupees two crores within the specified time, even after an extension granted by the Hon'ble Apex Court. The petitioner then sought rectification, arguing that the dismissal of the appeal for non-compliance should not prevent the rectification application. The rejection order did not provide reasons for the decision.
  
  2. The High Court noted that the original order of the Commissioner was detailed and challenged before the Tribunal. The Court opined that a detailed order need not be passed while dismissing a rectification application if the original order was detailed. The rejection of the rectification application was not based on the non-compliance with the pre-deposit order but on the lack of apparent need for rectification.
  
  3. The Court emphasized that the rectification application was dismissed because the competent authority found no grounds for rectification. Consequently, the Court deemed the petition an abuse of the legal process and dismissed it accordingly. The judgment highlights the importance of complying with orders and the need for valid reasons when seeking rectification in legal proceedings.

  ---

• 2010 (3) TMI 1193
  
  Issues Involved:
  1. Classification of surplus from the sale of mutual fund units as "capital gains" or "business income".
  2. Grant of credit for Security Transaction Tax (STT) paid.
  
  Summary:
  
  Issue 1: Classification of Surplus from Sale of Mutual Fund Units

  This appeal by the revenue challenges the order of the CIT(A)-XXI, New Delhi, for the assessment year 2006-07, where the CIT(A) treated the surplus of Rs. 58,71,144/- from the sale of mutual fund units as "capital gains" instead of "business income". The Assistant Commissioner of Income-tax had initially assessed this surplus as business income u/s 143(3) of the Income-tax Act.

  The CIT(A) considered nine factors to conclude that the surplus should be treated as capital gains, including the use of own funds, lack of infrastructure, consistent treatment of mutual funds as investments, and the non-transferable nature of mutual fund units. The CIT(A) also noted that units of mutual funds are recognized as approved investments u/s 11(5) of the Act.

  The revenue argued that the assessee's main business is investing in shares and securities, and the surplus from mutual fund units should also be treated as business income. The revenue highlighted the regular and continuous activity in the investment of units and the intention to earn profit from these investments.

  Upon review, the Tribunal considered various factors, including the assessee's lack of borrowing, payment of management fees to two companies, and the classification of units as investments in the books of account. The Tribunal found that the substantial activity in the sale/redemption of units and the acceptance of surplus from shares as business income weighed against the assessee. The Tribunal also noted that the AO did not ascertain the motive behind the subscription to the units and that the classification of assets in the balance sheet was inconsequential.

  Based on the substantial nature of transactions and the lack of evidence supporting the assessee's claim that units were held as investments, the Tribunal held that the CIT(A) erred in treating the surplus as capital gains. The order of the CIT(A) was reversed, and the AO's assessment of the surplus as business income was restored.

  Issue 2: Grant of Credit for Security Transaction Tax (STT) Paid

  The assessee argued that if the surplus is taxed as business profits, credit for the STT paid should be granted. The CIT(A) did not decide on this issue as the transactions were initially treated as capital gains. Since the decision has been reversed, the matter of granting credit for STT is restored to the AO to allow deduction as per law.

  Conclusion:

  The appeal of the revenue is allowed, subject to the grant of credit for the STT paid as per law on transactions of the units. The order was pronounced in the open court on 31 March, 2010.

  ---

• 2010 (3) TMI 1192
  
  Issues involved:
  The appeal challenges the cancellation of a penalty u/s 271(1)(c) of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax(Appeals) for the assessment year 2002-03.
  
  Assessment of Income:
  - The appellant, a Company, filed its return of income for the assessment year, declaring business loss and income from capital gains. The Assessing Officer determined the total income, initiated penalty proceedings u/s 271(1)(c), and levied a penalty in respect of income from other sources.
  - The Learned Commissioner of Income Tax(Appeals) cancelled the penalty, citing the inappropriateness of netting interest expenses against interest income, referencing the Tuticorin Alkali Chemicals and Fertilizers Ltd. judgment. The appellant's treatment of interest income differed from the Assessing Officer's approach, but it was deemed a valid view and not grounds for penalty.
  
  Bonafide Explanation and Precedent:
  - The Revenue contended that the appellant concealed income particulars, urging restoration of the penalty based on the Tuticorin Alkali Chemicals and Fertilizers Ltd. judgment. However, the appellant's counsel highlighted a previous ITAT order accepting the deduction of interest expenses against interest income, demonstrating a bonafide explanation.
  - The Tribunal upheld the cancellation of the penalty, noting the bonafide nature of the appellant's explanation based on the precedent set in the previous assessment year. The explanation was considered valid, leading to the dismissal of the Revenue's appeal.
  
  The judgment emphasizes the importance of a bonafide explanation in tax matters and the relevance of precedent in determining the appropriateness of penalty imposition u/s 271(1)(c) of the Income Tax Act.

  ---

123456789........ 43