|
Advanced Search Options
Case Laws
Showing 81 to 100 of 787 Records
-
2007 (8) TMI 752
Murder - gun shot injury - Petition u/s 482 CrPC to quashed the order passed u/s 319 summoning the respondent No. 2 to face the trial - Plea of alibi - statements of the witnesses u/s 161 - accused here viz., Kapil Dev Singh (respondent No.2) and Daya Singh - accused of the tripple murder case were putting pressure on Nigam Singh not to give evidence in the said case - HELD THAT:- We are of the opinion that the statements of the witnesses u/s 161 CrPC being wholly inadmissible in evidence could not at all be taken into consideration. The High Court relied upon wholly inadmissible evidence to set aside the order passed by the learned Sessions Judge. That apart, no finding on a plea of alibi can be recorded by the High Court for the first time in a petition u/s 482 Cr.P.C. As mentioned, the burden to prove the plea of alibi lay upon the accused which he could do by leading evidence in the trial and not by filing some affidavits or statements purported to have been recorded u/s 161 CrPC. The whole procedure adopted by the High Court is clearly illegal and cannot be sustained.
The other argument based upon the acquittal of co-accused Daya Singh has also no merits. The question as to whether an order passed u/s 319 Cr.P.C. would cease to be operative if the trial of the co-accused has been concluded, has been considered in Shashikant Singh v. Tarkeshwar Singh [2002 (4) TMI 958 - SUPREME COURT] held '' The words 'could be tried together with the accused' in Section 319(1), appear to be only directory. 'Could be' cannot under these circumstances be held to be 'must be'. The provision cannot be interpreted to mean that since the trial in respect of a person who was before the Court has concluded with the result that the newly added person cannot be tried together with the accused who was before the Court when order u/s 319(1) was passed, the order would become ineffective and inoperative, nullifying the opinion earlier formed by the Court on the basis of evidence before it that the newly added person appears to have committed the offence resulting in an order for his being brought before the Court."
Therefore the mere fact that trial of co-accused Daya Singh has concluded cannot have the effect of nullifying or making the order passed by the learned Sessions Judge as infructuous.
The learned Sessions Judge trying the case of co-accused Daya Singh seems to have been swayed by the fact that the High Court had not only set aside the order passed by the learned Sessions Judge u/s 319 CrPC by which the respondent No. 2 Kapil Dev Singh was summoned to face trial but had also recorded a finding in his favour that he was present in a meeting in Nagar Nigam, Allahabad. Since we are setting aside the order of the High Court, the aforesaid finding of the learned Sessions Judge would automatically go and cannot stand.
Thus, we consider it desirable that the criminal revision filed by Rajendra Singh against the acquittal of Daya Singh should be heard by the High Court as expeditiously as possible. We accordingly request the High Court to decide Criminal Revision (Rajendra Singh v. Daya Singh) expeditiously preferably within a period of four months of presentation of a certified copy of this order before the High Court.
In the result, the appeal succeeds and is hereby allowed. The impugned judgment and order of the High Court is set aside and the order passed by the learned Sessions Judge, Allahabad, summoning respondent No. 2 Kapil Dev Singh to face trial is restored.
-
2007 (8) TMI 751
The Delhi High Court allowed exemption subject to exceptions in a case where the revenue was aggrieved by a tribunal order for reopening assessment. The court found no error in the tribunal's view that there was no omission in disclosing material facts, leading to the dismissal of the appeal as no substantial question of law arose.
-
2007 (8) TMI 750
Block Assessment - Unexplained Payment Of Commission - search and seizure operation u/s 132(1) - Excess stock of goods found - HELD THAT:- In the present case, nothing was found during the search which would suggest that the books maintained by the assessee were unreliable. It is only subsequent to the search and with a view to verify the correctness of the books that the Deputy Director of Income-tax recorded the statement of V.P. Jain. Whatever be the merits or demerits of both statements of V.P. Jain, unless they could be directly connected with the recovery of any incriminating material during the search, they cannot be used against the assessee.
The view expressed by this Court in Ravi Kant Jain [2001 (3) TMI 52 - DELHI HIGH COURT] is, of course, binding on us and we have also followed the view expressed by the Rajasthan High Court in Elegant Homes [2002 (8) TMI 38 - RAJASTHAN HIGH COURT]. In CIT v. Jupiter Builders (P.) Ltd.[2006 (9) TMI 127 - DELHI HIGH COURT], this Court reiterated the law that the undisclosed income must be unearthed as a result of the search.
We are clearly of the opinion that in the absence of any incriminating material found during the search conducted on 11/12-9-2001 in the premises of the Bansal Group, the statement of V.P. Jain recorded on 25-9-2001 and on 14-12-2001 could not be used for proceedings under Chapter XIV-B of the Act.
We also find that the statement of V.P. Jain was recorded behind the back of the assessee. When the assessee was in fact allowed to cross-examine V.P. Jain, after his second statement was recorded on 14-12-2001, V.P. Jain had retracted from his earlier statement. The Assessing Officer, nevertheless, relied upon the statement given by V.P. Jain on 25-9-2001 completely disregarding his subsequent statement.
Thus, we are of the view that the revenue has not been able to raise any substantial question of law which would necessitate admission of this appeal.
Excess stock - It was contended by the assessee that different bundles have a different weight and it cannot be said with any degree of certainty that the average weight of the goods was 65 kg. per bundle. That the entire exercise was an estimate is confirmed by the CIT(A) who arrived at an average weight at 60 kg per bundle. Similarly, in respect of the fine wire products, the Assessing Officer took the average weight at 20 kg. per bundle and this was reduced by the CIT(A) to 16 kg. per bundle.
The mere fact that some employees of the assessee signed the panchnama does not mean that they certified the correctness of the number of bundles or the average weight of each bundle. They only certified that they were witnesses to the proceedings. What conclusions have to be drawn from the panchnama is of no concern to those employees.
Of course, the best method of determining the number of bundles and their average weight would be to actually count the bundles and use machines/cranes for weighing each bundle. This is no doubt a tedious exercise but where a liability is sought to be foisted upon an assessee, the revenue has to be a little more serious while exercising powers conferred upon it under the Act. Mere guess work or an estimate cannot be an adequate substitute for a scientific investigation or carrying out some empirical study. The officers who conducted the search did not want to take the necessary trouble which, of course, would have been time consuming, but the impact of making a guesstimate can be quite damaging insofar as the assessee is concerned. The assessee cannot be made to suffer the consequences of lethargy on the part of the officers of the revenue.
Thus, we are of the opinion that the Tribunal rightly came to the conclusion that the alleged excess stock calculated by the revenue needs to be deleted. It is, of course, not possible today to redetermine the stock so the question of any remand does not arise.
In our view, no substantial question of law arises. Dismissed.
-
2007 (8) TMI 749
Issues: Violation of natural justice in passing an order without notice and without giving a hearing to the petitioner. Interpretation of Section 129DD of the Customs Act, 1962 regarding the revisionary authority's requirement to call for case records.
In the judgment delivered by the Delhi High Court, the petitioner challenged an order dated 28th March, 2002, passed by the Joint Secretary to the Government of India, Order No. 85-87/2002. The petitioner contended that the order was issued without providing any notice or hearing, violating the principles of natural justice. The Court acknowledged that the impugned order was indeed passed without notice to the petitioner, contravening the fundamental principle that adverse actions should not be taken without allowing the party to present its case. The Court emphasized the importance of giving an opportunity to be heard before any adverse action is taken against a party, highlighting a violation of natural justice in this case.
Furthermore, the Court analyzed Section 129DD of the Customs Act, 1962, stating that the revisionary authority must call for case records as it is implicit in the nature of their function. Even if not explicitly stated, the Court held that no revisionary jurisdiction can be exercised without necessary records, emphasizing that the revisionary authority must peruse the case records before making any decision. The Court concluded that the impugned order could not be sustained due to the failure to follow these procedural requirements outlined in the Customs Act.
Regarding the reliance on a previous judgment, the Court distinguished it by noting that the present case had specific averments that no notice was issued to the petitioner before the revisionary authority's decision. As a result, the Court set aside the impugned order and directed the parties to appear before the revisionary authority for further proceedings. The Court emphasized the need for the revisionary authority to issue notices to both parties, call for case records, and make decisions after hearing both sides. Ultimately, the Court allowed the writ petition, granting relief to the petitioner based on the violations of natural justice and procedural requirements under the Customs Act, 1962.
-
2007 (8) TMI 748
Deduction u/s 36(1)(viia) - bad debts written off - Pro rata disallowance u/s 14A - Broken period interest paid on the purchase of securities - Applicability of s. 40A(9).
Deduction u/s 36(1)(viia) - bad debts written off - HELD THAT:- In the opinion of the AO, the proviso to s. 36(1)(vii) and s. 36(2)(v) clearly states that the assessee has to debit bad debts claimed during the year to the provision for bad and doubtful debts and deduction of bad debts u/s 36(1)(vii) of the Act is limited to the amount which exceeds the credit balance available in the provision for bad and doubtful debts u/s 36(1)(viia) of the Act. The AO asked the assessee to furnish the break-up of the bad debts pertaining to the rural branches as well as non-rural branches. The assessee filed the reply contending that the entire write off of bad debts pertains to the non-rural branches and provision for bad and doubtful debts relating to advances made on rural branches.
Finally, the AO came to the conclusion that the provision for bad and doubtful debts relating to 10 per cent of the rural advances for the AY 2002-03 is to be allowed, but at the same time, the AO was of the opinion that total sum to be deducted from the total bad debts written off as per proviso to s. 36(1)(vii). In short, the AO made the disallowance in respect of the bad debts written off and provision for bad and doubtful debts.
We find that this issue is covered in favour of the assessee by the decision of the jurisdictional High Court in the case of South Indian Bank Ltd. [1999 (3) TMI 43 - KERALA HIGH COURT]. Respectfully following the same as well as the decision of this Tribunal in assessee's own case, we hold that the CIT(A) has rightly deleted the addition made by the AO in respect of the bad debts written off. We, therefore, confirm the order of the CIT(A) on this issue.
Pro rata disallowance u/s 14A - expenditure estimated to be incurred for earning tax-free income - HELD THAT:- An identical issue had come for the consideration of this Tribunal in the case of Dhanlakshmi Bank Ltd.[2006 (7) TMI 524 - ITAT COCHIN] held that; '' We are, therefore, of the opinion that in spite of the introduction of s. 14A, the principles laid down by the apex Court in the case of Rajasthan State Warehousing Corporation [2000 (2) TMI 5 - SUPREME COURT] still hold good law and as there is no clear identity in respect of the funds applied by the assessee for making the investment for earning the tax-free income as well as taxable income and as assessee's business is indivisible one, the method adopted by the AO for making the disallowance is not a permissible method and AO was not justified in making the disallowance from the expenditure in respect of the interest attributable to investment on tax-free bonds and expenditure incurred for earning the dividend income."
In our opinion, the same principles are applicable to the assessee's case. We, therefore, uphold the order of the CIT(A) on this issue.
Addition in respect of the broken period interest paid on the purchase of securities - HELD THAT:- An identical issue had come for the consideration before, in the case of Nedungadi Bank Ltd.[2002 (11) TMI 29 - KERALA HIGH COURT] held as under: '' Following the decision in CIT vs. South Indian Bank Ltd.[2002 (11) TMI 53 - KERALA HIGH COURT] held that the interest paid for the broken period would constitute allowable outgo in the hands of the assessee and is an admissible deduction in the computation of the total income of the bank under the head 'Profits and gains of business or profession'.
Respectfully following the ratio in the above precedent, we hold that the CIT(A) has rightly deleted the addition in respect of broken period interest made by the AO. We, therefore, confirm the order of the CIT(A) on this issue.
Applicability of s. 40A(9) - Disallowance on the contribution to medical benefit scheme - HELD THAT:- On the perusal of the said scheme, it is seen that the fund is to be created with the contribution from the bank as well as pensioners and for administration of the funds, a managing committee was formed. As per the scheme, each member to the scheme and his/her respective spouse are the beneficiaries. It is further provided that the spouse of the member will continue to receive the benefit even after the death of the member. Certain ailments and diseases were specified which would be covered under the scheme and the maximum limit of reimbursement was restricted to Rs. 30,000. As per the terms of bipartite agreement between the associate bank management and the union, the assessee paid Rs. 50 lakhs as its contribution towards the formulation of the fund under the scheme.
On a bare reading of the sec 40A(9), it is very clear that any sum paid by the assessee as an employer towards setting up or formation of or as contribution to any fund, trust, company, AOP, BOI, etc. except to the extent provided by or under cls. (iv) and (v) of s. 36(1) or required by or under any other law for the time being in force is not an allowable expenditure.
In the present case, the fund is not controlled by the assessee bank. In our opinion, the decision relied on by the Revenue of Hon'ble Andhra Pradesh High Court in the case of Raasi Cement Ltd.[2004 (12) TMI 55 - ANDHRA PRADESH HIGH COURT] is not helpful. In our further considered opinion, the bona fide contribution made by the assessee as an employer to the fund set up as a part of the settlement between the assessee bank and its executive employees is not hit by sub-s. (9) of s. 40A. We, therefore, uphold the order of the CIT(A) on this issue.
In the result, the Revenue's appeal is dismissed.
-
2007 (8) TMI 747
Issues involved:
The issue involves the interpretation of section 2(7A) of the Income-tax Act, 1961 and whether an Additional Commissioner of Income-tax can exercise the powers and functions of an Assessing Officer for making income assessments.
Judgment Summary:
Interpretation of Section 2(7A) of the Income-tax Act, 1961:
The High Court addressed the issue arising from an order passed by the Income-tax Appellate Tribunal regarding the authority of an Additional Commissioner of Income-tax to conduct income assessments. The substantial question of law framed pertained to whether an Additional Commissioner could be considered an Authority u/s 2(7A) of the Act for assessment purposes. It was noted that the section had been retrospectively amended by the Finance Act, 2007 from 1-6-1994. Consequently, the Court was informed that the question should be answered in the negative in favor of the revenue and against the assessee due to this amendment. The Court highlighted that the amendment would require the Tribunal to rehear the matter as it had not previously addressed the merits of the case. As a result, the appeal was disposed of, and the parties were directed to appear before the Tribunal for further proceedings on 18th September, 2007.
Conclusion:
The High Court's judgment clarified the impact of the retrospective amendment to section 2(7A) of the Income-tax Act, 1961 on the authority of an Additional Commissioner of Income-tax in conducting income assessments. The decision necessitated a rehearing of the matter by the Tribunal and provided guidance for future proceedings in the case.
-
2007 (8) TMI 746
Issues involved: Interpretation of law regarding the admissibility of investment allowance on plant and machinery income from lease under Section 32A of the Income Tax Act, 1961.
Summary:
The Income Tax Appellate Tribunal referred a question of law to the Punjab and Haryana High Court regarding the admissibility of investment allowance on income from leased plant and machinery under Section 32A of the Income Tax Act, 1961 for the assessment year 1983-84. The Tribunal had initially allowed the investment deduction claimed by the assessee, but proceedings under Section 263 were initiated due to perceived errors in the assessing authority's order. Upon appeal, the Tribunal held that if the income from lease is assessed under the head of 'income from business and profession,' then the investment allowance under Section 32A is admissible, citing a judgment of the Andhra Pradesh High Court.
The High Court considered the arguments of both parties and reviewed relevant judgments. The counsel for the assessee pointed to the Supreme Court's decision in Commissioner of Income-Tax Vs. Shan Finance (P) Ltd., which upheld the Andhra Pradesh High Court's ruling that income from leasing plant and machinery as business income implies the machinery is used wholly for the assessee's business. The Supreme Court also referenced a previous judgment regarding the hiring out of machinery for business purposes. The counsel for the respondents did not contest this legal position established by the Supreme Court.
Based on the Supreme Court's precedent in Shan Finance (P.) Ltd.'s case, the High Court ruled in favor of the assessee, concluding that the investment allowance on plant and machinery income from lease is admissible when assessed as business income. Therefore, the question referred by the Tribunal was answered against the revenue and in favor of the assessee, disposing of the reference accordingly.
-
2007 (8) TMI 745
Town Planning Acts - Maharashtra Regional and Town Planning Act, 1966 (MRTP Act) has adopted the Land Acquisition Act, 1894 by reference - Interpretation of Section 127 of the MRTP Act - Whether, in any event, all the provisions of the Land Acquisition Act, as amended by Central Act 68 of 1984 with emphasis on Section 11A can be read into the provisions of the MRTP Act? - authority within six months of receipt of the purchase notice issued by the owner, applies to a State Government for acquiring the land as a step contemplated by Section 127 of the MRTP Act - Writ Petition to permit the appellant to develop the reserved land for residential purposes - HELD THAT:- The amendment introduced by Act 68 of 1984 provides that no declaration u/s 6 shall be made after the expiry of one year from the date of publication of the notification u/s 4(1) of the Act. It further provides that the Collector, after the declaration is made, has to take an order for acquisition, mark out the land available, issue notice to persons interested in the land to be acquired and for, passing an award containing the true area of the land acquired, the compensation that should be allowed for the land and the apportionment of the compensation among the claimants, if there are more than one.
Section 11A introduced by Act 68 of 1984 provides that the Collector shall make an award within a period of two years from the date of publication of the declaration and if no award is made within that period the entire proceedings for the acquisition of the land shall stand lapsed. Thus, the Land Acquisition Act, as amended in the year 1984 provides for two lapses of the acquisition; one, in a case where a declaration u/s 6 is not made within one year of the publication of the notification u/s 4(1) of the Act and; two, the award itself not being made within a period of two years from the publication of the declaration.
It is clear that when the MRTP Act was enacted, the Land Acquisition Act that was referred was the unamended Act of 1894. That Act did not contain either a provision for lapsing of the acquisition on the non issue of a declaration u/s 6 of the Act within one year of a notification u/s 4(1) of the Act or by the award not being rendered within two years of a declaration u/s 6 of the Act. These two time limits were prescribed by Act 68 of 1984.
When we interpret Section 127 of the Act, it is not possible to forget the impact of Section 126(1) of the Act. Obviously, the provisions have to be read harmoniously. The court can only postulate the question whether the authority under the MRTP Act has done which it possibly could, in terms of the statute. Therefore, while reading Section 127, we have to take note of the fact that the authority under the MRTP Act can only make an application for acquisition under the Land Acquisition Act and nothing more. Therefore, when Section 127 of the MRTP Act says that if within six months from the date of the service of such notice, the land is not acquired or no steps as aforesaid are commenced for its acquisition the reservation shall be deemed to lapse.
We have to see what the Authority under MRTP Act has done. The first part of the provision above quoted is unambiguous and that is a case where the land is actually acquired. Or, in other words, the acquisition is complete. The second limb above quoted shows that it is possible to avert the lapse of the scheme if steps as aforesaid are commenced for its acquisition. The step that the authority under the MRTP Act can commence, is the step of applying to the State Government to acquire such land under the Land Acquisition Act. After all, the legislature has given the authority a locus poenitentiae for invoking the machinery for acquisition under the Land Acquisition Act.
Therefore, when a purchase notice is received by it, in all reasonableness, what it can do is to make an application to the State Government to make the acquisition within six months of the receipt of the purchase notice.
In Municipal Coproration of Greater Bombay vs. Dr. Hakimwadi Tenants Association & Ors. [1987 (11) TMI 386 - SUPREME COURT] this Court approved the view of the Bombay High Court that it is enough if the application is made by the Authority for acquisition of the land. Suppose, immediately on receipt of a purchase notice, the authority under the MRTP Act makes an application to the Government to acquire the land and for administrative reasons or otherwise it takes the Government time to initiate the proceeding and the six months expire in between, can it be postulated that the reservation has lapsed? In that case we will be compelling the authority under the MRTP Act to do something that it has no power to do.
According to me such an interpretation of the provision would be unreasonable and should be avoided. Here, the application has been made according to the respondents by the Chief Engineer as authorised by the local authority and to say that the letter written by him is unauthorised or is not adequate compliance of Section 127 of the MRTP Act appears to me to be unwarranted especially when we keep in mind the laudable objects of the MRTP Act.
The MRTP Act serves a great social purpose and the approach of the court to an interpretation must be to see to it that the social purpose is not defeated as far as possible. Therefore, a purposive interpretation of Section 127 of the Act so as to achieve the object of the MRTP Act is called for.
I would, therefore, hold that there has been sufficient compliance with the requirement of Section 127 of the MRTP Act by the authority under the Act by the acquisition initiated against the appellant in the appeal arising out of SLP(C) No.11446 of 2005 and the reservation in respect of the land involved therein does not lapse by the operation of Section 127 of the Act. But since on the main question in agreement with my learned Brothers I have referred the matter for decision by a Constitution Bench, I would not pass any final orders in this appeal merely based on my conclusion on the aspect relating to Section 127 of the MRTP Act. The said question also would stand referred to the larger Bench.
I therefore refer these appeals to a larger Bench for decision. It is for the larger Bench to consider whether it would not be appropriate to hear the various States also on this question considering the impact of a decision on the relevant questions. The papers be placed before the Hon’ble Chief Justice for appropriate orders.
-
2007 (8) TMI 744
The Delhi High Court considered whether renovation expenditure of Rs. 91,200 was of capital nature. The Court referred to similar cases and ruled in favor of the assessee, stating that the expenditure was revenue expenditure and not subject to section 32(1A) of the Income-tax Act, 1961.
-
2007 (8) TMI 743
Issues:
The judgment involves the computation of deduction u/s 80HHC in the case of a supporting manufacturer. The main issue is whether export incentives received by the assessee are eligible for deduction under section 80HHC.
Issue 1: Computation of Deduction under Section 80HHC:
The case revolves around the eligibility of export incentives for deduction under section 80HHC. The Assessing Officer contended that such incentives are not profit from business and hence not eligible for deduction under sub-section (3A) of section 80HHC. The Commissioner (Appeals) held that duty drawback is not to be reduced while computing deduction under section 80HHC, but DEPB amount and profit on sale of DEPB license are not eligible for deduction. The cross appeal challenges the relief granted and denied by the Commissioner (A).
Issue 2: Interpretation of Export Incentives Eligibility:
The contention of the revenue is that export incentives are not eligible for deduction under section 80HHC. The revenue argued that 90% of such export incentives should be reduced as per the Explanation to section 80HHC. The assessee relied on previous Tribunal decisions and a Supreme Court case to support their claim that such incentives should be considered as part of business profits.
Judgment Summary:
The Tribunal analyzed the relevant provisions and previous decisions to determine the eligibility of export incentives for deduction under section 80HHC. The Tribunal referred to a case involving a supporting manufacturer and held that the assessee is entitled to deduction under section 80HHC for export incentives treated as business profits. The Tribunal emphasized that when export incentives are passed on to the supporting manufacturer, they become part of the sale proceeds and are eligible for deduction. The Tribunal upheld the order of the Commissioner (Appeals) and allowed the appeal of the assessee while dismissing the appeal of the revenue.
-
2007 (8) TMI 742
Issues Involved:1. Opportunity of being heard to the Assessing Officer. 2. Relief on addition made on account of low household withdrawals. 3. Deletion of addition made on account of short-term capital gain and computation of NIL long-term capital gain. 4. Disallowance of expenses on different heads and addition in household expenses. Summary:Issue 1: Opportunity of being heard to the Assessing OfficerThe revenue contended that the Ld. CIT(A) erred in not allowing proper opportunity of being heard to the Assessing Officer. However, it was found that the Assessing Officer was present during the appellate proceedings and had submitted written submissions and arguments. Thus, the contention was rejected, and the ground was dismissed. Issue 2: Relief on addition made on account of low household withdrawalsThe Assessing Officer estimated household expenditure at Rs. 1,80,000 per annum and added Rs. 94,500 to the income of the assessee. The Ld. CIT(A) reduced the estimation to Rs. 1,20,000 per annum, sustaining an addition of Rs. 34,500. Considering the facts, the Tribunal further reduced the estimation to Rs. 1,00,000, allowing the objection partly. Issue 3: Deletion of addition made on account of short-term capital gain and computation of NIL long-term capital gainThe Assessing Officer added Rs. 18,60,292 as short-term capital gain, questioning the assessee's computation of NIL long-term capital gain. The Ld. CIT(A) deleted the addition, accepting the assessee's computation. The Tribunal upheld this decision, noting that the assessee had provided sufficient evidence, including valuation reports, LBT orders, and approval from local authorities. The Assessing Officer's reliance on estimations and presumptions was deemed unjustified. Issue 4: Disallowance of expenses on different heads and addition in household expensesThe assessee objected to the disallowance of expenses totaling Rs. 60,136 and an addition of Rs. 35,500 in household expenses. The Tribunal found the disallowances to be on the higher side given the turnover of Rs. 79.96 Lac and restricted the disallowance to Rs. 2,500 in lumpsum for telephone and scooter/petrol expenses. The objection was partly allowed. Conclusion:The appeal by the revenue was dismissed, and the cross objection by the assessee was partly allowed. The order was pronounced in the open court on 27-8-2007.
-
2007 (8) TMI 741
Issues:
Appeal under Section 35G of the Central Excise Act, 1944 against order of Customs, Excise and Service Tax Appellate Tribunal regarding entitlement to deemed credit under Notification No. 58/97-C.E. when input suppliers did not pay Central Excise duty and provided incorrect certificates on invoices.
Analysis:
The case involved an appeal filed by the Revenue challenging an order passed by the Tribunal regarding the entitlement to deemed credit under Notification No. 58/97-C.E. The appellant-Revenue contended that the manufacturer of final products may not be entitled to deemed credit if the manufacturer-supplier of inputs did not pay Central Excise duty and provided inaccurate certificates on invoices. The assessee, engaged in manufacturing various products falling under the Central Excise Tariff Act, availed deemed credit under Rule 57A(6) of the Central Excise Rules against specified inputs. The suppliers of inputs were alleged to have not discharged full duty liability, leading to a show cause notice for recovery of deemed Modvat credit. The adjudicating authority disallowed the deemed credit, ordered recovery, and imposed a penalty, while allowing a partial Modvat credit to the assessee.
On appeal, the Commissioner (Appeals) set aside the Order-in-Original, leading the Revenue to approach the Tribunal. The Tribunal dismissed the appeal, emphasizing the requirement of a specific declaration on invoices for availing Modvat credit. The Tribunal noted that the denial of Modvat credit was due to the absence of a declaration that the appropriate duty of Excise had been paid on the inputs. However, the Commissioner (Appeals) found that the invoices bore a declaration regarding duty liability under Rule 96ZP(3), which was deemed sufficient for claiming Modvat credit as per Notification No. 58/97-C.E.
Upon thorough consideration of submissions and orders, the High Court declined to accept the Revenue's contention. The Court observed that the invoices in question contained a declaration regarding duty liability to be discharged under Rule 96ZP(3), which was deemed adequate for claiming Modvat credit. The Court, based on the established findings and legal position, concluded that no substantial question of law necessitating the admission of the appeals existed. Consequently, the appeal was dismissed, affirming the Tribunal's decision and upholding the entitlement to deemed credit based on the declarations provided on the invoices.
-
2007 (8) TMI 740
Penalty imposed u/s 271(1)(c) - Prove genuineness of the transactions - inability to prove the share application monies considered as cash credits u/s 68? - concealment of income or furnished inaccurate particulars - not recordedrequisite satisfaction of the AO - non-application of mind - HELD THAT:- There is a difference between the two sets of expressions, namely, "fictitious" on the one hand and "doubtful" and "not proved" on the other hand. Thus, while concluding his reasoning and making the addition the Assessing Officer would appear to have abandoned his earlier view that the monies were received from fictitious persons and seems to have settled for less strong expressions. It is, therefore, somewhat difficult to assert that the Assessing Officer did reach the satisfaction in the course of the assessment proceedings that the assessee concealed its income or furnished inaccurate particulars thereof.
The last line in the assessment order to the effect that the penalty proceedings u/s 271(1)(c) have been initiated separately does not also amount to recording of the requisite satisfaction. In our opinion, the case falls within the ratio of the judgments of the Hon’ble Delhi High Court in CIT v. Ram Commercial Enterprises Ltd. [1998 (10) TMI 13 - DELHI HIGH COURT]; and Diwan Enterprises v. CIT [1998 (11) TMI 27 - DELHI HIGH COURT]. We accordingly cancel the penalty on this ground.
Even on merits, we are satisfied that it cannot be said that the assessee concealed its income or furnished inaccurate particulars thereof. In the present case, the evidence adduced before the CIT (Appeals) in appeal against the assessment order has not been examined by the Assessing Officer or the CIT (Appeals) while dealing with the penalty proceedings against the assessee for concealment of income. If this evidence is taken into account it would appeal that it cannot be asserted that the receipt of share application monies is totally unsupported.
We find that the assessee had filed the confirmation from all the share applicants, proof of share allotment to them, evidence for proving their identity, certificates from chartered accountants showing the distinctive numbers of the shares allotted to the applicants, etc. These ought to have been considered by the departmental authorities while dealing with the penalty proceedings for concealment of income. They have, however, omitted to do so, They have merely relied on the findings in the assessment proceedings without independently examining the evidence adduced by the assessee in the course of the assessment proceedings both before the Assessing Officer as well as the CIT (Appeals). Their orders thus suffer from basic infirmity, Explanation 1 to section 271(1)(c) is also not attracted since the assessee has adduced whatever evidence was in its possession which has not been found to be false unsubstantiated.
All that, can be said is that the income-tax authorities were not satisfied with such evidence. That does not amount to proof that the assessee concealed its income or furnished inaccurate particulars thereof. We accordingly accept the submissions made on behalf of the assessee and cancel the penalty imposed on it. The appeal is allowed with no order as to costs.
-
2007 (8) TMI 739
Benefit of N/N. 64/95-CE dt.16/3/1995 - withdrawal of warehousing facility - Held that: - the benefit of notification cannot be denied in respect of warehoused goods, on withdrawal of warehousing facility, when the goods are otherwise exempted - appeal allowed - decided in favor of appellant.
-
2007 (8) TMI 738
Issues Involved: The issues involved in the judgment are the unexplained payment of commission and excess stock of goods found in the searched premises.
Unexplained Payment of Commission: The search and seizure operation under section 132(1) of the Income-tax Act, 1961 were conducted, and the Assessing Officer made additions based on the statement of V.P. Jain regarding purchases made from the Bansal Group. However, the Tribunal held that post-search statements like V.P. Jain's could not be relied upon for proceedings under Chapter XIV-B of the Act unless directly connected with incriminating material found during the search. The court cited precedents emphasizing that undisclosed income must be based on evidence found during the search, and statements recorded post-search without a direct nexus cannot be used against the assessee.
Excess Stock of Goods: The assessee, engaged in manufacturing, had excess stock of goods found during the search. The search party estimated the stock visually, leading to a discrepancy compared to the inventory in the books. The Tribunal found the estimation inadequate, suggesting a need for empirical basis rather than guesswork. It noted that a shortcut was taken during assessment, and employees' signatures on the panchnama did not certify the accuracy of the estimates. The court emphasized that a scientific investigation or empirical study should have been conducted, and mere guesswork cannot substitute for accurate assessment. Consequently, the alleged excess stock calculated by the revenue was deemed to be deleted by the Tribunal.
Conclusion: The court found that no substantial question of law arose in both issues and dismissed the appeal, affirming the Tribunal's decisions regarding the unexplained payment of commission and excess stock of goods.
-
2007 (8) TMI 737
The Supreme Court dismissed Civil Appeals with no order as to costs based on the Order in Commissioner of Central Excise, Belapur v. M/s. E. Merck India Ltd. & Anr. (C.A. Nos. 4138-4141/2004) decided on 19th July, 2007 [2009 (238) E.L.T. 386 (S.C.)].
-
2007 (8) TMI 736
Issues involved: The judgment involves two main issues: (1) Whether expenses on software development are capital or revenue expenditure, and (2) Whether payments made to National Stock Exchange Ltd. are allowable as revenue expenditure.
Issue 1: Software Development Expense
The assessee, a Stock/Share Broker, claimed deduction of Rs. 36,000 spent on software development as revenue expenditure. The Assessing Officer and CIT(A) considered it capital expenditure based on a decision of the Rajasthan High Court. The Tribunal analyzed various case laws, including the decision of the Delhi High Court in CIT v. K. & Co., and held that the software development expense is revenue in nature. Therefore, the order of the CIT(A) disallowing the expenditure as capital was set aside, and the appeal on this ground was allowed.
Issue 2: Payments to National Stock Exchange Ltd.
The assessee paid Rs. 53,389 as penalty for late delivery, short delivery, and short margin in the share brokering business. The Assessing Officer disallowed the expenditure, questioning its nature. The assessee argued that these penalties were common in the business and should be allowed as revenue expenditure. The Tribunal referred to a decision of the ITAT, Chandigarh Bench, in Master Capital Services Ltd. v. Dy. CIT, where it was held that such payments made in the normal course of business, without intentional violations of law, are allowable expenses. The Tribunal found the facts similar to the cited case and ruled in favor of the assessee, allowing the payments as revenue expenditure. Consequently, the order of the CIT(A) disallowing the payments was set aside, and the appeal on this ground was allowed.
In conclusion, the appeal filed by the assessee was allowed on both grounds, with the Tribunal determining that the software development expense and the payments to National Stock Exchange Ltd. were revenue expenditures and thus should be allowed as deductions.
-
2007 (8) TMI 735
Issues involved: Determination of penalty u/s 221 of the Income-tax Act, 1961 for failure to deposit TDS.
Summary:
The High Court of Delhi heard an appeal by the revenue against an order of the Income-tax Appellate Tribunal regarding the quantum of penalty for the assessee's failure to deposit TDS for the financial years 2001-02 and 2002-03. The Assessing Officer initially imposed a 100% penalty u/s 221, citing lack of a valid explanation from the assessee. However, the Commissioner of Income-tax (Appeals) reduced the penalty to 10% of the total tax, a decision upheld by the Tribunal. The revenue approached the High Court u/s 260A of the Income-tax Act, 1961 challenging this reduction.
Upon review, the High Court found that the assessee had cooperated with the Income-tax Department during the proceedings u/s 201(1) and 201(1A) of the Act, and had eventually deposited the tax due, albeit with some delay, marking the first default by the assessee. Citing precedents from the Gauhati High Court and the Kerala High Court, the High Court emphasized that the discretion to impose penalties should be exercised judiciously, reserving the maximum penalty for exceptional cases of contumacious behavior.
Ultimately, the High Court concluded that the Commissioner and the Tribunal had not erred in imposing a 10% penalty, as there were no special reasons necessitating the maximum penalty. The authorities were deemed to have acted in accordance with the law and no substantial question of law was found to arise. The appeal was dismissed.
-
2007 (8) TMI 734
The Appellate Tribunal CESTAT Ahmedabad ruled in favor of the respondent, Managing Director of M/s.Rishiroop Rubber (I) Ltd, dropping penalty proceedings against them. The Tribunal allowed the appellant's plea and set aside the impugned order, rejecting the Revenue's plea for imposing a penalty.
-
2007 (8) TMI 733
The Delhi High Court ruled in favor of the assessee, deleting penalties under section 271B for the assessment years 1991-92 and 1992-93. The decision was based on previous court rulings.
........
|
9911796707
