TMI Tax Updates - e-Newsletter
October 17, 2014
Case Laws in this Newsletter:
Income Tax
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Highlights / Catch Notes
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Income Tax:
Rejection of grant of certificate for registration u/s 10(23C)(vi) Merely because some profit arises from its activity will not mean that the predominant object of the activity is to earn profit and that it is not an educational activity - HC
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Income Tax:
The interest cannot be capitalized which was paid after the slump sale was effected and the factory was in operation, and therefore, expenses were revenue in nature - HC
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Income Tax:
Once the refund of the amount collected towards advance tax and the correspondent interest are paid in compliance with the direction issued by a Court, an assessee cannot claim interest on interest, independent of the order on the basis of which such payments are made - HC
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Income Tax:
Block assessment u/s 158BC Section 153 (2A) of the Act is attracted to an order for fresh assessment to be passed under Chapter XIV B of the Act in pursuance of the order of the Section 250 of the Act- HC
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Income Tax:
Levy of penalty u/s 271(1)(c) - Claim of depreciation on leased assets - The transactions entered into by the assessee were sham and bogus transactions which were intended to defeat the provisions of law - AT
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Income Tax:
Profit from own chity investment - the addition made by the AO on estimate basis towards profit from own chity investment was not justifiable - AT
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Income Tax:
Denial of claim of exemption u/s 80P(2)(a)(i) Letting out of surplus space in the building owned and used by the assessee is not such an activity falling under clause (c) - the assessee is not entitled for deduction u/s. 80P of the Act - AT
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Income Tax:
Prior period expenses merely because an expense relates to a transaction of an earlier year, it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question. - AT
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Service Tax:
Excess payment of service tax and its subsequent adjustment - Substantial benefit cannot be denied in such cases merely because some aspects of the procedure had not been followed - AT
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Service Tax:
Activity of safe keeping of gold in its vaults - prima facie the provisions of Rule 6(2)(iv) of Service Tax (Determination of Value) Rules 2006 will apply not only to monetary loan but also to loan given in the form of gold - AT
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Service Tax:
Steamer Agent Service - services were rendered to a shipping line and payment was received from shipping line. That being the case, prima facie, the demand under the head for steamer agents service is not maintainable - AT
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Central Excise:
100% EOU - Disallowance of the credit of Education Cess and Secondary & Higher Secondary Cess as per the formula prescribed in Rule 3(7)of CCR - the disputed goods were not produced or manufactured by the appellant's 100% EOU - credit cannot be denied - AT
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Central Excise:
SSI exemption - brand name of others - The container of the product exhibited to us carries symbol and name of market leader M/s. Infra Drugs and Chemicals which is a Division of a marketer of M/s. Oyster Lab Ltd. - benefit denied - AT
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Central Excise:
Denial of refund claim on the ground that said deposit cannot be held to be pre-deposit inasmuch as the same was adjusted against sanctioned refund claim - Revenue cannot take the benefit of its own actions - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2014 (10) TMI 402
Employees and employers contribution Effect of amendment u/s 43B - Applicability of Commissioner of Income Tax V/s. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] - Whether the Tribunal was right in ignoring the distinction between the employees contribution and employer's contribution Held that:- The employer assessee would be entitled to deduction only if the contribution to the employee's welfare fund stood credited on or before the due date and not otherwise following the decision in Commissioner of Income Tax V/s. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] - both employees' and employer's contributions are covered under the amendment to Section 43B of I.T. Act - the Tribunal was right in holding that payments are subject to benefits of Section 43B Decided against revenue.
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2014 (10) TMI 401
Stay application Applicability of guidelines for staying demand - Held that:- Assessee rightly contended that in Commissioner of Income Tax Versus Jafari Momin Vikas Co-Op Credit Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] it has been rightly held that they are not doing banking activities and they do not fall within the definition of banking as defined under Section 5(b) of the Banking Regulation Act, nor do they possess license u/s 22 of the Act, which is the mandatory requirement - As per the clarification issued by the CBDT dated 01.12.2009, detailed instructions have been given as to how and under what circumstances, stay of demand could be granted - the guidelines are binding upon the Officer, while considering the application for grant of stay. The petitioner is the Co-operative Society registered under the provisions of the Tamil Nadu Co-operative Societies Act - The bye-laws of the Society have clearly shows that the Society has to work and function for the benefit of its members - Unlike any other private organization, the Society operates on the strict parameters in accordance with the provisions of the Tamil Nadu Co-operative Societies Act, 1983 and the Tamil Nadu Co-operative Societies Rules, 1988 - if the entire tax levied is directed to be remitted, it would undoubtedly cause severe financial hardship and it would also cripple their entire activities assessee has made out a case for grant of interim stay Stay granted.
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2014 (10) TMI 400
Undervaluation of stock - Whether the Tribunal was right in deleting the disallowance made by the AO on account of under valuation of stock even when the entry tax levied was includible in the closing stock of the assessee as per the provisions of Section 145A following the decision in Commissioner of Income Tax, Faridabad Versus M/s Lakhani Rubber Udyog (P) Ltd. [2011 (2) TMI 546 - PUNJAB AND HARYANA HIGH COURT] - The nature of entry tax being as such it has nothing to do with the goods, it cannot become part of stock as it did not relate to it and hence, was not worked out by the appellant company or disclosed in the books of account - section 145A is not applicable and the addition on a/c of undervaluation of closing stock on the basis of effecting entry tax is liable to be set aside Revenue is unable to distinguish the judgments or refer to any statutory provisions or raise any argument that would enable us to hold to the contrary - Decided against revenue.
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2014 (10) TMI 399
Rejection of grant of certificate for registration u/s 10(23C)(vi) Educational institution - Whether the requirement of clause (vi) of sub-section (23C) of Section 10 of the Act has been fulfilled or not Held that:- As decided in American Hotel & Lodging Association, Educational Institute Vs. Central Board of Direct Taxes [2008 (5) TMI 17 - SUPREME COURT OF INDIA] - the authority was required to consider the nature and genuineness of the activities - the authority is only required to examine that the petitioner's institution comes within the phrase "exists solely for the educational purpose and not for profit" - mere existence that there is some profit does not disqualify the petitioner if the sole purpose of existence was not profit making but educational activities - The authority has to find out the predominant object of the activity and see whether the institution exists solely for education and not to earn profit - Merely because some profit arises from its activity will not mean that the predominant object of the activity is to earn profit and that it is not an educational activity - the threshold conditions are actual existence of an educational institution and approval of the prescribed authority for which every applicant has to move an application in the standardised form in terms of the first proviso thus, the order of the Tribunal is to be set aside and the matter is remitted back to the CIT(A) for fresh adjudication Decided in favour of assessee.
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2014 (10) TMI 398
Depreciation on enhances value of assets disallowed Intention to reduce tax liability or not - Slump sale Held that:- At the time of transfer of the assets, the assessee had no income for it to reduce its tax liabilities by way of such transfer, both the CIT (A) and the Tribunal had rightly concluded that the AO was in error in invoking Explanation 3 to Section 43 for determining actual cost in the deal - Tribunal was rightly in concluding that Explanation 3 to Section 43 of the Act was not required to be invoked thus, no substantial question of law arises for consideration Decided against revenue. Interest expenditure on unpaid purchase consideration Held that:- Explanation 8 to section 43(1) is brought on the statute book by the Finance Act, 1986, w.e.f 1st April 1974, which explains that where an amount is paid or is payable as interest in connection with acquisition of asset, so much of such amount which is relatable to any period after such asset is first put to use shall not be included and shall be deemed to have been included in the actual cost of such asset relying upon Commissioner of IncomeTax v. Rajaram Bandekar [1993 (1) TMI 46 - BOMBAY High Court] the explanation was added with an object of removing doubts with regard to the includibility of interest relatable to any period after the asset has first been put to use, in the computation of its actual cost - CIT (A) as well as the Tribunal have noticed that in view of introduction of Explanation 8 to Section 43 (1) of the Act which was held retrospective in nature, the interest cannot be capitalized which was paid after the slump sale was effected and the factory was in operation, and therefore, expenses were revenue in nature - The directions given to the AO to allow the amount of interest of ₹ 1.57 Crores is upheld Decided against revenue.
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2014 (10) TMI 397
Refund of amount paid as advance tax - Payment of interest on interest - Held that:- The application to refund the advance tax as well as the quantum thereof was the subject matter of the proceedings which culminated in the Supreme Court - Claiming any amount over and above what was awarded by the Supreme Court would amount to widening the purport of the order of the Supreme Court - The Tribunal did not take this aspect into account - Once amounts are paid in compliance with the directions issued by a Court, no inferior forum or Court can modify the direction thereof directly or indirectly - Revenue contended that all the claims, which the assessee was entitled to regarding the refund, have merged into the orders of the Supreme Court and unless there was a specific direction issued by the Supreme Court for payment of interest on interest also, there was no occasion for the respondent to lay a claim the Supreme Court has simply directed the authorities to extend the benefit by taking into account the principle laid down in Modi Industries Limited And Others Versus Commissioner of Income-Tax And Another [1995 (9) TMI 324 - SUPREME Court] - there was no direction for payment of interest on interest - notwithstanding the fact that there are precedents which held that an assessee is entitled to be paid interest on interest also, once the refund of the amount collected towards advance tax and the correspondent interest are paid in compliance with the direction issued by a Court, an assessee cannot claim interest on interest, independent of the order on the basis of which such payments are made thus, the order of the Tribunal is set aside Decided in favour of revenue.
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2014 (10) TMI 396
Tribunal restored the matter - Benefit of netting Nexus with income Interest income Depreciation on expenses - Claim of deduction u/s 80I, 80IA, 80HH and 80HHC - Following the decision in Commissioner of Income Tax -Ahmedabad-III Versus Nirma Ltd. [2014 (10) TMI 388 - GUJARAT HIGH COURT] - whenever certain income is to be excluded for the purpose of deduction under section 80-I, 80-IA and 80HH, etc. gross income is to be excluded or only the net thereof is the question as decided in M/s ACG Associated Capsules Pvt. Ltd. (Formerly M/s Associated Capsules Pvt. Ltd.) & Others Versus The Commissioner of Income Tax, Central-IV, Mumbai & Others [2012 (2) TMI 101 - SUPREME COURT OF INDIA] - for the purpose section 80HHC of the Act, it is not the entire amount received by the assessee on sale of DEPB credit, but the sale value of less the face value of the DEPB that will represent profit on transfer of DEPB credit by the assessee - even other amounts, interest or rent when are to be excluded for the purpose of explanation (baa) to section 80HHC of the Act - Ninety per cent of not the gross rent or gross interest, but the net thereof shall have be excluded - Revenue gets automatically answered since the amounts referred to in the said question are to be excluded for the purpose of deduction under section 80HHC of the Act - The foundation for the logic for excluding the net profit and not the gross profit from the claim of deduction when it is found that the source of income does not qualify for such deduction u/s 80HHC of the Act Decided against revenue. Calculation of deduction u/s 80IA - Sale of various items disallowed Sale of poster paper, iron scrap, gunny bags, LDO sale, soap stone barden. Misc. sales, compound sale, waste paper craft sale, plastic waste sale, barrel sale, HCO sales Held that:- Following the decision in Commissioner of Income Tax -Ahmedabad-III Versus Nirma Ltd. [2014 (10) TMI 388 - GUJARAT HIGH COURT] as decided in Deputy CIT v. Harjivandas Juthabhai Zaveri [1999 (12) TMI 5 - GUJARAT High Court] the benefit of deduction u/s 80I of the Act is to be gratned on various incomes, such as, job work receipt, sale of empty soda ash bardan, sale of empty barrels and plastic waste - Such questions are, therefore not required to be considered Decided against revenue. Claim of deduction u/s 80HH and 80HHC - Interest from debtors Held that:- Following the decision in Commissioner of Income Tax -Ahmedabad-III Versus Nirma Ltd. [2014 (10) TMI 388 - GUJARAT HIGH COURT] - the Court upheld the assessee's claim for deduction under section 80I of the Act on the interest received on late payment of sale consideration as amount derived from eligible business. These questions are, therefore, not required to be considered Decided against revenue.
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2014 (10) TMI 395
Applicability of section 153(2A) - Notice u/s 158BC Computation of undisclosed income - Whether section 153(2A) of the Act is attracted to a block assessment framed in pursuance to an order under Section 250 and Chapter XIV B of the Act and whether this order passed on 28.03.2003 is in time as stipulated under Section 153 (2A) of the Act or not Held that:- Though Chapter XIV B is a complete code by itself and an assessment order has to be passed under the Chapter and passing the assessment order under other provisions of the Act are not permissible - If the Chapter do not provide for contingency, then Section 158BH makes all other provisions of the Act apply to an assessment made under the Chapter - Section 153 (2A) being a provision which provides for limitation to pass assessment order under pursuance of Section 250 or 254 or 263 or 264 of the Act - The provision is attracted to an assessment which has to be made under Chapter XIV B of the Act - Section 158BH permits to look at the other provisions of the Act in the field in respect of which no provisions are made under Chapter XIV B - Section 153 (2A) of the Act is attracted to an order for fresh assessment to be passed under Chapter XIV B of the Act in pursuance of the order of the Section 250 of the Act. As decided in Assistant Commissioner of Income Tax & Anr. Versus M/s. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA] - the assessment order for the block period was passed by the assessing authority on 30.09.1999 - The appellate authority u/s 250 of the Act had set aside the order by order dated 24.10.2000 - The order was communicated on 15.01.2001 - The period prescribed u/s 153(2A) of the Act is before the expiry of one year from the end of financial year in which order under Section 250 of the Act is received by the Chief Commissioner or Commissioner as the case may be - The copy of the appellate authority was received on 15.01.2001, 31.03.2001 is the end of the financial year and 31.03.2002 is one year there from before which the fresh assessment order ought to have been passed - The fresh assessment order is passed on 28.03.2003, nearly one year after the expiry of the period of limitation - Therefore, it is barred by time Decided against revenue.
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2014 (10) TMI 394
Penalty u/s 272B(1) - Failure to comply with the provisions of section 139A Held that:- it cannot be said that, the AO has any discretion in the matter or that the intention of the defaulter has to be gone into for levying penalty - If a failure is disclosed, the penalty is automatic thus, the Court is not convinced that the petitioner's contentions can be sustained Decided against assessee.
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2014 (10) TMI 393
Treatment of rental income on leasehold premises - Sub-letting of property - AO treated it as income from house property Held that:- Following the decision in Stream International Services (P.) Ltd. Versus Assistant Director of Income-tax (International Taxation) - 7(2), Mumbai [2013 (9) TMI 339 - ITAT MUMBAI] - the assessee was neither the owner nor the deemed owner of the house property, applying the provisions of section 22, the annual value of such property could not have been charged to tax under the head "Income from house property" - As it was a case of simple subletting or property, not facilitating the carrying on of the assessee's business in any manner, the rental income so realized by the assessee in the present circumstances cannot be considered as 'Business income' - In such a situation, it was directed that the same should be included under the head 'Income from other sources' - The impugned order on the issue was set aside and the matter was restored to the file of the AO for doing the needful accordingly - The Assessing Officer will allow eligible deductions and allowances as per the relevant provisions under Chapter IV-F - While allowing such deductions, the Assessing Officer will also ensure that no deduction is doubly claimed/allowed, firstly, in computing of income under the head "Profits and gains of business or profession" and then under the head "Income from other sources" Decided in favour of assessee. Exempt income earned as dividend disallowed u/s 14A Held that:- Following the decision in GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - application of Rule 8-D is prospective and is applicable from AY 2008-09 - the DRP has considered the disallowance of 5% to be reasonable - the AO has not appreciated the directions of the DRP correctly, may be directions was not clear the AO is directed to restrict the disallowance u/s 14A of the Act to 5% of the exempt income Decided in favour of assessee. Transfer pricing adjustment Determination of ALP Selection of comparables directors of companies selected involved in serious fraud cases - Held that:- Assessee rightly contended that the company deserves to be excluded as the Directors of this company were involved in fraud, therefore, financial results of the company are not reliable relying upon Capital IQ Information Systems (India) (P.) Ltd. Versus Deputy Commissioner of Income-tax (International Taxation) [2014 (3) TMI 626 - ITAT HYDERABAD] - whenever a company or its directors are found to be involved in fraud, exclusion of such company is upheld from the final list of comparables as the financial results are not reliable thus, those company cannot be treated as comparable. Infosys BPO Ltd. Extremely high turnover Held that:- The turnover of this company is extremely high as compared to that of the assessee - Infosys is a brand and commands premium in the market, therefore, this company should be excluded from the list of comparables - Infosys is a brand and commands premium in the market - the turnover for the year of this company was ₹ 649.56 crores as against that of the assessee of ₹ 54.17 crores which is almost 12 times of the assessee - Infosys BPO Ltd. is a joint company and it assumes significant business risks unlike the assessee who does not assume significant risks therefore deserves to be excluded from the final list of comparables the company is directed to be deleted as comparable. Caliber Point Business Solutions Ltd. Related party transaction Held that:- The related party transaction is more than 25% which is a filter adopted by the TPO himself - the DRP has not considered this objection because it was of the opinion that related party transaction is mainly for reimbursements and recoveries and therefore would not affect the company - as decided in assessees own case for the earlier assessment year, it has been rightly held that a pure reimbursement of expenses by one AE to another AE is very much a transaction as per section 92F(v) and consequently is equally an international transaction as per section 92B requiring consideration as per section 92 of the Act this company cannot be treated as comparable.
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2014 (10) TMI 392
Levy of penalty u/s 271(1)(c) - Claim of depreciation on leased assets - Inaccurate particulars furnished - sham transactions - Tax avoidance - Held that:- The search/survey operation on M/s. Western Pacques India Ltd., which was one of the major lessees having the transaction of lease with the assessee, it was found that the leased assets were neither installed nor put to use by the lessee and were in fact non-existent - the most of the assets stated in the lease agreement were not eligible for 100% depreciation - there were huge over invoicing of the assets - even the assessee itself, in the statement of facts has mentioned that in some cases the party (lessee) had taken the assessee for a ride by cheating the assessee with regard to the purchase of assets - The assessee had come to know about this fact only from the assessment order - This explanation given by the assessee itself proves that the assessee neither purchased/owned the alleged leased assets nor was aware as to whether the said assets were ever purchased by the lessees - Had the assessee leased the assets in question, the assessee firstly would have purchased those assets either from the manufacturer in case of simple lease transactions and/or from the lessee itself in case of sale and lease back transaction - When the assessee itself was not aware about the existence of assets, it was obvious that such a transaction could not fall in the definition of lease transactions. The assessee had mentioned that the AO in the assessment order had mixed up the facts which would be explained at the time of hearing - the assessee had put a wrongful claim of depreciation and thereby had furnished inaccurate particulars of income for the purpose of concealment of real income, hence, the penalty proceedings were correctly initiated by the AO - It was not a case of tax planning by the assessee so as to avoid or reduce its taxes by remaining within the framework of the law - The transactions entered into by the assessee were sham and bogus transactions which were intended to defeat the provisions of law - tax avoidance by way of tax planning or structuring the transactions so as to reap the largest tax benefit may be permissible under law but fraudulent transfer of assets or income or engaging in sham transactions with the object of reducing the tax liability cannot be said to be a case of tax avoidance but of tax evasion - Any act or attempt to reduce the tax liability by deceit, subterfuge or concealment is not permissible under law - It was a clear cut case of furnishing of inaccurate particulars of income and as such the penalty has been correctly levied by the lower authorities - neither the assessee offered any explanation nor the assessee could show that the claim of the assessee regarding the depreciation was bonafide thus, the order of the CIT(A) is to be upheld Decided against assessee.
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2014 (10) TMI 391
Admission of additional evidence u/s 46A(1) Held that:- A distinction has to be made between the evidence and material voluntarily furnished by an assessee in support of his appeal and the evidence/material requisitioned from an assessee by the FAA with a view to proper disposal of proceedings before him - While the provisions of rule 46A apply to the former, it will have no application to the latter - the entire additional evidence has come on the record of the FAA because the FAA decided to examine the facts of the case in depth and adjudicate upon the matter on the basis of evidence and material thus gathered there was no requirement in law that the FAA should invariably consult or confront the AO every time an additional evidence that was not filed before the assessing officer comes on the record of the first appellate authority - If the additional evidence furnished by the assessee before the appellate authority is in the nature of clinching evidence leaving no further room for any doubt or controversy in such a case no useful purpose served on performing the ritual of forwarding the evidence/material to the AO and obtain his report Decided against revenue. Profit from own chity investment Whether the assessee has not produced further evidences to prove the loss claimed in respect of certain AYs - Held that:- The deletion of addition is justified as there was no incriminating material found or seized during the course of search to suggest the addition for the AY 2002-03 - For the AY 2003-04, the material relating to the investment in own chity was found for the month of Feb and March 2003 - Since these chits were not terminated during the relevant year, the CIT(A) was of the view that the AO has computed the income by projecting the investments found for two months against the whole year and further estimated the income at 10% - there is no need for estimating the income for the AY 2003-04 in view of the fact that the chity reflected in the seized material for the relevant year are not terminated as on 31.3.2003 - the CIT(A) is justified in deleting the addition of ₹ 3,00,905/ for the AY 2003-04 - there was loss from own chity investment as per the working furnished by the assessee - The entire working furnished by the assessee was forward to the AO for verification and report - there was no discrepancy in the working furnished by the assessee - the assessee has admitted more investments in own chits than the figure worked out by the AO - the addition made by the AO on estimate basis towards profit from own chity investment was not justifiable - the CIT(A) observed that the addition of ₹ 1,39,264/- for the AY 2004-05 and to the extent of ₹ 74,329/- for the AY 2007-08 are to be made and deleted the balance addition of other AYs the order of the CIT(A) is upheld Decided against revenue. Addition of income from kuri late fee Held that:- CIT(A) rightly found that various items of income are clubbed together and disclosed in the respective financial statement - the CIT(A) was rightly of the opinion that there was no reason to disbelieve the submissions made by the assessee that other kuri income offered includes income from kuri late fee - the AO has made the addition only on pure guess work and not on the basis of any material found/seized during the course of search the order of the CIT(A) is upheld Decided against revenue. Interest paid on deposits disallowed Held that:- The addition was made by the AO without referring any seized material and the addition was only on presumption without any material to show that borrowed funds have been advanced to sister concerns during the relevant assessment years - In the absence of any material to suggest that the advance made to sister concerns were out of borrowed funds, the deletion of addition by the CIT(A) is justified Decided against revenue. Interest claimed on housing loan Held that:- The amount borrowed by the partners was credited to the assessees firm and the corresponding payment was also made by the assessee including interest payments AO was of the view that the interest was to be borne by the partners and it was wrongly claimed by the assessee firm - however, there is no material to suggest that the partners were derived any benefit out of the loans availed by the assessee firm - In the absence of any material to suggest the benefits derived by the partners in a personal capacity, the claim of the revenue cannot be accepted Decided against revenue. Excess interest received from money lending business Held that:- The CIT(A) has considered the average opening and closing balances of the financial year so as to compute the interest income, which is an accepted method of assessment of income and advances when the day-to-day balances of loan is not available the order of the CIT(A) is upheld Decided against assessee. Income from chitty business of foremans commission Held that:- The assessee furnished reconciliation statement with regard to collection of the foreman commission before the CIT(A) - The CIT(A), after going through the reconciliation statement observed that the foreman commission receivable for the AY 2002-03 was at ₹ 21,57,720 and for The AY 2008-09, it was ₹ 23,63,326 - he sustained the addition towards undisclosed foreman commission at ₹ 8,800/- for the AY 2006-07 and ₹ 16,06,951/- for the AY 2008-09 -The assessee could not controvert the above findings of the CIT(A) thus, the order of the CIT(A) is upheld Decided against revenue. Profit from terminated kuries disallowed Held that:- The assessee filed the detailed working of the profit from the terminated kuries - after going through the details furnished by the assessee regarding the outstanding of terminated kuries, he quantities it at ₹ 3,13,771/- and sustained the same and deleted the balance ₹ 31,11,054/ for the kuries which have not been terminated as on 31.3.2008 - The CIT(A) given relief in respect of kuries which are not terminated relying upon COMMISSIONER OF INCOME-TAX Versus GURUVIJAYA KURI CO. LTD. [2008 (1) TMI 267 - KERALA HIGH COURT Co Ltd.] the order of the CIT(A) is upheld Decided against assessee. Estimation of profit Proceedings u/s 153A Held that:-Assessee was rightly of the view that the income tax assessment for the AYs 2002-03 to 2005-06 have been completed as on the date of search - In this case, the assessments for the AYs 2002-03 to 2005-06 had been completed under summary scheme u/s 143(1) and the time limit for issue of notice u/s 143(2) had expired as on the date of search - there was no assessment pending in respect of these AYs and in such a situation, there was no question of abatement relying upon M/s ALL CARGO GLOBAL LOGISTICS LTD Versus DEPUTY COMMISSIONER OF INCOME TAX [2012 (7) TMI 222 - ITAT MUMBAI(SB)] Decided against assessee. Treatment of agricultural income Claim of agricultural income under return files as per section 153A Held that:- Owning agricultural land was not doubted by the Department - There were evidences produced by the assessee suggesting agricultural income generated by the assessee in his land - since the Department have no evidence contrary to the evidence furnished by the assessee; therefore, it is not proper to hold that the assessee has shown other income in the form of agricultural income - Since evidence brought on record suggest that the agricultural income earned by the assessee, there was no reason to interfere with the findings of the CIT(A), which is confirmed as the reasons advanced by the assessee also bonafide for variation in the agricultural income claimed in the original return filed after the search action Decided against revenue. Receipt form sale of trees disallowed Held that:- The certificates from revenue authorities furnished by the assessee as well as the remand report of the AO in connection with the claim of agricultural income, clearly shows that the assessee is having properties other than wetlands - the tree sale agreement properly described the name and address of the purchaser, the nature of trees and conditions of sale, schedule of payments and the data-wise receipt of payments by the assessee - evidences furnished by the assessee, in support of his claim, were in order - since the trees sold were naturally and spontaneously grown, no question of taxability of the receipt arises revenue has not doubted the certificate issued by the revenue authorities which suggest the availability of timber - it is natural to earn income from sale of trees Decided against revenue. Investment in immovable property Held that:- The assessees have furnished evidence before the CIT(A) and explained the investments in the properties in the cash flow statements - The CIT(A) had also called for remand report - the CIT(A) has observed that the unexplained investments in immovable properties were accounted for as fixed assets in the regular books of account of the firm in which the assesses were partners and the same cannot be considered as unexplained investment in immovable properties and it is to be excluded and the properties are owned by the assesses which are duly accounted for in the regular books of accounts the order of the CIT(A) is upheld Decided against revenue. Addition of personal drawings Held that:- The AO estimated very huge drawings - the CIT(A) observed that for the AY 2005-06 to 2008-09, there is no necessity of any addition as the drawings admitted by the assesses is reasonable as there is drawings by other members of the family namely Lilly, Shju, Jaison, Sabu, Salu and Benny the order of the CIT(A) is upheld Decided against assessee. Cost of furnishing the residential house - CIT(A) rightly found that no evidences were furnished regarding expenditure towards horticultural work, kennel and well - own timber was used in the construction and the bricks/tiles used in the construction were procured from the business concerns of the assessee group at reduced prices, were not supported by any evidence - the assessee has not offered any explanation regarding the cost of furnishing at ₹ 1,93,410/- estimated by the AO - the submission of the assessee regarding pavement work and installation of gate was in order - the cost of pavement work at ₹ 95,394/- and cost of gate at ₹ 11,825/- (Total ₹ 1,07,219) included in the valuation report of the Departmental Valuer shall not be treated as unexplained investment for the AY 2005-06 - the other contentions such as own timber, procurement of bricks/tiles at reduced prices, cost of kennel, cost of horticultural work, cost of well, etc. were not proved by the assessee with sufficient evidences the order of the CIT(A) is upheld Decided against assessee.
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2014 (10) TMI 390
Denial of claim of exemption u/s 80P(2)(a)(i) Co-operative society as per Kerala Co-operative Societies Act AO was of the view that the assessee has not fulfilled the main object of providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities Held that:- Following the decision in Kunnamangalam Co-operative Bank Ltd. [2014 (10) TMI 350 - ITAT COCHIN] - the Assessee is carrying on banking business and for all practical purposes it acts like a co-operative bank - The Society is governed by the Banking Regulations Act - the society being a co-operative bank providing banking facilities to members is not eligible to claim deduction u/s 80P(2)(a)(i) after the introduction of subsection (4) to section 80P - until and unless that condition is satisfied, it cannot be said that the prime object or principal business of the assessee is banking business. The assessee cannot be regarded to be primary cooperative bank and in consequence thereof, it cannot be a co-operative bank as defined under part V of the Banking Regulation Act 1949 - the provisions of section 80P (4) read with explanation there under will not be applicable in the case of the assessee -The assessee will be entitled for the deduction u/s 80P(2)(a)(i) - the assessee is a primary cooperative bank and therefore hit by the provisions of section 80P(4) - Clause (c) of section 80P(2) is intended to cover receipts from sources other than the actual conduct of the business but attributable to an activity which results in profits and gains - Letting out of surplus space in the building owned and used by the assessee is not such an activity falling under clause (c) - the assessee is not entitled for deduction u/s. 80P of the Act Decided against assessee.
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2014 (10) TMI 389
Deduction u/s 14A Held that:- The benefit of Maxopp Investment Ltd. & Others Versus Commissioner of Income Tax [2011 (11) TMI 267 - Delhi High Court] was not available to the AO it has been rightly requested that the matter is to be remitted back to the AO for fresh adjudication in the light of the decision above mentioned Decided in favour of assessee. Expenses on contribution to Cooperative Education Fund disallowed Prior period expenses disallowed - Held that:- Following the decision in Commissioner of Income-tax, New Delhi Versus Shri Ram Pistons & Rings Ltd. [2008 (5) TMI 631 - DELHI HIGH COURT] - merely because an expense relates to a transaction of an earlier year, it does not become a liability payable in the earlier year unless it can be said that the liability was determined and crystallized in the year in question. If such liability has been actually claimed and paid in the later previous years, it cannot be disallowed as deduction merely on the basis that the accounts are maintained on mercantile basis - when there was no change in the rate of tax between the two years, it is immaterial whether the deduction is allowed in one year or the other - the liability of prior period expenses for consumption of raw material has been stated to have arisen in the earlier year, but got crystallized on a later date. The expenditure and the liability have been certified by the tax auditors, and there appears to be no dispute that the appellant had 'actually incurred the expenditure - the claim of assessee has been allowed by the AO for last several years as held in Radhasoami Satsang Versus Commissioner of Income-Tax [1991 (11) TMI 2 - SUPREME Court] - principle of res judicata does not apply to income tax proceedings - each assessment year being an independent unit, what is decided in one year may not apply in the following year, but where fundamental aspect permeating through the different assessment year has been found as a fact one way or other and parties have allowed, that position to be sustained by not challenging the order, it would not be appropriate to allow the position to be changed in a subsequent year thus, Revenue is not permitted to take a different stand in the year under consideration thus, the order of the CIT(A) is upheld Decided against revenue.
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Corporate Laws
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2014 (10) TMI 405
Dismissal of application u/s 34 of the Arbitration and Conciliation Act - Learned Arbitrator held that the clause relating to payment of taxes was deleted by the appellants representative Mr. Ahlawat on 19.1.2007 and since work order was acknowledged, it is binding on the appellan - issue of deviation in price bid on 19.1.2007 - appellant, also challenged the arbitral award on the ground that the same is in conflict with the public policy of Indi - Held that:- Appellant has accepted the liability of payment of excise duty, sales tax, service tax and other taxes and hence it cannot be held that the clause 4.9.1 of the Work Order is inconsistent with the terms and conditions of contract documents. Court, in the case of Oil and Natural Gas Corporation Ltd. (supra), observed that the term public policy of India is required to be interpreted in the context of jurisdiction of the Court where the validity of award is challenged before it becomes final and executable. The Court held that an award can be set aside if it is contrary to fundamental policy of Indian law or the interest of India, or if there is patent illegality. In our view, the said decision will not in any way come into rescue of the appellant. As noticed above, the parties have entered into concluded contract, agreeing terms and conditions of the said contract, which was finally acted upon. In such a case, the parties to the said contract cannot back out and challenge the award on the ground that the same is against the public policy. Even assuming the ground available to the appellant, the award cannot be set aside as because it is not contrary to fundamental policy of Indian law or against the interest of India or on the ground of patent illegality. High Court has rightly came to the conclusion that no ground exists for setting aside the award as contemplated under Section 34 of the Act. - Decided against appellant.
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FEMA
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2014 (10) TMI 404
Contravention of Sections 9 (1) (b), 9 (1) (c) and 9 (1) (d) read with Section 64 (2) of the Foreign Exchange Regulations Act, 1973 - Remission of amount from abroad - Held that:- ED itself is not clear whether the declaration made by Mr. Sri Chawla in Bangkok could be termed as a statement under Section 40 of FERA. It is not shown that the procedure envisaged under FERA was followed while recording the said declaration. In any event, Mr. Sri Chawla only talks of payment being made to two persons who met him on behalf of Mr. Rakesh Jain. The payment is purportedly made for the purchase of land. The sale deeds show that the purchaser was OEPL and the seller was ACPL. The said statement, therefore, does not help in proceeding only against Mr. Rakesh Jain, if no proceedings had been initiated against ACPL, which is the true beneficiary. While the declaration of Mr. Sri Chawla may, more or less, corroborate the statement of Mr. Rakesh Jain as regards the total amount paid, the statement of Mr. Madan does not corroborate either statement. AT has relied on material that was not part of the record of the case. In particular, while the AO correctly notes that the Investigation Officer had not conducted any inquiry to ascertain the fair price and has also taken note of the order of the CIT and on that basis held that the SCN is not supported by proper evidence, the AT appears to have not referred to the proceedings under the Income Tax Act, 1961 at all. The conclusion of the AT that there was payment over and above the sale consideration shown in the sale deed, appears to be based on the AT taking 'judicial notice' of the price of agricultural land in the vicinity of Gurgaon on the basis that it is an 'adjacent area'. No such plea was advanced by any of the parties before the AT. The Appellants are, therefore, justified in their criticism of the impugned order of the AT for travelling well beyond the scope of its revisional jurisdiction and adjudicating upon factual matters for which there was no basis in the record. The Court is unable to sustain the impugned order dated 3rd June 2008 of the AT and restores the AO dated 6th January 2000. The appeals are accordingly allowed, but in the circumstances, with no order as to costs. The amounts deposited by the Appellants shall be refunded to them within a period of eight weeks in accordance with law - Decided in favour of assessee.
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Service Tax
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2014 (10) TMI 419
Excess payment of service tax and its subsequent adjustment - proper procedure - Held that:- Substantial benefit cannot be denied in such cases merely because some aspects of the procedure had not been followed. Indeed, such adjustment has been permitted by the CESTAT in BSNLs own case cited [2009 (6) TMI 58 - CESTAT, NEW DELHI]. In the present case there has been no malafide on the part of the appellant as is evident from the fact that the adjudicating authority refrained from imposing any penalty observing that the appellant acted in a bonafide manner and malafide cannot be attributed to them - Decided in favour of assessee.
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2014 (10) TMI 418
Waiver of pre deposit - activity of safe keeping of gold in its vaults - Banking and other financial services - Held that:- Tribunal in the appellants own case for the earlier period [2013 (12) TMI 45 - CESTAT CHENNAI] observed that prima facie the provisions of Rule 6(2)(iv) of Service Tax (Determination of Value) Rules 2006 will apply not only to monetary loan but also to loan given in the form of gold. The other issue regarding the service tax for the amount of receipt in the form of margin of profit for safekeeping of the gold in the vault, the Tribunal directed the applicant to make a predeposit of about 10% of the tax - Conditional stay granted.
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2014 (10) TMI 417
Penalty u/s 76, 77 - respondent has not filed any declaration under the Amnesty Scheme - Under the circumstances, whether the order of the CESTAT is legal and correct in setting aside the penalties imposed under Section 76, Section 77 of the Act and allowing the benefit under the Amnesty Scheme - Held that:- assessee availed the benefit of Amnesty Scheme and paid duty and interest. Therefore, now the question for consideration is, as the duty and interest was not paid within the due date under the Act, the assessee is liable to pay interest under Sections 76 and 77 of the Act. Clarifying the Amnesty scheme, a circular has been issued by the department where it has been made clear that if the assessee availed the benefit of Amnesty scheme and the tax liability is determined, then he is not liable to pay any penalty. In that view of the matter, we do not see any merit in this appeal. The order passed by the Tribunal is in accordance with law - Decided against Revenue.
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2014 (10) TMI 416
Trading activity of liquor products - Commission Agent service - exemption Notification No. 13/2003-S.T., dated 20-6-2003 - Held that:- appellants have been appreciated for their splendid performance for the year 1995-96 and intimated the revised target fixed for them. The appellants have been informed that new year has just begun and it is time for them to look forward and plan. In the case of Allied Domecq, the letter starts with sentence stating that full reimbursement as promoter margin will be allowed on the Scotch Brands. Indeed the manufacturer of wines has indicated that they would be paying overriding commission of ₹ 15/- per 750 ml. bottle and an additional amount upto ₹ 15/- per 750 ml. bottle will be reimbursed towards discount/promotional give away scheme induced by them - activity of the appellant is not merely of the commission agent but in all the cases include promotional activities and further in some cases, the appellant performed as C & F agent also. Therefore, on the basis of the agreements/orders placed by the appellants, the appellant is not a mere commission agent but is providing Business Auxiliary Service. Since on the basis of facts of the case itself, I do not see any need to interfere with the order passed by the Commissioner (Appeals) - Decided against assessee.
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2014 (10) TMI 415
Waiver of pre deposit - Irregular CENVAT Credit availed - Management Consultancy Services - Held that:- adjudicating authority has committed an error in coming to such a conclusion as the Honble High Court of Gujarat in the case of CCE, Ahmedabad-II v. Cadila Healthcare Ltd. [2013 (1) TMI 304 - GUJARAT HIGH COURT] has held that Cenvat credit of the service tax paid on Management Consultancy Services can be availed in full, if such services are not exclusively used for exempted services or manufacturing of exempted product. It is undisputed in the case in hand that the appellant is a manufacturer of final product, on which duty liability is discharged when cleared for home consumption and exports also made under bond/LUT. If that be so, we find that the appellant has made out a prima facie case for the waiver of the pre-deposit of the amount involved, as it is not in dispute that the service provider has discharged the service tax liability under the category of Management Consultancy Services, there is no proceedings issued against service provider - Stay granted.
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2014 (10) TMI 414
Utilization of 20% excess credit of tax payable - contravention of Rule 6(3)(C) of Cenvat Credit Rules, 2004 - exemption Notification No. 22/2006, dated 31-5-2006 - Cenvat credit taken of service tax paid on commission paid to agencies - whether the credit paid on sales commission is an admissible input for the output service viz. repair and maintenance of the XBIS - Held that:- it cannot be said that maintenance and repairs services rendered by the appellant are part of the conditions of the sale. In my opinion, in this case, the sale and AMC cannot be said to be the result of composite contract. In such circumstances, the stand taken by the original adjudicating authority that the credit paid on sales commission is not admissible has to be upheld. However, at this stage learned C.A. submits that even the credit which was not taken by the appellant at all has also been included for the purpose of demand. He is not able to quantify the exact amount. Therefore, actual amount of credit taken has to be determined by the original adjudicating authority. In the case of sales contract and AMC, the appellant could have entertained a view that credit was admissible. Having regard to the type of item being sold and terms and conditions of the sale, I consider that this is a fit case for considering waiver of penalty under Section 80 of the Finance Act, 1994. Accordingly, in the facts and circumstances, the penalty is set aside. - demand of Cenvat credit on the basis of contravention of Rule 6(3) of Cenvat Credit Rules. The demand of Cenvat credit availed on sale commission has to be worked out on the basis of actual credit availed by the appellant. For this purpose, the matter is remanded to the original adjudicating authority - Decided partly in favour of assesse.
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2014 (10) TMI 413
Cable operator service - value of the taxable service provided by the petitioner - Held that:- Prima facie, the petitioners uncooperative and obstructionist conduct before the assessing authority disentitles the petitioner to any equitable consideration at the present, interlocutory stage. Further, what exactly is the gross consideration received by the petitioner for having provided the taxable Cable Operator service, could only be determined by a critical evaluation of the documentary evidence. In the totality of circumstances, we are therefore inclined to grant waiver of pre-deposit and stay of proceedings for recovery of the assessed liability, on condition that the petitioner remits the entirety of the tax assessed liability plus the interest thereon (however, excluding the component of penalties under Sections 77 and 78), within six weeks from today and report compliance by 14-10-2013. In default of either the deposit or reporting compliance as stipulated, there shall occur a failure of pre-deposit and the appeal would consequently stand rejected for failure of pre-deposit - Partial stay granted.
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2014 (10) TMI 412
Steamer Agent Service - Customers approach the applicant for transportation of their goods by sea to destinations not served by M/s. Yang Ming Ltd - Held that:- In the case of Chakiat Agencies Pvt. Ltd. (2010 (3) TMI 398 - CESTAT, BANGALORE) the appellant therein approached another shipping line and which allowed them to carry their cargo and paid them for the services rendered by appellants, which is not the case, in the present appeal - any evidence on record in this case to show that the services were rendered to a shipping line and payment was received from shipping line. That being the case, prima facie, the demand under the head for steamer agents service is not maintainable - Decided in favour of Assessee.
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Central Excise
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2014 (10) TMI 410
Waiver of pre deposit - Transfer of cases - it was submitted that, if this Court desires a uniform decision to be rendered by the Tribunal, then all cases pending at Hyderabad, Bangalore and adjacent areas be transferred to CESTAT, Bangalore. - Held that:- list of cases that has been given by Mr. Radhakrishnan which are pending at Bangalore be adjudicated along with other cases pending at CESTAT Hyderabad and other places, we think that all the cases should be heard by a Full Bench, presided over by the President CESTAT so that in the ultimate eventuate, uniform order is passed. Assessee directed to make pre deposit - On such deposition being made, the appeals which have been dismissed shall be revived and be transferred to the CESTAT at Bangalore for appropriate adjudication in accordance with law.
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2014 (10) TMI 409
100% EOU - Disallowance of the credit of Education Cess and Secondary & Higher Secondary Cess as per the formula prescribed in Rule 3(7)of CENVAT Credit Rules, 2004 - Power of the commissioner of central excise (Appeals) to remand the matter appellants submits Commissioner does not have power to remand after amendment to Section 35A(3) of Central Excise Act, 1944 and therefore seeks remand the matter to Commissioner to hear the matter afresh and decide the issue in respect of remand - held that:- issue already stands settled as per this Bench decision in the case of Bacha Motors (P) Ltd Vs. CST Ahmedabad [2010 (1) TMI 472 - KARNATAKA HIGH COURT]. On merits of restriction of CENVAT Credit as per Rule 3(7)(a) of CENVAT Credit Rules, 2004, it is observed from the opening sentence of Rule 3(7)(a) that the provision will be applicable to the inputs or capital goods produced or manufactured by a 100% EOU. In the instant case, as borne out from the facts argued the disputed goods were not produced or manufactured by the appellant's 100% EOU. Otherwise also, CENVAT Credit of cesses have been held to be admissible as per the case laws relied upon by the appellant - Decided against Revenue.
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2014 (10) TMI 408
Remission of duty - Goods destroyed in fire - Held that:- Whatever objections were raised by the Commissioner for denial of remission, stands duly met by the appellant. There is no dispute about the fact of fire as also about the fact of destruction of the goods. In fact the appellant has been prompt to call fire brigade immediately, inspite of taking first measured in trying to extinguish fire by way of fire extinguisher and pouring water etc. Further intimation about fire accident and loss of goods stands made by the appellant on the very next day itself. The extent of damage of goods also stands verified by Superintendent. In the wake of above admitted factual position, denial of remission of duty on mere technical ground i.e. being some difference in the occurrence of fire timing and in calling fire brigade are of no relevance. Further, I find that the appellants claim from insurance company stands settled in their favour, by National Consumer Forum. appellants are entitled to remission of duty subject to the condition that the duty element has not been claimed from the insurance company - Decided conditionally in favour of assessee.
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2014 (10) TMI 407
SSI exemption - brand name of others - market leaders name is symbolically impressed on the cover and wrapper of the drug - Held that:- The product of the appellant appears to have no marketability with association of the name of market leader being printed on the wrapper and cover (container) of the medicine cleared by the appellant. Therefore, brand name of the market leader brings out distinction to deny SSI exemption to the appellant. - On perusal of the wrapper of capsule, it is noticed that first three letters of drug resembles with the first three letters of market leader appealing to commons sense that the drug has inherent intimacy with the marketer demonstrating object thereof between the two. The container of the product exhibited to us carries symbol and name of market leader M/s. Infra Drugs and Chemicals which is a Division of a marketer of M/s. Oyster Lab Ltd. - Following decision of Nivaram Pharma Pvt. Ltd. [2004 (10) TMI 18 - HIGH COURT OF JUDICATURE (MADRAS)] - Decided against assessee.
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2014 (10) TMI 406
Denial of refund claim - Commissioner (Appeals) has rejected the refund claim by upholding the order of adjudicating authority on the ground that said deposit cannot be held to be pre-deposit inasmuch as the same was adjusted against sanctioned refund claim - Held that:- When it is the department itself, who adjusted the sanctioned refund claim against the penalty amount, due to be paid by the assessee, it has to be treated as pre-deposit, which are subject to outcome of final order of the appellate authority. Revenue cannot take the benefit of its own actions i.e. first adjusting the outstanding dues against the sanctioned claims and then to say that same were not pre-deposits - As regards the reliance on provisions of Section 11B(ec), it is seen that same was introduced with effect from 11-5-2007, as such, would not be applicable to the refunds arising out of the order dated 17-2-2006. In any case, I find that the same does not apply to the refund of penalty as held by the Tribunal in the case of CCE, Mumbai v. Fibre Foils Ltd. [2000 (7) TMI 437 - CEGAT, MUMBAI] laying down that in any case the limitation provided in terms of Section 11B applies to refund of duty and not refund of penalty - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2014 (10) TMI 411
Additional tax under section 5D of the Kerala General Sales Tax Act, 1963 - Payment of tax @ compounded rate u/s 7 of the Act - Assessment under regular provisions when assessee has choosen compounded levy - Held that:- additional tax can be levied and collected by the Revenue from a dealer who is liable to pay tax under sections 5 and 5A of the KGST Act at a particular rate. In the instant case, the dealer is not being taxed under section 5 or section 5A of the KGST Act but is paying tax at the compounded rate as envisaged in section 7 of the KGST Act and therefore will not be liable to pay additional tax under the amended provision of the KGST Act. The aforesaid proposition is in agreement with several decision of this court, where the court has reached the conclusion that the option of composition of tax is like a bilateral agreement between the parties with an object to dispense with the rigors of regular assessment. The dealer is given the choice to opt for compounded payment of tax and once the option is exercised and the same is accepted by the concerned authority, it is no longer open to the dealer to request for a regular assessment as envisaged under section 5 or 5A of the KGST Act. Therefore, by no stretch of imagination, can it be said that when a dealer is assessed under compounding scheme, one is also being asses sed under the regular procedure of assessment, namely, section 5 or 5A of the KGST Act to have been made liable to pay additional tax as per section 5D of the KGST Act. High Court is not justified in confirming the demand notice issued by the assessing authority for payment of additional tax on the appellant who had already opted for paying tax at the com pounded rates under section 7 of the KGST Act - Decided in favour of assessee.
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Wealth tax
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2014 (10) TMI 403
Determination of share of beneficiaries in a trust for the purpose of wealth tax - Applicability of section 21(4) - Whether the Tribunal is correct in holding that the Trust is a specific one and that the beneficiaries are known and their shares are determinate Held that:- The basic principle requisite condition that has to be satisfied is that the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from the court of wards, administrator-general, official trustee, receiver, manager, or other person aforesaid as if the persons on whose behalf or for whose benefit the assets are held were an individual who is a citizen of India and resident in India for the purpose of this Act - if Section 21(4) of the Act to be applied, the Wealth Tax can be levied and assessed on the Trust - Prince Moazam Jah Bahadur was the beneficiary of the Trust with remainder interest conferred on Prince Shahmat Ali Khan - The protective assessments were made u/s 21(4) of the Act on the ground that there was a dispute regarding the beneficiaries raised by the assessee in the assessment of Prince Shahmat Ali Khan - The Tribunal rightly came to the conclusion that Prince Shahmat Ali Khan is the sole beneficiary of the remainder interest of the Trust and there being no other rightful claimants under the Trust Deed on the relevant date had found Section 21(4) of the Act is inapplicable and the Trust is required to be assessed u/s 21 (1) of the Act - the Tribunal found that Prince Shahmat Ali Khan alone has remainder interest, definite and determinable interest in the assessees Trust Relying upon Commissioner Of Income-Tax, Bombay Versus Scindia Steam Navigation [1961 (4) TMI 6 - SUPREME Court] the order of the Tribunal is upheld Decided against revenue.
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