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2021 (10) TMI 1375
Doctrine of approbate and reprobate - Filling up of post of Director-General either by direct recruitment or on deputation in tune with CPRI (Pay, Recruitment and Promotion) Rules, 1989 - HELD THAT:- There is no element of an unequal bargaining power involved. Nobody has forced the Respondent to enter into a contract. He indeed was an employee of the society for 23 years. We do not wish to go into the question as to whether it is a case of re-employment or not, as the fact remains that the Respondent wanted the job, which is why there was an unexplained and studied reluctance to raise the issue of him being a permanent/regular employee, but only at the fag end of his tenure.
The first of the representations were made on 30.12.2014, followed by others. The conduct speaks for itself. Hence, on the principle governing delay, laches, and acquiescence, followed by approbation and reprobation, Respondent No. 1 ought not to have been granted any relief by invoking Article 226 of the Constitution of India. On the interpretation of the rules, we have already discussed that there is no prohibition in law for a tenure appointment. We are dealing with a post that stands at the top realm of the administration. There is an intended object and rationale attached to the post. It is the incumbent of the post who has to carry forward the object and vision in the field of research - The Division Bench was not right in holding that the highest constitutional authority on the executive side was misled by the lower officials. There are no place for such an inference. A conscious decision has been made to go for a tenure appointment in the interest of society. Similarly, a conscious decision was also made to go for a fresh recruitment.
There is a marked difference between the assessments made during the Respondent's tenure and the one made for continuation after the completion of the tenure. No question of being a junior or senior arises as materials have been placed for assessment by a different department. The assessment was done by the highest authorities, as approved by the Secretary to the Government of India and by the Hon'ble Minister concerned apart from the Cabinet Secretary - In the absence of any prohibition and mandatory mode of appointment, the Appellant's decision in going for a tenure appointment is perfectly in order.
The order is very explicit in saying that it is subject to suitability, and such suitability for re-appointment having been considered, this Court is not expected to substitute its view. The non-consideration of the report by the "ACC" also would not be fatal, as the Cabinet Secretary himself has approved it, and so also the other higher authorities - the Respondent has not shown any substantial prejudice. Even if one assumes that these materials have not been placed before "ACC", we believe that there may not be any need for such approval for two reasons. Firstly, the first Appellant found that the Respondent is not suitable for re-appointment, which was approved by the other authorities. Therefore, the employer has taken a conscious decision in the interest of the society. Secondly, it is not a case of extension in which case maybe the confirmation by "ACC" would have been warranted.
The appeals filed by the Respondent deserve to be dismissed. Once it is held that the Respondent is not entitled to any extension, the consequential benefits cannot be granted - appeals filed by the Appellants stand allowed.
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2021 (10) TMI 1374
Maintainability of application - seeking initiation of Insolvency Resolution Process against the guarantor - section 95(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- As on date no CIRP or Liquidation process is pending against the Corporate Debtor because of approval of the Resolution Plan. Section 60(2) of the Code requires that for an Insolvency Resolution Process to be initiated against the guarantor there must be CIRP or Liquidation process is pending against the principal borrower/Corporate Debtor. Since, that requirement is not satisfied in the present case, at this point of time petition is premature and is dismissed as such.
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2021 (10) TMI 1373
Rebate claim - duty paid on the goods, which were exported by the appellants - amount adjusted against the said amount of rebate, which is allegedly due from the appellants - HELD THAT:- From the provisions of Section 11 of the Central Excise Act, it is evident that the adjustment in the present case has been made bona fide as permissible under the provisions of the Act.
There are no merit in this appeal. Thus, the appeal is dismissed.
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2021 (10) TMI 1372
Seeking to issue appropriate directions to the 2nd Respondent Bank and the 3rd Respondent Board to comply with the Corporate Governance requirements while conducting the 94th AGM - seeking to issue appropriate directions to the 2nd Respondent Bank and the 3rd Respondent Board and the 9th Respondent Committee to identify appropriate candidates and place their recommendations before the members during the 94th AGM - seeking to issue appropriate directions to the 2nd Respondent and the 3rd Respondent reassess the performance of the Petitioner and recommend the Petitioner for appointment as Director to be placed before the 94th AGM - rejection of application of the Petitioner under Section 160 of the Companies Act 2013.
HELD THAT:- There is consensus of all the learned Senior Counsel appearing for the contesting parties, for relegating the matter to the writ court, so as to enable the parties to advance submissions, for the final conclusion on the maintainability of the writ petitions, instead of a prima facie opinion.
It is deemed fit to interfere with the impugned interim order to the limited extent of remitting the matter, for attaining finality to the preliminary issue of maintainability of the writ petitions - the matter is remitted back to the writ court, granting liberty to all the parties concerned, to advance submissions, regarding the maintainability of the writ petitions.
Appeal disposed off.
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2021 (10) TMI 1371
Assessment of Agricultural income - income received from the sale of rubber was subjected to tax under Kerala Agricultural Income Tax Act 1950 ('KAIT Act') - re-plantation expenses are considered as capital expenditure and the expenses incurred by the assessee for upkeep and maintenance of newly planted rubber trees are in the nature of revenue expenditure, for mere plantation of rubber trees, the assessees do not earn income, but the income is derived only from proper upkeep and maintenance of trees - HELD THAT:- The scope and extent of the operation of Rule 7A, which is similar to Rule 8(2), with regard to allowance for replanting expenses and deduction towards upkeep and maintenance expenses of immature plants in computation of income from rubber under the provisions of the Act and Rules need an authoritative pronouncement from this Court.
Revenue, argues that there is no need or necessity for reconsideration of Rehabilitation Plantations Ltd. case [2012 (6) TMI 570 - KERALA HIGH COURT] by the Full Bench, Accordingly to Revenue, it is for the Supreme Court, if necessary, to lay down law in this behalf. We are not persuaded with the objection stated by the Revenue. Firstly, Rehabilitation Plantations Ltd. has not taken note of the judgments referred to above in Travancore Rubber & Tea Co. Ltd. [1960 (12) TMI 15 - SUPREME COURT] and Karimtharuvi Tea Estates Ltd. [1962 (11) TMI 44 - SUPREME COURT]. Rule 7A(2) juxtaposed with Rule 8(2) and the case law on the point under KAIT Act would demonstrate that the applicable provisions of law and the precedents on the point are not adverted to by the Division Bench. The claims of assessees are rejected by referring to the view taken in Division Bench judgment.
We refer the following question for consideration by a Full Bench of this Court, subject to the orders of Hon'ble The Chief Justice:
“Whether the assessee/Plantation Companies under Rule 7A(2) of the Rules are entitled to an allowance towards replanting expenses and a further deduction towards upkeep and maintenance expenses incurred by the assessee for the immature plants till the age of maturity in the computation of income under the Act and Rules.”
In our considered view the issues are of regular occurrence for all the plantation owners and the question needs an authoritative pronouncement from a Full Bench of this Court.
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2021 (10) TMI 1370
Exempt supply or not - service of repairs and maintenance of vehicles used for sewage and waste collection, treatment and disposal and other environmental protection services provided to Local Authorities - service of repairs and maintenance of JCBs and Mobile Toilets to the Government and Local Authorities - Sl. No. 3 of Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017 - pure services or not - the services to be covered under Heading 9994 as per Serial Nos. 75 and 76 of the Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017 or not - rate of GST - determination of time and value of supply of goods or services or both - HELD THAT:- Entry No. 3 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 exempts ‘‘Pure Services (excluding works contract service or other composite supplies involving supply of any goods) provided to the Central Government, State Government or Union Territory or local authority or a Government Authority by way of any activity in relation to any function entrusted to a Panchayat under Article 243G of the Constitution or in relation to any function entrusted to a Municipality under Article 243W of the Constitution”.
The ‘service of repairs and maintenance of vehicles used for sewage and waste collection, treatment and disposal and other environmental protection services’ and the service of ‘repairs and maintenance of JCBs and Mobile Toilets’ involves supply of parts also as per ‘Scope of Work’ mentioned in aforesaid paragraphs. As such, the services provided by the applicant are not ‘pure services’ and the same are not covered in Entry No. 3 of Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 - the applicant had also submitted in Statement of Facts along with Form GST ARA-01 that they are engaged in business of providing works contract services. As such, the exemption is not admissible to the applicant on ‘service of repairs and maintenance of vehicles used for sewage and waste collection, treatment and disposal and other environmental protection services’ and the service of ‘repairs and maintenance of JCBs and Mobile Toilets’ under Entry No. 3 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017.
The applicant is not engaged in providing services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories, urinal or toilets. In fact, the applicant is engaged in providing services of repairs and maintenance of Mobile Toilets which is not covered in the entry ‘services by way of public conveniences’. As such, the exemption under Sl. No. 76 of the Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017 is not admissible to the applicant - the exemption under Serial Nos. 75 and 76 of the Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017 is available to SAC 9994 which covers ‘Sewage and waste collection, treatment and disposal and other environmental protection services’.
The ‘services of repairs and maintenance of vehicles used for sewage and waste collection, treatment and disposal and other environmental protection services’ and the service of ‘repairs and maintenance of JCBs and Mobile Toilets’ are not covered in SAC 9994 as per the scheme of classification of service as appended with Notification No. 11/2017-C.T. (Rate), dated 28-6-2017 and Explanatory Notes to the Scheme of Classification of Services.
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2021 (10) TMI 1369
Assessment u/s 153A - Tribunal justification in holding that Section 143(2) notice is not required to be issued in the case of an assessment under Section 153A - HELD THAT:- It the very argument of the assessee that the explanation to a statutory provision may fulfill the purpose of clearing up the ambiguity or can't add to or widen the scope of the main section, thereby the procedure in the assessment under Section 153A is as otherwise provided in this Section is not a complete legal argument, by applying explanation to Section 153A of the Act. The argument of assessee as pointed out by Mr.P.K.R Menon ignores the presence of the words “save as otherwise provided in this Section i.e., Section 153A”. The plain reading of explanation leads to the very same conclusion as reached in the reported cases in Tarsem Singla [2016 (7) TMI 703 - PUNJAB AND HARYANA HIGH COURT] and Promy Kuriakose [2016 (8) TMI 327 - KERALA HIGH COURT]. The explanation, in the final analysis of the scheme of Section 153A, does not in any manner expand the meaning, including the requirement of Section 143 (2) of the Act.
For the above reasons and discussions, the questions are answered against the assessee and in favour of the revenue.
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2021 (10) TMI 1368
Income from house property - 90 shops which are allegedly lying vacant - assessee is claiming those shops as stock in trade - Lower Authorities brought those shops under taxation under the head “income from house property” and thereby calculated the ALV and after granting 30% standard deduction worked out the ALV of those shops - HELD THAT:- As Assessee vehemently submitted that assessee is a builder and unsold shops/units are stock-in-trade and cannot be brought to tax under the head “income from house property” as held by Hon’ble Jurisdictional High Court in Neha Builders (P.) Ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT] and the income derived from stock would be income from “ business and profession” and not from “income from house property”.
We find that assessee has shown business income from rent received from letting out of 231 shops and rent received therefrom is accepted as income from business and profession by Revenue. Therefore, respectfully following the decision of Hon’ble Gujarat High Court in Neha Builders (P.) Ltd., the addition on account of income from property is with regard to 90 shops which are allowing vacant being stock-intrade cannot be brought to tax. Similar view was taken by Co-ordinate Bench in Jaiprakash Khanchand Aswani [2018 (12) TMI 1963 - ITAT SURAT]
Appeal of the assessee is allowed.
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2021 (10) TMI 1367
Deduction of Education Cess - assessee debited education cess in the Profit & Loss Account which was disallowed u/s 40(a)(ii) in the computation of income - assessee claimed the deduction of the same during appellate proceedings which was rejected by Ld. CIT(A) - HELD THAT:- This issue is squarely covered in assessee’s favor by the decision of Hon’ble Bombay High Court in Sesa Goa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT] wherein it has been held that in the Income-tax Act, 1922, Section 10(4) had banned allowance of any sum paid on account of 'any cess, rate or tax levied on the profits or gains of any business or profession'. However, in the corresponding Section 40(a)(ii) of the IT Act, 1961 the expression "cess" is quite conspicuous by its absence. In fact, legislative history bears out that this expression was in fact to be found in the Income-tax Bill, 1961 which was introduced in the Parliament. However, the Select Committee recommended the omission of expression "cess" and consequently, this expression finds no place in the final text of the provision in Section 40(a)(ii) - The effect of such omission is that the provision in Section 40(a)(ii) does not include, "cess" and consequently, "cess" whenever paid in relation to business, is allowable as deductable expenditure. Therefore, respectfully following the same, we direct Ld. AO to allow the deduction of education cess paid by the assessee. This ground stand allowed.
Quantum of deduction u/s 35(2AB) - HELD THAT:- We concur with the submissions of Ld. AR that deduction has to be allowed as claimed by the assessee and certified by the Auditors since the amendment was brought in the Rule 6(7A)(b) w.e.f. 01/07/2016 only. Prior to the amendment, the prescribed authority was to submit its report in relation to the approval of in-house research & development facility in form No.3CL to the DG (IT exemptions) within 60 days of its granting approval. It was only with effect from 01/07/2016, the prescribed authority was required to quantify the expenditure incurred by the assessee on in-house research & development facility.
We find that fact as well as issue is pari-materia the same. In the absence of any contrary decision on record, respectfully following the above decisions, we would hold that the assessee would be entitled for deduction u/s 35(2AB) on actual expenditure incurred by it. The aggregate amount of expenditure stated be to be incurred by the assessee is Rs.150.19 Lacs and the assessee is eligible to claim deduction @200%. AO is directed to quantify the exact claim and allow the deduction of the same. This ground stand allowed.
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2021 (10) TMI 1366
Validity of assessment order - direction to appellant to accept the revised return filed by the respondent - extension of input tax credit under the provisions of Section 12(2) of the TNVAT Act - primary and substantial ground which was raised in the writ petitions was that the Assessing Officer was guided by the report issued by the Enforcement Wing Officials which could not have been the basis for completing the assessment - HELD THAT:- The lis before the Court was as to whether the revision of assessment was valid and whether there were any procedural impropriety committed by the Assessing Officer. In such circumstances, the finding regarding taxability of the product or otherwise may not be required to be given at that stage as the adjudicatory process is yet to be completed.
When the matter stands remanded to the authority, an open remand would be more appropriate, especially when the counter affidavit filed by the appellant was a very brief counter affidavit and the preliminary objection taken by the appellant was that the writ petitions are not maintainable and the respondent should have filed an appeal under Section 51 of the Act - the matter should go back to the Assessing Officer for a fresh decision on merits and in accordance with law.
The writ appeals are partly allowed and the order and direction issued in the writ petitions in so far as it remands the matter to the Assessing Officer is sustained.
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2021 (10) TMI 1365
Suit for recovery of money due on a promissory note - defence of the defendant is that the defendant has neither borrowed any amount nor executed any promissory note in favour of the plaintiff - forgery of signature of defendant - HELD THAT:- As of now, there is no mechanism or scientific method to findout the age of the writing or ink. But the learned Additional District Judge, without considering the non-availability of any such mechanism, by simply observing that the defendant has to be given an opportunity to prove his defence and no prejudice would be caused to the plaintiff, allowed the petition. Hence, this Court has no hesitation to hold that the impugned order is not good in law and the same is liable to be set aside.
Considering the facts and circumstances of the case and also the fact that this Court has already fixed the time limit for disposal of the suit and the same was not complied with, as the proceedings were subsequently stayed by this Court in the present revision, this Court is of the view that necessary directions are to be issued for the early disposal of the suit.
The Civil Revision Petition is allowed.
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2021 (10) TMI 1364
Seeking grant of Bail - non-existent transactions - Section 132(1)(b) & (c) of the CGST Act, 2017 R/w Section 132(1)(i) and Sub-Section (5) of the Act - HELD THAT:- As per the charge-sheet and the evidence collected by the Department, it has turned out that fake entities were created and no goods were in fact transported from one entity to another and fake bills were generated, hence, there are no change in the circumstances so as to entertain the third bail application.
The third bail application is accordingly rejected.
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2021 (10) TMI 1363
Seeking grant of bail - offence under Sections 132(1)(b)(c) of of the Central Goods and Services Tax Act, 2017 - HELD THAT:- No ground is made out for entertaining the second bail application as there is no change in circumstance necessitating entertaining the second bail application.
The Criminal Misc. Second Bail Application is dismissed.
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2021 (10) TMI 1362
Rectification of mistake u/s 254 - Omission on part of ITAT to decide the grounds - HELD THAT:- We notice that the Tribunal has inadvertently omitted to decide ground Nos. 2 & 3 of the assessee’s appeal for the assessment year 2012-13 and ground No.2 of the assessee appeal for assessment year 2013-14, which, is mistake apparent from record within the meaning of section 254(2) of the Act. Hence, we allow these Misc. Applications and recall the order [2021 (5) TMI 1041 - ITAT CHANDIGARH] for a limited purpose of adjudicating ground No 2&3 of the assessee’s appeal pertaining to AY 2012-13 and ground No 2 of the assessee’s appeal for the AY 2013-14 after hearing the assessee on theses afresh. Misc. Applications are allowed.
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2021 (10) TMI 1361
Seeking appointment of Insolvency Resolution Professional - HELD THAT:- The applicant has approached the IRP who has accorded his consent to accept his appointment as the IRP. Accordingly, the application is allowed.
Seeking his replacement from the position of Interim Resolution Profession for the CIRP of the Corporate Debtor - HELD HAT:- Application has becomes infructuous and disposed of accordingly.
List main company petition on 06.12.2021.
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2021 (10) TMI 1360
Deduction u/s 35(2AB) - Appellant not entitled to deduction u/s 35(2AB) to the extent the expenses eligible for deduction under the said provision pertained to a unit entitled for deduction under Section 10B - HC held insofar as it pertains to the finding that the assessee is not entitled to claim deduction under Section 35(2AB) of the Act is hereby quashed - HELD THAT:- Issue notice.
Dasti, in addition, is permitted.
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2021 (10) TMI 1359
Dishonor of Cheque - insufficient funds - existing and enforceable debt or not - rebuttal of statutory presumption under section 139 of NI Act - burden to prove - HELD THAT:- The burden on the accused is to make out a probable defence. The accused need not step into the witness box or adduce direct evidence. It would suffice if the accused is in a position to create a reasonable doubt that the version of the complainant is false. In the factual matrix, the accused has more than succeeded in rebutting the presumption.
Except a bald statement in the complaint that the disputed cheque was issued towards payment of unpaid amount, there is no disclosure whatsoever as to when was the coal supplied, what was the quantity of the coal supplied, what was the amount received from the accused and what amount is unpaid. The complainant did not adduce any documentary evidence to show that he supplied coal to the accused, at any point in time. While the complainant asserted that the outstanding is reflected in the balance sheet, the balance sheet is not produced on record - in cases where the allegation is that certain goods were supplied and the cheque was issued towards payment of the consideration, it would be hazardous to convict only on the basis of the presumption under section 139 of the Act in the absence of any material, and which material ordinarily would be expected to be in the complainant's possession and control, to show that goods were as a fact supplied to the accused.
While dealing with an appeal against acquittal, the Court must bear in mind that the presumption of innocence is only strengthened by the acquittal and if two reasonable conclusions are possible on the basis of the evidence on record, the Appellate Court should be slow to reverse a judgment of acquittal.
Appeal dismissed.
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2021 (10) TMI 1358
TP Adjustment - Comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee software development service segment need to be deselected from final list. Also companies having huge turnovers need to be deselected.
ALP adjustment pertaining to interest on receivables - HELD THAT:- As directed the TPO to allow credit period as per agreement between assessee and its AEs - if it turned out that no such period was specified, the credit period would be 90 days only - HELD THAT:- There is hardly any dispute that the learned lower authorities have gone by SBI short term deposit rates which is in the nature of a loan or cash transaction involving domestic deposits rather than LIBOR rate in international transactions, involving the very business segment.
Coming to the Revenue’s argument that this tribunal has already directed the TPO to go by the agreement between an assessee and its AEs, we quote Technimont ICB Pvt. Ltd [2013 (9) TMI 595 - ITAT MUMBAI] and Sabic Innovative Plastic India Ltd. [2013 (9) TMI 596 - ITAT AHMEDABAD] that an AE could not be adopted as a tested party since lacking uncontrolled comparable transactions. As in CIT Vs B R Constructions [1992 (6) TMI 13 - ANDHRA PRADESH HIGH COURT] holds that a co-ordinate bench decision not taking into consideration the relevant law and facts; as the case may be, is not a binding precedent. We therefore accept the assessee’s instant ground for this precise reason alone and delete the impugned ALP adjustment.
Management and consultancy fee involving ALP adjustments - HELD THAT:- We are of the view that the learned TPO needs to re-examine the entire issue in light of the assessee’s foregoing submissions accordingly pin-pointing; prima-facie, a cost to cost reimbursement arrangement between itself, its AE and the ultimate payee M/s.KPMG qua the services in issue. We further wish to quote here the foregoing judicial procedents decision that the benefit test also not to be applied whilst determining “NIL Arm’s Length Price” on the ground that the taxpayer had not in fact derived any benefit from the international transactions in issue. The assessee shall also be at liberty to file its additional evidence; if any, in consequential proceedings as well.
Allow education cess paid as a deduction - HELD THAT:- Revenue on the other hand quotes Section 40(a)(ii) of the Act that a “cess” very much forms part of the clinching statutory expression “tax” employed therein. And that it is too late now for the assessee to make the impugned claim once the same had not been recorded in the corresponding books of account as well. We find no merit in the Revenue’s foregoing arguments in light of Sesa Goa Ltd, [2020 (3) TMI 347 - BOMBAY HIGH COURT], Chambal Fertilizers and Chemicals Ltd [2018 (10) TMI 589 - RAJASTHAN HIGH COURT] holding the impugned cess as an allowable deduction in light of CBDT’s circular dt.18-05-1967 that education cess is not included in “tax” u/s.40(a)(ii) of the Act. We therefore direct the AO to frame consequential computation as per law.
Foreign tax payment as a deduction - allowance of foreign tax credit claim u/s.91(1) - HELD THAT:- Section 91 of the Act is a specific provision dealing with foreign tax credit to be granted in case of taxes paid in the specified countries i.e. except Pakistan which comes under the latter sub-section 2 thereof. If we go by the assessee’s analogy that foreign tax credit to the specified extent u/s.91(1) “of a sum calculated on such doubly taxed income at the Indian rate of tax of the said country, whichever is the lower, or at the Indian rate of tax if both the rates are equal” is allowable for the purpose of granting credit and the remaining component is to be granted deduction under Chapter-IV of the Act, the same would render the former specific provision itself as otiose going contrary to “generalia specialism non derogant” which means that a specific provision prevails over the general one. We thus adopt stricter interpretation and conclude whatever is the assessee’s unallowable foreign tax credit claim u/s.91(1) since exceeding the specified limit, would not be entitled for business expenditure u/s.37.The assessee fails in this ground.
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2021 (10) TMI 1357
Payment of excessive price for purchase of sugarcane - HELD THAT:- AO would allow deduction for the price paid under clause 3 of the Sugar Cane (Control) Order, 1966 and then determine the component of distribution of profit embedded in the price paid under clause 5A, by considering the statement of accounts, balance sheet and other relevant material supplied to the State Government for the purpose of deciding/fixing the final price/additional purchase price/SAP under this clause. The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the nonmembers are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2) of the Act, as has been held by the Hon’ble Supreme Court Tasgaon Taluka S.S.K. Ltd. [2019 (3) TMI 321 - SUPREME COURT]
Needless to say, the assessee will be allowed a reasonable opportunity of hearing by the AO in such fresh determination of the issue.
Disallowance on account of sugar sold to members at concessional rate - In our considered opinion, it would be just and fair if the impugned order on this score is set aside and the matter is restored to the file of AO, instead of to the CIT(A), for fresh consideration as to whether the difference between the average price of sugar sold in the market and that sold to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon’ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limited[2012 (11) TMI 669 - SUPREME COURT ] - Restoration to the AO is necessitated because, following the judgment of the Hon’ble Apex Court in the case of Tasgaon Taluka S.S.K. Ltd. (supra), we have remitted the issue of payment of excessive price to the file of AO, and as such, the instant issue cannot be sent to ld. CIT(A) as it would amount to simultaneously sending one part of the same assessment order to the AO and other to the CIT(A), which is not appropriate.
Disallowance on account of VSI Contribution - assessee made provision for Vasantdada Sugar Institute (VSI) contribution and claimed deduction u/s.35(1) - HELD THAT:- Ground decided in favour of the assessee.
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2021 (10) TMI 1356
Demand of property tax in respect of two buildings owned by the petitioner - CHAD building - College building - eligibility for exemption in terms of Coimbatore City Municipal Corporation Act, 1981 - hospital comes within the description of a 'charitable hospital' or not - HELD THAT:- Reports for the periods 2018-2019 and 2019-2020 have been circulated along with statement of costs and statements indicating the break-up between the charitable work and the revenue generating work that the institution is engaged in. Orders of assessment as well as Certificate under Section 80 G of the Income Tax Act, 1961 have also been placed on record - Suffice it to say that the argument advanced by the respondents, that only an institution which has no revenue at all can be a charitable institution, is untenable as it ignores ground realities. Assuming that an institution was bereft of all revenue sources, such institution would itself be in a need of charity, and cannot hope to do charity.
Though the grant of exemption is one that should be considered by the original authority and not a question in which the Court would be inclined to intervene under Article 226, in this case, it is believed that such intervention is justified. It is not in dispute that the hospital has been granted the benefit of exemption continuously from 1933. It is also not in dispute that the CHAD is part of the hospital and is engaged in charity and medical relief, both in the hospital and, as an extension to the neighbouring committees as well - there are no justification whatsoever to exclude the CHAD from the ambit of exemption from property tax and quash that portion of the impugned order denying such relief.
Claim of exemption qua the buildings comprised in the educational institution - HELD THAT:- The amendment does overlook the charitable nature of the activity undertaken by a teaching college. It perhaps was intended to address prosperous educational institutions run on profit motive. A teaching institution, by definition, focuses on the dispensation of education in the arena of medicine, both subjects constituting public duty. The fee structure in the college is stated to a sum of Rs. 3000/- per annum only and no other charges are collected - The expenditure is wholly met from out of the fee collection from the hospital, which also treats a section of the society gratuitously. Thus, a distinction must be made between a teaching hospital which is service oriented and other Educational institutions where the dominant object is profit.
Thus, it stands now, the petitioner is not entitled to exemption from property tax in regard to the college buildings. The impugned order is upheld to this extent - petition allowed in part.
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