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Showing 41 to 60 of 1690 Records
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2016 (7) TMI 1657
Disallowance on account of interest on unsecured loans paid in excess of 18% to the persons specified u/s 40A(2)(b) - Whether AO is empowered to make disallowance by invoking the provisions of section 40A(2)( b)? - HELD THAT:- There is no dispute with regard to the fact that the amount was borrowed for the purpose of business and the assessee has claimed payment of interest @ 24% p.a. - AO considering the same as unreasonable and excessive, restricted @ 18%. The revenue has not placed any material under the identical facts and circumstances that the fair market rate of interest is lower than what the assessee has claimed. As per section 40A(2)(b) AO has to give a finding having regard to the fair market rate.
In the present case, no such finding is given. The assessee has placed reliance on the two decisions of the Coordinate Bench of the Tribunal rendered in the case of Ram Avtar Garg [2010 (5) TMI 715 - ITAT JAIPUR] pertaining to A.Y. 2005-06 and in assessee’s own case in pertaining to A.Y. 2010-11 wherein the Coordinate Benches have allowed the interest @ 24% being fair market rate. The facts of the present case are identical. The revenue has not brought any contrary material on record suggesting that the rate so claimed by the assessee is excessive of the fair market rate as prevalent during the year under appeal. Therefore, we hereby direct the AO to delete the disallowance made on account of interest on fair market rate paid in excess of 18% to the persons specified under section 40A(2)( b) - Appeal of assessee allowed.
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2016 (7) TMI 1656
Reduction of Share Capital - Section 100 to 105 of the Companies Act, 1956 - HELD THAT:- In view of the averments made in paragraph 20 to 24 of the Affidavit in Support of Company Summons for Direction, inter-alia stating that there are no Secured Creditors in the Applicant Company and that the unsecured creditor has given its consent in writing for the proposed reduction which is attached to the Affidavit in Support of Company Summons for Direction as Exhibit L and that the proposed reduction would not in any way adversely affect the interest of any of the Applicant Company’s creditors or the ordinary operations of the Applicant Company in the ordinary course of its business and that there is no compromise or arrangement with any of the creditors of the Applicant Company as there is no reduction in the amount payable to any of the creditors of the Applicant Company. In view of above, the procedure prescribed under Section 101(2) of the Companies Act, 1956 is dispensed with.
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2016 (7) TMI 1655
Addition treating the entire tax credit as undisclosed income - HELD THAT:- There is no dispute that the assessee has not proved to have actually conducted any retail business in the relevant previous year. His stand throughout except to the extent of revised statement not accepted has been that his source of income is only salary. Learned counsel strongly argues that the assessee has been carrying out retail saree business so as to be eligible for peak credit addition amount only.
We put a specific query as to whether any evidence is available in support of this retail business plea. Learned counsel fails to place reliance any documentary evidence forming part of the case file in this regard. We agree with the CIT(A) in this peculiar backdrop of facts that the assessee’s revised statement is liable to be rejected. It is made clear that there is no argument on assessee’s part qua his latter substantive ground. Nor is there any evidence or legal plea raised to controvert the CIT(A)’s findings on enhancement issue. We find no reason to interfere with the order of the CIT(A). Assessee appeal dismissed.
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2016 (7) TMI 1654
Reduction of share capital - procedure prescribed under Section 101(2) of the Companies Act, 1956 was dispensed with - HELD THAT:- The Petitioner Company states that the Petitioner has complied with all the statutory requirements as per the directions of this Court and they have filed necessary affidavit of compliance in the Court. Moreover, Petitioner Company also undertakes to comply with statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder.
No objector has come forward to oppose the proposed reduction. Since the requisite statutory procedure has been fulfilled, the Company Scheme Petition is made absolute - Application allowed.
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2016 (7) TMI 1653
Action of the CIT(A) in dismissing its appeal by holding that the same was barred by limitation - Penalty u/s 271(1)(c) - As mentioned appeal was barred by 361 days and that the assessee had not filed any condonation petition/affidavit in this respect but till date no remedial action has been taken by the assessee - HELD THAT:- From the pleadings of the assessee it clearly reveals that in fact the assessee was not aggrieved by the quantum additions rather the assessee was aggrieved on account of levy of penalty that is way the assessee had chosen not to file the appeal against the quantum additions. If on a subsequent occasion some senior counsel advised the assessee to file the appeal, that cannot be a sufficient cause for condonation of delay. We are surprised rather shocked to see that the concerned Chartered Accountant has deposed in the affidavit that he was getting feelers from the AO that the AO would not levy penalty if the assessee would not contest the quantum additions and that it was he who advised the assessee not to file the appeal, even, after receipt of notice regarding the initiation of penalty the proceedings under section 271(1)(c) of the Act. He also deposed before the Ld. CIT(A) in his affidavit that the appeal was not filed because of his advice and that the delay may be condoned. We feel it difficult to digest that such an advice may be given to an assessee by a Chartered Accountant and then that Chartered Accountant could affirm that he in fact has given such a wrong advice to the assessee by way of deposition in an affidavit.
Whatsoever might have been advice of the Chartered Accountant of the assessee, firstly the assessee in fact was not aggrieved by the order under section 143(3) but of the penalty order under section 271(1)(c); secondly the assessee has not shown sufficient cause for condonation of delay in filing the appeal before the Ld. CIT(A), hence, there is no infirmity in the order of the Ld. CIT(A) in rejecting the application for condonation of delay.
Even no application for condonation of delay has been filed before this Tribunal. No reasons/circumstances for filing the appeal with a delay of 361 days has been explained before us. It seems that the assessee again failed to take advice from his senior counsel even after dismissal of his appeal for the same reason by the Ld. CIT(A). Hence, appeal before this Tribunal is barred by limitation.
In view of this, neither we find any reason to interfere with the order of the Ld. CIT(A) in dismissing the appeal before him being barred by limitation nor we find any reason or sufficient cause to condone the delay in filing the appeal before this Tribunal. Hence, the appeal of the assessee is dismissed in both courts.
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2016 (7) TMI 1652
Award of sentences - series of murders - single trial - Whether consecutive life sentences can be awarded to a convict on being found guilty of a series of murders for which he has been tried in a single trial? - HELD THAT:- A reading of Section 31 of the Code of Criminal Procedure would show that the provision is attracted only in cases where two essentials are satisfied viz. (1) a person is convicted at one trial and (2) the trial is for two or more offences. It is only when both these conditions are satisfied that the Court can sentence the offender to several punishments prescribed for the offences committed by him provided the Court is otherwise competent to impose such punishments. What is significant is that such punishments as the Court may decide to award for several offences committed by the convict when comprising imprisonment shall commence one after the expiration of the other in such order as the Court may direct unless the Court in its discretion orders that such punishment shall run concurrently. Sub-section (2) of Section 31 on a plain reading makes it unnecessary for the Court to send the offender for trial before a higher Court only because the aggregate punishment for several offences happens to be in excess of the punishment which such Court is competent to award provided always that in no case can the person so sentenced be imprisoned for a period longer than 14 years and the aggregate punishment does not exceed twice the punishment which the court is competent to inflict for a single offence.
In State of Punjab v. Joginder Singh [1962 (11) TMI 59 - SUPREME COURT], this Court held that if the sentence is 'imprisonment for life' the convict has to pass the remainder of his life under imprisonment unless of course he is granted remission by a competent authority in exercise of the powers vested in it Under Sections 432 and 433 of the Code of Criminal Procedure.
The legal position is, thus, fairly well settled that imprisonment for life is a sentence for the remainder of the life of the offender unless of course the remaining sentence is commuted or remitted by the competent authority. That being so, the provisions of Section 31 under Code of Criminal Procedure must be so interpreted as to be consistent with the basic tenet that a life sentence requires the prisoner to spend the rest of his life in prison. Any direction that requires the offender to undergo imprisonment for life twice over would be anomalous and irrational for it will disregard the fact that humans like all other living beings have but one life to live. So understood Section 31(1) would permit consecutive running of sentences only if such sentences do not happen to be life sentences. That is the only way one can avoid an obvious impossibility of a prisoner serving two consecutive life sentences.
While multiple sentences for imprisonment for life can be awarded for multiple murders or other offences punishable with imprisonment for life, the life sentences so awarded cannot be directed to run consecutively. Such sentences would, however, be super imposed over each other so that any remission or commutation granted by the competent authority in one does not ipso facto result in remission of the sentence awarded to the prisoner for the other.
The power of the Court to direct the order in which sentences will run is unquestionable in view of the language employed in Section 31 of the Code of Criminal Procedure. The Court can, therefore, legitimately direct that the prisoner shall first undergo the term sentence before the commencement of his life sentence. Such a direction shall be perfectly legitimate and in tune with Section 31. The converse however may not be true for if the Court directs the life sentence to start first it would necessarily imply that the term sentence would run concurrently. That is because once the prisoner spends his life in jail, there is no question of his undergoing any further sentence. Whether or not the direction of the Court below calls for any modification or alteration is a matter with which we are not concerned.
The reference is accordingly answered.
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2016 (7) TMI 1651
Suit for injunction simpliciter - suit was decreed by the trial court, granting a permanent prohibitory injunction decree, restraining the defendants from trespassing into the plaint item Nos. 1 and 2 properties and from using any portion of the said properties as a pathway - HELD THAT:- On a close reading of Rule 23-A of Order XLI of the Code it will be evident that, to invoke the power, vested in an appellate court, to remand a case, twin satisfactions will have to be arrived at. Firstly, the appellate court, on an analysis of the facts and on applying the principles of law, should find that the decree is to be reversed. Only after taking such a decision, the appellate court can step into the next arena. Second condition to be satisfied for invoking the power is that, the appellate court on merits, should find that a retrial is essential for the complete adjudication of the lis between the parties.
Well settled is the proposition of law that whether the court should or should not remand a case is one of discretion. Surely, the discretion has to be exercised on sound and reasonable premises and guided by judicial principles. If only these two conditions are satisfied, a remand under Order XLI Rule 23-A of the Code could be legally justified. Merely on establishing any one of the conditions mentioned above, an appellate court shall not remand a case to the lower court. In other words, these twin conditions are conjunctive and not disjunctive.
Insofar as a remand under Order XLI Rule 23 of the Code is concerned, it can be called a restricted or limited remand. An order of remand passed by an appellate court by invoking Order XLI Rule 23A of the Code is wider in scope.
The impugned judgment is set aside. The matter is remitted back to the lower appellate court - Appeal allowed.
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2016 (7) TMI 1650
Nature of expenditure - disallowance being payment made to NHAI towards land acquisition - assessee had claimed the entire expense as revenue expenditure which was related to construction of an elevated corridor from Beach road to Maduravoil in Chennai which has been approved by the Central Government - AO rejected the claim of the assessee for treating it as revenue expenditure and held the expenditure to be in the nature of capital expenditure - HELD THAT:- Assessee had incurred the expenditure only with the primary motive of facilitating its business and earning more revenue. Just because the benefit of the expenditure incurred by the assessee also flows to some unrelated parties, the expenditure cannot be disallowed under section 37(1) of the Act. This is a conscious decision taken by the assessee in concurrence with the Central Government and State Government. See AIRPORT AUTHORITY OF INDIA VERSUS COMMISSIONER OF INCOME TAX [2011 (12) TMI 114 - DELHI HIGH COURT]
The only purpose of the expenditure is to generate more profit and the benefit of which will overflow to subsequent years and the period is unknown. Hence, the expenditure incurred by the assessee is nothing but deferred revenue expenditure and accordingly the same has to be allowed as deduction under section 37(1) in the year in which it is incurred. Therefore, we hereby direct the learned Assessing Officer to treat the expenditure as revenue expenditure and allow deduction accordingly. - Decided in favour of assessee.
Disallowance being expenditure incurred towards strengthening and realigning of the tracks in the harbor - As per AO assessee has claimed deduction being the expenditure incurred towards strengthening and realigning of shed line-II and connecting lines at inner harbor - AO held the expenditure incurred by the assessee as capital expenditure and therefore, disallowed the same as allowable deduction either under section 31 or under section 37(1) - CIT-A agreed with the view of AO and directed the Assessing Officer to allow depreciation on the same - HELD THAT:- We find that it is necessary for the assessee to incur these expenditures in order to carry out its business activities. Further, by incurring such expenditure a new asset is not created but only the existing assets are reconditioned by carrying out extensive repairs. In such circumstances, the expenses incurred by the assessee will purely amount to revenue in nature and therefore allowable as deduction under section 37(1)
On a similar situation that of the present assessee also in the case of COATS VIYELLA INDIA LTD. [2000 (11) TMI 24 - MADRAS HIGH COURT] it was categorically held that contribution made to Govt. for building a new bridge in place of old one with a view to provide access to factory for workmen and goods though not owned by the assessee and when there is no addition to value of any of its assets would be treated as a revenue expenditure. Similarly, the Hon’ble High Court of Delhi in the case of Airport Authority of India Vs. CIT (2011 (12) TMI 114 - DELHI HIGH COURT] also held the issue in favour of the assessee. - Decided in favour of assessee.
Disallowance u/s 14A read with Rule 8D - As per AO Assessee has invested in equity shares of certain corporation limited companies, the dividend earned from which is exempt from tax - HELD THAT:- As relying on relevant portion of the decision of this Tribunal in the case of Kamarajar Port [2016 (5) TMI 315 - ITAT CHENNAI] we hereby hold this issue in favour of the assessee, subject to verification that all such investments are made in sister concerns / associate concerns / companies owned by the Government. Thus, this issue is also decided in favour of the assessee.
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2016 (7) TMI 1649
Levy of fuel surcharge adjustment (FSA) which is collected from the consumers in addition to fixed tariff for consumption of power - HELD THAT:- Fuel surcharge is really a surcharge levied to meet increased cost of generation and purchase of electricity and the scope cannot be circumscribed by its nomenclature. Thus the formula in Regulation 45B and the FSA determined by the Commission would take into consideration various factors which result in the increased cost of generation and purchase of electricity.
The appellants are directed to make the deposit along with interest; if no other rate is prescribed at the rate of 8 per cent per annum, and other charges for delay, as may be permissible to recover within a period of one month from today - Appeal dismissed.
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2016 (7) TMI 1648
Seeking interim injunction against the arbitration proceedings initiated by the appellant - invocation of doctrine of forum non conveniens - whether the court could at all interfere in the course of an arbitral proceeding? - whether the arbitral proceedings could be regarded as vexatious or oppressive? - whether the arbitration agreement was null and void and/ or incapable of performance? - whether there was waiver of the arbitration clause on the part of the appellant because of its withdrawal of a petition under Section 45 of the Arbitration and Conciliation Act, 1996 which had been filed before the Company Law Board in the said Company Petition?
HELD THAT:- It is clear that the doctrine of forum non conveniens can only be invoked where the court deciding not to exercise jurisdiction, has jurisdiction in the strict sense, but comes to the conclusion that some other court, which also has jurisdiction, would be the more convenient forum. It must also be kept in mind that the doctrine of forum non conveniens is essentially a common law doctrine originating from admiralty cases having trans-national implications. It is clear that the doctrine of forum non conveniens is only available when a Court has the jurisdiction but the respondent is able to establish the existence of another competent court.
The finding of the learned single Judge that the arbitration agreement in the present case is incapable of performance or inoperative because of the pendency of the proceedings in the Company Law Board is clearly out of line. As pointed out above, while discussing the World Sport Group (supra) decision, it was specifically noted that the mere existence of the multiple proceedings (proceedings before the Company Law Board and those before the arbitral tribunal) is not sufficient to render the arbitration agreement inoperative or incapable of being performed - In any event, the subject matter of the proceedings before the Company Law Board fell within the ambit of the alleged oppression and mismanagement whereas the subject matter of the dispute before the arbitral tribunal related to the termination of the JVA and the rights flowing therefrom.
The learned single Judge was of the view that there was a waiver or abandonment of the arbitration clause by the parties. This finding is clearly erroneous. The learned single Judge was of the view that merely because the appellant withdrew its application under Section 45 which it had challenged before the Company Law Board, the appellant had abandoned the arbitration agreement - The learned single Judge lost sight of the fact that, while through the application under Section 45, the appellant had sought a reference to arbitration of the claims of the respondents before the Company Law Board, it had subsequently directly invoked the arbitration agreement which had also been set in motion and, therefore, by no stretch of imagination could it have been concluded that the appellant had abandoned and / or waived the arbitration agreement.
There was some debate and discussion that the ‘place of arbitration’ was not London in terms of the arbitration agreement and, therefore, Part I would not apply. On the one hand, it was contended on the part of the respondents that London was only a venue and not the ‘place of arbitration’, which, according to them, was New Delhi. Thus, their arguments and counter-arguments as to whether Part I applied or Part II applied were based on the difference of opinion with regard to the ‘place of arbitration’. There appears to be confusion even in the minds of the parties as, on the one hand, the appellant had filed an application under Section 45 of the 1996 Act (which falls in Part II) before the Company Law Board and, on the other hand, the very same appellant filed an application under Section 9 (which falls in Part I) of the 1996 Act. Of course, the appellant took the plea that because the agreement was prior to 06.09.2012, the decision in Bhatia International would apply and, therefore, Part I would be applicable even in respect of arbitration agreements referred to in Section 44 of the 1996 Act. Be that as it may, we are not entering into this controversy.
Courts need to remind themselves that the trend is to minimize interference with arbitration process as that is the forum of choice. That is also the policy discernible from the 1996 Act. Courts must be extremely circumspect and, indeed, reluctant to thwart arbitration proceedings. Thus, while courts in India may have the power to injunct arbitration proceedings, they must exercise that power rarely and only on principles analogous to those found in sections 8 and 45, as the case may be, of the 1996 Act - Application disposed off.
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2016 (7) TMI 1647
Penalty u/s 271(1)(c) - AO passed assessment order under Section 143 (3) determining the total income after rejecting the books of accounts and estimating the profit @ 6% and making addition under Section 40(a)(i) of the Act - Tribunal cancelling the penalty - HELD THAT:- This Court is of the opinion that the Tribunal in its order has held that the substantial additions on merits have been deleted in this order while considering the cross appeals on merits and therefore nothing survives in favour of the revenue for levy of the penalty.
AO could have initiated the fresh penalty proceedings after receipt of the order of the Tribunal, but Assessing Officer did not do so. No review of the order is permitted under the I.T. Act by the Assessing Officer. The additions now made by the Assessing Officer in the order dated 6.01.2006 are not part of the show cause notice and no fresh notice is issued for initiating the penalty proceedings against the assessee. The result would be that the Assessing Officer dropped the proceedings for penalty on 30.03.2005 and thereafter, did not initiate the penalty proceedings.
Commissioner of Income Tax (Appeals) was justified in deciding the issue in favour of the assessee and against the revenue department. We may also note that substantial additions on merits have been deleted in this order while considering the cross appeals on merits. Therefore, nothing survives in favour of the revenue for levy of the penalty. Considering the facts and circumstances, in the light of the findings of the Commissioner of Income Tax (Appeals), we are of the view , Learned Commissioner of Income Tax (Appeals) was justified in canceling the penalty under section 271(1)(c) - Decided in favour of assessee.
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2016 (7) TMI 1646
Deduction u/s 80- IA(4) for generating power for captive consumption - HELD THAT:- This will be governed by the answer in question (C) in Commissioner of Income-tax v. Alembic Limited [2016 (7) TMI 1239 - GUJARAT HIGH COURT] where we decided the issue in favour of the assessee and against the revenue. In that view of the matter, we answer the question in favour of the assessee and against the revenue.
Withdrawal from the revaluation reserve from the book profit under section 115JB - HELD THAT:- Since this question is covered by the decision of this court in [2008 (8) TMI 1009 - GUJARAT HIGH COURT] in the case of Commissioner of Income-tax-I v. Alembic Glass Industries Limited decided on 11.8.2008 where following the decision in [2008 (8) TMI 1010 - GUJARAT HIGH COURT], the question is answered in favour of the assessee, we answer this question in favour of the assessee and against the revenue.
Deduction of claim of interest payable to ONGC - Whether during the year assessee has not paid any amount towards this liability?” - HELD THAT:- This court in [2011 (5) TMI 816 - GUJARAT HIGH COURT] the case of Commissioner of Income-tax v. Alembic Glass Industries Limited as held a settled law is if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date. What should be certain is the incurring of the liability. It should be capable of being estimated with reasonable certainty though the actual quantification may not be possible. If these requirements are satisfied the liability is not a contingent one. The liability is in praesenti though it will be discharged at a future date. It does not make any difference if the future date on which the liability shall have to be discharged is not certain.where this court held in favour of the assessee and against the revenue
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2016 (7) TMI 1645
Absence of conveyance deed - relinquishment of rights - patta was granted in favour of the defendant after filing of the suit - defendant has failed to prove his independent income to pay the amount for grant of land - HELD THAT:- It is not in dispute that the defendant and the plaintiffs are sons of late Narayana. It is also available on record that Narayana had two daughters who are married and have not claimed any right with regard to the suit scheduled property. The mother of the plaintiffs died in the year 1987. Plaintiffs No.1 and 2 examined in the trial court as CWs 1 and 2 have stated that they do not claim share in the suit properties. Consequently, the dispute pertaining to partition of the suit scheduled property was limited to plaintiffs No.3 and 4 and the appellant-defendant.
When the terms of the family settlement/arrangement between the parties have been reduced to writing, it has to be registered. But in the facts and circumstances of this case and the conduct of the parties, Ex.D-22 appears to record the family settlement already arrived at between the parties. That Ex.D22-resolution was acted upon is also supported by the subsequent conduct of the parties. Plaintiffs No.3 and 4 retired from the army in 1988 and 1989 respectively - there was division of status among the brothers, the defendant and plaintiffs No. 3 and 4 during the year 1995 or at the time when the defendant paid Rs.20,000/- to plaintiffs No.3 and 4 for relinquishment of their interest in items No.1 and 2 or on 18.03.1995 when before panchayat resolution (Ex.D22) was passed.
The judgment of the High Court of Karnataka dated 20.03.2008 in R.F.A. No.805 of 1998 is set aside so far as suit property items No.1 and 2 is concerned and respondents/plaintiffs’ suit for partition of items No.1 and 2 is dismissed - the impugned judgment is modified and it is held that all the four respondents/plaintiffs and appellant/defendant are entitled to 1/5 share each in item No.3.
Appeal allowed in part.
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2016 (7) TMI 1644
Smuggling - seizure of goods - applicability of Section 52A of the NDPS Act, 1985 - HELD THAT:- Stand Over to 22.07.2016, on the point of applicability of Section 52A of the NDPS Act, 1985, in the matter of seizure.
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2016 (7) TMI 1643
Interpretation about applicability of Section 52A of NDPS Act, 1985 - narcotic drugs and psychotropic substances - HELD THAT:- The decisions particularly in case of State of Punjab v. Makhan Chand [2004 (2) TMI 663 - SUPREME COURT] by the Apex Court in no uncertain terms declares that Section 52A of the NDPS Act does not empower the Central Government to lay down the procedure for search of an accused, but it only deals with disposal of the seized narcotic drugs and psychotropic substances. Even the Standing Orders and Standing Instructions issued by the Central Government under Section 52A of the NDPS Act are guidelines to the officers to see that a fair and transparent procedure is adopted by the Officers-in-charge of the investigation.
There are no hesitation in declaring that the observations made therein must be construed to be per incuriam - these Criminal Appeals are required to be heard on merits, and accordingly fixed for final hearing on 2nd August 2016.
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2016 (7) TMI 1642
Disallowance u/s 14A - AO added the disallowance made u/s 14A of the Act to the book profit computed under the provisions of the Companies Act - HELD THAT:- In the absence of any income directly attributable to the interest paid by the assessee, the disallowance has to be computed under Rule 8D(2)(ii). From the assessment order it appears that the assessee has incurred expenditure which is directly attributable to any particular income by way of interest on the borrowed loan and also made investment during the year under consideration. Therefore, the observation made by the CIT(A) that the entire investment was made in the earlier previous year is not correct. Apparently, there is an investment during the previous year which is relevant to the assessment year under consideration. Even though the CIT(A) found that the investments were made in the subsidiary companies, no such particulars are available how the companies in which investments were made are subsidiary of the assessee-company.
CIT(A) by reproducing the order of this Tribunal has simply found that the investment in subsidiary companies cannot be considered for disallowance u/s 14A. In the absence of any material available on record, this Tribunal is of the considered opinion that the Assessing Officer has to examine the companies in which the investments were made by the assessee and how such companies are subsidiary or holding company of the assessee. Since such an exercise was not done by both the authorities below, this Tribunal is of the considered opinion that the mater needs to be reconsidered.
Apparently few investments were made during the year under consideration. The order of this Tribunal for the earlier assessment years viz. 2010-11 and 2011-12 is not applicable to the facts of this case. Therefore, the Assessing Officer has to reexamine the matter afresh by taking into consideration all the investments made by the assessee and thereafter decide the same in accordance with law. Accordingly, the orders of the lower authorities are set aside and the disallowance made by the Assessing Officer u/s 14A is remitted back to the file of the Assessing Officer.
Disallowance of expenditure made by the assessee for acquisition of intangible asset viz. logo - assessee claimed the same as revenue expenditure while computing the taxable income - AO disallowed the claim of the assessee on the ground that what was paid by the assessee is a royalty, therefore, it is in the capital filed and allowed depreciation u/s 32 - HELD THAT:- The assessee being a company engaged in the business, a Trust cannot be a group concern of the business concern. The Trust can be an independent entity for charitable activity or other activity as per the object of the Trust. This Tribunal is of the considered opinion that a Trust cannot be construed as a group concern of a business concern. The Trust has to be always treated independently and it is an independent statutory body. The assessee now claims that the logo belongs to Shriram Ownership Trust was used by the assessee in its business activity and payment was made on turnover basis. The question arises for consideration is whether such payment is an allowable business expenditure u/s 37(1) of the Act. This Tribunal is of the considered opinion that when Shriram Ownership Trust is an independent statutory body, being a Trust, the assessee has to necessarily make payment for using the logo to Shriram Ownership Trust and such payment has to be at the market rate. Therefore, this payment being an expenditure for using logo is an allowable expenditure u/s 37(1) of the Act
Appeal of the Revenue is partly allowed for statistical purposes.
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2016 (7) TMI 1641
Revision u/s 263 - Bogus share transactions - returns were filed by such companies with meagre income; intimations were issued u/s 143(1); thereafter notices u/s 148 were issued either at the instance of such companies divulging a paltry escapement of income or otherwise ; assessment orders were passed u/s 143(3) read with section 147 after making nominal additions - HELD THAT:- It is relevant to mention that we have disposed of more than 500 cases involving same issue through certain orders with the main order having been passed in a group of cases led by Subhlakshmi Vanijya Pvt. Ltd. [2015 (8) TMI 174 - ITAT KOLKATA] as held Contention of the assessee that since the AO of the assessee-company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable. Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order.
The notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases.
CIT having jurisdiction over the AO who passed order u/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT - Addition in the hands of a company can be made u/s 68 in its first year of incorporation.
After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid.Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day.
Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given by the CIT.
Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 - Decided against assessee.
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2016 (7) TMI 1640
Issuance of Summons u/s 108 of Customs Act - requirement of petitioner to present himself in person before the Senior Intelligence Officer, DRI , DZU, New Delhi - HELD THAT:- There shall be stay of part of the impugned Order passed by the High Court so far as it directs that any coercive action against the petitioner shall only be effected after initiation of proceedings in accordance with law and after serving upon the petitioner a seven days notice in that behalf.
Let the notice be issued in the matter, returnable after three weeks.
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2016 (7) TMI 1639
Disallowance of royalty - nature of expenditure - AO treated the expenditure as capital in nature and allowed depreciation @ 12.5% - HELD THAT:- Material available on record. Shriram Ownership Trust is a Trust by itself, therefore, its logo cannot be used by any other concern. The object of the Trust is not to do business. The assessee-company was established for the purpose of business.
When the assessee-company used the logo belongs to Shritam Ownership Trust, this Tribunal is of the considered opinion that for the purpose of using the logo, the assessee has to necessarily make the payment. In the case before us, the payment was made on turnover basis, therefore, the same has to be allowed as revenue expenditure u/s 37(1) of the Act. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. - Decided against revenue.
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2016 (7) TMI 1638
Condonation of delay in filing appeal - HELD THAT:- The Court finds sufficient cause having been shown for condonation of delay - The delay condonation application is accordingly allowed.
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