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Showing 81 to 100 of 1590 Records
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2016 (8) TMI 1515 - DELHI HIGH COURT
Rejection of refund claim/export rebate - rejection on the ground of time limitation - appeal initially filed before wrong forum - allegation that claim apparently made to the wrong Maritime Commissioner; instead of filing it before the appropriate jurisdictional Commissioner, i.e., in Bhiwadi or in Delhi where the exports took place - HELD THAT:- In this case, what the petitioners were seeking was neither revisional nor appellate relief. Rather they were seeking a benefit which was admissible to them in terms of a Statute and the Notifications issued thereunder. That they were liable to pay customs duty for the imports made is not disputed; that for such imports upon export of the ultimate produce, they were entitled to revision/rebate is also not in dispute; it is rather an entitlement. This rebate was premised upon sound public policy, i.e., encouragement of export on foreign exchange earnings. Such being the case, the considerations as well as the construction to be placed upon Section 11B which applies to all manner of refunds - whether it is in case of excess payment of duty, amounts payable where no duty is leviable or in the case of refund unrelated to levy per se would vary. In a case where refund is claimed on account of the entitlement of an application under some scheme which is conceived in the larger public interest, strict adherence to the principle that an application made within the period of time to the wrong authority but subsequently filed before the correct authority would still be considered time-barred, in our opinion, acts very unreasonably.
In the case of M.P. Steel Corporation v. Commissioner of Central Excise, [2015 (4) TMI 849 - SUPREME COURT] has surveyed the law on the subject - including Parson Tools - and concluded that the period from the cause of action till institution of appellate or revisional proceedings from original proceedings - which proved to be abortive appeal should be excluded.
The refund claims should have been adjudicated as if they had been originally filed before the authorities having jurisdiction. That rebate was premised on the basis of jurisdiction, primarily applicable for assessment is a matter of convenience in the circumstances of the case - Petition allowed.
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2016 (8) TMI 1514 - MADRAS HIGH COURT
Validity of provisional seniority list of Assistant Commercial Tax Officer - allegation was that the regular rule for fixing the seniority was not followed by the State Government - HELD THAT:- This Court considered the matter in detail and by order dated 19.06.1986, set aside the provisional seniority list. While assailing the provisional seniority list, this Court also laid down certain guidelines for drawing the seniority list. In the operative part of the judgment, this Court directed that on the basis of guidelines in the judgment, the Assistant Commercial Tax Officers at Sl.Nos.129 to 519, in the impugned seniority list can be placed above the writ petitioners over the direct recruits in the inter-se seniority list, only if they had held the post substantively within the permanent cadre strength allotted to the particular category even before the writ petitioners commenced their probation.
On a perusal of the records, this Court finds that the Government only challenged the direction given by this Court with regard to Assistant Commercial Tax officers placed at Sl.Nos.129 to 519 in the impugned seniority list, before the Hon'ble Supreme Court in Civil Appeal No.1454 of 1987. The objection raised was to the expression permanent cadre strength. The stand of the State Government was that employees holding the temporary posts prior to appointment of the writ petitioners before this Court, should also be considered for the purpose of fixing the seniority and they should not be omitted out of consideration. One another stand of the Government was that temporary appointment to a permanent post was different from regular appointment to a temporary post. The contentions were rejected for the reason that there was nothing to show that the cadre strength fixed by the Government in any particular year comprised not only permanent posts, but also temporary posts.
It is apparent that the promotion as well as upgradation are only for the permanent posts and hence G.O.Ms.No.1, Commercial Taxes and Registration (A2) Department, dated 04.01.2010, G.O.Ms.No.17, Commercial Taxes and Registration (A2) Department, dated 10.02.2014 and G.O.Ms.No.47, Commercial Taxes and Registration (A2) Department, dated 31.03.2015, have to be considered. Further, the seniority list placed before the Hon'ble Supreme Court, has been agreed to by all the parties concerned, and hence there cannot be any deviation with regard to the promotions subsequently claimed by them - The attempt of the appellant is nothing but re-appreciating or re-arguing the case which had already been decided by the Hon'ble Supreme Court and hence such an act to re-agitate is only to be rejected. If the appellant has any grievance with regard to the judgment passed by the Hon'ble Supreme Court, he has to approach the Hon'ble Supreme Court seeking necessary clarifications, as the seniority list placed before the Hon'ble Supreme Court, has been agreed to by all the parties concerned. Therefore, it is for the appellant to approach the Hon'ble Supreme Court, for clarification of the judgment, if so advised.
Appeal dismissed.
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2016 (8) TMI 1513 - MADRAS HIGH COURT
Release of goods lying with the appellant-Port Trust - Muriate of Potash - HELD THAT:- There appears to be some communication gap between the appellant-Port Trust and the second respondent-Customs authority. Though the Learned Counsel for the appellant-Port Trust has contended that the first respondent is liable to pay demurrage charges for the 20% of the goods detained, on the ground that there was no detention order passed by the Customs authority and no detention certificate was issued for the same, the Learned Counsel for the first respondent submitted that for no fault of them, the first respondent has been penalised or sought to be penalised by the appellant-Port Trust in spite of an application made in this regard for release of the 20% goods.
Since it is now made clear by the second respondent-Customs authority that an order has been passed way back during January, 2016 and only for want of communication from the Customs authority, the appellant-Port Trust has not released the goods, we direct that the 20% of the goods, if not already released, be released by the appellant-Port Trust to the first respondent forthwith without any demurrage charges, as the same has to be waived of by the Port Trust authority - Appeal disposed off.
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2016 (8) TMI 1512 - ITAT CHENNAI
Penalty levied u/s 271(1)(c) - addition made towards introduction of capital in partners account and towards unexplained credit - HELD THAT:- Assessee or his representative could not bring out any materials to establish that the additions are made and sustained due to possible interpretations of the Act or difference of opinion. It is purely a factual case where the assessee was not able to establish the genuiness of the credits in the assessee’s current account in the partnership firm where the assessee is the Managing Partner and other credits in his books of accounts which is elaborately discussed in the orders of the Revenue.
These aspects of the case lead to the fact that the assessee has concealed his income. In such circumstances, we do not find it necessary to interfere with the order of CIT (Appeals). Accordingly we hereby confirm the order of the CIT (Appeals). Appeal of the assessee is dismissed.
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2016 (8) TMI 1511 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - exercise of reopening is being undertaken at the behest of the audit party - Capital gain not showed by the assessee on transfer of a land to Shri Ashwinbhai B. Patel - HELD THAT:- If the view of the Assessing Officer was that once the land was sold through a exchange deed, the assessee was liable to pay capital gain, irrespective of the subsequent cancellation of the deed, he ought to have taxed such income in the order of assessment. The fact that the assessee had executed such documents and not offered any income of capital gain to tax was thus within the knowledge of the Assessing Officer. Without there being anything additional, such issue cannot be reexamined in exercise of powers of reassessment. As noted, the letter dated 24.10.2003 of the Assessing Officer of Shri Ashwin B. Patel may prima facie, give an impression that such facts were being brought to the notice of the present Assessing Officer for the first time, but as noted, the queries raised by the Assessing Officer during the original assessment and the replies of the petitioner would show that all these details were very much part of the record.
Reduction on account of withdrawal of interest and the additional depreciation claimed - As question of additional depreciation in ground (2b), the Assessing Officer had not inquired into the nature of reduction of interest - It may be that such interest though paid during the assessment year 2009-2010 was later on withdrawn. Withdrawal of the interest happened during the assessment year 2010-2011. The Assessing Officer therefore, would be prima facie, correct in questioning the assessee in reducing such interest for the assessment year in question namely, 2009-2010. Computation of income being specific to the period pertaining to the previous year relevant to the assessment year under consideration, a legal question would arise whether for a later withdrawal of interest, the assessee could have claimed effect thereof during the earlier year. Being at a stage where the assessment is yet to be framed, we would not give our conclusive opinion on this aspect. Suffice it to say, this issue was not examined by the Assessing Officer in the original assessment.
Higher depreciation - additional depreciation which was on account of increase in opening WDV did not match the figures contained in the report of the Chartered Accountant - Entire claim of depreciation in whatever form presented by the assessee was under examination. The assessee had replied to such a question in detail giving sufficient materials. If the Assessing Officer was not satisfied he could have either raised further query or disallowed the claim in toto. Not having done that same cannot be reexamined in exercise of powers of reassessment.
Disallowance of interest - assessee had received total interest of ₹ 2.00 crores against which it had paid interest to the department to the tune of ₹ 31.39 lacs which could not have been adjusted against the interest income - As petitioner pointed out that though such adjustment was claimed in the return, the Assessing Officer disallowed the same. He took us through the order of assessment and pointed out that such amount of ₹ 31.39 lacs was not allowed to be reduced from the interest income. Learned counsel for the Revenue was unable to controvert this aspect. This ground thus was based on inaccurate factual premise.
Depreciation of windmill - AO was of the opinion that four wind turbine generators were not commissioned on 30.9.2008 thus depreciation relatable to such investment was not allowable - assessee had pointed out the factum of installation and commission of wind power turbines and the details regarding why the depreciation and additional depreciation was available on such investment. This issue was also therefore, thoroughly scrutinised.
Depreciation at a higher rate on the energy saving device - Energy saving device is covered under the item (3)(8)(ix) under the heading of machinery and plant. As provided in section 32(1)(iia) additional deprecation is allowed in case of machinery and plant. It is submitted that it is fulfilling all the conditions narrated in section 32(1)(iia) and therefore it is eligible for additional deprecation.” Thus it was after a minute scrutiny that Assessing Officer did not disturb the income of higher depreciation on this investment. Reopening on such basis would not permissible.
Expenditure towards notified area tax - assessee had made such payment before the due date of filing the returns and the Assessing Officer during the assessment proceedings scrutinised such issue are not in dispute. That being the position it would not be open for the Assessing Officer to revisit such a claim in reassessment.
Short deduction of tax at source on freight charges - In the order of assessment, the Assessing Officer had made a detailed discussion on the payment made to clearing and forwarding agent without TDS and whenever necessary, Assessing Officer made disallowance. Thus the entire issue was examined by the Assessing Officer during the scrutiny assessment.
Disallowance of interest expenditure under section 14A r.w.r. 8D - This issue also was pointedly in focus before the Assessing Officer during the scrutiny assessment.
Non deduction of tax on export commission paid by the assessee - AO noted that such expenditure was allowed without deduction of tax in view of the earlier circulars of CBDT dated 23.7.1969 and 7.2.2000 - assessee had while disclosing that foreign commission was paid to non residents, no TDS was deducted in view of circular dated 7.2.2000. The assessee produced copy of such circular. It was after such inquiry that Assessing Officer made no disallowance, as can be seen from the reasons recorded on account of such circular of the CBDT. It is doubtful whether later circular of CBDT could have been pressed in service to fasten the liability on account of non deduction of tax while making payment which was being done at a time when later circular was not in existence. Quite apart from this legal question, undisputedly, the Assessing Officer was aware about such payments, as was pointed out by the assessee, that no TDS was deducted and the reason why the same was done.
If we compare the audit objections and the reasons recorded, we find that the Assessing Officer has included all objections pointed out by the audit party but has also included one more ground namely, of the escaped capital gain on sale of land by the petitioner to Shri Ashwin Kumar B. Patel. This ground was not part of the audit objection. In our opinion, this would indicate that the Assessing Officer had independently applied his mind and formed a belief that on the grounds mentioned by the audit party in its objection letter and additional ground which is recorded in the reasons, the income chargeable to tax in case of assessee had escaped assessment. We may recall the issue of capital gain tax on sale of land was referred in the letter dated 24.10.2003 by the Assessing Officer of Shri Ashwin Kumar B. Patel. In our opinion therefore, on this ground also, petition must fail.
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2016 (8) TMI 1510 - BOMBAY HIGH COURT
TP Adjustment - Selection of MAM - Tribunal directing AO to restrict the adjustments only in relation to the transactions with the Associate Enterprise and not on the entire revenue of manufacturing segment - assessee has selected Transactional Net Margin Method and applied the same at entity level - whether if the overall margins are less than the arms length margin, the short fall must be on account of the Associate Enterprise transactions and not on pro-rata basis? - HELD THAT:- The impugned order of the Tribunal decided the issue framed herein in favour of the respondent assessee by following its decision in CIT v. Thyssen Krupp Industries India (P.) Ltd. [2015 (12) TMI 1076 - BOMBAY HIGH COURT] and in the case of CIT v. Tara Jewels Exports (P.) Ltd. [2015 (12) TMI 1130 - BOMBAY HIGH COURT]. No distinguishing features in this case to the above two cases relied upon by the impugned order has been shown to us.
Question as framed does not give rise to any substantial question of law.
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2016 (8) TMI 1509 - ITAT MUMBAI
Validity of order passed u/s.153A - agricultural income which was treated by the AO as bogus - HELD THAT:- After relying on the judicial pronouncements in the case of Umesh Electricals [2011 (2) TMI 1584 - ITAT AGRA] , Pragati Coop Bank [2005 (6) TMI 26 - GUJARAT HIGH COURT] and case of Orient Trading Co. Ltd [1962 (8) TMI 69 - BOMBAY HIGH COURT ] CIT(A) has deleted the addition on account of agricultural income. Detailed finding recorded by CIT(A) are as per materials on record, therefore, do not warrant any interference on our part. Accordingly, we confirm the action of CIT(A) regarding agricultural income earned and declared by assessee.
Long term capital gain on sale of shares - Our attention was invited to the statement and copies of the contract notes for purchase and sales of shares of Planter Poly to indicate that actual sales was made in the assessment year 2003-04. AO has made this addition in the assessment year 200102. In the interest of justice and with a limited issue of verifying actual year of sale, we restore the addition back to the file of AO for verifying the factual position and make addition in the correct year of sale.
Similarly in the case of Jayant B Patel [2010 (10) TMI 1208 - ITAT MUMBAI] addition on account of sale of shares of Tripex Ltd.was made in the assessment year 2001-02 and also addition on account of 5% commission. Ld. AR drew our attention to the statement and copies of the contract notes for the purchase in the month April 2005 and sales in August, 2006. As per ld. AR the sale of shares of Tripex Ltd. was made in the assessment year 200708 and not in the assessment year 2001-02, therefore, the AO was not justified in making addition in the assessment year 200102. In the interest of justice and fairplay, we restore this issue back to the file of AO for verifying the record and taxing the same in the current assessment year.
All other additions made by the AO in respect of sale of shares are being confirmed.
Addition made on account of seizer of cash and jewellery, we confirm the respective additions so made by AO in the hands of the assessee in his individual capacity.
Addition on the ground of telescoping - whether assessee could not establish link between the income declared and cash found during the course of search, therefore, benefit of telescoping cannot be given? - HELD THAT:- Assessee had offered profit on sale amounting to ₹ 63,73,000/in various years and also from agricultural operations amounting to ₹ 5,25,500/. The AO has not brought any material on record to suggest that profit so declared was spent by assessee and not available with him at the time of search. In these circumstances CIT(A) found that again making addition in respect of cash found during the course of search amounts to double addition, insofar as addition has already been made on account of income declared on account of GP on cash sales and agricultural income. Under these circumstances, we do not find any infirmity in the order of CIT(A) for allowing telescoping of cash seized which was less than the amount offered by the assessed on account of GP on estimated sales and agricultural income amounting to ₹ 69.73 lakhs.
Addition on account of gifts - HELD THAT:- As held in ITAT Jodhpur in the case of Vishal Dembla [2013 (12) TMI 868 - ITAT JODHPUR] wherein it was held that where the assessee has already submitted his return prior to search which has attained finality and no incriminating document was found during the search, gifts already disclosed by the assessee in the return of income which has attained finality, could not be disturbed u/s.153A.
No merit for the addition made by the AO with respect to gifts received by assessee in A.Y.2003-04 & 2004-05, which were not pending on the date of search and no incriminating material was found during search with regard to these gifts. Accordingly, addition of gifts made by AO when no incriminating materials was found during the course of search is not sustainable. The AO is directed to delete the same. Since we have already decided the legal issues in favour of the assessee, we are not going into merit of the addition made on account of gifts. - Assessee appeal is partly allowed.
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2016 (8) TMI 1508 - SUPREME COURT
Whether two Indian companies can enter into an agreement with a stipulation that their agreement "be governed by, construed and interpreted in accordance with the laws of the United Kingdom"?
HELD THAT:- In the facts and circumstances of the case on hand as indicated by the record, the AGREEMENT-II appears to be falling under the 2nd of the above mentioned two classes of the contracts. There is no discharge of the original contractee i.e., the American company's obligations. There are mutual obligations (arising out of AGREEMENT-I) still to be enforced. The American company legally cannot claim to have been discharged from the obligations arising under AGREEMENT-I and infact has not been discharged. On the other hand, the Appellant by an express covenant under AGREEMENT-II retained its rights to enforce obligations (arising under AGREEMENT-I) against the American company - Adjudication of the dispute raised by the Respondent in the arbitration would necessarily involve examination of the rights and obligations of the American company under AGREEMENT-I and AGREEMENT-II. Therefore, it is a dispute between three parties (of which one is an American company) with a foreign element i.e. rights and obligations of the American company. Hence, the stipulation regarding the governing law cannot be said to be an agreement between only two Indian companies.
Section 45, permits an enquiry into the question whether the arbitration agreement is "null and void, inoperative and incapable of being performed" - The Appellant's case as evidenced by the plaint in its suit is that parts of the AGREEMENT-I though created valid rights and obligations between the (original) parties thereto ceased to be valid subsequent to the assignment under AGREEMENT-II. Because (according to the Appellant's understanding) the parties to AGREEMENT-II are only two companies incorporated in India. They could not have agreed that the governing law of the agreement should be the law of the United Kingdom. According to the Appellant, such a stipulation in the agreement would be contrary to the public policy and hit by Sections 23 of the Indian Contract Act, 1872. Therefore, the arbitration agreement initiated by the Respondent cannot be proceeded with.
The principles of law in this regard are well settled. In all of the cases, the validity of either of the clauses/agreements does not depend upon the existence of the other - the examination of the question of consistency of Article X Section 10.2 (part of the substantive contract) with Section 23 of the Contract Act are beyond the scope of the enquiry while adjudicating the validity of the arbitration agreement either Under Section 45 or Section 8 (amended or original) of the 1996 Act. Therefore, the submissions of the Appellant in this regard are required to be rejected.
Appeal dismissed.
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2016 (8) TMI 1507 - ITAT MUMBAI
Contribution received from members incidental to sale of plot ["Transfer Fees"] - exemption on the Principle of Mutuality - Allowability of deduction u/s.80P(2)(d) - contribution received by the Society from a member on the occasion of the use of TDR by the member and which was exempt on the Principle of Mutuality - HELD THAT:- Issue decided in favour of assessee as relying on case Land End Cooperative Housing Society [2016 (2) TMI 620 - ITAT MUMBAI]
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2016 (8) TMI 1506 - ITAT CHENNAI
Deduction under Section 80-IA - Classification of rental income received by the assessee - rental income received by the assessee by letting out the property - “income from house property” or “income from business” - HELD THAT:- Assessee admittedly developed a technology park by name “Olympia Tech Park”, which is exclusively meant for developing software and I.T. enabled services. The assessee, apart from the building, has also provided infrastructure facilities such as specialized air-conditioners, specialized cabling, specialized electrical fittings, specialized furniture in the form of business modules, etc.
Therefore, it has to be construed as infrastructure facility with all specifications and requirements. CIT(Appeals) has rightly placed reliance on the judgment of Madras High Court in Elnet Technologies Ltd. [2012 (11) TMI 671 - MADRAS HIGH COURT] - As rightly submitted by assessee, the judgment of Madras High Court in Chennai Properties & Investments Ltd. [2003 (3) TMI 28 - MADRAS HIGH COURT] was reversed by the Apex Court [2015 (5) TMI 46 - SUPREME COURT]. The Apex Court found that when the assessee let out the property as business, the rental income has to be assessed as income from business. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee.
Disallowance u/s 14A - Only contention of the assessee that the investment in deep discount bonds does not result in any exempted income and the income from deep discount bonds is taxable - HELD THAT:- No details of investments said to be made by the assessee which earned taxable income are available either before the Assessing Officer or before this Tribunal. Moreover, the so-called investments in subsidiary companies are also not available on record. In the absence of any such details either before this Tribunal or before the CIT(Appeals) or before the Assessing Officer, the claim of the assessee that the investment made in deep discount bonds and subsidiary companies has to be excluded cannot be accepted. When the assessee claims that investment in deep discount bonds resulted in taxable income, it is for the assessee to file necessary material to substantiate its case. In the absence of any such material, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
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2016 (8) TMI 1505 - ITAT MUMBAI
Revision u/s 263 - Nature of expenses - expenses incurred by the assessee company for launch/ initial issue of ‘Franklin India Flexicap Fund’ and one other scheme - revenue or capital expenditure - HELD THAT:- As on debatable issues where two views are possible jurisdiction u/s.263 is not to be exercised. We accordingly hold that exercise of jurisdiction u/s.263 could not have been made.
As the impugned order passed u/s 263 has been quashed by the Tribunal [2012 (6) TMI 629 - ITAT MUMBAI] and therefore, there are no basis to continue with the impugned disallowance made by the AO on account of launch/initial issue expenses in consequent to the order passed by the CIT u/s 263. Therefore, under these circumstances the impugned disallowance being devoid of force of law is directed to be deleted. - Decided in favour of assessee.
Disallowing the administrative and other expenses and depreciation allowance - expenses pertaining to a erstwhile company which stood merged/amalgamated with the assessee company - HELD THAT:- There is no dispute that the assessee company is engaged in the business activities in a full-fledged manner. This fact is confirmed in the impugned assessment order passed in the hands of the assessee company wherein income of the assessee company has been assessed under the head ‘income from business’. It is further noted that in the hands of erstwhile company itself, the AO of the said company in subsequent year i.e. A.Y. 2007-08 assessed its income under the head ‘income from business’ and also allowed the benefit of depreciation. Thus, no contradictory action could have been taken in the hands of the assessee company while computing taxable income of the erstwhile company to be included in the taxable income of the assessee company, in consequence to the amalgamation/merger of FTAMC into the assessee company - entire facts and circumstances of this case suggest that lower authorities have themselves acknowledged factum of continuation of business - no rational to disallow routine administrative expenses under the erroneous presumption of non-continuation of business activities - disallowance of expenses and depreciation to be incorrect on facts as well as on law. - Decided in favour of assessee.
Depreciation allowance u/s 32(1)(ii) of goodwill acquired by the assessee on acquisition and merger - HELD THAT:- As relying on SMIFS SECURITIES LTD. [2012 (8) TMI 713 - SUPREME COURT] assessee is prima facie entitled for the claim of depreciation on the amount of Goodwill acquired by the assessee on account of acquisition of erstwhile company (FTAMC).
However, we find it appropriate that requisite facts in this regard should be verified by the AO. Therefore, we send this ground back to the file of the AO. The AO shall verify the factual assertion made by the assessee that depreciation has been allowed on this amount of Goodwill in subsequent years, as has been claimed before us. If it is found to be correct, then depreciation should be granted from the beginning. The assessee shall file requisite documents in support of its claim. AO take into account all the documentary evidences and other submission as may be made available by the assessee on objective basis before deciding this issue afresh, but keeping in view the legal position as discussed. - Decided in favour of assessee for statistical purposes.
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2016 (8) TMI 1504 - KARNATAKA HIGH COURT
Approval of Amalgamation Scheme - dispensation of meeting of shareholders and creditors for approving the Scheme of Amalgamation - HELD THAT:- The Scheme of Amalgamation, Annexure-A is approved. Petition is accordingly allowed - The petitioner – Company is hereby dissolved without winding up.
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2016 (8) TMI 1503 - SUPREME COURT
Government bungalows occupied by former Chief Ministers of the State of Uttar Pradesh even after demitting office of the Chief Minister for several years without any right to retain the same - Maintainability of the writ petition filed in the public interest - validity of provisions of Ex-Chief Ministers Residence Allotment Rules, 1997.
Whether the writ petition filed in the public interest is maintainable and whether the writ Petitioner has locus standi to file the writ petition? - HELD THAT:- The Petitioner has locus standi to file the writ petition - when the Petitioner society is challenging the validity of the 1997 Rules, whereby government bungalows have been allotted to former Chief Ministers, especially when there is an acute shortage of government premises, in our opinion, it cannot be said that the Petitioner has no locus standi to file the present petition.
Whether the Ex-Chief Ministers Residence Allotment Rules, 1997 are legal and valid? - HELD THAT:- The term "Minister" includes the Chief Minister and Section 4(1)(a) of the 1981 Act, permits a Minister to retain his residence for 15 days after he/she demits his/her office. In view of the above special provisions made, the Chief Minister is not entitled to privileges and protection as are available to the President of India and the Vice-President of India, who are entitled to an official residence for life - there is a statutory provision which relates to salaries and perquisites to be given to the ministers, including the Chief Minister. The 1981 Act is a statute enacted by Respondent No. 1-State under its power Under Article 164 read with Entry 40 of the List II (State List) of the Seventh Schedule of the Constitution. Thus, there is a statutory provision with regard to perquisites to be given to the ministers, including the Chief Minister Under Section 4 of the said Act, which has been reproduced hereinabove. The said Act provides that all the ministers are entitled to official residence without payment of any rent and they are also entitled to occupy the said official residence for 15 days even after completion of their term. Thus the statutory provision is to the effect that the Chief Minister can continue to occupy the official accommodation for a further period of 15 days after completion of his/her term.
The 1997 Rules, which permit the former Chief Ministers to occupy government bungalows for life cannot be said to be valid. In the circumstances, Respondent No. 1 cannot permit any former Chief Minister to occupy any government bungalow or any government accommodation after 15 days from the date on which his term comes to an end.
Allotment of bungalow to private trusts or societies - HELD THAT:- Allotment of government property to someone without adequate market rent, in absence of any special statutory provision, would also be bad in law because the State has no right to fritter away government property in favour of private persons or bodies without adequate consideration and therefore, all such allotments, which have been made in absence of any statutory provision cannot be upheld. If any allotment was not made in accordance with a statutory provision at the relevant time, it must be discontinued and must be treated as cancelled and the State shall take possession of such premises as soon as possible and at the same time, the State should also recover appropriate rent in respect of such premises which had been allotted without any statutory provision.
The government bungalows allotted to the Respondents is held to be bad in law and the concerned Respondents shall hand over possession of the bungalows occupied by them within two months from today and the Respondent-Government shall also recover appropriate rent from the occupants of the said bungalows for the period during which they were in unauthorized occupation of the said bungalows - Petition allowed.
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2016 (8) TMI 1502 - ITAT MUMBAI
Penalty u/s 271(1)(c) - assessee earned commission in the range of 1.5% to 3.5% on various kinds of accommodation entries provided by it - HELD THAT:- As decided in MIHIR AGENCIES PVT. LTD., MUKESH CHOKSI VERSUS DCIT-CC-46, MUMBAI [2016 (7) TMI 1343 - ITAT MUMBAI] Tribunal has adopted a particular rate for estimating the income of the assessee for the year under consideration, we hold that the FAA was not justified in confirming the order passed by the AO u/s. 271(1)(c) of the Act. Therefore, reversing his order, we decide the effective ground of appeal in favour of the assessee.
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2016 (8) TMI 1501 - TELANGANA HIGH COURT
Condonation of delay dismissed - appellant claimed that the delay was due to a wrong advice tendered by their authorized representative, the affidavit of the authorized representative was not filed - HELD THAT:- Tribunal failed to see that in applications for condonation of delay, reliance can be placed upon the affidavit of advocates for the parties. This is probably the reason why the assessee did not file the affidavit of the advocate. Therefore, we are of the considered view that the application for condonation of the delay was dismissed by the Tribunal, on a ground that it is not available. Hence, the order requires to be set aside.
Accordingly, the appeal is allowed, the order is set aside, the condone delay petition is allowed, and the Tribunal is directed to number the appeal and take up for disposal, in course of time.
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2016 (8) TMI 1500 - ITAT JAIPUR
Validity of Reopening of assessment - Reopening on the basis of the DVO’s report and valuation - valuation given by the DVO - HELD THAT:- It is settled proposition of law that the information of the DVO per se is not an information for the purpose of reopening of assessment under Section 147 of the Act. It is mandatory requirement that the Assessing Officer has to apply his mind to the information if any collected and must form the belief thereupon.
unless and until there is some other evidence to indicate that extra consideration had flown in the transaction of purchase of property, the DVO report cannot form the basis of any addition on the part of the revenue. In the case on hand apart from the DVO’s report there is no other evidence to indicate that the assessee has invested in the residential property during all these years as alleged in the DVO’s report. Therefore the same cannot be the basis of reopening of the assessment until and unless an independent corroborative material is available with the Assessing Officer to form the belief that the income assessable to tax being the investment made in the residential house during all these years has escaped assessment.
Unexplained investment in construction of residential house while framing the reassessment - HELD THAT:- It is clear from the reassessment order that instead of making addition under Section 69 of the Act being the reason for reopening of assessment, the Assessing Officer himself has changed his mind and made the addition only on account of unexplained credit in the capital account. Therefore the basis of reopening itself was not found to be correct reason making any addition of income or reassessment of income when the Assessing Officer has finally framed the reassessment order.
In the case of CIT Vs. Jet Airways (I) Ltd [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] has held that the condition precedent to exercise on the jurisdiction under Section 147 is the forming of reason to believe by the AO that income chargeable to tax has escaped assessment and subsequently if the Assessing Officer found that as a matter of fact the same is not escaped assessment, it is not open to him independently to assess some other income.
Accordingly, the reassessment of these five years is also not sustainable when the Assessing Officer has not made any addition of income on account of unexplained investment but made some other addition. In view of the above discussion, the reassessment for the Assessment Years 2004-05 to 2008-09 is not sustainable.
LTCG on sale of gold - HELD THAT:- Assessee has shown the credit in his capital account of ₹ 1,80,000 as sale of gold and insurance of ₹ 51,244. The Assessing Officer made the addition by allowing only ₹ 10,000 as value of the gold as on the date of sale and consequently the balance amount of ₹ 1,70,000 was brought to tax which was claimed by the assessee as LTCG. It is apparent from the record that the Assessing Officer has not conducted a proper enquiry to find out actual market value of the gold and further whether the assessee has offered to tax the LTCG of ₹ 1,80,000. It is manifest from the assessment order that the Assessing Officer has made these additions purely on the basis of estimate and without conducting any enquiry about the actual amount realized by the assessee from these transactions. Accordingly in the facts and circumstances of the case, the matter is set aside to the record of the Assessing Officer for conducting a proper enquiry and giving an opportunity of being heard to the assessee and then decide the matter as per law.
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2016 (8) TMI 1499 - ITAT AHEMDABAD
Deduction u/s 80IB(11A) denied - non satisfying the conditions laid down - as per revenue assessee, not being an integrated undertaking, is not entitled for the relief u/s 80IB(11A) AND transport and handling activities claimed by the assessee are merely incidental and not integrated to its main activity - HELD THAT:- We find that the assessee has filed detailed paper book containing AY 2005-06 order u/s 143(3) of the Act in which claim was allowed u/s 80IB(11A) - We further find that against Ld. CIT(A)’s order of AYs 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 in which CIT(A) allowed the claim u/s 80IB(11A) of the Act, the Department has not preferred any appeal meaning thereby that it has accepted the decision of Ld. CIT(A) in assessee favour - we are of the opinion that assessee is entitled for the claim allowed u/s 80IB(11A) and find no reason to interfere in the order of Ld. CIT(A). - Decided against revenue.
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2016 (8) TMI 1498 - ITAT CHENNAI
Disallowance of exemption of salary income claimed under Article 15(1) of DTAA between India and China - Assessee is non-resident Indian resident of China - HELD THAT:- In view of the specific condition under Article 23 of the India-China DTAA, the assessee is not eligible to claim relief under article 15(1) since the assessee is non-resident and as per Article 23 of DTAA between India and China allows exemption only to a resident Indian. Under the above facts and circumstances, the assessee is not eligible to claim exemption under section 5(2) of the Income Tax Act and accordingly, the ground raised by the assessee is dismissed.
Disallowance of rental income from house property - CIT(A) confirming the rental income of the property higher market value of the property during the said period - HELD THAT:- Considering the area, location, etc., the value of the property taken by the AO is more or less double for the Medavakkam property, the rental income worked out by the AO should be 50%, as has been rightly claimed by the assessee, which should be accepted. Admittedly, the assessee has not filed any documentary evidence before the Tribunal with regard to the claim of rental income. Moreover, the assessee has not raised such issue before the AO or before the ld. CIT(A). AO needs to verify the correctness of the claim of the assessee - remit the matter to the file of the AO to verify and decide the issue afresh after allowing an opportunity of hearing to the assessee. This ground of appeal of the assessee is allowed for statistical purpose - Appeal filed by the assessee partly allowed for statistical purposes.
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2016 (8) TMI 1497 - ITAT DELHI
Addition u/s 68 - accommodation entries in the garb of purchase and sale of jewellery - CIT-A deleted the addition and held that the existence of the jewellery was proved from the VDIS, 1997 declaration and the assessee has claimed the sale of the same jewellery, which got tallied with the purchase bills issued by the buyer and assessee has not provided any opportunity to the assessee to explain the material facts on which the Assessing Officer made the addition - HELD THAT:- A.O. could not point out any discrepancy in the evidences relied by the assessee nor bought out any credible evidence to contradict the contention of the assessee. Even if A.O. has some material to reject the assessee’s contention, he should provide an opportunity to the assessee to seek his explanation on such material. Such material does not carry any evidential value in the absence of opportunity to the assessee. Any assessment framed on the basis of such material does not stand in the eye of law - addition made in the assessment order cannot sustain as per law and accordingly the same is directed to be deleted - See SH. MOHAN LAL AGARWAL [2013 (1) TMI 570 - ALLAHABAD HIGH COURT] case - Decided in favour of assessee.
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2016 (8) TMI 1496 - ITAT CHANDIGARH
Deduction of the profit derived from industrial undertaking u/s 80IC - substantial expansion carried out by the assessee in the 6th year of the new industrial undertaking - Claim restricted to 25% - HELD THAT:- As relying on own case [2015 (6) TMI 725 - ITAT CHANDIGARH] we hold that the assessee before us is entitled to only 25% of deduction during the present year because the assessee has already availed the period of full deduction @ 100% in the earlier five years i.e. from assessment years 2004-05 to 2008-09. In this background, we find nothing wrong with the order of Ld. CIT(A) and we uphold the same. Accordingly, assessee”s appeal is dismissed.
Disallowance u/s 14A r.w.r. 8D - assessee applied provisions of Rule 8D and has not considered any interest disallowance holding that no interest expenditure is related to exempt income earned by the assessee - HELD THAT:- It is the duty of the revenue to establish nexus of the funds that assessee has used the interest bearing funds for the purposes of earning exempt income to make any disallowance u/s 14A with respect to interest expenditure. As AO has not established the nexus about investment of interest bearing funds in exempt income generating apparatus, no disallowance u/s 14A rwr 8D can be made on account of interest expenses. Reverse the finding of the ld CIT (A) in confirming the disallowance on account of interest expenses u/s 14 r.w.r. 8D of the Income tax Rules.
Regarding the issue of other expenses we confirm the finding of the ld CIT (A) in confirming disallowance - out of total disallowance on account of interest expenses stands deleted andon account of other expenditure is confirmed. In the result ground of the appeal is partly allowed..
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