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Showing 81 to 100 of 707 Records
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2008 (3) TMI 706 - ITAT CHANDIGARH
Disallowance on deduction u/s 80-IA - primarily engaged in the hiring of marriage palace and the activity of catering and manufacture of food was only incidental - major income by way of rental charges for the banquet hall/marriage palace - not constituting an "industrial undertaking" within the meaning of u/s 80-IA - Incurred expenditure on foreign travel of its director his sons for studies in abroad - concealed the particulars of its income? - Levy penalty u/s 271(1)(c) or Disallowed expenditure - HELD THAT:- The fact that the assessee did not prefer a claim for AY 1993-94 does not hit the bona fides of the instant claim for the reason that for AY's 1994-95 to 1996-97 the assessee had claimed such deduction although such assessments were completed in a summary manner under s. 143(1) of the Act. Furthermore, the AO, in the original assessment proceedings finalized, allowed the claim of the assessee in principle. Therefore, factually speaking, to say that the claim of the assessee made in the return of income was patently wrong and devoid of bona fides would be a misnomer. It is indeed a different matter that such a claim has ultimately not been found to be strictly in accord with law but the factum of the assessee having disclosed full particulars and the claim made for bona fide considerations cannot be disputed.
In fact we have perused the order of the Tribunal in the assessee's case, rendered in connection with the s. 263 proceedings, and find that the invoking of s. 263 by the CIT was entirely on the basis of the judgment of the Hon'ble Supreme Court in the case of Indian Hotels Co. Ltd.[2000 (8) TMI 5 - SUPREME COURT], which, according to the CIT rendered the assessment as erroneous in view of the fact that the assessee was not eligible for s. 80-IA benefits. Therefore the plea of the Revenue that the claim of the assessee was wrong even without the help of the Supreme Court judgment in the case of Indian Hotel Co. Ltd. (supra) and therefore it constituted concealment, in our view, is neither the facet which is the basis of the disallowance and nor can it be investigated at this stage. Therefore having regard to the manner in which the claim of the assessee has been denied, we do not find that the bona fides of the assessee can be doubted.
The claim was based on the judgment of a High Court, although it is undeniable that a contrary view was possible. So however in such a situation when there is a divergence of opinion amongst the High Courts and in the absence of a decision of the jurisdictional High Court or the Supreme Court on such issue, the claim of the assessee made in the return of income cannot be labelled as non-bona fide. The denial of deduction on account of a subsequent judgment of the Supreme Court would not constitute concealment or furnishing of inaccurate particulars within the meaning of s. 271(1)(c) of the Act. In the result following the ratio of the judgment of the Supreme Court in the case of Dilip N. Shroff [2007 (5) TMI 198 - SUPREME COURT] we find justification for the CIT(A) having deleted the penalty.
In the instant case apart from the fact that the claim of the assessee was based on the audit report of chartered accountant, it also emerges that such claim has been accepted by the AO himself during the original assessment proceedings. Therefore the claim cannot be termed as mala fide. The ratio of the decision of the jurisdictional High Court in the cases of Manoj Ahuja [1984 (1) TMI 35 - PUNJAB AND HARYANA HIGH COURT] and Deep Tools (P) Ltd.[2004 (8) TMI 52 - PUNJAB AND HARYANA HIGH COURT] squarely applies herein also. Therefore on this aspect also we affirm the decision of the CIT(A).
In the result for the AY 1997-98 the appeal of the Revenue is dismissed.
Disallowance sustained on expenditure - foreign travel of its director - Penalty under s. 271(1)(c) - HEDL THAT:- We find no justification for the imposition of penalty for the reason that there is no case made out by the AO that the claim for expenditure reflected any falsity. In fact, the purpose of the travel has been fully explained and the same has not been rejected as false or lacking in bona fides. Merely because there is difference of opinion as regards the allowability of the claim, the same would not constitute "concealment" or "furnishing of inaccurate particulars" within the meaning of s. 271(1)(c) of the Act. In our view the CIT(A) has correctly deleted the penalty.
Resultantly, the appeals of the Revenue for 1997-98 and 1998-99 are dismissed.
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2008 (3) TMI 705 - SUPREME COURT
Jurisdiction of High court u/s 100 CPC - re-examining questions of fact - Pleas not made in the plaint - how a question of law relating to section 41 - Suit for permanent injunction - Restraint from interfering with the ownership and possession of the Plaintiff - HELD THAT:- The High Court while reversing the decision of the first appellate court, examined various aspects relating to title and recorded findings relating to title. It held that gifting a property to a daughter or sister by way of 'Pasupu Kumkumam", could be done orally and did not require a registered instrument. Even though there was no independence evidence of oral gift except the assertion to Rukminibai (which was denied by Damodar Rao), the High Court, held that there was an oral gift in her favour. It also accepted the evidence of PW3 and PW5 and plaintiffs, that Damodar Rao negotiated for the sale of the plots representing that they belonged to his sister Rukminibai and that he attested the sale deeds as a witness and identified the Rukminibai as the executant before the Sub-Registrar and therefore, section 41 of TP Act came to the aid of plaintiffs and Damodar Rao was estopped from denying the title of his sister. The High Court in a second appeal arising from a suit for an injunction, could not have recorded such findings, in the absence of pleadings and issue regarding title.
We are therefore of the view that the High Court exceeded its jurisdiction under section 100 CPC, firstly in re-examining questions of fact, secondly by going into the questions which were not pleaded and which were not the subject matter of any issue, thirdly by formulating questions of law which did not arise in the second appeal, and lastly, by interfering with the well reasoned judgment of the first appellate court which held that the plaintiffs ought to have filed a suit for declaration.
We are conscious of the fact that the suit was filed in the year 1978 and driving the plaintiffs to a fresh round of litigation after three decades would cause hardship to them. But the scope of civil cases are circumscribed by the limitations placed by the rules of pleadings, nature of relief claimed and the court fee paid. The predicament of plaintiffs, was brought upon themselves, by failing to convert the suit to one for declaration even when the written statement was filed, and by not seeking amendment of issues to include an issue on the question of title. In the absence of a prayer of declaration of title and an issue regarding title, let alone the pleadings required for a declaration of title, the parties cannot be said to have an opportunity to have a full-fledged adjudication regarding title.
We, therefore, allow this appeal, set aside the judgment of the High Court and dismiss the suit. Nothing stated herein or by the courts below shall be construed as expression of any opinion regarding title, in any future suit for declaration and consequential reliefs that may be filed by the Appellants, in accordance with law. Parties to bear their respective costs.
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2008 (3) TMI 704 - CESTAT MUMBAI
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... ... ..... t enrichment. The excess fine and penalty was required to be returned to the appellant immediately on the passing of the order of the Tribunal. Accordingly, it is ordered that the excess redemption fine of ₹ 2 lakhs and excess penalty of ₹ 1 lakh already paid by the appellant shall be returned to them without any further delay" It can be seen that the above reproduced portion that the issue involved in this case of J.N.P. Impex (supra) was the same, as is before me. 6. Accordingly, respectfully following the decision of the division bench, I find that the impugned orders are liable to be set aside and I do so, to the extent they rejected the refund claim of the appellants on the question unjust enrichment in respect of redemption fine and penalty. The appellants claim for refund of the amount and redemption fine and penalty needs to be upheld and I do so. The lower authorities are directed to refund the amount of redemption fine and penalty to the appellant.
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2008 (3) TMI 703 - ITAT LUCKNOW
Additions u/s 68 - unexplained cash credits - royalty payment - prior period expenses u/s 36(1)(vii).
Additions u/s 68 - unexplained cash credits - credit balances as were appearing in the accounts of these parties were in the form of opening balances coming from earlier years - HELD THAT:- The five amounts in question represented the purchases made by the assessee on credit. There is no dispute that the assessing officer had accepted the purchases, sales as also the trading results disclosed by the assessee. Thus, in view of the decision of Hon'ble Allahabad High Court in the case of CIT v. Pancham Dass Jain (supra), we hold that provisions of Section 68 are not attracted to amounts representing purchases made on credit. We therefore hold that the Commissioner (Appeal) was fully justified in deleting the addition.
In the instant case, the assessee had filed confirmation letter of M/s Awadh Wood Products, R.K. Perfumers and Tanu Enterprises before the CIT(A). There is no material on record to controvert the contents of these confirmation letters, which are available on the assessee’s paper book. In the instant case, we have already observed that the provisions of s. 68 are not attracted to amounts representing purchases made on credit.
Therefore, we do not find any infirmity in the findings of CIT(A) on this issue and accordingly, we uphold her view. Consequently, we dismiss ground No. 1 of Revenue’s appeal.
Addition on royalty payment - From the observations of the AO in the case of Shri K.N. Singh Patel, it is clear that he has duly shown this royalty payment in his IT return on which he is duly assessed to tax. Learned counsel for the assessee stated that Shri K.N. Singh Patel has closed his business activities and allowed the use of his brand name "Har Singar" to the assessee for which royalty was payable to him. In our view, the AO was not justified in stating that the payment made to Shri K.N. Singh Patel was unjustified and totally unreasonable.
Thus, considering the entire facts of the case and also the material available on record, we hold that the CIT(A) has rightly deleted the addition made by the AO. We therefore dismiss this ground of appeal also.
Addition on prior period expenses - HELD THAT:- We do not find any infirmity in the findings of CIT(A) on this issue. The amount in question allegedly treated as prior period expenditure, was actually a write off of the bad debt and therefore could not be treated as prior period expenditure in view of the provisions of s. 36(1)(vii) of the IT Act, 1961. There is no dispute that the amount in question has been written off during the period relevant to assessment year under consideration, and, therefore, we hold that the learned CIT(A) was justified in allowing a relief to the assessee.
In the result, both the appeals are dismissed.
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2008 (3) TMI 702 - SUPREME COURT
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... ... ..... termine as to which view of Delhi High Court in Hari Nagar or Mahalakshmi is correct. We cannot refuse to lay down the law having been called upon to do so. We must lay down a law for the future. We, therefore, while directing the Central Government to refix the price of levy sugar, would keep this direction confined only to the parties before us including the interveners. The reason therefor is that the other mill owners were not aggrieved thereby. The parties before us are fighting their grievance for more than 22 years. They should not be allowed to go empty handed. 72. We are, therefore, of the opinion that Mahalakshmi has wrongly been decided whereas Hari Nagar has correctly been decided. 73. Appeals arising out of SLP (C) Nos.481/2007 and 14130/2007 filed by Mahalakshmi Sugar Mills Co. Ltd. and Govind Nagar Sugar Ltd. respectively are consequently allowed and Appeals arising out SLP (C) Nos.14967-14978 of 2007 filed by Union of India & Ors. are dismissed. No costs.
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2008 (3) TMI 701 - RAJASTHAN HIGH COURT
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... ... ..... s simply proceeded on the basis of a judgment of this Court in the case of the assessee itself reported in (2002) 255 ITR 599. We have again gone through the judgment of the learned Tribunal, so also the judgment of the Division Bench reported in (2002) 255 ITR 599. In our view, the controversy involved in the present case is squarely covered by the aforesaid judgment, and despite best efforts, learned counsel for the revenue could not point out any distinguishing feature on the basis of which it can be said that this judgment is not applicable. In that view of the matter, for the same reasonings, we do not find any ground to interfere. The appeals are, therefore, dismissed.
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2008 (3) TMI 700 - MADHYA PRADESH HIGH COURT
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... ... ..... tion, can be interpretive of the fact that there has been any kind of advertence to the facts in issue. The Tribunal has only stated that at the most there is a partial partition. We really fail to fathom that on what basis the Tribunal has come to such a conclusion and on what ground it has reversed the finding of the CWT(A). It is trite law that the Tribunal is the highest fact finding authority and, therefore, it has to discharge its obligation while it reverses a factual order more so, when the assessee had suffered. 8. In view of the aforesaid, we set aside the order passed by the Tribunal on 18th Feb., 2000, Annex. A/8, and direct to remit it for proper adjudication as per law. Needless to emphasize when this Court has directed remit of the case as there has been no discussion by the Tribunal with regard to factual matrix, there has been no expression of opinion on the merits of the case. 9. In the result, the appeal stands allowed. There shall be no order as to costs.
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2008 (3) TMI 699 - CESTAT, AHMEDABAD
Recovery of dues - Rebate claim ... ... ... ... ..... would mean that duty or any sum payable to the Central Government under the provisions of Central Excise Act, 1944 or Rules made thereunder. Therefore, the rebate claim payable under Central Excise Act, cannot be appropriated towards the liability under Income Tax Act, 1961. rdquo 4. emsp It is seen from the above that the appellate authorities has observed that the Assistant Commissioner has not referred to any provisions of Central Excise Act, under which the liability under Income Tax Act can be discharged by appropriating the money payable to the assessee. We find that the provisions of the Income Tax Act relied upon the Assistant Commissioner and the notice served upon the department, does not stand considered by the Commissioner (Appeals). We would like him to re-consider the same and decide the matter accordingly. 5. emsp For the above purpose, we set aside the impugned order and remand the matter to the Commissioner (Appeals) for fresh decision. (Pronounced in Court)
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2008 (3) TMI 698 - CESTAT, CHENNAI
Stay/Dispensation of pre-deposit ... ... ... ... ..... Customs Act is pari materia with Section 35F of the Central Excise Act. The apex court, in the cited judgement, did not rule that any predeposit as required under Section 129E of the Customs Act should be made before filing the appeal. Moreover, the words lsquo pending the appeal rsquo are to be conspicuously seen in the text of Section 129E also. To put it in a nutshell, the Commissioner (Appeals) has neither examined the provisions of Section 35F properly nor understood the scope of the Apex Court rsquo s judgment correctly. 2. emsp The impugned order is set aside and the lower appellate authority is directed to dispose of the assessee rsquo s appeal (filed against the order of the original authority) on merits in accordance with law and the principles of natural justice as the appellant has duly complied with the requirement of predeposit under Section 35F of the Central Excise Act. The present appeal stands allowed by way of remand. (Dictated and pronounced in open court)
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2008 (3) TMI 697 - PUNJAB AND HARYANA HIGH COURT
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... ... ..... siness profits for the deduction under section 80HHC the unabsorbed business losses of earlier years under section 72 should be set off." (p. 381) He has also conceded that the said judgment of the Hon’ble Supreme Court has been further followed by the Hon’ble Madras High Court in the case of CIT-II v. Salzer Electronics Ltd. decided on 3-7-2007. Mr. Sethi has further conceded that question No. 2 has also been answered against the revenue and in favour of the assessee by a judgment of this Court cited as CIT v. Vardhman Polytex Ltd. 2006 154 Taxman 254. He has also admitted that question No. 3 as raised by the revenue also stands decided by this Court in Nahar Spinning Mills Ltd. v. CIT IT Appeal No. 503 of 2007, decided on 25-2-2008 against the revenue and in favour of the assessee. In view of the above stand taken by the learned counsel for the revenue, no substantial question of law survives for determination of this Court. Hence this appeal is dismissed.
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2008 (3) TMI 696 - ITAT DELHI
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... ... ..... ort the order of the AO. However, on going through entire material on record and on considering the merits of the case, we do not find any scope to interfere in the order of the learned CIT(A), firstly, because no incriminating material was found during the course of search against the assessee to justify the addition; secondly, all the transactions, on the basis of which the addition has been made, were duly disclosed by the assessee; and thirdly, addition on the basis of statement of third party cannot be justified. For supporting the order of the learned CIT(A) we can also place reliance on the orders of Hon'ble Delhi High Court in the cases of Ravi Kant Jain (supra), Jupiter Builders (supra) and decision of Hon'ble Punjab & Haryana High Court in the case of Jeeta Khan (supra). In view of the above, the ground taken in the appeal of the Department is dismissed. 18. In the result, the cross-objection is allowed whereas the appeal of the Department is dismissed.
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2008 (3) TMI 695 - CESTAT BANGALORE
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... ... ..... invited to Section 73 (3) of the Finance Act and also a Board s Circular based on that. The Circular and also the Section 73(3) provides that if the assessee cleared the Service Tax due along with interest on his own and even on the insistence of the departmental authority, then no penalty proceedings can be taken against them. In other words, all the proceedings against the appellants will be deemed to have been concluded. In view of the above position, we are of the view that the impugned revisionary orders, enhancing the penalties and imposing penalties under section 78, are not in order. Further, the impugned order in Sl. No. 4 is also very harsh especially when the appellants had paid the entire amount of Service Tax and interest even before the issue of Show Cause Notice. In such circumstances, we allow the appeals with consequential relief, if any. The impugned orders are set aside. (Operative portion of this Order was pronounced in open court on conclusion of hearing)
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2008 (3) TMI 694 - ITAT DELHI
Computing the book profit u/s 115JA - Addition u/s 201(1A) for delay in deposit of TDS - Disallowed amount received as duty drawback and profit on sale of REP license u/s 80-IA and u/s 115JA - Eligibility for deduction u/s 35 or u/s 37 - contribution made to Ranbaxy Science Foundation(RSF) and Ranbaxy Community Health Care Society(RCHCS) - Sale of scrap will form part of total turnover for computing deduction u/s 80HHC - provision for bad and doubtful debts - proportionate lease rent on oak wood barrels.
Computing the book profit under s. 115JA made addition under s. 201(1A) for delay in deposit of TDS - HELD THAT:- In the case of Harshad Shantilal Mehta vs. Custodian & Ors.[1998 (5) TMI 25 - SUPREME COURT] observed that tax, penalty and interest are different concepts under the IT Act, 1961. It was held that the definition of 'tax' under s. 2(43) of the IT Act, 1961 does not include penalty or interest. According to the Hon'ble Court, neither penalty nor interest can be considered tax under s. 11(2)(a) of the IT Act [sic-Special Court (Trial of offences) Relating to Transactions in Securities Act, 1992].
It may be pointed out that the ld DR has not been able to show any contrary authority. Hence, following the above authorities, we hold that the learned CIT(A) was not justified in upholding the addition made by the AO in respect of payment of interest under s. 201(1A) while computing book profit under s. 115JA of the IT Act. The issue is, therefore, decided in favour of the assessee. In the result, ground is allowed.
Disallowed amount received as duty drawback and profit on sale of REP license u/s 80-IA and u/s 115JA - On going through the order of the Tribunal rendered in AY 1996-97 in assessee's own case, it is found that the Tribunal has considered similar arguments and after following the decision of Hon'ble Delhi High Court in the case of Britannia Industries Ltd. [2005 (10) TMI 30 - SUPREME COURT] held that the assessee is not eligible for deduction in respect of duty drawback and profit on sale of REP licenses.
In the case of CIT vs. Ritesh Industries Ltd.[2004 (9) TMI 36 - DELHI HIGH COURT], categorically held that amount of duty drawback cannot be regarded as income derived from industrial undertaking.
Thus, the issue has to be decided against the assessee. Ground Nos. A2 and B3 are therefore rejected.
Eligibility for deduction u/s 35 or u/s 37 - contribution made to Ranbaxy Science Foundation and Ranbaxy Community Health Care Society - establish community based scientific research for control of various endemic diseases - Assessee company, therefore, is directly concerned with the activities of these two organizations, although the organizations have a separate entity of their own. It is true that these organizations have been exempted under s. 11 or under s. 80G but the fact remains that the assessee company is incurring heavy expenditure in maintaining these institutions for its own business purposes and is being directly benefited by their activities.
The provisions made by the assessee company cannot be said merely for carrying out philanthropic objects, rather the contributions are directly aimed for promoting business of the assessee company and also for advertising its name because various conferences and workshops are conducted under the banner of the Ranbaxy Laboratories (P) Ltd. Thus, on examination of the nexus between the activities of the foundation and society and those of the assessee company.
The issue regarding contribution to various foundations and societies has been considered by various Courts in relation to allowability of deduction of expenditure. In the case of Sri Venkata Satyanarayana Rice Mill Contractors Co. vs. CIT [1996 (10) TMI 2 - SUPREME COURT], after making reference to various decisions, allowed the claim of the assessee
In the case of Mahindra & Mahindra Ltd. vs. CIT [2003 (1) TMI 71 - BOMBAY HIGH COURT], High Court allowed deduction of expenditure incurred by the assessee in making initial contribution to the approved superannuation fund to an educational society, which was running school for children of employees, as business expenditure under s. 37. It was held that the amount should be allowed as business expenditure because it was incurred predominantly for staff welfare.
Therefore, it is clear that even if there is no statutory obligation on the part of the assessee to incur the expenditure, but the expenditure has been incurred to bring goodwill to the assessee or is for the purpose of promoting its business then such expenditure is to be allowed as business expenditure. In view of the above, we uphold the claim of the assessee and allow ground No. 5.
Deduction u/s 80HH/80-IA - profits derived from goods manufactured on loan license basis - manufacture of drugs and pharmaceuticals - HELD THAT:- It was pointed out by the learned counsel for the assessee that in earlier year i.e. AY 1991-92 in assessee's own case the Tribunal has confirmed the order of the learned CIT(A) in setting aside the issue and in directing the AO to consider the claim of the assessee. Both the sides agreed before us that the same course should be adopted in this assessment year also. It could not be pointed out as to what happened to the directions of the Tribunal and what is the final outcome.
Since position could not be ascertained and further since neither the AO nor the learned CIT(A) have considered the relevant facts nor carried out further examination or inquiry we consider it proper to restore the matter back to the file of AO to decide the issue afresh after examining all relevant aspects and as per law, of course, after providing opportunity of being heard to the assessee. Consequently, order of the learned CIT(A) is set aside and the ground is allowed for statistical purposes.
Sale of scrap will form part of total turnover for computing deduction u/s 80HHC - we have gone through the order of the Tribunal rendered in assessee's own case for AY 1996-97, wherein after considering various authorities it has been held that sale of scrap is not to be included in total turnover for the purposes of computing deduction u/s 80HHC. The ld DR has not been able to point out any decision of jurisdictional High Court in favour of the Revenue. As the issue stands covered in favour of the assessee by the earlier decisions of the Tribunal in the case of the assessee itself, respectfully following the same, we uphold the claim of the assessee and allow the ground in assessee's favour. Ground is allowed.
In the result, assessee's appeal stands partly allowed as indicated above.
Computation of book profit under s. 115JA - provision for bad and doubtful debts - In the case of CIT vs. HCL Comnet Systems & Services[2007 (5) TMI 203 - DELHI HIGH COURT], the assessee had made provision for bad and doubtful debts in its P&L a/c for AY1997-98. The Hon'ble High Court while dismissing the appeal, held as under: ''there was no reason why a bad and doubtful debt claimed by the assessee could not be treated as an ascertained liability. If the debts that were bad and doubtful should have been written off, then cl. (c) of the Explanation to s. 115JA would become completely inoperative and otiose, which was not the intention of the legislature."
Thus, the issue is decided in favour of the assessee. Ground fails.
Exclude the proportionate lease rent on oak wood barrels leased to M/s Khodey Distillery Ltd. - On going through the order of the Tribunal in the case of Crosslands Research Lab Ltd. (supra), it is found that the order of the learned CIT(A) has been affirmed wherein the total cost of wooden barrel worked out. Consequently, the view taken by the learned CIT(A) in the present appeal for present assessment year which is based on the order of the learned CIT(A) in the case of Crosslands Research Lab Ltd. for AY 1995-96 is fully justified. Accordingly, order of the learned CIT(A) on the issue in question is upheld. Ground fails.
In the result, assessee's appeal is partly allowed, in the manner as indicated above and the appeal filed by the Revenue is dismissed.
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2008 (3) TMI 693 - SC ORDER
... ...
... ... ..... Tripathi, ASG., Mr. V.Rama Subramanium, Adv., Ms. Vismai Rao, Adv., Mr. B.V. Balaram Das,Adv. ORDER Delay condoned. Dismissed on the facts of the case.
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2008 (3) TMI 692 - ITAT MUMBAI
Adjustment of cash seized at the time of search against the advance tax liability - completion of assessment u/s 153A - Interest charged u/s 234B and 234C - HELD THAT:- After going through the old provisions of law and the new provisions of law of s. 132B and cl. (d) of s. 158BC, it is amply clear that whatever the amount has been seized by the Department that has to be treated against any pending demand including penalty and against the demand of the block period of which the assessment has to be completed.
As per the old provisions of law, the AO has to wait (sic) the order under s. 132(5) and then the order under s. 158BC. However, taking into the difficulties of the assessee in mind, the legislature has amended the provisions of s. 132B as well as cl. (d) of s. 158BC.
Even as per the amended provisions of law, there is no requirement to seek any request from the assessee for adjustment. However, in the present case, the assessee has requested to adjust the remaining cash seized during the search against the tax liability of the assessee. Therefore, in our considered view the Department has to adjust the amount seized at the time of search towards the advance tax, etc., from the date when the amount was seized. It is incorrect on the part of the AO, who has taken into consideration the adjustment from the date of assessment. It is a matter of commonsense that once the amount is lying with the Department that has to be adjusted; otherwise that amount where will be adjusted and in which account the Department will keep the amount. The seizure of the amount is for the' obvious reason that the same has to be adjusted against any demand raised against the assessee or against any demand which is pending before the date of search.
Therefore, we direct the AO to adjust the remaining cash seized by the Department from the date of seizure because if any amount is to be adjusted against any liability the date of payment of that liability shall be the date of seizure and not the date of adjustment and/or the date of order. The AO is therefore, directed to modify his order accordingly.
Rate of interest under ss. 234A and 234B has to be applied - The rate of tax (sic-interest) is mentioned under the respective sections. It is also clearly mentioned that what rate is to be charged from which date and upto which date and what rate has to be charged from the date of amendment. Therefore, the AO is directed to ascertain the factual date that upto which date the current rate of interest is to be charged. The AO will also allow opportunity to the assessee for applicability of current rate of interest. We order accordingly.
In the result, the appeals filed by the assessee are allowed in part.
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2008 (3) TMI 691 - RAJASTHAN HIGH COURT
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... ... ..... only for the capital gain, and not as their having acquired those articles in the previous year by their income from the undisclosed sources. o p /o p 13. The other aspect also, is no less important, that in case of other assessees, being the other family members, after passing of the impugned order, the Tribunal has found them liable to pay, only capital gain tax, and those orders have acquired finality, as such, the position boils down to is, that the two assessees stand meted with differential treatment, despite being similarly situated, on factual matrix, which also cannot be permitted. o p /o p 14. Thus, in our view, both the questions, as framed, are required to be answered in favour of the assessee, and against the Revenue, and are accordingly answered. The appeals are allowed. The impugned orders of the learned Tribunal are set aside. The matter will now go back to the Assessing Officer, to give effect to this order, and tax the assessees, on capital gains. o p /o p
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2008 (3) TMI 690 - KERALA HIGH COURT
... ...
... ... ..... xport market. The Tribunal assumed that they also introduced some innovation in the working of the company to boost production and it was presumed that the payment of service charges paid by the assessee was not business expediency and hence an allowable deduction. We are of the view that none of the aspects relevant have been considered by the Tribunal and the import of section 40A(2)(b) has not been discussed. The fact that there was no business increase actually, because of the services rendered by them, was also not considered and the fact that the company has been paying salary and commission to them for some service was also not considered, The approach made is totally perverse and there is no rationale in it. We, therefore, answer the questions in favour of the revenue and against the assessee and consequently allow the appeal by setting aside the orders of the Commissioner of Income-tax (Appeals) and the Tribunal and restore the order passed by the Assessing Officer.
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2008 (3) TMI 689 - ITAT AGRA
Long-term capital gain - sale proceeds of shares - Claim Exemption u/s 54F - Income from undisclosed sources - Genuine transaction or not - HELD THAT:- The evidences submitted by the assessee are not proved to be bogus, false or incorrect. Assessee has no other source of income except rental income and share from partnership firm. The Revenue too has not brought on record any source from which the assessee could have earned this alleged undisclosed income and there is no material on record to establish or even suggest that cash actually flowed from the assessee to purchase the demand drafts as alleged by the Revenue. On the other hand the broker has categorically confirmed that he made the payment of sale proceeds.
After lifting the veil Department's enquiry should have gone to establish logically, from the records, that sale consideration was actually the money of the assessee converted under the guise of share transaction. Similarly, here there was no tax planning for which any colourable device or collusion could have been used. It was a simple transaction of sale of shares at the most opportune time which is perfectly in tune with the human nature. As a matter of fact the entire approach and findings of the lower authorities are based on suspicion, surmises and conjectures and badly affected by various other cases, which have no application to the assessee's case.
In our view, the action of the Revenue authorities in concluding that the sale value of shares is income of the assessee from undisclosed sources cannot be accepted. Thus, the income declared by the assessee under the head long-term capital gain is directed to be assessed as such.
In the result, appeal by the assessee is allowed.
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2008 (3) TMI 688 - SC ORDER
... ...
... ... ..... etition for the simple reason that if the share application money is received by the assessee-Company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to re-open their individual assessments in accordance with law. Hence, we find no infirmity with the impugned judgment. Subject to the above, special leave petition is dismissed.
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2008 (3) TMI 687 - ITAT MUMBAI
Addition on unexplained cash credits - credits in bank accounts - earned commission income at the rate of 0.15% - reasonable percentage of the commission on the total turnover? - HELD THAT:- Having carefully examined the various Orders in the case of different assessees' it has become amply clear that in these type of activities brokers are only concerned with their commission on the value of the transactions. The assessee has also made out a case that the customers do not come directly to him and they come through a sub-broker who also charge a particular share of commission. In all the judgments what has been stated is that an average percentage of commission is between . 15% to .25%.
In the cases of Palresha & Co. (supra) and Kiran & Co. (supra), the Tribunal has considered reasonableness of percentage of commission to be earned on turnover was at .1%. The assessee himself has offered the percentage of commission at 0.15%, which is more than the percentage of commission considered to be reasonable by the Tribunal in the cases of Palresha & Co. (supra) and Kiran & Co. (supra), in similar type of transactions. The theory of the Assessing Officer to treat the entire deposit as "unexplained cash credits, cannot be accepted in the light of assessment orders in the case of beneficiaries and also in the light of the fact that assessee is only concern with the commission earned on providing accommodation entries.
We, therefore, of the view that since the assessee itself has declared the commission on turnover at 0.15% which is more than the percentage considered to be reasonable by the Tribunal in the cases of Palresha & Co. (supra) and Kiran & Co. (supra), the same should be accepted. We, accordingly, accept the commission declared by the assessee and set aside the Order of the CIT (A) in this regard.
Disallowance on loss - sale of assets - HELD THAT:- The assessee company was asked to submit the details of the same and in response thereto, it was stated that the company was taken over by the assessee with assets and liabilities. At the time of take over, it was decided that fixed assets and debtors were to be realized and out of such realization, the creditors were to be paid. During the course of this process, the company had suffered a loss of which details are given in para 10 of the assessment order. The assessee company was asked to produce the supporting bills for repairs and name and addresses of the parties on behalf of the company made transactions, but, the assessee did not file any details and the Assessing Officer has rejected the claim of the assessee. Similar was the position before the CIT (A) and the CIT (A) confirmed the disallowance. Before the Tribunal, the assessee could not improve his case and we, therefore, find no merit in this ground. Accordingly, we, dismiss the same.
In the result, appeal of the assessee is partly allowed and that of the Revenue is dismissed.
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