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2014 (6) TMI 998 - ITAT MUMBAI
Disallowance of interest expenditure - Held that:- Identical issue had come up for adjudication before the Tribunal in one of the group cases i. e. in the case of Eminent Holdings Pvt. Ltd [2014 (7) TMI 2 - ITAT MUMBAI] that matter was restored back to the file of the FAA. Departmental Representative(DR) left to the issue to the discretion of the Bench. After hearing the rival contentions, we are of the opinion that this matter should be remanded back to the file of the FAA.
Levy of interest u/s. 234 - Held that:- Provisions of section 234A, 234B and 234C were applicable to the notified person also. Therefore, upholding the order of the FAA to that extent, we hold that provisions of section 234 of the Act are applicable. As far as calculation part is concerned, we find merits in the submission made by the assessee. Therefore, we are restoring back the issue to the file of the AO for fresh adjudication who would decide the issue after considering the amount taxed deductible at source on the income assessed and after affording a reasonable opportunity of hearing to the assessee. Ground allowed in part in favour of the assessee.
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2014 (6) TMI 997 - ITAT HYDERABAD
TPA - selection of comparable - Held that:- The assessee is engaged in providing software development services only to its AE in USA on cost plus basis. Assessee is registered under the Software Technology Parks of India’s Scheme of Government of India as 100% export oriented unit, thus companies functionally dissimilar with that of assessee or any extraordinary event undertaken need to be deselected from final list of comparable.
Allowance of risk adjustment - Held that:- It is a fact that the assessee has raised the issue of risk adjustment before the TPO as well as the DRP. In our considered opinion, this issue may become academic if the assessee’s contention in respect of comparables selected/rejected by TPO is accepted. Therefore, we restore this issue to the file of the AO/TPO for considering afresh if need be, after working out the margin in terms with our directions issued in respect of comparables selected/rejected by the TPO. If, after excluding/including the comparables as per our directions, hereinabove, the assessee’s margin is found to be within Arm’s length, then, issue of risk adjustment may not arise. This ground of the assessee is considered to be allowed for statistical purposes.
Excluding communication expenses from the export turnover while computing deduction u/s 10A - Held that:- This issue is squarely covered by the decision of the Hon’ble Bombay High Court in case of CIT Vs. Gemplus Jewellery [2010 (6) TMI 65 - BOMBAY HIGH COURT] and ITO Vs Saksoft Ltd (2009 (3) TMI 243 - ITAT MADRAS-D). Following the ratio laid down in the aforesaid judgments, we direct the AO to exclude the communication expenses from export turnover as well as total turnover while computing deduction u/s 10A of the Act.
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2014 (6) TMI 996 - ANDHRA PRADESH HIGH COURT
Initiating of proceedings u/s 147 - international transaction as identified as sham - assessment beyond ordinary period - Held that:- In case of assessment in relation to the present assessment year 2003-2004, it should be by the end of financial year 2008, while for the year 2004-2005, it should be by the end of financial year 2009. Before us, copies of such notices have not been produced. However, the learned Tribunal on fact found that the notice was issued beyond four years, but there has been no factual basis as required under the aforesaid provision to reopen the assessment beyond four years and within six years, meaning thereby pre-conditions for issuance of notice after four years and within six years, namely, the allegation of escapement of assessment on account of failure on the part of the assessee to make a return under Section 139 or in response to notice issued under sub-section (1) of Section 147 or Section 148 or to disclose fully and truly all material facts necessary for its assessment for that assessment year have not been fulfilled. When pre-conditions are not found in the notices, initiation of proceedings is bad. We cannot re-appreciate this finding in the absence of the allegation of perversity. - Decided in favour of assessee.
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2014 (6) TMI 995 - ANDHRA PRADESH HIGH COURT
Proceedings initiated u/s 153A - non-availability of the books of accounts - Held that:- We notice that the Tribunal, on fact, found that assessment was done on the basis of the estimated income. It was found again that there is no incriminating material and in the course of search, no books of accounts and vouchers were found and it was admitted that the M.D. consequent to the completion of the assessments, the relevant books of accounts and vouchers were shifted to a godown and they were not able to locate the relevant books of accounts. We fail to understand when the assessment was made on the estimated income, how there can be relevancy of books of accounts and for that matter, non-availability of the books of accounts could be a factor to exercise the jurisdiction under Section 153-C of the Income Tax Act, 1961. The learned Tribunal, on appreciation of fact, correctly concluded that such exercise was not called for.
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2014 (6) TMI 994 - SUPREME COURT
Proceedings initiated by “any person interested”, under Section 25(2) of the Patents Act - Held that:- It is now well settled, that rules of procedure are meant to ensure justice to the concerned parties, based on their substantive rights. It is therefore commonly said, that all rules of procedure, are nothing but handmaids of justice. In a matter as the one in hand, if the dispute has to be settled stricto sensu, according to the procedure envisaged by law, the course to be adopted, has already been delineated by us above. We have resolved in our conclusions recorded hereinabove, the remedy which will have to be adopted by the concerned parties, depending upon the date of institution of proceedings under Section 25(2) of the Patents Act, the date of institution of a “revocation petition” under Section 64(1) of the Patents Act, as also, the date of institution of a counter-claim in an “infringement suit”, under Chapter XVIII of the Patents Act.
Based on the factual position noticed at the beginning of the instant order, it is apparent, that the appellant has filed at least 19 “infringement suits”, and the respondents have filed at least 23 “revocation petitions”. The respondents have also filed “counter-claims” to the “patent infringement suits” filed by the appellant. In the present facts and circumstances, even though the challenge to the same patent, by our above determination, has been limited to a specific singular challenge, as against multiple challenges as at present, yet the same are to be pursued before different fora. In the instant case, the disputation is of the same nature, and between the same parties, even though it may be in respect of different patents. As such, it would be convenient for the parties concerned, to agree to resolve the same, before a singular adjudicatory authority. That will also be convenient for the concerned adjudicatory authority.
Accordingly, for convenience of the parties concerned, it would be open for them by consent, to accept one of the remedies, out of the plural remedies, which they would have to pursue in the different cases, pending between them, to settle their dispute. Having consented to one of the available remedies postulated under law, it would not be open to either of the consenting parties, to seek redressal from a forum in addition to the consented forum. We, therefore hereby affirm, that the consent order passed by the High Court on 1.9.2010, being on the subject of procedure, and being before a forum which had the statutory jurisdiction to deal with the same, was fully justified in the facts and circumstances of the present case.
The instant submission was advanced at the hands of the learned counsel for the reason, that the appellants did not desire two proceedings, on the subject of revocation of the same patent, to be continued simultaneously before different fora. In our discussion recorded while dealing with the submission advanced by the learned counsel for the appellants, we have accepted the contention advanced at the hands of the learned counsel for the appellants, that only one out of two remedies available under Section 64 of the Patents Act, can be availed of, so as to assail the grant of a patent. Accordingly the said remedy may be availed of in the capacity of either “any person interested”, or in the capacity of a defendant in a “counter-claim”. We have already concluded hereinabove, that having availed of any one of the above remedies, it is not open to the same person to assail the grant of a patent by choosing the second alternative available to him. In view of our above conclusion, the instant submission advanced by the learned counsel for the appellants does not survive for consideration.
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2014 (6) TMI 993 - BOMBAY HIGH COURT
Validity of Show cause notice against alleged fraud and money laundering - ingredients necessary for the attachment order - whether show cause notice does not contain any reason for the Adjudicating Authority to believe that the petitioner has committed an offence under section 3 or is in possession of proceeds of crime as required by section 8 of The Prevention of Money Laundering Act, 2002?
Held that:- The contention that the show cause notice does not state that the Adjudicating Authority has reason to believe that the petitioner has committed an offence under section 3 of the Act or is in possession of proceeds of crime is not well founded. The notice has, for all practical purposes, adopted, incorporated the complaint in toto. The notice, fairly read, indicates that the Adjudicating Authority, on the basis of the material in the complaint had reason to believe that the ingredients necessary for the attachment order existed. So read, it follows that the Adjudicating Authority stated in the show cause notice that he had reason to believe that there existed the factors necessary to serve the notice. The reasons, in turn, stand incorporated in the notice from the complaint. It is apparent that the notice has been issued based on the reasons to be found in the complaint and the documents which have been expressly referred to in the contention. The complaint itself expressly sets out the reason to believe. If, on the basis of the facts disclosed in the enclosures, the Adjudicating Authority had formed the opinion that there was no reason to believe the existence of the factors mentioned in section 8, he would not have issued the show cause notice. That he did indicates that he had reason to believe the existence of the said factors. In the facts and circumstances of the case this is sufficient compliance.
The above show cause notice was served upon the petitioner on its name as the said property is reflected in the complaint and attachment order. The final order on the show cause notice will determine the rights in the property qua the various persons concerned, including Aastha, the said Mohit Agarwal and the petitioner. The hearing on the show cause notice has proceeded. The petitioner has been heard. There is, any event, no warrant for exercising our extraordinary jurisdiction in setting aside the attachment order before the final orders which are due to be passed shortly.
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2014 (6) TMI 992 - GUJARAT HIGH COURT
Seniority list of Income-Tax Officers - contempt proceedings against the respondents - Held that:- Department stated that entire seniority will have to be considered by CBDT looking to the proposal and other requirements which will take some more time. It is expected that such seniority list may be finalized as far as possible by 15th October, 2014. Petition is disposed of accordingly.
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2014 (6) TMI 991 - ITAT CHANDIGARH
Issue of claim of deduction under section 10B - profits on sale of incentives received under the scheme Vishesh Krishi Upaj Yojna @ 5% of FOB value of exports, received from Ministry of Commerce, Govt. of India - Held that:- CBDT has issued the circular No. 8 of 2002 dated 27.08.2002 which clarifies that the restriction in deduction under section 10A and 10B to 90% of the profits and gains of the enterprises was for only one assessment year i.e. 2003-04. The assessee is in appeal before us relating to assessment years 2006-07 and 2009-10. Hence, the assessee is entitled to the claim of deduction @ 100% of the profits and gains of the enterprises. We find that a mistake has occurred in the order of the Tribunal. In view thereof, we modify the findings of the Tribunal in para 62 and hold that the assessee is entitled to deduction @ 100% of the profits of the EOU unit.
We allow the Miscellaneous Application moved by the assessee relating to assessment years 2006-07 and 2009-10 on the issue of claim of deduction under section 10B of the Act to be allowed at 100% of the profits of EOU unit. The remaining order passed by the Tribunal shall remain unchanged.
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2014 (6) TMI 990 - CESTAT KOLKATA
Rate of duty - Fe content of export goods - case of Revenue is that in terms of N/N. 62/2007-Cus., dated 3-5-2007, the Fe content of the export goods being less than 62%, as revealed from the Test Reports, applicable rate of duty would be ₹ 50/- per MT. - Held that: - Undisputedly, the Assessee/Respondent had exported Iron Ore Fines having Fe content less than 62%, as is evident from the Test Reports of the samples drawn at the time of shipment of the goods in question. Since the FE content was found to be less than 62%, therefore, it satisfies the conditions of the N/N. 62/2007-Cus.
The notification states that the conditions, in which the goods are exported, become relevant in determining Fe content; for application of the said Notification, the price at which such goods are sold, is not relevant in determining the rate of duty applicable at the time of export of the goods out of India. In these circumstances, we do not find any infirmity in the Order of the ld. Commissioner (Appeals).
Matter remanded to the Adjudicating Authority for verification and determination of refund claims - appeal allowed by way of remand.
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2014 (6) TMI 989 - CESTAT MUMBAI
Confiscation of foreign currency - Penalty - Redemption fine - Held that: - There is no finding in the impugned order except retracted statement of Shri PKJ. There was no cogent evidence brought on record to show the involvement of the appellant in any manner in giving illegally any currency to Shri PKJ and non-disclosure by department as to how the seized and the allegedly exported foreign currency was illegally procured by the appellant - The genuineness of CDF for USD 70,000/- is not in doubt. The seized currency recovered from Shri PKJ is clearly identifiable with the CDF also recovered at the spot from his possession.
We find that penalties have been imposed on Shri Satish Choudhary on the basis of inculpatory statement made by Shri PKJ which was retracted within 24 hours and there is no corroborative statement made by Shri Satish Choudhary and no material has been found during the course of investigation against Shri Satish Choudhary to prove that Shri Satish Choudhary has handed over the foreign currency to Shri PKJ. Therefore, as held by the Hon'ble apex court in the case of Vinod Solanki [2008 (12) TMI 31 - SUPREME COURT] and in K.I. Pavunny v. Asst. Collector (HO), Central Excise Collectorate, cochin [1997 (2) TMI 97 - SUPREME COURT OF INDIA] that "a find of fact was arrived at that the confession was voluntary in nature. Reliance therein for the purpose of arriving at the guilt of the accused was not only placed on the statement given under Section 108 of the Customs Act, 1962 but also on the deposition of evidences and it was also held law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc. but the requirement is that it may appear to the court as such."
As the findings are on the basis of statement of other and in the case of D. Bhoormal [1974 (4) TMI 33 - SUPREME COURT OF INDIA] the hon’ble apex has held that in case of penalty, the department has to prove that the person proceeded against was concerned with the smuggling or not. As the department has failed to establish that Shri OPJ was connected with the alleged smuggling of foreign currency, therefore no penalty is imposable on Shri CPJ. Therefore, the penalty on Shri OPJ is dropped.
As the adjudicating authority has held that the foreign currency seized from Monalisa Forex Services Pvt. Ltd. is not liable for confiscation. However, M/s. Monalisa Forex Services Pvt. Ltd. is no where connected with Shri PKJ. Therefore, the foreign currency seized from Monalisa Forex Services Pvt. Ltd. cannot be adjusted against dues of other co-appellants. Accordingly, the adjustment of the foreign currency seized from M/s. Monalisa Forex Services Pvt. Ltd. against the dues of other co-appellants is not sustainable, hence set aside - Decided by the majority order.
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2014 (6) TMI 988 - ITAT CHANDIGARH
Disallowing a sum towards exchange difference by resort to provisions of section 43A - Held that:- Case of the assessee before the Commissioner of Income Tax (Appeals) was that the provisions of sec43A were not applicable as the foreign exchange was not on account of borrowing for the purpose of imported machinery. The assessee has filed a Paper Book which is available on record. However, it is not clear from the documents available on record whether the assessee had utilized the said foreign exchange for the purpose of acquisition of machinery from any country outside India. In case the basic condition of acquisition of asset from outside India is not satisfied then the provisions of section 43A are not attracted. In order to cull out the facts, we deem it fit to restore this issue back to the file of Assessing Officer to determine the facts of the case.
Disallowance on account of processing fee against the ECB loan - Held that:- The matter has been remitted back to the file of Assessing Officer against ground No. 2(a) in order to determine the nature of the ECB loan taken by the assessee. In case the said loan has been taken during the course of carrying on of the business, the expenditure incurred on processing fee is to be allowed as expenditure in the hands of the assessee. However, in case the said loan is utilized for the acquisition of assets from a country outside India, then the processing fee is a capital expenditure and the same is to be capitalized to the cost of Plant & Machinery. This aspect also shall be verified by the Assessing Officer
Disallowance u/s 14A - Held that:- The assessee had earned dividend income of ₹ 279,170/- and also agricultural income of ₹ 45,000/-. The Assessing Officer in view of the investments made by the assessee invoked the provisions of section 14A of the Act and disallowed a sum of ₹ 1,00,000/- out of general and administrative expenses and financial expenses relatable to earning of exempt income. The said disallowance was restricted to ₹ 50,000/- by the Commissioner of Income Tax (Appeals) against which the assessee is in appeal. The year under appeal is assessment year 2006-07 and the provisions of section 8D are not applicable and in view thereof, we restrict the disallowance to ₹ 20,000/-. - Decided partly in favour of assessee.
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2014 (6) TMI 987 - ITAT PUNE
TDS disallowance - Whether the Ld. CIT(A) was justified in deleting the disallowance u/s 40(a)(ia) by holding that TDS disallowance applies only to amounts ‘payable’ as on 31st March and not to amounts already paid during the year? - Held that: - the issues relating to the applicability of section 194C of the Act, as contained in the Grounds raised in the Cross Objection, as also the fresh plea raised by the assessee before us based on the second proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 w.e.f. 01.04.2013, deserve to be examined afresh on their merits. The aforesaid new plea has not been examined by the lower authorities, because they did not have the benefit of the insertion of second proviso to section 40(a)(ia) of the Act by the Finance Act, 2012 w.e.f. 01.04.2013 before them - the matter is restored back to the file of the Assessing Officer with directions to examine contentions of the assessee and decide the same - appeal allowed by way of remand.
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2014 (6) TMI 986 - ITAT PUNE
TDS u/s 194C and 194H - assessee purchased sugarcane from the farmers and has made payments to the harvesting and transport contractors without deduction of TDS - Held that:- Since in the instant case it has been categorically observed that the price fixed for sugarcane is negotiated on ex-factory gate basis and the responsibility to harvest and transport the sugarcane is on the cane growing farmers and since such transportation and harvesting charges and commission paid by the assessee have not been claimed as separate deduction by the assessee and the same have been deducted from the purchase price of cane paid to the farmer and the assessee only has made the payment on behalf of the farmer to the harvesting and transport contractors, therefore, the provisions of s. 194C and 194H, in our opinion, are not applicable to the facts of the present case.
We find from the assessment order for the asst. yr. 2005-06 passed under s. 143(3) on 15th Dec., 2008 that no such disallowance was made in the said scrutiny assessment order. Further, the submission of the learned counsel for the assessee that in the past years also there was no such disallowance under s. 40(a)(ia) could not be controvered by the learned Departmental Representative. The various decisions relied on by the learned Departmental Representative are distinguishable and not applicable to the facts of the present case. - Decided in favour of assessee
Disallowance of Bakshish under s. 40(a)(ia) - CIT(A) deleted the disallowance holding that the Bakshish paid to the harvesting and transport contractors directly by the assessee sugar factory is made on belief of sugarcane grower farmers - Held that:- It is the submission of the learned counsel for the assessee that such payment is made on completion of every harvesting season although the assessed is not contractually liable for such payment. However, same is paid to maintain good relationship with the labour force who come from outside Nashik and Marathawada Regions. It is also the submission of the learned counsel for the assessee that each individual payment is less than ₹ 20,000 and therefore tht provisions of s. 194C will not be applicable. The learned Departmental Representative could not controvert the above submission of the learned counsel for the assessee. Further, no such disallowance was made in the past yeas. The assessee has not claimed separately any such expenditure and the same has been debited to the purchase of sugarcane account. In view of our reasonings given in the preceding paras, we find no infirmity in the order of the CIT(A) deleting the disallowance - Decided in favour of assessee
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2014 (6) TMI 985 - ITAT KOLKATA
Addition on account of unaccounted receipt from National Dairy Development Board (NDDB) - Held that:- We find that the assessee is able to explain by filing details of packaging charges received to the sum of ₹ 1,20,27,912/- and why the difference kept in. The assessee has reconciled the figure of ₹ 7,22,171/- being the amount of packaging charges already booked in the Ay 1999-2000 and it has been verified by the AO as well as CIT(A). The second figure of ₹ 4,62,597/- being the amount received from NDDB was reflected under the head “other incomes” as is evident from the statement forming part of assessee’s paper book appearing at pages 27 to 31. From the above reconciliation it is clear that the assessee is able to explain why difference between the receipts as noted in TDS certificate and receipt declared by assessee arose. Accordingly, this amount of ₹ 12,32,996/- has rightly been deleted by CIT(A) and we confirm the same. This ground of appeal of revenue is dismissed.
Disallowance of interest on borrowed money - Held that:- We find that the assessee company contributed a sum of ₹ 2,10,48,250/- by way of its shares in the joint venture. The assessee company under the name of Metro Dairy Ltd. produces milk in joint venture with WBSCMPFL and NDDB. The joint venture is a business enterprise and investment by assessee in the same is wholly and exclusively for the purpose of business. The assessee company filed copy of joint venture agreement amongst assessee, WBSCMPFL and NDDB before the AO, before CIT(A) and even now before us. Once the investment is made in a joint venture and all the monies borrowed were used wholly and exclusively for the purpose of business, no interest can be disallowed. This issue is covered by the decision of Hon’ble Calcutta High Court in the case of CIT Vs. Rajib Lochan Kanoria (1994 (2) TMI 42 - CALCUTTA High Court ). Even this issue is covered by the decision of Hon’ble Bombay High Court in the case of CIT Vs. Reliance Utilities & Powers Ltd.(2009 (1) TMI 4 - BOMBAY HIGH COURT ) wherein it is held that if there is interest free funds available to assessee to meet its investments and at the same time the assessee has raised loans it can be presumed that investments were from interest free funds available. Even otherwise, for the purpose of consistency, the assessee has made this investment from AY 1994-95 to 1999-2000 no such interest was allowed by AO and accepted this fact. In term of the above, we are of the considered view that the CIT(A) has rightly deleted the disallowance and we confirm the same.
Addition under the head ‘Scooby Doo Promotion expenses’ - Held that:- As explained by the assessee before the AO that it did not receive any bill from Parley Agro Pvt. Ltd. but remitted ₹ 19/- per tray of Frooti Mango drink containing 27 tetra packs of the said juice. The assessee submitted complete breakup of ₹ 49,44,199/- paid/payable to Parley Agro Pvt Ltd. It was claimed by the assessee that it was under compulsion to participate in the scheme as a prudent businessman and accordingly, paid its share of expenses. It was the objection of the revenue that no services in exchange of payment to Parley Agro Pvt. Ltd. was received by the assessee company but it seems that the objection of the revenue is unjustified in view of the fact that the advertisement in the form of Scoobi Doo animation film was shown in Television and All India display of such film was intended for increase of the sale of “Frooti”. This being a promotional scheme assessee received huge success in business and this being a business itself, assessee’s expenses are also business expenses. We are of the view that the CIT(A) has rightly deleted the disallowance and we confirm the same
Addition on account of increase in closing stock of stores & spares etc. - Held that:- We find from the reconciliation that the increase in the value of stock from ₹ 48,19,274/- to ₹ 48,37,047/- i.e. ₹ 17,772/- was properly accounted by the assessee and in view of this, CIT(A) has rightly deleted the addition and we confirm the same.
Addition on unaccounted receipts from Dhara Vegetable Oil & Food Co. Ltd - Held that:- We find that as per TDS certificate issued to assessee by Dhara Vegetable Oil & Food Co. Ltd. the total bill of packaging charges amounting to ₹ 87,11,115/- and not ₹ 87,21,394/- as noted by the AO in the assessment order. The assessee explained before us that the gross bill of ₹ 87,11,115/-, it reversed the packaging charges of the earlier years attributable to under despatch packing material and added the packaging charges relating to under despatch packing material and the current year and there was discrepancy. We find that the assessee has determined the income chargeable under the head Profit and Gains of business in accordance with the method of accounting regularly employed by the assessee and also reconcile the discrepancy in the packaging charges vis-à-vis closing stock. Once the assessee explained the same, the addition cannot be made. Accordingly, we confirm the order of CIT(A) deleting the addition
Addition of amount received by assessee from Metro Dairy Ltd on account of TDS credit - Held that:- AO failed to correctly appreciate the submissions made by assessee in regard to real nature of receipt of the assessee. It is a fact that assessee has received a sum of ₹ 4,62,911/- on account of reimbursement of expenses incurred by assessee on a joint venture project carried on with Metro Dairy Ltd. Since this amount represented reimbursement of expenses it was not in the nature of income in the hands of the assessee. CIT(A) has rightly deleted the same and we confirm the same.
Addition on account of obsolete stores - Held that:- From the details of closing stock as on 31.03.2003 has shown in the statement enclosed with the assessee’s letter it is noticed that the total of the various items of closing stock of stores and spares was at ₹ 51,32,752/- from which obsolence amounting to ₹ 2,5,705/- was deducted. From the statement it is clear that this amount shown by the assessee as provision for obsolence rather it is a deduction claimed on account of obsolete stores and spares written off. This being an usual practice in the manufacturing industry to write off obsolete stores annually and therefore, claim as deduction from the closing stock is fully justified.
Addition on account of remission of sales tax - Held that:- The sales tax remission given under West Bengal Incentive Scheme 1993 and 1999 was not for assisting the assessee in carrying out its business operation but incurred the promotion of industries in the State of West Bengal and consequently, following the decision of Hon’ble Supreme Court in the case of Sahaney Steel & Press Works Ltd. Vs. CIT [1997 (9) TMI 3 - SUPREME Court ] holding the sales tax remission as capital receipt.
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2014 (6) TMI 984 - BOMBAY HIGH COURT
Offence punishable u/s 9(1)(b), 9(1)(bb) and 9(1)(bbb) of the Central Excises and Salt Act, 1944 read with Rule 173 of the CER, 1944 - goods removed without determination and payment of duty - Held that: - the learned Magistrate had taken into consideration the length of the proceedings which were protracted on one or the other ground and, therefore, had rightly awarded the sentence of fine. The penalty awarded should necessarily be proportionate to the crime which is committed. The quantum of punishment/sentence would depend on the duty leviable on the seized articles. It is pertinent to note that in the present case, the prosecuting agency has not specifically stated the quantum of duty which was evaded by the accused persons.
It contemplates that in the case of an offence relating to any excisable goods, the duty leviable thereon under this Act exceeds one lakh of rupees, with imprisonment for term which may extend to seven years and with fine. It therefore, follows that the prosecuting agency has to specifically state the duty leviable on the goods which is the subject of Section 9(1)(bb) and (bbb) - In the present case, the same has not been considered by the learned Magistrate or the revisional Court.
The very fact that revision would not be maintainable is a sufficient ground to allow the present writ petition as the judgment passed in a proceeding which is not maintainable would be a judgment without jurisdiction - petition disposed off.
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2014 (6) TMI 983 - SUPREME COURT
Appointment on ad hoc basis as Lower Division Clerks - grant of selection grade - whether the respondents would not entitled to grant of increments during the period of their temporary service? - Held tat:- Ad hoc appointment is always to a post but not to the cadre/service and is also not made in accordance with the provisions contained in the recruitment rules for regular appointment. Although the adjective “regular” was not used [pic]before the words “appointment in the existing cadre/service” in Para 3 of the G.O. dated 25-1-1992 which provided for selection pay scale the appointment mentioned there is obviously a need for regular appointment made in accordance with the Recruitment Rules. What was implicit in the said paragraph of the G.O. when it refers to appointment to a cadre/service has been made explicit by the clarification dated 3-4-1993 given in respect of Point 2.
Our preceding analysis would clearly show that the dictum in Jagdish Narain Chaturvedi (2009 (5) TMI 959 - SUPREME COURT) covers the controversy. The respondents prior to regularization were not members of service or a part of the cadre and hence, the benefit of the circular pertaining to selection grade was not applicable to them. Therefore, the irresistible conclusion is that they are only entitled to the benefit of selection grade from the date of regularization. The period of nine years, eighteen years and twenty seven years has to be computed from that date. True it is, they may have been given the first benefit on an erroneous understanding of the circular and also prior to the decision in Jagdish Narain Chaturvedi’s case. But that would not entitle them to assert their claim on that basis, for that would be contrary to the law of the land as stated in Jagdish Narain Chaturvedi’s case. Be it noted, the State, as the latter circular would indicate, has decided not to take any steps for recovery of the benefit. Therefore, we conclude and hold that the writ petition preferred by the respondents before the High Court deserves dismissal and, accordingly, the order passed by the writ court and the decision in intra-court appeal are set aside and the writ petition stands dismissed.
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2014 (6) TMI 982 - GAUHATI HIGH COURT
Appeal admitted on following substantial question of law :-
Whether Tribunal was justified in law in holding that income received by the assessee during the assessment year in question from services/erection charges of plants and accessories was not a part and parcel of the income which it derived from their manufacturing activities from eligible undertakings/enterprises and, hence, they were not entitled to claim deduction available to them under Section 80-IC of the Income Tax Act, 1961 ?
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2014 (6) TMI 981 - BOMBAY HIGH COURT
Eligibility for deduction under section 80IB - DEPB and duty drawback not considering - Held that:- We are not in agreement that the ITAT has erred in not considering both the aspects viz. the duty drawback as also the claim which was made towards DEPB. If DEPB was covered by Liberty India's judgment [2009 (8) TMI 63 - SUPREME COURT] then failure to consider duty drawback claim is unsustainable, is the plea. We are unable to agree with the same.
Supreme Court has considered both the claims and held as above. Therefore, ratio of that judgment is clearly applicable to the facts and circumstances of the present case. The Tribunal did not commit any error in holding that if the claim was of Daman Unit of the Assessee, then the matter was squarely covered against the Assessee and in favour of the Revenue by Liberty India' judgment.
From the copy of the order passed by the Delhi High Court in the case of Dharampal Premchand Ltd., [2010 (9) TMI 155 - DELHI HIGH COURT] it is apparent that Assessee filed return declaring certain income which included amount refunded as excise duty. The Assessing Officer held that the refund of excise duty was not income derived and therefore, the Assessee was not entitled to include the same in its income. It is in that event the Assessing Officer held that the deduction under section 80-IB in respect of that unit could not be granted. The Assessing Officer's order was reversed by the Commissioner of Income Tax (Appeals). The Tribunal reversed the order of the Commissioner of Income Tax (Appeals).
As a result of the above discussion and finding that the Tribunal's order is not vitiated by any perversity, we proceed to dismiss this Appeal
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2014 (6) TMI 980 - KARNATAKA HIGH COURT
Violation u/s.11(5) and 13(1)(d) - whether the exemption is to be withdrawn for the entire income or the portion of the income? - Held that:- This issue is covered by the judgment of the Bombay High Court in the case reported in Director Of Income-Tax (Exemptions) Versus Sheth Mafatlal Gagalbhai Foundation Trust(2000 (10) TMI 26 - BOMBAY High Court ).
Following the aforesaid judgment, this court in the case of Commissioner of Income Tax, Mangalore Vs. Fr. Mullers Charitable Institutions, Kankanady, Mangalore [2014 (2) TMI 1033 - KARNATAKA HIGH COURT ] has held the entire income of the assessee cannot be assessed for the tax, for violating under Section 11(5) read with Sec.31(1)(d) of the Act and what would become the subject matter of assessment is only that income which is the subject matter of violation. - Decided in favour of the assessee
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2014 (6) TMI 979 - ITAT DELHI
Disallowance of Commission paid to Managing Director of assessee company - Held that:- We find this issue to be covered in favour of the assessee by the decision of ITAT in assessee’s own case for AY 2005-06 [2012 (5) TMI 217 - ITAT DELHI] wherein the ITAT decided this issue in favour of the assessee. Since the issue is settled by the decision of ITAT in assessee’s own case in earlier years, we do not find any infirmity in the order of learned CIT(A) in deleting the disallowance
Disallowance u/s 14A applying the provisions of Rule 8D - Held that:- We find this issue also to be covered in favour of the assessee by the decision of ITAT in assessee’s own case for AY 2007-08 wherein the ITAT set aside the matter to the file of the Assessing Officer wherein held in case, the AO is satisfied with the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, the AO is to accept the claim of the assessee insofar as the quantum of disallowance under s. 14A is concerned. In such eventuality, the AO cannot embark upon a determination of the amount of expenditure for the purposes of s. 14A(1). In case, the AO is not, on the basis of objective criteria and after giving the assessee a reasonable opportunity, satisfied with the correctness of the claim of the assessee, he shall have to reject the claim and state the reasons for doing so. Having done so, the AO will have to determine the amount of expenditure incurred in relation to income which does not form part of the total income under the said Act. He is required to do so on the basis of a reasonable and acceptable method of apportionment
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