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Showing 81 to 100 of 658 Records
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2007 (9) TMI 645
Issues involved: Denial of natural justice, ownership of gold, fair opportunity for defense, confession and retraction, examination of evidence, remand for re-determination.
Denial of natural justice: The appellant, Shri Swadesh Chandra Paul, was not given a fair opportunity for defense as he was not a noticee in the Show-cause Notice and was dealt with behind his back without proper examination and cross-examination. The Authorities below failed to thoroughly examine him and issue summons, leading to a violation of natural justice.
Ownership of gold: The case involved the ownership of gold bars weighing 817.700 grams seized from Shri Babul Roy, with allegations that Shri Swadesh Chandra Paul was the owner. The retracted statement of Shri Babul Roy and an affidavit filed by Shri Swadesh Chandra Paul were crucial pieces of evidence that needed rigorous testing, which the Authorities below failed to conduct.
Fair opportunity for defense: The appellant argued that he was handicapped in leading evidence due to lack of examination and cross-examination. The Authorities below did not grant a fair opportunity to both appellants for proper defense, leading to a flawed decision of confiscation of gold without proper examination of facts.
Confession and retraction: The confession and subsequent retraction of Shri Babul Roy, followed by an affidavit filed by Shri Swadesh Chandra Paul, raised doubts about the handling of the case by the Authorities below. The lack of thorough examination and testing of evidence called for a re-determination of the issue to ensure justice.
Examination of evidence: The crucial evidence, including statements, affidavits, and allegations of pressure, required thorough examination to determine the ownership of the gold and any collusion between the appellants. The Authorities below failed to conduct a proper examination, leading to the need for a remand for re-determination.
Remand for re-determination: The Tribunal allowed both appeals by way of remand, emphasizing the need for a re-determination of the issue by the learned Adjudicating Authority. The remand aimed to grant fair opportunities to both appellants for examination and cross-examination, ensuring a rational conclusion following due process of law.
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2007 (9) TMI 644
Issues involved: Appeal against order of Income Tax Appellate Tribunal regarding disallowance of expenditure attributable to exempt income u/s 14A for assessment year 2001-02.
Summary:
The appeal was filed by the revenue challenging the order of the Income Tax Appellate Tribunal Madras 'A' Bench regarding the disallowance of expenditure attributable to exempt income from dividend for the assessment year 2001-02. The assessing officer had reopened the assessment to disallow the expenditure in view of Section 14A of the Income Tax Act. The assessee contended that the reopening was contrary to the proviso appended to Section 14A. The Commissioner of Income Tax (Appeals) allowed the appeal, which was upheld by the Tribunal. The revenue then filed a tax case appeal questioning the correctness of the Tribunal's decision.
The main question of law formulated in the appeal was whether the reopening to disallow expenditure on exempted income u/s 14A was valid for the assessment year 2001-02, considering the return was filed after the introduction of the section.
The revenue argued that since the return was filed after the introduction of Section 14A, there was no basis for reopening the assessment for an earlier year. Referring to a circular issued by CBDT, the revenue contended that assessments filed after 1st April 2001 should not be reopened under Section 147 for disallowing expenditure u/s 14A.
Upon considering the arguments and perusing the relevant materials, the court analyzed Section 14A and the circular issued by CBDT. The court noted that the proviso to Section 14A was intended to prevent reopening of assessments for years prior to 2002-03. As the assessment year in question was 2001-02, covered by the proviso, the reassessment made by the assessing officer was against statutory provisions. The circular emphasized that reopening assessments finalized before 1st April 2001 for disallowing expenditure u/s 14A would lead to unnecessary hardship and litigation for taxpayers. The court concluded that the circular did not support the revenue's argument that assessments pending before finalization could be reopened under Section 147 based on Section 14A. Therefore, the court dismissed the tax case appeal, stating that no question of law was involved.
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2007 (9) TMI 643
Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 challenging penalty under section 271(1)(c) for assessment years 2001-02 and 1999-2000.
For the assessment year 2001-02:
The High Court considered the appeal against the order of the Income-tax Appellate Tribunal, which had set aside the penalty under section 271(1)(c) of the Act due to lack of recorded satisfaction by the Assessing Officer regarding concealment of income or inaccurate particulars. The revenue argued for awaiting a decision from a larger Bench on whether satisfaction can be discerned from the assessment order itself. The Court noted that the assessment order did not meet the requirement of section 271(1)(c) as per previous judgments and found no discernible satisfaction for initiating penalty proceedings. With the tax effect below the limit, the Court held that no substantial question of law arose and dismissed the appeal.
For the assessment year 1999-2000:
In this case, the Tribunal also set aside the penalty under section 271(1)(c) citing the absence of recorded satisfaction by the Assessing Officer regarding concealment or inaccurate particulars. The revenue sought to await a decision from a larger Bench on the issue of discernible satisfaction from the assessment order. The Court reiterated the previous judgment's requirement for explicit satisfaction in the assessment order and found no such satisfaction discernible in the present case. Consequently, the Court held that no substantial question of law arose and dismissed the appeal.
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2007 (9) TMI 642
Issues Involved:1. Whether there was a 'transfer' of the asset. 2. Whether any capital gains were assessable in the hands of the assessee. Summary:Issue 1: Transfer of AssetThe Tribunal examined whether there was a 'transfer' of the asset. The assessee, a Hindu Undivided Family (HUF), owned a part of the property at 21, Barakhamba Road, New Delhi. The Karta of the assessee-HUF, Mr. Ashok Kapur, declared on 6-11-1979 that he was converting the assessee's share in the property into stock-in-trade for a new venture named Ashok Kapur & Co. (HUF). An agreement was entered into with Ansal Properties on 19-11-1979 for constructing a multi-storeyed building, with 50% of the building to be retained by Ashok Kapur & Co. (HUF) and the remaining 50% by the Builders. The Income-tax Officer (ITO) initially held that the transfer occurred at two stages: first, when the property was converted into stock-in-trade, and second, when it was transferred to Ansal Properties. However, the Inspecting Assistant Commissioner (IAC) disagreed, stating the conversion occurred only at the stage of the agreement with the Builders. The Tribunal concluded that the conversion of the property into stock-in-trade did not result in a transfer within the meaning of the Income-tax Act for charging capital gains. The High Court concurred with the Tribunal's findings that no transfer took place at the first stage. Issue 2: Capital Gains AssessmentThe second issue was whether capital gains were assessable in the hands of the assessee. The Tribunal held that by entering into the agreement with Ansal Properties, the assessee did not enter into a partnership and continued to own the property. The High Court examined the agreement dated 6-11-1979, which indicated that the Owner Dealer (Ashok Kapur & Co. (HUF)) allocated 50% of its share to the Builder. Clauses 22 and 23 of the agreement allowed the Builder to sell its allocation to third parties, indicating a transfer of property. The High Court disagreed with the Tribunal's conclusion that there was no transfer and held that there was indeed a transfer of property from the assessee to the Builder. Consequently, the High Court found that capital gains were assessable in the hands of the assessee based on the valuation indicated in the assessee's accounts. Conclusion:Both questions were answered in the negative, in favor of the revenue and against the assessee. The computation of capital gains tax by the ITO, concurred with by the CIT(A), was affirmed. The reference was disposed of.
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2007 (9) TMI 641
Murder - High Court reversed the Order of Conviction passed by the learned trial Court - Offences punishable u/s 302 r/w Section 34 and Section 201 of the Indian Penal Code, 1860 ('the Act') - HELD THAT:- The time of lodging the FIR was found to be suspicious by the High Court in view of several contradictory statements made by PW-l. The investigating officer also admitted in his cross examination that the seals of the two containers in which blood stained earth and samples had been kept were found to be tampered with.
The investigating officer had admitted that he had recorded the statement of Chhotey Lal (PW-4) on 31.8.1978 as this witness was not available earlier. The case diary interestingly was not produced during trial by the investigating officer. The High Court found that in the absence of any definite material to prove that the dead body was that of the deceased, the prosecution version was rendered to that extent, doubtful. Since PW-4 resiled from his statement made earlier, the High Court examined the evidence of PW-l in detail.
So far as Paramjeet (PW-7) is concerned, his evidence was also found to be not reliable because he appeared to have been tutored. He was aged about 7-8 years when he gave the statement on 11.7.1980. The incident had occurred on 24.08.1978, i.e. nearly two years before his deposition. That means that he was about 5-6 years old at the time of incident. The High Court, with reference to his evidence found that the testimony he gave in court was the result of tutoring. In these circumstances, the High Court concluded that the prosecution has failed to establish the accusation.
Though learned counsel for the State submitted that the circumstances highlighted by the prosecution were sufficient to record conviction, we find that the High Court has examined all the relevant aspects in detail and has recorded the judgment of acquittal.
There is no embargo on the appellate Court reviewing the evidence upon which an order of acquittal is based. Generally, the order of acquittal shall not be interfered with because the presumption of innocence of the accused is further strengthened by acquittal. The golden thread which runs through the web of administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favourable to the accused should be adopted.
The principle to be followed by appellate Court considering the appeal against the judgment of acquittal is to interfere only when there are compelling and substantial reasons for doing so. If the impugned judgment is clearly unreasonable and relevant and convincing materials have been unjustifiably eliminated in the process, it is a compelling reason for interference. These aspects were highlighted by this Court in Shivaji Sahabrao Bobade and Anr. v. State of Maharashtra [1973 (8) TMI 160 - SUPREME COURT], Jaswant Singh v. State of Haryana [2000 (4) TMI 825 - SUPREME COURT].
In the instant case, we find that the reasons indicated by the High Court for recording the order of acquittal do not suffer from any infirmity to warrant interference. The appeal is accordingly dismissed.
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2007 (9) TMI 640
Issues involved: Alleged contravention of cenvat credit provisions based on bogus invoices.
Summary:
Issue 1: Cenvat Credit Contravention
The appellant, a steel forging manufacturer, was alleged to have taken cenvat credit based on five bogus invoices issued by another party. Excise Officers found discrepancies in stock records and recovered invoices not accounted for in the register. Adjudicating authority held transactions as fictitious, denying credit and ordering recovery of modvat credit along with penalties. The Appellate Commissioner upheld the denial of credit and penalties on the manufacturer and authorized signatory, while setting aside the penalty on an employee.
Issue 2: Fictitious Transactions
The sole proprietor of the party issuing bogus invoices was found to have provided fake registration numbers of non-transport vehicles on invoices. The Appellate Commissioner upheld the denial of modvat credit and penalties, considering the transactions as fraudulent.
Key Points:
- Evidence revealed discrepancies in stock records and non-transport of goods to the manufacturer.
- Appellate Commissioner upheld denial of credit and penalties based on fraudulent transactions.
- Legal representative cited precedents to support the decision.
- Statements of the authorized signatory confirmed discrepancies in transactions and transport details.
- Authorities justified recovery of modvat credit and penalties based on fraudulent evidence.
- Appeals were dismissed, and the impugned order was upheld without interference.
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2007 (9) TMI 639
Issues Involved:
1. Validity of initiation of proceedings u/s 147(a) of the Income Tax Act, 1961.
2. Adequacy of notice issued u/s 148 of the Income Tax Act, 1961.
Summary:
1. Validity of initiation of proceedings u/s 147(a):
The petitioner, M/s. Maddi Sreeramulu & Sons (HUF), challenged the initiation of proceedings u/s 147(a) of the Income Tax Act, 1961, following a search conducted by the police on 17.9.1975, which led to the seizure of gold, silver, and cash. The Income Tax Officer (ITO) received information about the seizure from the Superintendent of Police on 25.9.1975 and completed the initial assessment u/s 143(1) on 31.3.1979. However, the ITO later sought to reopen the assessment on 30.11.1979, citing reasons based on the same seizure list, and issued a notice u/s 148 without providing the petitioner with the reasons recorded.
The petitioner argued that the ITO had already considered the seized materials and examined the petitioner under oath before passing the initial assessment order. Therefore, the reassessment was merely a review of the earlier order, which is not permissible under the law. The Appellate Assistant Commissioner quashed the reassessment, but the Income Tax Appellate Tribunal (ITAT) upheld it, stating that the ITO had valid reasons to believe that income had escaped assessment.
The High Court found that the ITO had all the necessary information and had accepted the petitioner's explanations before passing the initial assessment order. Hence, the initiation of proceedings u/s 147(a) was invalid, as there were no new materials to justify the reassessment. The court quashed the ITAT's order and affirmed the First Appellate Authority's decision.
2. Adequacy of notice issued u/s 148:
The petitioner contended that the notice issued u/s 148 was invalid as it did not mention the status of the assessee. The Revenue argued that the notice included the General Index Register (GIR) number, which pertained to the assessee in the capacity of "Karta" of the HUF, making the omission immaterial. The High Court did not specifically address this issue in detail, as the primary focus was on the validity of the initiation of proceedings u/s 147(a).
Conclusion:
The High Court concluded that the initiation of proceedings u/s 147(a) was invalid due to the lack of new material facts and quashed the ITAT's order, affirming the First Appellate Authority's decision. The S.J.C. was allowed in favor of the assessee.
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2007 (9) TMI 638
The Bombay High Court dismissed the appeal as the question of law had already been addressed in a previous order related to Income Tax Appeal No.416 of 2004. The Tribunal's decision was based on a previous order in ITA NO.1022/M/1996.
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2007 (9) TMI 637
The Bombay High Court dismissed the appeal as no substantial question of law arose. The Tribunal's order was based on a previous order which had been upheld by the High Court. The appeal was taken up for hearing with the consent of both parties.
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2007 (9) TMI 636
Issues involved: Assessment of deduction under Section 80 HHC and Section 80 HHB of the Income Tax Act, 1961, imposition of penalty u/s 271(1)(c) by the Assessing Officer, cancellation of penalty by CIT(A) and Tribunal, satisfaction for initiating penalty proceedings under Section 271(1)(c) of the Act.
The Assessee, engaged in the business of export of engineering goods and services, initially claimed a deduction under Section 80 HHC of the Income Tax Act, 1961. Subsequently, the Assessee filed a revised return seeking a deduction under Section 80 HHB of the Act. The Assessing Officer rejected the revised claim, citing lack of evidence to support the eligibility criteria for the deduction under Section 80 HHB, along with disallowing other claimed deductions.
The Assessing Officer imposed a penalty of Rs. 5,50,112 under Section 271(1)(c) of the Act. However, the CIT(A) overturned this decision, stating that there was no basis for imposing the penalty as the Assessee had not concealed income or provided inaccurate particulars. The Tribunal upheld this view, emphasizing the lack of recorded satisfaction by the Assessing Officer for initiating penalty proceedings.
The High Court, while acknowledging the non-applicability of a previous court decision, concurred with the CIT(A) and Tribunal that there was no concealment of income or furnishing of inaccurate particulars by the Assessee. The Court noted that the issues in the assessment were debatable, and even if the Assessee was not entitled to the deduction under Section 80 HHB, it did not imply an intention to conceal income for undue advantage. Consequently, the Court found no substantial question of law and dismissed the appeal.
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2007 (9) TMI 635
Issues involved: Interpretation of capital gains u/s 2(47) of the Income Tax Act in relation to a lease-cum-sale agreement and subsequent sale deed.
Summary:
1. The appellant, the revenue, challenged the order of the Appellate Tribunal regarding the classification of capital gains arising from a lease-cum-sale agreement and subsequent sale deed.
2. The respondent-assessee claimed that the transfer occurred by delivery of possession before obtaining the absolute sale deed, thus qualifying for long-term capital gains treatment.
3. The assessing Officer and the first Appellate Authority rejected the assessee's contention, leading to an appeal to the tribunal.
4. The tribunal considered legal contentions, including the definition of "Transfer" u/s 2(47) and relevant case laws, and held in favor of the assessee based on the concept of part performance under Section 53-A of the Transfer of Property Act.
5. The tribunal's decision was upheld by the High Court, which found no reason to interfere with the tribunal's judgment, citing precedents such as Poddar Cement and Mysore Minerals.
In conclusion, the High Court dismissed the appeal by the revenue without costs, affirming the tribunal's decision in favor of the assessee regarding the classification of capital gains from the property transaction.
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2007 (9) TMI 634
Issues involved:
The issues involved in this case include the rejection of books of accounts by the Assessing Officer (AO) under section 145 of the Income Tax Act, 1961, and the subsequent best judgment assessment made by the AO.
Issue 1: Rejection of Books of Accounts under Section 145
The Tribunal refused to state the case and refer the questions raised by the applicant regarding the justification of invoking section 145 of the IT Act. The AO had rejected the books of accounts for the assessment years 1988-89 and 1989-90, leading to best judgment assessments. However, the Tribunal found that the rejection of books of accounts was not proper as there was no error in accounting, and accepted the results shown by the books of accounts.
Issue 2: Legal Justification for Rejection of Books of Accounts
The AO rejected the books of accounts based on lower net profit rates compared to the previous year. However, the Tribunal found that the AO did not establish any defects in the books of accounts or provide reasons why correct profit could not be deduced. The Tribunal concluded that the rejection of books of accounts was not justified as per the provisions of section 145 of the IT Act.
Issue 3: Acceptance of Results by the Tribunal
The Tribunal affirmed the results shown in the books of accounts by the assessee, stating that the lower net profit rates alone were not sufficient grounds for rejection. The Tribunal held that the acceptance of the results was a factual finding and did not warrant a reference as a question of law. The Tribunal's decision in this regard was deemed appropriate and not erroneous.
Separate Judgment by Judges:
There is no separate judgment delivered by the judges in this case.
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2007 (9) TMI 633
Issues involved: Conviction under Section 376 read with Section 511 of IPC, benefit of doubt, acquittal.
The Supreme Court perused the order passed by the Division Bench of the High Court of Bombay convicting the accused-appellant u/s 376 read with 511 IPC and sentencing him to five years of rigorous imprisonment and a fine of Rs. 5,000. The prosecution's case involved the accused luring the prosecutrix Anita into his house and sexually assaulting her. The Trial Court had sentenced the accused to seven years of rigorous imprisonment and a fine of Rs. 4,000, which was partly allowed by the High Court, reducing the sentence to five years of rigorous imprisonment and a fine of Rs. 5,000. The Supreme Court examined the evidence, including the doctor's testimony stating no injuries on Anita's body, no signs of semen, torn clothes, or presence of accused's hair on her body. The doctor mentioned Anita was habituated to sexual intercourse. The Supreme Court held that the evidence was not correctly appreciated by the lower courts, and the accused was entitled to the benefit of doubt. Consequently, the Supreme Court allowed the appeal, set aside the judgments of the lower courts, and acquitted the accused of all charges. If the accused was in jail, he was to be released immediately if not required in any other case.
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2007 (9) TMI 632
Issues Involved:
1. Whether the gift received by the daughter of the appellant is a taxable cash credit.
2. Whether the gift given by a Non-Resident out of natural love and affection to daughter of a friend for her marriage should be treated as income of the father.
3. Whether the findings of the ITAT are against the evidence on record.
4. Whether the ITAT misdirected itself in deciding the issue of genuineness of the gift.
Summary:
1. The appellant, a dealer in real estate, challenged the order of the Income-tax Appellate Tribunal upholding the addition of a gift received by the appellant's daughter as a taxable cash credit. The Assessing Officer found the gift to be bogus, leading to an addition of Rs. 1,90,000 in the appellant's income. The CIT(A) deleted this addition, citing the donor's statement and past decisions. However, the Tribunal reversed this decision, emphasizing the lack of relationship between the donor and donee, incongruity of the gift amount with the donor's income, and absence of specific occasion for the gift. The Tribunal found the appellant's claims unsubstantiated, leading to the dismissal of the appeal.
2. The appellant's claim that the gift from a Non-Resident friend for the daughter's marriage should not be treated as income was rejected by the Tribunal. The Tribunal highlighted the lack of relationship between the donor and donee, the substantial amount of the gift compared to the donor's income, and absence of a specific occasion for the gift. The Tribunal found the appellant's arguments unconvincing, leading to the dismissal of the appeal.
3. The CIT(A) had deleted the addition of the gift amount based on the donor's statement and past decisions. However, the Tribunal found the appellant's claims unsubstantiated, emphasizing the lack of relationship between the donor and donee, incongruity of the gift amount with the donor's income, and absence of specific occasion for the gift. The Tribunal concluded that the findings of the CIT(A) were not validly possible, leading to the dismissal of the appeal.
4. The Tribunal found that the appellant's claims regarding the genuineness of the gift were not supported by the evidence. The Tribunal emphasized the lack of relationship between the donor and donee, incongruity of the gift amount with the donor's income, and absence of specific occasion for the gift. The Tribunal concluded that the appellant's story was not credible, leading to the dismissal of the appeal.
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2007 (9) TMI 631
Expenditure on the annual bonus - Whether ITAT was correct on the facts and in the law in holding the expenditure being the annual bonus paid to the dealers is not in the nature of "Sales Promotion" expenses and the provisions of section 37(3A) of the Income-tax Act are not applicable? - HELD THA:- The admitted position is that in view of the decision of this Court in CIT v. High Blyma Labs (P.) Ltd., the question of law is required to be answered in the affirmative, in favour of the assessee and against the revenue.
Thus, the reference is disposed of accordingly.
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2007 (9) TMI 630
Issues involved: Appeal u/s 260A of the Income-tax Act, 1961 against penalty u/s 271C for failure to deduct tax at source.
Issue 1: Levy of penalty u/s 271C
The assessee made payments for fabrication charges without deducting tax at source, claiming lack of advice from its chartered accountant regarding the liability u/s 194C of the Act. The Tribunal accepted the explanation as bona fide, cancelling the penalty imposed by the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals).
Issue 2: Reasonable cause for failure to deduct tax
Despite not depositing the tax due immediately upon realizing the mistake, the assessee deposited substantial amounts during survey proceedings. The Tribunal found the assessee cooperative and not avoiding liability, considering the incorrect advice from the chartered accountant. Section 273B of the Act allows for no penalty if a reasonable cause for failure to deduct tax is proven, which the assessee successfully demonstrated in this case.
The High Court upheld the Tribunal's decision, deeming it a possible and non-perverse view that did not warrant interference or raise a substantial question of law. The appeal was dismissed, affirming the cancellation of the penalty under section 271C of the Income-tax Act, 1961.
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2007 (9) TMI 629
Deduction u/s 10A - Interest income derived from the industrial undertaking - HELD THAT:- Similar issue had arisen for consideration in assessee's own case for the assessment year 1999-2000 and this Tribunal in I.T. Appeal and held that interest income cannot be considered as part of the profits and gains derived from the business of export of computer software. This Tribunal has referred to the decision of the Hon'ble Supreme Court in the case of CIT vs. Sterling Foods [1999 (4) TMI 1 - SUPREME COURT] and ultimately concluded that interest income cannot form part of the income eligible for deduction u/s 10-A of the Act. Thus, first ground of appeal of the assessee, is dismissed.
Expenditure incurred for earning dividend income - exempt u/s 10(33) - invoking the provisions of section 14A - HELD THAT:- In the present case, we find that no attempt has been made by the assessing officer to establish the expenses, which were incurred in earning the tax-free income. We may also add here that the decision of the Third Member in the case of Wimco Seedings Ltd. vs. DCIT [2006 (12) TMI 65 - ITAT, DELHI] in the absence of any decision of the Special Bench in Maruti Udyog Ltd. [2004 (10) TMI 278 - ITAT DELHI-A] to the contrary has a binding force as that of a Special Bench as laid down by the Special Bench of the Tribunal in the case of DCIT vs. Padam Prakash,[2006 (9) TMI 222 - ITAT DELHI-E]. Thus, we uphold the order of the CIT (Appeals) and dismiss the first ground of appeal of the Revenue.
Addition on account of common expenses - HELD THAT:- Similar disallowance was made by the assessing officer and the Tribunal had an occasion to deal with the same and in I.T. Appeal for assessment year 1999-2000, The Tribunal deleted the similar addition made by the assessing officer. The Tribunal found that there were no common expenses attributable to the software unit, which were incurred or met by the head office and consequently no disallowance of expenses could be made in the head office account. In the present assessment year the assessing officer has merely followed the order in assessment year 1999-2000. The facts and circumstances being identical, we are of the view that the CIT (Appeals) was justified in deleting the addition made by the assessing officer. Consequently, ground No. 2 raised by the Revenue, is dismissed.
Addition on account of notice pay - HELD THAT:- It is not in dispute that in AY 1999-2000 in this issue had come up for consideration before this Tribunal and the Tribunal held that the notice period pay was debited to the software division and when it was recovered, the same has to be considered as income derived by the industrial undertaking. The Tribunal held that such notice period pay would go to reduce the expenses on account of salary and this real nature of the transaction will not have any effect on the income derived by the assessee from the business of computer software. Respectfully following the aforesaid decision of the Tribunal, we uphold the order of the CIT (Appeals) and dismiss the third ground of appeal of the Revenue.
In the result, both the appeals by the assessee and the Revenue, are dismissed.
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2007 (9) TMI 628
Application of the provisions of Section 19 of the Prevention of Corruption Act, 1988 ("the Act") - Sanction granted by the competent authority was defective and illegal - Public Servant - alleged commission of an offence under Sections 7, 13(1)(d) read with 13(2) of the Act - High Court reversed the order of Conviction opining that the order of sanction being illegal - HELD THAT:- We have noticed that the sanctioning authority had purported to pass the order of sanction solely on the basis of the report made by the Inspector General of Police. Even the said report has not been brought on record. Thus, whether in the said report, either in the body thereof or by annexing therewith the relevant documents, IG Police had placed on record the materials collected on investigation of the matter which would prima facie establish existence of evidence in regard to the commission of the offence by the public servant concerned is not evident.
Ordinarily, before passing an order of sanction, the entire records containing the materials collected against the accused should be placed before the sanctioning authority. In the event, the order of sanction does not indicate application of mind as the materials placed before the said authority before the order of sanction was passed, the same may be produced before the court to show that such materials had in fact been produced.
In this case, the High Court called for the original records. It had gone thereinto. It was found that except the report, no other record was made available before the sanctioning authority. The order of sanction also stated so. PW-8 also did not have the occasion to consider the records except the purported report.
We are, therefore, of the opinion that the impugned judgment does not suffer from any legal infirmity although some observations made by the High Court, as noticed, do not lay down the correct legal position. The appeal is dismissed.
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2007 (9) TMI 627
Issues:
1. Challenge to the order of the Income-tax Appellate Tribunal u/s 263.
2. Classification of income/loss from transactions in shares as business income/loss or capital gains.
Issue 1:
The tax case appeals were filed by the revenue challenging the correctness of the Income-tax Appellate Tribunal's order u/s 263. The Commissioner of Income-tax revised the assessment order, considering the shares sold by the assessee as "capital investment" and the profit as "capital assets" falling under "capital gains." The Commissioner noted the frequent purchase and sale of shares by the assessee, classifying the transactions as "business loss" instead of "capital loss" granted by the assessing authority. The Tribunal allowed the appeals of the assessee, emphasizing that the shares were held as investments, not as "stock-in-trade" or "current assets," resulting in "capital gain."
Issue 2:
The assessee claimed loss on the sale of shares as business loss for the assessment years 1994-95 and 1995-96. The assessing authority treated it as capital loss, but the Commissioner of Income-tax revised the order, directing to assess the income/loss from share transactions as business income/loss. The assessee contended that the shares were capital assets, relying on being an investment company and citing a decision of the Calcutta High Court. The Tribunal, following a Supreme Court decision, held that the intention to carry on business in shares determines the classification of income, noting the consistent treatment of shares as investments by the assessee. The revenue appealed, arguing that the shares were intended as "stock in trade," but the Court upheld the Tribunal's decision based on the factual findings and lack of evidence to question the classification as capital assets.
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2007 (9) TMI 626
Issues involved:
The judgment involves the determination of two questions of law:
1. Whether provision of warranty for repairs/replacement is an existing liability at the time of sale and is allowable as deduction?
2. Whether the credit in the Modvat account is not to be treated as the income of the assessee although the assessee is entitled for set off of this amount against the payment of Excise Duty to this extent?
Issue 1: Provision of Warranty for Repairs/Replacement
The case pertains to assessment years 1987-88 to 1989-90. The assessee, a firm dealing in transformers, claimed a provision for warranty against manufacturing defects. The Assessing Officer disallowed the claimed amounts, stating that the provisions were not for determined liabilities. The CIT(A) upheld this view, noting that the assessee was claiming the deduction of warranty twice and was using accounting methods to postpone tax payments. However, the Tribunal allowed the provision amount for all assessment years, stating it was allowable.
Issue 2: Treatment of Modvat Credit
For the assessment year 1988-89, the Assessing Officer added an unutilized modvat credit amount to the total income of the assessee. The CIT(A) disagreed, stating the credit was not available in cash and could only be utilized under statutory conditions. The Tribunal upheld the CIT(A)'s view that the modvat credit cannot be treated as total income of the assessee.
Key Legal Precedents:
1. The Division Bench referred to the judgment in CIT v. Majestic Auto Ltd., where it was held that a liability, even if quantified and discharged in the future, should be treated in the present time and not as a contingent liability.
2. In CIT v. Indo Nippon Chemicals Co. Ltd., the Supreme Court ruled that modvat credit, being an irreversible credit, does not amount to taxable income and should not be valued using the 'gross method' for raw materials and the 'net method' for stock on hand.
In conclusion, the High Court answered both questions against the revenue and in favor of the assessee, citing relevant legal precedents to support their decision.
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9911796707
