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Showing 161 to 180 of 1233 Records
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2014 (5) TMI 1075 - ITAT PUNE
Valuation on account of impurities - Held that:- No interference is required in the order of the CIT(A) because he has allowed relief considering the trade practices, whereby the value of Gold in the ornaments manufactured, has been adjusted on account of impurities, alloy mixing, soldering joints, etc., whereas the Assessing Officer had adopted the rate of pure Gold. Nothing has been brought on record by the Revenue to establish any error in the approach of the CIT(A) in reducing the valuation on account of impurities, etc.. Accordingly, the action of the CIT(A) is hereby affirmed and the Revenue fails in its Ground of Appeal No.1.
Addition on account of interest expenditure by invoking section 40A(2)(b) - Held that:- Though the Assessing Officer was justified in examining the interest paid to M/s Gajara Finance within the prescription of section 40A(2) of the Act, so however, factually it is evident that the Assessing Officer failed to demonstrate as to how the payment of interest to M/s Gajara Finance @ 15% was excessive or unreasonable having regard to the market rate of interest, which was a condition precedent for making a disallowance in terms of section 40A(2)(a) of the Act. In this case, assessee pointed out before the CIT(A) that the loans raised from M/s Thane Janta Sahakari Bank Ltd. and ICICI Bank were on account of a cash credit facility and fo7r acquisition of car respectively. Both the loans were secured against assets and on the contrary, borrowing from M/s Gajara Finance was unsecured and this aspect clearly showed that the terms and conditions of the two borrowings were not similar. In-fact, this aspect also justifies the interest paid to M/s Gajara Finance at a rate higher than that paid to the banks. This aspect of the matter has not been controverted by the learned Departmental Representative before us, and continues to hold the field. Therefore, considering the aforesaid aspects and in view of the discussion of the CIT(A) which we have extracted above, Revenue has to fail on this Ground.
Disallowance out of interest expenditure by invoking section 40A(2)(b) - Held that:- The recipient organization to whom assessee has made the impugned payments. In order the CIT(A) has brought out the intended benefits, which the assessee was looking for, in return for incurring the expenditure. In our considered opinion, the decision of the CIT(A) does not require any interference inasmuch as he has factually brought out that considering the larger context of business expediency, the said expenditure has been incurred wholly and exclusively for the purposes of business. The order of the CIT(A) is hereby affirmed in the absence of any cogent material and reasoning with the Revenue to controvert the same. Thus, on this Ground also Revenue fails.
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2014 (5) TMI 1074 - ITAT HYDERABAD
Disallowance made u/s. 40(a)(ia) - non deduction of tds - Held that:- In this case as seen from the Profit and Loss A/c., the assessee had debited an expenditure of ₹ 23,38,41,519 out of total expenditure of ₹ 1212,47,48,985 and carried an amount of ₹ 1189,09,04,466 as work-in- progress in Balance Sheet. In other words, the assessee has not claimed this amount of ₹ 16,05,80,987 as an expenditure in the Profit and Loss A/c. In our humble opinion, unless and until the assessee claimed this as an expenditure while computing the income, the provisions of section 40(a)(ia) of the Act cannot be invoked.
The judgement relied on the learned DR is on the applicability of provisions of section 40A(3) of the Act in respect of payment made to a person in a day otherwise than by a account payee cheque drawn on a bank or account payee bank draft exceeding ₹ 20,000, no deduction can be made in respect of such expenditure. On the other hand, section 40(a)(ia) is with regard to disallowance in respect of payments where the assessee failed to deduct TDS. These two sections are not para materia.- Decided in favour of assessee
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2014 (5) TMI 1073 - ITAT HYDERABAD
Estimation of profit at 10% on unaccounted turnover - Held that:- In the present case, when the assessee has admittedly not produced its books of accounts before the revenue authorities, there is no option left with them but to estimate the profit of the assessee. However, profit has to be estimated applying a reasonable rate. In the present case search has taken place on 12-9-2006 i.e., in financial year 2006-07 relevant to the asst. Year 2007-08. Therefore, taking it as a base we direct the Assessing Officer to estimate the profit on unaccounted turnover at double the rate of the average net profit declared by the assessee for the asst. Year 2007-08 and the preceding two assessment years i.e., asst. year 2005-06 and 2006-07. Further, the Assessing Officer must ensure that there cannot be inclusion of disclosed turnover while estimating profit from undisclosed turnover as per the seized material. In other words, turnover already disclosed should be excluded from the unaccounted turnover. Following the decision of co-ordinate bench in case of Sri Ravinder Kumar (2013 (6) TMI 739 - ITAT HYDERABAD), we direct the Assessing Officer to allow telescoping of the unaccounted income at the hands of the partners while considering investments made by them.- Decided in favour of assessee in part
Addition u/s 69C on account of unexplained purchases - Held that:- It is not disputed that the Assessing Officer himself has accepted the fact that the entries made in the loose papers represent unaccounted sales of the assessee. It is also a fact that the Assessing Officer has estimated profit on such unaccounted sales turnover. That being the case, it is not reasonable on the part of the Assessing Officer to make additions on account of unaccounted purchases on the basis of the same entries as found recorded in the seized documents. Therefore, the finding of the CIT (A) in this regard appears to be just and reasonable - Decided in favour of assessee
Addition of unaccounted interest income - Held that:- Assuming for the sake of argument that the amounts mentioned by the Assessing Officer is correct, then it actually represent the sale shown on credit basis (sundry debtors) as held by the CIT (A). That being the case, no addition can be made at the hands of the assessee on account of interest on such credit sales as the sales relate to the firm “Jai Balaji Sanitary Stores and not the assessee. In the aforesaid circumstances, in our view, the addition made by the Assessing Officer has no legs to stand. - Decided in favour of assessee
Addition as unexplained investment - Held that:- AR at the time of hearing before us as well in his written submission has submitted that assessee has neither purchased the land nor has paid the amount of ₹ 4,60,000/- to the persons concerned. In view of such submission, we are inclined to remit this issue to the file of the Assessing Officer to verify the claim of the assessee and decide the issue accordingly after affording a reasonable opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
Entitlement to exemption u/s 54F - Held that:- It is worthwhile to note here the co-ordinate bench of this Tribunal in case of Sri M.V. Subramanyeswara Reddy and others (2014 (4) TMI 71 - ITAT HYDERABAD ) and Shyamlal Tandon vs. ITO (2014 (4) TMI 867 - ITAT HYDERABAD ) held that if the property is a residential property but used for commercial purpose the nature and character of the property would not change so as to invalidate the claim of exemption u/s 54F of the Act. Following the aforesaid view of the co-ordinate bench and considering the factual aspect of this issue, we allow the claim of the assessee u/s 54F of the Act. - Decided in favour of assessee
Addition as unaccounted income - Held that:- The amount received by the assessee on the dissolution of the firm was towards contribution made by him in the partnership business. Therefore, the amount received by him being a capital invested by him earlier in the partnership business cannot be treated as income of the assessee. We therefore direct the Assessing Officer to delete the same. - Decided in favour of assessee
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2014 (5) TMI 1072 - ITAT CHENNAI
Disallowance u/s.40(a)(i) - non deduction of tax at source on the commission payments made to the nonresident u/s.195(2) - CIT(A) deleted the disallowance - Held that:- The assessee has paid commission to foreign agent M/s.Met-Tech International Pte, Singapore for procuring export orders for the assessee from companies located in Japan, Indonesia and UK. The Commissioner of Income Tax (Appeals) has given categoric finding that the foreign agent had not extended any technical services but had only procured export orders. The commission was paid by the assessee on various dates through banking channels for the services rendered outside India. The Commission has been remitted in foreign currency outside India. The findings of the Commissioner of Income Tax (Appeals) on the issue remain unrebutted. The Hon’ble Supreme Court in the case of GE India Technology Vs. CIT reported as [2010 (9) TMI 7 - SUPREME COURT OF INDIA ] has held that, if the income chargeable to tax is not assessable in India, there is no question of deduction of tax at source. No error in the findings of the Commissioner of Income Tax (Appeals) on the issue. - Decided in favour of assessee.
Disallowance u/s.14A - CIT(A) deleted the disallowance - Held that:- The provision of Rule 8D cannot be applied in the assessment year under appeal i.e. 2007-08. However, reasonable disallowance has to be made for earning tax free income. The assessee has made additional investment of F1.33 Crores during the relevant financial year. Even if the investment is made from own funds, the assessee must have been spending some amount in managing its investment portfolio which is to the tune of F2.62 Crores. In our considered view, 5% of the dividend income earned is just and reasonable for making disallowance u/s. 14A. - Decided partly in favour of revenue.
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2014 (5) TMI 1070 - CESTAT KOLKATA
Services rendered in Nepal - Export of services - Non receipt of foreign exchange - period from 1-4-2004 to 31-3-2009 - “Maintenance and Repair Services” and “Installation and Commissioning Services” provided - Held that:- Prima facie, even if the service provider is in India and exporting the services to Nepal, but not receiving the value of service in convertible foreign exchange, would still be eligible to the benefit under the Export of Services Rules, 2005. The issue of limitation raised by the applicant is a mixed question of facts and law and to arrive at the conclusion that the demand is barred by limitation, necessary evidences adduced before the authorities have to be scrutinized, which would be done at the time of disposal of the appeal. - 25% of demand ordered to be deposited - Partial Stay granted.
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2014 (5) TMI 1069 - ITAT DELHI
Disallowance u/s 40(a)(ia) - amount paid by the assessee to the consolidator for transfer of rights - Held that:- The issue in relation to disallowance u/s 40(a)(ia) is concerned, the same is squarely covered in favour of the assessee by the decisions relied upon. The relevant conclusion as drawn by ITAT in the case of Finian Estates Developers Pvt. Ltd. (2012 (6) TMI 705 - ITAT, Delhi) which state that the provisions of s.40(a)(ia) of the Act in any case do not apply,the assessee having not claimed any deduction for any expenses on account of payment of Vikram Electric Equipment (P) Ltd., either in its P and L a/c or in the computation of taxable income filed. It was only that the A.O. recoded a loss of ₹ 19,700. This obviously, did not include any addition of either ₹ 4.02 crores of ₹ 1.24 crore.
So far as the issue in relation to genuineness of the expenditure is concerned, it is found that the Department has not challenged the findings of Ld. CIT(A) in this regard. So, considering the entirety of facts, circumstances, material on record and by following the precedents, we direct to delete the impugned addition made by the A.O. and confirmed by Ld. CIT(A). - Decided in favour of assessee.
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2014 (5) TMI 1068 - ITAT PANAJI
Depreciation on the UPS @ 60% as are applicable to the computers - Held that:- After hearing the rival submissions we found that this issue is duly covered by the decision of the Hon'ble Delhi High Court in the case of CIT vs. BSES Yamuna Powers Ltd. (2010 (8) TMI 58 - DELHI HIGH COURT ). Respectfully following the decision of the Hon'ble Delhi High Court, we delete the disallowance sustained by the CIT(A). - Decided in favour of assessee.
Transfer pricing adjustment in the operating margin of CDR unit and sustaining part addition therein by the CIT(A) - selection of comparable - Held that:- Out of the 5 companies for which the assessee has asked for relief before us and requested to exclude these companies also from the comparables, we further exclude 3 companies out of the comparables and sustain the action of CIT(A) to treat R. Systems International Ltd. to be a comparable company. We noted that exclusion or non-exclusion of R. Systems International Ltd. will not have much impact on the cash PLI because in the case of this company, the cash PLI comes to 26.1 per cent as computed by the assessee and filed before us while the average cash PLI in the case of the assessee comes to 32.67 per cent. The assessee has given average cash PLI of all the comparables at 24.97 per cent which is much below the cash PLI worked out in the case of the assessee at 32.67 per cent. The cash PLI earned by the assessee is much more than the average of the cash PLI in the case of the other comparables. Therefore, in our opinion, no addition on this account can be sustained in the case of the assessee. We, accordingly, set aside the order of CIT(A) and delete the addition sustained by CIT(A). - Decided in favour of assessee.
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2014 (5) TMI 1067 - ITAT MUMBAI
Taxable income of Insurance Company u/s 44 - nature of the funds transferred from shareholders’ Accounts to the Policyholders’ Account to meet out the deficiencies - Held that:- under the provisions of IRDA Act, the assessee is under obligation to maintain separate accounts namely ‘policy holders account’ and the ‘shareholders account’. In case, there is income deficiency in policy holders’ account, the funds are transferred from the shareholders account otherwise, both these accounts are part of the business of the assessee and it is case of transfer of funds from one hand to the other of the same person. Such transfer of funds to policy holders’ accounts should not be treated as income as it is a case of transfer of funds from one hand to the other. It is a tax neutral transaction. This issue is now settled by the decisions of the Tribunal in the case of ICICI Prudential Insurance vs. ACIT [2012 (11) TMI 13 - ITAT MUMBAI] - Decided in favor of Assessee.
Applicability of provisions of Section 14A on insurance Companies - dis-allowance of expenditure related to exempted income - Held that:- in view of the special provisions applicable to the insurance companies, we are of the opinion that the provisions of section 14A r.w.r. 8D were held not applicable to the insurance companies i.e., ICICI Prudential Insurance, HDFC Standard Life Insurance Company. Therefore, the SBI Life Insurance Company Limited (assessee in the present case should not be any exception. Considering the settled nature of the issue vide the decisions of the Tribunal’s orders - Decided in favor of assessee.
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2014 (5) TMI 1066 - ITAT PUNE
Transfer pricing adjustment - CUP v/s TNMM method - Held that:- TPO has wrongly applied the CUP method for determining the ALP in respect of some mentioned transactions pertaining to export of finished goods. More so, when the TPO accepts that more than 90% of the exports to the AEs are at ALP, there is no reason to apply CUP method for part of the exports. Accordingly, the additions made on this account are not justified and they are directed to be deleted.
Adjustment towards imports - Held that:- On behalf of assessee that in respect of most of the products, the assessee has paid lower price to its AEs as compared to the prices paid to Third Parties. This fact has been clarified by the assessee to the TPO filed by the assessee. In this background, it was submitted that considering the fact that in respect of most of the instances, the assessee has paid lower prices to the AEs as compared to Third Parties, which indicates that the pricing of the products is influenced by economic circumstances and underlying transactional differences. In some of the products where the price paid by the assessee to its AEs is more than the price paid to Third Parties, such higher price paid amounts to ₹ 2,55,063/-. However, in most cases, where the prices paid by the assessee to its AEs is lower than the price paid to Third Parties, the lower price paid is to the tune of ₹ 18,08,201/- as detailed on page 217 of the Paper Book. This aspect has not been appreciated by the TPO.In view of above discussion, the TPO was not justified in adopting CUP method for determining ALP in respect of some of the international transactions pertaining to import of goods.
Adjustment towards Commission paid to AE - According to the TPO, CUP method is the most appropriate method for computing the ALP of the commission payment made by the assessee to its AEs and compared the rate of commission paid by the assessee to unrelated domestic agents against the rate of commission paid to the AEs located in Europe - Held that:- We find that considering the vast differences in the functions performed, the comparison of the rate of commission paid by the assessee to the AEs and third parties is not justified. It is further to be appreciated that the assessee has given the details of the parties to whom commission is paid in the domestic market. The rate of commission varies from 1 % to 7% which itself indicates that depending upon the services rendered, the commission is paid. Accordingly, the TPO has wrongly applied the CUP method for determining the ALP in respect of transactions of payment of commission by the assessee company to its AEs.
Similar issues i.e. determination of ALP for export, import & commission arose in other A.Ys. 2007-08 and 2008-09. Facts being similar, so following the same reasoning, we hold that the TPO was not justified in applying CUP method for determining ALP on account of some export, import transactions and commission payments as discussed above. - Decided in favour of assessee.
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2014 (5) TMI 1065 - ITAT CHENNAI
Denial of benefits of Section 11 and Section 12 - whether CIT (A) had failed to recognize the assessee’s society which was registered under Tamilnadu Societies Registration Act and established for the promotion and control of the game of chess, to fall within the ambit of charity as prescribed U/s. 2(15) of the Income Tax Act, 1961? - Held that:- sports promotion is “human resources development’ and considering the policy declaration of Government of India, sports is construed at par with “education”. The Government of India does consider promoting and regulation of sports as constitutional obligation and discharges the same through recognized sports federations in India like that of the assessee. The Government also formulates sports management and provides training and technical assistance for development of sports in India. The National Sports Federations like that of the assessee honoring the national development board is the extended arm of Government providing training, coaching, development of skill among the sportspersons in India. In furtherance to the above discussions one can appreciate that in the present scenario, sports has also emerged as a profession the income derived from which is taxable, and such profession is associated with systematic and continues education in the sport one profess coupled with trained physical and mental fitness and therefore providing knowledge in any sport have to be treated at par with education.
Considering the scope of sports development in India, we are of the view that the recognized sports association in India, who impart knowledge in sports, promotion of sports by conducting various sports activities in all branches, to fall within the scope of “education as defined under the amended provisions of Section-2(15) of the Act”. Accordingly we hold that the objects of the assessee society will fall within the scope of the first limb of the amended provisions of section 2(15) of the Act viz., “education”. Further on analyzing the activities of the assessee society with regard to FIDE trainer coach fee, AICF chronicle, Prize money share, Rent on Monrai system, Title fees, Telecast charges–Doordarshan and FIDE remittances we find that all of them relate to the activities which are incidental to the main objects of the assessee’s society and therefore, proviso to section 2(15) of the Act will not be attracted. Based on our aforesaid decision the learned Assessing Officer is hereby directed to modify his order accordingly.
We hereby hold that the objects of the assessee trust falls within the scope of the first limb of Sec.2(15) of the Act viz. ‘Education’ and therefore, the proviso to Sec.2(15) of the Act will not be attracted and accordingly, the order of the Ld. CIT (A) stands confirmed in allowing exemption - Decided in favour of assessee.
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2014 (5) TMI 1064 - PUNJAB & HARYANA HIGH COURT
Reopening of assessment - unaccounted giving of accommodation/book entries - Held that:- During survey operation carried out on the premises of the assessee, it was discovered that the assessee was giving accommodation/book entries to various persons and this business was being carried out during the previous years relevant to assessment years 2002-03 and 2003-04. For reopening under section 147 of the Act, the appellant was found to be indulging in the business of arranging bogus long/short term gain/gifts/accommodation entries on commission basis. Evidence of cash deposits into various banks was also found. As no return had been filed for the assessment year 2002-03, the income generated from above business had escaped assessment within the meaning of Section 147 of the Act. The Tribunal held that the assessee had not furnished any returns of income for both the assessment years i.e. 2002-03 and 2003-04 and in the absence of the returns of income and because of availability of the information of escapement of income with the Assessing officer, the formation of belief under Section 147 of the Act and issue of notice under Section 148 of the Act was valid. In the light of the above, there is no justification in the submission made by learned counsel for the appellant that reopening was invalid.
After taking into consideration the totality of facts and circumstances where the assessee himself had admitted to have been carrying on the business of providing accommodation entries through several accounts belonging to him, his family members, brokers and also the admission of different stock brokers etc., the addition had been rightly made in his income.The narration of aforesaid factual matrix points out that the department had discharged the initial onus to prove the undisclosed income of the assessee and it was upon the assessee to have produced relevant material to rebut the same. No illegality or perversity could be shown in the aforesaid findings. In such circumstances, the findings recorded by the authorities below cannot be faulted. - Decided against assessee.
G.P. rate of 0.5% of the turnover - Held that:- As decided in assess's own case wherein rate of 0.5% of the turnover has been upheld
Unexplained investment on account of profit of trading of shares of assessee - Held that:- Tribunal upheld the order of the CIT(A) in the absence of any evidence that the said shares being actually purchased either in the name of the assessee or in the names of his family members was the unaccounted investment of the assessee and the same was to be included in the hands of the assessee. As regards the amount for the purchase of shares paid out of the bank accounts of the assessee, his mother and his son, the Tribunal restored the issue back to the Assessing officer to verify the source of payments made by the assessee to Mr. R.K.Kohli & Co. vis a vis the details of shares acquired. It was observed that if it was found that the transactions in the relevant source bank account had been considered while estimating the income in the hands of the assessee for accommodation basis, necessary credit shall be allowed while computing unexplained investments. The Tribunal further observed that in the assessment years 2003-04 and 2004-05, the benefit of telescoping is to be allowed in respect of income assesseed in the earlier years. The revenue had challenged the observations of the Tribunal with regard to the telescoping whereby the assessee was entitled to allowance of investment in shares relating to this period.The issue has been remitted to the Assessing Officer requiring re- examination for determining the quantum of unaccounted income in the hands of the assessee. In view of the above, no interference is called for.
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2014 (5) TMI 1063 - HIMACHAL PRADESH HIGH COURT
Revision u/s 263 - MAT computation - Whether doubtful loans written off as bad debts and subsequently credited to the profit and loss account by way of contra-entry, could be deducted from the book profits under clause (i) of Explanation 1 to section 115JB , especially when such doubtful loans had not been included in the book profits of the relevant years for the purposes of section 115JA or 115 JB? - Held that:- It would be seen that it had not been disputed before the ITAT that the sum represents the provision for non-performing assets created earlier years, not out of reserve created before 1.4.1997. Therefore, the same had to be reduced for computation of book profit in accordance with section 115JB. The ITAT has come to categorical findings of fact that following provisions were available for credit to the profit and loss account, which had been made after 1.4.1997 and not prior to it.Therefore, in the given facts and circumstances, we have left with no option but to uphold the order passed by the ITAT.
from the exposition of law, it can be safely concluded that the power of the Commissioner Income Tax to exercise suo motu revisional power in terms of Section 263(1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein viz “(i) the order is erroneous”; (ii) “by virtue of the erroneous order prejudice has been caused to the interest of the Revenue, however, every loss of revenue as a consequence of an order of Assessing Officer cannot be treated to be prejudicial to the interest of revenue. Both the conditions precedent for exercising the jurisdiction under section 263 of the Act are conjunctive and not disjunctive. The order of assessment passed by an Income Tax Officer, therefore, should not be interfered with only because another view is possible.
The ITAT has correctly interpreted the provisions of section 115JB of the Act and thereafter applied the same to the facts of each case(s). - Decided in favour of assessee.
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2014 (5) TMI 1062 - ITAT MUMBAI
Reopening of assessment - Held that:- The reopening of assessment originally completed u/s 143(3) by the AO beyond the period of four years from the end of the relevant assessment year was bad in law as rightly held by the ld. CIT(A) as the same was based merely on “change of opinion” and there was no failure on the part of the assessee, specifically pointed by the AO in the reasons recorded, to disclose fully and truly all material facts necessary for his assessment. The assessment completed by the AO us/ 143(3) r.w.s. 147 in pursuance of such invalid initiation, therefore, was bad in law and the ld. CIT(A), in our opinion, was fully justified in cancelling the said assessment. We, therefore, uphold the impugned order of ld. CIT(A) cancelling the assessment made by AO u/s 143(3) r.w.s.147 of the Act - Decided in favour of assessee.
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2014 (5) TMI 1061 - CALCUTTA HIGH COURT
Waiver of pre deposit - Demand of differential duty - Undervaluation of goods - Clearance of goods to sister concern - Section 11A - whether the learned Tribunal was justified in directing the petitioner to deposit ₹ 60 Lakhs as a condition for hearing the appeals - Held that:- Prima facie there is not a whisper in the show-cause notice of any fraud, collusion, wilful mis-statement, suppression of facts or of contravention of any particular provision of the Central Excise Act, 1944. There is only a sweeping, vague averment that the petitioner No. 1 appeared to have deliberately undervalued the goods cleared to its sister units, with intent to evade payment of differential Central Excise Duty and Educational Cess. - Prima facie goods cleared by the various units of the petitioner No. 1 to sister concerns and/or units were disclosed and duty was paid thereon. It is doubtful whether it can be said that there was any such suppression of facts or any such contravention of the Central Excise Act to entitle the Revenue to invoke the extended period of limitation. These observation are, however, only prima facie observations which will not influence the adjudication of the pending appeals on merit.
Where an assessee has a good prima facie case, and the disputed duty and/or penalty has apparently been charged wrongfully, the requirement of pre-deposit of the disputed tax and/or penalty is liable to be waived, since pre-deposit of tax not payable by an assessee, would in itself cause hardship to that assessee - Where there is a very good prima facie case, pre-deposit would have to be waived altogether. Where the appellant has an arguable case, pre-deposit might be waived on such conditions as would protect the interest of Revenue. In fact, learned Tribunal was conscious of its duty to consider the prima facie case and accordingly recorded a prima facie finding with regard to the merit of the demand, but cursorily without properly applying its mind to the issues involved in the appeal. - Tribunal has cursorily considered the merits of the case. The learned Tribunal has not at all considered the question of limitation, on which, the question of jurisdiction to issue a show-cause notice for realizing a demand, depends. Admittedly, the demand was not raised within one year but almost two/three years by-invoking the extended period of limitation.
Prima facie case was in favour of the demand, insofar as recovery of duty is concerned, the learned Tribunal did not consider whether imposition of 100% penalty was justified in the particular facts of the case. - The power to dispense with pre-deposit may be discretionary. However, it is well-settled, that when facts and circumstances of the case warrant exercise of discretion to waive pre-deposit, pre-deposit would have to be waived. - The condition precedent for exercise of power to waive pre-deposit is prima facie satisfaction of the Appellate Authority that pre-deposit would result in undue hardship to the appellant. The Appellate Authority cannot whimsically and arbitrarily waive pre-deposit or even part thereof. Pre-deposit can be waived in part either on satisfaction that payment of the amount that is waived would cause financial hardship to the appellant, but the appellant is, in the financial position to make payment of the rest of the duty and penalty without undue hardship, or alternatively when the Appellate Authority is prima facie satisfied that the appellant has been able to make out a strong prima facie case for setting aside of a part of the duty levied and/or penalty imposed corresponding to the amount, of which pre-deposit is waived. In the instant case, the impugned order does not disclose the reason for directing pre-deposit of ₹ 60 lakhs only and waiving deposit of the balance duty and penalty. - Decided in favour of assessee.
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2014 (5) TMI 1060 - ITAT JODHPUR
Revision u/s 263 - CIT directed the AO to re-examine whether share profits disclosed by the assessee as short-term capital gain fell under the head 'Business income'? - Held that:- In the present case as we have already pointed out that the assessee furnished the details relating to the shares transactions, disclosed the profit on the basis of books of account wherein all the transactions were entered. The assessee was maintaining the shares transactions with three brokers under two portfolios i.e. investment portfolio and trading portfolio. The assessee disclosed short-term capital gain of ₹ 27,42,135 on the sale of shares which were held as an 'investment' and also declared profit of ₹ 2,23,199 as 'business income' on the day trading of shares. The assessee also paid security transaction tax. The AO during the course of assessment proceedings, asked the assessee to furnish the details relating to the sale transactions and the assessee furnished the same before the AO as well as before the learned CIT. So, it cannot be said that the assessee had not furnished the details relating to the shares transactions or the AO had not examined those details while framing the assessment under s. 143(3) of the Act. We therefore, by considering the totality of the facts of the present case, are of the view that the learned CIT was not justified in treating the assessment order passed by the AO under s. 143(3) of the Act as erroneous and prejudicial to the interest of the Revenue. In that view of the matter, the impugned order is set aside and the assessment order passed by the AO is restored. - Decided in favour of assessee
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2014 (5) TMI 1059 - ITAT LUCKNOW
Validity of assessment u/s 153C - Held that:- undisputedly the assessee was subjected to search action under section 132(1) of the Act, therefore, the assessment can only be framed upon the assessee under section 153A of the Act. The assessment under section 153C of the Act can only be done in those cases where the Assessing Officer, during the course of assessment upon searched person, has found some incriminating material relating to some other person upon whom search was not conducted. Having recorded his satisfaction, the Assessing Officer of the searched person may refer the material along with satisfaction note to the Assessing Officer of the person upon whom action under section 153C of the Act is required to be taken. But in the instant case, the assessee himself has been subjected to search action, therefore, the assessment under section 153C of the Act is not possible. The right course would be to complete the assessment under section 153A of the Act. Therefore, we do not find any infirmity in the order of the ld. CIT(A), who has examined the issue in the light of the relevant provisions of law and finally annulled the assessment. We accordingly confirm the order of the ld. CIT(A) and dismiss the appeals of the Revenue. - Decided against revenue
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2014 (5) TMI 1058 - ITAT CHENNAI
Deduction u/s 80P - CIT(A)’s only ground while denying claim of deduction is that the assessee has advanced loans to even the nominal/associate or ’B’ class members which is hit by section 80P(2)(a)(i) - Held that:- The assessee has produced before us an order in case of M/s SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. vs ITO [2014 (5) TMI 556 - ITAT CHENNAI]. Therein, after taking into consideration section 2(16) of the Tamilnadu Co-operative Societies Act, 1983, treating associate or ‘B’ class members within section 2(16) of the State Co-operative Societies Act, we have held that no such distinction could be drawn for the purpose of deduction u/s 80P(2)(a)(i) of the Act. We have also held that being a deduction provision, there is no scope for further classification within members. On being pointed out, the Revenue has failed to draw any distinction on facts. - Decided in favour of assessee
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2014 (5) TMI 1057 - CESTAT NEW DELHI
Classification of goods - Classification of product of aluminium tubes and pipes and Fan motors - Held that: To bring the goods to the fold of CTH 8708 91 00 that should be established as parts and accessories of the motor vehicles of headings 8701 to 8705. The burden lies on Revenue to prove that the imported goods were sold. But nothing comes out from that angle on record and Revenue failed to discharge its burden of proof. So far as the aluminium tube is concerned, claim of the appellant is that the same shall fall under CTH 7608 10 00. That entry relates to the “product of aluminium tubes and pipes”. Therefore, appellant is correct on its claim of classification in so far as the aluminium square tube is concerned.
It is explained by the appellant that the goods fulfils the characteristics of CTH 8501 10 19. That entry reads as the residual goods of the heading 8501 dealing with electric motors and generators. There is no whisper in the show cause notice that the fan motors were the accessories and parts of the motor vehicle under the heading 8701 to 8705. Without physical examination report suggesting that the fan motors belong to the family of motor vehicle parts and accessories, it is not possible at this stage to appreciate contention of Revenue that the said goods belong to CTH 8708 91 00 - Decided in favour of assessee.
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2014 (5) TMI 1056 - KERALA HIGH COURT
Goods for commercial use indicated as for personal use – Imposition of Penalty – Respondent-Assesse purchased scanner with accessories, same was transported on strength of form 16 – Notice was issued under section 47(2) of Kerala Value Added Tax Act by Commercial Tax Inspector suspecting genuineness of transaction – Penalty under section 70B was imposed as goods were shown for personal use whereas it was for commercial use –Tribunal vide impugned order upheld order revoking penalty – Held that:- section 70B contemplates that any person bringing goods from outside State projecting purchase as one for its own use and utilising goods so brought otherwise than for own use shall, without pre judice to any other provisions in Act, be liable to pay by way of penalty –Fact that when person make use of goods it may generate profit, will not detract from use being its own use though word “commercial” figures in heading of section 70B – What is required for attracting section 70B is bringing goods from outside State declaring it for own use, but not using it for own use – In such circumstances, no reason to take different view than view taken by appellate authority and as affirmed by Tribunal – Decided against revenue.
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2014 (5) TMI 1055 - DELHI HIGH COURT
Condonation of Delay – Vide impugned order reported in [2015 (8) TMI 691 - CESTAT NEW DELHI], tribunal being dissatisfied with explanation of appellant, dismissed application for condoning delay - Aggrieved by said order appeal was filed - Appellant urged before Tribunal that he could not approach tribunal within prescribed time on account of certain family problems and financial hardships - Therefore, in view of peculiar circumstances, current Court was of opinion that delay be condoned and Tribunal to hear stay application as well as appeal in accordance with law - Impugned order set aside - Appeal allowed.
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