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2018 (4) TMI 1960
Reopening of assessment u/s 147 - as per the AIR information the AO noticed that assessee has deposited cash in the saving bank account which was actually the sales which were deposited in cash in the bank account of sole proprietor - HELD THAT:- We find that the return of income filed on 30.9.2009 was processed u/s 143(1)(a) of the Act which means that there was no scrutiny of accounts and records of the assessee.
Subsequently, received information on the basis of AIR received by the Income Tax Department which revealed that during the F.Y. 2008-09 total cash has been deposited in the savings bank account of the assessee held with Union Bank of India, Neemuch. This information supported by the material; evidence in the shape of AIR information was sufficient enough for the AO to issue notice u/s 148 - The action taken by the AO further seems to be correct because the alleged cash was deposited in the savings bank account and one cannot ignore the possibility that the income may have been concealed and not duly reflected in the income tax return.
We, find no infirmity in the findings of CIT (A) confirming the action of the Assessing Officer in issuing notice u/s 148 of the Act and to make the reassessment u/s 147.
Estimated disallowance of car expenses, mobile expenses, travelling expenses and depreciation AND addition for household expenses - HELD THAT:- The alleged cash deposit was also duly explained by the assessee through its account books and the AO was satisfied with the information and he has mentioned that the alleged cash was in the nature of sales during the year. AO after failing to make any addition on the count of alleged cash deposit, further scrutinised the account books and without pointing out any specific mistake made an ad hoc disallowance of 15% of various expenses treating them to be personal in nature.
Similarly, addition for household withdrawals was made just for the lack of information to be received by the assessee. In our view, to make such disallowances the AO should have made a test check of the bills and vouchers and should have brought on record sample of such expenditure which were personal in nature and had been booked as business expenditure. In the instant case, no such finding has been brought on record by the AO. We, therefore, find no basis for the disallowance made by the Assessing Officer for expenses as well as household withdrawals.
Appeal of the assessee stands partly allowed.
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2018 (4) TMI 1959
Conversion of free shipping bill to DEPB scheme shipping bill - denial on the ground of time bar - HELD THAT:- Personal notice is permitted.
Post after four (4) weeks.
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2018 (4) TMI 1958
Levy of Excise Duty - ''other charges'' - assessee-Respondents had collected the Sales Tax amount and shown the same in the books of account as ''other charges'' - HELD THAT:- Any amount recovered attributable to “other expenses” i.e. Sales Tax is not includible in the transaction value as it can only be considered as profit on an activity.
Similar view has come up for consideration before the Tribunal in the assessee Respondents’ own case INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2013 (9) TMI 310 - CESTAT AHMEDABAD], where the majority decision was in favour of the assessee-Respondents.
There are no reason to interfere with the impugned order and the same is hereby upheld - the appeal filed by the Department is dismissed.
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2018 (4) TMI 1957
TP Adjustment - ALP determination - AO accepted the consideration received by FIPL from the assessee as appropriate and did not make any adjustment on account of ALP - whether the fact that income declared by FHPL and FIPL has been accepted as at Arm’s Length, means that the corresponding payment by the Assessee to FHPL and FIPL should also be regarded as at Arm’s Length? - HELD THAT:- ALP has to determined in the hands of the Assessee irrespective of the acceptance of ALP in the hands of FHPL and FIPL. The question as to whether the payment for such services are at Arm’s Length or commensurate with the benefit received by the Assessee are all matters which needs examination by the TPO. No such exercise has been carried out by the TPO. But that does not mean that the ALP has been established by the Assessee.
It would be just and proper to set aside the order of the Assessing Officer on this issue and remand the question of determination of ALP to the TPO for fresh consideration. It is made clear that the TPO shall not dispute that services were rendered by the AE. If the approach of the Assessee in adopting TNMM at entity level is disputed by the TPO, the Assessee should be permitted to file TP study for each of the international transaction separately.
Assessee is also directed to file the TP study, if not already filed which is in accordance with the provisions of the Act and substantiate that the price paid by it to its AE is at arm's length within the methods laid down in the Act and the judicial decisions rendered on this issue. TPO will consider the same in accordance with the law, after affording an opportunity of being heard.
Validity of the order of assessment making addition on account of adjustment in ALP suggested by TPO on the ground that TPO did not confront to the Assessee information received from IRA, Singapore - As as already held, the TPO misdirected himself by not examining these evidence on the premise that the payment to the AE’s was only with a view to reduce tax liability in India and to shift profits earned in India out of India. The tests laid down in the judicial decision referred to in the earlier part of this order have to be applied to the evidence filed by the Assessee. Since this exercise has not been carried out, we have remanded the issue to the TPO for fresh consideration.
Assessee vehemently argued that the revenue should not be given a second innings. We are of the view that there cannot be any estoppels in cases involving Transfer Pricing. These are new provisions and are evolving. The ITAT special bench in the case of Quark Systems Pvt.Ltd. [2009 (10) TMI 591 - ITAT, CHANDIGARH] has held that there cannot be estoppel in Transfer Pricing issues and the law on the subject was evolving and it would not be unfair to hold that an Assessee can take a stand that a company chosen by it as comparable is in fact not comparable. Keeping in mind the decision of the Special Bench referred to above, we are of the view that the determination of ALP is an exercise which has to be carried out by the TPO in accordance with the provisions of the Act.
Appeal by the Assessee is treated as allowed for statistical purpose.
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2018 (4) TMI 1956
Validity of assessment order framed u/s 144 - an ex-parte order - HELD THAT:- We as considered the assessment order and we find that in spite of several notices the assessee did not attend the assessment proceedings and therefore the Assessing Officer was left with no choice but to frame an ex-parte order under section 144 - No infirmity in the order so framed. Ground No. 1 is accordingly dismissed.
Estimation of income - estimation of net profit by the CIT(A) @ 3% as against 8% applied by the AO - There is no dispute that the books of account of the assessee are audited and audited financial statements were available with the AO at the time of the assessment proceedings. No doubt the assessee did not produce the relevant bills/vouchers nor any supporting evidence was produced at the time of assessment proceedings. But as mentioned else were the AO should not have ignored the past history of the assessee in estimating the net profit @ 8%.
Though FAA has reduced the net profit rate to 3% but at the same time he also ignored the past history of the assessee. Considering the nature of business of the assessee the profit rate as declared appears to be reasonable. No comparable cases have been brought on record by the AO or the CIT(A) to justify the adoption of the profit rate. Therefore we are inclined to accept the profit rate shown by the assessee. The Assessing Officer is directed to accept the net profit rate as shown by assessee in its financial statements. The addition on this ground is directed to be deleted.
Non allowability of the depreciation on adoption of profit rate - HELD THAT:- Since the assessee has claimed the depreciation in its return of income and has furnished necessary details in its audited statement of account, in our considered opinion, the claim of depreciation cannot be denied. In light of aforementioned circular Circular No. 029D (XIX-14) dated 31.08.1965 has clarified the claim of depreciation on adoption of profit rate, we accordingly direct the Assessing Officer to allow the claim of depreciation as further provisions of the law. Ground No. 3 is allowed.
Disallowance of interest paid u/s 40(a)(ia) - HELD THAT:- In our considered opinion due to the amendment brought in the relevant provisions of the Act this issue needs to be restored to the file of the Assessing Officer. The assessee shall furnish necessary details demonstrating that the payee has shown the receipt of the interest as its income and shall also furnished necessary certificate as provided. AO is directed to verify the details so furnished by the assessee and decide the issue afresh as per the amended provisions of the law. With these directions ground No. 5 is treated as allowed for the statistical purposes.
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2018 (4) TMI 1955
Seeking modification of the Tribunal order [2017 (11) TMI 2035 - ITAT BENGALURU] - applicability of LIBOR - As submitted that while adjudicating ground Nos.5 & 6, vide para.12 of the order, it was observed by this Tribunal that this ground of appeal was not raised before the lower authorities - HELD THAT:- We heard rival submissions and perused the material on record. We find that the findings of the Tribunal vide para.12 are contrary to material on record. Accordingly, we recall the impugned Tribunal order for the limited purpose of adjudicating grounds No.5 and 6. The registry is directed to post the appeal for hearing in the regular course.
Misc. Petition filed by the assessee is allowed.
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2018 (4) TMI 1954
Suit for recovery - conversion of the property of the plaintiff being the goods - guilty of the tort of negligence and/or guilty of wrongful conversion - forum selection clause in the Bills of Lading - suit barred by time limitation or not - burden to prove - HELD THAT:- In the instant case, the plaintiff has discharged the burden of nonpayment by production of the original Bill of Lading and the Banker's Certificate certifying non-payment. The ledger accounts for the relevant years are neither relevant nor necessary to prove the claim of the plaintiff. The very fact that the original Bills of Lading were returned to the Allahabad Bank by the Middle East Bank itself raises a strong presumption that payment has not been made. All the documents along with original copies of Bills of Lading were returned to Allahabad Bank by Middle East Bank. The defendants did not dispute that goods were delivered without production of the original Bills of Lading - Once the defendants are able to establish that the goods are released to the consignee with the consent of the plaintiff and the plaintiff has claimed a duty drawback of such exports, the plaintiff could have been asked to produce the documents as put forth to the witnesses of the plaintiff.
The first witness of the plaintiff during cross-examination has stated that the caption bill of lading namely the BL No. 30313 was "At sight bill of lading". The witness explains the expression 'at sight' by stating that said explanation implies that after the concerned goods reached at sight the buyer first makes the payment and then obtains the bill of lading on the basis of which it can get the goods released. It is the obligation of the importer, first make the payment and thereafter obtain the bill of lading so that it can get the goods released on the basis of such bill of lading - In absence of such evidence and failure on the part of the defendant to establish that the goods covered by the bill of lading COK/30312/DXB were released with the consent of the plaintiff and the plaintiff has claimed duty drawback the defendants cannot escape their liability on account of conversion and liable for loss and damage suffered by the plaintiff.
The defendants were under an obligation not to part with the goods without production of the original Bills of Lading. The plaintiff sues the defendant for this breach. The plaintiff has also specifically alleged conversion of goods - The very fact that the original Bill of Lading have been returned to the banker of the plaintiff without payment and failure on the part of the defendants to return the goods or account for the goods, the defendants are guilty of conversion.
In the instant case the plaintiff has relied upon several causes of action and made necessary pleadings in support of its claim for damages on account of conversion and had throughout the trial maintained that apparent is not the real state of things in view of the fact that the defendant Nos. 1 and 4 are one and the same carrying on same business and had jointly and severally made themselves liable for performance of the contract. The burden of proof in this regard has been ably discharged by the plaintiff. The plaintiff is successful in establish loss and damage against the defendants for conversion.
The defendants were aware of the stipulation that the goods would be released only against the production of the original Bill of Lading and not otherwise. Still then the defendant admits to have delivered the goods to the consignee without the production of the original Bill of Lading. The original Bill of Lading has been returned to the plaintiff by its bankers. The defendants are unable to account for the goods. The defendants claimed to have delivered the goods to the consignee with the consent of the plaintiff has not been proved by the defendants at the trial. Under such circumstances the plaintiff can always claim for damages in tort - It is no doubt a duty of the plaintiff to establish at any rate prima facie, that the suit is within the time and not barred by lapse of time. The plaintiff is able to establish that the claim against the defendant No. 1 is not barred by limitation.
In the instant case, the defendant No. 4 is the wholly owned subsidiary of the defendant No. 1 and even before the filing of the written statement has become defunct. The suit cannot proceed against the defendant No. 4. The bogey of defendant No. 4 as foreign principal is still canvassed to stave off a possible attack on the other defendants for realisation of the price of the goods entrusted to the defendants for delivery.
The plaintiff has led evidence to show that the defendant No. 1 has clearly represented that it would be the obligation of the defendant No. 1 to ensure delivery of the goods through the defendant No. 4. The said representation read with the evidence and surrounding circumstances makes it clear that the defendant No. 1 had an arrangement with the defendant No. 4 and had jointly undertaken to deliver the goods to the oversees consignee. Although it may be true that the defendant No. 4 was in existence at the time of entering the contract but subsequently the defendant No. 4 became defunct and at least made to look so to defraud its creditor and whenever proceedings were filed in India against the defendant No. 4 the said non-existent defendant through the defendant No. 1 raised issue of jurisdiction by suppressing the fact that defendant No. 4 had ceased to exist since 2007 and for all intents and purposes the defendant No. 1, 2 and 3 are the real persons - Under the Indian Law the standard of proof required to establish such nexus is one of probability and may be established having regard to the relation of the parties alleged to be acting in concert that is to show their conduct and their own interest from which it may be inferred that they must be acting together. The preponderance of evidence in absence of any contrary evidence leads to the conclusion that the circumstance are such, as human experience would tell that it can safely be taken that the said defendants must be acting together.
Although in the written statement, defendant and defendants both are used singular and plural with regard to interchangeably describe the defendants, it is clear from the reading of the written statement that the said written statement has been filed to safeguard interest of the defendant No. 4 as well. The entrustment of goods upon the defendants are not denied and an artificial contrive to separate the defendants have failed as the evidence on record has clearly supported the stand of the plaintiff that the defendant No. 1 is jointly and severally liable under the contract. The defendants have not come forward with any contrary evidence - Under such circumstances there shall be a decree for Rs. 37,89,000/- against the defendant No. 1 along with simple interest at the rate of 8% per annum from December, 2000 until realisation.
Application disposed off.
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2018 (4) TMI 1953
Classification of imported goods - re-rollable plate & pipes material scrap - goods found to be second and defective pipes - to be classified under the Heading 7204 49 00 “others” which attracts the duty @ 15% or under the Heading 72082510 as “plates”? - benefit of N/N. 21/2002-Cus., dated 1-3-2002 at Serial No. 190B - HELD THAT:- It appears that in the previous orders the Department has classified the same item under the Heading 7204 49 00. It is the finding of the original authority that the goods were found to be ‘seconds and defective steel plates’ which cannot be considered as ‘fresh plates’ - When it is so, then the assessee-Appellants have rightly classified the subject goods as Heading 7204 49 00. Hence, the enhanced value declared by the Department is set aside and the goods will have to be accepted on the declared value.
The impugned orders are set aside and the appeals are allowed.
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2018 (4) TMI 1952
GP addition on AUDA and electric connection charges expenses - Alternative plea of re-quantification of the impugned addition in order to avoid double addition - HELD THAT:- As come on record that learned lower appellate authority has taken into account the relevant figures which already stood added as income in preceding assessment year. It is thus a case of consistency in the impugned assessment year visà-vis earlier assessment year qua the very issue. There is no material on record which could rebut this factual position. We therefore find CIT(A)’s approach to be consistent in re-computation of the impugned addition as per the relevant facts in preceding assessment year. The assessee therefore fails in his former substantive ground.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- There is no dispute about the fact that both the lower authorities have applied rule 8D whilst computing the impugned disallowance as applicable from assessment year 2008-09 onwards. The hon’ble apex court recent decision in Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT] settles the law that relevant expenditure in case of exempt income has to be apportioned between taxable and non-taxable income. The assessee’s arguments therefore challenging application of rule 8D in principle in light of section 14A are rejected. As alternative plea in view in the case of Joint Investments Pvt. Ltd [2015 (3) TMI 155 - DELHI HIGH COURT] that such disallowance cannot exceed the actual exempt income figure. Revenue fails to rebut this legal position. We therefore restrict the impugned disallowance to the extent of exempt income and delete the remaining disallowance component out - Assessee’s latter instant substantive ground is therefore partly accepted. This assessee’s appeal is partly allowed.
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2018 (4) TMI 1951
Levy of Stamp Duty - Immovable Property - wind mill sold as a running out along with the immovable property, where the Wind Electric Generators were erected and shown as an item of property in the registered sale deed - to be assessed to stamp duty, treating it as a Conveyance under Entry 23 of Schedule I of the Indian Stamp Act 1899 or not? - HELD THAT:- The question as to whether a movable property was permanently attached or annexed to the immovable property is essentially a question of fact. It is so because there is no definition given to the term movable property in the Transfer of Property Act. There is no fixed guideline to arrive at a conclusion whether a particular movable property if attached to the immovable property would become an immovable property - In case, the owner of the land for the beneficial enjoyment of the land erected a windmill and constructs a building to house the plant, it would certainly be an immovable property.
The establishment of a windmill requires fixing the windmill machinery to the earth. The erection of windmill is through a process. Erection is not a temporary phenomena. There should be a small structure for the windmill station. The possibility of removing the windmill and the related machinery imbedded in the earth, later would be of no consequence. Such possible act is not a relevant factor to decide the issue.
In MOHAMMED IBRAHIM VERSUS NORTHERN CIRCARS FIBRE TRADING CO. [1944 (4) TMI 9 - MADRAS HIGH COURT], a Division Bench of this Court held that if a thing is imbedded in the earth or attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached, then, it is part of the immovable property.
In South Indian Bank Ltd., by its THE SOUTH INDIAN BANK LTD., BY ITS GENERAL MANAGER, M.G.P. NAMBIAR VERSUS V. KRISHNA CHETTIAR AND BROTHER BY ITS PARTNER V.K. PALANIAPPAN AND ORS. [1974 (12) TMI 80 - HIGH COURT OF MADRAS] the Division Bench indicated that the onus is on the person, who alleges that though the movable property is annexed to land, it was never intended to be the part of land.
The recitals in the Sale Deeds clearly indicates that windmill machineries were erected by attaching it to the earth, and it was part of the immovable property. The respondents included the windmills as an item of transferred asset along with the immovable property. The respondents wanted a statutory recognition to the sale of windmills without paying required Stamp Duty.
The windmill has no existence without the immovable property. The machineries for the windmill should be attached to the earth. It should be an attachment of a permanent nature as otherwise the machineries would be washed out by the wind - The sale in question was a composite one relating to an immovable property. The fact that the respondents valued the windmill and its machineries separately and paid the value also separately would not make any difference. It was a sale of immovable property which includes the land and windmill. The Sub-Registrar therefore correctly levied the stamp duty.
The order passed by the learned single Judge is legally and factually unsustainable. The common order is therefore set aside. The writ petitions are dismissed.
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2018 (4) TMI 1950
Dishonour of Cheque - Defendants contend that by reason of the bar under Section 13 of the Maharashtra MoneyLending (Regulation) Act, 2014, no decree can be passed in the suit - whether the suit relates to any loan or part thereof lent by a money lender? - HELD THAT:- Merely because while narrating the facts of the case the grant of loan by the Plaintiff to the Defendants finds a mention, merely as a historical narration, it cannot be said that the suit is for recovery of loan. The moment payment is made by a cheque or another negotiable instrument of a loan, the liability under the loan is substituted by the liability to honour the cheque or the negotiable instrument, as the case may be. In fact, in a sense, the original liability to pay the loan is discharged by means of execution of the negotiable instrument. If this negotiable instrument is not honoured upon presentation for payment, a distinct and new liability arises under the provisions of the Negotiable Instruments Act. It is no answer then to a suit filed on such negotiable instrument that its holder is a money lender and that he did not hold a valid licence when he lent the original sum. The original loan lent merely forms part of a consideration for the negotiable instrument. There is nothing in law which prevents such consideration coming from a money lender, who does not hold a valid money lending licence. The consideration cannot be termed as an invalid consideration.
Section 30 of the Act merely provides for a bar in passing a decree in favour of a money lender in a suit which relates to money lent and advanced and does not render the loan itself to be either illegal or invalid. Accordingly, there is no merit in this defence offered to the summons for judgment.
In the premises, on the facts of the case, this court would be perfectly justified in making the summons for judgment absolute by passing a decree in favour of the Plaintiff. However, with a view to give one chance, only by way of mercy, to the Defendants to try and make out a case at the trial of the suit, this court is of the view that the Defendants may be allowed to defend the suit but on a condition of deposit of the entire principal amount of the dishonoured cheque into this court.
Defendant No. 1 is granted leave to defend the suit on and subject to the condition of deposit in this court of a sum of Rs. 1,86,78,313/within a period of eight weeks from today - The notice of motion is accordingly dismissed.
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2018 (4) TMI 1949
Addition u/s 41(1) - cessation of liability by the assessee - CIT-A deleted the addition - HELD THAT:- CIT(A) categorically come to the conclusion that the provisions of section 41(1) cannot be invoked at all inasmuch as these liabilities does not cease to exist.
CIT(A) had verified the balance sheet of the assessee and had found the assessee had made certain payments to one party in AY 2013-14 and with regard to other parties, pursuant to the disputes chose not to pay the dues , and had decided to show the balances payable to these parties even as late as on 31.03.2013. Hence, there cannot be any case to invoke the provisions of section 41(1) on the ground of cessation of liability by the assessee.
None of the factual findings given by the Ld. CIT(A) in his order have been controverted by the revenue before us with material contrary evidences. No justifiable reason to interfere in the order of the Ld. CIT(A) in this regard. Accordingly, ground no. 1 raised by the revenue is dismissed.
Proportionate disallowance of interest on borrowed funds - CIT-A deleted the addition - HELD THAT:- As categorical finding given by the CIT(A) that one partner has allowed his credit balance i.e. own funds to be withdrawn by the another partner of the firm. Hence, there cannot be any utilization of borrowed funds for excess withdrawals made by one of the partners and consequentially, there cannot be any disallowance of interest on borrowed funds on a proportionate basis.
There is no provision in the partnership deed to charge interest on the excess withdrawals made by any of the partners from the firm. While this is so, when one partner has accommodated another partner to withdraw the balances, which is only internally made between the two partners without disturbing the borrowed funds of the firm. Hence, it cannot be categorized as withdrawal of the borrowed funds of the assessee firm, so as to warrant disallowance of interest on a proportionate basis. Accordingly, CIT(A) had rightly deleted the disallowance of interest - Decided against revenue.
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2018 (4) TMI 1948
Disallowance u/s. 40(a)(ia) - TDS on reimbursement of charges - assessee made an oral prayer that the assessee can produce necessary evidence to show that the recipient of the amount i.e. the warehousing corporations have offered the amount paid by assessee to tax if, the matter is remitted back - HELD THAT:- We do not find merit in the submissions made by the assessee. There is no document on record that would indicate that it is a case of reimbursement of charges - the plea raised by the assessee that it is a case of reimbursement or expenses is without any merit. We do not find any infirmity in the order of CIT (Appeals) in confirming the addition.
We remit this issue back to the file of Assessing Officer for verification. The assessee shall furnish necessary details before the AO to substantiate that the recipients of the amount i.e. the warehousing corporations have offered the amount to tax. AO shall decide this issue de-novo after considering the necessary documents furnished - Appeal of assessee is partly allowed for statistical purpose.
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2018 (4) TMI 1947
Rectification of mistake u/s 154 - deduction u/s 88E in respect of security transaction tax paid - debatable issue - HELD THAT:- We find merit in the contention of the Ld. A.R. that the provision of section 154 of the Act should be resorted in order to rectify an apparent mistake but not the issues which are debatable one.
We find from the records before us that during the year assessee has paid STT of Rs.Rs.45,18,667/- whereas the rebate was claimed only to the extent of Rs.35,68,713/- on its own. In our opinion, there is no mistake apparent on the face of the order passed by CIT(A) on the basis of which the AO concluded that the rebate under section 88E is wrongly allowed in respect of 4 items of income as have been stated above. In our opinion, the issue sought to be rectified under section 154 was debatable and not apparently wrong.
We are of the view that the order passed by Ld. CIT(A) upholding the order passed by AO under section 154 of the Act is wrong and can not be sustained.
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2018 (4) TMI 1946
Allowability of assessee’s claim of interest expenditure - Commissioner (Appeals) upheld the disallowance of interest expenditure by holding that interest income earned by the assessee has to be treated as business income and the interest expenditure cannot be allowed u/s 36(1)(iii) as it is not for the purpose of business and it cannot be allowed under section 37(1) as it was connected to activities prohibited in law or for infraction of law - HELD THAT:- Commissioner(Appeals) has totally overlooked and ignored the inconsistencies pointed out by the assessing officer with regard to the nature of transactions between the parties in purported violation of various provisions of Companies Act. Commissioner(Appeals) while allowing assessee’s claim in Assessment Year 2010–11 has not at all dealt with a number of factual issues raised by the assessing officer. In as much as, while deciding assessee’s appeal for AY 2011–12 the Commissioner(Appeals) has upheld the disallowance of interest expenditure claimed by the assessee on a altogether different reasoning by changing the head of interest income shown by the assessee under the head ‘income from other sources’ to ‘business income’. Thus, there is inconsistency even in the stand of the department with regard to the head of income.
The most important factor which will have crucial bearing on the disputed issue is the fate of the cases filed by the CBI against the assessee under the Prevention of Corruption Act and Prevention of Money Laundering Act. A reading of the impugned assessment orders as well as the first appellate order for assessment year 2011–12 would leave no room for doubt that the disallowance of interest expenditure stands on the fulcrum of the allegations made by the CBI against the assessee and other persons in the charge sheet/complaint filed under the Prevention of Money Laundering Act, 2002 and Prevention of Corruption Act, 1988.
Undisputedly, these are recent developments much after completion of proceedings before the Departmental Authorities. None of the Departmental Authorities had the benefit of the aforesaid orders passed by the learned Special Judge, CBI (04), New Delhi, which were produced for the first time in course of appeal hearing before us. Rules of natural justice and fair play demand that the Departmental Authorities must be given an opportunity to analyze and examine the impact the orders passed by the learned Special Judge, CBI (04), New Delhi, may have on the disputed issue arising in the present appeals.
Therefore, regard being had to the facts discussed by us herein before and the changed scenario arising due to the orders passed by the learned Special Judge, CBI (04), New Delhi, we are of the considered opinion that the issues raised in the present appeals are required to be restored back to the Assessing Officer for de novo adjudication after considering all incidental facts and material including the orders of the learned Special Judge, CBI (04), New Delhi. Appeals are allowed for statistical purposes.
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2018 (4) TMI 1945
Interpretation of statute - appointment of the Chairperson - scope of the expression 'Chairperson "may" be a Judge of a High Court for the State Commission, a Judge of the Supreme Court or the Chief Justice of a High Court for the Central Commission' - whether the expression "may" should be read as "shall", i.e., whether it is mandatory to have a judicial mind presiding over these Commissions in the form of a Judge?
HELD THAT:- It is concluded as follows:
i. Section 84(2) of the said Act is only an enabling provision to appoint a High Court Judge as a Chairperson of the State Commission of the said Act and it is not mandatory to do so.
ii. It is mandatory that there should be a person of law as a Member of the Commission, which requires a person, who is, or has been holding a judicial office or is a person possessing professional qualifications with substantial experience in the practice of law, who has the requisite qualifications to have been appointed as a Judge of the High Court or a District Judge.
iii. That in any adjudicatory function of the State Commission, it is mandatory for a member having the aforesaid legal expertise to be a member of the Bench.
iv. The challenge to the appointment of the Chairman and Member of the Tamil Nadu State Commission is rejected as also the suo moto proceedings carried out by the Commission.
v. Our judgment will apply prospectively and would not affect the orders already passed by the Commission from time to time.
vi. In case there is no member from law as a member of the Commission as required aforesaid in para 2 of our conclusion, the next vacancy arising in every State Commission shall be filled in by a Member of law in terms of Clause (ii) above.
Transfer petition allowed.
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2018 (4) TMI 1944
Levy of Service Tax - consideration paid for usage of trademark “AREVA” which is owned and registered by the parent company of the appellants in France - HELD THAT:- The said issue was decided in the appellant’s own case [2013 (3) TMI 82 - CESTAT CHENNAI] where it was held that The expression “tax on the sale or purchase of goods” in Entry 54 in List II of Seventh Schedule when read with the definition clause 29-A of Article 366 includes a tax on the transfer of property in goods whether as goods or in the form other than goods involved in the execution of works contract.
Following the decision, there are no hesitation to hold that the demand cannot sustain. The impugned order is set aside and the appeals are allowed.
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2018 (4) TMI 1943
Seeking to restrain Respondents and/or their nominees from in any manner deleting/amending or NOT giving effect to Clauses (b) & (c) of Article 1V-Appendix A of the Articles of Association - HELD THAT:- In respect of the expenses incurred on account this litigation, the prayer has been made in CA No. 276(PB)/2018. If there is any such provision as sought to be projected by citing Articles of Association, then appropriate application be placed before R-1 by the petitioner or by respondent nos. 9,11,16,17, 18 and 20 and R-1 shall consider the aforesaid representation in accordance with the provisions of Articles of Association, specially Article 80 and pass appropriate order in accordance with law.
We do not wish to proceed with the notice seeking explanation of respondent nos. 2,3, 5,7, 10 and 12 under Section 425 of the Companies Act but feel contended to observe that all the aforesaid respondents shall remain careful in future to conduct the affairs of the company. They should not give further chance to any Forum to go to the extent of issuing contempt notices to them.
Application disposed off.
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2018 (4) TMI 1942
Seeking grant of bail - Money Laundering - It is contended by the counsel for the petitioner that the allegation against the petitioner is that out of money laundered she has purchased residential and agriculture property in Bhilwara - HELD THAT:- Considering the contentions put-forth by the counsel for the petitioner and the fact that complaint has been filed and property had already been attached and the custodial interrogation of petitioner is not required, the anticipatory bail is allowed.
The petitioner is directed to surrender before the concerned Court within two weeks of this order - Anticipatory Bail Application is allowed.
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2018 (4) TMI 1941
Input tax credit - goods or an immovable property - extended period of limitation - HELD THAT:- There is no substantial question of law, which enables us to entertain this Appeal. The matter has been decided in the light of the peculiar facts and circumstances of the present case.
For these reasons, this Appeal cannot be entertained. The view taken by the Tribunal cannot be termed as perverse or vitiated by any error of law apparent on the face of the record.
Appeal dismissed.
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