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Showing 141 to 160 of 984 Records
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2009 (7) TMI 1260
Issues Involved:
1. Delay in filing the petition.
2. Dismissal of the petition.
Summary:
Issue 1: Delay in filing the petition
The Supreme Court condoned the delay in filing the petition. The term "Delay condoned" indicates that the Court accepted the reason for the delay and allowed the case to proceed despite the late submission.
Issue 2: Dismissal of the petition
The Supreme Court dismissed the petition. The term "Dismissed" signifies that the Court did not find sufficient grounds to entertain the petition and thus rejected it.
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2009 (7) TMI 1259
Issues involved: Assessment order additions - GP ratio discrepancy, unexplained credit entries in bank account, sundry creditors amount discrepancy.
In the present case, the Assessing Officer made three additions in the assessment order: Firstly, a discrepancy in the GP ratio where the addition was made based on a higher ratio compared to what was provided by the assessee. Secondly, an addition against unexplained credit entries in the bank account. Thirdly, an addition on account of sundry creditors wrongly shown. The CIT (Appeals) partially allowed the appeal, reducing the first addition significantly after accepting the explanation regarding the difference in GP ratio due to the nature of sales. The CIT (Appeals) also deleted the addition for unexplained credit entries, noting that it had been assessed for another assessee. The ITAT upheld these findings as factual, with no legal question arising.
Regarding the unexplained credit entries, the CIT (Appeals) decision to delete the addition was based on the fact that the Assessing Officer could not establish that the money did not belong to the present assessee. The ITAT concurred with this view, emphasizing that no addition could be made without proper evidence. The ITAT observed that the Assessing Officer failed to refute the claim that the money did not belong to the present assessee, leading to the deletion of this addition.
On the issue of the sundry creditors amount, the ITAT upheld the CIT (Appeals) findings that the liabilities were acknowledged in the books and pertained to the amount payable by the erstwhile firm, now taken over by the assessee. As long as there was no cessation of liability, the ITAT ruled that no addition could be made under section 41(1), emphasizing the factual nature of this determination.
In conclusion, the High Court dismissed the appeal, stating that all the findings were factual in nature with no legal questions arising. The appellant was directed to pay costs, highlighting the dismissal of the appeal based on the factual nature of the issues involved.
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2009 (7) TMI 1258
Issues involved: Confirmation of penalty u/s 271(1)(c) of the IT Act, 1961 for undisclosed income from investments in mutual funds.
Summary:
1. The appeal was filed against the penalty of Rs. 9,80,628 levied u/s 271(1)(c) of the IT Act. The assessee had undisclosed income from investments in Reliance Mutual Fund and Franklin Templeton Mutual Fund, which was brought to light during assessment proceedings.
2. The AO added Rs. 30,00,000 as income from undisclosed sources and initiated penalty proceedings. The assessee claimed the investments were made from accumulated bank balances. However, the CIT(A) upheld the penalty, stating lack of evidence for the source of funds used for investments.
3. The counsel argued that the investments were made from existing bank balances and the addition was agreed upon for peace with the Department. The Departmental Representative contended that the assessee's disclosure was not voluntary and the penalty was justified under s. 69 of the Act.
4. The Tribunal found that the assessee did not disclose the income until prompted by AIR information. The explanation provided was deemed unsatisfactory, leading to the confirmation of the penalty. The Tribunal rejected the assessee's arguments based on relevant case laws and upheld the penalty levy.
5. The Tribunal concluded that the assessee failed to substantiate the source of funds for investments, leading to the justified levy of penalty u/s 271(1)(c). The appeal of the assessee was dismissed.
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2009 (7) TMI 1257
The Supreme Court dismissed the case after condoning the delay. The citation is 2009 (7) TMI 1257 - SC. The High Court reference is 2008 (11) TMI 677 - Delhi High Court. The judges were Mr. Justice S.H. Kapadia and Mr. Justice Aftab Alam. Petitioner represented by Mr. Gourab Banerjee, ASG, Mr. Rajiv Nanda, Adv., Mr. Kul Bharat, Adv., Mr. B.V. Balaram Das, Adv.
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2009 (7) TMI 1256
The Bombay High Court admitted the case based on substantial questions of law regarding the exclusion of a sum paid to retired partners from taxable income. Two questions were raised, but questions 1 and 4 were not pressed by the appellant. The respondent waived service.
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2009 (7) TMI 1255
Issues Involved:
1. Entitlement to tax exemption u/s 10(10C) of the Income Tax Act, 1961 for compensation under the Optional Early Retirement Scheme (OERS) of RBI.
2. Validity of reassessment proceedings initiated by the Assessing Officer.
3. Compliance of OERS with Rule 2BA of the Income Tax Rules, 1962.
Summary:
1. Entitlement to Tax Exemption u/s 10(10C):
The primary issue was whether the petitioners, ex-employees of the Reserve Bank of India (RBI), were entitled to tax exemption for compensation up to Rs. 5 lakhs under the Optional Early Retirement Scheme (OERS). The petitioners argued that the OERS was a voluntary retirement scheme and thus eligible for tax exemption u/s 10(10C) of the Income Tax Act, 1961. The court noted that the scheme was indeed voluntary and the term "early" was superfluous. The petitioners had claimed this exemption in their tax returns for the financial year 2003-2004, which was initially accepted by the tax authorities.
2. Validity of Reassessment Proceedings:
The Assessing Officer later issued notices u/s 148 of the Income Tax Act, alleging that the petitioners' income had escaped assessment. This was based on a circular from RBI, which, relying on an opinion from M/s. Choksi & Co., Chartered Accountants, claimed that the OERS did not comply with Rule 2BA of the Income Tax Rules. The court found that there were no new materials before the Assessing Officer except the RBI circular, which had no binding value. The court held that the opinion of a Chartered Accountant or RBI could not be grounds for reassessment.
3. Compliance with Rule 2BA:
The court examined whether the OERS complied with Rule 2BA of the Income Tax Rules, 1962. It found that the OERS met the requirements of Rule 2BA, including clauses (i), (iii), and (iv). The scheme applied to employees who had completed over ten years of service and were over forty years of age, aimed at reducing overall employee strength, and did not contemplate filling vacancies caused by voluntary retirement. The court referenced a composite decision of the Income Tax Appellate Tribunal, which had ruled in favor of the assessees, confirming that the sums in question were exempt u/s 10(10C) up to Rs. 5 lakhs.
Conclusion:
The court allowed the writ application, setting aside and quashing the impugned assessment orders. It held that Section 10(10C) of the Income Tax Act, 1961, was applicable to the OERS introduced by RBI, and the petitioners were entitled to the tax exemption claimed. The court also noted that the orders of the Tribunal and Commissioner (Appeals) in favor of the assessees were binding on the Assessing Officer.
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2009 (7) TMI 1254
Appeal filed against the order of the CIT - order passed by the CIT u/s. 263 is arbitrary, without proper reasons, invalid and bad in law - The return was processed u/s. 143(1). The case was selected for scrutiny and notice u/s. 143(2) was issued on 12th Jan., 2005. AO has investigated the issues thoroughly and after examination he has made certain disallowances. assessee filed appeal against this order of the AO before the CIT(A), The CIT(A) partially allowed the relief from disallowance from carrying charges paid to C.S. Bohra where TDS was deducted. The AO disallowed ₹ 71,339 and the CIT(A) sustained only ₹ 26,399. This order of the CIT(A) has been asserted by the Department as well as by the assessee. Hence, this appeal.
HELD THAT:- The CIT has mentioned in his order that the AO has passed an order in haste without making any inquiry on the issues. In this connection, we hold that the case was selected on a scrutiny on 12th Jan., 2005 fixing the hearing on 20th Jan., 2005. The order was passed on 13th Dec., 2006. Thus there was a time of two years for investigation of the case. The details on the order sheet are placed in the paper book at pp. 8 to 17.
We find that the questionnaire has been issued and that too under the direction of the Addl. CIT which is evident from p. 9 of the paper book which is a note sheet dt. 19th Jan., 2005. The various notings in the note sheets show that the assessee has produced the books of account, bills and vouchers which have been verified by the AO. The questionnaires issued to the assessee calling details are also evident from pp. 18, 19, 20, 21, 53, 54 and 55 of the paper book. Thus these facts show that the AO has issued the details of questionnaires on the various issues which had been replied by the assessee which is evident from pp. 56 and 57 of the paper book.
Sundry creditors - we find that the AO has himself verified these sundry creditors by calling information u/s. 133(6) and they have replied to the AO by confirming the transaction. Thus after inquiry the AO has reached to the conclusion not to make addition on this issue. Thus the AO has adopted one course of two courses permissible in law. The AO had taken one view where two views are plausible and such view cannot make the order erroneous and prejudicial to the interest of the Revenue. The CIT's view cannot be invoked to substitute the view of the AO. The assessment also does not become erroneous where queries raised during the assessment proceedings are not recorded in the final assessment order. The queries were raised during the assessment proceedings which have been answered by the assessee and the AO has taken a view and on that the order passed by the AO does not become ipso facto erroneous and prejudicial to the interest of the Revenue.
regarding the payments made in cash - we find that the AO has made specific queries in respect of the land and building expenditure which is capital in nature of ₹ 8,93,337 in his questionnaire dt. 11th Jan., 2005 which is evident from page No. 18 of the paper book. Thus the necessary inquiry in this regard appears to have been made by the AO and after examination he has not made any addition on this account. Similarly the expenses debited under the head "Travelling and conveyance expenses"
we find that necessary details were submitted which is evident from p. 60 of the paper book and after verification the AO did not make any addition on this account. Similarly in the case of carrying charges the AO asked the details which is evident from p. 12 of the paper book. The assessee furnished the information and details in this regard during the assessment proceedings which are evident from pp. 60 and 62 of the paper book and after the examination the AO arrived at a conclusion and made the addition @ 1 per cent of the total expenses at ₹ 71,339 against which the assessee filed an appeal before the CIT(A) and after verification the addition has been reduced to ₹ 26,399. Thus this issue has not only been examined by the AO but also by the CIT(A) and after the verification the CIT(A) granted partial relief to the assessee.
Thus this issue cannot be made a basis for invoking the revisionary power by the CIT. Similarly in respect of the labour expenses, after verification, the AO made certain additions and in the appeal the CIT(A) had deleted the addition after verification. As far as the site Peditar expenses are concerned, we find that the AO made a specific query in his questionnaire dt. 19th Oct., 2006 which is evident from page No. 53 of the paper book. After the verification the AO made same addition and this issue cannot be made a basis to invoke the revisionary powers u/s. 263.
regarding the genuineness of the sub-contracts - we find that the amount was paid and the AO in his questionnaire dt. 19th Oct., 2006 has specifically made a query in this regard which is evident from page No. 54 of the paper book and the assessee submitted details and information in this regard. Audited accounts also show that the sub-contract made to the sister concern M/s M.K. Agarwal & Co. was made on the prevailing market price. As far as TDS on this account is concerned, the assessee has submitted TDS return which was also verified by the AO which is evident from page No. 55 of the paper book.
Regarding the payments made to the persons as specified in s. 40A(2)(b), we find that there was no deviation from the policy followed by the assessee in the past years. Thus from the above facts we are of the view that the invoking of the provisions of s. 263 by the CIT is not justified. In holding so, we also get the strength and support from the following decisions : CIT vs. Max India Ltd [2007 (11) TMI 12 - SUPREME COURT].
"The phrase 'prejudicial to the interests of the Revenue' in s. 263 of the IT Act, 1961, has to be read in conjunction with the expression 'erroneous' order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue. For example, when the AO adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the Revenue, unless the view taken by the AO is unsustainable in law."
The issue that has been raised is that, since the assessment order adverted to only MN property and was silent with respect to the properties located at GE and DC: on this short ground alone the revisional order of CIT ought to be sustained.
We, therefore, set aside the order of the CIT and the appeal of the assessee is accordingly allowed.
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2009 (7) TMI 1253
The High Court of Bombay dismissed the appeal as the issue raised was already decided against the Revenue in a previous judgment. No substantial question of law was found. The appeal was dismissed with no order as to costs.
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2009 (7) TMI 1252
Issues Involved:
The judgment involves the issue of disallowance of a specific amount by the Ld. CIT(A) for the Assessment Year 2000-01, based on the genuineness of transaction, identity, and creditworthiness of the parties involved.
Details of the Judgment:
Issue 1: Disallowance of Amount
The only ground raised by the revenue was the disallowance of a specific amount, and the Ld. CIT(A) erred in deleting the disallowance by holding that the assessee had discharged its onus, especially when the genuineness of transaction, identity, and creditworthiness of the parties was not established.
Contentions:
The learned DR supported the findings in the assessment order, while the counsel for the assessee strongly relied upon the discussions made in the order of CIT(A). The assessee had produced copies of bills and contract notes, all payments were received through account payee cheques/demand drafts, duly credited in the bank account, and recorded in the regular books of account.
Judgment:
The Tribunal observed that the assessee had provided all details regarding its transactions, including copies of contract notes and bills. The Assessing Officer did not verify these details and did not provide any findings of the investigation to the assessee. The Tribunal held that the addition made by the Assessing Officer lacked evidence put to the assessee during the assessment proceedings. Consequently, the Tribunal upheld the Ld. CIT(A)'s decision to delete the addition, citing a violation of the principles of natural justice by the Assessing Officer.
Conclusion:
The Tribunal dismissed the revenue's appeal, upholding the order of the CIT(A) regarding the disallowance issue for the Assessment Year 2000-01.
Note:
Separate judgments were not delivered by the judges in this case.
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2009 (7) TMI 1251
Sale and purchase of shares - Long-term capital gain - assessees claimed/offered long-term capital gains on sale of shares of various listed companies - Assessment proceedings u/s 153A - genuineness of transactions - Addition made by the AO u/s 68 - HELD THAT:- We find substantial merit in the view of the learned CIT(A) that it is this fact which has resulted into such action of the AO. We have also noted that voluminous documentary evidences have been filed by the assessee to prove its claim which support the genuineness of the transaction. However, the AO has utilized the statements of the persons who were not cross-examined by the assessee. Hence, as per the settled judicial principle, such statements cannot be given any weightage. On appreciation of documentary evidences submitted by the assessee, the genuineness of the transactions appears to be established.
As regards the aspect of off market transactions, it is noted that neither these are illegal nor prohibited and only some of the compliances have to be made by the brokers. As regard the aspect of such compliances, we find that it is not the case that all the off market transactions have not been reported by the concerned brokers to the stock exchange as per rules and even otherwise, any failure on the part of the brokers in doing such compliance cannot make the contract between the assessee and the broker illegal or void as the broker may face the consequences for his default under relevant statute. It is also noted that all the transactions are not off market transactions, hence, the AO's approach to pick and choose the only such instances which are favourable to him cannot justify such addition.
We are further of the view that economic consequences as a result of off market transactions or otherwise have taken place and, therefore, such transactions cannot be treated as sham merely for some discrepancies or for the view of the AO in regard to genuineness of these transactions. Thus, we are of the view that the share transactions cannot be considered as ingenuine/sham and, therefore, the sale proceeds of such share transactions cannot be taxed u/s 68 of the Act.
Treatment of transactions - We find that the learned CIT(A) has examined the factual details of these transactions on the basis of various parameters like frequency, volume, line of trade in which the assessee is mainly engaged and we are of the view that the decision of the learned CIT(A) is correct in law on that count also. Before parting from this aspect, we may add that this plea of the AO during the course of appellate stage itself contradicts and weakens the stand of the AO regarding his action of making addition under s. 68 because such plea results into an inference that the genuineness of the transaction cannot be doubted in absolute terms.
Thus, we hold that there is no merit in any ground of this appeal of the Revenue. Hence, we dismiss all the grounds raised by the Revenue.
In the result, the appeal filed by the Revenue stands dismissed.
Addition u/s 68 - Statement recorded on oath during the search operations - HELD THAT:- It is noted that the sole basis for making this addition is the statement of Shri Tilak Singh Parmar which has been retracted by him subsequently also. It is also noted that the said person is working in the capacity of peon/office boy. Hence, how his statement only can be a proper basis for making such addition. We further find that the entries recorded in such diary have been reconciled by the assessee from the books of account of various group concerns/assessees. Hence, in our opinion, the order of the learned CIT(A) in deleting the addition is correct in law. Thus, ground No. 3 of the Revenue's appeal is also dismissed.
In the result, Revenue's appeal is dismissed.
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2009 (7) TMI 1250
The High Court of Delhi condoned the delay in refiling the appeal. The court found that the payment made for the use of goodwill for a period of two years was of revenue nature, based on a previous judgment. The court dismissed the appeal as no substantial question of law arose due to the two-year agreement period.
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2009 (7) TMI 1249
Assess the house property income on actual receipt basis OR reasonable rent basis - difference of opinion between the ld' JM and the ld' AM - Third Member Appointment - determination of annual letting value of the house property - Whether the standard rent fixed under the Rent Control Act can be adopted as annual value while computing the income from the property for the assessment years 2000-01, 2002-03 and 2003-04 in the case of the assessee - Whether the earlier order of the Tribunal in assessee’s own case was necessarily to be followed or not - The ld JM restored the matter to the file of the AO to pass a fresh order in light of the order of the Tribunal decided for earlier year whereas the ld AM was of the view that the computation made by the AO is correct - Three appeals by the department against the order of the CIT(A) relating to assessment years 2000-01, 2002-03 and 2003-04.
The assessee, in the returns of income had disclosed annual letting value of the property on the basis of actual rent received. The assessee was asked to explain the discrepancy in the monthly rental of the property. AO noticed that the Municipal valuation of the property was ₹ 38,860 only per annum and since the actual rent received was more than the Municipal valuation, the annual value of the property has been adopted on the basis of actual rent received u/s 23(1)(a).
AO adopted the annual letting value of the property on the basis of rent received by the assessee for the four months in the previous year relevent to assessment year 2000-01. For the subsequent years also the same annual letting value of the property has been adopted by the AO.
The CIT(A), relying upon the decision of the Hon’ble Bombay High Court in the case of CIT v. J.K. Investors (Bombay) Ltd.[1999 (7) TMI 675 - ITAT MUMBAI], held that notional interest on the interest free deposit was not to be taken into account in working out the annual letting value of the property insofar as the Municipal valuation of the property was less than the actual rent received. He accordingly accepted the annual value of the property as declared by the assessee.
HELD THAT:- It is evident from the plain reading of section 23 that the annual letting value of the house property is first to be determined on notional basis as the amount at which the property might be expected to be let from year to year. It is settled law that where the property is subjected to Rent Control Act, the fair market rent should not exceed the standard rent.
The appeals relate to assessment years 2000-01, 2002-03 and 2003-04. The appeal for the assessment year 2001-02 has already been decided by the Tribunal and the issue has been remanded back to the AO for determination of the standard rent to be adopted as the annual letting value for purposes of section 23(1)(a) and assessing the annual letting value of the property in accordance with the provisions of sections 23(1)(a) and 23(1)(b).
The earlier Bench of the Tribunal did not consider the fact that the property in question was not subject to Rent Control Act and therefore the annual letting value was not to be restricted to the standard rent as per the Rent Control Act. The ld JM has not doubted the correctness of the decision of the Tribunal in assessee’s own case for the assessment year 2001-02 and therefore has followed the same and set aside the issue and directed the AO to determine the standard rent. However, the ld AM has pointed out that the earlier Bench of the Tribunal has ignored the important factor in this case in deciding that the annual letting value of the property u/s 23(1)(a) was to be adopted as the standard rent as per Rent Control Act.
Therefore, I agree with the ld AM, that the earlier decision of the Tribunal did not constitute a binding precedent on the facts and in the circumstances of this case. Though in my personal opinion when the earlier decision of the Coordinate Bench is doubted, it is preferable to make a Reference to the Hon’ble President for constitution of the Larger Bench, yet in the light of the Third Member decision of the Tribunal in the case of Napar Drugs (P.) Ltd.[2005 (11) TMI 195 - ITAT DELHI-B], the Coordinate Bench can deviate from the earlier decision in certain circumstances and since the present case falls in the exceptions, the course adopted by the ld AM cannot be said to be illegal or highly improper.
Admittedly, the assessee, apart from the rent received from Deutsche Bank AG and Bombay Stock Exchange, has received interest free deposits from the tenants. As per the decision of the Bombay Bench of the Tribunal in the case of J.K. Investors (Bombay) Ltd.[1999 (7) TMI 675 - ITAT MUMBAI], the benefit derived by the assessee from the interest free deposit could be taken into consideration for determination of fair rental value u/s 23(1)(a).
In my considered view, the benefit derived by the assessee from the interest free deposit could not be more than the lending rate at which the deposits were available in the market at the particular point of time. Even if that is taken into account, the fair rental value of the property does not work out to the amount determined by the AO and confirmed by the ld AM. Therefore, partly agree with the ld. AM that the annual letting value in this case cannot be limited to standard rent but I do not agree with him that the fair rent adopted by the AO is justified. I partly agree with the ld JM that the matter has got to go back to the AO instead of adopting the value determined by the AO. I hold accordingly.
Since this case is peculiar insofar as I have partly agreed with ld AM and partly with ld JM, I would like to give the following opinion :-
That in this case the annual letting value cannot be limited to the standard rent as workable under the Rent Control Act but the fair rental value shall have to be determined. The fair rental value determined by the AO however is not reasonable.
The ld JM had proposed to set aside the order of the AO. To that extent I have agreed with him. So however, I have not agreed with him that the standard rent is to be determined and adopted as annual letting value u/s 23(1)(a).
The ld AM has held that the standard rent is not to be adopted. I have agreed with him to this extent. So however, I have not agreed with him that the fair rental value has to be adopted as adopted by the AO.
The issue shall be set aside and restored to AO for determination of the fair rent to be adopted as the annual letting value.
We agree with the findings of the Third Member; accordingly these appeals are to be taken as disposed of in view of the decision of the Third Member. The orders of the ld. JM and ld. AM and the Third Member will be treated as part of this order which are annexed herewith.
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2009 (7) TMI 1248
Issues Involved:
1. Jurisdiction under Section 263 of the IT Act, 1961.
2. Genuineness of the transaction of sale of jewellery.
3. Application of the decision in the case of Smt. Sudha Agrawal.
4. Validity of the CIT's action based on additional enquiry and report.
Issue-wise Detailed Analysis:
1. Jurisdiction under Section 263 of the IT Act, 1961:
The assessee challenged the jurisdiction exercised by the CIT under Section 263 of the IT Act, 1961. The CIT had issued a notice under Section 263 based on findings from an additional enquiry conducted post-assessment. The tribunal noted that the CIT's action was based on a report from the Addl. Director of IT, Ahmedabad, which was obtained after the assessment was completed. The tribunal held that the CIT's action of initiating proceedings under Section 263 was void ab initio as the information obtained through the additional enquiry could not be considered as part of the "record" for the purpose of Section 263. The tribunal emphasized that the CIT cannot disturb a concluded assessment merely to make roving and fishing enquiries, and the power under Section 263 is not unbridled and must be exercised with caution.
2. Genuineness of the Transaction of Sale of Jewellery:
The CIT questioned the genuineness of the sale transaction of jewellery amounting to Rs. 2,96,08,100 to M/s Arihant Jewellers, as the address provided by the assessee was found to be non-existent. The assessee provided various evidences, including an affidavit from Shri Paras Vaid, owner of M/s Arihant Jewellers, confirming the transaction and explaining that the business was conducted from Raipur and Ahmedabad. The tribunal noted that the AO had made due enquiries and accepted the transaction as genuine based on the documentary evidence provided by the assessee, including purchase memos, PAN details, and banking transactions. The tribunal held that the AO's order was not erroneous as the AO had reached a reasonable level of satisfaction after due application of mind.
3. Application of the Decision in the Case of Smt. Sudha Agrawal:
The assessee relied on the decision of the tribunal in the case of Smt. Sudha Agrawal, where similar transactions with M/s Arihant Jewellers were held as genuine. The CIT dismissed the applicability of this decision, stating that it was rendered in the context of Section 158BC, whereas the present case was under Section 153A. The tribunal disagreed with the CIT's reasoning, stating that the ratio of the decision regarding the genuineness of the transactions is applicable irrespective of the sections under which the assessment proceedings were concluded. The tribunal noted that the decision in Smt. Sudha Agrawal's case had been accepted by the Department by not filing further appeal, thus making the view taken by the AO a possible view in law.
4. Validity of the CIT's Action Based on Additional Enquiry and Report:
The tribunal scrutinized the CIT's action of obtaining a report from the Addl. Director of IT, Ahmedabad, after the completion of the assessment. The tribunal held that such an action was beyond the CIT's jurisdiction under Sections 131(1), 133(6), and 135 of the IT Act. The tribunal emphasized that the CIT's power to make enquiries is limited to pending proceedings and cannot be exercised to disturb the finality of a concluded assessment. The tribunal concluded that the CIT's action of initiating proceedings under Section 263 based on an additional enquiry was not justified and amounted to a change of opinion, which is not permissible under the law.
Conclusion:
The tribunal quashed the order of the CIT, holding that the CIT's action under Section 263 was not correct in law. The tribunal emphasized that the AO had made due enquiries and accepted the transaction as genuine based on the evidence provided by the assessee. The tribunal also held that the decision in the case of Smt. Sudha Agrawal was applicable and supported the genuineness of the transactions. The tribunal concluded that the CIT's action of obtaining additional information post-assessment was beyond his jurisdiction and amounted to a change of opinion, which is not permissible under Section 263. The assessee's appeal was allowed.
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2009 (7) TMI 1247
Issues Involved:
The issues involved in the judgment are the disallowance of sundry creditors under Section 68 of the Income Tax Act and the subsequent appeal process.
Disallowance of Sundry Creditors under Section 68:
The assessee's return for the Assessment Year 2001-02, declaring an income of &8377; 4,10,544/-, was processed under Section 143(1)(a) and selected for scrutiny. The Assessing Officer doubted the genuineness of sundry creditors of an amount of &8377; 1 lakh and above, as they were not income tax assesses and lacked PAN numbers. The Assessing Officer disallowed the sundry creditors and added the amount to the assessee's income under Section 68. The CIT(A) upheld this decision, but the ITAT allowed the assessee's appeal, noting that the trading results were not disturbed and the purchases from the creditors were not disallowed. The ITAT found that the sales, purchases, and gross profits disclosed by the assessee were accepted by the Assessing Officer, leading to the conclusion that no addition could be made under Section 68 as the trading results were accepted.
Appeal Process:
The ITAT's decision was challenged in this appeal. The Tribunal's observation that the sales, purchases, and gross profits as disclosed by the assessee were accepted by the Assessing Officer was upheld. The ITAT's approach was deemed correct as there was no case for disallowance of corresponding purchases, and it was acknowledged that the outstanding creditors related to purchases and the trading results were accepted by the AO. Consequently, the court found that no substantial question of law arose for consideration in this case and dismissed the appeal.
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2009 (7) TMI 1246
Whether the High Court correct to upheld the order of conviction passed against the appellant herein for the offence punishable under Section 15 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as ‘the NDPS Act’) and sentenced her to undergo rigorous imprisonment for a period of ten years, and to pay a fine of ₹ 1 lac, and in default of payment of the same to undergo rigorous imprisonment for another period of two years, for having found in possession of 2 bags containing 61 Kgs. of poppy husk, without any permit or licence?
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2009 (7) TMI 1245
Issues Involved:
1. Treatment of Dividend Income
2. Treatment of Brokerage Income
3. Computation of Speculation Loss
4. Carry Forward of Losses
5. Interest Charged u/s 234B
Summary:
1. Treatment of Dividend Income:
The CIT(A) held that "dividend income was received in respect of shares which were held as stock in trade. Therefore it is part of the business income, having been earned in the course of the share trading." The Tribunal agreed with this view, stating that "for the purpose of applying the Explanation to sec.73, the dividend income arising from shares held as stock-in-trade has to be considered as part of the share business income and dealt with accordingly."
2. Treatment of Brokerage Income:
The CIT(A) considered brokerage income as part of the share business. However, the Tribunal reversed this decision, citing the Delhi Bench of the Tribunal in M.G. Capital Services Ltd v ACIT (2004) 91 TTJ 214, which held that "the brokerage income earned by an assessee as a share broker cannot be set off against the speculation loss because there was no element of speculation whatever in the brokerage income received by the assessee."
3. Computation of Speculation Loss:
The Assessing Officer computed the speculation loss at Rs. 15,51,84,920 by adding the expenditure of Rs. 6,40,44,409 to the share trading loss of Rs. 9,11,40,511. The CIT(A) directed that "the Assessing Officer should have computed the profit/loss from the entire business in shares without excluding the various items of income from the same and deemed the resultant figure as speculation loss."
4. Carry Forward of Losses:
The assessee's CO contended that the Assessing Officer erred in not allowing the carried forward losses of earlier years. The Tribunal restored this ground to the Assessing Officer for a fresh decision "in accordance with law after due opportunity to the assessee."
5. Interest Charged u/s 234B:
The second ground of the CO against the interest charged u/s 234B was deemed consequential. The Tribunal directed the Assessing Officer "to give consequential relief, if any."
Conclusion:
The Tribunal confirmed the CIT(A)'s decision regarding dividend and kasar income but reversed the decision on brokerage income. The appeal and CO were partly allowed.
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2009 (7) TMI 1244
The Supreme Court judgment involves three Civil Appeals: No. 3720 of 2006, No. 6482 of 2008, and No. 6484 of 2008. The case concerns the regularization of employment for various individuals in Andhra Pradesh. The Employment Exchange sponsored the name of one respondent for a position, and despite multiple orders in favor of regularization, the respondent's service was terminated by the state government. The High Court directed the state to reconsider the cases of the respondents in accordance with relevant government orders and circulars. However, the Supreme Court overruled this decision, stating that the High Court should not have disregarded the Tribunal's final orders on regularization. The Supreme Court directed the State of Andhra Pradesh to comply with the Tribunal's orders within two months.
For Civil Appeal No. 6482 of 2008, the case involved a similar situation with the Tribunal directing regularization without clear vacancies available. The High Court directed the state to consider the cases of the respondents as per government orders. The Supreme Court overturned this decision, stating that regularization can only occur against clear vacancies, and as such, the High Court's order was set aside.
Civil Appeal No. 6484 of 2008 had a parallel scenario with the Tribunal ordering regularization without clear vacancies, and the High Court directing consideration based on government orders. The Supreme Court ruled in line with the previous appeal, stating that without clear vacancies, there can be no regularization. The High Court's order was consequently set aside.
In all three appeals, the Supreme Court emphasized that regularization can only occur against clear vacancies and directed the state to adhere to the Tribunal's orders within a specified timeframe. The High Court's decisions were overturned in favor of upholding the Tribunal's rulings.
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2009 (7) TMI 1243
Issues involved: Application for dispensation of meetings of equity shareholders, secured creditors, and unsecured creditors for considering a scheme of arrangement between two companies.
Equity Shareholders and Secured Creditors: The application sought dispensation of meetings for equity shareholders and secured creditors based on certificates from a Chartered Accountant confirming their consent to the scheme of arrangement. The court noted that all consents were verified and certified, therefore, meetings for these stakeholders were not required to be held.
Unsecured Creditors: The applicant, a profit-making company, presented the list of unsecured creditors and financial details to support the dispensation of their meeting. The scheme specified that no liabilities would be transferred to the transferee company, and the applicant would retain them. Referring to a similar decision by the Delhi High Court, the court observed the substantial net assets and profit of the applicant, leading to the dispensation of the unsecured creditors' meeting to prevent prejudice.
Conclusion: Considering the financial stability and details provided, the court dispensed with the meetings of equity shareholders, secured creditors, and unsecured creditors, ultimately disposing of the application accordingly.
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2009 (7) TMI 1242
Cenvat - Fraudulent availment of credit - the decision in the case of INDIAN SPECIAL CASTING PVT. LTD. Versus COMMR. OF C. EX., LUDHIANA [2009 (2) TMI 434 - PUNJAB & HARYANA HIGH COURT] contested - Held that: - This is not a fit case for interference under Article 136 of the Constitution - appeal dismissed.
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2009 (7) TMI 1241
Whether, on the facts and circumstances of the case, FactSet Research Systems Inc. (‘FactSet’ or ‘the applicant’) will not be taxable in India under the Income-tax Act, 1961, with respect to the subscription fees?
Whether, on the facts and circumstances of the case, the applicant will not be taxable under the Double Taxation Avoidance Agreement entered into between the Government of India and the Government of United States of America with respect to the subscription fees?
Whether, on the facts and circumstances of the case, if the applicant is not taxable in India for the subscription fees, its customers in India will be required to withhold taxes under section 195 of the Act on subscription fees paid to the applicant?
Assuming that the applicant has no other taxable income in India, whether, on the facts and circumstances of the case, the applicant will be absolved from filing a tax return in India, under the provisions of section 139 of the Act with respect to the subscription fee?
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