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Showing 21 to 40 of 1464 Records
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2016 (3) TMI 1455
Applicability of notification dated 22.3.2001 - courier service included in the class of establishments to which the EPF & MP Act or not - employer-employee relationship between the petitioner and other 11 agencies - petitioner disputed the liability on the ground that the petitioner had never employed 20 or more persons and hence, the EPF & MP Act is not applicable to the petitioner and requested to conduct an enquiry under Section 7A of the EPF & MP Act, to determine the question of applicability - Sections 2(f) and 2A of the EPF & MP Act - HELD THAT:- According to Clause 4, the agency shall be under obligation to deposit the entire sale proceeds of the day, without any deduction to the account of the petitioner on the very next day. As per Clause 8, the petitioner shall supply stationery to be used by the agency for delivery, booking and for administration for free of charge. The stationery to be supplied by the petitioner only be used for the delivery and booking of the documents. According to Clause 12, the agency shall keep a register of consignment notes issued by the petitioner and the balance stock, which shall be kept up to date at all times and shall be made available to the petitioner at all times for verification. As per Clause 13, the petitioner either himself or through his authorised representative shall be at liberty at all times to inspect and verify the premises and records of the agency and take copies of such records to ensure compliance with the various terms of the Agency Agreement.
According to Clause 19, the agency shall maintain the office records of all documents, control of consignment notes, ledger books, showing the amount due from the sundry debtors, collection statements, delivery run-sheets and stationeries in the proper or orderly manner and to the satisfaction of the petitioner. According to Clause 16, the agency shall not carry on the business of courier or its agency in his own name or in proprietorship or as director of a company nor shall any courier/agency be permitted to be operated from the place of business from which agency of Professional Courier is operated.
This Court is of the opinion that ultimate control; both the financial and human resources, are vested with the petitioner. So also, unity of management and control, functional integrity and unity of purpose, are obviously evident from the above clauses. The above findings are to be appreciated, in view of the definition under Section 2(f) of the EPF & MP Act.
There is no illegality or impropriety in any of the findings, in Exts. P7 and P9 orders and the respondents have correctly and properly appreciated all the evidence collected during the course of enquiry under Section 7A and tested the same with Sections 2(f) and 2A of the EPF & MP Act.
Petition dismissed.
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2016 (3) TMI 1454
Penalty u/s 271B - AO estimated the assessee’s sales outside books of account - no books of account were maintained by the assessee - AO applying estimated profit rate of 5% on such sales - HELD THAT:- Hon’ble Gauhati High Court in Suraj Mal Parasuram Todi [1996 (8) TMI 102 - GAUHATI HIGH COURT] has held that where no books of account are maintained, penalty should be imposed for non-maintenance of books of account u/s 271A and no penalty can be imposed u/s 271B for violation of section 44AB requiring audit of accounts.
Thus Penalty u/s 271B ought not to have been levied because the assessee admittedly did not maintain any books of account as has been recorded in the assessment order itself. We, therefore, order for the deletion of penalty.
Penalty u/s 271(1)(c) - estimation of income at 5% on estimated sales - Delhi High Court in CIT vs. Aero Traders P. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] has upheld the view taken by the Tribunal in deleting penalty u/s 271(1)(c) which was imposed on the basis of addition made by the AO on estimated profit.
Thus it is clear that the penalty so confirmed in the instant case cannot be sustained because it was imposed by the AO on the estimate of income made by him. We, therefore, order for the deletion of penalty.
Assessee appeal allowed.
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2016 (3) TMI 1453
Liability to pay a sum of Rs. 8,40,568/- in 40 equal installments payable within 7th of each month, starting from August, 2000 - petitioner assails the award passed by the Arbitrator under Section 7B of the Indian Telegraph Act, 1885, on the ground that the Arbitrator has passed an unreasoned award, more so, the award so passed is without jurisdiction - HELD THAT:- Appointment of the Arbitrator having not been done in consonance with the provisions contained under Section 7B of the Act, meaning thereby, it is the Central Government alone can appoint Arbitrator, the same having not been done in consonance with the said provisions the award so passed in Annexure-5 is without jurisdiction and therefore, cannot sustain in the eye of law.
Similar question came up for consideration in M/s. Fly Wings Travels (P.) Ltd. [1994 (4) TMI 406 - DELHI HIGH COURT] wherein, the Delhi High Court having come to the conclusion that the Arbitrator having not been appointed in consonance with the provisions contained under Section 7B of the Act, set aside the award passed by the said incompetent Arbitrator. In the present case the Arbitrator has not been appointed by the Central Government as required under Section 7B of the Act.
On perusal of the award indicates that no reason has been assigned, rather, the Arbitrator who is obliged under law to pass a reasoned award has resolved the dispute without assigning any reason. It is well settled law that in public law remedy when the order visits with civil consequences, natural justice required recording the reasons as they are bridge between the order and its maker to indicate how his mind was applied to the facts presented and the decision reached.
It is seen that under Section 7B, the award is conclusive but when the citizen complains that he was not correctly put to bill for the calls he had made and disputed the demand for payment, the statutory remedy opened to him is one provided under Section 7B of the Act. By necessary implication, when the arbitrator decides the dispute under Section 7B, he is enjoined to give reasons in support of his decision since it is final and cannot be questioned in a court of law. However, the only remedy available to the aggrieved person against the award is judicial review under Article 226 of the Constitution.
The appointment of Arbitrator, having been made, in derogation of the provisions contained under Section 7B of the Act and such Arbitrator having passed the award in Annexure-5 without assigning any reasons, the same cannot sustain - the impugned award passed by the Arbitrator in Annexure-5 is set aside and the matter is remitted back to the Central Government to adjudicate the dispute in consonance with Section 7B of the Act - Application allowed.
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2016 (3) TMI 1452
Rectification of mistake u/s 154 - Addition u/s.80E - incurring interest expense on the loan taken for the purpose of education for himself/herself or for their relatives - AO has observed that the education loan was taken by the married major son of the assessee, and therefore, cannot claim interest u/s 80E - HELD THAT:- The power of rectification under section 154 can be exercised only when the mistake, which is sought to be rectified, is an obvious patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions.
In the present case, before carrying out rectification as suggested by the AO one has to decide the nature of loan, who has taken the loan etc. It will require long drawn process of hearing. It is a debatable question. The assessee annexed form no.16 along with her return and shown the deduction under section 80E. This step must have been taken by the designated employer or by the assessee after due consideration of section 80E and loan documentation. Such stand can be dispelled after perusal of the loan documents and other details. It cannot be a subject matter of proceedings under section 154. Appeal of the assessee allowed.
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2016 (3) TMI 1451
Approval of reconstitution of the Managing Committee as per the provisions contained under Rule 28(1) of the Orissa Education (Establishment, Recognition and Management of Private High Schools) Rules, 1991 - whether the reconstitution of the Managing Committee of the School in question has been done in conformity with the provisions of Rule 28 of 1991 Rules?
HELD THAT:- The reconstitution has to be made under Sub-Rule(1) of Rule 28 of 1991 Rules. As per Sub-Rule (2) of Rule 28 of 1991 Rules, the Headmaster of the school or the teacher-in-charge of Headmaster shall be Secretary of the Managing Committee in his ex-officio capacity. Under Sub-Rule (3) of Rule 28 of 1991 Rules, the Sub-Collector shall nominate the President from among the members specified in Clauses (a) to (d) of Sub-rule (1). Sub-Rule (4) of Rule 28 of 1991 Rules, says that the Inspector shall take all necessary steps to reconstitute the Managing Committee in respect of aided High School and of any such School which becomes aided. Therefore, pivotal role is being played by Inspector of School, who is to take all necessary steps to reconstitute the Managing Committed in respect of aided High Schools.
As it appears from the records, the Inspector of Schools instead of applying his mind independently submitted letter on 01.11.2012 recommending the proposal of Sri Sarat Kumar Mohapatra, senior most Asst. Teacher, who has been allowed to remain-in-charge of the School temporarily, for reconstitution of the Managing Committee to the Director, Secondary Education, Odisha, Bhubaneswar for approval of the Managing Committee. On the basis of such recommendation, the Director has passed the impugned order under Annexure-4 on 08.09.2014 - The 1991 Rules having been framed under the Rule making power under Orissa Education Act, 1969, has got its own statutory force and therefore, the authority has to act in adherence to the provisions contained under the 1991 Rules and for any deviation thereof, consequential order cannot sustain in the eye of law.
The action taken by the Inspector of School is not in consonance with the provisions of Sub-Rule(4) of Rule 28 of 1991 Rules. When a gross illegality has been committed by the authority for reconstitution of Managing Committee, which has been brought to notice of the Court by the present petitioner, without delving into the question of locus standi of the petitioner, this Court is of the considered view that the order passed under Annexure-4 for reconstitution of the Managing Committee of Bapujee Ashram Residential High School, Goradajhari in the district of Khurda under Rule 28(1) of 1991 Rules dated 08.09.2014 cannot sustain in the eye of law - the matter is remitted back to the District Education Officer, Khurda for submission of proposal afresh in-compliance to the Sub-Rule (4) of Rule 28 of 1991 Rules.
The writ petition stands disposed of.
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2016 (3) TMI 1450
Fake encounter - inherent power of the High Court for quashing the criminal proceedings against an offender who had settled the dispute with the victim - compoundable offence u/s section 320 of Indian Penal Code - Locus standi (the right or capacity to bring an action or to appear in a court/direct connection with the offence and only that person can file an application before court), to challenge the order - HELD THAT:- In the instant case, the applicant has invoked the power under Section 482 of Cr.P.C. to challenge the order of discharge dated 30.12.2014 whereby the learned Sessions Judge Gr. Bombay has discharged the respondent no. 1 of the offences under Sections 120B, 364, 365, 368, 341, 342, 384, 302, 218 r/w. 201 of IPC. It is not in dispute that the said order is not an interlocutory order and could be challenged by invoking the revisional jurisdiction of the High Court under Section 397 /401 of Cr.P.C. Hence, in the light of the law laid down by a three Judge Bench of the Apex Court in the case of Madhu Limaye [1977 (10) TMI 111 - SUPREME COURT] and which has been followed in Gian Singh and Mohit [2012 (9) TMI 1112 - SUPREME COURT], the powers under Section 482 cannot be resorted to in view of the said specific provision of the code for the redressal of the grievance particularly when the aggrieved party had already assailed the said order in revisional jurisdiction of this Court.
The Applicant had sought to invoke the power under section 482 of Cr.P.C. mainly on the ground that the Respondent No. 1 through powerful network of forces at his command has prevailed upon the Rubabuddin Shaikh to withdraw the revision application. The Applicant has alleged that the withdrawal appears to be suspicious, under threat, inducement and promise - It is no doubt true that the powers under sections 482 and 483 of the Cr.P.C. are wide. However, it is well settled that these powers should be exercised sparingly to prevent abuse of process of any court or otherwise to secure the ends of justice or to prevent misuse of judicial mechanism or miscarriage of justice. In the instant case, Rubabuddin, the brother of the deceased who is an aggrieved party and at whose instance the crime was registered had by application dated 5.10.2015 which was supported by his affidavit, sought leave to withdraw the revision application as well the application for condonation of delay. Since said Rubabuddin was not represented by an advocate, no order was passed on the said application on the said date. On 6.10.2015 said Rubabuddin had remained present alongwith his counsel and had once again sought leave to withdraw the said applications.
Locus standi (the right or capacity to bring an action or to appear in a court/direct connection with the offence and only that person can file an application before court) - HELD THAT:- The present case does not involve the issue of locus standi of a third party / stranger for setting the criminal law in motion. The issue in the present case is whether the applicant, who is a total stranger to the proceedings can invoke the powers under Section 482 of Cr.P.C. to challenge the discharge order. Hence, the decisions in Antulay [1984 (2) TMI 317 - SUPREME COURT] is not strictly applicable to the facts of the present case.
In Sulochana Devi [1992 (11) TMI 295 - ORISSA HIGH COURT] the Petitioner who was not a party to the proceedings had invoked the powers of the High Court under section 482 of the Cr.P.C. to challenge the order of issuance of proclamation under section 82 of the Code and attachment of the property. Raising the issue of locus standi, preliminary objection was raised to the maintainability of the application at the behest of the Petitioner. The Orissa High Court after considering the scope of section 482 of the Cr.P.C. as well as the decisions of the Apex Court in Madhu Limaye, Simerjeet Singh [1977 (10) TMI 111 - SUPREME COURT] and in the case of the Janata Dal V/s. H.S. Choudhary & Ors. [1992 (8) TMI 301 - SUPREME COURT] citation held that ordinarily, the aggrieved party, which is affected by any order has the right to seek redress by questioning the legality, validity or correctness of the order unless such party is a minor and in same person or is suffering from any other disability which law recognises as sufficient to permit another person e.g. next friend, to move the court in his behalf.
Reverting to the case in hand, it is not in dispute that the applicant is neither a victim nor an aggrieved person. He is not in any manner connected with the proceedings pending before the learned Sessions Court Greater Bombay. The Applicant has not suffered any prejudice and has not demonstrated that his legal rights are impaired or any harm /injury is caused to him or is likely to be caused. The Applicant has thus not been able to demonstrate that his legal right has been invaded so as to give him locus standi to challenge the order.
he Applicant who claims to be a socially responsible citizen has allegedly filed this application for preventing abuse of process of court. It is pertinent to note that though the alleged incident had occurred in the year 2005, and no case was registered against the respondent no. 1 and the other police officers, the applicant herein had not shown any interest to set the criminal law in motion. The said crime was registered only pursuant to the directions given by the Honourable Supreme Court in view of the letter of grievance made by Rubabuddin, the brother of the deceased.
In the instant case, the State had not challenged the order of discharge. nonetheless the aggrieved person, Rubabuddin Shaikh, the brother of the deceased Shorabuddin had challenged the said order in revision application (st) 413 of 2015 which was filed along with the application for condonation of delay being application No. 355 of 2015. As stated earlier this Court has allowed the aggrieved person to withdraw the said application after being satisfied that the request for withdrawal was voluntary and that the same was not made under threat, pressure, inducement or promise. Hence, this is not one of those rare cases which brings about a situation which is an abuse of the process of the Court, which necessitates exercise of inherent jurisdiction.
The application is dismissed.
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2016 (3) TMI 1449
Addition u/s 68 - unsecured loans/deposits - HELD THAT:- We find that the issue in question is covered in favour of the assessee and against the Revenue by the decision in the case Vijay Conductors India Pvt.Ltd [2015 (9) TMI 1519 - DELHI HIGH COURT] wherein had upheld the order of the Tribunal Settlement Commission and determined the income of Mr. S.K. Gupta without making any addition for unexplained cash credit. During the course of assessment Proceedings of the intermediary companies, including the Respondent Assessees, AO sought directions from the ACIT u/s 144-A. Additional CIT passed an order in which after discussing the facts he inter alia directed that it would be in the best interest of the Revenue to tax these transactions in the hands of beneficiaries and Mr. S.K. Gupta "without making any additions on this account in the hands of conduit entities". The said orders of the Settlement Commission or of the Additional CIT were binding on the AO.
It is not in dispute that the Assessees are the conduit entities and not the beneficiaries. Consequently, the order of the ITAT deleting the addition u/s 68 in their hands does not suffer from any legal infirmity.
Respectfully following the decision in the case of PRO CIT vs. Vijay Conductors India Pvt.Ltd. and other cases [2015 (9) TMI 1519 - DELHI HIGH COURT] we delete the addition and allow the claim of the assessee.
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2016 (3) TMI 1448
Penalty u/s 271(1)(c) - assessment order was made u/s 153C/143(3) considering the revised return - HC held Tribunal while dismissing the appeal filed by the assessee has dealt in its order, in detail every aspect, including the factual aspect of the matter - HELD THAT:- Petitioner submits that in respect of the same impugned order of the Tribunal, the High Court has issued notice in the connected matter.
It is open to the petitioner to point out the same before the High Court by way of filing an application for review.
The special leave petition is disposed of accordingly with liberty as above.
It is made clear that we have not considered the special leave petition on merits.
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2016 (3) TMI 1447
Exemption u/s 11 denied - registration of the Society u/s 12A(a) cancelled - HELD THAT:- We find that the Hon’ble Tribunal [2015 (9) TMI 1550 - ITAT AMRITSAR] has cancelled the order of CIT by which he had cancelled the registration u/s 12A(a) of the Act, therefore, the basis on which the exemption u/s 11 has been denied does not survive. In view of the above, we are in agreement with argument of learned AR that after restoration of registration by Hon'ble Tribual, the assessee is eligible for exemption u/s 11. Appeal filed by assessee is allowed.
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2016 (3) TMI 1446
Change in classification of services provided - harvesting and transportation of sugarcane from field to factory - manpower recruitment or supply agency service or business auxiliary service? - HELD THAT:- To be heard along with Central Excise Appeal No. 305 of 2014 & Central Excise Appeal No. 200 of 2014.
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2016 (3) TMI 1445
Revision u/s 263 by CIT - Excess manufacturing cost claimed by the assessee - HELD THAT:- We find that no adverse inference with regard to melting loss of 72 kgs. can be drawn. Hence, this issue cannot be subject matter of revision proceedings u/s 263 of the Act. We further observed that the manufacturing costs, i.e wages, packing material and testing, refining charges & melting loss were genuine and incurred for business purposes. It is not the case of CIT that any of these expenses were found by to be bogus or sham. The only observation in this regard is that the expenses were excessive. In the earlier paragraphs we have already explained that the manufacturing costs were not excessive. Rather the costs incurred compared favourable with the ‘making charges’ recovered from related party. We have thus fully substantiated the genuineness and reasonableness of manufacturing costs incurred by the assessee. The direct costs and making charges incurred by the assessee were reasonable and even the prices charged from the related party were commensurate with the costs incurred by the assessee. Hence, the direction given by CIT for making addition on account of excess manufacturing cost is therefore vacated.
Sales made to related parties at lower prices - Addition u/s 40A(a)(2) - Similar disallowance was deleted by the Gujarat High Court in the case of CIT v. Indu Nissan Oxo Chemical Industries Ltd. [2015 (2) TMI 818 - GUJARAT HIGH COURT] .wherein the disallowance made u/s. 40A(2)B) in respect of payments made to the directors were deleted by the High Court, observing that the recipient of payments was taxed at maximum rate and therefore there was no avoidance or evasion of taxes as envisaged u/s 40A(20(b) of the Act. In view of the above, we are of the view that CIT was wrong in invoking provisions of Sec. 40A(a)(2) and doubting the sales made by the assessee to its sister concern, M/s Anjali Jewellers. Hence, on this issue revision cannot be made by CIT u/s 263 of the Act.
Loss of gold incurred by the company in the course of manufacture of jewellery - After considering the details & documents for AYs 2011-12 & 2012-13, more specifically the quantitative details of gold and jewellery manufactured, the AO accepted the reasonableness of melting loss of 5.28% and 4.81% in AYs 2011-12 & 2012-13 and no adverse inference was drawn. Even, the melting loss of 4.81% incurred in AY 2012-13 was not disputed by the Assessing Officer. The above facts show that the Department while framing the assessments u/s. 143(3) of the Act for the immediately preceding AY 2009-10 and subsequent AYs 2011-12 & 2012-13 accepted the melting loss of 5% in the assessee’s line of business. In the circumstances, we are of the view that CIT’s observations with regard to the melting loss of gold of 72 kgs. being excessive in AY 2010-11 and the directions given to examine the same is unjustified and contrary to the jurisdictional facts of the case. Hence, the same are quashed.
Certain bills held to be bogus - It shall be appreciated that M/s Anjali Estate & Developers had credited contractual income and offered profit to tax at normal tax rates. These jurisdictional facts further prove that there was no tax avoidance arrangement or siphoning of profits. Both the assessee and M/s Anjali Estate & Developers were taxed at normal tax rates. Moreover, the assessee did not claim deduction of the impugned bill bearing number 006aEd/0-11 in the relevant FY 2009-10 but had deferred it and carried forward to the next year. On the other hand, M/s Anjali Estate 7 Developers had accounted the bill as contractual income of FY 2009-10 and paid tax at normal tax rates on its annual income. It is therefore not a case where the assessee had booked higher repairs & maintenance costs to avoid taxes and/or siphoned off profits to sister concern. The revision order of CIT that repairs & maintenance charges were being paid in order to avoid tax was factually incorrect, and without any cogent basis or material. Accordingly, we cancel the directions of CIT in this regard. Hence, this issues of assessee is allowed.
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2016 (3) TMI 1444
Addition of Additional Conveyance Allowance - HELD THAT:- We find that the first issue about additional conveyance allowance granted to DO of LIC is covered in favour of the assessee by this tribunal orderin the case of S. N. Mishra [1998 (12) TMI 111 - ITAT JABALPUR] this issue is covered in favour of the assessee.
Addition on account of expenses incurred for the business of LIC to the extent of 40% of Incentive Bonus received from LIC - Instead of 40% as claimed by the assessee, deduction can be allowed to the extent of 30% of incentive bonus if it is found that the assessee has been able to establish that to that extent, actual expenses were incurred for increase of the business of LIC. Neither the A.O. nor the learned DR of the revenue could point out that any expenses out of Rs. 13,41,092.94 is not incurred for increase of the business of LIC. Under these facts, by respectfully following this judgment of T. K. Ginarajan [2013 (8) TMI 261 - SUPREME COURT] we hold that to the extent of 30% of incentive bonus which comes to Rs. 921,736/- should be allowed as deduction from Incentive bonus as against deduction of Rs. 12,28,982/- claimed by the assessee on account of expenses incurred for the business of LIC to the extent of 40% of Incentive Bonus Rs. 30,72,453/- received from LIC. This issue is decided partly in favour of the assessee.
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2016 (3) TMI 1443
Revision u/s 263 by CIT - wrongfull allowance of exemption u/s 11 by AO - rental receipt from kalyana mandapam was understated in the return of income and it was falsely classified as corpus donation for the purpose of claiming exemption u/s 11 - as per CIT while letting out the community hall, the trust used to collect major portion of the rent as corpus donation and used to collect a minimum amount as rent, referring to the proviso to sec. 2(15) legislature took away certain activities of general public utility outside the purview of charity u/s 2(15) of the Act by inserting two provisos to sec. 2(15) - as per assessee he has utilized the entire money received on letting out of community hall for charitable activity, therefore, the AO has rightly allowed the claim of the assessee.
HELD THAT:- When the AO has not examined the utilization of rent for charitable activity, this Tribunal is of the considered opinion that utilization of the income of the assessee-trust for charitable activity needs to be examined year by year for allowing the claim of the assessee u/s 11 - CIT(E) also has not examined the utilization of the fund for charitable purposes.
CIT(E) proceeded as if the proviso to sec. 2(15) of the Act would make the assessee-trust not eligible for exemption u/s 11 of the Act. This Tribunal is of the considered opinion that proviso to sec. 2(15) is applicable in respect of the trust whose object is advancement of any other general public utility.
In the case before us, it is not the object of the trust to advance any public utility service. The main object as per the trust deed is to establish educational and medical institution and also providing scholarship to the needy people. Therefore, proviso to sec. 2(15) may not be applicable at all.
This Tribunal is of the considered opinion that the matter needs to be reexamined by the Assessing Officer in the light of the material available on record with regard to utilization of the income for charitable activity. Accordingly, while confirming the exercise of jurisdiction by the CIT(E), the Assessing Officer is directed to examine the utilization of the income of the assessee-trust in the light of the material available on record including the tax evasion petitions said to be received and thereafter decide the claim of exemption u/s 11, in accordance with law after giving a reasonable opportunity to the assessee - Appeal of the assessee is partly allowed
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2016 (3) TMI 1442
TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee deselected.
Exclusion on the ‘abnormal profits’- As seen from the order of CIT(A) the reasons for rejection are that they are having ‘negative margins’/ losses. Therefore, grounds raised by the Revenue are not maintainable. Hence, rejected.
Foreign Exchange Gain/Loss as operating in nature - HELD THAT:- This issue is held in favour of assessee and against Revenue in all the cases as the foreign exchange gain/loss is accruing as part of business activity and on the billing/billed amount. So, the same is rightly treated as part of operating income. M/S. CISCO SYSTEMS (INDIA) PRIVATE LTD. [2014 (11) TMI 849 - ITAT BANGALORE], SAP LABS INDIA (P.) LTD.[2010 (8) TMI 676 - ITAT, BANGALORE] AND M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT].
Deduction u/s 10A - exclusion of Telecommunication Charges for export turnover and total turnover - HELD THAT:- AO excluded the Telecommunications charges and Travelling charges from estimated turnover. Ld.CIT(A) following the Co-ordinate Bench decision has directed the AO to exclude the same from total turnover as well. This direction is as per the principles on the subject. The jurisdictional High Court in the case of CIT Vs. Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that whatever is excluded from estimated turnover should also be excluded from total turnover. The direction of Ld.CIT(A) is upheld. Grounds are rejected.
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2016 (3) TMI 1441
Admission of the additional evidences furnished before the ld. CIT(A) - CIT- A denied admission - HELD THAT:- We find substance in the contentions of the ld. Counsel for the assessee. It is notable that even though the remand report of the AO was sought by the ld. CIT(A) on the said additional evidences, he finally did not admit such evidences for consideration. Such an action of the ld. CIT(A) is not justified in view of the proposition made in the case of Sahrukh Khan vs. DCIT [2006 (7) TMI 532 - ITAT MUMBAI]
CIT(A) had called for the remand report on the additional evidences so furnished, he has to admit the same on record for consideration on merits. CIT(A), however, failed to do so, but refused to admit the same, which is not tenable in view of the aforesaid decisions. We further note that factum of calling of remand report on merits of the additional evidences etc. does not arise in the case of Moser Bear India Ltd.[2008 (12) TMI 19 - DELHI HIGH COURT] relied upon by the ld. CIT(A). Therefore, the decision of Hon’ble Delhi High Court, in our opinion, does not help the Revenue, having been rendered in different context.
Besides, on perusal of the impugned order it reveals that the ld. CIT(A) has not passed speaking order on merits of the case also by recording his specific findings on the objections of the AO and the submissions of the assessee, but has simply endorsed the views taken by the AO in a very slip shod manner. Therefore, the issues under consideration need fresh adjudication by the Revenue authorities. Since the Assessing Officer has to examine the additional evidences in order to verify the sundry creditors and to examine veracity of depreciation claimed, it will be expedient in the interest of justice to restore the matter to the file of Assessing Officer for deciding both the issues de novo after considering the additional evidences noted above which shall be furnished by the Assessee before him in support of its claims. The Assessing Officer shall pass a speaking order in accordance with law - Appeal of the assessee is allowed for statistical purposes.
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2016 (3) TMI 1440
Correct method of accounting - Addition on account of recognizing the income by applying the percentage of completion method as per Accounting Standard-7 issued by ICAI - HELD THAT:- We note that assessee was following project completion method from the beginning for calculating its income from the projects and the department was accepting the same throughout, however, this year only the AO has not accepted this method without spelling out how this method distorts the projects. Admittedly, the assessee is not a contractor so revised AS-7 need not be followed by the assessee who is Real Estate Developer.
As the construction is completed up to 53.95%, therefore, the project was not complete and real profits cannot be estimated from the same. The ld. CIT (A) has rightly held that the AO has not pointed out any discrepancy that method followed regularly by the assessee was distorting or under estimating the profits and since no such facts and figures have been brought on record by the AO, therefore, the method regularly followed by the assessee cannot be interfered with. Therefore, the percentage completion method applied by the AO cannot be applied in the case of the assessee. Therefore, in view of the above, we do not find any infirmity in the order of the CIT (A) and accordingly, we uphold the same. - Decided against revenue.
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2016 (3) TMI 1439
Penalty u/s 271(1)(c) - Whether the Tribunal was justified in holding that the prior approval taken for levy of penalty from Additional Commissioner does not fulfill the mandate under Sec.274 which provide for taking approval from Joint Commissioner in complete defiance of the definition of “Joint Commissioner of Income Tax” provided u/S.2 (28C) of the Act, which includes “Additional Commissioner of Income Tax ? - HELD THAT:- On a bare perusal of the above definitions and sec. 2(28C) read with 274(2) in particular, it is clear that 'Joint Commissioner' means a person appointed to the post of Joint Commissioner of Income-Tax and includes Addl. Commissioner of Income-Tax and granting approval by the Addl. Commissioner of Income-Tax u/sec. 274(2)(b) of the Act on a permission sought by the AO before imposing penalty u/sec. 271(1)(c), in our view is accorded by the authority competent under the law.
Taking into consideration above, the Tribunal in our view erred in quashing the penalty order merely on the premise that Addl. CIT does not find place in Sec. 274(2)(b) and imposition of penalty is bad and void ab initio.
Also contention raised by the learned counsel for the assessee about the Circular dated 10.12.2015. In our view the said Circular may not be applicable for the reason that the Revenue has assailed the penalty amounting to Rs.29,02,743/- and not only the penalty reduced by the CIT(A). Before the Tribunal, both the Revenue as well as the assessee preferred appeals and the entire penalty as referred to hereinbefore, was in issue before the Tribunal and now before this Court. Therefore, we reject the contention of the learned counsel for the assessee as the Circular has no application.
The judgments relied upon by the assessee basically are the principles of interpretation of the provisions of law, before us when the provision is self explicit clear and plain language is unambiguous, need no interpretation.
The judgment in the case of Brij Mohan [1979 (8) TMI 2 - SUPREME COURT] was a case relating to the change of law before and after amendment made in sec. 271(1)(c) clause (iii) of the Finance Act, 1968. In our view, this case is not relevant for the present purpose. - Decided against assessee.
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2016 (3) TMI 1438
Disallowance of payments of PF/ESIC paid beyond the due date prescribed under the relevant statutes - issue is squarely covered against the assessee by Gujarat High Court [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein it was held that section 43B does not apply to employees contribution.
HELD THAT:- Leave granted.
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2016 (3) TMI 1437
Validity of sale deed - Maintainability of Suit for permanent injunction - time limitation - Suit for declaration against the present petitioners as well as respondents No.2, 3 and 4 claiming declaration of sale deeds executed by defendants No.1 and 2 in favour of defendants No.3, 4 and 5 (the present petitioners) as null and void - HELD THAT:- From reading of 53-A of Transfer of Property Act, it is clear that a prospective purchaser is entitled to protect his possession, only if, he has done something further in pursuance of the contract. In the present case, though the alleged agreements to sale and possession of the Respondent No.1 are disputed but even if, they are considered as it is, clear from the plaint that the Respondent No. 1 has done nothing in pursuance of the alleged agreements to sale. It is also not pleaded that the Respondent No.1 was ready and willing to perform his part of contract or was willing to get sale deed executed. It is also pertinent to mention that according to the proviso no such right is available against the purchaser for consideration without notice like the present petitioners. Hence, the Respondent No. 1 is not entitled to maintain the suit for permanent injunction u/s 53-A of the Transfer of Property Act.
Maintainability of suit for permanent injunction - HELD THAT:- In view of proviso to the Section 53-A of the Transfer of Property Act and also in view of section 41(h) of the Specific Relief Act, because the Respondent No.1 has not resorted to equally efficacious remedy i.e. by filing a suit for specific performance, hence the suit for permanent injunction was not maintainable.
It is not in dispute in the present case that the Respondent No.1 is not the owner of the suit land as there is no conveyance deed in his favour and the Respondent No. 1 is claiming his right on the basis of alleged agreements to sale. It cannot be disputed that in view of clear provision of section 54 of the Transfer of Property Act, an agreement to sale does not confer any title. Thus, if the Respondent No. 1 himself is not the owner of the suit property, how can he challenge the title of the other who acquired title by registered sale deed in his favour. It is settled position of law that a person can challenge the title of other, only if, he himself is having title in the suit property. Apart from it in view of the proviso to section 34 of the Specific Relief Act, until the Respondent No. 1 claims ownership or claim relief for specific performance for acquiring title for he is entitled to claim, in absence of the same, a mere suit for declaration as the present suit is clearly hit by the proviso to section 34 of the Specific Relief Act.
The question is, when the suit property and claim of the Respondent No.1 is the same, why was the relief prayed in the present suit not claimed/prayed in the previous suit, while the same could have been and should have been claimed in the previous suit and if the same was not claimed or omitted to be claimed, the subsequent suit would be clearly hit by the provisions of Order II Rule 2 CPC. In view of the aforesaid provision of law, present suit is clearly barred by law and hence, the plaint is liable to be rejected - The provisions of Order VI Rule 4-A of CPC are mandatory in nature and it is clear from the bare perusal of the suit, it is clear that there no necessary pleadings which are mandatorily required to be made in the plaint. Thus failure to comply with the aforesaid mandatory provisions of law would lead to rejection of the plaint.
Time Limitation - HELD THAT:- It is also clear that the present suit filed in the year 2011 to challenge the sale deeds of the year 1995 i.e. after 16 years is clearly barred by time, while the period of limitation is only 3 years. It is also not in dispute that the petitioners’ name in the revenue record were also recorded in the year 1995. Thus, the suit filed by the Respondent No.1 is clearly barred by limitation.
The manner in which the learned trial court has dealt with the judicial precedent relied upon by the petitioners is also not proper because it has merely been observed that those citations are not applicable in the present circumstances without any discussion. Even all objections, which are purely legal objections, are not considered and decided. This approach of the learned trial court clearly amounts to failure to exercise the jurisdiction vested in it by law - the suit filed by the Respondent No.1 is clearly barred by law and allowing its continuance would be gross misuse of process of law, hence the plaint deserves to be rejected and consequently the suit deserves to be dismissed.
The present civil revision stands allowed - The application preferred under Order VII Rule 11 of the Code of Civil Procedure, 1908 stands allowed and the plaint is rejected.
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2016 (3) TMI 1436
Deduction u/s 54F - Claim available for only one residential house purchased or constructed - deduction denied as assessee has utilized the net consideration for investment in two residential properties - assessee has not yet completed the entire residential house - HELD THAT:- Assessee will be entitled for benefit u/s 54F of the Act with respect to investment in only one residential house property at Parsik Hills, Belapur as the said residential house property is completed at later point of time vis-à-vis acquisition of the residential flat at NRI Complex, Nerul in November 2007 and the provisions of Section 54F(2) of the Act will get invoked and be applicable with respect to residential flat at NRI Complex, Nerul being acquired in November 2007 i.e. prior to completion of investment in residential house property at Parsik Hills, Belapur, and the investment in construction of residential house property at Parsik Hills, Belapur shall be entitled for benefit u/s 54F as the assessee has sold two plots of land and the AO has rightly allowed the exemption u/s 54F with respect of investment made by the assessee in the construction of the residential house property at Parsik Hills, Belapur.
Benefit u/s 54F of the Act of the investment in construction of residential house property at Parsik Hills, Belapur on the ground that the property was not in livable condition to occupy owing to non-production of evidence with regard to basic amenities like place for cooking/kitchen/toilet, bathroom, approach road within the plot etc. and non production of evidences regarding any electricity or telephone or tap water connection having been granted to the structure - The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claiming benefit under the said provision is the capital gain realized from sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house.Thus, benefit u/s 54F of the Act cannot be denied to the assessee during the year ending March, 2008 merely because the assessee has not yet completed the entire residential house at Parsik Hills, Belapur while the assessee can complete the house with a stipulated period of three years from the date of transfer of original asset, the deduction cannot be denied merely on the ground that construction is not completed . Our decision is fortified by the decision of Hyderabad- Tribunal in the case of Narsimha Raju Rudra Raju [2013 (11) TMI 415 - ITAT HYDERABAD]
Thus, in our considered view, the assessee shall be entitled for benefit u/s 54F of the Act with respect to investment made by the assessee in construction of residential house property at Parsil Hills, Belapur as allowed by the AO and we set aside the orders of the CIT(A) in this regard and restore the orders of the AO.
Assessing the agricultural income earned by the assessee as income under the head “income from other sources”- HELD THAT:- No details regarding procurement of seeds or labour or water for carrying out the agricultural operations has been produced by the assessee even in the second round of litigation. No details were produced with respect to the crop cultivated or produced from the agricultural land even by the caretaker - In the absence of any cogent material/evidence brought on record by the assessee with respect to the actual carrying on the agricultural activity in the said land stated to be agriculture land, the said income cannot be assessed to tax as ‘agricultural income’ and the same shall be charged to tax as ‘income from other sources’, hence this ground of appeal raised by the assessee is dismissed and the findings of the authorities below are confirmed. We order accordingly.
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