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Showing 441 to 460 of 735 Records
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2009 (11) TMI 540
Waste and scrap – Coper sludge – Excisability – Copper sludge arising in process of manufacture of zinc sulphate whether can be said to be a waste or not - Mere fact that even the waste could be sold in the market or it could be dealt with in the market itself is not sufficient to come to the conclusion that it is different product having marketability - marketability of the product as a result of the process is one aspect and the disposal of waste is another aspect – Submission of Revenue that duty payable on such waste not accepted
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2009 (11) TMI 539
Issues:
1. Deduction under section 80HHA and setting off income against loss from a non-industrial unit.
2. Entitlement to depreciation for plant and machinery of the menthol unit.
Issue 1: Deduction under section 80HHA and setting off income against loss from a non-industrial unit:
The case involved an assessee, a private limited company engaged in the manufacture and sale of basic drugs, claiming deductions under section 80HHA and depreciation for the menthol unit in Rampur. The Assessing Officer partially allowed the deduction under section 80HHA, leading to an appeal. The first appellate authority allowed the appeal, directing not to adjust losses of other units while computing the deduction under section 80HHA. The Income-tax Appellate Tribunal (ITAT) partially allowed the Department's appeal and restored the assessment order. However, it upheld the direction not to adjust losses of other units for section 80HHA deduction. The Tribunal also ruled that the trial run of the plant constituted use, entitling the assessee to depreciation for the relevant assessment year.
In analyzing the first question, the Court referred to past judgments, including one involving the assessee for previous assessment years. It highlighted the interpretation of section 80HHA, emphasizing that the deduction is intended for profits and gains of industrial undertakings fulfilling specified conditions. The Court cited decisions supporting the view that the deduction is linked to industrial undertaking profits, not total profits of the assessee. The assessee argued that the issue was settled in their favor based on previous decisions. However, the Court noted conflicting views within the assessee's cases for different years. The Department cited a Supreme Court decision to support its stance on the issue.
Ultimately, the Court answered the first question against the assessee, holding that deduction under section 80HHA requires adjusting losses from non-industrial units first before setting off against industrial undertaking income.
Issue 2: Entitlement to depreciation for plant and machinery of the menthol unit:
Regarding the second question, the Tribunal found that the machinery was put to use, with the Commissioner of Income-tax (Appeals) determining that the trial run of the plant constituted use. Citing a relevant case law, the Tribunal justified allowing depreciation for the assessment year 1987-88 as the machinery was used for business purposes during the relevant accounting year.
The Court upheld the Tribunal's decision on the second question, ruling in favor of the assessee and against the Department. It affirmed that the machinery being put to use for business purposes justified the allowance of depreciation for the menthol unit.
In conclusion, the Court provided a detailed analysis and ruling on the issues of deduction under section 80HHA and entitlement to depreciation for the plant and machinery of the menthol unit, ultimately deciding against the assessee on the first issue and in favor of the assessee on the second issue.
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2009 (11) TMI 538
Reassessment - assessee would under the guise of questioning the taxability would in effect convert it as his appeal or revision in disguise which is impermissible in law particularly having accepted the assessment orders – reassessment proceedings pertaining to particular income - claim for exemption from the taxability under section 10B in reassessment proceedings is to be restricted only to the extent of escaped income and not the entire income as claimed by the assessee
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2009 (11) TMI 537
Issues Involved:
Interpretation of notification regarding backward areas for claiming deduction under section 80HH of the Income-tax Act, 1961.
Analysis:
The appeal by the Revenue challenged the order passed by the Income-tax Appellate Tribunal regarding the deduction claimed under section 80HH for the assessment year 1993-94. The respondent claimed the deduction based on the location of their manufacturing unit in Belgaum, a backward area as per a specific notification. The Assessing Officer initially rejected the claim, but the appellate authority allowed it for Belgaum District, distinguishing it from Belgaum taluk of Gulbarga District. The Revenue filed subsequent appeals leading to the current case.
The substantial question of law in this appeal was whether the Tribunal's confirmation of Belgaum being a backward area, as per the notification, was contrary to law and arbitrary. The court answered this question in the negative against the Revenue, providing detailed reasoning.
The court analyzed the notification dated December 19, 1986, which listed backward areas for claiming benefits under section 80HH. It was noted that while certain taluks from various districts were excluded, the notification did not exclude any taluk from Belgaum District. Specifically, for Gulbarga District, Chittapur taluk, Sedam taluk, and Belgaum taluk were excluded. This interpretation was crucial in determining the eligibility of the assessee for the deduction.
The court concluded that the concurrent findings of the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal were justified. The notification clearly excluded specific taluks from Gulbarga District, not Belgaum District. Therefore, the assessee was entitled to claim the benefit under section 80HH for their manufacturing unit in Belgaum. The court dismissed the appeal by the Revenue, upholding the decision in favor of the respondent.
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2009 (11) TMI 536
Issues Involved:
1. Whether converting limestone into limestone powder qualifies as a manufacturing activity under sections 80-IA and 80-IB of the Income-tax Act, 1961?
2. Whether the judgment in Lucky Minmat P. Ltd. v. CIT [2000] 245 ITR 830 supports the view that certain activities can be considered manufacturing processes?
3. What constitutes "manufacture" under the Income-tax Act based on relevant legal precedents and definitions?
Issue 1: Conversion of Limestone into Limestone Powder as Manufacturing Activity:
The primary issue revolves around determining whether the process of converting limestone into limestone powder constitutes a manufacturing activity under sections 80-IA and 80-IB of the Income-tax Act, 1961. The judgment extensively discusses the definition of "manufacture" as per Black's Law Dictionary, emphasizing the transformation of raw materials into new forms or combinations. Reference is made to legal precedents such as Sterling Foods v. State of Karnataka and CIT v. Relish Foods, which establish that processing raw materials does not necessarily change their essential identity. The court also highlights the distinction between processing and manufacturing based on cases like Indian Hotels Co. Ltd. v. ITO and Gem India Manufacturing Co. v. CIT, where the nature of the transformation determines whether it amounts to manufacturing. Ultimately, the court concludes that the conversion of limestone into lime and lime dust by stone crushers qualifies as a manufacturing process, as ruled by the apex court, thereby rejecting the Revenue's argument against it.
Issue 2: Interpretation of Lucky Minmat P. Ltd. v. CIT Judgment:
The judgment in Lucky Minmat P. Ltd. v. CIT is analyzed to determine its relevance in defining manufacturing processes. The court cites the specific observation from the judgment that the conversion into lime and lime dust or concrete by stone crushers can be considered a manufacturing process. The Revenue argues that this observation is obiter dicta and not the ratio of the decision, contending that each case must be assessed individually to determine manufacturing status. However, the court clarifies that the Supreme Court's directive on the conversion of limestone into lime and lime dust is a definitive ruling, not obiter dicta. This clarification solidifies the position that such conversion activities indeed constitute manufacturing processes, aligning with the assessee's position.
Issue 3: Understanding "Manufacture" in Legal Context:
The judgment delves into various legal interpretations of what constitutes "manufacture" under the Income-tax Act, drawing from cases like Aspinwall and Co. Ltd. v. CIT and CIT v. Gem India Manufacturing Co. The court emphasizes that a transformation resulting in a commercially different article signifies a manufacturing activity. The analysis of these precedents establishes that the core identity of a product remains unchanged despite processing, unless a distinct transformation occurs. The court's reference to Sacs Eagles Chicory v. CIT and subsequent apex court validation underscores the importance of identity retention in determining manufacturing status. By aligning these legal principles with the case at hand, the court decisively rules in favor of the assessee, affirming that the conversion of limestone into limestone powder qualifies as a manufacturing activity under the Income-tax Act.
In conclusion, the judgment provides a comprehensive analysis of the issues surrounding the classification of converting limestone into limestone powder as a manufacturing activity. By referencing legal definitions, precedents, and specific judgments, the court clarifies the criteria for identifying manufacturing processes under the Income-tax Act and ultimately rules in favor of the assessee based on established legal principles and interpretations.
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2009 (11) TMI 535
Proper service - assessee refused to accept the service of the notice - search and seizure operation was conducted on his premises of assessee - Held that: - Revenue is unable to show that there was any refusal of the assessee to accept service as has been assumed in the question referred - Tribunal has categorically held that no other mode was adopted and steps for service of notice were taken about a week before the time was expiring - question has to be answered against the Revenue and in favour of the assessee
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2009 (11) TMI 534
Deduction u/s 80P - deduction under Section 80P(2)(a)(i) in respect of interest earned on deposits made out of the non-SLR funds - normal banking business/activities - Held that: - The words used by the legislature are very important. The first word used is attributable, which is much wider in scope than the word derived. The second phrase used is any one or more of such activities. Any banking business providing credit facilities to its members and investing the sums deposited by the members of the society is part of banking business - the investment of the funds by the banks including the non reserves were part of the banking activities since no bank would like its reserve funds to remain idle and not earn any interest - herefore, the interest earned on such deposits is directly attributable to the business of banking - Deduction allowed.
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2009 (11) TMI 532
Issues:
1. Interpretation of section 37(1) of the Income-tax Act, 1961 regarding deduction of commission and subsidy paid to cane growers as part of purchase price.
2. Validity of assessment order set aside by the Commissioner under section 263 of the Income-tax Act.
3. Jurisdiction of Assessing Officer in passing assessment order after Commissioner's order set aside.
4. Applicability of previous court judgment in a similar case.
Analysis:
1. The primary issue in this case pertains to the interpretation of section 37(1) of the Income-tax Act, 1961 regarding the deductibility of commission and subsidy paid to cane growers as part of the purchase price. The question raised was whether these payments are allowable for deduction under the said provision. The Tribunal, in its order dated January 13, 1997, upheld the Assessing Officer's decision that the assessment order was without jurisdiction. However, the court referred to a previous judgment dated March 15, 2007, which concluded a similar question in favor of the assessee, indicating that the matter had already been settled in a previous case.
2. Another issue addressed in this judgment is the validity of the assessment order that was set aside by the Commissioner under section 263 of the Income-tax Act. The Commissioner's order dated March 23, 1990, was challenged before the Tribunal by the assessee. Subsequently, the Tribunal set aside the Commissioner's order, leading to a series of events culminating in the present reference application. The court found no illegality in the Tribunal's order, emphasizing that the Assessing Officer had no basis to pass a fresh assessment order on March 25, 1992, following the setting aside of the Commissioner's order.
3. The jurisdiction of the Assessing Officer in passing the assessment order after the Commissioner's order was set aside was also a crucial aspect of this case. The court highlighted that the Assessing Officer had no grounds to rely on the earlier order dated March 23, 1990, once it had been invalidated by the Tribunal. This raised concerns about the procedural correctness and jurisdictional boundaries within which the Assessing Officer operated, ultimately influencing the outcome of the case.
4. Additionally, the judgment referenced a previous court decision in I. T. R. No. 48 of 1992, which had already settled the question in favor of the assessee and against the Department. This previous judgment, dated March 15, 2007, was cited to demonstrate that the issue at hand had already been conclusively addressed in a legal context, further supporting the dismissal of the present application. The court's reliance on established legal precedents underscored the importance of consistency and adherence to prior judicial decisions in resolving similar tax matters.
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2009 (11) TMI 530
Right to exercise option to adopt its previous year under section 3(1) (e) (i) - business had commenced with effect from December 1, 1983 - Assessee filed return for the assessment year in question by treating the previous year to be from December 1, 1983 to June 30, 1984 - Assessing Officer stated that this amounted to change of previous year without permission under section 3(4) of the Act and on that ground the claim for loss for that year was rejected - Held that: - There was no other source of income prior to December 1, 1983 - company had a right to exercise the option to adopt a previous year under section 3(1)(e)(i) of the Act - claim of loss shown up to June 30, 1984, has to be allowed, treating the `previous year' as ending on June 30, 1984 - no prior permission was required under section 3(1)(e)(i) - question, answered against the Revenue and in favour of the assessee
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2009 (11) TMI 529
Courier Service - assessee had entered into franchise agreement with several persons - Agents designated as franchisees and conditions of franchise agreement not enforced - all the 4 conditions of the taxable service are not met - Appellant is not covered by the definition of franchisee service as given in Section 65(47) of the Finance Act, 1994 and therefore would not attract service tax - appellants are not a franchiser rendering franchise service
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2009 (11) TMI 528
Waiver of pre-deposit - Penalty – transportation of goods through pipeline service - appellant had installed storage tanks in the factory premises of the purchaser – sale of goods though tanks - ownership of such goods in tanks and pipelines lies with the appellant - no service provided by the appellant to fall under the category of 'transportation of goods through pipeline' - prima facie case for waiver of pre-deposit - waiver of pre-deposit allowed
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2009 (11) TMI 526
Stay of the order - findings of all the fora below that material are obscene, at this stage it will be very risky to allow the stay of operation - stay is granted the department will be compelled to release the material and in that case it would have serious repercussion in the event later on it is found that the appeal is not sustainable - Held that: - if appeal succeeds the appellant does not stand to suffer as the materials may be released and utilised for which the same are imported - allegations contained in the petition are not admitted by the department - respondent waives the Notice of Appeal
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2009 (11) TMI 524
Search and seizure - documents seized, which included a rough paper with noting pertaining to sale transaction, receipt of amounts - containing the signature of the assessee - Revenue referred to the assess-ment order and the first appellate order and submitted that the assessment is not based solely on one document, namely, annexure E seized from the assessee - assessee submitted that annexure E does not contain sufficient materials to make assessment against the assessee - Held that: - Tribunal has not even gone through the assessment order and the first appellate order against which the second appeal was filed before it - Tribunal has not exercised jurisdiction properly, we allow the appeal by setting aside the order of the Tribunal and remand the matter back to the Tribunal
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2009 (11) TMI 523
Penalty under Section 144 of the Customs Act - smuggling of the Cars - assessee was not aware as to whether the RTO registration was sought for the purpose of exporting the vehicles - export which took place was not on the basis of the original registration book issued by the authorities - duplicate copy of the original registration book was taken out and zerox copy of the duplicate - Held that: - duplication registration certificate which was presented to the Customs at the time of export - showed the year of manufacture to be 1960, 1961 and 1962 and there was nothing to connect the applicant with these years being shown as he has shown the years of manufacture as "not known" - no substantial question of law arises - appeal is dismissed
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2009 (11) TMI 522
Waiver of pre-deposit - demands of service tax – Business Auxiliary Service assailed on the ground of exemption under export of services – management, maintenance or repair service - services provided by appellant was in India - Commissioner held that this appellant has marketed for the goods in India and activities were undertaken in India – Held that: - benefit of service having accrued in India the appellant had not provided export of service - appellant has made deposit of Rs. 1,19,12,350/- and direct that as an interim measure, pre-deposit of Rs. 1 crore - balance demand of service tax and penalty shall be stayed till disposal of the appeal
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2009 (11) TMI 521
Cenvat credit - allowed on inputs which have not been proved to be received in the manufacturing unit for manufacture of dutiable products in contravention to the erstwhile Rule 57G(3) of Central Excise Rules, 1944 - assessee had proved beyond doubt that they had received the inputs in question and the same has been used by them in the manufacture of the final product – Held that: - Department wants to rely on certain material which was never produced before the Assessing Officer or Revenue Authorities upto the level of the Tribunal - Department cannot be permitted to place additional evidence on record - No question of law much less a substantial question of law is involved in all the appeals. The appeals are accordingly rejected. No order as to costs.
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2009 (11) TMI 520
Waiver interest - assessee aggrieved by the levy of interest - filed an appeal before the Commissioner - on the ground that the same was not chargeable without issuance of notice - Commissioner allowed the appeal - held that the assessing officer was not justified in charging interest and the same was ordered to be deleted - Held that: - assessee's appeal was not maintainable as the same was filed only against the levy of interest payable under Section 215 pursuant to the orders passed under Sections 154/155 of the Act - question referred to us is answered in favour of the revenue and against the assessee
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2009 (11) TMI 518
Penalty on CHA - changed the sample and forwarded to Textile Committee for monetary consideration from the importer - not being known of the fact of the change of the sample and the appellant cannot held liable for penal action - appellant was mere an employee, who was working under the instruction of the CHA firm – Held that: - absence of any knowledge and holding that penal action cannot be taken against the CHA firm, penalty against the appellant is also not sustainable - Accordingly, the appeal is allowed with consequential relief.
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2009 (11) TMI 517
Novation of contract - suits for recovery - winding up - Held that:- This appeal is liable to be dismissed. The appellant-company has made much hue and cry about novation of contract in pursuance of e-mails exchanged between the parties on 9-5-2006, 10-10-2006, 11-10-2006 and 6-12-2006 (R2 to R4) but the e-mails cannot constitute any concluded contract and could not be accepted as novation of the written loan agreement dated 15-4-2005 and memorandum of understanding dated 31-8-2006 (R3), especially when in the loan agreement dated 15-4-2005, which is accompanied by an agreement of pledge, dated 15-4-2005 (P5) and the deed of guarantee, dated 15-4-2005 (P6), there is a specific clause 12.5, which reads as under:—
"12.5 Variation.—No variation of this agreement shall be binding on any party unless such variation is in writing and signed by each party." (emphasis added).
In view of the aforesaid prohibition, the appellant-company cannot assign their obligation by substituting the shares of another company for discharge of its liability. Moreover, it is not firstly possible to record a finding that a "concluded contract" had ever come into being because there is no "acceptance of proposal" to substitute the loan in consideration of allotment of shares. No concluded contract by the managing director or the directors of the company could come into being unless resolution of the company on that score was passed. No such resolution having been placed on record, no conclusion could be reached that a concluded contract has come into being. Appeal dismissed.
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2009 (11) TMI 516
Reduction of Share capital - cancelling and extinguishing 95,93,137 fully paid-up shares held by promoters of the company, namely, Alghanim Industries (Mauritius) Limited (hereafter, ‘AIM’) and by cancelling and extinguishing 25,25,040 fully paid-up shares held by public shareholders at the rate of ₹ 7 per fully paid-up share and also by cancelling and extinguishing partly paid-up shares
Held that:- Section 392(1)(b) of Companies Act does not leave any doubt that where the High Court makes an order sanctioning a compromise or an arrangement, it may at any time thereafter can give directions in regard to any matter or make such modifications in the compromise or arrangement for working of compromise or arrangement. The argument that the registration of the Minute for reduction of the capital with the RoC renders it irreversible, is, therefore, misconceived.
This Court examined the Auditor’s report, various steps Rockwool has taken from time-to-time and the way the applicants herein went on purchasing shares during May, 2005 to February, 2006 at higher price and they do not lend any support to the allegation that Rockwool played fraud on the Court. The plea of fraud is, therefore, rejected. Appeal dismissed.
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