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Showing 61 to 80 of 1246 Records

• 2012 (9) TMI 1199
  
  Issues involved: Appeal against order of ld. CIT(A)-IV, Baroda regarding deletion of addition of depreciation on moulds @ 40% instead of 25% for manufacturing electric and electronic goods.
  
  Summary:
  
  Issue 1: Depreciation rate on moulds
  The Assessing Officer restricted depreciation on moulds to 25% for the assessee engaged in manufacturing electrical and electronic items, not rubber and plastic goods. The ld. CIT(A) deleted the addition based on a previous Tribunal decision allowing higher depreciation at 40% for moulds used in manufacturing plastic goods. The Tribunal upheld the ld. CIT(A)'s decision, citing relevant case law and directing recomputation of depreciation at 40%.
  
  Conclusion:
  The Tribunal dismissed the Revenue's appeals, upholding the deletion of the addition and allowing higher depreciation at 40% for moulds used in manufacturing plastic goods.

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• 2012 (9) TMI 1198
  
  Issues involved: The judgment deals with the issue of allowing exemption u/s 11 of the Income-tax Act, 1961 to a society set up for religious activities, which was denied by the Assessing Officer based on a violation of section 13(1)(b) of the Act.
  
  Facts: The society, registered u/s 12A of the Income-tax Act, filed a return declaring nil income and was selected for scrutiny. The Assessing Officer noted that the society's activities were geared towards the benefit of the Christian religion, in violation of section 13(1)(b) of the Act.
  
  Decision: On appeal, the CIT(A) allowed the claim of the assessee based on the decision of the ITAT in the assessee's own case for the AY 2008-09. The ITAT upheld the findings of the CIT(A) and granted exemption u/s 11 of the Act, citing consistency in previous decisions.
  
  Grounds of Appeal: The Revenue appealed against the CIT(A)'s decision. The AO's acceptance of the claim for exemption in previous years was highlighted. The ITAT upheld the findings of the CIT(A) in various assessment years, and the High Court appeals were pending.
  
  Final Decision: After hearing both parties, the ITAT dismissed the appeal of the Revenue. The consistent allowance of the exemption in previous years, lack of contradictory material from the Revenue, and following the precedent set by previous decisions led to the dismissal of the appeal.
  
  Conclusion: The ITAT upheld the exemption u/s 11 of the Act for the society involved in religious activities, based on consistency in previous decisions and lack of new grounds raised in the appeal.

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• 2012 (9) TMI 1197
  
  Issues involved:
  The judgment involves seeking sanction of the Scheme of Amalgamation of two companies u/s 391 to 394 of the Companies Act, 1956.
  
  Details of the Judgment:
  
  Issue 1: Dispensation of Meetings of Equity Shareholders and Creditors
  - The Transferee Company sought dispensation of the Equity Shareholders' meeting, which was granted by the Court.
  - The Transferor Company also sought dispensation of meetings of Equity Shareholders and Unsecured Creditors, which was approved due to consent given in writing.
  - Subsequently, the petitions seeking sanction of the Scheme of Amalgamation were filed.
  
  Issue 2: Admission of Petitions and Publication of Notices
  - The Court admitted the petitions and directed the publication of notices in two newspapers.
  - Notices were issued to the Regional Director and the Official Liquidator, with the petitions published in newspapers as directed.
  
  Issue 3: Reports and Observations
  - The Official Liquidator confirmed no prejudicial conduct in the affairs of the Transferor Company.
  - The Regional Director made observations regarding amendment in the capital clause and filing of financial reports.
  - The Transferee Company responded to the observations with justifications and explanations.
  
  Issue 4: Court Decision and Sanction of Scheme
  - After considering submissions and previous orders, the Court found objections raised by the Regional Director unsustainable.
  - The Court sanctioned the Scheme of Amalgamation, determining it non-prejudicial to the members or public interest.
  - The Transferor Company was directed to preserve its records and not dispose of them without prior permission.
  
  Issue 5: Costs and Disposal of Petitions
  - The Court determined the costs per petition and directed payment to the Central Government Standing Counsel and Official Liquidator.
  - The petitions were disposed of with the mentioned terms, concluding the legal proceedings.

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• 2012 (9) TMI 1196
  
  Issues involved:
  The issue involves the deletion of an addition made by the Assessing Officer in respect of capital gain as unexplained cash credit under section 68 of the Income Tax Act.
  
  Details of the judgment:
  
  1. Assessment and Addition:
  The assessee filed the return of income for the assessment year 2006-07, and the Assessing Officer treated the short term capital gain declared by the assessee as unexplained cash credit under section 68 of the Income Tax Act. The Assessing Officer's reason was that the assessee brought income from unaccounted sources in his books of account by paying lesser tax, claiming it as short term capital gain.
  
  2. Appeal and Tribunal's Decision:
  In the appeal, the CIT(A) directed the Assessing Officer to accept the capital gain as disclosed by the assessee. The Revenue challenged this before the Tribunal. The Tribunal, after considering the arguments, noted that the assessee had declared the short-term capital gain in the return of income. The Tribunal found that the source of credit was explained by the assessee with documentary evidence, which was not found false. The Tribunal concluded that the Assessing Officer treated the capital gain as unexplained credit based on doubts and suspicion, while the CIT(A) had valid reasons for accepting the declared capital gain.
  
  3. Conclusion:
  The Tribunal's view was that the Assessing Officer's treatment of the capital gain as unexplained credit was based on doubts and suspicion, whereas the CIT(A) had provided valid reasons for accepting the declared capital gain. The Tribunal declined to interfere, stating that no substantial question of law arose for consideration. Consequently, the Tax Appeal was dismissed based on the findings of fact, as no substantial legal issue was identified for the court's consideration.

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• 2012 (9) TMI 1195
  
  Issues involved:
  The issue involves the confirmation of a sum as a bogus liability under Section 68 by the Assessing Officer, which was upheld by the learned CIT(A) and challenged by the assessee before the Tribunal.
  
  Details of the Judgment:
  
  Issue 1: Assessment of Bogus Liability u/s 68
  The assessee, engaged in manufacturing polymer products, filed a return showing a loss. During scrutiny, the Assessing Officer noted a significant addition of liability under "unsecured loans." The assessee failed to produce confirmation letters from creditors to prove the genuineness of the liability, resulting in the Assessing Officer treating a portion of the liability as bogus under Section 68.
  
  Issue 2: Appeal before CIT(A) and Tribunal
  The assessee appealed before the CIT(A), who confirmed the addition of the disputed amount as made by the Assessing Officer under Section 68. The Tribunal considered the submissions of the assessee, which included details of loan transactions through account payee cheques and bank accounts. The Tribunal decided to restore the issue to the Assessing Officer for verification of the loan creditors in accordance with the provisions of the Income Tax Act.
  
  Key Arguments by the Assessee:
  The assessee contended that despite providing details and addresses of creditors, confirmation letters were not produced for all creditors due to genuine difficulties. The assessee argued that the Assessing Officer should have conducted further inquiry before treating the liabilities as bogus under Section 68. The assessee emphasized that the assessing officer did not properly examine the books of accounts and failed to consider the audited financial statements and bank statements.
  
  Decision of the Tribunal:
  After considering the submissions and material on record, the Tribunal found merit in the assessee's contentions and decided to allow the appeal for statistical purposes. The issue of the disputed liability was restored to the Assessing Officer for verification, providing the assessee with a reasonable opportunity to be heard.
  
  This judgment highlights the importance of proper verification and examination of evidence before treating liabilities as bogus under Section 68 of the Income Tax Act, ensuring fair assessment procedures and adherence to legal principles.

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• 2012 (9) TMI 1194
  
  Issues Involved:
  1. Disallowance of interest expenditure u/s 36(1)(iii).
  2. Classification of income from property as "business income" vs. "income from house property".
  3. Eligibility for depreciation and other expenses.
  
  Summary:
  
  1. Disallowance of Interest Expenditure u/s 36(1)(iii):
  The Revenue challenged the CIT(A)'s decision that the assessee had sufficient non-interest bearing funds to fund investments in equity shares. The Assessing Officer (AO) had disallowed interest expenditures for A.Y. 2005-06 and 2006-07, arguing that the assessee diverted interest-free funds to group companies and invested in equity shares, necessitating borrowing. The CIT(A) held that the advances to group companies were for business purposes and that the assessee had sufficient own funds, thus disallowing interest u/s 36(1)(iii) was not justified. The Tribunal upheld the CIT(A)'s decision, referencing the Supreme Court's rulings in S.A. Builders Ltd. and Munjal Sales Corporation, and other ITAT decisions, confirming that the assessee's own funds were sufficient to cover the investments.
  
  2. Classification of Income from Property:
  The AO classified the income from the property "Subhaag" as "income from house property," while the assessee claimed it as "business income" due to providing office space and related services. The CIT(A) sided with the assessee, referencing ITAT and High Court decisions that income from providing composite services (office space, EPABX, lift, etc.) should be classified as "business income." The Tribunal confirmed this view, noting that the assessee provided comprehensive services and facilities, thus the income was rightly assessed as "business income."
  
  3. Eligibility for Depreciation and Other Expenses:
  The Revenue's residual ground contested the allowance of depreciation and other expenses following the classification of income as "business income." Since the Tribunal upheld the classification of the income as "business income," it consequently dismissed this ground, affirming the assessee's eligibility for the claimed depreciation and expenses.
  
  Conclusion:
  Both appeals by the Revenue were dismissed, affirming the CIT(A)'s decisions on all grounds.

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• 2012 (9) TMI 1193
  
  Issues involved:
  The judgment involves the disallowance of interest paid by the assessee in two assessment years, A.Y. 2003-04 and A.Y. 2005-06.
  
  A.Y. 2003-04:
  The appellant challenged the disallowance of interest of Rs. 1,02,931 out of the net interest paid of Rs. 3,64,977. The Commissioner (Appeals) upheld the disallowance citing lack of nexus between the advances received and the interest-free loans given to M/s. Chetan Steel Co. The Assessing Officer (AO) determined the total income at Rs. 18,64,940, disallowing Rs. 1,02,931 of interest paid by the assessee. The First Appellate Authority (FAA) also confirmed the disallowance. The appellant argued that the interest expenditure was justified as it was funded by interest-free capital and loans. The Tribunal found in favor of the assessee, stating that the burden of proof had been met and the disallowance lacked sufficient evidence.
  
  A.Y. 2005-06:
  In this assessment year, the disallowance of interest of Rs. 80,489 and bank charges of Rs. 51,999 against interest income received was contested. The Commissioner (Appeals) upheld the disallowance due to the lack of explanation regarding the nexus between interest-free funds and their utilization for interest-free advances. The Tribunal decided in favor of the assessee based on similar grounds as the A.Y. 2003-04 judgment. Ground No. 2 was dismissed as the assessee did not press the same.
  
  The Tribunal allowed the appeal for A.Y. 2003-04 and partly allowed the appeal for A.Y. 2005-06, emphasizing the importance of establishing a clear nexus between interest payments and the source of funds.

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• 2012 (9) TMI 1192
  
  Issues Involved:
  1. Jurisdiction of DRAT to condone delay in filing an appeal u/s 18 of SARFAESI Act.
  2. Applicability of Section 5 of the Limitation Act to proceedings under SARFAESI Act.
  
  Summary:
  
  1. Jurisdiction of DRAT to condone delay in filing an appeal u/s 18 of SARFAESI Act:
  The petitioner challenged the order dated 04.05.2012 by the Debts Recovery Appellate Tribunal (DRAT), Chennai, which dismissed the application for condonation of delay in filing an appeal against the Debts Recovery Tribunal-II (DRT), Hyderabad's order. The DRAT relied on the Madhya Pradesh High Court decision in Seth Banshidhar Kedia Rice Mills Pvt. Ltd v. State Bank Of India (AIR 2011 MP 205), holding that u/s 18 of the SARFAESI Act, the appellate tribunal has no power to condone the delay in the presentation of the appeal.
  
  2. Applicability of Section 5 of the Limitation Act to proceedings under SARFAESI Act:
  The court examined the legislative framework of the SARFAESI Act, the DRT Act, and the Limitation Act, 1963. Section 17 of the SARFAESI Act provides a forum for adjudication of claims before the DRT, and Section 18 provides a right to appeal to DRAT. The DRT and DRAT exercise powers similar to a civil court under the Code of Civil Procedure, 1908, and the Limitation Act is expressly applicable u/s 24 of the DRT Act. Section 29(2) of the Limitation Act states that Sections 4 to 24 of the Limitation Act apply to any special or local law unless expressly excluded.
  
  The court referred to the Supreme Court decision in MUKRI GOPALAN v. CHEPPILAT PUTHANPURAYIL ABOOBACKER, which held that Section 29(2) of the Limitation Act applies to special or local laws, making Sections 4 to 24, including Section 5, applicable unless expressly excluded. The court found no express exclusion of the Limitation Act under the SARFAESI Act. Therefore, Section 5 of the Limitation Act, which allows for the condonation of delay, is applicable to proceedings under Sections 17 and 18 of the SARFAESI Act before the DRT and DRAT.
  
  The court concluded that the DRAT's order rejecting the application for condonation of delay for want of jurisdiction is incorrect and set it aside. The DRAT, Chennai, was directed to consider the petitioner's application for condonation of delay afresh on merits and pass appropriate orders in accordance with the law within two months.
  
  Conclusion:
  The writ petition was allowed, and the DRAT was directed to reconsider the application for condonation of delay. The miscellaneous applications, if any, were disposed of as infructuous, with no order as to costs.

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• 2012 (9) TMI 1191
  
  Issues involved: Appeal against CIT(A) order regarding disallowance u/s.14A and taxability of interest received.
  
  Issue 1: Disallowance u/s.14A - Rs. 97,82,691
  The appellant contested the disallowance u/s.14A, arguing that no disallowance was warranted as taxable interest income had already been offered to tax. The CIT(A) was criticized for not acknowledging the direct nexus between taxable interest income and expenses. The appellant also challenged the reliance on irrelevant decisions. The disallowance of Rs. 4,21,903 was deemed unwarranted as no additional efforts were incurred for managing investments. The addition u/s.14A was deemed against natural law and equity.
  
  Issue 2: Interest Received Not Chargeable to Tax - Rs. 95,43,091
  The appellant disputed the taxability of interest received from an AOP, contending that it was already taxed at the AOP level and should not be taxed again in the hands of members. Ground 2 was withdrawn during the hearing, leaving only the first ground for consideration.
  
  Judgment:
  The Tribunal found that invoking 14A/8D for disallowing interest and administrative expenses was incorrect. The Profit & Loss A/c showed the income and expenditure details, with the appellant offering interest income and claiming interest paid under 'other sources'. The Tribunal disagreed with the disallowance, noting the smallness of expenditure and lack of application of mind by the authorities. Section 14A cannot be invoked arbitrarily, and Rule 8D cannot be applied without satisfaction being recorded. The additions made by the Assessing Officer were deleted, and a partial disallowance of 5% of exempt income was allowed. The appeal was partly allowed on 26th September 2012.

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• 2012 (9) TMI 1190
  
  Issues Involved:
  1. Classification of shares as long-term or short-term capital assets.
  2. Deductibility of expenses related to the dissolution of SYNCON u/s 48.
  3. Eligibility for exemption u/s 54F for investment in residential property.
  4. Determination of the cost of acquisition of shares.
  
  Summary:
  
  Issue 1: Classification of Shares as Long-Term or Short-Term Capital Assets

  The Revenue contended that the shares should be considered short-term capital assets as the share certificate was issued just before the sale. The CIT (A) examined the facts and found that the shares were held by the assessee since at least 31.3.2003, supported by the balance sheet and annual reports. The Tribunal agreed with the CIT (A)'s findings, stating that the date of the share certificate does not reflect the date of purchase. Therefore, the shares were correctly classified as long-term capital assets, and this ground of the Revenue was rejected.

  Issue 2: Deductibility of Expenses Related to the Dissolution of SYNCON u/s 48

  The assessee claimed a deduction for payments made to other partners of SYNCON, arguing that the dissolution was a precondition for the sale of shares to Aptech. The CIT (A) allowed the deduction, stating that the expenditure was incurred wholly and exclusively in connection with the transfer. However, the Tribunal disagreed, noting that the payments were not a condition precedent to the sale of shares and appeared to be an attempt to create a deductible liability. Therefore, the Tribunal set aside the CIT (A)'s order and restored the AO's disallowance of the expenditure.

  Issue 3: Eligibility for Exemption u/s 54F for Investment in Residential Property

  The AO disallowed the exemption u/s 54F, arguing that the assessee already had two houses and that the investment was not solely in the assessee's name. The CIT (A) found that the two adjacent units with a common entrance constituted a single residential unit and that the investment was made from the assessee's funds, with the spouse's name included for convenience. The Tribunal agreed with the CIT (A)'s findings and rejected this ground of the Revenue.

  Issue 4: Determination of the Cost of Acquisition of Shares

  The AO considered the cost of acquisition of shares as Nil, citing the lack of specific mention of consideration in the Board resolution. The CIT (A) found that the shares were issued at par for Rs. 10 each, supported by the balance sheet disclosures. The Tribunal agreed with the CIT (A)'s findings, allowing the cost of acquisition at Rs. 10 per share. This ground of the Revenue was dismissed.

  Conclusion:

  The appeal filed by the Revenue was partly allowed, with the Tribunal rejecting the Revenue's grounds on the classification of shares, exemption u/s 54F, and cost of acquisition, but allowing the ground on the deductibility of expenses related to the dissolution of SYNCON.

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• 2012 (9) TMI 1189
  
  Issues involved: Assessment of unsecured loans and interest payments u/s 68 of the Income Tax Act, 1961 for A.Yr. 2007-08.
  
  Summary:
  The Appellate Tribunal ITAT Kolkata heard an appeal filed by the assessee against the order of the ld. CIT-(A)-XXX, Kolkata regarding the addition of unsecured loans and interest payments. The AO had added amounts under 'unexplained loan creditors' and 'interest paid on the above loan creditors' due to lack of confirmation and details provided by the assessee. The ld. CIT(A) deleted a significant portion of the additions but confirmed a specific amount of unsecured loans and interest. The Tribunal considered the documents submitted by the assessee, including IT returns, balance sheets, bank statements, and affidavits, to support the transactions entered through banking channels. Both parties agreed to set aside the issue for further verification by the AO to allow the assessee another opportunity to substantiate its claim.
  
  In conclusion, the appeal of the assessee was allowed for statistical purposes, and the matter was remanded to the file of the AO for additional verification.

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• 2012 (9) TMI 1188
  

  Interlocutory applications - Implementation of the R & R Plans - resumption of mining operations in "Category A" mining leases and issues - Permission granted subject to conditions - In the present case, it was cleared that No mining operation under any of the mining leases shall take place unless all the statutory sanctions, permissions and approvals are subsisting. In case, after the resumption of mining operations in terms of this order any statutory sanction, permission or approval is lapsed or is not renewed in time, the mining operations would remain stopped until the required statutory sanction, permission or approval is duly granted. the Monitoring Committee finds any slackness in the implementation of the R & R Plan in leasehold area under a mining lease, the Monitoring Committee shall apprise the CEC in that regard and it would be open to the CEC to direct suspension of the mining operations under the concerned mining lease and to report the matter to this Court.

  HELD THAT:- In light of the recommendation of the CEC, the ban imposed on mining operations in all the mining leases (excepting two mining leases of M/s. NMDC Ltd.) in the districts of Bellary, Tumkur and Chitradurga by orders dated July 29 and August 26, 2011 is lifted in respect of the 18 "Category A" mines as enumerated in Annexure R-1 to the report. Mining operations in those 18 "Category A" may commence to the extent of the permissible annual production as determined by the CEC and as indicated in the table at page Nos. 15 and 16 of the report. The commencement of the mining operations shall be subject to the conditions.

  It is made clear that the permission for resumption of mining operations shall not come in the way, in any manner whatsoever, in any investigation, inquiry or proceedings that may be pending against any of the 18 mining leases covered by this order or that may be instituted against any one of them in future. The report of investigation, inquiry or proceeding in respect of any of the 18 leases should also be submitted before this Court.

  The interlocutory applications relating to the opening up of "Category A" mines are disposed of.

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• 2012 (9) TMI 1187
  
  Issues involved: The judgment involves appeals filed by Revenue challenging orders of CIT(Appeals) for the assessment years 2005-06, 2006-07, 2007-08, and 2008-09 under sec.143(3) of the Income Tax Act, 1961.
  
  ITA No.895/Mds/2012 A.Y. 2005-06:
  The Revenue challenged the deletion of depreciation on technical know-how acquired in previous financial years. The CIT(A) relied on ITAT's order in the assessee's own case for the AY 2002-03. The Revenue contended that the appeal to the High Court was pending, and the order should be set aside.
  
  ITA No.896/Mds/20012 - A.Y. 2006-07:
  The Revenue disputed the deletion of disallowance under sec. 80IA and depreciation on technical know-how. The CIT(A) also deleted an addition related to Coke Oven project expenses, which the Revenue argued should be considered capital expenditure. The CIT(A) relied on ITAT's orders in the assessee's own case, and the Revenue's appeals were pending before the High Court.
  
  ITA No.897/Mds/20012 - A.Y. 2007-08:
  Similar to previous years, the Revenue contested the deletion of depreciation on technical know-how. The CIT(A) relied on ITAT's orders in the assessee's own case, and the Revenue's appeals were pending before the High Court.
  
  ITA No.894/Mds/20012 - A.Y. 2008-09:
  The Revenue challenged the deletion of bad debts and treatment of royalty expenditure as revenue expenditure. The CIT(A) directed the Assessing Officer to treat royalty expenditure as revenue expenditure, contrary to the Revenue's stance that it should be considered capital expenditure. The CIT(A) also allowed derivative losses, which the Revenue disputed. The Revenue's appeals were pending before the High Court.
  
  The Revenue argued that the CIT(A) erred in overturning the Assessing Officer's findings in all cases, while the assessee supported the CIT(A)'s orders citing precedents. The Tribunal noted that most issues were covered by previous decisions of ITAT Chennai in the assessee's favor, except for the Coke Oven project expenses in one case.
  
  The Tribunal upheld the CIT(A)'s orders for most issues but remanded the matter of Coke Oven project expenses for further consideration by the Assessing Officer to verify the details of expenditure provided by the assessee.
  
  In conclusion, ITA Nos.895, 897 & 894/Mds/2012 were dismissed, and ITA No.896/Mds/2012 was partly allowed for statistical purposes.

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• 2012 (9) TMI 1186
  
  Issues Involved:
  1. Retrospective vs. Prospective Operation of the 2009 Amendment Rules.
  2. Eligibility of the Applicant under the 2004 Rules.
  3. Validity of the Tribunal's Interim Orders.
  
  Summary:
  
  1. Retrospective vs. Prospective Operation of the 2009 Amendment Rules:
  
  The primary issue revolved around whether the substitution of the upper age limit provision in the 2009 Rules should be considered retrospective, thereby applying from the date the original 2004 Rules came into effect. The Tribunal held that the substitution should be read as if it was part of the original 2004 Rules, thus benefiting the applicant. However, the High Court disagreed, stating that the amendment came into force from the date of its publication in the Official Gazette on 28.05.2009, making it prospective. The Court emphasized that statutes and rules are generally prospective unless expressly stated otherwise. The Court cited several Supreme Court judgments, including *Shamrao V. Parulekar*, *Vijayalakshmi Rice Mills*, and *Gopal Krushna Rath*, to support the principle that amendments by substitution are prospective unless explicitly made retrospective.
  
  2. Eligibility of the Applicant under the 2004 Rules:
  
  The applicant, who was over-aged according to the 2004 Rules, applied for the post of Police Sub-Inspector despite being ineligible. The Tribunal's interim orders allowed him to participate in the selection process, which he passed. The High Court noted that the applicant was aware of his ineligibility but still applied and later challenged the age limit. The Court ruled that the applicant's participation based on interim orders did not entitle him to benefit from the 2009 amendment, which was prospective. The Court highlighted that allowing the applicant's claim would unfairly disadvantage other candidates who did not apply due to the age restriction.
  
  3. Validity of the Tribunal's Interim Orders:
  
  The Tribunal's interim orders permitted the applicant to take the examination and participate in subsequent selection processes. The High Court found these orders to be contrary to established legal principles, as they effectively altered the recruitment rules during the ongoing selection process. The Court reiterated that recruitment rules should not be changed mid-process, as it would violate Articles 14 and 16 of the Constitution of India by denying equal opportunity to all eligible candidates.
  
  Conclusion:
  
  The High Court allowed the writ petitions, setting aside the Tribunal's order and dismissing the applicant's claim. The selection process was directed to be completed without considering the applicant's claim, upholding the prospective nature of the 2009 amendment and maintaining the integrity of the recruitment process.

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• 2012 (9) TMI 1185
  
  Issues Involved:
  1. Discharge of Solicitors and handing over papers.
  2. Non-payment of outstanding fees and refusal to give NOC.
  3. Right of solicitors to obtain reasonable fees.
  4. Client's right to change advocate.
  5. Calculation and settlement of fees.
  
  Summary:
  
  1. Discharge of Solicitors and Handing Over Papers:
  The defendant No.1 sought discharge of his solicitors and the handing over of papers and proceedings. The firm representing him had already handed over the papers, which was undisputed.
  
  2. Non-payment of Outstanding Fees and Refusal to Give NOC:
  Defendant No.1 contended that the firm refused to give a No Objection Certificate (NOC) for filing the Vakalatnama of new advocates due to non-payment of certain outstanding fees. The Prothonotary and Senior Master of the Court held that the firm stood discharged by his order dated 25th July, 2012.
  
  3. Right of Solicitors to Obtain Reasonable Fees:
  The firm argued that their right to obtain reasonable and legitimate fees charged to their client must be protected by the Court. Defendant No.1 claimed that the fees had been settled and paid, making the refusal to give discharge unreasonable. The firm had sent a bill dated 11th December 1996, which Defendant No.1 challenged in his letter dated 8th July 1997. The firm also produced a letter dated 26th December 2011, showing an outstanding amount of Rs. 5.95 lakhs, with Rs. 2 lakhs paid in part-payment.
  
  4. Client's Right to Change Advocate:
  The Prothonotary and Senior Master granted the application for discharge, considering the Supreme Court judgment in R.D. Saxena Vs. Balram Prasad Sharma, which emphasized the client's freedom to change advocates and that a lien cannot be exercised by the advocate. The firm had not exercised a lien over any papers, and all papers had been taken by Defendant No.1.
  
  5. Calculation and Settlement of Fees:
  The Court cannot delve into the arithmetical calculation of fees but noted that the bill dated 11th December 1996, for Rs. 8.05 lakhs, had a balance of Rs. 5.95 lakhs after crediting Rs. 2.10 lakhs. Defendant No.1 claimed a settlement for Rs. 11,000, which the firm refuted. The Court observed that the cheque for Rs. 11,000 was returned and could not be accepted as full settlement. The Court concluded that a reasonable amount of fees remained unpaid and granted leave for discharge upon payment of Rs. 2 lakhs to the firm.
  
  Order:
  1. Upon Defendant No.1 paying Rs. 2 lakhs to his present firm of solicitors, the firm shall stand discharged.
  2. Defendant No.1 shall be entitled to be represented by any other firm of advocates.
  3. The order of the Prothonotary and Senior Master dated 25th July, 2012, is modified to this extent.

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• 2012 (9) TMI 1184
  
  The Supreme Court of India dismissed the special leave petition after condoning the delay. (2012 (9) TMI 1184 - SC)

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• 2012 (9) TMI 1183
  
  Issues involved:
  The issues involved in this case include the addition of unexplained cash credits u/s 68 of the Income Tax Act, 1961 due to failure to provide confirmation of creditors, the confirmation of addition by the ld. CIT(A), and the alternative submission of the assessee to adjust the closing stock in lieu of the disputed creditors.
  
  Addition of unexplained cash credits u/s 68:
  The Assessing Officer (AO) made an addition of &8377; 1,38,452/- as unexplained cash credits u/s 68 of the Income Tax Act, 1961, due to the assessee's failure to provide confirmation for certain creditors. The AO emphasized the triple onus under section 68 for providing identity, creditworthiness, and genuineness of transactions, which the assessee failed to prove, resulting in the addition.
  
  Confirmation of addition by ld. CIT(A):
  The ld. CIT(A) confirmed the findings of the AO regarding the unexplained cash credits. Despite the alternative submission of the assessee to adjust the purchases from the trading account, the ld. CIT(A) rejected this based on the decision of the Hon'ble Delhi High Court in CIT vs. La Medica, emphasizing the importance of proving the genuineness of transactions.
  
  Alternative submission of the assessee:
  The assessee's counsel argued that while the purchases were not disputed, the creditors were contested due to the inability to provide confirmations during the assessment proceedings. The counsel suggested adjusting the closing stock to account for the disputed creditors, but this contention was not accepted.
  
  Decision and reasoning:
  The Tribunal upheld the ld. CIT(A)'s decision, citing the precedent set by the Hon'ble Delhi High Court in CIT vs. La Medica. The Tribunal found that the assessee failed to prove the genuineness of the creditors, similar to the case precedent. Therefore, the appeal was dismissed, and the order of the ld. CIT(A) was confirmed.
  
  Separate Judgement:
  No separate judgment was delivered by the judges in this case.

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• 2012 (9) TMI 1182
  

  Appeal challenging grant of bail to accused (history-sheeter) - the nature of crime it is perceivable that two persons came on a motorcycle and kidnapped Bihari Lal and kept him in confinement for eight days. The role of the accused is clearly stated. the fact that the accused is a history-sheeter and involved in number of cases, rejected the application for bail. Being unsuccessful to secure bail from the court of Session, the accused preferred a Bail Application before the High Court under Section 439 of the Code. The High Court only mentioned the fact that the accused has a criminal history and is involved in number of cases but considering the factum that he has been in custody since 30.09.2011 directed his enlargement on bail on certain conditions. HELD THAT:- the order passed by the High Court is set aside and the bail bonds of the accused are cancelled. The accused is directed to surrender to custody forthwith failing which it shall be the duty of the investigating agency to take him to custody immediately. The question should be posed whether the accused deserves to be enlarged on bail or not and only thereafter issue of imposing conditions would arise. We do not deny for a moment that period of custody is a relevant factor but simultaneously the totality of circumstances and the criminal antecedents are also to be weighed. They are to be weighed in the scale of collective cry and desire. The societal concern has to be kept in view in juxtaposition of individual liberty. Regard being had to the said parameter we are inclined to think that the social concern in the case at hand deserves to be given priority over lifting the restriction of liberty of the accused.

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• 2012 (9) TMI 1181
  
  Issues Involved:
  1. Deleting the disallowance of depreciation on intangible assets.
  2. Deleting the disallowance of expenditure u/s 14A.
  3. Directing the AO to verify the contentions regarding foreign expenses and to delete the addition.
  
  Summary:
  
  Issue 1: Deleting the disallowance of depreciation on intangible assets
  
  The assessee, a Private Limited Company engaged in software development, claimed depreciation on intangible assets. The AO disallowed the depreciation, questioning the value of the intangible assets. The CIT(A) deleted the disallowance, noting that the software was registered as a trademark and used for business purposes, thus qualifying for depreciation u/s 32. The Tribunal upheld the CIT(A)'s decision, referencing similar cases and rulings, including the ITAT Ahmedabad decision in DICT Vs M/s. Bhagawati Banquets and Hotels Ltd., which supported depreciation on intangible assets.
  
  Issue 2: Deleting the disallowance of expenditure u/s 14A
  
  The AO disallowed expenses related to exempt income u/s 14A, applying Rule 8D. The CIT(A) deleted the disallowance, stating that Rule 8D operates prospectively from AY 2008-09 and no nexus was established between interest-bearing funds and investments earning exempt income. The Tribunal upheld the CIT(A)'s decision, finding no justification to interfere.
  
  Issue 3: Directing the AO to verify the contentions regarding foreign expenses and to delete the addition
  
  The AO disallowed foreign travel expenses due to lack of evidence proving they were incurred for business purposes. The CIT(A) directed the AO to verify the contentions and delete the disallowance if justified. The Tribunal remitted the matter back to the AO for de novo consideration, instructing the assessee to provide necessary details and the AO to pass an appropriate order based on the evidence.
  
  Other Appeals:
  
  For AY 2004-05, 2005-06, 2006-07, 2007-08, and 2008-09, the Tribunal followed the decision for AY 2003-04, dismissing the revenue's appeals on similar grounds. The appeals for AY 2003-04 and 2004-05 were partly allowed for statistical purposes, while the appeals for other years were dismissed.
  
  Conclusion:
  
  The Tribunal upheld the CIT(A)'s decisions on depreciation and expenditure disallowances, remitting the issue of foreign travel expenses back to the AO for verification. The appeals for AY 2003-04 and 2004-05 were partly allowed for statistical purposes, and other appeals were dismissed.

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• 2012 (9) TMI 1180
  
  Issues involved:
  The appeal filed by the Revenue against the order of Ld.CIT(A)-XXX, New Delhi for Assessment Year 2008-09 regarding the taxability of salary earned by an employee working on an international assignment.
  
  Facts of the case:
  The assessee, an employee of M/s KJS India Pvt.Ltd., was on a long term international assignment to Kraft Foods, Philippines, and was present in India for less than 60 days during the relevant year. The assessee was regarded as a tax resident of Philippines and paid taxes there on the salary received in India for services rendered in Philippines.
  
  Arguments before the First Appellate Authority:
  The First Appellate Authority relied on the India-Philippines Double Taxation Avoidance Agreement, specifically Article 16(1), to conclude that the salary in question is not taxable in India.
  
  Grounds of appeal by the Revenue:
  The Revenue appealed on the grounds that the salary was accrued, received, and paid in India, and should be taxed accordingly under the Income Tax Act, 1961. They also questioned whether the tax paid in Philippines included the salary earned in India and claimed that the penalty proceedings initiated by the Assessing Officer were premature.
  
  Decision of the Tribunal:
  After considering the facts and the Indo-Philippines DTAA, the Tribunal held that the salary income derived by the appellant, a tax resident of Philippines, from employment exercised in Philippines shall be taxable only in Philippines. Therefore, the salary received through KJS India for work done in Philippines is not taxable in India. The Tribunal upheld the decision of the First Appellate Authority and dismissed the appeal of the Revenue.
  
  Conclusion:
  The Tribunal's decision was based on the specific provisions of the Double Taxation Avoidance Agreement between India and Philippines, which governed the taxability of the salary earned by the assessee while working on an international assignment.

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