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2016 (2) TMI 1303 - SC ORDER
Permission for withdrawal of petition - Clandestine removal of goods - manufacturing of carbon black - excess weight over and above weight of packing material - excess weight over and above standard excess weight - Duty demand u/s 11A - Penalty imposed under Rule 209A - HELD THAT:- Permission granted.
The special leave petition is dismissed as withdrawn.
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2016 (2) TMI 1302 - CALCUTTA HIGH COURT
Dishonor of Cheque - notice issued upon the director/authorized signatory of the company - validity of notice issued under Section 138(b) of the Negotiable Instruments Act, 1881 - HELD THAT:- Petitioner No. 2 to whom the notices were addressed is the director and authorised signatory of the company who represented the company throughout the transaction which is the subject-matter of the impugned prosecution. It is claimed that he had signed the agreement from which the liability arose in respect whereof the dishonoured cheque was issued. He is also alleged to be the signatory of the cheque and had received the notice of dishonour at the registered office of the company. Under such premises, the petitioner No. 2 can be safely assumed to be the alter ego of the company. He is the principal director of the company and was the human agency representing the company in the transaction which is the subject matter of prosecution. A corporate entity has to function through a human agency and the mental state of such human agency is attributable to the company. Hence, knowledge of petitioner No. 2 of such notice and his response thereto can be attributed to the juristic entity as the former is nothing but the alter ego of such corporate entity.
Negotiable Instruments Act is a legislation operating in the commercial field and section 138 thereof was incorporated to give tooth and claw to the legislation so as to ensure greater accountability and creditability in commercial transactions relating to cheques. This legislative intention ought to be the guiding principle while construing the validity of notice issued under the aforesaid provision of law - The issue as to whether a notice issued upon the director/authorized signatory of the company can be deemed to be a valid notice under Section 138(b) of the Negotiable Instruments Act fell for consideration Bilakchand Gyanchand Co. Vs. A. Chinnaswami [1999 (3) TMI 620 - SUPREME COURT] and Rajneesh Aggarwal Vs. Amit J. Bhalla [2001 (1) TMI 855 - SUPREME COURT]. In Bilakchand, notice issued upon the Managing Director/signatory was held to be a valid notice under Section 138(b) of the Act.
The petitioner No. 1 company had sufficient notice of dishonor of the cheques and had failed to make payment within the stipulated time and the impugned prosecutions are not liable to be quashed on such score - the revision petitions are dismissed.
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2016 (2) TMI 1301 - SC ORDER
Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- Since the tax effect is low, we are not inclined to entertain these appeals or interfere with the impugned order - Appeal dismissed on this ground alone, leaving the question of law open. No costs.
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2016 (2) TMI 1300 - ITAT MUMBAI
TDS u/s 194H - Disallowance u/s.40(a)(ia) - not deducting the TDS on Credit Card commission charged by bank on credit card transaction - HELD THAT:- As decided in own case [2015 (8) TMI 1476 - ITAT MUMBAI] payment of commission to banks with regard to the processing of credit card transactions was not liable to be considered as a ‘commission’ within the meaning of section 194H.
The bank does not act as an agent of the assessee while processing the credit card payments and a charge collected by the bank for such service does not amount to ‘commission’ within the meaning of section 194H.
In view of the aforesaid Judgment of Hon’ble Delhi High Court in the case of JDS Apparels P. Ltd.[2014 (11) TMI 732 - DELHI HIGH COURT] we hereby affirm the conclusion of the CIT(A) to the effect that the impugned disallowance made by the AO by invoking section 40(a)(ia) is unsustainable. - Decided in favour of assessee.
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2016 (2) TMI 1299 - ITAT DELHI
Addition on account of notional income under the head "Income from House Property" - HELD THAT:- It is admitted before us that fact and circumstances of the issue involved is identical to earlier years. A perusal of order passed by the jurisdictional high court revels that the notional addition has been deleted by their Lordships [2010 (11) TMI 798 - DELHI HIGH COURT] - Respectfully following the decision of jurisdictional high court above ground No.1 of the Revenue appeal is dismissed.
Disallowance of interest expenditure claimed by the assessee - as claimed by the assessee that during the year under consideration no interest cost was debited as expenditure in the Profit & Loss Account and hence there was no such claim made in the return of income. - HELD THAT:- CIT-A correctly find that during the FY relevant to the AY under consideration, the appellant company has not paid any interest to the banks as stated by the ld. AO. The finance charges debited to the profit & loss a/c pertains to various services extended by the bankers to the appellant company. In such circumstances, no disallowance on account of advances made was liable to be made - After careful consideration of the issue we do not find any infirmity in the view adopted by CIT(A) in deleting the addition - Decided in favour of assessee.
Addition on account of extra depreciation claimed on computer peripherals - Case records show that during the year under consideration assessee has claimed depreciation on computer peripherals at the rate of 60%, however, this was restricted by the Ld. AO to the rate of 15% - HELD THAT:- CIT(A) has deleted the disallowance by following the decision of Hon'ble Delhi High Court in the case of BSES Yamuna Power Ltd.[2010 (8) TMI 58 - DELHI HIGH COURT]. After careful consideration of the case records we find no reason not to uphold the view taken by CIT(A) by following decision of jurisdictional high court noted above. As such ground No.3 of Revenue Appeal is also dismissed.
Disallowance u/s 14A read with Rule 8D - HELD THAT:- We principally agree with the said contention of the assessee. The AO should have first examined the books of accounts of the assessee and only thereafter if he was not satisfied with the claimed by the assessee that it had not incurred any expenditure for the purpose of any exempt income that he could have invoked provisions of Rule 8D. In the instant case Ld. AO has failed to adopt this mandatory procedure. It is also seen that even the assessee has not been able to substantiate its claim before the lower authority. In our considered opinion this issue requires fresh examination at the end of the AO. Accordingly we set aside the order of Ld. CIT(A) on this issue and direct the AO to examine this issue afresh in light of discussions made.
Disallowance on account of license fees paid by the assessee to New Delhi Municipal Corporation (NDMC) - HELD THAT:- As exonerates the claim made by the assessee. As per interim order dated 06th February 2002 assessee has been making payments to NDMC from FY 2001-02 onwards. For all these years i.e FYs 2001-02 FY 2013-14 even after payment of ₹ 75 lakhs per month initially and ₹ 1 crore per month thereafter the final liability determined in year 2015 was much more. Contingency if at all during FYs 2001-02 to 2013-14 was vis a vis ₹ 150.09 cr which finally became determinable in year 2015. However for the year under consideration the payment of ₹ 12 cr was a confirmed liability, which NDMC accepts as not being subject to further litigation before Delhi High Court. Considering the peculiar facts of the present case we therefore hold that the appellant was entitled to claim deduction of ₹ 12 crores paid by it to NDMC as License Fees under License Deed dated 14th July 1984. Decisions relied upon by the Ld AO in his order of assessment are also not relevant since these are decisions wherein certain provisions made in books of accounts were sought to be claimed as a deduction, per contrary this is a case where liability actually being discharged is being claimed as deduction. We accordingly hold that appellant merits succeeding in its claim.
Reopening of assessment u/s 147 - HELD THAT:- Facts relied upon by the Ld AO in support of his reasons to belief i.e note no. 2(iii) was duly considered by him during the course of original assessment. No fresh facts have also come to the knowledge of Ld AO justifying a fresh initiation of action u/s 147 of the Act. It is trite law that when a specific query raised by the AO is replied to by the assessee during the course of original assessment then it cannot be said that there is any failure or omission attributable to the assessee. As relying on HARYANA ACRYLIC MANUFACTURING COMPANY VERSUS COMMISSIONER OF INCOME-TAX IV AND ANOTHER [2008 (11) TMI 2 - DELHI HIGH COURT] we concur with the submission made by the appellant that the assumption of jurisdiction u/s 147 of the Act in this instant case by issuance of notice u/s 148 dated 26th February 2010 is bad in law
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2016 (2) TMI 1298 - KARNATAKA HIGH COURT
Deduction u/s 80IB(10) - Tribunal directing the assessing authority to give deduction under section 80IB(10) of the Act if the assessee has completed construction as guided by the decision of this Court in case of Ittina Properties [2014 (8) TMI 388 - KARNATAKA HIGH COURT] - as per revenue the assessee had failed to file audit report in Form-10CCB along with the completion certificate obtained from the Local Authority showing the completion of construction of the building/apartment as required under the law to claim deduction under section 80IB(10) - HELD THAT:- This Court, in the case of Ittina Properties [Supra] did not take the view only because completion certificate from Panchayat was produced, but on the contrary, in the said decision it was found by this Court that neither in the Income Tax Act nor in Karnataka Municipal Corporations Act, is there any provision for issuance of completion certificate by the local authorities and therefore, Revenue ought not have insisted for production of such certificate for getting benefit under the Income Tax Act. Therefore, distinction as sought to be canvassed by the learned counsel for the appellant-Revenue would not dilute the legal position as held by this Court in the above appeal.In any event, for examination as to whether the construction was completed or not, the matter is remanded by the Tribunal. When the Tribunal had followed the decision of this Court, we do not find that any substantial question of law would arise for consideration as sought to be canvassed. Hence, the appeals are dismissed.
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2016 (2) TMI 1297 - ITAT KOLKATA
Rectification of mistake u/s 254 - specific ground no. 2 raised for jurisdiction that assessment framed u/s. 144/147 of the Act is bad in law has not been adjudicated - HELD THAT:- We found that ground no.2 raised by assessee is not at all adjudicated by the Tribunal and hence, qua this ground we recall the order. The registry will fix this appeal in regular course for hearing ground no.2 only.
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2016 (2) TMI 1296 - SUPREME COURT
As per Ranjan Gogoi, J.,
Interpretation of statute - "public servant" as contained in Section 2(c) of the Prevention of Corruption Act, 1988 - meaning of the expression "office" appearing therein as well as "public duty" which is defined by Section 2(b) of PC Act - HELD THAT:- There can be no dispute that before enactment of the PC Act, Section 46A of the BR Act had the effect of treating the concerned employees/office bearers of a Banking Company as public servants for the purposes of Chapter IX of the Indian Penal Code by virtue of the deeming provision contained therein. The enactment of the PC Act with the clear intent to widen the definition of 'public servant' cannot be allowed to have the opposite effect by expressing judicial helplessness to rectify or fill up what is a clear omission in Section 46A of the BR Act. The omission to continue to extend the deeming provisions in Section 46A of the BR Act to the offences Under Sections 7 to 12 of the PC Act must be understood to be clearly unintended and hence capable of admitting a judicial exercise to fill up the same. The unequivocal legislative intent to widen the definition of "public servant" by enacting the PC Act cannot be allowed to be defeated by interpreting and understanding the omission in Section 46A of the BR Act to be incapable of being filled up by the court.
It is thus concluded that thhe accused Respondents are public servants for the purpose of the PC Act by virtue of the provisions of Section 46A of the Banking Regulation Act, 1949 and the prosecutions launched against the accused Respondents are maintainable in law - petition dismissed.
As per Prafulla C. Pant, J.,
Whether the Chairman, Directors and Officers of Global Trust Bank Ltd. (a private bank before its amalgamation with the Oriental Bank of Commerce), can be said to be public servants for the purposes of their prosecution in respect of offences punishable under Prevention of Corruption Act, 1988 or not? - HELD THAT:- Section 46A was inserted in Banking Regulation Act, 1949 by Act No. 95/56 with effect from 14.01.1957. The expression "every chairman who is appointed on a whole time basis, managing director, director, auditor" was substituted by Act No. 20/94 with effect from 31.01.1994 in place of "every chairman, director, auditor". As such managing director of a banking company is also deemed to be a public servant. In the present case transactions in question relate to the period subsequent to 31.01.1994.
In Federal Bank Ltd. v. Sagar Thomas and Ors. [2003 (9) TMI 707 - SUPREME COURT] this Court has held that a private company carrying banking business as a scheduled bank cannot be termed as a company carrying any statutory or public duty. However, in said case the Court was examining as to whether writ can be issued Under Article 226 of the Constitution of India against a scheduled bank or not. There was no issue before the Court relating to deeming fiction contained in Section 46A of Banking Regulation Act, 1949 in respect of a chairman/managing director or director of a banking company against whom a crime relating to anti-corruption was registered.
It is clear that object of enactment of P.C. Act, 1988, was to make the anti corruption law more effective and widen its coverage. In view of definition of public servant in Section 46A of Banking Regulation Act, 1949 as amended the Managing Director and Executive Director of a Banking Company operating under licence issued by Reserve Bank of India, were already public servants, as such they cannot be excluded from definition of 'public servant' - For banking business what cannot be forgotten is Section 46A of Banking Regulation Act, 1949 and merely for the reason that Sections 161 to 165A of Indian Penal Code have been repealed by the P.C. Act, 1988, relevance of Section 46A of Banking Regulation Act, 1949, is not lost.
A law which is not shown ultra-vires must be given proper meaning. Section 46-A of Banking Regulation Act, 1949, cannot be left meaningless and requires harmonious construction. As such in our opinion, the Special Judge (CBI) has erred in not taking cognizance of offence punishable Under Section 13(2) read with Section 13(1)(d) of P.C. Act, 1988. However, we may make it clear that in the present case the accused cannot be said to be public servant within the meaning of Section 21 Indian Penal Code, as such offence Under Section 409 Indian Penal Code may not get attracted, we leave it open for the trial court to take cognizance of other offences punishable under Indian Penal Code, if the same get attracted.
The courts below have erred in law in holding that accused Ramesh Gelli and Sridhar Subasri, who were Chairman/Managing Director and Executive Director of GTB respectively, were not public servants for the purposes of Prevention of Corruption Act, 1988 - Application disposed off.
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2016 (2) TMI 1295 - ITAT HYDERABAD
TP Adjustment - assessee had applied Resale Price Method (“RPM”) to submit that the transaction was at ALP - whether it should be RPM or TNMM for determination of the ALP? - HELD THAT:- After taking note of the Tribunal’s order in assessee’s own case for the A.Y. 2009-10 [2015 (9) TMI 1701 - ITAT HYDERABAD]and also taking note that the issue arising in this year is also similar, we deem it fit and proper to remit these issues to the file of the TPO for re-determination of the most appropriate method for determination of the ALP and we also direct the TPO to consider the comparables adopted by the assessee in addition to the companies selected by him for determination of the ALP if it is held that the RPM is the most appropriate method. Accordingly, ground Nos. 1 to 13 are treated as allowed for statistical purposes.
Disallowance u/s 36(1)(5) - contribution is to employees superannuation fund which has not been approved by the appropriate authority - HELD THAT:- As this is a legal issue, we deem it fit and proper to admit the additional evidence filed by the assessee and remit this issue also to the file of the A.O, to examine the issue relating to the contribution made to the LIC and consider the same in the light of the judgment of the Hon’ble Supreme Court in the case of Tex Tool Company Limited. [2009 (9) TMI 66 - SUPREME COURT] Accordingly, Ground of the assessee is allowed for statistical purposes.
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2016 (2) TMI 1294 - MADRAS HIGH COURT
Recovery of Service Tax - main grievance of the petitioner is that petitioner society should be given exemption from paying the service tax - HELD THAT:- When the petitioner society has not been included in the list of organizations, which are exempted form paying the service tax, this court cannot directly direct the respondents form exempt the petitioner society from paying the service tax - It is brought to the notice of this court that petitioner society has given a representation dated 15.10.2014 to the first respondent to exempt them from paying the service tax, however, the said representation has not yet been disposed of by the first respondent.
The first respondent is directed to consider the petitioner's representation dated 15.10.2014 and pass orders, on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order - petition disposed off.
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2016 (2) TMI 1293 - ITAT KOLKATA
Denial of claim of deduction u/s. 80IA(4)(iii) - new industrial undertaking with development of industrial park - controversy regarding the date on which the project was completed - According to AO, the assessee is not eligible for deduction u/s.80IA(4)(iii) on the income earned from software park as completion certificate of the building of Bangalore Development Authority was not furnished and the appellant has constructed 15 units instead of 3 units approved by the Ministry of Commerce when the appellant himself has admitted in IPSII before the appropriate authority as on 1st July, 2007 - HELD THAT:- The infrastructure for the electrical connection in the industrial park was ready on 20.03.2007. The date of occupation certificate issued by the Bangalore Development Authority on 23.06.2007 for which the assessee had Bangalore Development Authority on 29.12.2006 with a provisional Completion Certificate issued by the Architect. It is not within the control of the assessee company to obtain completion certificate from Bangalore Development Authority and the contention of the assessing authority is not correct.
The contention of the AO that the fresh approval was required under the non-automatic route for more than the minimum number of units required to be established in the industrial park is not correct because the approval was for minimum number of units and there was no restriction imposed for increasing the number of units and hence no fresh approval is required under the current scenario. Further, assessee sent all the details to CBDT for notification on the basis of the first approval as well as after receipt of the renewed approval. The new notification and the Industrial policy 2008 has come subsequently. Assessee has given a representation to the Chairman of Empowered Committee & the Director of CBDT for giving an opportunity to assessee. The Empowered Committee has still not withdrawn the approval granted and hence its validity cannot be disputed. As regards the approval issued by the DIPP, Ministry of Commerce and Industry, we are of the view that the said approval was for non-automatic route and the said approval so granted by the Ministry of Commerce and Industry has not been cancelled till date.
Such change has been duly intimated vide IPS- II dt. 01.01.2008 and on consideration of the same the approval dated16.03.2009 has been granted and further the said approval remains in force till date and has not been withdrawn.
We find that in similar facts and circumstances in the case of CIT Vs. Ittina Properties (P) Ltd. [2014 (8) TMI 388 - KARNATAKA HIGH COURT] held in respect to controversy regarding the date on which the project was completed to be eligible for the benefit of section 80IB that Tribunal has recorded a finding that the building was completed within the stipulated period and therefore de hors this certificate issued by the Panchayat after the building is completed, the assessee is entitled to the said benefit. In that view of the matter, we do not see any merit in these appeals. Accordingly the appeals are dismissed.
Similarly, Hon’ble Gujarat High Court in the case of Creative Infocity Ltd. Vs. Under Secretary [2012 (4) TMI 117 - GUJARAT HIGH COURT] also held that , once Industrial Park was approved by Ministry of Commerce & Industry, CBDT has to suo motto issue notification and if there is delay on the part of the CBDT in issuing notification, it would not warrant assessee being denied benefit of deduction u/s. 80IA(4)(iii) - Decided in favour of assessee.
Disallowance of interest on interest free advances - enhancement u/s. 251(1) of disallowance of interest - HELD THAT:- Assessee has advanced for acquisition of real estate properties, loans to sister concerns and share application money in associate concerns, which were in same business as that of the assessee i.e. real estate business and hence, the said sum advanced are only in the nature of business of the assessee and are out of commercial expediency. Further, there is no nexus established between interest bearing funds borrowed and interest free funds advanced to sister concerns, no disallowance can be attributed to the assessee on account of interest bearing borrowed funds. Accordingly, this issue is decided in favour of assessee and against revenue.
Disallowance of depreciation - assets used in the business - HELD THAT:- AO has not responded to CIT(A) and accordingly, CIT(A) directed the AO to allow depreciation on assets used in the business but after verification of facts and figures claimed now vis-à-vis the relevant rate of depreciation as applicable. We find that the assessee’s issue is covered as per explanation 5 to sec. 32 of the Act which makes it very clear that the allowance of depreciation is mandatory and has to be considered whether or not the assessee makes a claim in this respect or not. Even otherwise, the CIT(A) after admitting additional issue has remitted the matter back to the file of the AO for verification of facts and figure and applicable rates for claim of depreciation and also verification on assets used in the business only. We find no infirmity in the order of CIT(A) and hence, the same is confirmed. This issue in both the years, of revenue’s appeal is dismissed.
Addition on account of difference in the statement of accounts declared by assessee - AO has made addition on account of difference on the disclosure made by assessee as per the actual receipt and as per the rent received as per TDS certificate - HELD THAT:- Petitioner has received a total of ₹ 57,43,973/- and this rent of ₹ 5,91,292/- was received only in next year. Similar is the explanation in the case of M/s. Carrier Net Technologies Pvt. Ltd. amounting to ₹ 18,62,059/-. It was explained to the AO that the assessee was entitled to receive rent w.e.f. 19.03.2007 @ ₹ 11,76,100/-, which amounts to ₹ 1,40,95,533/- for whole of the year but the AO computed the rent in view of the TDS Certificate at ₹ 1,58,57,591/-. Hence, difference. Similar is the position in respect to Arivana Networks India Pvt. Ltd. being the difference of ₹ 17,93,381/-. It was explained that a sum of ₹ 1,63,02,907/- was shown in the TDS certificate included service tax @ 12.36% on actual rent of ₹ 1,45,09,600/- and this difference was on account of service tax at ₹ 17,93,387/-. Hence the entire difference of ₹ 56,66,732/- was explained. The CIT(A) accepted the explanation of the assessee. Now before us Ld. CIT, DR fairly conceded the position. Accordingly, we feel that factually the assessee has not received excess rent of ₹ 56,66,732/- added by the AO. We find that the CIT(A) has rightly deleted the addition in the given facts and circumstances of the case and we confirm the same. This issue of revenue’s appeal is dismissed.
Correct head of income - treating the receipt from the occupants of Industrial Parks and income from house property instead of the same as assessable as income from business - HELD THAT:- Assessee was not letting out bare structure but was providing whole lot of services/amenities for software and allied industries as eligible for use of such Industrial Park. In such circumstances, the assessee claimed the rental receipts from the occupants of the Industrial park as business income. We find that this issue is covered by the decision of Hon’ble Supreme Court in the case of Chennai Properties & Investments Ltd.[2015 (5) TMI 46 - SUPREME COURT] - In this case, letting of the properties is in fact is the business of the assessee. The assessee, therefore, rightly disclosed the income under the head "Income from business". It cannot be treated as "Income from the house property".
Appeal of assessee allowed.
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2016 (2) TMI 1292 - BOMBAY HIGH COURT
Levy of Service Tax - Courier services - activity of ‘door to door’ transportation of time-sensitive documents, goods or articles utilizing services of a person - Valuation - HELD THAT:- It was held that as the appellant had misdeclared gross value in returns inasmuch as value declared after adjustment of amount payable on account of services received, the penalty was imposable under Sections 77 and 78 of the Finance Act, 1994.
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2016 (2) TMI 1291 - KARNATAKA HIGH COURT
Exemption u/s 11 - entitled for registration u/s 12A - Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act, even when the objects of KSRTC will fall under the limb "any other object of General Public Utility" under section 2(15) of the IT Act and the activities of BMTC under this limb will be hit by the proviso to section 2(15) of IT Act amended w.e.f. 1 .4.2009 as the transport Services are provided to all sections of the society on - commercial basis like any other private transporter and generating such huge surplus year after year and is running its activities on commercial basis?
Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act, even when the functions of BMTC include providing casual contract and chartered services, including luxury buses like Volvo and Mercedes fully air-conditioned are run as well as provided on hire for the occasions like wedding, excursion, pilgrimage and rallies or whenever the general public needs dedicated buses for their travel and these are charged on commercial basis. it is also seen that BMTC is providing Advertisement space on buses to the private sector charging substantial fee, which activity is nothing but commercial activity and there is a deviation from its predominant object of providing transport service?
Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act, even when the KSRTC under the head "Non operating revenue –“Non-traffic Revenue, has accounted a receipt of ₹ 135.58 crores as miscellaneous Income -which are mainly from advertisement and transportation of luggage and goods are obviously out of its commercial purpose is involved and is charging for every services provided?
Whether Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act. when BMTC was formed by the Government of Karnataka as a Corporation by a legislative Act and is a public limited company under section 25 of Indian Companies Act and in view of the amended provisions of Section 2(15) and as BMTC is run on commercial basis like any other private transporter, the registration granted under section 12A is rightly been cancelled?
Whether Hon'ble. Tribunal was right in following the judgment of Hon'ble High Court in the case of the KIADB wherein it is held that the first proviso to section 2(15), which was introduced by Finance Act, 2008 w.e.f. 01.04.2009, cannot be invoked by the registering authority for the purpose of cancellation of registration under section, 12AA(3) even if the assessee is found to be carrying on of any activity in the nature of trade, commerce or business?
HELD THAT:- As counsel appearing for appellant and learned counsel appearing for. Learned counsel appearing for both the parties, submitted that, subject matter involved in this appeal.
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2016 (2) TMI 1290 - ITAT MUMBAI
Disallowance u/s.14A on account of expenses attributable to earning of the exempt income - AR submitted before us that the assessee’s own funds are sufficient to cover up the value of investments and hence no interest disallowance is required to be made u/s.14A - HELD THAT:- As relying on Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] we delete disallowance made by the AO u/s.14A holding that the assessee’s own funds are sufficient to cover up the value of investments in question. Accordingly, Ground No.1 of the appeal is allowed.
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2016 (2) TMI 1289 - DELHI HIGH COURT
Clubbing the two charge sheets - holding of one trial for both the charge sheets - conspiracy to obtain and operate a benami locker - HELD THAT:- The broad test for ascertaining whether offences charged form part of the same transaction is whether the other set of offences, even though distinct and separate, have been committed for facilitating the commission of the main offence. If the offences alleged involve similar system or persons and there is a hint of continuity of action, it is then part of the same transaction. If the substratum of the series of acts is common, then those acts do constitute same transaction.
The allegation in the FIR No. RC/AC-1/2011/A0001 is that reliable information was received that B.L. Bajaj was acting as a middleman for obtaining bribe money from respondent Nos. 5, 6 & 7 for providing them undue favours through Mr.A.K. Srivastava, Chairman cum Managing Director, NALCO and then converting such bribe money into tangible form of gold for facilitating its delivery; for which bank account was opened with locker facilities by impersonating and using fake documents. The only purpose for impersonation and using of forged documents could be to provide a safe cover for A.K. Srivastava and Chandni Srivastava in accepting bribe money.
Thus, the modus operandi appears to have been decided between four of the accused persons including the petitioner, rendering the two offences in two charge sheets being part of the same transaction. It matters not if respondent Nos. 5, 6 & 7 were not involved in opening of the bank locker by impersonation and using fake documents but one cannot lose sight of the fact that the account and the locker were opened for the purposes of depositing gold bars which were purchased out of the bribe money, allegedly given by the respondent Nos. 5, 6 & 7. Thus even if the respondent Nos. 5, 6 & 7 have not played any active role in opening of the bank account and the locker, nonetheless the offence would form part of the same transaction for which four of the accused persons including the petitioner ought to be tried in one trial and not in two different trials - If two trials are held, it would only cause miscarriage of justice. Respondent Nos. 5, 6 & 7, it is made clear, would not lose on any count as they would be tried with respect to the respective charges framed against them.
Thus it would only be in consonance with the procedural propriety that the two charge sheets be tried together by amalgamating the same before the Special Judge.
The Court below was not justified in holding that the offences delineated in charge sheet No. 4/2011 was not part of the same transaction and on which premise, the prayer of the petitioner for clubbing the two charge sheets and consolidating the same for the purposes of one trial was rejected - Petition allowed.
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2016 (2) TMI 1288 - ITAT AHMEDABAD
Product development expenses - Revenue or capital expenditure - HELD THAT:- We find that ld. CIT(A) while deciding the appeal for A.Y. 2002-03 and following it has given a finding that due to incurring of product development expenses, the installation capacity did not increase and assessee did not set up a separate and independent unit from manufacturing and no capital asset was brought into existence. He has further held that entries in the books of account were not determinative of the allowability or otherwise of the expenditure. Before us, Revenue has not brought any material on record to controvert the finding of ld. CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of ld. CIT(A). - Decided against revenue.
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2016 (2) TMI 1287 - KERALA HIGH COURT
Works Contract - imposition of liabilities referable to service tax - HELD THAT:- The issue stands covered in favour of the respondent for the period in question as per the judgment of the Hon’ble Supreme Court of India in Commissioner, Central Excise and Customs, Kerala v. Larsen and Toubro Limited [2015 (8) TMI 749 - SUPREME COURT] where it was held that Works contract were not chargeable to service tax prior to 1.6.2007.
Appeal dismissed.
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2016 (2) TMI 1286 - ITAT MUMBAI
Disallowance of interest expenditure - HELD THAT:- We set aside the issue to the file of the CIT(A) , who is directed to adjudicate the matter afresh in accordance with law and in the lines indicated in the aforementioned orders of the Tribunal. Needless to say that the assessee company shall be granted a reasonable opportunity of being heard by the CIT(A).
MAT - calculating of book profit u/s 115JB - HELD THAT:- We have observed that this ground relating to the calculating of book profit u/s 115JB is consequential to our decision in the ground no 4 raised by the assessee company, which we have adjudicated in preceding para’s of this order.
Levy of interest u/s 234A, 234B and 234C - HELD THAT:- Restore the issue back to the file of learned assessing officer who would levy interest as per provisions of Section 234 of the Act and give credit for the TDS amount.
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2016 (2) TMI 1285 - SUPREME COURT
Partition of property - defendant, in the written statement, mainly contended that the suit for partition is not maintainable and is hit by Section 11 of The Code of Civil Procedure, 1908 on the principle of res judicata - specific contention was also taken that the plaintiff did not have any right in the property and that as to the date of the suit, the defendant had been in exclusive possession of the suit property for more than thirty years, and hence, the suit was liable to be dismissed on the ground of adverse possession and limitation as well.
Principles of res judicata - HELD THAT:- The suit filed by the plaintiff in 1962, based on the settlement deed executed by her husband in her favour and the sufferance of the dismissal of the suit, will not, in any way, be a bar for making a claim for her share, if any, of the family property, if otherwise permissible under law. As succinctly addressed by the first appellate court, the 1962 suit for the entire property was based on a settlement deed and it was a suit for possession. Whereas, the 1988 suit for partition was for plaintiff’s one-half share in the property based on her birth right. Cause of action is entirely different - the High Court is not right on the point of res judicata.
Whether suit is ouster and limitation? - HELD THAT:- Ouster is a weak defense in a suit for partition of family property and it is strong if the defendant is able to establish consistent and open assertion of denial of title, long and uninterrupted possession and exercise of right of exclusive ownership openly and to the knowledge of the other co-owner - This court in SYED SHAH GHULAM GHOUSE MOHIUDDIN AND ORS. VERSUS SYED SHAH AHMED MORIUDDIN KAMISUL QUADRI (DEAD) [1971 (2) TMI 127 - SUPREME COURT] held that possession of one co-owner is presumed to be on behalf of all co-owners unless it is established that the possession of the co-owner is in denial of title of co-owners and the possession is in hostility to co-owners by exclusion of them. It was further held that there has to be open denial of title to the parties who are entitled to it by excluding and ousting them.
It is ordered that the appellants shall be entitled to 35% and the respondent 65%. Let the suit property be accordingly partitioned. If it is found that it is not possible to do so by metes and bounds, let the property be sold and proceeds shared accordingly.
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2016 (2) TMI 1284 - SUPREME COURT
Determination of tariff for procurement of power by the Distribution Licensees in Gujarat from Solar Energy Projects - benefit of the accelerated depreciation - case of the 1st respondent is that notwithstanding the fact that it entered into a PPA during the “control period” specified in the 1st tariff order, it is not obliged to sell power to the appellant for the price specified in Article 5.2 of the PPA and is legally entitled to seek (from the 2nd respondent) fixation of a separate tariff - HELD THAT:- It is admitted on all hands that the “benefit of accelerated depreciation” mentioned in the 1st Tariff Order and the PPA is the stipulation contained in Section 32 (1)(i) of the Income Tax Act read with Rule 5(1A) of the Income Tax Rules. They provide for the method and manner in which depreciation of the assets of an assessee is to be calculated - an undertaking engaged in generation of power has an option to claim depreciation on its assets in accordance with the scheme under Section 32(1)(i) of the Income Tax Act. Such an option could be exercised at the relevant point of time as indicated in the said proviso.
What is the point of time at which the power producer can exercise such right to seek the determination of a separate tariff? - HELD THAT:- The Income Tax Act gives an option to the producers of power either to avail the ‘benefit of the accelerated depreciation’ or not. It also specifies the point of time at which such an option could be exercised. The right to exercise such option at a point of time specified in the 2nd proviso to Rule 5(1A) is limited only for the purpose of availing the benefits flowing from the Income Tax Act. The PPA does not make any reference to the “benefits of accelerated depreciation” - Whether the availability of the AD Scheme is beneficial to the power producer or not in a given case depends on various factors the details of which we do not propose to examine. It is for the power producer to make an assessment whether the availing of the AD is beneficial or not will take a decision if the scheme under Section 32 IT Act should be availed or not.
The 1st respondent created enough confusion. While on one hand the 1st respondent asserted a right to seek determination of a separate tariff independent of the tariff fixed under the 1st Tariff Order in view of the stipulation contained in the 1st Tariff Order that “for a project that does not get such benefit, the Commission would, on a petition in that respect, determine a separate tariff taking into account all the relevant facts” did not seek a relief before the 2nd respondent to determine a separate tariff but claimed the benefit of the 2nd Tariff Order. Assuming for the sake of argument that the petition filed by the 1st respondent (1270/2012) is to be treated as an application for determination of separate tariff which would be identical with the tariff fixed under the 2nd Tariff Order, whether the 1st respondent would be entitled for such a relief depends, if at all he is entitled to seek such a determination, on a consideration of “all the relevant facts” but not by virtue of the operation of the 2nd Tariff Order.
The impugned order cannot be sustained and the same is therefore set aside - Appeal allowed.
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