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Showing 141 to 160 of 591 Records
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2012 (3) TMI 591
Issues Involved:
The judgment involves the issue of whether the interest paid as the cost of acquisition of shares should be considered for computing short term capital loss.
Summary of Judgment:
Issue 1: Consideration of Interest as Cost of Acquisition for Computing Short Term Capital Loss
The appeal was filed by the Revenue against the order of Ld. CIT (A)-XVI, Ahmedabad for the Assessment Year 2008-09. The assessee applied for 60,00,000 equity shares in an IPO but was allotted only 37,604 shares due to oversubscription. The assessee considered the interest paid as "cost of acquisition" and added it to the cost of shares, resulting in a short term loss upon selling the shares. The Assessing Officer disallowed a portion of the interest, calculating only the proportionate interest eligible for consideration as cost. However, CIT (A) allowed the appeal, stating that the interest paid for the entire loan amount borrowed for share acquisition should be considered. The Tribunal also held in favor of the assessee, emphasizing that the borrowed funds had a direct nexus with the acquisition of shares, and the entire interest paid should be allowed as a deduction. The Tribunal dismissed the Revenue's appeal, affirming that the interest paid on the borrowed funds for acquiring shares should be considered as the cost of acquisition for computing short term capital loss.
Issue 2: Disallowance of Interest Expenditure
The Assessing Officer disallowed a claimed interest expenditure of &8377; 27,408 as no supporting evidence was provided by the assessee. CIT (A) upheld the disallowance, stating that even if the Assessing Officer did not request evidence, the assessee could have submitted it during appellate proceedings. As the assessee failed to provide any details, the disallowance was sustained. The Tribunal agreed with CIT (A) and dismissed the cross objection of the assessee.
In conclusion, the appeal of the department and the cross objection of the assessee were both dismissed in the judgment pronounced on 16 - 3 - 2012.
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2012 (3) TMI 590
Issues involved:
The judgment deals with the issue of whether the interest paid for the acquisition of shares should be considered as the cost of acquisition for computing short term capital loss.
Summary:
Issue 1: Addition of interest for computing short term capital loss
The appellant, the Revenue, challenged the order of the Ld. CIT (A) regarding the deletion of the addition of interest paid for the acquisition of shares in computing short term capital loss for the Assessment Year 2008-09. The appellant contended that only the proportionate interest with reference to the shares allotted should be considered as cost, not the interest on the entire loan borrowed. The Assessing Officer disallowed the balance interest of Rs. 48,00,847 based on the proportionate interest calculation. However, the Ld. CIT (A) allowed the appeal of the assessee, stating that the interest paid to the financial institution for the loan raised for the acquisition of shares should be considered for the entire loan amount. The Ld. CIT (A) relied on the decision of the Hon'ble Mumbai Tribunal in a similar case. The Revenue appealed against this decision.
Issue 1 Details:
The Assessing Officer contended that the cost of acquisition should only include the proportionate interest with respect to the shares allotted, not the interest on the entire loan borrowed. The Ld. CIT (A) disagreed and allowed the interest paid to the financial institution for the entire loan amount to be considered as the cost of acquisition. The Tribunal noted that the borrowed funds were directly related to the acquisition of shares, even though only a portion of the applied shares was allotted. The Tribunal held that the interest paid by the assessee on the borrowed funds for acquiring the shares should be allowed as part of the cost of acquisition for computing short term capital loss. The Tribunal dismissed the appeal of the Revenue, upholding the decision of the Ld. CIT (A).
This summary provides a detailed overview of the judgment, focusing on the issues involved and the decision rendered by the Tribunal.
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2012 (3) TMI 589
Exemption under section 11 - Held that:- We find that assessee deserves to succeed in this ground. We have seem various assessment orders for earlier years, copies of which are placed on record and found that the respective assessing officers had allowed the net deficit to be carried forward in the respective assessment order. Therefore, there is no reason in not allowing the benefit of carry forward losses/deficit. Accordingly, we direct the AO to allow the benefit of quantified carry forward losses to the assessee against the income of the assessee.
For the year under consideration there was a positive income and, therefore, assessee has filed its return showing the income of the year, exemption under section 11 of the Act has also been claimed. If the carry forward losses are allowed to be set off then the income will become of negative figure and, therefore, exemption under section 11 cannot be allowed. The ld. Counsel of the assessee has fairly agreed that if the ground no. 8 is allowed in its favour then other grounds will become academic in nature. Since we have allowed this ground in favour of the assessee, therefore, all other grounds having become academic in nature and has become infructuous, they are dismissed.
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2012 (3) TMI 588
Issues involved: Challenge to detention order u/s 3(1)(i) of COFEPOSA Act.
Details of the judgment:
1. The detenu arrived at Chennai Airport from Brussels with gold coins concealed in his pant pockets, leading to his interception by Customs Officers. Despite having an invoice, the detenu did not declare the gold, resulting in its seizure under Mahazar.
2. The detenu's confession statement confirmed his attempt to smuggle gold coins without a valid license, leading to his arrest and remand by the Magistrate.
3. Subsequently, a notice was issued for the confiscation of the gold coins under the Customs Act for attempted smuggling.
4. The Government initiated proceedings u/s 3(1)(i) of COFEPOSA Act, detaining the detenu to prevent future smuggling activities based on subjective satisfaction and consideration of all relevant facts.
5. The detenu challenged the detention order, arguing that he intended to declare the gold for his daughter's marriage and that the detaining authority did not adequately consider the adjudication order prior to detention.
6. The detaining authority justified the detention based on the likelihood of the detenu engaging in future smuggling activities despite the impounding of his passport.
7. The Court considered the submissions and materials on record, acknowledging the detenu's transit status and the Customs Department's perspective on the attempted smuggling.
8. While the detenu claimed he was about to declare the gold, the Customs Department had already confiscated it for non-declaration, offering an option of redemption through penalty payment.
9. The Detaining Authority's consideration of the adjudication order and the likelihood of the detenu's future involvement in smuggling activities were key factors in upholding the detention order.
10. Citing precedents, the Court emphasized the need for sufficient material to justify preventive detention, especially when a passport is impounded, concluding that the detaining authority lacked acceptable evidence for the detenu's potential future smuggling activities.
11. Consequently, the Court set aside the detention order, allowing the detenu's immediate release unless required in connection with another case.
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2012 (3) TMI 587
Issues Involved:
1. Whether an offence that is not compoundable under the Criminal Procedure Code, 1973 (Cr.P.C.), can be quashed based on the facts and circumstances of the case.
Issue-wise Detailed Analysis:
1. Non-Compoundable Offence Quashability:
The primary issue raised in the writ petition was whether a non-compoundable offence under the Cr.P.C. could be quashed given the specific facts and circumstances of the case.
Background Facts:
- Petitioner No.1 opened a Current Account with the Bank of Maharashtra, which was later converted into a Cash Credit Account with various credit facilities.
- The Petitioner defaulted on payments amounting to Rs. 188 lacs, leading to criminal cases being registered by the CBI.
- The charges included allegations of securing credit facilities through forged documents and fraudulent utilization of these facilities.
- A criminal case was also registered against an individual connected to the petitioners for using forged Powers of Attorney in property transactions.
- Despite ongoing criminal proceedings, the banks involved offered a One-Time Settlement, which was accepted by the petitioners, leading to the clearance of dues and a compromise with the banks.
Legal Arguments:
- Petitioners' Argument: The petitioners argued that the Supreme Court had previously exercised its powers under Article 142 of the Constitution to quash non-compoundable offences in special circumstances (citing cases like Nikhil Merchant Vs. CBI and B.S. Joshi Vs. State of Haryana). They contended that the facts of their case were similar to those in Nikhil Merchant's case, where the Court had quashed criminal proceedings after the parties reached a settlement.
- Respondent's Argument: The Additional Solicitor General argued that settlement of disputes with the banks did not absolve the petitioners of their criminal liability. He emphasized the gravity of the offence, involving fraudulent transactions and offering a property as collateral without having a valid title. He further argued that the issue of quashing non-compoundable offences was under reconsideration by a larger Bench in Gian Singh Vs. State of Punjab, and thus, the Court should refrain from deciding the present case.
Court's Analysis and Decision:
- The Court reviewed several precedents, including Nikhil Merchant's case, B.S. Joshi's case, and Manoj Sharma's case, which indicated that the power to quash non-compoundable offences should be used sparingly and only in special circumstances.
- The Court noted that the golden thread running through these decisions was that continuing criminal proceedings after a compromise between the complainant and the accused would be futile and an abuse of the process of the court.
- The Court distinguished the present case from Nikhil Merchant's case, where the dispute had civil and criminal facets, whereas, in the present case, the emphasis was on the criminal intent of the petitioners.
- The Court held that the facts of the present case did not warrant the quashing of criminal proceedings as the allegations involved a larger conspiracy and fraudulent intent.
- The Court concluded that the pendency of a reference to a larger Bench in Gian Singh's case did not preclude it from deciding the present case based on existing precedents.
Conclusion:
The writ petition was dismissed, and the Court declined to quash the criminal proceedings against the petitioners. The Court emphasized that the exercise of inherent powers under Article 142 of the Constitution or Section 482 Cr.P.C. should be circumspect and based on the facts and circumstances of each case. The decision underscores the principle that settlement of civil disputes does not automatically absolve criminal liability, especially in cases involving fraudulent intent and conspiracy. The Court also reiterated that the pendency of a reference to a larger Bench does not stay other proceedings involving similar issues.
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2012 (3) TMI 586
Issues Involved:
1. Sustaining the disallowance of Rs. 89,67,627/- being contribution made to Pasudhan Kalyan and Upbhokta Samvardhan Trust (alias SPARSH).
2. Confirming disallowance of Rs. 3,23,670/- being payment made to Vikas Yojna Fund.
Summary:
Issue 1: Sustaining the disallowance of Rs. 89,67,627/- being contribution made to Pasudhan Kalyan and Upbhokta Samvardhan Trust (alias SPARSH)
The Assessee, a co-operative society engaged in milk procurement and processing, contributed Rs. 89,67,327/- to SPARSH Trust for animal productivity enhancement. The AO disallowed this amount, arguing it was a donation and not an expenditure u/s 37(1). The ld. CIT (A) confirmed the disallowance but allowed deduction u/s 80G after verification. The Tribunal found that the contribution was directly linked to the procurement of better quality milk and was thus an expenditure incurred wholly and exclusively for business purposes, allowable u/s 37(1). The Tribunal noted that the Trust's expenditure was for the benefit of the Assessee's business, and the contribution was not a mere donation but a business expenditure. Consequently, the addition made by the lower authorities was deleted.
Issue 2: Confirming disallowance of Rs. 3,23,670/- being payment made to Vikas Yojna Fund
The Assessee incurred Rs. 3,23,670/- for registering members and societies at the village level to ensure regular milk procurement. The AO disallowed this amount, stating it was not incidental to the business. The CIT (A) confirmed the disallowance, questioning the benefit derived by the Assessee. The Tribunal found that the expenditure was for business purposes, ensuring regular milk supply, and was thus allowable u/s 37(1). The Tribunal also noted that the Assessee received a grant for the same purpose, which was offered for taxation. Therefore, the disallowance was unjustified, and the addition was deleted.
Conclusion:
The appeal of the Assessee was allowed, with both disallowances being deleted. The order was pronounced in the open court on 15.3.2012.
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2012 (3) TMI 585
Provision made for leave encashment in the current assessment year on the basis of actuarial valuation - Held that:- Restore the matter back to the file of Assessing Officer for adjudication as per the decision of Hon’ble Apex Court in the case of M/s. Exide Industries Ltd. (2009 (5) TMI 894 - SUPREME COURT). This ground of appeal of assessee is allowed for statistical purposes.
Disallowance u/s. 14A - Held that:- We restrict the disallowance u/s. 14A of the Act to 1% of total exempt income and direct the Assessing Officer to work out the quantum of disallowance accordingly. This ground of appeal of assessee is allowed.
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2012 (3) TMI 584
Issues involved: Quantum appeals for two different assesses, penalty imposed u/s 271(1)(c) of the Act for the same assessment years.
Judgment Details:
1. Quantum Appeal - Gomti Silk Mills Ltd. (ITA No.2898/Ahd/2006 for A.Y.2003-2004):
- Ground Nos. 1 and 2 challenged the addition of specific amounts.
- Assessee argued discrepancies in the P&L account and stock details.
- Tribunal found that the addition cannot exceed the debited amount in the P&L account.
- Tribunal set aside the CIT(A)'s order and remanded the matter to the AO for fresh decision.
- Grounds 1 and 2 allowed for statistical purpose.
2. Quantum Appeal - Gomti Fibres Ltd. (ITA No.2899/Ahd/2006):
- Grounds challenged additions and interest charges.
- Assessee pointed out discrepancies in the consumption of raw material and stock details.
- Tribunal observed that the addition was not justified as the material was not consumed in the present year.
- Order set aside and matter remanded to the AO for fresh decision.
- Appeal allowed for statistical purpose.
3. Penalty Appeals:
- Since additions were set aside in quantum appeals, penalties were also deleted.
- AO can initiate penalty proceedings again if new additions are made.
- Both penalty appeals allowed.
In conclusion, both quantum appeals were allowed for statistical purposes, and penalty appeals were also allowed as penalties were deleted due to the set-aside additions.
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2012 (3) TMI 583
Issues Involved:
1. Validity of the Sanction Order to Prosecute the Appellant.
2. Power of Review by the Sanctioning Authority.
3. Independent Application of Mind by the Sanctioning Authority.
4. Delay in Granting the Sanction.
Summary of Judgment:
Issue 1: Validity of the Sanction Order to Prosecute the Appellant
The appellant challenged the sanction order dated 16.09.2009 u/s 19(1)(c) of the Prevention of Corruption Act on the grounds that the same Authority had previously declined sanction twice, and there were no new materials to justify a change in decision. The learned Single Judge dismissed the writ petition, holding that the sanction was granted with independent application of mind and supported by reasons.
Issue 2: Power of Review by the Sanctioning Authority
The court reiterated that the Sanctioning Authority has the power to review its decision only if new materials come to light. The Supreme Court's decision in State of Himachal Pradesh V. Nishant Sareen, AIR 2011 SC 404, was cited, emphasizing that a change of opinion on the same materials is not permissible unless fresh materials are presented.
Issue 3: Independent Application of Mind by the Sanctioning Authority
The court found that the impugned sanction order was influenced by the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI), as evidenced by letters dated 03.09.2009 and 04.09.2009, which were not disclosed to the appellant. The Sanctioning Authority's decision was not independent, as it was made under pressure from the CVC and CBI. The court emphasized that the grant of sanction must be a "solemn and sacrosanct act" based on independent application of mind, as established in R.S. Nayak V. A.R. Antulay, (1984) 2 SCC 183.
Issue 4: Delay in Granting the Sanction
The court noted that the sanction order for the alleged conduct during 2001-2002 was passed in 2005, with a delay of three years. This delay, combined with the lack of new materials, led the court to conclude that the sanction order was not valid.
Conclusion:
The court set aside the learned Single Judge's order, quashed the impugned sanction orders, and allowed the writ petition and writ appeal. The court emphasized that the Sanctioning Authority must act independently and cannot review its decision based on the same materials without new evidence.
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2012 (3) TMI 582
Allowing the expenses though relating to previous year but crystallized and paid during the year - Held that:- CIT(A) was justified in directing the Assessing Officer to allow expenses which was crystallized and paid during the year, though related to earlier year.
Distribution of gifts - addition on account of articles distributed among business associates on various occasions for want of detail of persons to whom the gifts were distributed - expenditure incurred on guest house - addition on account of subscription expenses of club, or director and employees of the company - addition on account of subscription expenses of club, of Director and employees - addition paid to ESI department being additional amount charged by ESI department for delay in depositing ESI payment - disallowance u/s 14A - expenses incurred in relation to the income does not form total income
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2012 (3) TMI 581
Issues involved: Appeal against CIT's order directing addition of amount to income u/s 37 of the Act for replacement of machinery.
Summary:
The appeal was filed challenging the CIT's order to add a specific amount to the income of the assessee u/s 37 of the Act. The original assessment accepted the returned income, but the CIT found that the amount representing the cost of machinery replaced was reported as 'expenditure of capital nature' and directed the Assessing Officer to add it to the income of the assessee. The assessee argued that the replacement was not capital in nature as it was necessary for proper functioning and not for capacity enhancement. The Assessing Officer had initially accepted the expenditure as revenue expenditure after proper examination.
The Tribunal noted that the expenditure was incurred on replacing various machinery components essential for efficient production. The CIT invoked section 263, considering the replacement as providing an enduring benefit rather than a short-term advantage, thus classifying it as capital expenditure. The Tribunal found no specific error in the CIT's order and upheld the treatment of the expenditure as capital. However, it allowed depreciation on the capital expenditure, modifying the CIT's order accordingly.
In conclusion, the appeal was partly allowed, recognizing the expenditure as capital but granting depreciation benefits to the assessee.
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2012 (3) TMI 580
Adjustment of seized cash against advance tax liability - Interest u/s.234B and 234C of advance tax - Held that:- Assessing Officer was obliged to adjust the seized cash against advance tax liability and, therefore, if any interest chargeable to section 234B and 234C on account of this amount of advance tax is liable to be deleted. The Assessing Officer while recomputing the chargeability of section 234B and 234C will take into consideration the seized cash of ₹ 90,31,000/- towards advance tax prior to 15.03.2009. Therefore, the appeal of the revenue has no merits.
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2012 (3) TMI 579
Issues involved: Condonation of delay in refiling, validity of assumption of jurisdiction u/s 148 of the Income Tax Act, taxation of income from operation and maintenance, applicability of provisions u/s 115A and 44D, discrimination in tax treatment, taxation of interest income under DTAA, classification of Liaison Offices, entitlement to carry forward losses and unabsorbed depreciation.
Condonation of delay in refiling: The application for condonation of delay in refiling was allowed as there was no objection from the assessee.
Validity of assumption of jurisdiction u/s 148: The substantial question of law was whether the ITAT was right in holding that assumption of jurisdiction u/s 148 of the Income Tax Act was not valid based on the facts and circumstances of the case.
Taxation of income from operation and maintenance: Another question was whether the income from operation and maintenance of Godavari Power Station should be taxable as business income and not as fee for technical services u/s 9 of the Act and Article 13 of the DTAA between India and UK.
Applicability of provisions u/s 115A and 44D: The ITAT was questioned on whether the provisions of section 115A read with section 44D of the Act were applicable to the income from Godavari (O and M) Project.
Discrimination in tax treatment: It was also in question whether subjecting the assessee to tax on a gross basis would amount to discrimination vis-a-vis an Indian company carrying on the same business, within the meaning of Article 26 of the DTAA between India and UK.
Taxation of interest income under DTAA: The ITAT was asked to determine if interest income earned by the assessee outside India, although from funds arising out of projects, was liable to be taxed in India under the provisions of the DTAA between India and UK.
Classification of Liaison Offices: The ITAT's conclusion on the classification of Liaison Offices as cost centres and not permanent establishments, and the attribution of income to such cost centres, was also under scrutiny.
Entitlement to carry forward losses and unabsorbed depreciation: Lastly, the question arose whether the assessee was entitled to the benefit of carry forward of losses and unabsorbed depreciation even when the income was computed on a gross basis.
The parties were given liberty to file documents/material within 12 weeks, and the case was listed in the category of Regular Matters as per its turn.
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2012 (3) TMI 578
Issues involved: Appeal against order accepting conversion of shares to investment from stock in trade and deletion of disallowance of charges for professional and technical services.
Conversion of shares to investment:
The assessee, a member of the Bombay Stock Exchange, converted stock in trade to investment, supported by a resolution passed by the Board of Directors. The Assessing Officer (AO) contended that the conversion was a tax-saving tactic, denying the benefit. However, the CIT(A) accepted the conversion, noting the company's consistent approach and separate portfolios for trading and investment. The Tribunal upheld the CIT(A)'s decision, emphasizing the legality of the conversion and the company's compliance with tax obligations.
Disallowance of charges for professional and technical services:
The AO disallowed charges for VSAT, leaseline, and transaction services, citing non-deduction of TDS under section 40(ia). The CIT(A) overturned this decision, stating that the charges did not qualify as fees for technical services. The Tribunal upheld this finding, dismissing the AO's view and highlighting the non-applicability of section 40(ia) from the relevant date. The appeal by the revenue was partly allowed, with the Tribunal affirming the conversion of shares to investment but dismissing the disallowance of charges for professional and technical services.
This judgment clarifies the legality of converting shares to investment, the treatment of charges for professional services, and the applicability of tax deduction provisions in such cases.
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2012 (3) TMI 577
Issues Involved:
1. Deletion of addition on account of difference of Arm's Length Price.
2. Opportunity to the TPO before computing margins.
3. Consideration of service and commission income as operating income.
4. Consideration of segmental accounts of healthcare division in Advanced Micronics Device Ltd.
5. Applicability of penalty u/s 271(1)(c) and 271G.
Summary:
1. Deletion of Addition on Account of Difference of Arm's Length Price:
The Revenue challenged the CIT(A)'s deletion of the addition of Rs. 2,28,21,754/- made by the TPO, who had determined the Arm's Length Price (ALP) of international transactions involving the assessee, a wholly owned subsidiary of Dentsply Industries, USA. The TPO had used the TNMM method and found the assessee's operating margin to be 4.55%, whereas it should have been 7.11%. The CIT(A) upheld the TPO's selection of comparables but deleted the addition after admitting additional evidence without allowing any opportunity to the TPO.
2. Opportunity to the TPO Before Computing Margins:
The CIT(A) admitted additional evidence regarding the comparables and the assessee's data without allowing any opportunity to the TPO/AO, violating Rule 46A of the IT Rules, 1962. The Tribunal noted that the CIT(A) did not follow the procedure laid down under Rule 46A and did not allow the TPO/AO to examine the additional material.
3. Consideration of Service and Commission Income as Operating Income:
The CIT(A) made adjustments to the operating profit and total costs of both the comparable companies and the assessee, considering commission income, service charges, interest payments, and other incomes. The Tribunal found that the CIT(A) did not provide an opportunity to the TPO/AO to examine these adjustments.
4. Consideration of Segmental Accounts of Healthcare Division in Advanced Micronics Device Ltd.:
The CIT(A) considered the segmental accounts of Advanced Micronic Devices Limited without allowing the TPO/AO to examine the additional evidence. The Tribunal directed the CIT(A) to re-adjudicate the issue after allowing sufficient opportunity to the TPO/AO.
5. Applicability of Penalty u/s 271(1)(c) and 271G:
The CIT(A) quashed the applicability of penalty u/s 271(1)(c) and 271G, stating that the assessee had furnished all details and information in its return and transfer pricing study report. The Tribunal did not specifically address this issue but directed the CIT(A) to re-adjudicate all issues after allowing sufficient opportunity to both parties.
Conclusion:
The Tribunal vacated the findings of the CIT(A) and restored the matter to his file for re-adjudication in accordance with the law after allowing sufficient opportunity to both parties. The appeal was allowed for statistical purposes.
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2012 (3) TMI 576
Cheating the Government by evading the payment of tax - Prayer to quash the FIR - offence punishable u/s 420 of IPC - HELD THAT:- There is no provision of registration of FIR in such like matters of evading the tax. The provisions provide for the mandatory penalty. It is well settled proposition of law that if a special provision has been made qua particular subject, the said subject is excluded from the general provisions.
Thus, the only allegation in the said FIR that the petitioner helped the main accused to evade the tax under no circumstances invite the offence of Section 420 of IPC, in case, the person is found guilty of evading the tax. The Punjab Value Added Tax Act provides for payment of penalty. The provisions of the said VAT Act are sufficient and equipped to deal with the matters where an attempt is made to evade the tax. Thus, the registration of the FIR in such like matters is totally an abuse of process of law. Once an FIR cannot be registered against a person who evaded the tax, no FIR can be registered against a person who is stated to have assisted and the person who has attempted to evade the tax.
Thus, the present petition is allowed and FIR, u/s 420, 120-B, 186, 34 of IPC, and subsequent proceedings arising out of the same are hereby quashed.
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2012 (3) TMI 575
Issues involved: The issues involved in this case are related to the revocation of brand rate of duty drawback on exports under DEPB scheme based on Circular No. 39/2001-Cus., dated 6-7-2001, and the retrospective application of the circular.
Summary:
1. The petitioner, a partnership company engaged in manufacturing cotton powerloom grey cloth, was not entitled to Cenvat credit due to the product being exempt from Excise duty. The petitioner availed benefits under the Duty Entitlement Passbook Scheme (DEPB) and brand rate of drawback on excise duty paid on inputs. The Ministry of Finance issued letters revoking the brand rate based on Circular No. 39/2001-Cus., dated 6-7-2001.
2. The petitioner challenged the revocation on the grounds that the circular should apply prospectively, not retrospectively. The Bombay High Court in a similar case held that Circular No. 39/2001 operates prospectively. The Apex Court confirmed this decision in Union of India v. Arviva Industries (I) Ltd. The petitioner argued that since they had already been granted the benefit of drawback based on earlier circulars, they should not be denied the benefit retrospectively.
3. The court agreed with the petitioner, citing the Bombay High Court's decision and the Apex Court's confirmation. The revocation letters were set aside, allowing the petitioner to retain the benefit of the brand rate of duty drawback. The court held that the circular should be effective prospectively, and the impugned letters were quashed accordingly.
4. The judgment concluded by allowing both writ petitions, ruling in favor of the petitioner, and no costs were imposed in this matter.
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2012 (3) TMI 574
... ...
... ... ..... tacharya, ASG, Mr. K Swami, Adv., Mr. Ajay Singh, Adv., Mr. Arvind Kumar Sharma,Adv.-on-Record O R D E R Delay condoned. The special leave petition is dismissed.
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2012 (3) TMI 573
Issues involved: Appeal against order of Ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad for assessment year 2008-09 regarding disallowance of expenses u/s.40(a)(ia) of the Act.
Factual Matrix: The assessee declared total income of Rs. 3,75,430/- for the assessment year 2008-09. During scrutiny, it was found that certain payments made by the assessee had tax deducted at source u/s.194C but not deposited by the due date. The Assessing Officer disallowed expenses u/s.40(a)(ia) despite the assessee's argument of retrospective application of the amended Section 40(a)(ia) from assessment year 2008-09.
Decision: The Ld. CIT(A) allowed the appeal of the assessee based on a decision of a co-ordinate bench of the Tribunal. The Revenue appealed against this decision, contending that the addition of Rs. 11,42,085/- should not have been deleted u/s.40(a)(ia) of the Act.
Judgment: The ITAT Ahmedabad, after considering the arguments and precedents, dismissed the Revenue's appeal. It noted that the issue had been decided by the Hon'ble Calcutta High Court and followed the decision in the case of Virgin Creators, holding that the amendment to Section 40(a)(ia) is prospective in nature and applies from the year of the amendment.
Conclusion: The appeal of the Revenue was dismissed, affirming the decision of the Ld. CIT(A) in favor of the assessee regarding the disallowance of expenses u/s.40(a)(ia) for the assessment year 2008-09.
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2012 (3) TMI 572
G.P. addition - Held that:- The books of account were incomplete at the time of survey and there was discrepancies found in the stock. GP rate also declined marginally i.e. from 14.17% shown in immediately preceding year to 13.28% shown during the year under consideration. There was no material to establish that the assessee was making sales outside books of account. After the survey and end of the year, the assessee has prepared its Profit & Loss account on the basis of books of account. Since there were certain discrepancies in stock and marginal decline in GP rate, we are of the view that if an addition of ₹ 50,000/- is sustained in trading account that will meet the ends of justice, which will take care of decline in GP and other discrepancies found.
Enhancement of household expenses - Held that:- As already sustained trading addition of ₹ 50,000/- which is more than the addition made by Assessing Officer on account of household expenses and since trading addition was available with the assessee for incurring expenses etc., therefore, we find no infirmity in the order of ld. CIT (A) in allowing set off of the income made on account of household expenses. Accordingly we confirm the action of ld. CIT (A). In fact, there will be no addition as household expenses is less than trading addition sustained.
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9911796707
