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Showing 81 to 100 of 1760 Records
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2015 (9) TMI 1690
Long Term Capital Gain - Year of assessment - ancestral property - property has been jointly held by all the family members - HUF of the assessee has not filed return of income - assessee along with other co-owners has sold an ancestral property purchased by his Grand-father - partial share of the assessee in the sale consideration - HELD THAT:- Admittedly, the conveyance deed was executed on 31.3.2008 and the same was registered under the Registration Act on 1.7.2008. On a perusal of the conveyance deed, we notice that the possession of the property was also given to the buyers on 31.3.2008 and the assessee along with other co-owners have received the entire consideration before 31.3.2008.
Hence, we agree with the contentions of the assessee that the impugned property has been transferred during the year relevant to the assessment year 2008-09 and hence AO was not justified in assessing the same in AY 2009-10. As A.R submitted that the registration of deed on 1.7.2008 was only a formality and upon the registration of the deed, the conveyance would date back to the date of execution of the deed we find support to the contentions of the assessee in the decision rendered in the case of M. Shyamala Rao [1998 (4) TMI 113 - ANDHRA PRADESH HIGH COURT] as observed that the registration of the conveyance deed relates back to the date on which the agreement for sale was executed in favour of the buyer by the owner. In view of the above, the capital gain, if any, is assessable in AY 2008-09 only.
Whether the capital gain can be assessed in the hands of the assessee herein in his individual capacity - assessee has contended before the AO that the property belongs to the HUF and what he has received is only a share from the HUF - HELD THAT:- We notice that the tax authorities have rejected the claim on the reasoning that the HUF has not filed return of income and hence the capital gain should be assessed in the individual hands. In our view, the approach of the tax authorities cannot be uphold in view of the decision in the case of Ch.ATCHAIAH [1995 (12) TMI 1 - SUPREME COURT] wherein held ITO can, and he must, tax the right person and the right person alone. By right person, we mean the person who is liable to be taxed, according to law, with respect to a particular income.
Merely because the HUF of the assessee has not filed return of income, the assessing officer cannot assess the capital gain in the hands of the assessee in his Individual status. Since the property has been jointly held by all the family members, the same cannot be said to belong to the assessee in his individual status. In fact, the conveyance deed wasl also executed jointly by all the co-owners. AO was not correct in law in assessing the share of the assessee as capital gain in the individual status. - Decided in favour of assessee.
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2015 (9) TMI 1689
Reopening of assessment - "change of opinion" - rate of depreciation on “water supply & drainage” and some part of the block of asset viz., the value of non-productive assets - claim of excess rate of depreciation on the on-productive assets is being restricted @ 10% instead of 15% - HELD THAT:- There is a change of opinion by the AO for the purpose of reopening the assessment u/s.147. As held by the Supreme Court in the case of Kelvinator India Ltd. [2002 (4) TMI 37 - DELHI HIGH COURT] mere change in opinion would not confer jurisdiction upon the AO to initiate a proceeding u/s.147 of the Act. Therefore, we uphold the order of the CIT(Appeals) on this issue and quash the assessment order passed u/s.147 - Decided against revenue.
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2015 (9) TMI 1688
Sanction of Amalgamation Scheme - allegation that the affairs of the Petitioner Company, viz, Intas Lifesciences Private Limited, have not been conducted in a manner prejudicial to the interest of its members or to the public interest - HELD THAT:- It appears that the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme is genuine and bonafide and in the interest of the shareholders and creditors.
The Company Petitions is allowed and the Scheme is approved. The Scheme is hereby sanctioned. Prayers made in the respective Company Petitions are hereby granted.
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2015 (9) TMI 1687
Clearance of 'rejects' of all wool fabrics and polywool fabrics into DTA without payment of appropriate duties of 'surcharge', 'Special Additional Customs Duty' and 'Countervailing duty' (CVT) - HELD THAT:- Appeal dismissed.
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2015 (9) TMI 1686
Execution of agreement - Degree of specific performance or refund of amount - agreement to sale - whether in the facts and circumstances of the case, a decree of specific performance of agreement of sale should have been passed, or the decree of refund of part consideration received by the defendant, with interest, would have served the ends of justice? - HELD THAT:- Explanation 1 to sub-section (2) provides that mere inadequacy of consideration shall not be deemed to be an unfair advantage within the meaning of clause (a) or hardship within the meaning of clause (b). Explanation 2 provides that the question whether the performance of a contract when involved hardship on the defendant within the meaning of clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent in the contract, be determined with reference to the circumstances accepting at the time of contract. Sub-section (3) provides that the court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
In the present case, it appears that possession was not given to the plaintiff at the time of execution of the agreement, nor the area of land agreed to be sold was clear, as such, it cannot be said that the plaintiff has done substantial acts or suffered losses due to expenditure in constructions, etc., in consequence of a contract capable of specific performance. The direction given by the High Court in the impugned order shows that the measurements of land actually agreed to be sold, are not final - instead of affirming the decree of specific performance as modified by the High Court, it will be equitable, just and proper to direct the appellants to pay back the amount of ₹ 60,000 accepted by the original defendant with interest @ 18% p.a to the respondent-plaintiff from 4-2-1992 till date, within a period of three months from today, failing which this appeal shall stand dismissed.
Appeal dismissed.
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2015 (9) TMI 1685
Deduction u/s 80IA - proof of manufacturing activities - need for filing of audit report alongwith the return - HELD THAT:- As in the assessee’s own case [2013 (6) TMI 882 - ITAT INDORE]wherein the ITAT has found assessee as eligible for claiming deduction u/s 80IA on Unit-2 relating to manufacturing of micro nutrient fertilizers.
Audit report was filed and the requirement of section 80IA(7) has been duly met with. Unit-II was separate and independent unit from the existing unit and the new unit commenced its production during A.Y. 1997- 98. The manufacturing of micronutrient fertilizers even has not been disputed by the Assessing Officer. It is not the case that the unit in dispute is part of earlier unit or its expansion. There is an uncontroverted finding in the impugned order that the assessee was maintaining separate accounts for both the units which are duly audited. Since the assessee has duly fulfilled the requirements of section 80IA(7) of the Act by filing the audit report before framing the assessment, we are of the view that the Assessing Officer wrongly disallowed the claim of the assessee. As per provisions of section 80IA(7), requiring filing of audit report alongwith the return is not mandatory rather it is directory and if the audit report is filed at any time before framing the assessment, the required conditions are considered to be fulfilled.- Decided in favour of assessee.
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2015 (9) TMI 1684
Assessment made u/s 144 - AO disbelieved the correctness of loss returned by the assessee and rejected such loss stating that assessee has not produced books of accounts - HELD THAT:- Commissioner of Income Tax (Appeals) stated that books of accounts were not produced even before him for verification. However the contention of the assessee was that CD was produced before the Commissioner of Income Tax (Appeals) containing the books of accounts. Taking the totality of the facts and circumstances into consideration, in the interest of justice, we are of the opinion that the assessment has to be redone afresh by the Assessing Officer. Thus, we set aside the orders of lower authorities and restore the assessment back to the file of the Assessing Officer with a direction to complete the assessment de novo and in accordance with law, after providing adequate opportunity to the assessee.
Denial of exemption u/s 10B/10A - since the approval was not given by the Board set up under Industries (Development & Regulation) Act, 1951 approval obtained by the assessee cannot be accepted as approval under section 10B of the Act for the purpose of claiming deduction - HELD THAT:- Refering to submission of the assessee that the assessee started its business in the year 1999 as a manufacturer and exporter hydraulic cylinder and its components and since then they have been filing their return claiming exemption under section 10B of the Act and the same was allowed the Department upto the assessment year 2008-09 we do not see any reason as to why the assessee should not be allowed deduction under section 10A if it is proved that assessee is entitled for deduction under section 10A instead of section 10B of the Act. Therefore, we are of the view that in case the assessee is not entitled for deduction under section 10B of the Act, the assessee’s claim shall be considered under section 10A of the Act, subject to fulfilling of the conditions therein. Therefore, we set aside the issue to the file of the Assessing Officer for de novo consideration and decide the issue refering to cases TECHNOVATE E SOLUTIONS PVT LTD [2013 (3) TMI 372 - DELHI HIGH COURT] and REGENCY CREATIONS LTD., VALIANT COMMUNICATIONS LTD. [2012 (9) TMI 627 - DELHI HIGH COURT] - Appeals of the assessee are allowed for statistical purposes.
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2015 (9) TMI 1683
Revision u/s 263 - quantum of short deduction of tax at source was admitted by the assessee and there was no further verification required by the Assessing Officer - HELD THAT:- Disallowance under Section 40(a)(ia) of the Act could not be made where there was a short deduction of tax at source and that such claim was made by the assessee in the audit report, which wasaccepted by the Assessing Officer. It also considered that the same was in consonance with the view expressed by the Tribunal earlier and confirmed by the Calcutta High Court in the case of CIT –vs- S.K.Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH] - Further, it has been held that since two views were possible to be taken by the Assessing Officer in the case of the assessee, and one of the possible views has been taken, then in such a situation the jurisdiction under Section 263 of the Act could not have been exercised.
No infirmity with the order of the Tribunal in allowing the appeal of the assessee
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2015 (9) TMI 1682
Accrual of income - Disallowance of revenue subsidies and grants - short receipt of earlier years’ income that it was not expenditure of the year under appeal - AO asked the assessee to explain why the same should not be disallowed and added back to its total income - HELD THAT: - Assessee was entitled to get subsidy @3% from the state government that as per the agreement with WB it was decided that it would get higher subsidy i. e. @4. 5%, that subsequently the state government reduced the subsidy to 3% that the assessee had in pursuance of the agreement, showed subsidy at higher rate that after resolution of the state government it decided to reverse the entries of subsidy disclosed in the earlier years. We have perused the resolution and it clearly shows that the assessee was informed by the state government about reduction in subsidy during the year under consideration only. Therefore, if the reduced the unrealised subsidy-that was disclosed in the returns of incomes of earlier years in the books of accounts for the year under appeal-it was justified.
Income shown in the returns in anticipation and not realised finally cannot be taxed. Basic principle of taxation jurisprudence lays down that income which an assessee could have,but has not earned cannot be made taxable as income accrued to him. In other words what has really accrued to an assessee has to be found out and what has accrued must be considered from the point of view of real income taking the probability or improbability of realisation in a realistic manner. See MOTOR CREDIT CO. PVT. LIMITED [1980 (4) TMI 64 - MADRAS HIGH COURT]
In the case before us the assessee came to know about the fact-that the income accrued to it in pursuance of agreement entered in to with World Bank would not be received-during the year under appeal. Therefore in our opinion the FAA has rightly held that the assessee was entitled to show lesser receipt during the year. Confirming his order we decide first ground of appeal against the AO.
Addition being interest of borrowed capital - assessee claimed expenditure in respect of various capital projects undertaken by it and which were capitalised in the books of accounts that same expenditure was claimed u/s. 36(1)(iii) - Rejection of claim made by the assessee on the ground that that the same could be allowed only if it is payable in respect of the period after the assets have been put to use in terms of the provisions of Explanation 8 to section 43(1) of the Act, that the assessee could not follow two methods of accounting one for the purposes of its books and the other for the purposes of computing its total income that even if the interest is allowable it would be disallowed u/s. 43B as proof of payment has not been produced - HELD THAT:- This issue is directly covered by the judgment of the Hon’ble Apex court delivered in the case of Core Health Care Ltd. [2008 (2) TMI 8 - SUPREME COURT] unlike section 37 which expressly excludes an expense of a capital nature, section 36(1)(iii) emphasises the user of the capital and not the user of the asset which comes into existence as a result of the borrowed capital. The Legislature has therefore, made no distinction in section 36(1)(iii) between “capital borrowed for a revenue purpose” and “capital borrowed for a capital purpose”. An assessee is entitled to claim interest paid on borrowed capital provided that the capital is used for business purpose irrespective of what may be the result of using the capital which the assessee has borrowed. “Actual cost” of an asset has no relevancy in relation to section 36(1)(iii) - The proviso inserted in section 36(1)(iii) by the Finance Act, 2003, with effect from April 1, 2004, will operate prospectively - Decided against revenue.
Disallowance of prior period expenses - HELD THAT:- We find that the AO had disallowed the claim of the assessee as it had not filed any evidence in that regard that the FAA had held that the assessee had itself disallowed two item that the expenditure of earlier years’ could be allowed in subsequent years. As fare as the suo motto disallowance is made we are of the opinion that the FAA was correct in holding that no addition could be made in that regard.
But for other expenses we have to consider the relevant facts. From the order of the FAA we do not find that such details were made available to him. Even if such details were filed he has not mentioned a single word about it. He has allowed the expenditure because law permits prior period expenses to be allowed. He totally forgot that the AO had made the disallowance because the claim made by the assessee was not substantiated by evidences. Before us,also no material was produced to prove that crystallization had actually taken place during the year. In our opinion,an assessee has to show the manner in which the earlier years’ expenditure was quantified in the year under appeal. Without these facts no expense can be allowed. Following particular guide line or rule governing a particular activity does not absolve the assessee from filing of documentary evidence in support of its claim for an expenditure- especially when the AO had directed it to file the same during the assessment proceedings. In the cases relied upon by the assessee the Hon’ble courts or the Tribunal had not dealt with the issue of crystallisation of expenses in a particular year. Thus, the facts are totally distinguishable. Considering the peculiar facts of the issue before us,we hold that the AO was justified in disallowing the of prior period expenses,because the assessee had failed to establish that these expenses actually crystallised during the year under consideration. Since it was following the mercantile system of accounting it had to establish that these liabilities pertaining to the previous year actually crystallised during the year under appeal. So,partly revering the order of the FAA we decide ground no. 3 in favour of the AO,in part.
Disallowance of electricity duty u/s 43B - HELD THAT:- Electricity duty is not being a sum payable by the assessee as a primary liability by way of tax, duty cess or fee, section 43B is not attracted to the assessee in respect of electricity duty collected by it for being passed on the State Govt. See KERALA STATE ELECTRICITY BOARD VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2010 (11) TMI 127 - KERALA HIGH COURT] and M/S MAHARASHTRA STATE ELECTRICITY DISTRIBUTION CO. LTD. AND VICA-VERSA [2015 (10) TMI 597 - ITAT MUMBAI].
Disallowance of loss suffered by the assessee on account of flood,cyclone/storm, theft etc. - HELD THAT:- . As far as loss of stock in concerned we are opinion that same is to be allowed as revenue expenditure. So the order of the FAA is reversed to that extent. For the balance amount we hold that the assets were forming part of block of assets. Therefore, depreciation should be allowed with regard to them. We find that issue of the claim of depreciation about assets of block has been decided in favour of the assessee by the decision of Tribunal relied upon by the assessee. Ground no. 2-3 are allowed in favour of the assessee in part.
Write off of intangible assets - AO disallowed the claim on the ground that the same was capital in nature - HELD THAT:- In the matter of Raychem RPG Ltd [2011 (7) TMI 953 - BOMBAY HIGH COURT] has held that of the software facilitated the assessee's trading operations or enabled the management to conduct the assessee's business more efficiently or more profitably then it was not in the nature of profit-making apparatus and that the expenditure was to be allowed. We find that lawyer’s fees has been held to allowable expenditure in the matter of Bombay Cycle and Motor agencies Ltd. [1979 (1) TMI 64 - BOMBAY HIGH COURT] . In that matter fees was paid to draw up lease agreement. We find that the FAA has followed the orders for AY. 99-00 and 2000-01 but has not distinguished the facts of the case of AY. 1997-98 and the facts of the matter under appeal. Order passed without giving any reason for not following the decision favouring the assessee comes under the category of non speaking order. The order of the FAA falls under that category hence cannot be endorsed. So, reversing his order we decide last ground in favour of the assessee.
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2015 (9) TMI 1681
TP Adjustment - interest calculated @ 18% on the delayed credit period on the import made by AEs beyond 180 days - HELD THAT:- Assessee has undertaken 33 transaction of exports for the value aggregating ₹ 18.45 crores, out of which in 25 transactions, the payments was received well before the expiry of credit period of 180 days. For the balance 8 transactions, in 6 transactions the delay was less than 30 days as given in the table incorporated above. If overall credit period of all the 33 transactions is to be analyzed, then it is evident that the average credit period for all the transactions is only 139 days, the working for which has been given at page 5 of the paper book.
For making any adjustment in the arms length price, a comparability analysis is to be carried out with the uncontrolled transactions to benchmark the price or profit in a third party situation.
Here in this case, neither the TPO nor the assessee has given any comparable instance as to whether in such a situation or condition an unrelated party would have charged interest. If in the majority transaction there no delay then for few transactions interest cannot be imputed, unless it is benchmarked with the transactions with some unrelated parties. However, no such comparable instance has been filed or sown before us. 8 transactions where there is a delay beyond the period of 180 days, the interest if at all, should be levied. Then same should be on the basis of LIBOR + 150 points (i.e. 1.5%) - we direct the TPO/AO to apply the interest rate of LIBOR + 1.5% and worked out the adjustment on account of interest for the transactions, which are beyond the period of 180 days. Accordingly, grounds raised by the assessee are partly allowed.
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2015 (9) TMI 1680
Rejection of books of accounts - addition on the basis of net profit of 3% of the gross receipts - survey proceeding u/s. 133A - HELD THAT:- The term net profit as commonly understood means the profit which has been arrived at by netting off income over the expenditure meaning thereby that whatever expenses which were due and were deductible have been deducted from the income of the Assessee before deriving the final figure of profit.
We are of the view that in a situation when once addition has been made on the basis of estimation of net profit, further addition is not called for and for this conclusion we derive support by the decision of CIT vs. Aggarwal Engg. Co. [2006 (7) TMI 188 - PUNJAB AND HARYANA HIGH COURT] wherein the Hon’ble High Court after considering the decision of Allahabad High Court in the case of CIT vs. Banswarilal Banshidhar [1997 (5) TMI 37 - ALLAHABAD HIGH COURT] held that no further addition was called for in respect of purchases and introduction of cash. Before us, Revenue has not placed on contrary binding decision in its support nor has controverted the submissions made by ld. A.R. In view of the aforesaid facts, we are of the view that apart from addition made by A.O by making estimation of net profits, no further addition on account of income declared during the course of survey was called for. Thus this ground of Assessee is allowed.
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2015 (9) TMI 1679
TDS u/ 194C or 194J - payment of carriage fees/payment charges by the assessee - HELD THAT:- We find that the Tribunal in that case relying upon the decision of the Co-Ordinate Bench in the case of ACIT Vs NGC Network (I) (P) Ltd [2014 (11) TMI 484 - ITAT MUMBAI] held that provisions of Sec. 194J are not at all applicable on the impugned payments.
A similar view was taken by the Tribunal in the case of UTV Entertainment Television Ltd [2014 (12) TMI 716 - ITAT MUMBAI] wherein also the Tribunal followed the decision in the case of NGC Network [2014 (11) TMI 484 - ITAT MUMBAI] . In the case of UTV Entertainment Television (supra), the Tribunal at para-7 has held that the impugned payments is covered by the explanation (iv)(b) under the provisions of Sec. 194C of the Act. The objections raised by the Ld. DR in respect of impugned payments being payment for royalty vis-à-vis payment for technical service is also taken care of by the Tribunal in the case of UTV Entertainment (supra) at para-2 of its order.
We are convinced with the findings of the Ld. CIT(A), therefore, no interference is called for.
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2015 (9) TMI 1678
Long term capital gain - Additions made by the AO in the absence of complete satisfactory documentary evidence - HELD THAT:- As decided in KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. [2009 (7) TMI 1251 - ITAT NAGPUR] Assessee has placed on record all the evidences to support the sale transactions including the quotation of the said shares on the date of sale which tallies with the sale price of the assessee. No opportunity to cross-examine the broker was given to the assessee. These authorities have held that no adverse cognizance of the fact that the broker could not be produced or the companies were not found at their addresses can be taken. Thus the above mentioned authorities are squarely applicable to the assessee.
In view of the evidences and authorities placed on record by the assessee, in the absence of any evidence or document brought on record by the assessing officer to negate the contentions raised by the assessee, the transaction of sale of the said shares was genuine and resulted into a long term capital gain of ₹ 13,52,6501- to the assessee. Thus the addition is hereby deleted assessing officer is directed to assess the long term capital gain as declared by the assessee and charge the same to tax @ 10%. Thus this ground of appeal is allowed.
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2015 (9) TMI 1677
Addition of claim u/s. 54EC of REC bond, hutment charges paid and brokerage paid - Whether CIT(A) has erred in law and on facts in admitting the fresh evidences and submission without giving any opportunity to the A.O. being heard on the principles of law and natural justice and thereby violated the provision of Rule 46A of the I.T. Rules - HELD THAT:- Deductions claimed by the assessee are reasonably supported by documentary evidences and just because the AO has some apprehensions, without any supporting material, the disallowances cannot be made. It was not for the AO to consider what ought to have happened in ideal circumstances.
All that he was to see whether there were any inconsistencies in the claim made by the assessee, or whether the claim so made was devoid of supporting evidences. Clearly, that was not the case. There was thus no good reasons to reject the claim of deduction for brokerage and removal of hutments. Learned CIT(A) was thus quite justified in giving the impugned relief. We approve the relief so granted by the ld. CIT(A) and decline to interfere in the matter.
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2015 (9) TMI 1676
Rectification u/s 154 - whether the excess depreciation was correctly disallowed - HELD THAT:- In the present case the alleged “mistake” sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February 2007 and thus for less than 180 days. Thus AO wanted to reappreciate facts on record which have already been considered.
The fact that the assets were put in use in February 2007 is a matter of debate. In the proceedings u/s 147, the assessee had stated that his assets were put to use on 28/08/2006. The assessee had also produced evidence of the same in the form of copy of WIP Plant & Machinery and WIP Electric Installation for the F.Y 2005-06 and 2006-07 showing the date of purchase of these assets, Fixed assets Register for the F.Y 2005-06 and 2006-07 showing the date of purchase,installation and date of put to use of these assets, Certificate of M/s Power Tracks approved Chartered Engineers to prove the date of installation of the new plant and machinery, Certificate of Central Excise Department regarding installation of new plant and machinery all of which showed that the assets were installed by August 2006. It supports case of assessee on merits.
On the other hand the AO has relied upon detail of WIP provided by the assessee during reassessment proceedings which showed that the Capital WIP was capitalized in the month of February 2007 to believe that the assets were put to use for less than 180 days. Clearly this appears to be a matter which requires long drawn process of reasoning. The mere fact that capital WIP was capitalized in the month of February does not settle the issue of claim of depreciation. The assets may have been installed and ready for use earlier as claimed by the assessee.
The point therefore is clearly debatable and requires further investigation which is not permissible u/s 154 of the Income Tax Act.
In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 1971 (8) TMI 3 - SUPREME COURT held “ A decision on a debatable point of law is not a mistake apparent from record.” Hon’ble Punjab & Haryana High Court in case of CIT Vs. Investment Trust of India Ltd. [2009 (8) TMI 9 - PUNJAB AND HARYANA HIGH COURT] held “ the issue relating to disallowance of depreciation on the ground that the asset did not exist in the assessee’s business of hiring out assets, is a debatable one and hence cannot be the subject matter in rectification proceeding.” Therefore the provision of section 154 of the Income Tax Act, 1961 is not attracted to the instant case. - Decided in favour of assessee.
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2015 (9) TMI 1675
Dishonor of Cheque - section 138 of NI Act - existence of legally enforceable debt or not - validity of second complaint - HELD THAT:- It is an undisputed fact that in respect of earlier cheque issued by the present applicant a criminal case was preferred u/S. 138 of the Negotiable Instruments Act and a judgment of conviction was also delivered by the Judicial Magistrate First Class, Narsingarh. Fine was also imposed. An appeal was preferred against the judgment of conviction ie., No. 231/2007 and both the parties in Lok Adalat, on 25/7/2000, have agreed to withdraw pending litigation. A cheque was also given in the light of the settlement of ₹ 3,51,750/- and the same has been dishonoured. The second complaint has been preferred on account of dishonour of the second cheque.
The apex Court in the case of LALIT KUMAR SHARMA VERSUS STATE OF UP. [2008 (5) TMI 429 - SUPREME COURT] in almost similar circumstances has held that the question of entertaining a second complaint, does not arise as the cheque was not issued in discharge of debt or liability of the Company. It was issued on account of a settlement arrived at between the parties.
Appeal allowed.
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2015 (9) TMI 1674
TDS u/s 194A - considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A - Whether the State Welfare Board constituted through the notification issued under / in consonance with Section 18(1) of the Building and Other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996 could be considering as a corporation established by a Central / State or Provincial Act, falling within the meaning of notification GO No.SO 3469, dt.22.10.1970 ? - HELD THAT:- The common genus that runs through all the three clauses is that ownership is vested with the Government either by way of holding the shares or by way of financing. If a company whose shares are held by the government is considered as one falling within sub-clause (f) of clause (iii) of section 194A of the Act, there is no reason why a welfare board constituted in accordance with the Central enactment should be excluded from its ambit. Especially so since funds of the Board was nothing but only cess collected by contractors under a statutory edict.
Apart from the above, what we find is that the Board has been established through a notification issued, under section 18 of Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. This Section has been reproduced by us above at para ten above. Clause (2) thereof states that the Board shall be a body corporate. To understand what is a body corporate, when a ready definition is not available in the relevant statutes, the best place to look is the Companies Act, 1956.
A body corporate is considered equivalent to a corporation. The board can thus very well be construed as a corporation. It has been constituted to exercise the powers conferred on a State under the Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. Thus in our opinion the methodology in which and the purpose for which the board has been created, when seen along with the wording of SO No.3469, dt.22.10.1970, would show that it could claim itself to be falling within subclause (f) of clause (iii) to sub-section (3) of Section 194A of the Act. Assessee had a bonafide reason to believe that interest payment on deposits placed by the Board did not warrant deduction of tax at source.
Assessee was justified in considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A of the Act. It had every reason to hold a bonafide belief that it was not liable to deduct tax at source on the interest payments effected by it to the Board. Especially so since Board gave all details to the assessee as to how it was constituted and also explained why the interest paid to it was exempt. In the facts and circumstances of the case, we are therefore of the opinion that assessee could not be deemed to be one in default for not deducting tax at source on interest paid to the board. Accordingly we set aside the orders of the Ld. CIT (A) and that of ITO (TDS) treating the assessee as one in default u/s.201(1) and levying interest u/s.201(1A) of the Act. - Decided in favour of assessee.
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2015 (9) TMI 1673
Sale of land under litigation - invalidation of the transaction - Jurisdiction for initiation of SCN - after 37 years from the date of the revenue entry, the proceedings are initiated under the Ordinance - HELD THAT:- It is by now well-settled that if the action of initiation of the SCN is without jurisdiction, or exfacie barred by delay, the court may entertain the petition under Art. 226 of the Constitution.
At this stage, we may refer to the decision of the Apex Court in case of STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [2007 (10) TMI 300 - SUPREME COURT], wherein the showcause notice issued in purported exercise of the revisional power came to be challenged, inter alia, on the ground that the notice was beyond the period of limitation.
If the action is to be initiated for setting aside of a transaction under the Ordinance by invoking section 54 read with section 75 of the Ordinance, it has to be within reasonable period - in the present case, the proceedings is initiated after more than 35 years. Hence, we find that the initiation of the action itself can be said as beyond reasonable period and the bar of delay and laches could operate against the authority in initiation of the action. The aforesaid aspect is coupled with two additional circumstances, one is that the land has changed hands further during the period of delay and the ownership is transferred by the purchaser to the another person and the second is that the revenue entries were mutated. Thereafter, they were also certified by the competent authority and in spite of that, no action was taken for cancellation of such entry or otherwise or even for declaration of the transaction as invalid within reasonable period. If during the period of delay, the rights of the parties in the properties are altered, the delay would operate as a bar with more gravity and when the ownership is changed during the period of delay, the bar for not taking action within reasonable period would also operate with more gravity against the authority in initiation of the action.
The contention should fail even if considered in either way. If considered to be patent in any case, the action was required to be initiated within reasonable period which has not been initiated. If the contention is considered on the ground that the error was latent, then also, as per the provisions of the Bombay Land Revenue Code read with the Rules, before any entry is mutated in the revenue record, the notice under section 135D is required to be served to the original owner.
When the respondent no.5 originated the Government machinery, the bonafide would be lacking since one who is a party to the transaction cannot be heard to say at a later stage that the transaction is not valid that too after a period of about more than 35 years. In any case, respondent no.5 had moved the authority and the impugned action of issuance of show cause notice has been taken, but when the Court considers the aspect of reasonable period and finds that the exercise of the jurisdiction was barred by delay and the consequential action could be said as without jurisdiction, the question of locus on the part of respondent no.5 may not assume much importance.
Petition allowed.
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2015 (9) TMI 1672
Dishonor of cheque - summon of order - the present petitioner was summoned to face trial on the basis of summoning order - HELD THAT:- The petitioner had resigned from the Board of Directors of the Company on 1.4.2013; her resignation was duly accepted in the Board meeting on 1.4.2013 itself, and required information was sent on Form 32 [Annexure P/6] to the Registrar, the petitioner ceased to be Director of Company on 1.4.2013. More so, she is not the signatory to the cheque. The alleged cheque is dated 13.04.2013 and was returned dishonoured on 10.7.2013. Thus, on the date of issuance of cheque, the petitioner was not the Director PARKASH SOM 2015.09.24 15:45 I attest to the accuracy and authenticity of this document of the Company. More so, she was not the signatory to the cheque in question.
Petition allowed.
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2015 (9) TMI 1671
Income under the head "Management Development Programme and consultancy charges - whether exemption was not admissible because the requirement which is set out in sub-section (4A) of section 11 has not been satisfied? - Admissibility of depreciation - asset purchased by trust - ITAT allowed claim - HELD THAT:- Delay condoned.
Leave granted. The matter to be heard along with Civil Appeal LISSIE MEDICAL INSTITUTIONS VERSUS COMMISSIONER OF INCOME TAX [2013 (7) TMI 1143 - SC ORDER]
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