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2015 (2) TMI 1347
Penalty u/s. 271D - contravention of provisions of section 269SS - HELD THAT:- In the present case, in assessment year 2003-04 cash loans were obtained and in A.Y 2004-05 they were repaid. According to the plea raised before AO as well as Ld. CIT(A), the persons who have advanced these loans to the assessee are relatives of a salesman who reside in a village and were having no bank account. Such contention of the assessee has not been discarded or disproved. It is also not mentioned in the penalty order that the aforementioned amount taken by the assessee in violation of section 269SS and repayment thereof in violation of section 269T was not bonafide transaction and the same was made with a view to evade tax.
If it is so, then according to the decision in the case of CIT vs. Triumph International Finance (I) Ltd. [2012 (6) TMI 358 - BOMBAY HIGH COURT] no penalty is imposable either under section 271D or under section 271E as the explanation submitted by the assessee would be considered to be reasonable cause under section 273B.
We hold that it is not a fit case where levy of penalty either under section 271D or under section 271E is justified. The same are deleted and the appeals filed by assessee are allowed.
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2015 (2) TMI 1346
Seeking application for stay of the order made under Regulation 20(3) of the Customs House Agents Licensing Regulations, 2004 - HELD THAT:- Considering that the order is purely interim and has taken note of the previous order of this Court and also the contentions of the appellant no interference is called for. At the same time this Court is conscious of the fact that enquiry proceedings under Regulation 22 have got prolonged to an extent. The respondents are directed to complete the enquiry proceedings after giving two opportunities to the appellant in accordance with provisions of Regulations and other provisions of law and pass final orders at the earliest preferably within three months from today.
Appeal dismissed.
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2015 (2) TMI 1345
Sales Tax subsidy - capital or revenue receipt - HELD THAT:- The issue is covered, in favour of the assessee, by Tribunal’s order in assessee’s own case and that the Commissioner of Income Tax (Appeals) has merely followed the same. Learned Departmental Representative, however, vehemently relies upon the stand of the Assessing Officer.
We see no reasons to take any other view of the matter than the view so taken by us in assessee’s own case for other assessment years. No distinguishing factors have been pointed out by the learned Departmental Representative. In this view of the matter, and respectfully following the said orders, we uphold the conclusion arrived at by the ld. Commissioner of Income Tax (Appeals) and decline to interfere in the matter.
Appeal of the Assessing Officer is dismissed.
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2015 (2) TMI 1344
Authorized occupant or not - filing of suit by the Respondents for the enforcement of their alleged rights in respect of the subject premises - whether the subject premises can be said to be an asset of the SSML vested with the State?
HELD THAT:- In National Textile Corporation Ltd. v. Sitaram Mills Ltd. and Othrs. [1986 (4) TMI 349 - SUPREME COURT], this Court noticed the stand taken by parties with regard to property in question. The said case related to the very same mill SSML. The Division Bench of the High Court of Bombay on a petition Under Article 226 of the Constitution of India filed by SSML while upholding the constitutional validity of Section 3(1) of the Textile Undertakings (Taking Over of Management) Act, 1983 held that the surplus land appurtenant to the mill was not an 'asset in relation to the textile undertaking' within the meaning of Sub-section (2) of Section 3 of the Act and directed the Central Government to restore the possession of the said land to the Company.
The agreement to sell relied upon by Respondent No. 1 itself contains Clause 1(d), 2, 3, 6 etc. which mandates the execution of registered sale-deed or conveyance deed within three years. However, the same was never done. A suit for specific performance was filed by Respondent No. 1 before Bombay High Court against SSML 25 years after unregistered agreement to sell dated 25th March, 1975, thereby, acknowledging that there was no registered document of title with Respondent No. 1. The said suit is still pending - thus, all other rights and interests in or arising out of such property as were existing immediately before the appointed day in the ownership, possession, power or control of the textile company in relation to the said undertaking vested with the Central Government and by virtue of Sub-section (2) of Section (3) stood transferred to, and vested in, the National Textile Corporation. Liability if any of the owner of a textile undertaking i.e. SSML of any period to the appointed day is liability of such owner (SSML) and can be enforceable against him and not against the Central Government or the National Textile Corporation in view of Section 5(1) of 1995 Act.
The First Schedule of the 1995 Act provides the amount which the Central Government has to pay to the owner of every textile undertaking for the transfer and vesting of such undertaking to it. This provision cannot be the starting point of investigation as to which amount relates to which property or as a guide to construction - Therefore, it is clear that the property in question stood vested in the Central Government and, in turn, stood transferred and vested with National Textile Corporation Under Sub-section (2) of Section 3 of 1995 Act. Even if it is admitted that Respondent No. 1 has acted on the agreement to sell and has paid the entire consideration, it cannot be a ground to hold that Respondent No. 1 is authorized occupant within the meaning of Section 2(g) of the 1971 Act.
Thus, the Division Bench of the High Court failed to analyze the provisions correctly and wrongly presumed that the property in question has been sold to the Textile Undertaking prior to the commencement of 1983 Act. The Court wrongly relied on Section 53A of the Transfer of Property Act to hold that Respondent No. 1 has valid defence available under the said provision and hence erred in holding that Respondent No. 1 is an authorized occupant within the meaning of Section 2(g) of the 1971 Act - appeal allowed - decided in favor of appellant.
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2015 (2) TMI 1343
Constitutional validity of Parts I-B and I-C of The Companies Act, 1956 inserted by Companies Second Amendment Act of 2002 - HELD THAT:- The substantial questions of law involving interpretation of the provisions of the constitution falls for determination. That apart since an analogous challenge in the earlier round of litigation had been examined by a Constitution Bench of this Court, we see no reason why the present writ petitions should also not be referred to a larger Bench for an authoritative pronouncement on the questions that have been raised. We accordingly refer these writ petitions to be placed before a Constitution Bench for final hearing and disposal. Additional paper books shall be filed by the Petitioners within two weeks. The papers shall be placed before Hon'ble the Chief Justice of India for constituting a larger Bench.
Petition disposed off.
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2015 (2) TMI 1342
Cancellation of Registration u/s 12AA(3) - financial accounts of the assessee relating to the period relevant to Assessment Year 2009-10 reveal that the assessee had surplus of ₹ 57.70 Crores - On a perusal of the Website of the assessee, the ld. DIT (Exemptions),concluded that the assessee was providing buses for casual contracts and chartered services onhire, charging rates similar to those charged by private transporters and assessee permits commercial advertisements on its fleets.
HELD THAT:- In the case on hand the assessee is a public undertaking of the State Government of Karnataka - There is no finding rendered by the ld. DIT (Exemptions) that there was any violation of the two conditions by the assessee, and therefore the grounds which empower the ld. DIT (Exemptions) to cancel the registration u/s 12AA(3) of the Act, are absent. The registration cannot be cancelled in view of the amendment of the first proviso to section 2(15) of the Act, since it is not a ground specified in the statute for cancellation of registration under Section 12AA(3).
If the case of an assessee falls within the ambit of the first proviso to section 2(15) of the Act, the benefits which arise from registration under Section 12AA of the Act will not be available to it, and this aspect is to be considered by the AO, but this would not be a ground for cancellation of registration. From an appreciation of the facts and circumstances of the case on hand, we find that the facts herein are similar both factually and legally to that of the cited case of DIT(Exemptions) V Karnataka Industrial Area Development Board [2015 (7) TMI 169 - KARNATAKA HIGH COURT] and therefore respectfully following this decision, we hold that the impugned order of DIT (Exemptions) cancelling the assessee's registration by order under Section 12AA(3) of the Act dt.21.11.2011 is not sustainable and therefore cancel the same. - Decided in favour of assessee.
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2015 (2) TMI 1341
Depreciation on the assets acquired from holding company - assessee continued to be 100% subsidiary of the transferor company - whether Tribunal was correct in law in upholding the order of the CIT(A) directing the AO to allow depreciation on the assets acquired from Tata Motors Ltd. at the cost at which they have been acquired? - HELD THAT:- As of now the issue stands concluded against the Revenue by the decision of this Court in M/s. Essar Oil Ltd [2011 (7) TMI 1371 - BOMBAY HIGH COURT] - In these circumstances, we see no reason to keep this appeal pending till the decision of the Apex Court in M/s. Essar Oil Ltd. (supra).
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2015 (2) TMI 1340
Disallowance u/s 14A - HELD THAT:- Calculation of disallowance as per Rule 8D(2)(iii) is erroneous, as the AO without assigning any reason did not reduce the investment in mutual funds and group concern which does not quire incurrence of major expenditure. We restore this ground back to the file of A.O. for fresh consideration in terms of our above discussion.
Disallowance upfront brokerage fees - A.O. has disallowed the said expenses on the ground that assessee has changed its accounting policy with regard to expense on upfront brokerage fees - HELD THAT:- Looking into the nature of expenses, the same were incurred in the revenue field and the same has been incurred wholly and exclusively for the purpose of business. The change in the accounting system is not violative of any regulations issued by regulatory authorities in this regard. Furthermore change in accounting policy is bonafide and in line with the industry practice. In earlier years the assessee witnessed many times either the clients exited from the scheme or they switched to the other scheme. The same has necessitated the assessee to change their accounting practice and the assessee followed the same in all the subsequent years. It was also brought to our notice that no disallowance was made in next year while framing assessment u/s 143(3) of the Act. Accordingly, we do not see any justification for the disallowance made in respect of upfront brokerage fees actually paid by the assessee during the year under consideration.
Disallowance of office renovation expenses - HELD THAT:- No doubt the expenses were actually incurred by the assessee. However, the same was disallowed on the plea that it was capital in nature. Looking to the fact that the premises were not occupied at all, therefore, there was complete loss of expenditure incurred by the assessee. In the interest of justice, this ground is also restored to the file of A.O. for fresh adjudication in terms of our above discussion and judicial pronouncement cited by ld. A.R.
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2015 (2) TMI 1339
Condonation of delay - delay of 515 days in filing these appeals - HELD THAT:- We have considered the factual matrix of this case to reach the finding that there existed no sufficient and reasonable cause for the inordinate delay of 515 days in filing the appeal as the assessee has also not been able to establish that he was prevented by sufficient causes beyond his control from filing these appeals on time.
In the case on hand, the cause of substantial justice would not be served by condoning the inordinate delay of 515 days in filing these appeals for which no cogent reasons have been given. We accordingly reject these petitions for condonation of delay for Assessment Years 2002-03 to 2005- 06. Consequently, the assessee's appeals for Assessment Years 2002-03 to 2005-06 are not admitted for adjudication on merits and are dismissed in limine. - Decided against assessee.
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2015 (2) TMI 1338
Dowry - a young woman consumes pesticide having been driven to do so by repeated demands being made on her for money by the family into which she is supposed to merge her identity - Can it be argued that it is a penal statute and, should, therefore, in case of ambiguity in its language, be construed strictly?
HELD THAT:- Any money or property or valuable security demanded by any of the persons mentioned in Section 2 of the Dowry Prohibition Act, at or before or at any time after the marriage which is reasonably connected to the death of a married woman, would necessarily be in connection with or in relation to the marriage unless, the facts of a given case clearly and unequivocally point otherwise - Days or months are not what is to be seen. What must be borne in mind is that the word "soon" does not mean "immediate". A fair and pragmatic construction keeping in mind the great social evil that has led to the enactment of Section 304B would make it clear that the expression is a relative expression. Time lags may differ from case to case. All that is necessary is that the demand for dowry should not be stale but should be the continuing cause for the death of the married woman under Section 304B.
The facts of this appeal are glaring. Demands for money were made shortly after one year of the marriage. A she-buffalo was given by the father to the daughter as a peace offering. The peace offering had no effect. The daughter was ill-treated. She went back to her father and demanded money again. The father, then, went along with his brother and the Sarpanch of the village to the matrimonial home with a request that the daughter be not ill-treated on account of the demand for money. The father also assured the said persons that their money demand would be fulfilled and that they would have to wait till the crops of his field are harvested. Fifteen days before her death, Salwinder Kaur again visited her parents' house on being maltreated by her new family. Then came death by poisoning. The cross-examination of the father of Salwinder Kaur has, in no manner, shaken his evidence. On the facts, therefore, the concurrent findings recorded by both the courts below are upheld.
Appeal dismissed.
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2015 (2) TMI 1337
TP Adjustment - notional interest in the determination of Arms Length Price - addition pertaining to variable license fees claimed by the assessee as revenue expenditure and mortized by the AO u/s 35ABB - Revenue urges that the deletion being the interest adjusted on account of interest determined to be payable at 17.26% p.a. instead of 7.33% p.a. is not justified - HELD THAT:- This Court has today declined this question of law on the same ground for another Assessment Year 2007-08 [2015 (2) TMI 1126 - DELHI HIGH COURT]and for the said reason no question of law arises in this case too.
This appeal shall be listed in the category of ‘Regular Matters’, along with ITA above as per its turn.
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2015 (2) TMI 1336
Transfer the fund lying in five numbers Fixed Deposits in 3rd respondent-Karur Vysya Bank Account - HELD THAT:- There will be a direction to the respondent Bank to transfer the funds, as requested by the petitioner and as agreed, within a period of three weeks from the date of receipt of a copy of this order.
Petition disposed off.
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2015 (2) TMI 1335
Addition u/s 68 - addition for loan unexplained - AY 1997-98 - HELD THAT:- What we notice is that AO had not doubted the VDIS declaration in respect of Shri D.I.Kamalakar. As for Shri K.I.Raghavendra, his only grievance is that bank details were not produced. He has not doubted the credit worthiness of Shri K.I.Raghavendra. In the case of Shri Vyjanath R Patil as well as Shri Naganna Swadi, these persons had appeared before the AO and confirmed the loans. They had also produced evidence for the agricultural land in their possession - such confirmations when read along with the affirmations made before the AO by these creditors on their personal appearance before him could not have been brushed aside. Assessee in our opinion had discharged his onus, vis-à-vis the loans claimed to have been taken from these 4 persons. These additions therefore, were not called for.
We confirm the order of the learned CITA) to the extent he deleted the addition for the loans from Shri D.I.Kamalakr and Shri K.I.Raghavendra and set aside his orders in so far it relates to the confirmation of the addition for the loan from Shri Vyjanath R Patil and Shri Naganna Swadi.
Addition on disbelieving the confirmation filed by one Shri Parakash Kattimani - AY 1999-2000 - HELD THAT:- It is an admitted position that Shri Prakash Kattimani in his confirmation dated 14-02-2012 had stated that he had no banks statement or books of accounts with him to show the source of the payment. A look at the affidavit of Shri Prakash Kattimani does not prove anything. It simply gives the cheque Nos. through which payment of ₹ 10,00,955/- was effected. This would not in any way show that the payments were made by Shri Prakash Kattimani himself. Nor does it show any light of the credit worthiness of Shri Prakash Kattimani. Further, the assessee had changed his version before the CIT(A). Before the AO it had given in the confirmation letter from one Dasharath and one M/s Amar Trading Co., against the above sum. Before the CIT(A) assessee roped in one Shri Prakash Kattimani as the creditor, to whom he claimed he had given sub-lease of Ron Taluk Range. We are of the opinion that the lower authorities were justified in disbelieving the version given by the assessee and making addition
Demand drafts deposited with Excise department for the purpose of bidding for arrack ranges - Assessee had given the PAN of Shri Basant Kumar Patil and Smt.D.Pushpalatha before the CIT(A). In the remand report AO had made no comments whatsoever on the confirmations. Once the PAN of the creditor is given, the AO could have verified the veracity of the claim of the assessee. It is also a fact that the payments effected to excise department were through DD’s and details of all such DD’s were with the AO. Hence, we are of the opinion that in so far as the loans claimed by the assessee to have taken from Shri Basanth Kumar Patil and Smt D.Pushpalatha are concerned, it requires a fresh verification from the AO. However, in so far as the loan alleged to have been taken from Shri M.J.Torgal, assessee was unable to produce any substantiating evidence or document. We are of the opinion the addition by the AO to this extent was justified. Thus, we set aside the orders of the CIT(A) on this issue.
Loan shown as outstanding to Standard Chartered Bank CIT(A) has mentioned that documents were produced before him. AO has not made any comments in the remand report. The amount shown as due to Shri D.I.Kamalakar, who is assessee’s father, is stated to be three instalments of ₹ 9,390/- each paid by Shri D.I.Kamalakar,to M/s ANZ Grindlays Bank, against the Car loan. On this also, AO has not made any comments in his remand report. However, in the Balance sheet a sum of ₹ 98,000/- was shown as due to Shri Chidambara Shetty whereas before the CIT(A) assessee had given confirmation from one Smt.D.Chitra, Proprietrix of M/s Chitra Enterprises. Nevertheless, confirmation which stated that the amount was paid by cheque to the assessee was not doubted by the AO in the remand report. We are therefore, of the opinion that CIT(A) was justified in considering the loans of ₹ 4,36,170/- appearing in the liability side of the balance sheet of the assessee to be genuine.
Assessment year 2001-02 - Confirmation if any received from M/s Raghavendra Dall Industries, Sri Goverdhan Auto Finance, M/s Sangameshwara Enterprises, and Sri B Manik Rao are not before. However, learned CIT(A) does mention that the confirmation of all the 12 persons were available with him. Hence, with respect of the balance of ₹ 68,00,000/- we are of the opinion that the matter requires a fresh look by the AO. If the assessee is able to show that the confirmations had the details of the DD’s, and source for raising the amounts, and if the DD numbers tally, with the list given by the AO of his order reproduced by us in the annexure and provide details as to the account from which the money for which the DD’s were drawn, then, in our opinion the additions would not stand - we do make a note that it is the onus of the assessee to substantiate its contentions regarding the claim. Thus, against the deletion of ₹ 96,96,996/- the order of the CIT(A) is sustained to the extent whereas for the balance of sum of ₹ 68 lakhs pertaining to his order is set aside and issues remitted back to the file of the AO for consideration afresh in accordance with law.
Addition by the CIT(A) admittedly, Sri D.I.Kamalakar, was an assessee and his financial statement reflected the loans given to assessee, who was his son, has not been disputed by the revenue. Hence, we are of the opinion that the CIT(A) justified in deleting this addition.
Sustaining the addition against DD’s obtained from Thirupathaiah, we find that the assessee had indeed furnished a certificate from Allahabad Bank which clearly gave the DD numbers and the account from which the DD’s were taken. We find that the such DD nos. tallied with the list given by the AO and the Allahabad Bank had certified that the accounts belonged to M/s Kanakadurga Wines owned by Sri Thirupathaiah and Sri B.Venkatesah M. In such circumstances, we are of the opinion out of the total addition of ₹ 42,50,000/- sustained by the CIT(A) the addition was not justified. This addition stands deleted.
Addition which the assessee claims to have obtained from Sri Govindaiah Goud,, it is an admitted position that confirmation of Sri Govindaiah Goud, itself was only for ₹ 20.00 lakhs and not for ₹ 34,50,000/-. Similarly, assessee was unable to produce any credible evidence for loan alleged to have been obtained from Sri U.A.Ballal and Sri M.J.Torgal, ₹ 2.00 lakhs and 5.00 lakhs respectively. We are therefore, of the opinion the CIT(A) justified in confirming these additions.
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2015 (2) TMI 1334
Re-opening u/s.147 - Review v/s reopening - return was processed u/s. 143(1) - unexplained cash credit - bogus expenditure - HELD THAT:- In the case in hand, the return was processed u/s. 143(1) of the Act but the same had attained finality due to the expiry of limitation period of twelve months from the end of the month in which the return was filed. Hence, the assessment is deemed to be completed.
Merely because assessment was framed u/s.143(1), it will not lead to the conclusion that the requirement of Section 147 with regard to “reasons to believe” can be dispensed with when the finality of intimation u/s.143(1) is sought to be disturbed as held in the case of Orient Craft Ltd. [2013 (1) TMI 177 - DELHI HIGH COURT] and Kelvinator (I) Ltd. [2010 (1) TMI 11 - SUPREME COURT]
Assessing Officer has no power to review; he has the power to re-assess. As observed above, the reopening and reassessment in this case was nothing, but, the review u/s 143(3) of the Act in the garb of the provisions of section 147 of the Act, which was not permissible in view of the law laid down by the Hon’ble Supreme Court in the case of “CIT vs. Kelvinator of India Ltd.” (supra).
Even otherwise, in the case in hand, the issue upon which the reopening was done and the issue on which the addition was made were diagonally opposite to each other. The reopening was done on the suspicion of bogus billing allegedly arranged from Suryodaya Company i.e. the issue of bogus expenditure, which otherwise was proved to be wrong, however the addition has been made in respect of Share application money received i.e. in respect of unexplained cash credits. We annul the reopening of assessment u/s.147 of the Act. - Decided in favour of assessee.
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2015 (2) TMI 1333
Status of the assessee as AOP as against its claim as firm - completing the assessment on the assessee as an Association of Persons - failure to comply with the requirements of Section 144 - HELD THAT:- While rationalizing the provisions relating to assessment of firms it is made clear that, only in the event of a best judgment assessment is made for failure to comply with Section 144 the benefit which is available to a firm u/s 28 can be denied. If a best judgment assessment under Section 144 of the Act is not made, no disallowance u/s 184(5) can be made.
No doubt this explanatory note is not in conformity with Section 184(5) of the Act. But, when the CBDT issued the said explanatory note, it is giving relaxation and benefit to the assessee which the statute has not provided. Such a power is vested in the CBDT by virtue of Section 119. Once such a benefit is conferred by way of a circular, the authorities are bound by the same.
They cannot sit in judgment over the said explanation and deny the benefit to the assessee. Even though this Court can interpret the said provision and note that there is inconsistency between the provision and the explanation offered, but when the CBDT issued such instruction granting that benefit to the assessee that has to be respected. In that view of the matter, the approach of the three authorities in denying the benefit to the assessee was not justified. It is contrary to the said explanation found in the circular which the CBDT wanted to extend to the assessee in order to overcome the hardship by virtue of the said statutory provision. Therefore, the impugned orders cannot be sustained.
As contended that, when the partnership deed was not enclosed to the return filed, there is non-compliance of Section 184(2) and, therefore, the consequences mentioned in Section 184 has to follow. But, it is on record before the assessment, a partnership deed duly certified and signed by all the partners were produced before the assessing authority. There is substantial compliance with sub-section (2) of Section 184.
As could be seen from the language employed in Section 185, if there is non-compliance with the provisions of Section 184, the firm shall be so assessed and no deduction would be granted. It is at the time of assessment, if the authority is not given the partnership deed, the firm would be given the benefit. But, at the time of assessment, if the partnership deed was produced, certainly the authorities have to look into the partnership deed and if it is a firm which satisfies the other requirements, then the firm would be entitled to other benefits. Under such circumstances, Section 185 is not attracted.
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2015 (2) TMI 1332
Restraint on defendants from in any manner obstructing or hindering the activities of the plaintiff-Company, towards the construction of Multi-storied residential complex - permanent injunction sought - HELD THAT:- During the pendency of the above writ petition, the parties to the dispute have filed a joint memo requesting the Court to modify the ex-parte temporary injunction granted on 7-1-2015. At paragraph 2 of the joint memo, the respondents have undertaken that they will not act in any manner that is inconsistent with or detrimental to the rights of the petitioner-Company under the Joint Development Agreement dated 27-09-2012 or General Power of Attorney dated 27-09-2012 till consideration of the application filed by the plaintiff. In view of the undertaking given by the respondents, the order dated 07-01-2015 passed by the Trial Court is modified and the undertaking given by the respondent substitutes.
The Order is to be set aside as the said Appeal was allowed without issuing notice to the Respondent therein (the Petitioner in this Writ Petition). The question of maintainability of the said Appeal is kept Open - Trial Court is directed to dispose of the application filed under Order 39 Rules 1 and 2 of CPC without being influenced by the above undertaking on or before 25-03-2015, in accordance with law.
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2015 (2) TMI 1330
Interest income taxed under the head ‘Income from other sources’ - adjusting it against the interest expenditure capitalized to Incidental Expenditure during Construction (EDCP) account - HELD THAT:- As relying on own case [2013 (9) TMI 688 - ITAT MUMBAI] for the sake of consistency, we restore the issue to the file of the AO with a direction to examine the nexus between interest paid on borrowed funds and decide the issue in terms of the above reproduced directions given by the Tribunal for earlier assessment year.
Disallowance of expenditure u/s. 14A - HELD THAT:- Hon’ble Bombay High Court in the case of “Godrej & Boyce Manufacturing Co. Ltd. Vs. DCIT” [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D cannot be applied retrospectively but is applicable from assessment year 2008-09. For the assessment years prior to A.Y. 2008-09, the disallowance under section 14A can be made by the AO on some reasonable basis, if, the AO is not satisfied with the correctness of the working made by the assessee in this respect. We therefore direct that the AO will consider the working given by the assessee and if he will be satisfied in that respect, no further disallowance will be required to be made. However, if the AO will not be satisfied with the working given by the assessee, then the disallowance be made on some reasonable basis after giving the assessee due opportunity of representing its case in this respect. Subject to our above observations, the order of the Ld. CIT(A) on this issue is upheld.
Denial of deduction u/s. 80IB on the Technology Up-gradation Fund [TUF] subsidy received - HELD THAT:- As relying on own case [2013 (9) TMI 688 - ITAT MUMBAI] , we deem it proper to set aside this particular issue to the file of the AO with the direction to examine whether the reimbursement of interest cost is reimbursement of revenue expenditure debited to the P & L Account of that eligible unit to that extent either in this year or in any earlier years. If it is so then due to reimbursement the expenditure incurred by the assessee is reduced, to the extent the profit of the industrial undertaking will increase. Therefore, to examine the interest claim out of the unit and its reimbursement by way of subsidy, the matter is restored to the file of the AO. He is directed to keep in mind the decision of the Hon'ble Gauhati High Court in the case of Mehalaya Steels Ltd. [2010 (9) TMI 679 - GAUHATI HIGH COURT] and allow the deduction under section 80IB accordingly if the nexus is established.
Computation of disallowance made u/s. 14A for computing book profit u/s. 115JB - HELD THAT:- In view of the observations made above in the case of "Godrej Consumer Products Ltd." [2013 (11) TMI 1245 - ITAT MUMBAI] it is held that the expenditure found disallowable under section 14A can be added back while computing book profits under section 115 JB of the Act. Since in the case in hand, we have restored the issue of disallowance u/s 14A of the Act to the file of the A.O., hence, it is held that whatsoever expenditure would be found by the AO as disallowable under section 14A, the same can be added back while computing book profit under section 115JB in the case of the assessee.
Levy of interest u/s 234B - HELD THAT:- As decided in M/S CHARBHUJA INDUSTRIES PVT. LTD. [2014 (1) TMI 1623 - ITAT MUMBAI] no advance tax was payable on MAT computed u/s 115JB and accordingly, the interest u/s 234B and 234C cannot be levied for non-deposit of advance tax on MAT for the year under consideration. Hence, we delete the levy of interest u/s 234B and 234C in this case
Entire TUF subsidy received - ground raised for the first time before us only - HELD THAT:- As decided in own case [2013 (9) TMI 688 - ITAT MUMBAI] since this issue was not examined by the AO at all, we admit the additional ground and restore the matter to the file of the AO to examine the claim afresh keeping in mind the principles laid down by the Hon'ble Supreme Court on the issue of subsidy and also other case laws.
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2015 (2) TMI 1329
Disallowance of interest expenditure u/s 14A - AO observed that the assessee must have made expenditure for earning the exempt income - disallowance of administrative expenses - contention of the assessee is that the disallowance made should not exceed the exempt dividend income - HELD THAT:- Mumbai Bench of the Tribunal in the case of Daga Global Chemicals P. Ltd. Vs. DCIT [2015 (1) TMI 1204 - ITAT MUMBAI] held that disallowance under section 14A read with Rule. 8D cannot exceed the exempt income. Respectfully following the same, we direct the AO to restrict the disallowance on account of interest and administrative expenses to ₹ 33,446/-. Thus, the grounds of the appeal of the assessee are partly allowed.
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2015 (2) TMI 1328
CENVAT credit - inputs/capital goods - welding electrodes - period January' 2005 to June' 2005 - Whether the appeal filed by appellants before CESTAT under Section 35B of Central Excise Act, 1985 could be dismissed by CESTAT summarily under second proviso to Section 35B in the circumstances when clause (d) of first proviso (relating to credit of duty) inserted vide Section 109 of the Finance (No. 2) Act, 1998 had not yet been notified and made effective?
HELD THAT:- The issue decided in the case of M/S DSM SUGAR ASMOLI VERSUS THE COMMISSIONER OF CENTRAL EXCISE, MEERUT [2015 (2) TMI 1178 - ALLAHABAD HIGH COURT] where it was held that Since there is change in provisions, therefore, for the subsequent period, having examined the terms "capital goods" and "input" in the subsequent Rules and comparing with the Rules 57A, 57B and 57Q of earlier Rule, for the purpose of present case, we do not find any substantial difference which may help the appellant so as to include 'welding electrode' within either of the aforesaid terms for claiming MODVAT/CENVAT Credit on the use of "welding electrodes" in an industrial unit engaged in production of sugar and molasses.
It is, however, pointed out that on and after 10.09.2004, new Rules, i.e., CENVAT Credit Rules, 2004 (hereinafter referred to as "Rules, 2004") came into existence and the definition of "capital goods" and "input" is contained in Rule 2 (a) and (k), thereof, but for the purpose of present appeal, learned counsels for parties did not dispute that there is no substantial difference in the aforesaid definitions, so far as the question of 'welding electrodes' used in repair and maintenance in Sugar Mill is concerned and, therefore, the judgment in respect to Rules applicable prior to Rules, 2004 would cover the issue in this appeal also.
Appeal dismissed - decided against assessee.
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2015 (2) TMI 1327
CENVAT Credit - inputs/capital goods - Welding Electrode - appellant claimed that 'Welding Electrode' is specified under Head 8311.00 of Central Excise Tariff and used in repair and maintenance of 'Machines', therefore, would fall within the category of 'Capital Goods' as well as 'Input' - July' 2004 to December' 2004 - HELD THAT:- The definition of 'capital goods' under Rule 2(b) of Rules, 2002 and Rule 2(a) of Rules, 2004 is exhaustive in the sense that it clearly specifies what 'capital goods' would mean. The items which fall under certain chapters of Central Excise Tariff Act are specifiably mentioned in Rule 2(b)(i) of Rules, 2002 and Rule 2(a)(A)(i) of Rules, 2004. Then comes pollution control equipment', moulds and dies, jigs and fixtures, refractories and refractory material, tubes and pipes and fittings thereof and storage tank. All these things, if used in the factory of manufacturer of final products, or, for providing output service, would mean 'capital goods'. However, it would not include any equipment or appliance used in office.
Having failed to point out application of any other provision under Rule 2 (b) of Rules, 2002 and Rule 2(a) of Rules, 2004, the stress on the part of Assessee was on the term 'components' under Rule 2 (b) (iii) of Rules, 2002 and 2(a)(A)(iii) of Rules, 2004 and it is contended that 'Welding Electrodes', being used for maintenance and repair of machineries and factories, would fall in the category of “components”, hence would be entitled for CENVAT Credit being 'capital goods' - the 'capital goods' as defined under Rule 2(b) of Rules, 2002 and 2(a) of Rules 2004, in substance, are pari-materia with the 'capital goods' specified in Rule 57-Q of Rules, 1944 and there is no substantial difference therein.
Credit cannot be allowed - appeal allowed - decided in favor of Revenue.
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