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Showing 41 to 60 of 1946 Records
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2014 (1) TMI 1909 - ITAT MUMBAI
Computation of capital gain - determining Fair Market Value (FMV) of land as on 1st April, 1981 - AO wanted that FVM should be taken as valued by the DVO - As argued that the FMV returned by the assessee was on the basis of the Regd. Valuers' certificate and therefore it was fair and reasonable, that the land should be treated as a developed industrial land and not as an undeveloped industrial land, that the plot of land fell in two different zones that the average of the rate for each zone should be adopted - HELD THAT:- We are aware that IVDRB and Ready Recknor 2000 cannot be applied as it is for valuing FMV of a property as on 01.04.1981, but after considering relevant facts same could be used as starting point. We also agree with the FAA that there could not be very high variation in the value of plot of land for the period 1959 to 1981 and 1981 to 2001.
In absence of any other more reliable method his reliance on annual rate of appreciation method. It is known fact that price of land do not appreciate by uniform percentage every year, but for a period of more than forty years, some method has to adopted and method adopted by him is one of the reasonable method. It is also a fact that after the winds economic liberalisation swept the country in year 1991 price of land in Mumbai appreciated considerably than the earlier period-especially when internal emergency was declared in the country i.e. 1975-77.
We find that FAA has also used the reference books as one of the sources for arriving at the FMV. In our opinion method adopted by him is a better 'guesswork' than the guesswork done by the valuer. His estimation is also very near to the valuation made by the DVO. We have considered the case of S.Krishnan [1997 (4) TMI 22 - BOMBAY HIGH COURT] cited by assessee. We find that decision delivered by the Hon'ble jurisdictional High Court dealt with acquisition of property. Therefore same is not of any help for deciding the issue before us especially in light of the principle mentioned at paragraph 4 of our order.
Considering all we are of the opinion that FMV adopted by the FAA is a more reasonable and better proposition as compared to the FMV quoted by the valuer. Therefore, confirming his order, we decide the effective ground of appeal against the assessee-company.
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2014 (1) TMI 1908 - ITAT CHENNAI
Revision u/s 263 - adjustment of unabsorbed depreciation against short term capital gains - interpretation of a taxing statute - whether AO had rightly allowed benefit of setting off of unabsorbed depreciation pertaining to assessment year 1996-97 in the impugned assessment year i.e 2007- 08 against short term capital gains - HELD THAT:- We make it clear that we are dealing with a case of interpretation of a taxing statute. There is no quarrel between the parties about facts of the case. Rather the issue between them is about interpretation of section 32(2) as it stood before and after 1.4.1997 upto amendment introduced by the Finance Act, 2001. That being the case, the necessary interpretation of the relevant provision made by the ‘tribunal’, high court or for that matter, hon'ble apex court would govern the question raised hereinabove. Therefore, we accept the arguments of the assessee and hold that the Assessing Officer had rightly found it entitled for set off of the impugned unabsorbed depreciation.
In view of contradictory views of the ‘tribunal’ and high court(supra), since we have already held that the impugned brought forward unabsorbed depreciation pertaining to assessment year 1996-97 is entitled to be set off in the impugned assessment year as well, it emerges that there is only one interpretation possible which favours the assessee. So, the case law of Malabar Industrial Co. Ltd. (supra) goes against case of the Revenue.
Jurisdiction u/s 263 cannot be stretched beyond reasons in show cause notice. We reiterate that there are only two reasons in the show cause notice i.e impugned depreciation of assessment year 1996-97 could not have been set off in assessment year 2007-08 and other one is that the depreciation had been wrongly allowed to be set off by the Assessing Officer against short term capital gains - In view of the case law of General Motors India (P) Ltd. (supra) [2012 (8) TMI 714 - GUJARAT HIGH COURT], both reasons are no more sustainable. Similarly, we also see n
No reason to agree with the arguments of the Revenue that since the CIT has only directed the Assessing Officer to reframe the assessment after examining the issue afresh need not be disturbed in the instant appeal as the assessee would be at liberty to cite the aforesaid decisions. In our considered opinion, once the law settled by the hon'ble high court favours the assessee, there is no justification in reviving yet another innings before the Assessing Officer in consequential proceeding - we draw support from the case law of Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] wherein the hon'ble apex court observes that position of law in 263 proceedings has to be seen when the CIT passes order. - Decided in favour of assessee.
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2014 (1) TMI 1907 - RAJASTHAN HIGH COURT
Dishonor of Cheque - wrong cheque number has been narrated in the complaint - right to make amendments in typographical errors in the details of bounced cheque - HELD THAT:- There is no dispute about the fact that wrong cheque number has been narrated in the complaint and affidavit in support of the same also contains same wrong cheque number but at the same time it is also true that impugned cheque, return memo from bank and notice which were presented along the complaint bear the cheque number which the present petitioner now wants to correct and the court below while taking cognizance should be vigilant that complaint and affidavit should contain the same cheque number which has been placed on record.
In the present case, when complainant has been cross examined, the mistake came to the notice of complainant and application for the rectification has been moved and no person could be penalized for his bonafide mistake - Application allowed.
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2014 (1) TMI 1906 - ITAT AMRITSAR
Exemption u/s 11 - registration under Section 12AA - Proof of charitable activity u/s 2(15) - HELD THAT:- Merely filing an application for registration u/s 12AA and showing in writing that the aims and objects of the assessee trust are charitable, are not sufficient for granting registration to the society u/s 12AA of the Act until and unless the authority, who grants the registration, satisfies himself that the activities of the trust or institution are genuine or not. To satisfy himself he can make such inquiry as he deem necessary.
There is no bar under any provision of law that the authority cannot make an inquiry about the genuineness of the activities of the society trust or institution. Like the case on hand, in which the assessee-society remain non-cooperative and has not filed any documentary evidence, as required by learned CIT. The documentary evidence filed by the learned counsel for the assessee along with the case-laws are not helpful to the assessee because the case-laws relied upon by him are not identical to the facts of the present case. - Decided against assessee.
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2014 (1) TMI 1905 - KERALA HIGH COURT
Effects of attachments effected subsequent to the creation of equitable mortgage - Sale of mortgaged property - preponderance of judicial opinion - can attachment be effaced after the property is purchased by another in sale conducted by the Recovery Officer of the Debts Recovery Tribunal? - HELD THAT:- The preponderance of judicial opinion leads to the irresistible conclusion that the sale of the mortgaged property in favour of the petitioner under Ext. P5 sale certificate under the Act is free of all encumbrances. The attachments effected subsequent to the mortgage created in favour of the bank do not affect the title and ownership of the petitioner over the subject property. Such attachments have no impact on the sale conducted under the Act and the same ceases to have any effect or fall to the ground the moment the sale is confirmed in favour of the petitioner.
The Sub Registrar and the Village Officer are directed to efface the attachments effected subsequent to the mortgage from the relevant records. Otherwise those attachments would remain as a permanent taboo prejudicially affecting the marketability and title to the property even though they ceased to have any legal efficacy.
Petition allowed.
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2014 (1) TMI 1904 - ITAT JAIPUR
Addition u/s 69B - fair market value of a property - unexplained investment in connection with purchase of land at Hanumanpura, Distt. Jaipur - Addition u/s 40A(3) - Payment made over and above disclosed payments - HELD THAT:- We have come to a clear cut finding that the assessee is only a broker and not the purchaser of the land in question. The agreement found between MTPDPL to whom the land was to be supplied by the company of the assessee and therefore, this evidence strongly helps the case of the assessee. From these agreements, it is clearly established that the assessee was acting as a broker for the company of one Shri R.K. Tripurari. Ultimately the part of the land purchased by the company in the name of Shri Prakash Chand Vasitha has been sold to Shri Pappu Lal (for the assessment year 2008-09 and 2009-10.Shri Pappu Lal is a person of Shri R.K. Tripurari whose company is MTPDPL.
As a broker the assessee can be charged only on brokerage earned on the supply of land. The money got from Shri R.K.Tripurari have to be transferred to Shri Surender Singh Rajawat in connection with purchase of land. The source of investment is also from Shri R.K.Tripurari. At best, the assessee can be held as a mediator holding the land temporarily in the name of Shri Prakash Chand Vasitha and thereafter transfer in the name of Shri Pappu Lal, a nominee of Shri R.K.Tripurari - the adoption of the value of consideration at a flat rate of ₹ 5.45 lacs per bigha on the entire purchase of 53 bigha 16 biswa land is not justified.
When such lands are located at different places and has been purchased from different persons on different dates then the land will be of different nomenclature, different nature, different type and different quality. CIT(A) has also committed the error in confirming the impugned addition.
The documents seized from Shri Surender Singh Rajawat cannot be utilized against this assessee as no corroborative evidence / papers were found or seized during the search conducted in this case of the assessee - AO has not brought on record any statement of Shri Surender Singh Rajawat for explaining the relevant position on the issue - we are satisfied that entire addition in question deserves to be deleted - provision of Section 40A(3) of the Act are not applicable to payments allegedly made over and above disclosed payments. Accordingly, Ground No. 2 and 3 of the assessee appeal are allowed.
Addition u/s 69B of the Act on account of undisclosed/unexplained investment in agricultural land at Sarsani (Distt. Nagaur) - HELD THAT:- Sale deed squarely shows that quality of land is different. There is a difference of quality in fertility of Doyam and Baran land. Under these circumstances, non-production of Shri Khiv Singh for examination does not attract the presumption of Section 132(4A) of the Act. The AO has power to summon him u/s 131 of the Act. The AO has not even examined the Notary Public Shri Kedar Nath Gupta. Further when we have already held that provision of Section 69B of the Act is not applicable to the facts of this case. AR has correctly relied upon the decision in the case of case of CIT vs. Smt. K.C. Agnes [2003 (1) TMI 48 - KERALA HIGH COURT] in which it has been held that in case sale deed shows lower sale consideration than the consideration mentioned in the agreement to sell and both the documents were found during search, sale deed may be accepted as actual price for sale. Accordingly, we confirm the impugned findings of the ld. CIT(A) and we find no infirmity in his order. Thus the Ground No. 1 of the Revenue is dismissed.
Addition on account of treating sale of agricultural land as adventure in the nature of trade - HELD THAT:- AO has changed the consideration of sale by adopting the cost of land @ ₹ 5.45 lacs per bigha . As we have discussed in assessment year 2007-08 that this impugned aditon cannot be survived in this year also. Accordingly, with similar reasonings, we order to delete the impugned addition and allow the Ground No. 2 of this appeal. We also hold that the land transaction in question cannot be treated as adventure in the nature of trade.
On the basis of the statement of the assessee recorded on 29-01-2010 u/s 132(4) of the Act, the AO has concluded by relying on a part of the statement. The assessee has categorically stated in this statement that he earned only ₹ 30.00 lacs in the entire transaction. The law is settled that no addition can be made by relying on a statement on selective basis. The statement has to be read in its entirety. In our considered opinion, the AO has wrongly held that this transaction is an adventure in the nature of trade only because this purchase and sale was within short interval.
The assessee has not been doing any trade or business as we have discussed in assessment year 2007-08 except in these solitary transaction of purchase and sale of land. There is no history of the assessee for carrying out trading activity in plots, land or agricultural land. The assessee has been held only as a broker only. Accordingly, this appeal of the assessee is allowed on merits.
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2014 (1) TMI 1903 - GUJARAT HIGH COURT
Seeking leave to appeal - Section 378 of the Code of Criminal Procedure - HELD THAT:- In view of order refusing leave to appeal, as the findings and conclusion arrived at by the Court below does not call for any interference, the present Criminal Appeal deserves to be dismissed in light of the provisions of Section 378 of the Code of Criminal Procedure.
The present Criminal Appeal stands dismissed.
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2014 (1) TMI 1902 - ITAT CHENNAI
Exemption u/s 11 - cancelling the registration granted to the assessee u/s 12AA invoking the provisions of the sec.12AA(3) - HELD THAT:- The matter has to be remitted back to the file of Ld. DIT(E) who shall examine the conduct of the assessee with respect to its activities performed during the relevant previous year and if they fall beyond the scope of Sec.2(15) and its objects, in this case, objects being ”relief to the poor”, Ld. DIT(E) may pass appropriate order as per law by canceling the registration invoking the section 12AA(3).
DIT(E) shall also take note of ‘Report of the Subcommittee of the Central Board of Directors of Reserve Bank of India’ issued during the year January, 2011and the decisions in the case of Sinhagad Technical Education Society [2012 (3) TMI 262 - BOMBAY HIGH COURT] and in the case of CIT V. National Institute of Aeronautical Engineering Educational Society [2009 (7) TMI 94 - UTTARAKHAND HIGH COURT] in order to assess whether the activity conducted by the trust falls under the first limb of sec.2(15) of the Act or activities such as advancement of any other object of general public utility or any other activity which falls outside the scope of the sec.2(15) of the Act.
The assessee company is engaged in any activity predominantly beyond the scope of Sec.2(15) of the Act and intents to grab the benefits of the relevant provisions of the Act under the garb of charity as a colorable device, Ld. DIT(E) shall be at liberty to invoke the provisions of Sec.12AA(3) of the Act. Appeals of assessee are allowed for statistical purposes.
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2014 (1) TMI 1901 - CESTAT BANGALORE
CENVAT Credit - pet coke sold to customer - denial on the ground that credit could not have been taken without receiving the inputs in the factory - interest - penalty - HELD THAT:- In this case, admittedly the inputs were not received in the factory but credit was taken. Therefore, credit was not admissible and should be reversed. However when invoices were raised subsequently, the appellants have reversed the credit and therefore seeking reversal again would mean payment of duty twice on the same goods. The law does not require reversal of the Cenvat credit taken twice by an assessee even if there was a procedural omission on their part. That being the position, the appellant has made out a prima facie case for waiver of the Cenvat Credit amount demanded from them
Liability of Interest - HELD THAT:- Since the reversal of the credit made at the time of clearance which is in reality not a clearance actually amounts to reversal of credit, interest liability automatically arose and has to be discharged.
Penalty - HELD THAT:- The law also does not permit raising of invoice on inputs which have not been received in the factory at all. Appellants have done so. Thus the appellants have neither done justice to their own system which they have adopted for accounting nor have they followed the law which is required to be followed in such cases. That being the position, in my opinion, penalty is required to be imposed even though penalty under Section 11AC could not be imposed.
The waiver of pre-deposit of Cenvat credit demanded and penalty imposed is granted and stay against recovery is ordered during the pendency of appeal.
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2014 (1) TMI 1900 - ITAT PUNE
Depreciation u/s 32(1)(ii) on the infrastructure construction cost capitalized under the head ‘Right to collect toll’ - on the expenditure incurred on cost of construction of such infrastructure facility, assessee claimed depreciation @ 25% - HELD THAT:- It was a common point between the parties that the decision of the Tribunal in the assessee’s own case for assessment year 2004-05 as well as assessment year 2007-08 are in favour of the assessee, which continue to hold the field and have not been altered by any higher authority. As a result, Ground of Appeal Nos. 1 and 2 raised by the Revenue are dismissed in view of the aforesaid precedent.
Disallowance of employees contribution to EPF u/s 36(i)(va) r.w.s. 2(24)(x) - AO disallowed the impugned amount on the ground that such employee’s contribution towards PF was paid beyond the due dates prescribed under the PF Regulations - HELD THAT:- As the said amounts were duly deposited before the due date of furnishing return of income prescribed u/s 139(1) of the Act, the CIT(A) deleted the disallowance following the decision of the Tribunal in the assessee’s own case for assessment year 2006-07 [2011 (9) TMI 1019 - ITAT PUNE]. In view of the aforesaid precedent, the action of the CIT(A) is hereby affirmed and the Ground of Appeal No.3 raised by the Revenue is dismissed.
Disallowance of expenses on telephone, travel and vehicles on an ad-hoc basis on the plea of personal element - HELD THAT:- We find no reason to interfere with the order of the CIT(A) inasmuch as disallowance was made by the Assessing Officer merely on the basis of surmises and conjectures. In the absence of any specific evidence of personal or non-business use, ad-hoc disallowances are not maintainable. Thus, the order of the CIT(A) is hereby affirmed and Revenue fails on the Ground of Appeal No. 4 also.
Additional Ground of Appeal admitted by the CIT(A) as the claim was not made in the return of income filed by the assessee - Deduction u/s 35DD denied as claim not made in the return of income - such a claim was not made in the return of income but was preferred by the assessee in the course of assessment proceedings by way of a written communication - HELD THAT:- In our considered opinion, the action of the CIT(A) in admitting the aforesaid Ground of Appeal cannot be faulted following the judgment of the Hon’ble Bombay High Court in the case of Pruthvi Brokers and Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT]. As per the Hon’ble Bombay High Court, an assessee is entitled to raise before the appellate authorities additional grounds in terms of additional claims not made in the return filed by it. In holding so, the Hon’ble Bombay High Court had duly considered the judgement of the Hon’ble Supreme Court in the case of Goetze India Ltd. [2006 (3) TMI 75 - SUPREME COURT] which has been relied by the Revenue before us, and therefore, we find no error in the part of the CIT(A) in admitting the impugned Additional Ground of Appeal based on the parity of reasoning laid down by the Hon’ble High Court in the case of Pruthvi Brokers and Shareholders Pvt. Ltd. (supra). Accordingly, Ground of Appeal Nos. 5 and 6 are dismissed.
CIT(A) allowing the assessee’s claim for deduction u/s 35DD - said claim relates to 1/5 expenses of stamp duty payable on amalgamation which has been claimed as deductible in terms of section 35DD - CIT(A) allowed the claim of the assessee on the basis of the decision of the Pune Bench of the Tribunal in the assessee’s own case for assessment year 2006-07 [2011 (9) TMI 1019 - ITAT PUNE] - HELD THAT:- The precedent relied upon by the CIT(A) continues to hold the field as none of the parties have asserted that the same has been altered by any higher authority. Therefore, the order of the CIT(A), which is based on the decision of the Tribunal in the assessee’s own case for assessment year 2006-07 (supra), is hereby affirmed and the Revenue has to fail on this Ground.
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2014 (1) TMI 1899 - ITAT HYDERABAD
Capital gain on sale of property at Bangalore - Correct assessment year - contention that same item of income cannot be taxed in two different assessment years - HELD THAT:- On perusal of the order of the CIT(A), the CIT(A) seems to have accepted that out of ₹ 24.53 crores received by the assessee as a total consideration of Block-B1, ₹ 6.03 crores did not accrue during that year. Therefore, to that extent, the ground does not survive. However, whether the Order of the CIT(A) was accepted by the Revenue or not is not known to us. Therefore, A.O. is directed to consider exclusion of the amount brought to tax, to the extent included in this year in assessee computation, in case the same was assessed in A.Y. 2005-2006. With this direction, the ground is considered as allowed for statistical purposes.
Disallowance u/s 14A - Major disallowance is on the issue of expenditure relatable to Floriculture business which was claimed as exempt - HELD THAT:- We are of the opinion that the entire disallowance made by the A.O. cannot be sustained. However, keeping in view that assessee has earned substantial amount of dividend on investments and also keeping various Coordinate Bench decisions on similar issue in the relevant A.Y., we are of the opinion that 2% of the amount earned as dividends can be considered as expenditure related to exempt income. Accordingly, A.O. is directed to restrict the disallowance to 2% of the dividend income earned during the year. With this direction, grounds No.4 and 5 are partly allowed.
Disallowance of royalty amount paid by the assessee to Gulf Oil International (Maritius) Inc. - HELD THAT:- For royalty on domestic sales is concerned, as rightly pointed out by the learned Counsel, the DRP in later two years has examined the internal CUP and allowed the royalty on the domestic sales. Keeping in view the factual position as examined by the DRP and also the Order of the TPO for A.Y. 2009-2010, we are of the opinion that there is no need to disallow the royalty payment on domestic sales. Therefore, the claim is allowable based on the above facts.
Coming to the export sales assessee relied on the various factors for allowing the entire claim. However, considering the fact that same issue was also examined by the DRP in A.Ys. 2007-2008 and 2008-2009 which the assessee/appellant seems to have accepted, we are of the opinion that the royalty on export sales can be restricted to 1% as was done in later years and accordingly, the royalty is restricted to an amount of ₹ 18,05,788/- as per the working furnisheded by assessee . Therefore, out of the amount of ₹ 62,29,972/- Assessing Officer is directed to allow royalty at ₹ 18,05,788/- and balance amount of ₹ 44,24,184/- stands disallowed.
This is not a disallowance under section 37(1) but an adjustment made under Transfer Pricing Provisions where arms length price is to be determined, whether the agreement is approved or not. Keeping that in mind, we are of the opinion that the decision relied on by the learned Counsel, does not apply to the facts of the case. As decided earlier, the restriction on the royalty amount is limited to ₹ 44,24,184/-.
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2014 (1) TMI 1898 - ITAT JAIPUR
Exemption u/s 10 (23BBA) - assessee i.e. Shree Bade Mathureshji Temple Board, Kota is having perpetual succession and is constituted u/s 92 of the C.P.C. 1908, by the District Judge, Kota for the better management and looking after day to day functioning of Shree Bade Mathureshji Temple, Kota - HELD THAT:- As per the provisions of Section 10(23BBA) any income of any body or authority established, constituted or appointed by or under any Central/State or Provincial Act, which provides for the administration of any public religious or charitable trust or endowments shall not be included in computing the total income.
In the present case, Shree Bade Mathureshji Temple Board, Kota has been constituted u/s 92 of the C.P.C. vide order dated 07/5/1974 in Civil Execution Case No. 32 of 1973 by the District Judge, Kota. The copy of the said order is placed at page No. 26 to 143 of the assessee’s paper book. The said order has been upheld by the Hon'ble jurisdictional High Court vide order dated 1st September, 1986. Copy of which is placed at pages No. 2 to 25 of the assessee’s paper book. Therefore, it is crystal clear that the assessee Board, is constituted under the Central Act i.e. Section 92 of the C.P.C., 1908, therefore, the provisions of Section 10(23BBA) of the Act are applicable and the income of the assessee from any source is exempt.
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2014 (1) TMI 1897 - SUPREME COURT
Benefit of re-designated pay/post and the pay-scale of a higher post - whether an order would also mean that the applicant could claim post revision and benefits of the higher post without being considered for the said post? - HELD THAT:- Contempt jurisdiction conferred onto the law Courts power to punish an offender for his wilful disobedience/contumacious conduct or obstruction to the majesty of law, for the reason that respect and authority commanded by the Courts of law are the greatest guarantee to an ordinary citizens that his rights shall be protected and the entire democratic fabric of the society will crumble down if the respect of the judiciary is undermined. Undoubtedly, the contempt jurisdiction is a powerful weapon in the hands of the Courts of law but that by itself operates as a string of caution and unless, thus, otherwise satisfied beyond reasonable doubt, it would neither fair nor reasonable for the law Courts to exercise jurisdiction under the Act. The proceedings are quasi-criminal in nature, and therefore, standard of proof required in these proceedings is beyond all reasonable doubt.
It is well settled principle of law that if two interpretations are possible, and if the action is not contumacious, a contempt proceeding would not be maintainable. The effect and purport of the order is to be taken into consideration and the same must be read in its entirety. Therefore, the element of willingness is an indispensable requirement to bring home the charge within the meaning of the Act.
No case is made out to initiate the contempt proceedings against the Respondents - Petition dismissed.
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2014 (1) TMI 1896 - ITAT CHENNAI
Reopening of assessment u/s 147 - failure on the assessee’s part to disclose truly all particulars in the shape of legal and professional expenses - Reopening beyond a period of four years from the end of relevant assessment year - HELD THAT:- No paper book has been filed by the Revenue controverting the aforesaid finding of fact. Similarly, there is one thing more which we take notice of. The impugned assessment year is 2004-05. The reopening notice in the present case has been issued on 28.3.2011 - it is beyond a period of four years from the end of relevant assessment year i.e on 31.3.2005. A perusal of the first proviso to section 148 of the Act makes it clear that in case the reopening is made beyond four years from the end of the relevant assessment year, it can be only resorted to in case of failure on assessee’s part in disclosing fully and truly all material facts necessary for assessment.
Undisputedly, this failure is nowhere pinpointed in the assessment order. In these circumstances, we observe that not only the impugned reopening is mere change of opinion on the part of the Assessing Officer qua legal and professional expenses, but also it is hit by first proviso to section 148 as there is no failure on the assessee’s part in disclosing truly and fully all necessary particulars. Hence, on both these counts, we hold the reopening as not sustainable in the eyes of law - Revenue’s appeal is dismissed.
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2014 (1) TMI 1895 - ITAT DELHI
Capital gains from the sale of flats - Application of section 50C - property in this case is a lease hold property and has not been registered - HELD THAT:- The extant provision of section 50C were applicable to those properties which are registered. The properties which are not registered do not come under the ambit of section 50C. This position was changed by insertion of Finance Act, 2009 w.e.f. 1.10.2009 by which the word assessable was inserted in those cases where property has not been registered. Thus we find that provisions of section 50C are not applicable in the impugned assessment year. Furthermore, in the case of lease hold property which has not been registered, section 50C cannot be invoked. Furthermore, we note that Ld. CIT(A) has given a finding that the prevailing circle rate on the date of sale was ₹ 3000/- per sqft. Against this the assessee has adopted ₹ 3500 per sqft. Thus, AO has wrongly taken circle rate @ ₹ 4000/- per sqft. Which was applicable from the subsequent date.
Accordingly, in the background of the aforesaid discussions and precedents, we do not find any infirmity in the order of Ld. CIT(A), hence, we uphold the same.
Disallowance of maintenance charges receipt - CIT(A) noted that these maintenance receipts have been treated as business income from Asstt. Year 2001-02 as approved by ITAT - HELD THAT:- Assessee’s income from business in relationship to the maintenance and other service receipts as detailed above has not been disputed by the Revenue in earlier periods. The contracts are same which were there for earlier assessment years as well as for the impugned assessment year. In such circumstances, in our considered opinion, there is no change in the facts and law and hence, departure from earlier practice by the Revenue is not sustainable. This proposition is supported by the decision of Hon’ble Jurisdictional High Court in the case of CIT vs. Dalmia Promoters & Developers P Ltd. [2006 (1) TMI 57 - DELHI HIGH COURT]. In this case it was expounded that for rejecting the view taken for earlier years, there must be change in facts, situation or law.
We further place reliance upon the decision in the case of CIT vs. Excel Industries Ltd.[2013 (10) TMI 324 - SUPREME COURT] held that when the Department has accepted the verdict of the Tribunal in some years, it cannot be allowed to challenge the verdict in other years. Thus, in our considered opinion in the background of the aforesaid discussion and precedents, there is no infirmity in the order of the Ld. CIT(A). Accordingly, we uphold the same. Appeals filed by the Revenue stand dismissed.
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2014 (1) TMI 1894 - ITAT KOLKATA
Revision u/s 263 passed on a non-existent company - scheme of amalagamtion initiated - assessee stated that no company in the name of Aarcee Holding Pvt. Ltd. was in existence as on the date of show cause notice dated 23.12.2010 initiating revision proceeding u/s. 263 - HELD THAT:- Assessee before us filed copy of the decision of Hon’ble Delhi High Court in the case of Spice Infotainment Ltd. Vs. CIT [2011 (8) TMI 544 - DELHI HIGH COURT] wherein it is held that assessment in the name of the company which has been amalgamated with another company and stands dissolved is null and void; assessment framed in the name of a non-existing entity is a jurisdictional defect and not merely a procedural irregularity of the nature which can be cured by invoking the provisions of s. 292B.
In the present case also the amalgamation took place vide the order of Hon’ble Calcutta High Court dated 17.04.2008 w.e.f. 01.04.2007 and this Company Aarcee Holding Pvt. Ltd. has amalgamated with Padmavati Properties & Trust Ltd. and no revision order can be passed on a non-existent company. Hence, the very premise of the revenue that revision order passed on a non-existent company does not stand. Moreover, the issue is also covered by the decision of Hon’ble Calcutta High Court in the case of I. K. Agencies P. Ltd. Vs. CIT [2011 (3) TMI 690 - CALCUTTA HIGH COURT]. As the issue is squarely covered, we quash the revision proceeding, which is null and void and the appeal of assessee is allowed.
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2014 (1) TMI 1893 - NATIONAL GREEN TRIBUNAL, NEW DELHI
Jurisdiction of requiring industrial units to furnish bank guarantee - invocation of the bank guarantee by the State Board on the alleged breach - HELD THAT:- Keeping in view the legislative scheme and the object of the Air Act, it is evident that the Board is not incapacitated to issue a direction which may not be prohibitory or of closure in substance and application, but may be regulatory with an object to ensure that anti-pollution devices and anti-pollution measures are adopted to prevent and control pollution. For this purpose, the Board may require an industry to furnish a bank guarantee which would serve dual purposes. On the one hand, it would provide incentive to an industry to install anti-pollution devices so as to ensure non-encashment of the bank guarantee, while on the other, in the event of default, resulting in pollution, the Board would be able to spend that money for remedial purposes to control environmental degradation or damage that has taken place as a result of such default. Both these purposes would squarely fall within the framework of law and the powers and functions of the Board. The purpose of requiring a Unit to furnish a bank guarantee is not penal per se. It is compensatory i.e. an amount which would be required to be spent upon rehabilitation and restoration of the environment due to the damage caused to it by default on the part of the Unit - The intention of the Legislature to ensure implementation of these facets is further elucidated by the language of Section 31A of the Air Act where the Board can issue directions as afore-mentioned in exercise of its powers and performance of its functions under the Act. Thus, there has to be a direct nexus between the directions contemplated under Section 31A of the Air Act and the powers and functions of the Board as contemplated under Sections 16, 17 and other relevant provisions of the Air Act. Once these Sections are read co-jointly, then it becomes clear that a direction which would ensure compliance of the conditions of the consent order and further the cause of prevention and control of pollution would be a direction permissible under law.
The Board is a statutorily constituted expert body and is, therefore, competent to examine and even anticipate the likely damage to environment by such disobedience and thus to remedy the wrong in a timely manner. It has been stated, time and again, that the Board has not been constituted to perform empty formalities. In fact, it has to prevent, control and abate environmental pollution and for achieving the purposes and carrying out the purposes of the Act effectively, it frames guidelines for taking effective measures - thus, asking for the bank guarantee, as an interim measure, during which the industrial unit is called upon to comply with the conditions of the consent order, does not fall outside the ambit of statutory powers vested in the Board.
Condition requiring a unit to furnish a Bank Guarantee - is it penal? - HELD THAT:- It is clear that a fine but unambiguous distinction between penalty and compensation has been accepted by courts and tribunals. Distinct and definite consequences flow from these actions. Their distinctions are procedural as well as consequential. A penal action cannot be permitted to take in its orbit, by process of overlapping, an action which is patently compensatory in nature. Striking a balance between environmental interest and sustainable development would require the expert bodies like the Boards to follow a path which would permit industrial growth and still protect the environment without allowing any irretrievable injury to the environment. In view of that, it will certainly be permissible in law for an expert body to provide an opportunity to a unit to attain the prescribed standards of emission or effluent discharge before it is directed to be closed in exercise of the powers vested in the Board. Such approach would be in consonance with the scheme of the Air Act. More so, it will make a provision also to ensure restoration or rectification of the environmental damage done by the unit at its cost in the case of default - In the case in hand, the regulatory regime under the Air Act permits taking of harsher steps in the nature of closure and prohibitory directions. Therefore, permitting a unit to operate for a limited period upon furnishing a Bank Guarantee for compliance of the conditions/directions imposed in the consent order, being an order of lesser gravity and consequences, would be permissible. It is in the interest of sustainable development and is even beneficial to the industry itself. The Bank Guarantee asked for is for compliance, compensation for environmental restoration, if required, and is not punitive in nature.
In the present case, the general Resolution governing industries, particularly the defaulting industries, was passed by the Board on 18th August, 2003, as has been noticed earlier, intended to invoke the 'polluter pays' principle and required the industry to furnish a bank guarantee for compliance with the terms and conditions of the consent order and installation of pollution control equipment clearly stipulating faithful utilisation of the amount for pollution control abatement scheme/programmes of the said industry - the bank guarantee asked for was not penal in nature but was clearly compensatory in its character and ensured prevention and control of pollution and restoration of environment. It is founded on the precautionary principle and is not beyond the statutory provisions of the Act concerned.
Equity, waiver and its effect - HELD THAT:- The industry has been a persistent defaulter and polluter. The parameters, particularly relating to air and ambient air quality, were found to be violative of the prescribed standards. The Board provided opportunity after opportunity and extended the time in favour of the industry to completely carry out its directions and provide antipollution devices. One of the letters afore noticed written by the industry to the Board further clearly showed that the former never disputed the allegations of the latter. For various reasons, the industry always prayed for extension of time which on most of the occasions was allowed by the Board in the interest of the industry and development. The bank guarantee was furnished by the industry without demur or protest. In fact, the language of the undertaking afore-reproduced clearly shows that the entire act of the industry was voluntary and it accepted the conditions without any protest either on facts or on law. It not only accepted such conditions but even implemented the directions by furnishing the bank guarantee and the undertaking - Estoppel is a rule of equity and evidence. It bars or prevents one from asserting the claim or right that contradicts what one has said or done before or what has been legally established as true. Similarly, 'waiver' is actual intent to abandon or surrender his right by a person i.e. a right or an objection may be available to a person in law but the person consciously not only waives that objection or right but in fact, acts to the contrary. Like in the present case, if the respondents actually believed that they could raise an objection with regard to the condition to furnishing of the Bank Guarantee, they ought to have raised it right at the very initial stage but they not only failed to raise such objection albeit acted to the contrary by submitting a Bank Guarantee without demur and protest.
Whether or not invocation of Bank Guarantee is proper? - HELD THAT:- The data furnished in the inspection reports of the Board leaves no doubt in our minds that the bank guarantee had been invoked when on repeated inspections, it was found that the industry is a persistent defaulter and thus, was causing air pollution, particularly in relation to ambient air quality and after issuing show cause notices to the industry from time to time. The Board, thus, was fully justified in invoking the bank guarantee. Ancillary but the most significant question that now arises for consideration is whether the bank guarantee had been invoked as per its terms. Clause 2 of the bank guarantee which we have reproduced above states that the industry had three obligations - (a) to operate and install the existing and the requisite pollution control system and/or other pollution control measures effectively within the stipulated time, and (b) this was to be to the satisfaction of the Board in terms of its letter dated 12th June, 2009, and (c) the industry was to meet the standards prescribed by the Board.
The primary and paramount consideration was the satisfaction of the Board in relation to the upkeep and continued maintenance of the anti-pollution devices. Even as per the letter of the Board dated 7th May, 2008, the industry was to comply with the conditions of the letter as well as the other conditions which may be imposed by the Board from time to time, in default of which, the bank guarantee was to be invoked. In terms of this letter, the industry was required to take all steps for continuous and satisfactory environmental compliance, which the industry on its own showing had failed. To read mens rea or the term 'deliberate' into the bank guarantee would not be permissible. Mens rea, as understood in the criminal jurisprudence, strictly speaking, would hardly have any application to the environmental jurisprudence. It is governed by principles such as Polluter Pays Principle and doctrine of absolute liability. The word 'deliberate' used in the letter dated 7th May, 2008 has to be given its due and normal meaning in relation to the facts and circumstances of the case taken cumulatively and not in abstract. Various letters of the industry clearly show that for a long period of more than three years they were not able to maintain the environmental standards and were not able to install the required devices. Even in January 2013, inspection of the industry had been conducted by a team of technical experts who found that there were visible flue gas emissions, fugitive dust emissions which were impermissible and required an appropriate action to be taken against the industry.
The condition requiring the respondents to furnish the bank guarantee is not penal and encashment thereof is neither unjustified - Appeal allowed in part.
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2014 (1) TMI 1892 - ITAT PUNE
Addition on account of Sticky Advances/NPA - HELD THAT:- Admittedly, assessee has directly taken the interest to the Balance Sheet and it is not routed through the Profit & Loss Account. Moreover, the issue of the taxability of the interest on the sticky losses/advances, is covered in favour of the assessee by the decision of the coordinate Benches in the case of The Durga Cooperative Urban Bank Ltd.[2011 (3) TMI 1552 - ITAT VISAKHAPATNAM] and Karnavati Cooperative Bank Ltd [2011 (11) TMI 367 - ITAT AHMEDABAD]. We find no reason to interfere with the reasoned order of the Ld. CIT(A) and accordingly the same is confirmed. In the result, the Revenue’s ground is dismissed.”.
Respectfully following the decision of the Tribunal in the case of Osmanabad Janata Sahakari Bank Ltd.[2015 (3) TMI 886 - ITAT PUNE] and in absence of any contrary material brought to our notice we find no infirmity in the order of the CIT(A) deleting the addition made by the Assessing Officer on account of interest on sticky advances/NPA. Appeal filed by the Revenue is dismissed.
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2014 (1) TMI 1891 - ITAT DELHI
TDS u/s 194I - lease premium paid to MMRDA towards additional premium for additional built up area - HELD THAT:- Issue involved is squarely covered in favour of the assessee by the decision of the Tribunal in assessee’s own case [2013 (9) TMI 158 - ITAT DELHI] payment of lease premium was not to be made on periodical basis but it was one time payment to acquire the land with right to construct a commercial complex thereon and the lease premium was paid to MMRDA in four installments - it is a lease premium for acquiring land with right to construct a commercial building although with certain restrictions, but it is a capital expenditure not falling within the ambit of section 194-I of the Act - Decided against Revenue.
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2014 (1) TMI 1890 - ITAT JAIPUR
Unexplained stock - survey u/s 133(A) - addition is solely based on admission made by the Director Shri Hem Raj Jain, recorded on oath during survey proceedings - HELD THAT:- As gone through the relevant portion of this statement also any statement recorded during survey proceedings conducted u/s 133A of the Act has no evidentiary value is found to be a correct position of law. This Bench has clearly spelt out this issue in favour of the assessee in the case of M/s. Unique Art Age [2014 (1) TMI 1075 - ITAT JAIPUR] - thus we exclude the admission made in the statement for supporting the impugned addition.
Whether de hors this statement can any addition in this item be made or sustained - We are of the considered opinion that difference in stock is not real. The survey party has quantified the stock of around 2,48,000 kg of butter and ghee on the same day which is humanly impossible on same day. The AO has assumed and presumed that difference in quantity of raw material i.e. Butter and Milk cream of 20,974 kg on account of maximum quantity could be storage of 94,000 kg and physically stock quantified by the survey team at 1,14,974 kg was due to the fact that quantity of butter was in process. This fact has been ignored by the authorities below because when the AO himself quantified the butter in process at 4,930 kg then how the same could be at 20,974 kg . Further, we are satisfied that inventory sheet prepared during the course of survey was not provided to the assessee despite repeated requests made by it.
AO has accepted the declared results and has not invoked the provision of Section 145(3) of the Act. The AO has not found any material defect in the books of account. Accordingly, the impugned addition on merits is also not sustainable and the same is deleted. Thus Ground Nos. 1 and 1.1 of the assessee are allowed.
Bogus purchases - purchases made from unregistered dealers - HELD THAT:- Purchases made from villages cannot be doubted as they are not found to be related to the director of the assessee company. AO has not made any direct enquiry and has failed to bring any corroborative material on record to support his conclusion and has based the addition solely on the statement of the director recorded during survey - No reason to uphold the findings of the ld. CIT(A) who has treated some part of these purchases as bogus. The assessee has discharge its burden by establishing the identity of the suppliers and there is no evidence to suggest that there is inflation in purchase price. Therefore, we cannot ignore the purchase price recorded in the purchase vouchers found during the course of survey which are duly recorded in the stock inventory and the consumption and production have not been doubted with the help of any evidence on record - Addition is uncalled for - Decided in favour of assessee.
Unexplained investment in the construction of office - as during the course of survey a surrender of ₹ 4.00 lacs was made on account of renovation of office premises - HELD THAT:- Both the authorities below have ignored the fact that this addition is also based on simply the surrender made by the director of the assessee company which stands disproved with the help of existing evidence. The assessee has filed all the necessary details of the expenditure incurred alongwith copy of ledger account of repairs and maintenance and copy of ledger account of fixed assets. These papers are also enclosed in the assessee's paper book filed before us. The AO has not pointed out any defect in the same. Therefore, without bringing any contrary material to substantiate the admissions made by the director of the assessee company and that too during the course of survey, cannot be upheld. The expenditure incurred on computer etc. related to Office also stands supported by the evidence on record. Therefore, we order to delete the impugned addition - Decided in favour of assessee.
Disallowance on account of telephone expenses - AO made a lumpsum disallowance @ 20% of the total expenses mainly on account of personal user by the director of the assessee company - HELD THAT:- In the case of a company, the usage of telephone etc. on account of non-business purposes cannot be added in the hands of the company, particularly because the company has a separate legal entity and its entire business is conducted through the directors. In case any benefit is drawn by the director, the director has to suffer the Fringe Benefit Tax at the prescribe rates which it has already suffered. Accordingly, we order to delete the entire expenditure. - Decided in favour of assessee.
Disallowance of employees contribution to PF and ESI on the reasoning that these payments were delayed - disallowance has been confirmed by the ld. CIT(A) on the ground that the provisions of Section 43(b) are applicable in respect of employer’s contribution to PF or ESI and not to employees contribution - HELD THAT:- This issue now stands covered to the effect that employees/ employer’s contribution to PF or ESI are deposited or paid before filing of return. These are allowable. The Hon'ble Apex Court in the case of CIT vs. Vinay Cements [2007 (3) TMI 346 - SC ORDER] has replied to various queries raised in this regard by different decisions/ orders. This issue has been further churned with reference to Hon'ble Supreme Court decision reported in the case of CIT vs. Vinay Cement (supra) by Hon'ble Gauhati High Court while deciding the case of CIT vs. George Williamsons Ltd. [2006 (6) TMI 71 - GAUHATI HIGH COURT]. Accordingly, we order to delete this addition from the hands of the assessee and allow the Ground of the assessee.
Unaccounted receipt of share capital - unaccounted income of the assessee company - HELD THAT:- The law on this subject is settled to this extent if the identity of the share applicants is established. There is no further need to prove anything by the assessee company even the creditworthiness of the applicants. In this regard, the decision of Hon'ble Jurisdictional High Court in the case of Barkha Synthetics Ltd. [2005 (8) TMI 67 - RAJASTHAN HIGH COURT] is relevant. The other main decision of Hon'ble High Court which support our above findings is that of Arawali Trading Co. [2007 (1) TMI 567 - RAJASTHAN HIGH COURT], inter alia. Therefore, we find no infirmity in the order of the ld. CIT(A) Accordingly, this addition has been correctly deleted from the hands of the assessee company. - Decided against revenue.
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