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Showing 81 to 100 of 1003 Records

• 2013 (4) TMI 931
  
  Issues Involved:
  1. Unexplained cost of construction u/s 69B.
  2. Credit for self-assessment tax paid.
  3. Interest u/s 234D.
  4. Estimation of income from business.
  5. Addition of unexplained investment u/s 69B.
  6. Addition of unexplained money u/s 69A.
  
  Summary:
  
  1. Unexplained Cost of Construction u/s 69B:
  The Revenue's grievance was that the CIT(A) wrongly deleted the addition made by the Assessing Officer towards unexplained cost of construction u/s 69B. The Assessing Officer had added Rs. 87.77 lakhs based on the District Valuation Officer's estimate of Rs. 251.36 lakhs. The CIT(A) reduced the estimate to Rs. 183.78 lakhs, considering State PWD rates and self-supervision. The Tribunal upheld the CIT(A)'s decision, noting that similar relief was granted in the case of the assessee's husband.
  
  2. Credit for Self-Assessment Tax Paid:
  The Revenue contested the CIT(A)'s direction to give credit for Rs. 8.5 lakhs paid as self-assessment tax for AY 2006-07 in earlier years. The Tribunal confirmed the CIT(A)'s order, noting that similar directions in the case of the assessee's husband had attained finality.
  
  3. Interest u/s 234D:
  The CIT(A) had deleted the interest charged u/s 234D. The assessee conceded that the Revenue's plea should be accepted due to the retrospective insertion of Explanation 2 to section 234D. The Tribunal decided this issue in favor of the Revenue.
  
  4. Estimation of Income from Business:
  For AY 2006-07, the CIT(A) directed the Assessing Officer to estimate the assessee's income from her business at 5% of turnover and allow depreciation. The Tribunal upheld this decision, noting that the CIT(A) acted within his jurisdiction and the Revenue failed to provide contrary evidence.
  
  5. Addition of Unexplained Investment u/s 69B:
  For AY 2007-08, the Assessing Officer added Rs. 85 lakhs as unexplained investment based on a bank loan and valuation report. The CIT(A) deleted the addition, relying on the vendor's statement and the Delhi High Court's ruling in CIT vs. Ved Prakash Choudhary. The Tribunal affirmed the CIT(A)'s decision, noting the lack of corroborative evidence from the Revenue.
  
  6. Addition of Unexplained Money u/s 69A:
  For AY 2008-09, the Assessing Officer added Rs. 4,43,830 as unexplained money. The CIT(A) deleted the addition, accepting the assessee's explanation that the amount was accounted for in her departmental store's cash book. The Tribunal upheld the CIT(A)'s decision, finding no justification to treat the amount as unexplained.
  
  Conclusion:
  I.T.A. Nos. 1313 and 1314/Mds/2012 were partly allowed regarding interest u/s 234D. The rest of the appeals (I.T.A. Nos. 1315, 1316, 1317, 1318, and 1319/Mds/2012) were dismissed as devoid of merits. Order pronounced on April 9, 2013, at Chennai.

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• 2013 (4) TMI 930
  
  Issues Involved:
  1. Validity of reopening assessment u/s 148.
  2. Disallowance of freight charges and clearing & forwarding charges due to non-deduction of TDS.
  
  Summary:
  
  1. Validity of Reopening Assessment u/s 148:

  The appellant assessee, engaged in manufacturing articles from leather and PVC cloth, filed its return for AY 2005-06, which was initially processed u/s 143(1) and later scrutinized u/s 143(3). The Assessing Officer (AO) issued a notice u/s 148 on 19th February 2010 to reopen the assessment, citing that the income had escaped assessment. The appellant challenged the reopening before the CIT [A], which annulled the reassessment, stating that the AO had no jurisdiction to reopen the assessment without sufficient evidence to form a belief that income had escaped assessment.

  The Tribunal, however, upheld the reopening, stating that the notice was issued within four years from the end of the relevant assessment year, and as per Section 147, the AO only needed a reason to believe that income had escaped assessment. The Tribunal relied on the Supreme Court's judgment in ACIT v. Rajesh Jhaveri Stock Brokers P. Limited, which held that the AO's belief need not conclusively prove the escapement of income at the stage of issuing the notice.

  The Court highlighted that the AO must have tangible material to arrive at a belief of escapement of income, and the sufficiency of such reason is not for the Court to investigate at the initiation stage. The Court dismissed the appeal, stating that no substantial question of law arose from the Tribunal's order.

  2. Disallowance of Freight Charges and Clearing & Forwarding Charges:

  During the original assessment, the AO did not call for details of TDS deducted on freight and clearing & forwarding charges. The CIT [A] noted that the AO had no evidence to form a belief that there was any default in respect of TDS on these payments and concluded that the AO had no jurisdiction to reopen the assessment.

  The Tribunal, however, held that the AO discovered from the assessee's records that disallowances were neither made in the original assessment nor examined at that stage. The Tribunal relied on the Supreme Court's judgment in Kalyanji Mavji & Company v. CIT, which stated that information for reopening can be derived from the original assessment records or subsequent investigation.

  The Court noted that the AO's reasons for reopening specified the omission to disallow the expenditure on freight and clearing & forwarding charges due to non-deduction of TDS, resulting in under-assessment of income. The Court upheld the Tribunal's decision, stating that the AO was justified in reopening the assessment based on the material available, which indicated that the taxable income had escaped assessment.

  Conclusion:

  The Court dismissed the tax appeal, affirming the Tribunal's order upholding the reassessment proceedings initiated by the AO within four years from the end of the relevant assessment year. The AO had valid reasons to believe that income had escaped assessment due to non-deduction of TDS on freight and clearing & forwarding charges, and the reopening was not based on a mere change of opinion.

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• 2013 (4) TMI 929
  
  Issues involved:
  The judgment addresses the solitary issue of addition of interest income received by the assessee, treated as chargeable to tax under the head "income from other sources."
  
  Issue 1: Addition of interest income under "income from other sources":
  The appellant, a partnership firm engaged in the business as a builder and developer, filed its income tax return for the relevant year. The Assessing Officer (A.O.) noted interest received on fixed deposits and from private parties, which the appellant did not reflect in the Profit & Loss account but credited and debited to the Kharghar project account. The A.O. brought the interest income received by the appellant to tax under "income from other sources" based on the decision of the Supreme Court in Tuticorin Alkali Chemicals & Fertilisers Ltd. vs. CIT. The appellant contended that the interest earned on temporary investments was credited to the project account where interest paid on funds borrowed for the project was debited. The A.O.'s decision was upheld by the ld. CIT(A), who found the facts similar to the Tuticorin case and rejected the appellant's arguments. The Tribunal, however, following the decision of the Bombay High Court in CIT vs. Lok Holdings, held that the interest income should be taxed under "profits and gains of business or profession" and not under "income from other sources."
  
  Issue 2: Claim for netting of interest expenditure against interest income:
  The appellant also claimed to net interest expenditure against interest income, arguing that the borrowed funds were used for temporary deposits. The Tribunal directed the A.O. to allow the deduction for interest expenditure if it was incurred wholly and exclusively for earning the interest income, which constituted business income. The A.O. was instructed to verify the relevant facts and allow the claim in accordance with the law.
  
  In conclusion, the Tribunal allowed the appeal of the assessee, holding that the interest income should be taxed under "profits and gains of business or profession" and directing the consideration of the claim for deduction on account of interest expenditure.

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• 2013 (4) TMI 928
  
  Issues Involved:
  1. Maintainability of the suit.
  2. Authority of the Board of Directors to dispose of company property without general body approval.
  3. Applicability of Sections 397 and 398 of the Companies Act, 1956.
  
  Summary:
  
  Issue 1: Maintainability of the Suit
  The plaintiffs/appellants filed an appeal against the trial court's order dated 2.11.2007 in Civil Suit No. 16A/2006, which dismissed the suit on the grounds of maintainability. The trial court decided preliminary issues (No. 5, 8(A), and 8(B)) and held that the plaintiffs had no right to file the suit, thus deeming it not maintainable.
  
  Issue 2: Authority of the Board of Directors
  The plaintiffs sought a declaration that the sale deeds executed in favor of defendants No. 9 to 14 be declared null and void, arguing that the Board of Directors of the company had no authority to return the suit land without the approval of the general body, as required u/s 293 of the Companies Act, 1956. The trial court failed to consider that the Board of Directors could not dispose of substantial property without general body consent, thus affecting the plaintiffs' rights as shareholders.
  
  Issue 3: Applicability of Sections 397 and 398 of the Companies Act, 1956
  The respondents argued that the plaintiffs should seek remedy u/s 397 and 398 of the Companies Act, 1956, concerning oppression and mismanagement. However, the court noted that these sections are subject to limitations u/s 399 and do not apply if the member lacks the requisite number of shares or support. The court held that the plaintiffs' rights were impaired due to the lack of general body approval, making the civil suit maintainable.
  
  Conclusion:
  The appeal was allowed, and the trial court's order was set aside. The court held that the civil suit filed by the plaintiffs/appellants is maintainable, and the trial court is directed to decide the suit on merits in accordance with the law.

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• 2013 (4) TMI 927
  
  Issues Involved:
  1. Validity of the sale conducted by the Indian Bank u/s SARFAESI Act.
  2. Whether the sale is void and fraudulent as contended by the Official Receiver.
  3. Whether the sale is vitiated by irregularities as raised by the auction purchaser and liable to be set aside.
  
  Summary:
  
  Issue 1: Validity of the Sale Conducted by the Indian Bank u/s SARFAESI Act
  The Indian Bank contended that the sale was conducted under the statutory provisions of the SARFAESI Act, a special enactment, and any grievances should be addressed to the Debt Recovery Tribunal (DRT) u/s 17 of the Act. The Bank cited several Supreme Court decisions supporting this view, including *Mardia Chemicals Limited vs. Union Of India* and *Official Liquidator, U.P. and Uttarakhand vs. Allahabad Bank*. The Bank argued that the Company Court lacks jurisdiction and that the sale certificate itself completes the sale, negating the need for registration.
  
  Issue 2: Whether the Sale is Void and Fraudulent as Contended by the Official Receiver
  The Official Liquidator argued that the sale is void u/s 446, 531, and 531(A) of the Companies Act, 1956, as it was conducted within one year from the date of the winding-up petition, making it fraudulent and an undue preference to one creditor. The Liquidator cited several case laws, including *Asset Reconstruction Company (India) Limited vs. Official Liquidator* and *Administrator, MCC Finance Limited vs. Ramesh Gandhi*, to support that the Company Court has exclusive jurisdiction over such matters. The Court agreed, stating that the sale is statutorily invalid and void, and the Official Liquidator has the right to oppose the registration of the sale certificate.
  
  Issue 3: Whether the Sale is Vitiated by Irregularities as Raised by the Auction Purchaser and Liable to be Set Aside
  The auction purchaser raised several irregularities, including non-disclosure of encumbrances and improper valuation. The Court found that the sale violated mandatory provisions of Rule 9 of the SARFAESI Act and the Tender-cum-Bid agreement. The auction was held on 29.09.2010, but the balance amount was not deposited within the stipulated 15 days, and no valid extension was sought. The Court held that the sale was conducted fraudulently and in violation of statutory provisions, making it void. Consequently, the auction purchaser is entitled to relief, and the Creditor Bank cannot enforce the liability.
  
  Conclusion:
  The sale conducted by the Indian Bank was declared void under Sections 531, 531(A), and 537 of the Companies Act and Rule 9 of the SARFAESI Act. The Official Liquidator's objections were upheld, and the auction purchaser was granted relief. The Creditor Bank's actions were found to be invalid, and any amounts realized from the sale cannot be retained. The Court allowed W.P. No. 19297 of 2012, dismissed W.P. No. 33655 of 2011 and Company Application No. 1972 of 2011, and allowed Company Application No. 421 of 2013.

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• 2013 (4) TMI 926
  
  Issues involved: The judgment involves three appeals before the Appellate Tribunal ITAT Delhi, including quantum appeals, penalty appeal, and the deletion of additions and penalties u/s 271(1)(C) of the Income Tax Act.
  
  ITA No. 5075 - Quantum Appeals:
  The revenue appealed against the deletion of additions totaling Rs. 40,50,850 and Rs. 39,50,621. The assessee, a trust, had its registration U/S 12 A A (2) canceled, but later reinstated. The Assessing Officer made additions due to lack of registration, treating donations and income over expenditure as taxable. However, the Ld. CIT (A) deleted these additions based on the reinstated registration, allowing benefits under Section 11 and 12 of the IT Act. The ITAT upheld this decision, emphasizing the genuine charitable objectives of the trust.
  
  ITA No. 5076 - Quantum Appeals:
  The revenue contested the deletion of a Rs. 1,78,01,645 addition received as a corpus donation, citing lack of registration U/S 12AA. Similar to the previous appeal, the Ld. CIT (A) deleted the addition based on the reinstated registration and the trust's charitable activities. The ITAT concurred with this decision, finding no grounds to interfere.
  
  ITA No. 5077 - Penalty Appeal:
  The revenue challenged the deletion of a penalty imposed u/s 271(1)(C) of the Income Tax Act. The penalty was annulled as the quantum additions were deleted, rendering the penalty baseless. The ITAT upheld the Ld. CIT (A)'s decision, stating that once the additions were removed, no tax evasion existed to warrant a penalty. Consequently, all three appeals were dismissed.
  

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• 2013 (4) TMI 925
  
  Issues involved: Disallowance of provision for trade guarantees, disallowance on account of hypothesis, disallowance of expenditure on payments to clubs, disallowance of bad debts and liquidated damages, disallowance of deduction claimed u/s 80HHC.
  
  Dispute 1 - Disallowance of provision for trade guarantees:
  - The appellant contested the disallowance of provision for trade guarantees of Rs. 2,55,65,091 made by the AO and confirmed by the Ld.CIT(A).
  - The AO allowed deduction of actual expenditure incurred and credit for guarantees written back, reducing the amount from the total income returned by the assessee.
  - The Ld.CIT(A) confirmed the action of the AO, stating no disallowance was made on account of provision created for trade guarantees.
  - The appellant argued that the issue was decided in their favor by the Tribunal in previous years, and since no difference in facts was presented, the issue was decided in favor of the assessee.
  
  Dispute 2 - Disallowance on account of hypothesis:
  - The appellant raised a ground regarding the disallowance of Rs. 18,16,090 made by the AO on account of hypothesis, which was confirmed by the Ld.CIT(A).
  - The disallowance was related to dividend income claimed as exempt u/s 10(33) of the Income Tax Act.
  - The appellant cited previous Tribunal decisions in their favor for assessment years 2000-01 and 2001-02, and since no distinguishing facts were presented, the issue was decided in favor of the assessee.
  
  Dispute 3 - Disallowance of expenditure on payments to clubs:
  - The Revenue appealed against the deletion of Rs. 2,36,341 made by the AO for expenditure on payments to clubs, which was deleted by the Ld.CIT(A).
  - The Ld.AR of the assessee argued that similar issues had been decided in favor of the assessee by the Tribunal in previous years, and since no distinguishing facts were presented, the deletion of the expenditure was upheld.
  
  Dispute 4 - Disallowance of bad debts and liquidated damages:
  - The Revenue appealed against the deletion of Rs. 66,58,662 on account of bad debts and liquidated damages made by the AO, which was deleted by the Ld.CIT(A).
  - The Ld.AR pointed out previous Tribunal decisions in favor of the assessee for similar issues in previous assessment years, and since no material change in facts was presented, the deletion of the amount was upheld.
  
  Dispute 5 - Disallowance of deduction claimed u/s 80HHC:
  - The Revenue appealed against the disallowance made by the AO on deduction claimed u/s 80HHC, which was upheld by the Ld.CIT(A).
  - The issue had been covered in favor of the assessee in previous years, and since no distinguishing facts were presented, the disallowance was upheld.
  
  Conclusion:
  - The appeal filed by the assessee was allowed, and that of the Revenue was dismissed, with the order pronounced on April 10, 2013.

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• 2013 (4) TMI 924
  
  Issues involved: Application for sanction of a Scheme of Arrangement and Amalgamation between two companies and their shareholders and creditors, approval of scheme by shareholders and creditors, objections raised by Regional Director, compliance with Companies Act, 1956.
  
  Approval of Scheme: Court dispensed with meetings of equity shareholders and creditors of petitioner No.1 as all had given written consent. Meetings of equity shareholders and secured creditors of petitioner No.2 were held, and approvals were obtained. Secured creditors of petitioner No.1 and debenture trustee also approved the scheme. Competition Commission approved the scheme under Section 31(1) of the Competition Act, 2002.
  
  Objections by Regional Director: Regional Director raised objections regarding appointed dates, transfer to trust not meeting Companies Act definition, treatment of secured creditors, and potential violation of Section 77 of the Companies Act.
  
  Petitioners' Response: Petitioners addressed objections in their affidavit, agreeing to change the appointed date, justifying transfer to trust under Sections 391 to 394 of the Companies Act, clarifying no financial assistance provided, and highlighting creditor consents.
  
  Final Hearing and Compliance: Audited accounts of both companies were submitted. Court requested final trust deed and trustee names. Petitioners disclosed trustees and provided final trust deed. Petitioners addressed and resolved all objections raised by the Regional Director.
  
  Court Decision: Court allowed the application, amended the scheme's clause, and directed alteration of Schedule 2 to reflect assets and liabilities. Compliance with Companies Act formalities and AS-14 accounting standards required. Computerized printout of the scheme to be appended to the order. Final copy of trust deed to form part of the sanctioned scheme. Petitioner companies to bear costs of the application. Urgent certified photocopies of the order to be provided upon request.

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• 2013 (4) TMI 923
  
  Issues involved:
  The issue involves the deletion of an addition made by the Assessing Officer amounting to Rs. 2,08,14,134/- on account of pre-operative bank interest receipts being taxable under the head income from other sources for the Assessment Year 2008-09.
  
  Summary:
  
  Issue 1: Taxability of pre-operative bank interest receipts under income from other sources
  
  The appeal by the Revenue challenged the order of the CIT(A) which deleted the addition made by the Assessing Officer. The counsel for the assessee argued that the issue is covered by a decision of the Jurisdictional High Court in a specific case. The counsel contended that the decision of the High Court is binding on all authorities within its jurisdiction, regardless of a Special Leave Petition (SLP) filed by the Department. The Tribunal found that the facts of the present case were similar to the case before the High Court, where it was held that interest earned on funds brought for business purposes prior to commencement of business is a capital receipt, not taxable under income from other sources. The Tribunal upheld the CIT(A)'s decision, emphasizing the binding nature of the High Court's decision on the authorities within its jurisdiction, irrespective of the SLP filed by the Department.
  
  In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the decision of the CIT(A) to delete the addition of pre-operative bank interest receipts as taxable income from other sources. The Tribunal held that the decision of the Jurisdictional High Court was binding on all authorities within its jurisdiction, and until modified or reversed by the Apex Court, it must be followed.

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• 2013 (4) TMI 922
  
  Issues involved: Appeal challenging the judgment of the Income Tax Appellate Tribunal regarding A.Y 2008-09. Questions regarding deletion of addition on sale of Ampad Land, failure to consider dates of "Cash receipts" in seized documents, and deletion of addition on gift received in kind.
  
  Deletion of addition on sale of Ampad Land: The Appellate Tribunal deleted the addition of Rs. 28,05,666 made on account of sale of Ampad Land. The Revenue challenged this deletion, but the Court did not consider this question as it did not arise from the Tax Appeal in question.
  
  Failure to consider dates of "Cash receipts": The Appellate Tribunal's order was challenged on the grounds that it failed to take cognizance of the dates of "Cash receipts" mentioned in seized documents. However, the Court did not consider this question as it was raised in a separate appeal filed by the Revenue.
  
  Deletion of addition on gift received in kind: The Appellate Tribunal also deleted the addition of Rs. 65,83,830 made on account of gift received in kind, despite the gifts being alleged as not genuine. The Revenue submitted that this question does not arise in the present Tax Appeal as the issue was raised by the assessee and the appeal was not accepted. Consequently, the Tax Appeal was disposed of as infructuous.

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• 2013 (4) TMI 921
  
  Issues involved: Challenge to maintainability of special leave petition based on the order passed in the review petition.
  
  Summary:
  1. The special leave petition was filed against the order passed by the High Court in a review petition. The Respondent argued that the petition was not maintainable as the main judgment was not challenged.
  
  2. The Petitioner relied on a previous judgment and contended that the SLP was maintainable even though the main order was not challenged. The Court referred to specific paragraphs of the judgment to support this argument.
  
  3. The Court disagreed with the views expressed in the previous judgment and held that once the review petition was dismissed, there was no merger and the main order had to be challenged. Reference was made to other judgments to support this conclusion.
  
  4. Based on the principles laid down in previous judgments, the Court dismissed the special leave petition, stating that it was not maintainable as only the order from the review petition was challenged, not the main order.

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• 2013 (4) TMI 920
  
  Issues Involved:
  
  1. Validity of initiation of re-assessment proceedings u/s 147/148 of the IT Act.
  2. Applicability of proviso to section 147 of the IT Act.
  3. Issuance of notice u/s 148 within the prescribed time limit as per section 149 of the IT Act.
  4. Validity of service of notice u/s 148 of the IT Act.
  
  Summary:
  
  1. Validity of initiation of re-assessment proceedings u/s 147/148 of the IT Act:
  
  The Tribunal examined whether the Assessing Officer (AO) validly initiated re-assessment proceedings u/s 147/148. It was found that the AO relied on vague and unsupported information from the Investigation Wing, Ghaziabad, regarding unexplained gifts. The AO had no new material or evidence to justify the re-assessment as the facts about the gifts were already on record from earlier proceedings. The Tribunal concluded that the reasons for reopening the assessment were vague, incorrect, and unsupported by evidence, making the re-assessment proceedings invalid.
  
  2. Applicability of proviso to section 147 of the IT Act:
  
  The Tribunal considered whether the case fell under the proviso to section 147, which restricts re-assessment after four years unless there was a failure by the assessee to disclose fully and truly all material facts. It was established that the assessee had disclosed all primary facts regarding the gifts in the original return and during the first re-assessment proceedings. Since there was no failure on the part of the assessee to disclose material facts, the re-assessment after four years was deemed invalid and barred by limitation.
  
  3. Issuance of notice u/s 148 within the prescribed time limit as per section 149 of the IT Act:
  
  The Tribunal scrutinized whether the notice u/s 148 was issued within the six-year limit. The AO claimed the notice was issued on 30.03.2007, but there was no corroborative evidence to support this. The Tribunal found that the notice was actually sent on 03.04.2007, beyond the six-year limit, and the purported service by affixture was unreliable and manipulated. Therefore, the notice was not issued within the prescribed time, rendering the re-assessment proceedings invalid.
  
  4. Validity of service of notice u/s 148 of the IT Act:
  
  The Tribunal assessed whether the notice u/s 148 was validly served. It was found that the AO did not attempt to serve the notice at the correct address, despite having the correct address on record from prior proceedings. The service by affixture was deemed unreliable and manipulated. The Tribunal held that there was no valid service of notice u/s 148, and thus, the AO did not acquire jurisdiction to proceed with the re-assessment.
  
  Conclusion:
  
  The Tribunal quashed the re-assessment proceedings on all four points, holding that there was no valid initiation of proceedings u/s 148, no valid issuance of notice within the limitation period, no failure by the assessee to disclose material facts, and no valid service of notice. Consequently, all resultant additions made by the AO were deleted, and the departmental appeals were dismissed.

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• 2013 (4) TMI 919
  
  Issues Involved:
  1. Applicability of provisions of section 115JA/115JB to the assessee.
  2. Grant of interest u/s 244A of the Act.
  3. Levy of interest u/s 234D.
  
  Summary:
  
  1. Applicability of Provisions of Section 115JA/115JB:
  The first issue pertains to the applicability of provisions of section 115JA and 115JB. For the assessment years 1997-98, 1998-99, and 2002-03, the Tribunal dismissed the assessee's ground of appeal as it was not raised before the CIT(A) nor in the original grounds of appeal before the Tribunal. The Tribunal stated, "The issue was not raised by the assessee by following proper procedure by raising the same as additional ground of appeal before the Tribunal."
  
  For the assessment years 2006-07 and 2007-08, the issue was raised before the CIT(A) and decided in favor of the assessee. The Tribunal referenced the Hyderabad Bench's decision in the case of State Bank of Hyderabad Vs. DCIT, which held that "the provisions of section 115JB will not be applicable to the assessee and set aside the assessment made under section 115JB on the assessee bank." Consequently, the Tribunal allowed the assessee's appeal, stating, "Respectfully following the decision of the Hyderabad Bench of the Tribunal, we set aside the order of the CIT(A) on this issue and allow this ground of appeal of the assessee."
  
  2. Grant of Interest u/s 244A:
  The second issue involves the grant of interest u/s 244A. The Tribunal, referencing its earlier decision in ITA No.1250/Mds/2008, noted that "there has been delay in making refund to the assessee by the Department. As such the assessee is entitled to interest on delayed payment of refund as provided under section 244A." The Tribunal remitted the case back to the Assessing Officer for the calculation of interest on interest, if any, arising out of delay in payment of interest, in accordance with the method set out by the Hon'ble Supreme Court in the case of Sandvik Asia Ltd.
  
  3. Levy of Interest u/s 234D:
  In ITA No.1756/Mds/2011 for the assessment year 2002-03, the Revenue raised an additional ground regarding the levy of interest u/s 234D. The Tribunal referenced its earlier decision in ITA No.248/Mds/2010, where it was held that "interest under section 234D is leviable on or after 2.6.2003 irrespective of the assessment year." The Tribunal allowed this ground of appeal, stating, "Respectfully following the decision of the Hon'ble jurisdictional High Court in the case of Infrastructure Development Finance Co. Ltd., we reverse the findings of the CIT(A) on this issue and allow the ground of appeal of the Revenue."
  
  Conclusion:
  The appeals of the Revenue were partly allowed for statistical purposes, with specific directions provided for each issue. The order was pronounced in the open court on April 2, 2013, at Chennai.

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• 2013 (4) TMI 918
  
  Issues: Appeal against Income Tax Appellate Tribunal judgment on disallowing cash receipt addition and expenses under section 40A(3) of the Income Tax Act.
  
  Cash Receipt Addition Issue:
  The primary issue was the addition of Rs. 1.67 crores towards unaccounted cash receipts by the Assessing Officer. The appellant contended that the entries in question belonged to another firm, Suraj Builders, and were duly reflected in their books of accounts. The CIT(Appeals) deleted the additions after considering various evidences and remand reports, concluding that the transactions were indeed related to Suraj Builders. The Tribunal upheld this decision, noting that the entries were recorded in the regular books of account of Suraj Builders, and no addition could be made in the hands of the present assessee. The High Court concurred, stating that no question of law arose as the appellant had successfully established the connection to Suraj Builders through additional evidence.
  
  Expenses under Section 40A(3) Issue:
  Regarding the disallowance of expenses under section 40A(3) of the Income Tax Act, the Tribunal affirmed the CIT(Appeals)' decision to delete the additions made by the Assessing Officer. The disallowance was related to cash payments noted in the impounded diaries, which were found to be transactions of M/s. Suraj Builders and not of the assessee. As such, the Tribunal concluded that no addition could be made in the hands of the present assessee. The High Court dismissed the Tax Appeal, stating that no question of law arose in this respect as well, given the factual findings and evidence presented.
  
  In conclusion, the High Court upheld the decisions of the CIT(Appeals) and the Tribunal, ruling in favor of the appellant on both the cash receipt addition and expenses under section 40A(3) issues.

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• 2013 (4) TMI 917
  
  Issues Involved:
  1. Preliminary objections.
  2. Rectification of the Register of Members.
  3. Increase in Authorized Share Capital.
  
  Summary:
  
  I. Preliminary Objections:
  
  1. When Appeal is Admitted Only on Two Questions, Can Other Questions of Law Be Examined?
  - The Court can examine additional questions of law not initially framed if they arise out of the order of the Company Law Board (CLB). The Court must ensure the respondents are not caught by surprise and are given a fair opportunity to respond.
  
  2. Composite Application Under Sections 111 and 397 of the Act:
  - A composite application under Sections 111 and 397 is maintainable. The CLB Regulations and the Fees Rules do not prohibit such petitions, and compelling separate petitions would be unfair and lead to multiplicity of proceedings.
  
  II. Scope of an Appeal Under Section 10F:
  
  - The appeal under Section 10F is limited to questions of law arising out of the CLB's order. The High Court can interfere if the CLB's findings are perverse, based on no evidence, or arbitrary.
  
  III. Rectification of the Register of Members:
  
  1. Scope of Section 111 of the Act:
  - The CLB has exclusive jurisdiction to decide matters of rectification of the register of members. It must examine if the procedural requirements under the Act were complied with before recording the name of the transferee.
  
  2. Burden of Proof:
  - The initial burden is on the appellants to show their names were entered in the Register of Members. Once established, the burden shifts to the company to prove the deletion of names was with sufficient cause.
  
  3. Appellants 1 and 2 Became Shareholders as Subscribers to the Memorandum of Association:
  - A-1 and A-2 became members of R-1 by subscribing to the Memorandum of Association.
  
  4. Appellants 3 and 4 Became Members on Their Being Allotted Shares:
  - A-3 and A-4 were shown as shareholders in the returns of allotment filed with the Registrar of Companies.
  
  5. Register of Members and Annual Returns:
  - The annual returns filed by R-1 showed A-1 to A-4 as shareholders, indicating their names were in the Register of Members.
  
  6. Compliance with Section 108 of the Act Necessary for a Valid Transfer of Shares:
  - Transfer of shares requires compliance with Section 108, including execution of a duly stamped transfer deed by the transferor and transferee.
  
  7. Payment of Consideration for Transfer of Shares: No Proof:
  - There was no evidence of consideration paid for the transfer of shares from A-1 to A-4 to R-4 and R-8.
  
  8. Failure to Produce the Minutes Book of Shareholders Meetings, and the Meetings of the Board of Directors: Its Consequences:
  - R-1 failed to produce the minutes book, and only loose sheets were provided, which have no evidentiary value.
  
  9. Contemporaneous Documents, Filed Before the CLB by the Respondents, Do Not Establish That Appellants Had Transferred Their Shares:
  - Various documents and affidavits provided by the respondents did not conclusively prove the transfer of shares by the appellants.
  
  10. Violation of Foreign Exchange Laws by Appellant No. 4:
  - The CLB did not establish which statutory provision rendered the investment by A-4 illegal.
  
  11. Legal Review Report of M/s. Khaitan and Company:
  - The report assumed the authenticity of documents without independent validation.
  
  12. Dematerialization of the Shares of the 1st Respondent:
  - No evidence was provided that NSDL verified the share transfer deeds during dematerialization.
  
  13. Reply Statements of Respondents 4 and 6:
  - The untested affidavits of R-4 and R-6 were not sufficient to prove the transfer of shares.
  
  14. Loss of Copies of Share Transfer Deeds: No Proof:
  - No evidence was provided regarding the loss of share transfer deeds.
  
  15. No Evidence:
  - The findings of the CLB were based on no legally acceptable evidence.
  
  16. Admission of the Appellants That They Had Transferred 76% of Their Shareholding to R-8 - Its Effect:
  - The appellants admitted to transferring 76% of their shares, and the CLB should confine its examination to the remaining 24%.
  
  17. Delay and Laches:
  - Mere delay of two years does not automatically disentitle the appellants from seeking rectification.
  
  18. Contradictory Stand of the Appellants:
  - The CLB should consider the contradictions in the appellants' pleadings while re-examining the case.
  
  19. Should This Court Adjudicate on the Merits of the Claim for Rectification of the Register of Members?
  - The High Court should not re-appreciate evidence but remand the matter to the CLB for fresh consideration.
  
  IV. Increase in Authorized Share Capital:
  
  1. Is Approval of the Company Law Board Required to Be Obtained Only After the Registered Office of a Company Is Shifted From One State to Another?
  - The CLB's confirmation of the alteration of the registered office does not presuppose that the office was already shifted.
  
  2. Is the Finding of the CLB That an EGM of the 1st Respondent Was Convened and Held on 29.09.2004 Based on No Evidence?
  - The CLB did not provide sufficient reasons for accepting the respondents' version of the EGM.
  
  3. Statutory and Other Provisions Applicable to the Alteration of the Memorandum of Association, for Increase of the Authorised Share Capital, in an Extra-Ordinary General Meeting:
  - Compliance with Sections 172 and 173 of the Act is necessary for convening an EGM.
  
  4. Affidavit of Sri Arvind Kumar Sanghvi:
  - The affidavit did not provide sufficient details regarding the notice and convening of the EGM.
  
  5. Power of the CLB Under Section 10-E (4-C) of the Act and Regulation 24 of the CLB Regulations:
  - The CLB should have exercised its powers to summon records and examine witnesses.
  
  6. Section 399: Share Holding Qualification to Be Satisfied Is on the Date on Which the Act of Oppression Took Place:
  - The appellants satisfied the qualification shareholding under Section 399 at the time of the alleged act of oppression.
  
  7. Shareholders Who Are Parties Were Given Up:
  - The CLB should re-examine the case after putting all respondents on notice and giving them an opportunity to be heard.
  
  8. Contention of the Respondents That the Object of Section 397 Is Not to Rake Up the Past But to Redeem the Future, and That Equity Is Not in Favour of the Appellants:
  - The CLB should consider the equitable jurisdiction under Section 402 while re-examining the case.
  
  Conclusion:
  The order of the CLB is set aside to the extent indicated and remanded for fresh consideration. The CLB shall re-examine the case within six months, considering the statutory provisions and observations made in this order.

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• 2013 (4) TMI 916
  
  Issues involved: Interpretation of the area of the plot for claiming deduction u/s 80IB(10) of the Income Tax Act, 1961.
  
  Summary:
  The Appellate Tribunal ITAT Pune heard an appeal filed by the revenue against the orders of CIT(A)-V, Pune. The Assessing Officer disallowed the claim of deduction u/s 80IB(10) as the project was deemed to be on less than 1 acre of land. The CIT(A) allowed relief to the assessee, considering the road acquisition area as part of the plot for calculation of the minimum required area. The Tribunal upheld the CIT(A)'s decision based on a similar precedent and the CBDT Circular No. 5 of 2005. The Tribunal held that the assessee was entitled to the deduction u/s 80IB(10) based on the total plot area, including the road acquisition area. The revenue's appeal was dismissed.
  
  The main contention was whether the road acquisition area should be included in the calculation of the minimum 1 acre plot size required for claiming deduction u/s 80IB(10). The Assessing Officer did not consider the road acquisition area of 513.80 sq.mtrs, leading to the rejection of the deduction claim. The assessee argued that the road acquisition area should not be excluded as it was part of the total plot area mentioned in the development agreement and approved building plan. The Tribunal agreed with the assessee, stating that the road acquisition area was still in possession of the assessee and entitled to FSI, thus justifying its inclusion in the plot size calculation.
  
  In conclusion, the Tribunal upheld the CIT(A)'s decision that the assessee was entitled to the deduction u/s 80IB(10) based on the total plot area, including the road acquisition area. The revenue's appeal was dismissed, affirming the allowance of the deduction to the assessee.

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• 2013 (4) TMI 915
  
  Issues Involved:
  1. Penalty u/s 271(1)(c) of the Income Tax Act, 1961.
  2. Addition of unexplained investment in bank deposits.
  3. Treatment of agricultural income as undisclosed income.
  4. Deletion of penalty related to Long Term Capital Gain (LTCG) on sale of land.
  5. Applicability of Section 271AAA for penalty in assessment year 2008-09.
  
  Summary:
  
  1. Penalty u/s 271(1)(c) of the Income Tax Act, 1961:
  The common issue in all appeals pertains to the penalty imposed by the Assessing Officer (AO) u/s 271(1)(c) of the Act, following assessments made consequent to a search action on 21.02.2008.
  
  2. Addition of Unexplained Investment in Bank Deposits:
  The assessee was found in possession of bank passbooks of accounts held in the name of his driver. The AO considered cash deposits of Rs. 18,69,073/- as unexplained investment and levied penalty u/s 271(1)(c). The CIT(A) upheld the penalty, rejecting the assessee's plea that the penalty should be based on peak deposits net of withdrawals. The Tribunal affirmed the CIT(A)'s decision, noting no co-relation between deposits and withdrawals was established.
  
  3. Treatment of Agricultural Income as Undisclosed Income:
  The AO treated the declared agricultural income of Rs. 5,04,200/- as unexplained, noting no evidence of agricultural activity on the stated land. The CIT(A) upheld the penalty, and the Tribunal agreed, stating the assessee's claim of agricultural income was disproved, thus justifying the penalty u/s 271(1)(c).
  
  4. Deletion of Penalty Related to LTCG on Sale of Land:
  The AO imposed a penalty on LTCG of Rs. 30,12,878/- from the sale of land, which the CIT(A) deleted, reasoning that the transfer occurred in the financial year 1998-99, making the gain taxable in assessment year 1999-2000, not in the year under consideration. The Tribunal upheld the CIT(A)'s decision, noting the complexity of the transaction and the bonafide nature of the assessee's claim.
  
  5. Applicability of Section 271AAA for Penalty in Assessment Year 2008-09:
  For assessment year 2008-09, the Tribunal noted that the search was initiated on 21.02.2008, making Section 271AAA applicable. Consequently, no penalty u/s 271(1)(c) could be levied for the undisclosed income, leading to the deletion of the penalty imposed by the AO.
  
  Conclusion:
  The Tribunal dismissed the appeals of the assessee for assessment years 2003-04 to 2007-08, upholding the penalties imposed u/s 271(1)(c) for unexplained investments and agricultural income. However, it allowed the appeal for assessment year 2008-09, directing the deletion of the penalty, and upheld the CIT(A)'s deletion of penalty for LTCG on sale of land. The Tribunal's decisions apply mutatis mutandis to similar issues in related appeals.

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• 2013 (4) TMI 914
  
  Issues involved: Appeal against order of CIT(A) confirming addition of Rs. 11,000,000 made by AO u/s 68 of the Income Tax Act, 1961.
  
  Details of the Judgment:
  
  Issue 1: Confirmation of addition of Rs. 11,000,000 under section 68 of the Act
  - The assessee, an individual, declared taxable income of Rs. 5,42,620 for the assessment year 2009-10.
  - AO made addition of Rs. 11,00,000 as unexplained cash credit u/s 68 of the Act due to cash deposit in savings bank account.
  - CIT(A) confirmed AO's order based on preponderance of probability.
  - Assessee explained cash deposit as proceeds from sale of ONGC shares redeposited in bank.
  - AO considered pattern of cash withdrawals from bank ATM and held source of deposit unexplained.
  - CIT(A) upheld AO's order stating no force in appellant's explanation and lack of cash flow evidence.
  - Tribunal observed sale proceeds of shares, cash withdrawals, and subsequent redeposit by assessee.
  - Assessee held cash for periods before redeposit, reasons for which were deemed plausible.
  - Revenue failed to prove cash deposit other than withdrawals from bank account.
  - Tribunal found taxing based on presumptions unjustifiable and deleted the addition u/s 68 of the Act.
  - Appeal of the assessee allowed in his favor.
  
  Conclusion: The Tribunal allowed the appeal of the assessee, deleting the addition of Rs. 11,00,000 made by the AO u/s 68 of the Act.

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• 2013 (4) TMI 913
  
  Issues involved:
  The issue pertains to the addition made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 on account of alleged unexplained cash credit of Rs. 44.45 lacs. The main question raised for consideration was whether the Tribunal was right in law in deleting the addition u/s. 68 by holding that the assessee had discharged the initial burden cast upon him.
  
  Judgment Details:
  
  1. The Tribunal allowed the assessee's appeal by observing that the assessee had received an advance from Madhav Vidharbh Estate Pvt. Ltd. for the sale of property, which could not materialize due to the society not giving NOC for transfer of property. The deal was canceled, and the money was returned. The assessee had submitted various documents including the sales agreement, cancellation agreement, PAN number of the intending purchaser, and acknowledgment of return of income of the purchaser. Similarly, for deposits from Riddhi Siddhi Pvt. Ltd., the assessee provided bank documents, confirmation from the party, acknowledgment of return of income, and PAN number. The Tribunal held that by furnishing these documents, the assessee had discharged the initial burden u/s. 68.
  
  2. The Tribunal cited the decision in the case of CIT v. Ranchod Jivabhai Nakhava, where it was held that once the assessee establishes the source of funds and the lenders' PAN details, the initial burden u/s. 68 is discharged. It was emphasized that the Assessing Officer should verify the lenders' returns to confirm the transaction's genuineness and creditworthiness before making any additions u/s. 68.
  
  3. The High Court affirmed the Tribunal's decision, stating that the assessee had provided sufficient evidence to prove the source of funds and had met the initial burden u/s. 68. The Court noted that the revenue did not dispute the authenticity of the documents submitted by the assessee. Therefore, the addition made by the Assessing Officer was deemed unnecessary, and it was deleted.
  
  4. The Court further emphasized that the Tribunal correctly applied the principles laid down in the Ranchhod Jivabhai Nakhava case and concluded that no question of law arose. As a result, the tax appeal was dismissed.

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• 2013 (4) TMI 912
  
  Issues Involved:
  1. Rejection of the Department's application to recall the Tribunal's order.
  2. Allegations of fraud in obtaining the Tribunal's order.
  3. Tribunal's jurisdiction and inherent powers to recall its orders in case of fraud.
  4. Validity of the Certificate issued under the Kar Vivad Samadhan Scheme.
  
  Issue-wise Detailed Analysis:
  
  1. Rejection of the Department's Application to Recall the Tribunal's Order:
  
  The Commissioner of Income-tax, Bangalore, was aggrieved by the rejection of an application filed by the Department for recalling the Tribunal's order. The Department's application was based on the claim that the Tribunal's order was obtained through fraudulent means, specifically through an affidavit filed by an employee of the respondent.
  
  2. Allegations of Fraud in Obtaining the Tribunal's Order:
  
  The Department contended that a fraud was played on the Tribunal by the respondent, who filed an affidavit to condone the delay in filing an appeal. The Department supported its allegations with statements recorded under section 131 of the Act and relied heavily on the Supreme Court's judgment in United India Insurance Co. Ltd. v. Rajendra Singh, which addresses the issue of fraud on the court and the remedy in such situations. The Tribunal, however, dismissed the Department's application without adequately addressing the allegations of fraud or referring to the Supreme Court's judgment.
  
  3. Tribunal's Jurisdiction and Inherent Powers to Recall its Orders in Case of Fraud:
  
  The judgment highlighted that the Tribunal, as an adjudicating body under the Income-tax Act, has inherent powers to rectify or recall its orders in exceptional cases, such as when an order is obtained by fraud. The judgment referenced several precedents, including the Punjab High Court's ruling in V. Venkataraman v. Controller of Estate Duty and the Allahabad High Court's ruling in ITO v. S.B. Singar Singh & Sons, which established that judicial bodies have the inherent jurisdiction to rectify wrongs committed by themselves, even in the absence of express statutory powers.
  
  4. Validity of the Certificate Issued Under the Kar Vivad Samadhan Scheme:
  
  The respondent argued that the Certificate issued under the Kar Vivad Samadhan Scheme had become final and binding, and therefore, recalling the Tribunal's order would serve no useful purpose. However, the judgment emphasized that the validity of the Certificate could only be assessed after addressing the allegations of fraud. The Tribunal's failure to consider the implications of fraud and its effects on judicial proceedings was criticized.
  
  Conclusion:
  
  The judgment concluded that the Tribunal had failed to exercise its powers appropriately by not addressing the allegations of fraud and not considering the relevant legal precedents. The Tribunal's order was set aside, and the matter was remitted back to the Tribunal for fresh consideration. The Tribunal was directed to afford a reasonable opportunity to both parties to substantiate and rebut the allegations. Additionally, costs were imposed on the respondents for their omission and commission, quantified at Rs. 5,000, payable to the Prime Minister's Relief Fund.

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