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2011 (10) TMI 703
Benefit u/s 28(iv) or any capital gains on re-transfer of the shares - Held that:- When there was no transfer and the premium estimated by the Assessing Officer at the time original transfer is based on the some future development and events then, there is no question of either any benefit u/s 28(iv) or any capital gains on retransfer of the shares. Accordingly, the appeals filed by the revenue are dismissed.-
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2011 (10) TMI 702
Payment to DAV Trust being reimbursement for running school in the premises of the assessee is allowable as staff welfare expenses u/s 37 - claim of depreciation on catalyst - deduction u/s 80IA - addition of club expenses - disallowance u/s 43B - disallowance of loss on account of sale of inventory and store items to sister concern made by the AO by invoking the provisions of Section 40A(2)(a) - disallowance of loss on account of revaluation of inventory of two imported pumps - credit of TDS on receipt from IMACID (Morocco)- pre-payment of deferred sales tax liability as capital receipt
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2011 (10) TMI 701
Issues involved:
The judgment involves an appeal filed by the assessee against the order of Ld CIT(A) for assessment year 1998-99 on an order passed by the Assessing Officer u/s 154 of the Income Tax Act.
Grounds of Appeal:
1. The CIT(A) did not accept the claim of payment of arrears of salary based on the 5th Pay Commission recommendation and Govt. notification.
2. The claim of arrears of salary is a genuine liability and permissible deduction under the law.
3. The claim is in conformity with the observations of the Assessing Officer and CIT(A) for the previous assessment year.
4. The claim is not of debatable nature and is a permissible deduction u/s 154 of the Income Tax Act.
5. The claim is supported by evidence and the mercantile system, and disallowance is unjustified.
Details of Judgment:
The assessment u/s 143(3) was completed without any discussion or disallowance regarding the provision for revision of pay as per the 5th Pay Commission Recommendations. The assessee filed a rectification application u/s 154, citing the Ld CIT(A)'s order for the previous year in support of the claim. However, the Assessing Officer rejected the application, stating that there was no obvious mistake apparent from the record.
The assessee contended that the claim was genuine and permissible under the law, supported by case laws and circulars. The Assessing Officer's rejection was based on technical grounds, and the claim was rejected without proper examination of facts or law.
The Ld CIT(A) upheld the Assessing Officer's order, stating that the claim should have been made during the assessment proceedings and not through a rectification petition after many years. The Tribunal observed that the rectification petition was time-barred and a claim not raised during assessment cannot be considered a mistake apparent from the record.
In conclusion, the Tribunal dismissed the appeal, stating that the claim should have been raised during the assessment proceedings and rejected all grounds raised by the assessee.
This judgment highlights the importance of timely and proper submission of claims during assessment proceedings to avoid issues with rectification petitions later on.
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2011 (10) TMI 700
Issues Involved:
1. Addition of alleged benefit value u/s 17(3).
2. Treatment of sum as income u/s 10(3).
3. Deletion of addition on account of bogus creditors.
Summary:
Issue 1: Addition of Alleged Benefit Value u/s 17(3)
The assessee, a non-employee director of SKCSPL, was added a value of Rs. 3,49,023/- by the AO as perquisite/profits in lieu of salary u/s 17(3) for expenses incurred on a business trip. The CIT(A) confirmed this addition, referencing section 2(24)(iv) and the case of Ravi Prakash Khemka v/s CIT 295 ITR 33 (Mad), stating that the benefit derived by the assessee is taxable. However, the ITAT noted that there was no employer-employee relationship between SKCSPL and the assessee, and thus, the addition u/s 17(3) was not justified. The ITAT allowed the assessee's appeal on this ground.
Issue 2: Treatment of Sum as Income u/s 10(3)
The AO treated Rs. 83,320/- incurred by SKPMIL for the assessee accompanying her husband on a business trip as casual and non-recurring receipt u/s 10(3). The CIT(A) upheld this addition, citing the case of Smt. Sudha Burman vs. Commissioner of Income-tax 296 ITR 96 (Del). The ITAT, however, found that the expenses were allowed as business expenditure in SKPMIL's case and the company had offered the expenditure for taxation. Since the assessee accompanied her husband on the company's request, the amount could not be considered casual or non-recurring income. The ITAT allowed the assessee's appeal on this ground as well.
Issue 3: Deletion of Addition on Account of Bogus Creditors
The AO added Rs. 20,86,980/- as unexplained cash credits, which included amounts from M/s UB Finance Pvt. Ltd., M/s UB Financial Services, and Shri U.R. Bhandari. The CIT(A) deleted this addition, noting that the credits were from earlier years and proper inquiries were not conducted by the AO. The ITAT upheld the CIT(A)'s decision, stating that the cash credits were opening balances from earlier years and the AO failed to carry out proper inquiries. The ITAT dismissed the revenue's appeal on this ground.
Conclusion:
The ITAT dismissed the revenue's appeal and allowed the assessee's appeal, concluding that the additions u/s 17(3) and 10(3) were not justified and the deletion of the addition on account of bogus creditors was appropriate.
Order pronounced in open court on 14-10-2011.
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2011 (10) TMI 699
Reopening of assessment - reasons to believe - Held that:- There is no live link between the reasons recorded by the AO and the addition made and also in the absence of any tangible material to show that the transactions of 8200 shares of Rashel Agro Tech. Limited amounting to ₹ 3,89,050/- are not genuine, we are of the view that the assessment completed by the AO is bad in law, the same is, therefore, quashed.
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2011 (10) TMI 698
Issues involved: Disallowance of proportionate interest paid on amounts invested in subsidiary companies u/s 14A.
Details of the judgment:
1. The appeals were filed by the assessee against the orders of the CIT(A) XXVI, Mumbai for assessment years 2004-05 and 2006-07. The main issue in both appeals was the disallowance of proportionate interest paid on amounts invested in subsidiary companies invoking provisions of section 14A.
2. The assessee contended that the investments in the joint venture company were for business purposes, citing the principles established by the Hon'ble Supreme Court in the case of CIT vs. S.A. Builders Ltd. The assessee argued that there were no borrowed funds invested in the joint venture company and no exempt income was earned during the year. However, the A.O. disallowed proportionate interest, which was confirmed by the CIT(A).
3. The learned counsel for the assessee submitted that the funds were used for working capital requirements and not diverted for investment in the joint venture company. The original investment was made in a previous year, and the interest claim was allowed in subsequent years. The sales made by the assessee company to the joint venture company showed a direct increase in business. The assessee argued that the interest paid on borrowings for business expansion should be allowed u/s 36(1)(iii) and section 14A should not apply.
4. The CIT(A) had confirmed the order invoking Rule 8D, but the Special Bench decision in the case of Daga Capital Management Pvt. Ltd. was not approved by the Hon'ble Bombay High Court. The Tribunal held that the factual aspects regarding the claim of interest by the assessee needed further examination, especially regarding the diversion of borrowed funds to subsidiary companies. The matter was restored to the file of the A.O. for examination of facts and appropriate decision-making.
5. The Tribunal allowed the appeals of the assessee for statistical purposes, emphasizing the need for a detailed examination of facts and legal principles before disallowing interest under section 36(1)(iii) and section 14A.
Judges: D. Manmohan (Vice President) and B. Ramakotaiah (Accountant Member)
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2011 (10) TMI 697
Exemption under sec. 11 denied - hiring of the auditorium and providing space for rent are commercial activities and there is nothing charitable about the activities carried on by the assessee - Held that:- CIT(A) correctly decided the issue in favour of the assessee after following the order of the Tribunal for Assessment Years 1986-87 to 1988-89 as held the predominant object of the letting out of the auditorium and furniture and fixture is for carrying out of the object of the trust. The learned CIT(A) also observed that his predecessor, while deciding the issue in Assessment Year 2007-08, has also followed the order of the Tribunal and decided the issue in favour of the assessee. The learned CIT(A), therefore, held that the assessee is entitled to exemption under sec. 11 of the Act. Appeal filed by the revenue is dismissed.
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2011 (10) TMI 696
Issues involved: Interpretation of Section 80-IB(10) for housing projects and eligibility for deduction.
Summary:
The appeal was filed by the Revenue against the order of the Commissioner of Income-tax(A)-I, Bangalore, for the assessment year 2006-07. The case revolved around the eligibility of the assessee for deduction u/s.80IB(10) for a housing project named 'Brigade Millennium'. The Assessing Officer contended that the project did not qualify for deduction due to certain units exceeding specified plinth areas, making it ineligible as per the provisions of Section 80 IB(10).
Before the Commissioner of Income-tax(A), the assessee relied on a previous ITAT decision in their favor for AY 2004-05 and AY 2005-06, where the deduction u/s.80IB(10) was allowed. The Commissioner of Income-tax(A) upheld the assessee's claim for deduction u/s.80IB(10) for the current assessment year, leading to the Revenue's appeal.
The Tribunal, considering the earlier order and the identical nature of the current case, decided in favor of the assessee. Citing various legal precedents, the Tribunal upheld the Commissioner's decision to allow the deduction u/s.80IB(10) for the housing project 'Brigade Millennium'. The Tribunal dismissed the Revenue's appeal based on the precedent and upheld the order of the Commissioner of Income-tax(A).
Therefore, the Tribunal's decision favored the assessee, confirming their eligibility for deduction u/s.80IB(10) for the housing project 'Brigade Millennium', based on the legal precedents and the earlier ITAT decision in the assessee's favor for previous assessment years.
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2011 (10) TMI 695
Issues involved:
1. Rectification of mistake in the order of the Tribunal.
2. Consideration of submissions regarding denial of Cenvat credit.
3. Invocation of larger period for demand confirmation.
4. Granting of option to pay reduced penalty under Section 11AC.
5. Benefit of payment of duty, interest, and penalty within thirty days.
Analysis:
1. The application for rectification of mistake sought to rectify an error in the Tribunal's order dated 10-8-2011. The applicant requested consideration of submissions made in the ROM application regarding the denial of Cenvat credit. The applicant argued that no mala fide intention could be alleged against them, and the issue was of an arguable nature based on statutory provisions and previous decisions. The applicant also highlighted that the show cause notice did not specify any grounds for invoking a larger period, emphasizing the absence of suppression with the intention to evade duty.
2. The applicant further made alternate submissions, requesting the Tribunal to grant the option to pay duty, interest, and penalty equal to 25% of the duty under the proviso to Section 11AC of the Central Excise Act, 1944. The applicant cited various decisions in support of this claim, emphasizing the need for granting such an option to the assessee. The Tribunal considered these submissions and the relevant legal provisions before making a decision.
3. Regarding the issue of time-barred show cause notice, the Tribunal noted that the Revenue was in appeal against the order that allowed Cenvat credit only on merits. The Tribunal observed that the ground of limitation could not be canvassed strictly due to the absence of a cross-objection by the appellants. However, the Tribunal acknowledged the importance of fairness and justice in considering this aspect. The Tribunal analyzed the observations made in the previous order, indicating that the decision would not have been different even if the limitation aspect was separately discussed.
4. The Tribunal addressed the point raised by the assessee regarding the adjudicating authority not granting the benefit of payment of duty, interest, and penalty within thirty days of receiving the order. The Tribunal considered the alternate submission made by the assessee and decided to grant the benefit of reducing the penalty if the Cenvat credit amount demanded, interest, and 25% of the penalty were paid within thirty days.
5. In conclusion, the Tribunal decided that if the specified payments were made within the given timeframe, the assessee would not be required to pay the remaining 75% of the penalty. However, failure to comply with the payment terms would result in the assessee being liable to pay the full penalty amount as demanded by the original adjudicating authority. The Tribunal's decision on the ROM application was pronounced in court, providing clarity on the payment requirements and penalties involved.
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2011 (10) TMI 694
The Gujarat High Court, in an oral order by Justice Akil Kureshi, considered the Revenue's challenge regarding the deletion of additions made on interest received on investments and disallowance of depreciation. The Court admitted the appeal for consideration of the addition on interest received as a substantial question of law. The decision on disallowance of depreciation was based on a previous tribunal ruling. The case was to be heard with Tax Appeal No.1791/2010.
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2011 (10) TMI 693
Capital gain computation - FMV adoption - AO proceeded to rework the fair market value of this land as on 01.04.1981 - Held that:- egarding the fair market value as on 01.04.1981. The Sub-Registrar cannot do that. He can only tell about a guideline value on a given date. But, astonishingly, he has given two distantly divergent values and arrived at an Arithmetic Mean, which is not in his domain. Moreover, it is a common factor that the guideline values were not updated in earlier period. The valuer’s report has taken into account all the relevant factors. Therefore, we left with no option but to accept the valuer’s report. The Assessing Officer could confront the chartered valuer, if he was not satisfied with the valuer’s report. The Assessing Officer has not done anything in this direction and has simply rejected the report without any reasons and rhymes. To our great chagrin, when the fair market value has to be ascertained on the date of sale, the Department itself refused to rely on guideline value and it is only when the cost of asset (land) is being ascertained, the Assessing Officer usually try to take shelter under the guideline value. On the contrary, the approved valuer in his report has relied on the market value, which is based on local enquiries made from the surroundings and he has also relied on the local status of this land existing in that year. Hence, we accept the computation given by the assessee and delete the entire addition made in this regard.
TDS u/s 195 - Disallowance under section 40(a)(i) non-deduction at source on the amount paid to FSC for the time charter hire - Held that:- Section 172 is a complete code by itself. Thus, the amount paid by the assessee to the FSC on time charter agreement would not amount to ‘royalty’ neither under Explanation 2 or under section 9(1)(b)(ii) or under the DTAA and in this case only section 172 applies. This, no tax is needed to be deducted at source under section 195 as the amount paid does not amount to ‘royalty’. Therefore, the disallowance under section 40(a)(i) for non-deduction at source on the amount paid to FSC for the time charter hire is erroneous and the same is set aside.
Disallowance under section 40A r.w. Rule 8D has been correctly held by the ld. CIT(A) to be applicable from the assessment year 2008-09 onwards and not for the earlier assessment years. Therefore, he has rightly restricted the disallowance under section 40A of the Act.
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2011 (10) TMI 692
Issues involved:
The judgment involves appeals by the assessee and the Revenue for assessment years 2005-06, 2006-07, and 2007-08, challenging orders of the Commissioner of Income tax(Appeals)-III at Chennai, related to depreciation claim, carry forward of loss, bad debts written off, disallowance of non-recoverable deposits, disallowance of conversion charges, and set off of carried forward loss/depreciation.
Assessment Year 2005-06:
Assessee's Appeal (ITA No.794(Mds)/2010):
- The assessee's claim of higher depreciation restricted to additions to leasehold building was confirmed.
- Disallowance of carry forward of loss was confirmed.
- The appeal was dismissed.
Revenue's Appeal (ITA No.832(Mds)/2010):
- Dispute over bad debts written off was decided in favor of the assessee.
- The Revenue's appeal was dismissed.
Assessment Year 2006-07:
Assessee's Appeal (ITA No.795(Mds)/2010):
- Disallowance of non-recoverable deposits and conversion charges confirmed.
- Disallowance of set off of carried forward loss/depreciation confirmed.
- The appeal was not successful.
Revenue's Appeal (ITA No.833(Mds)/2010):
- Dispute over bad debts and non-recoverable advances was partly allowed.
- Disallowance of non-recoverable advances to a group company was restored.
- The Revenue was partly successful in its appeal.
Assessment Year 2007-08:
Assessee's Appeal (ITA No.1427(Mds)/2010):
- Disallowance of non-recoverable deposits and set off of carried forward loss/depreciation confirmed.
- The appeal was dismissed.
In conclusion, the appeals by the assessee for all assessment years and the Revenue for 2005-06 were dismissed. The Revenue's appeal for 2006-07 was partly allowed. The judgment was pronounced on October 13, 2011, at Chennai.
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2011 (10) TMI 691
Issues:
1. Interpretation of liability under statutory enactment in relation to manufacture for Cenvat credit eligibility.
2. Jurisdiction to entertain appeal based on pecuniary limits under the Finance Act, 1994.
Analysis:
Issue 1: Interpretation of liability under statutory enactment for Cenvat credit eligibility
The judgment deliberated on the interpretation of liability under a statutory enactment in relation to manufacture for the eligibility of Cenvat credit. The counsel argued that if the liability relates to ancillary incidental activity contributing to the main activity of manufacture, it should be considered for Cenvat credit. The audit finding acknowledged the liability related to insurance under a statutory enactment. It was concluded that discharging such liability by paying Service Tax entitles the appellant to Cenvat credit. The opposing argument by the Departmental Representative (DR) was countered, emphasizing the entitlement to waive pre-deposit and allow the appeal.
Issue 2: Jurisdiction to entertain appeal based on pecuniary limits under the Finance Act, 1994
The judgment addressed the issue of jurisdiction to entertain the appeal based on pecuniary limits set by the Finance Act, 1994. Although the amount involved was Rs. 23,258 with a penalty of Rs. 2,000, initially, the appeal was considered for dismissal on pecuniary jurisdiction grounds. However, upon reviewing the matter in controversy, it was deemed important to intervene due to the significance of the issue. The judgment highlighted that the Finance Act, 1994 does not permit dismissal solely based on monetary limits in the absence of a provision similar to the second proviso to Section 35B of the Central Excise Act, 1944. As a result, the appeal was deemed entertainable, and the requirement of pre-deposit was waived with the consent of both parties for the appeal's disposal.
In conclusion, the judgment allowed the appeal, setting aside the impugned order after considering the interpretation of liability under a statutory enactment for Cenvat credit eligibility and addressing the jurisdictional aspect based on pecuniary limits under the Finance Act, 1994.
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2011 (10) TMI 690
The Supreme Court granted leave to the petitioner as per the order dated 15th January, 2008. The respondent did not appear despite being served. The High Court reference is from 2007 (1) TMI 138 - DELHI High Court. Justices R.V. Raveendran and K.S. Radhakrishnan presided over the case. Counsels for the petitioner included Mr. Mohan Parasaran, Mr. Fuzail A. Ayyubi, Mr. D.L. Chidananda, and Mr. B.V. Balaram Das.
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2011 (10) TMI 689
Issues Involved:
1. Reopening of the case under Section 147.
2. Addition under Section 68 for unexplained cash credits.
3. Disallowance of Kharajat expenses.
Detailed Analysis:
1. Reopening of the Case under Section 147:
The assessee contested the reopening of the assessment for the year 2004-05, arguing that it was based on a change of opinion and not on any new information. The Tribunal upheld the CIT(A)'s decision, stating that no inquiry was made regarding the genuineness of the loans during the original assessment. The reopening was within four years from the end of the assessment year, and the AO had valid reasons to believe that income had escaped assessment based on findings during penalty proceedings under Section 271D.
2. Addition under Section 68 for Unexplained Cash Credits:
Assessment Year 2004-05:
The AO added Rs. 9,85,500 as unexplained cash credits, which the CIT(A) confirmed. The Tribunal upheld this decision, noting that the assessee failed to prove the identity, genuineness, and creditworthiness of the creditors. The assessee's reliance on confirmatory letters and the statement of one creditor during penalty proceedings was insufficient to establish the genuineness of the loans.
Assessment Year 2005-06:
The AO treated several cash credits as non-genuine due to the lack of PANs, addresses, and other details. The CIT(A) provided partial relief by deleting additions where the assessee provided adequate documentation (e.g., A.V. Corporation and Megh Mayur Mallhar Co-op. Soc.). However, the Tribunal restored the matter for some creditors (Fashat Ali, G.V. Katwala, JK & Co., and Mayur M. Patel) to the AO for fresh adjudication, giving the assessee another opportunity to substantiate the creditworthiness of these creditors.
3. Disallowance of Kharajat Expenses:
The AO disallowed 10% of the Kharajat expenses claimed by the assessee due to the lack of verifiable documents and the fact that most expenses were paid in cash. The CIT(A) confirmed this disallowance, and the Tribunal upheld the decision, noting that the assessee failed to produce complete details and evidence to substantiate the expenses.
Conclusion:
- The Tribunal dismissed the assessee's appeal for the year 2004-05.
- The Tribunal partly allowed the assessee's appeal for the year 2005-06 for statistical purposes, remanding certain issues back to the AO.
- The Tribunal dismissed the Revenue's appeal for the year 2005-06.
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2011 (10) TMI 688
Issues Involved:
1. Deduction under section 80IB(10) of the Income Tax Act.
2. Addition of undisclosed sales based on seized documents.
3. Admission of additional evidence under Rule 46A(4).
4. Method of accounting and valuation of FSI (Floor Space Index).
Issue-wise Detailed Analysis:
1. Deduction under section 80IB(10):
The primary issue was whether the Assessing Officer (AO) was justified in restricting the deduction claimed under section 80IB(10) on the grounds that the FSI was sold at a rate higher than the market value specified in the Stamp Duty Ready Reckoner. The AO had accepted the profits of the projects but had notionally divided them to exclude the excess profits for computing the deduction. The Tribunal upheld the Commissioner (Appeals)'s decision that no such artificial bifurcation is permitted in law. The Tribunal found no evidence that the sale consideration was inflated or that money flowed back to the buyer. Hence, the entire profits of the project were deemed eligible for deduction under section 80IB(10).
2. Addition of undisclosed sales based on seized documents:
The AO made certain additions based on loose papers and documents seized during the search, concluding these as undisclosed sales. The Commissioner (Appeals) deleted some of these additions. The Tribunal noted that the seized documents were mere arithmetical workings and jottings without any corroborative evidence. It was held that no addition could be made based solely on these documents without examining the purchasers. Consequently, the Tribunal set aside the issues related to undisclosed sales and remanded them back to the AO for fresh adjudication after examining the purchasers.
3. Admission of additional evidence under Rule 46A(4):
The Commissioner (Appeals) had called for additional evidence under Rule 46A(4) without giving the AO an opportunity to examine these documents. The Tribunal upheld that under Rule 46A(4), there is no requirement for the Commissioner (Appeals) to confront the AO with the additional evidence. The Tribunal found that the evidence regarding the registration of the agreement and payment details were factual matters available on record and were examined by the Commissioner (Appeals).
4. Method of accounting and valuation of FSI:
The AO contended that the method of accounting was changed as the FSI was sold at a higher rate than the market value. The Tribunal noted that the assessee followed the project completion method, valuing the closing stock at cost or stamp duty market valuation rate, whichever was lower. The Tribunal found no error in this valuation method and upheld the Commissioner (Appeals)'s findings that the sale of FSI was at arm's length and the rate was comparable to other transactions in the same location.
Separate Judgments:
The Tribunal dismissed the Revenue's appeal and allowed the assessee's appeal for statistical purposes, setting aside the issues related to undisclosed sales for fresh adjudication by the AO. The Tribunal upheld the Commissioner (Appeals)'s decision on the deduction under section 80IB(10) and the method of accounting.
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2011 (10) TMI 687
Issues Involved:
- Claim of deduction u/s. 80IB(10) of the I.T. Act, 1961
- Justification and substantiation of payments to individuals
- Eligibility for deduction u/s. 80IB(10) based on project approval date
Analysis:
Claim of deduction u/s. 80IB(10):
The appeals by the revenue challenged the CIT(A)'s decision to allow the claim of deduction u/s. 80IB(10) made by the assessee for the AYs 2007-08 and 2008-09. The revenue contended that the build-up area of the shops in the housing project exceeded the prescribed limit, the assessee was a contractor and not a builder, and the sale of Transfer of Development Right (TDR) did not qualify for the deduction. However, the CIT(A) allowed the claim after considering a remand report. The revenue argued that the SRA scheme needed to be notified by the Government of India, but the Tribunal found no merit in this objection. Additionally, the Tribunal determined that the project approval date governed the eligibility for deduction u/s. 80IB(10), and the sale of TDR was considered income from the housing project, making the assessee entitled to the deduction.
Justification and Substantiation of Payments:
The revenue raised concerns about the lack of documentary evidence justifying the payments made by the assessee to individuals. However, the Tribunal did not find this argument compelling, as the focus was primarily on the eligibility for the deduction under section 80IB(10) based on the specific circumstances of the housing project and income sources.
Eligibility for Deduction based on Project Approval Date:
The eligibility for deduction u/s. 80IB(10) was a crucial issue in this case, with the revenue arguing that the project approval date post-31.3.2005 made the amended provisions applicable. However, the Tribunal determined that as the project was approved before 1.4.2005, the un-amended provisions of sec. 80IB(10) applied. The Tribunal cited a relevant High Court decision to support this interpretation, emphasizing that there was no bar for allowing the deduction prior to the amendment, especially concerning the presence of commercial establishments in the housing project.
In conclusion, the Tribunal dismissed the appeals filed by the revenue, upholding the CIT(A)'s decision to allow the deduction u/s. 80IB(10) for the assessee based on the project's approval date and the nature of income derived from the housing project, particularly concerning the sale of TDR. The judgment provided a detailed analysis of the legal provisions and relevant precedents to support the decision.
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2011 (10) TMI 686
Issues Involved: Appeal against order of Ld. CIT(A)-XX, Kolkata dated 20.12.2010 for assessment year 2007-08 regarding the rectification under section 154 of the Act for the issue of rebate under section 88E.
The Department's appeal was against the order of Ld. CIT(A) for assessment year 2007-08, where the assessment was initially completed u/s 143(3) on 07.11.2008. The Assessing Officer tried to rectify the calculation and the issue of rebate u/s 88E under section 154 of the Act. The assessee contended that the matter involved a debatable point of law not amounting to a mistake apparent from record. Ld. CIT(A) held that the Assessing Officer's actions were arbitrary and against the law, enhancing the tax and surcharge by disallowing the tax rebate under section 88E. The Department appealed this decision.
In considering the appeal, Ld. CIT(A) referred to the decision of the Hon'ble Apex Court in the case of M/s. Mepco Industries Ltd. vs. CIT 2009-TIOL-121-IT-LB dated 19.11.2009. The Departmental Representative sought cancellation of Ld. CIT(A)'s order based on the rectification order, while the assessee's counsel relied on the Hon'ble Supreme Court's decision and decisions of ITAT, "B" Bench, Kolkata, and ITAT, "A" Bench, Kolkata in similar cases. The Tribunal in a similar case held that rectification proceedings under section 154 to recompute the rebate under section 88E by disallowing expenses were debatable and not clear how business expenses could be disallowed through rectification.
Ultimately, the Tribunal, following the precedent and rectification relied upon by the assessee's counsel, confirmed Ld. CIT(A)'s order, dismissing the revenue's appeal. The revenue appeal was thus dismissed, and the order was pronounced in court on 14.10.2011.
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2011 (10) TMI 685
Issues involved: Disallowance of assessee's claim for deduction u/s 80IB(10) due to lack of notification by CBDT for the housing project.
Summary:
The appeal was filed by a partnership firm engaged in the business of promoters, builders, and contractors against the disallowance of its claim for deduction u/s 80IB(10) by the Assessing Officer (AO) and confirmed by the CIT(Appeals). The AO disallowed the deduction as the project was not notified by the CBDT. The CIT(Appeals) upheld the disallowance due to the absence of the notification. The firm later produced a notification issued by the CBDT after the CIT(Appeals)'s order, requesting an opportunity to substantiate its claim. The Tribunal set aside the lower authorities' orders and remanded the matter to the AO for fresh consideration in light of the notification, granting the firm an opportunity to be heard. The appeal was treated as allowed for statistical purposes.
In conclusion, the Tribunal allowed the appeal and remanded the matter to the AO for reevaluation of the deduction claim u/s 80IB(10) based on the notification issued by the CBDT, providing the firm with a chance to support its claim.
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2011 (10) TMI 684
Issues involved: Challenge to the punishment of dismissal from service as disproportionate based on the conviction for a less heinous offence under Section 10(n) of the Central Reserve Police Force Act, 1949.
The respondent, a Constable in the CRPF, was convicted and sentenced to imprisonment till the rising of the Court for leaving his duty, consuming illicit alcohol, and misbehaving with a superior officer. The Assistant Commandant found him guilty and dismissed him from service. The respondent challenged this in the High Court, which directed a reconsideration of the punishment due to its perceived disproportionality.
The appellants argued that the dismissal was justified under Section 12(1) of the Act, as the respondent's actions constituted grave charges of indiscipline. They contended that the High Court erred in finding the punishment disproportionate.
The respondent's counsel cited precedents to support the argument that dismissal for a less heinous offence and a one-day imprisonment was unwarranted. They emphasized the need for substantial justice and reconsideration of penalties in such cases.
The Supreme Court analyzed Sections 10(n) and 12(1) of the Act, highlighting the authority's discretion in dismissing a member sentenced to imprisonment. The Court noted the seriousness of the respondent's indiscipline, justifying the dismissal as a consequence of his actions.
The Court criticized the High Court's intervention, stating that the punishment was not strikingly disproportionate to warrant interference. Citing legal precedents, the Court emphasized the limited scope of judicial review in such matters.
Ultimately, the Supreme Court allowed the appeal, setting aside the High Court's order and upholding the dismissal of the respondent from service.
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9911796707
