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2009 (12) TMI 943
TDS u/s 194C(1) or 194C(2) - Non deduction TDS - disallowance u/s 40(a)(ia) - assessee having his own trucks and is engaged in the business of transportation - assessee prays that his case be held as an independent 'contract' and not Annexure 'sub-contract' - AO held that the assessee is liable for deduction of tax under s. 194C(2) on the premise that the assessee was having agreement with the parties as a sub-contractor through whom truck were arranged for transportation of goods
HELD THAT:- Neither the AO nor the CIT(A) recorded any findings of fact that there was any oral or written agreement between the assessee and transporters for carriage of goods or there has been tripartite agreement between the assessee, M/s Priyadarsini Cements and truck owners, nor it has been proved that any sum of money regarding freight charges was paid to them in pursuance of contract for specific period, quantity or price.
In the absence of these facts, we are unable to give any findings to the applicability of the s. 1940(1). The assessee is pleading before us that s. 194C(1) is applicable without placing any documents to prove that he has entered into an agreement as a contractor with only truck owners and not as a sub-contractor and the assessee's arguments are only in air. In view of this fact, we are not in a position to uphold this argument of the assessee and the same is dismissed.
Applicability of s. 40(a)(ia) - Whether sec 40(a)(ia) applies to cases in which the hire charges are 'payable' and not applicable to the amounts which have been already paid? - HELD THAT:- Respectfully following ratio laid down in the case of Tej Constructions [2009 (10) TMI 593 - ITAT HYDERABAD] as held once the AO has observed that books of account are not reliable, how the same books can be relied for other purpose for invoking other provisions of the Act - The AO rejected the claim on the ground that according to s. 194C stipulates that the person making payment to a contractor or at the time of credit to the account has to deduct tax at source - If amount is actually paid and tax is not deducted under the above section, s. 40(a)(ia) is not applicable we are inclined to allow the appeal of the assessee on issue relating to the applicability of s. 40(a)(ia ).
Similar view has been taken in the case of Jaipur Vidyut Vitran Nigam Ltd. v. Dy.[2009 (4) TMI 489 - ITAT JAIPUR-A]. Further, the judgment relied by the Departmental Representative are relating to the upholding the constitutional validity of the provisions of s. 40(a)(ia ) and not relating to the applicability of s, 40(a)( ia).
In the result the appeal of the assessee is partly allowed.
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2009 (12) TMI 942
... ... ... ... ..... notice issued to the creditors were returned with the endorsement that no such person exists. In answer to this, counsel for the assessee contended that even though notices were dishonoured by them, in the next year, all of them were made the payment and the Department allowed that claim. Even though we uphold the contention of the Department that the burden of proof of credit by producing the parties is on the assessee as correct, in view of the contention of the assessee that in subsequent year, the very same creditors have been made payment and the Department has accepted the same, we set aside the orders of the Tribunal and the first appellate authority and remand the matter to the AO for consideration of the same. If in the subsequent year, the creditors are identified and payments were made by the assessee and the same was accepted by the Department, the addition made under this head i.e., ₹ 3,11,146 will be deleted. The appeal is allowed in part as stated above.
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2009 (12) TMI 941
... ... ... ... ..... a. The parties have not furnished the industry-wise loss or the history of the loss in the case of the assessee for last 4/5 years, the loss incurred during various process undertaken by the assessee, percentage of loss in each process undertaken by the assessee, comparison of such loss in different processes industrywise and various assessment year-wise in case of the assessee, other comparative instances, the reasons for incurring loss and other factors such as type of machinery used, claim of manufacturer of machines as to the amount of loss likely to occur when work is done on their machines. Accordingly, we restore this issue to the file of the AO for examining it afresh. As a result, this ground of Revenue is allowed but for statistical purpose. 14 Ground Nos.5 and 6 are general in nature and they do not require any adjudication. 15 In the result, the appeal filed by the Revenue is partly allowed for statistical purpose. Order pronounced in the open court on 31-12-2009
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2009 (12) TMI 940
... ... ... ... ..... ng.) and Keihin Fie Pvt. Ltd. vs. CCE, Pune-III 2007 (213) ELT 637 (Tri.-Mumbai). The lower appellate authority also relied on these decisions of the Tribunal. In either of these cases, the assessee had not availed 50 of the CENVAT credit on capital goods during the first financial year in which the goods were received in their factory. One of the parties availed 100 credit in the next financial year, while the other party chose to avail 50 credit in the next financial year. In both the cases, it was held that there was no bar against availment of CENVAT credit in the second financial year to the extent of 50 where the benefit was not availed in the first financial year. The present appeal of the department is silent on the two crucial decisions of the Tribunal, which were relied on by the lower appellate authority. In the memo of appeal, there is mention of a few other decisions of this Tribunal, but there is no elaboration. 3. The appeal is dismissed. (Pronounced in Court)
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2009 (12) TMI 939
... ... ... ... ..... e above, it follows that the provisions of section 32(1)(ii) of the Act, as amended by the Finance (No.2) Act, 1988 with effect from 1.4.1999 are not applicable to the present case. The assessee has not acquired any intangible asset on or after 1.4.1998 so that only depreciation will be allowed on the same and not the expenditure incurred in acquiring them. The expenditure was incurred by the assessee in the revenue field and not in the capital field, nor did the assessee acquire any asset, tangible or intangible, by incurring the expenditure on advertisement and sales promotion. 12. For the above reasons we hold, concurring with the orders of the CIT(A), that the expenditure incurred by the assessee on advertisement and sales promotion for the assessment year 1999-2000 and 2001-02 is allowable as revenue expenditure. We uphold the orders of the CIT(A) and dismiss the appeals filed by the revenue with no order as to costs. Order pronounced on this 31st day of December, 2009.
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2009 (12) TMI 938
... ... ... ... ..... rcial expediency would be applicable to Section 57 (iii) as well as it applies to Section 37(1) as held by Supreme Court in Eastern Investments Ltd. vs. Commissioner of Income-tax, 20 ITR 1. In case it is found that the business had only been suspended in that particular year and had not been closed down, then the aforesaid expenditure would be allowable as business expenditure. In such a case in the absence of any income under the head 'business income' it could be treated as business loss and the assessee was entitled to set off of this business loss against the income from other sources as provided under Section 71 of the Act. 10. Since such an exercise has not been done by the Assessing Officer or the other authorities, we set aside the impugned orders by answering the question in favour of the assessee and against the Revenue. The matter is remitted back to the Assessing Officer to examine the matter in the aforesaid perspective and pass fresh assessment orders.
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2009 (12) TMI 937
... ... ... ... ..... he same income again. He accordingly directed the Assessing Officer to delete the addition of ₹ 2,19,03,394. Aggrieved with such order of the CIT(A), the Revenue is in appeal before us. 37. After hearing the learned DR and on perusal of orders of the authorities below, we find the appeal of the Revenue for A.Y. 1999-2000 on this issue has been restored to the file of the Assessing Officer for fresh adjudication. We, therefore, deem it proper to restore this issue to the file of the Assessing Officer for fresh adjudication and in accordance with law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. This ground by the Revenue is accordingly allowed for statistical purposes. 38. In the result, I.T.A. No. 3568/Mum/2006 by the assessee is dismissed, I.T.A. No. 3483/Mum/06 by the Revenue is partly allowed for statistical purposes and I.T.A. No. 4396/Mum/06 is allowed for statistical purposes. Order pronounced on 18th December, 2009.
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2009 (12) TMI 936
... ... ... ... ..... e Central Excise Act, 1944, to the High Court. He seeks permission to withdraw these appeals. Permission granted. Liberty is given to the appellants to move the High Court in accordance with law. The civil appeals are, accordingly, dismissed as withdrawn.
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2009 (12) TMI 935
... ... ... ... ..... Income-tax Act provides for computation of total taxable income and levy of tax on that income. Therefore, the Revenue cannot take advantage of the technicality of limitation in collecting tax form the citizen which is not otherwise due. Therefore, in our opinion, in view of the judgment of the Andhra Pradesh High Court in the case of Surya Traders (supra), the delay of 355 days in filing the appeal before the CIT (A) needs to be condoned and the appeal of the assessee has to be considered on merits. Accordingly, we set aside the order of the CIT (A) and condone the delay of 355 days in filing the appeal before the CIT (A). Now, the appeal filed by the assessee before the CIT (A) stands restored on the file of the CIT (A). We direct the CIT (A) to consider the appeal on merits and decide the same in accordance with law after giving a reasonable opportunity to the assessee. 7. In the result, the appeal of the assessee stands allowed. Order pronounced in the Court on 18-12-09.
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2009 (12) TMI 933
... ... ... ... ..... otal income. In fact, the procedure to be followed for the purpose of granting deduction under section 80-IA is to first compute the profits and gains of the eligible unit and then to determine the eligible deduction therefrom in terms of section 80-IA(5) of the Act. Thereafter, in the computation of total income under the provisions of the Act, the eligible deduction has to be reduced and if the total income computed is less than the eligible amount, deduction has to be limited to such amount. Since there has been variations in the total income computed by virtue of disallowances and later orders of the higher authorities allowing it, we direct the officer to rework total income and therefrom allow eligible deduction under section 80-IA(5) of the Act with reference to the profits of the eligible unit, but limiting it to the total income, if the claim amount is higher than such amount. The orders of the Tribunal and the first appellate authority will stand modified as above.
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2009 (12) TMI 932
... ... ... ... ..... e inasmuch as the ?cumulative unabsorbed depreciation brought forward as on 1st April, 1997 can still be set off against taxable business profits or income under any other head for the assessment year 1997-98 and seven subsequent assessment years. It is not only the view of the Tribunal but we find that even Madras High Court in the case of Commissioner of Income Tax vs. S and S Power Switchgear Limited, 218 CTR 701 has interpreted the said provision in the same manner relying upon the aforesaid speech of the Minister. From perusal of the bare provision, we also find that it is possible to construe the said provision in the manner decided by the Madras High Court as well as the Tribunal. In such circumstances, the speech of the Minister while introducing the proposed amendment which verified the intentions for introducing such an amendment would come to the aid of interpretation. We, thus, are of the opinion that no question of law arises and accordingly dismiss this appeal.
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2009 (12) TMI 931
Entitlement to interest - whether the interest on delayed refund is to be paid to the party immediately after expiry of three months from the date of receipt of the application of refund u/s 11B and 11BB of CEA, 1944? - Held that: - the assessee is entitled for refund claim within three months from the date of application of refund claim and if there is any subsequent litigation, that does not bar the assessee to claim the interest from date of expiry of three months of the filing of the refund claim - appeal rejected - decided against Revenue.
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2009 (12) TMI 930
... ... ... ... ..... e requisite statutory compliances have been fulfilled, Company Petition No.712 of 2009 is made absolute in terms of prayer clauses (a) to (f). This would be subject to the approval of the Scheme by the Delhi High Court in the Petition which has been filed by the Transferee in relation to the grant of approval qua the Petitioner. Moreover, it is clarified that the sanction granted by this Order is qua the Petitioner, which has its registered office in the State of Maharashtra. The sanction, will, it is clarified, not affect any Order that may be passed by the other High Courts whose sanction has also been sought under Sections 391 to 394. (12) The Petitioner to pay costs of ₹ 7500/- to the Regional Director within four weeks from today. (13) Filing and issuance of the drawn up order is dispensed with. (14) All authorities concerned to act on a copy of this order along with Scheme and form of minutes duly authenticated by the Company Registrar, High Court (O.S.), Bombay.
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2009 (12) TMI 929
Agricultural land or capital asset u/s 2(14) - Conversion of the agricultural land for non-agricultural residential purpose - survey u/s.133A - whether the land sold by the assessee was agricultural in nature or not - HELD THAT:- Assessee has produced certificate from the competent authorities that during these years assessee had used the land for growing ragi. In the absence of contrary evidence, the evidence adduced by the assessee coupled with the Village Accountant's certificate, we have to come to a reasonable presumption that the assessee's assertion that the land was used for some kind of agricultural activity, is to be accepted.
It is not disputed that in the revenue records, the entry is not changed, it continues as agricultural land. According to the revenue, the intention and purpose of the sale is for the use of Tibetan Childrens' Village for the setting up of educational institutions and other related purposes. According to the assessee, the land in his hands had retained the agricultural character till the date of sale, for the reason that the assessee was doing agricultural activity. We have hereinabove mentioned that the department had estimated the agricultural income for 2004-05 and estimated the agricultural income of the group. Therefore, it is difficult to come to the conclusion that in the hands of the assessee, the character of the land had changed.
Merely because the original owners had made application to change the character of the land from agricultural to non-agricultural and certificate was issued to that effect. Even for the revenue, there is no case that the land has been used for the intended purpose.
The previous owner made an application for conversion, obtained the permission, but with the condition that the land should be used for the intended purpose within two years, otherwise the original character of the land, i.e., agricultural nature, would be restored. Then the assessee or the subsequent purchased has to pay penalty and make a further application to obtain permission to revive the land for intended purpose. The assessee has not done this even according to the revenue. This was done by the subsequent purchaser i.e., Tibetan Childrens' Village, which compels to conclude that what the assessee held at the time of sale was agricultural land. It is true the facts is on border line, but the evidence produced before us in the form of RTC showing agricultural income etc., is in assessee's favour.
Secondly, In the instant case of the assessee also what was paid by the assessee was agricultural revenue. The non-agricultural revenue was paid by the subsequent purchaser after making an application for the second time to revive the nature of the land, which is evidenced by the letter which was written to the Secretary, Manchanayakanahally Gram Panchayat by the Tibetan Childrens' Village.
In the result, appeal by the assessee on this ground is allowed.
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2009 (12) TMI 928
... ... ... ... ..... was that he had resigned in the year 1999, whereas the FIR was registered in the year 2002. 14. Nipun Bansal, co-accused of the appellant, in whose account, ₹ 40 lakhs were transferred by committing forgery and cheating, is still in custody though during the course of arguments, I was informed that he had already made some payment to the bank before he was arrested. The petitioner does not deserve a treatment more favourable than what has been given to Nipun Bansal, who has retained an amount much less than the amount retained by the petitioner. 15. For the reasons given in the preceding paragraphs, I am of the considered view that the petitioner should not be enlarged on bail at this stage. The Bail Application is hereby dismissed. The observations made in this order, having been necessitated solely for the purpose of dealing with the contentions raised by the petitioner and the plea taken by him, shall not prejudice the decision of the case at any stage of the trial.
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2009 (12) TMI 927
Revision u/s 263 - as per CIT assessment order passed by AO u/s 143(3)/153A in respect of assessment year 1999-2000 is erroneous and prejudicial to the interest of the Revenue because of the reason that certain issues, highlighted in the said order, were not considered at the time of framing of the issues - assessment order has been set aside with direction to the AO to frame the assessment afresh after affording the assessee an opportunity of being heard and after making proper enquiries and verifications
HELD THAT:- In the present case, various correspondence and documents which are referred to by the learned senior counsel appearing for the petitioner indicate that Mr. A.L. Mehta had been writing time and again that income had escaped assessment and, therefore, the matter should be looked into.
The argument of the respondents is that the CBDT had wanted the matter to be examined and never intended that the orders are to be passed in one particular manner only. It was pointed out that no such directions were given by the CBDT to the respondent No.4 directing him to pass an order under Section 263 of the Act, necessarily reopening the assessments. He was called upon to examine the matter. The Commissioner passed detailed order under Section 263 of the Act, which depicts his independent mind, and various observations made in this order are not at the dictates of any authority. It was for this reason that submission of learned senior counsel for the petitioner was not that any such specific direction was given. Attempt was to demonstrate that the CBDT had “almost dictated the line of action” to the respondent No.4 making him virtually impossible to exercise independent judgment and unfettered discretion in discharge of his statutory function under Section 263 of the Act. It is not necessary for us to give any authoritative pronouncement on this aspect in the facts of this case. Reason is simple and obvious.
ASG, as noted above, as conceded that an opportunity shall be granted to the petitioner for making its submissions on the merits of the case by the Commissioner and thereafter fresh order would be passed. For this reason alone, once we proceed to set aside the impugned order, the effect would be that the concerned Commissioner will have to go into this issue afresh for considering the submissions of the petitioner, which would necessarily involve application of his independent mind. This, coupled with the fact that the Commissioner who passed the order is no more the concerned officer, i.e. the respondent No.4, the matter will have to go to another office discharging the duties in the capacity of respondent No.4. In these circumstances, the very basis of the submission that the impugned order was passed on the dictated lines of CBDT vanishes.
Present Commissioner/respondent No.4, while exercising his powers under Section 263 of the Act, shall look into the matter with independent mind without being influenced by the observations made in the impugned order. While doing so, he shall have regard to the submissions that would be made by the petitioner pleading that it is not a case for exercising powers under Section 263 of the Act. We also permit the petitioner to raise the plea that Mr. Mehta is not a whistleblower, but is a disgruntled person being an ex-employee of the petitioner, who has been fabricating and filing false and frivolous complaints against the petitioner.
Assessment completed under monitoring/supervision – Not amenable to revision u/s 263 - case of the petitioner is that the assessment under Section 153A of the Act was completed under the monitoring of the ACIT/ CIT/CCIT/CBDT and, therefore, such an order could not be regarded as erroneous, much less prejudicial to the interest of the Revenue - HELD THAT:- As contented an assessment order is passed under the monitoring of the Commissioner, the successor Commissioner could not set aside the assessment on the ground that the assessment order was passed without application of mind.
Since the matter has to be considered afresh by the Commissioner, even this contention can be raised by the petitioner before the said Commissioner and the Commissioner, while passing the order, shall specifically deal with this contention.
WP is allowed and the impugned order passed by the CIT respondent No.4 is hereby set aside. However, liberty is granted to the respondent No.4 to appropriately deal with the matter and pass fresh order after giving opportunity of being heard to the petitioner on various points canvassed before us or which it intends to raise at the time of fresh hearing.
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2009 (12) TMI 926
... ... ... ... ..... l on both sides. The special leave petition is dismissed.
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2009 (12) TMI 925
... ... ... ... ..... llowance of interest, if interest free advance has been given for commercial expediency. In Hotel Savera case cited above the Hon’ble Madras High Court has held that when the assessee has its own funds as well as borrowed fund and the money was inextricably mixed up and it was difficult to delineate which funds were utilized for making the advance, no disallowance was called for. 9. Now in the present case, we find that no explanation has been given regarding the purpose of advance. Hence there cannot be any inference that advance was given for business of commercial expediency. Similarly, no case has been made out before us that assessee’s own funds were utilized in making the advances. Under such circumstances, we do not find any infirmity or illegality in the order of the ld. CIT(A). Accordingly, we uphold the same. 10. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the Open Court on 14/12/2009 upon conclusion of the hearing.
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2009 (12) TMI 924
... ... ... ... ..... of the goods, and in the process he is required to consider the reports of the laboratory. He has not held that since the imported goods are deemed to be adulterated articles of food, the petitioner cannot be permitted to import them. It is evident that on the facts of the case, the proper officer of the customs cannot hold that the goods should be deemed to be adulterated. I, therefore, do not see under what authority he can withhold his order permitting clearance of the imported goods. In my opinion, he is under a statutory obligation to make an order permitting clearance of the goods. For these reasons, I allow the three petitions and order as follows. Within a week from the date of communication of this order the proper officer of the customs shall make the requisite order permitting clearance of the goods, and within 48 hours from the moment of payment of the assessed duty, the petitioner shall be permitted to clear the goods. No costs. Certified xerox according to law.
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2009 (12) TMI 923
... ... ... ... ..... accepted position that the applicants are merely highest bidders at the auction sale conducted by the Income Tax Department. Thus, in law, till the point of time the sale is confirmed and sale certificate issued in favour of the applicants by Income Tax Department the applicants would merely be offerers whose offer may or may not be accepted by Income Tax Department. In the circumstances, it is not possible to accept the contention that the applicants are persons who are directly affected by the outcome of the dispute between the tax defaulter, whose property is put up for auction sale, and the Income Tax Department. (8) In light of the aforesaid facts and circumstances Misc. Civil Application No.2593 of 2009 seeking leave to file an application for review is not required to be granted. As a consequence Misc. Civil Application No.1200 of 2009 also is not required to be granted. Accordingly both applications are rejected. Rule discharged. There shall be no order as to costs.
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