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Showing 81 to 100 of 1441 Records
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2014 (2) TMI 1365
Nature of expenditure - Disallowance of deduction of expenditure on the ground that it was capital expenditure - expenditure pertaining to the proposed new power project under the expense heads (a) professional fees (b) travelling expenses (c) tender expenses - HELD THAT:- As assessee was rendering services for operating and maintaining of Power Plant but during the year, the assessee was to start its own Power Plant. The new projects were not expansion of existing business. Even if, the assessee’s new projects are in the same line of business expenses relating to new projects are capital in nature and not allowable as revenue as held by the Hon’ble Bomaby High Court in case of J. K. Chemical Ltd. [1992 (10) TMI 18 - BOMBAY HIGH COURT]. The case law cited by the assessee is not squarely applicable on it because the assessee had incurred expenditure to expand the same business. Thus, we confirm the order of the CIT(A). The assessee’s appeal on this ground is dismissed.
Charging of interest u/s.234A, 234B and 234C - HELD THAT:- Charging of interest u/s.234A, 234B and 234C is mandatory as held by CIT vs. Anzum M. H. Ghaswala & Ors. [2001 (10) TMI 4 - SUPREME COURT] to the above finding. The A.O. has not charged any interest u/s. 234A only charged u/s. 234B & 234C.
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2014 (2) TMI 1364
Penalty u/s 271(1)(c) - assessee was not into existence - HELD THAT:- Assessee itself was not in existence as the company was incorporated on 11.1.2007 only and assessee had specifically raised this ground before CIT(A) but CIT(A) without looking into the facts passed the orders in these two years also as in all other years.
Therefore, the penalty order for these years does not stand as the assessee was not into existence in these years. Regarding other years also we find that facts and circumstances exactly are same as in the order referred to above and therefore respectfully following the order of coordinate Benches we also delete the penalties imposed by the AO and confirmed by CIT(A). - Appeals filed by the assessee are allowed.
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2014 (2) TMI 1363
Disallowance of “additional depreciation” claimed on addition of rolls under the head “plant & Machinery.” - HELD THAT:- When ever new plant & Machinery is acquired or installed, additional depreciation is to be allowed. The conditions relating to allowance of additional depreciation in that case of new industrial undertaking has been dispensed with Finance Act, 2005 w.e.f. 1.4.2005. It cannot be doubted that rolls are part of machinery that is why normal depreciation of 80% has been allowed by the Assessing officer, therefore in our opinion, the assessee was also entitled to additional depreciation in terms of Sec 32(1)((iia) particularly in the light of para 3.6 of Circular No. 8 of 2008. Accordingly we set aside the order of the Ld. CIT(A) and direct the Assessing officer to allow additional depreciation - Appeal of the assessee is allowed.
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2014 (2) TMI 1362
Rate of tax - Iron and Steel used by the Respondent for the execution of works contract being transferred not as goods but in some other form - HELD THAT:- The issue decided in favour of the respondent-assessee and against the petitioner-State.
Deduction towards land value from the total turnover to arrive at taxable turnover - Joint Development Agreement with the land owner to construct the building for him - HELD THAT:- The deduction is allowed - decided in favour of the respondent- assessee and against the Revenue.
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2014 (2) TMI 1361
Constitutional validity of the provision of Section 234E - Notice to the petitioner levying fee vide annexure A1 to A21 and Annexure – B - HELD THAT:- Pending consideration of the grounds in the writ petition, it is desirable that enforcement of notices referred to above issued by the 4th respondent are stayed until further orders.
In the meantime respondents are permitted to file counter-within two weeks.
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2014 (2) TMI 1360
Whether the ex-directors of a company in liquidation can be held accountable for the receivables of the company that can't be recovered by the Official Liquidator for want of requisite information and the complete records of the company? - HELD THAT:- In the present case, there is no allegation that the funds of the company in liquidation have been misapplied or retained by the applicant. The only ground on which a claim of compensation has been made is that the applicant is guilty of misfeasance or breach of trust in relation to the company in liquidation - In order to sustain the present claim against the applicant, it would be essential to show that the applicant was guilty of misfeasance or breach of trust. The examination of the conduct of the applicant must indicate that the applicant has committed a breach of his duty and as a result thereof, a loss has been caused to the company.
In the present case, the claim for compensation is premised on a breach of the obligation to furnish a complete and accurate Statement of Affairs and providing the necessary documents, required for recovering the money due to the company in liquidation, to the Official Liquidator - A Director is placed in a fiduciary position to that of a company and, therefore, it is the duty of a Director to ensure that the assets of the company are preserved and protected. It is the duty of a Director to ensure that the affairs of the company are conducted in a manner so as to comply with all laws and for the benefit of the company.
Given the allegations in the present case, it is not necessary that any separate and specific allegation be made against the applicant since the liability is sought to be imposed on the applicant on account of his being a Director of the company at the relevant time.
In the present case, the company itself has accepted that the applicant had tendered his resignation and an affidavit to this effect was placed on record much prior to the Official Liquidator being appointed as a Provisional Liquidator. Thus, there can be no doubt that the applicant had communicated his unequivocal intention to relinquish his office as a Director of the company. In view of the settled law that, unless articles provide otherwise, the acceptance of resignation submitted by a Director is not necessary for the same to take effect, it is clear that the applicant had demitted office as a Director much prior to the Official Liquidator being appointed as a Provisional Liquidator.
The present application is allowed and it is clarified that the applicant is not required to deposit 50% of the sum of ₹ 9.23 lacs as directed by the order dated 07.11.2012.
List on 30.04.2014.
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2014 (2) TMI 1358
The Supreme Court allowed the application for impleadment of the State of Assam as Respondent No.2. Notice was issued to the newly added parties, returnable on 28th March, 2014. Notice to be served upon the Standing Counsel for the State of Assam.
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2014 (2) TMI 1357
Disallowance of interest on advances made to sister concern without commercial expediency - CIT (A) deleted the disallowance by holding that the assessee has sufficient interest free funds - HELD THAT:- CIT (appeals) demonstrates that the assessee has sufficient interest free funds. Presumption is that such interest free funds have been utilized for giving interest free advances, unless otherwise proved. For this proposition we draw strength from the judgment of CIT vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] Respectfully following the same we uphold the finding of the Ld. CIT (A).
CIT (A) also held that the loans in question taken by the assessee were for specific purposes, namely for export bill discounting, packing credit loans, term loan taken for purchase of property for business use, car loan and overdraft. The Bank when guaranty such specific loans, ensure that the money is used for the purpose for which it is given . The funds are not released to the assessee but are paid to the organization from where the assessee received the asset/ goods etc. directly. They have sufficient cheques and balances in the system.
The loan granted by a bank or financial institution for specific purpose has been diverted, without evidence what so ever, for the purpose disallowing interest payment cannot be countenanced. Thus on this ground also the order of the Ld. CIT (A) has to be upheld. In the result this ground of the Revenue is dismissed.
Income from house property - Addition as notional income - AO considering the turn over and estimated that only 20% of the premises were used for business and the balance 80% of the property was vacant and he estimated a notional income of ₹ 7 lac under the provisions of section 22 - HELD THAT:- CIT (A) considered (a) the certificate of registration and allotment of TIN by the Department of commercial taxes Govt. of UP. (b) Monthly VAT returns. (c) Details of purchase of furniture. (d) Details of purchase of machinery. (e) Details of purchases of raw material. (f) Copies of the assessment orders of commercial tax officer, and held that the premises in question have been occupied by the assessee for the purpose of business. Further held that AO has no basis what so ever, to estimate that 20% of the factory was only being used for business and for holding that the balance area was lying vacant. DR could not controvert this factual finding of the first appellate authority. Her arguments were on the issue of admission of additional evidence etc. These are devoid of merit. Revenue ground dismissed.
Admission of additional evidence - assessee submitted that the only additional evidence that was admittedly an assessment order of the commercial tax department, and that it was filed at on the direction of the CIT (A) u/s 46(a) (iv) - HELD THAT:- In our view nothing turns on this issue. A copy of the order of the commercial tax officer, even if ignored does not effect the allowability of the ground no.2 as other evidences produced suffice to support the order of the Ld. CIT (A).
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2014 (2) TMI 1356
Unable to pay the due amount - Section 434(1)(a) of Companies Act, 1956 - HELD THAT:- The proposal submitted by the respondent for restructuring of its liabilities to banks would not in any way restrict the petitioner to maintain the present petition which the petitioner is entitled to ex debito justitiae. The second submission made by the respondent that there is an inter se agreement between various banks also does not offer any credible defence to the respondent - The present petition is, therefore, admitted
Appointment of a Provisional Liquidator - HELD THAT:- The Directors of the company shall file a Statement of Affairs within 21 days and also disclose the correct addresses of the company as well as the addresses of the Directors. It is clarified that the Directors of the company shall continue to operate the bank accounts, however, a weekly statement as to the receipts and payments shall be furnished to the Official Liquidator.
Application disposed off.
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2014 (2) TMI 1355
Short deduction of tax at source - TDS u/s 194C OR 194J - addition u/s 40(a)(ia) - HELD THAT:- As decided in assessee's own case [2012 (7) TMI 614 - ITAT MUMBAI] wherein a similar disallowance made u/s 40(a)(ia) of the Act for short deduction of tax at source by the assessee u/s 194-C instead of section 194-J of the Act was held to be unsustainable by the Tribunal holding that the provisions of section 40(a)(ia) of the Act are applicable only when there is no deduction of tax at source and not where there is only short of deduction of tax at source. Respectfully following above we uphold the impugned order of the ld. CIT(A) deleting the disallowance made by the A.O. u/s 40(a)(ia) - Decided against revenue
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2014 (2) TMI 1354
Winding up of Company - Restraint from Sale of the land, buildings, plant and machinery etc. of the company in liquidation by the State Bank of India (SBI) - direction to the SBI to hand over the entire auctioned assets to the Official Liquidator - Section 456 of the Companies Act - Maintainability of the application - HELD THAT:- In the present case, we are concerned with same question but so far as the Companies Act and the SARFAESI Act are concerned. The difference between the RDB Act and the SARFAESI Act may be immediately noticed inasmuch under the SARFAESI Act, the security is realized by the secured creditor without intervention of the Court whereas under the RDB Act, a recovery officer of DRT sells assets of debtor to recover dues, as certified by DRT.
The decision of the Delhi High Court in KOTAK MAHINDRA BANK LTD. AND MOHAN TRACTORS PVT LTD. VERSUS MEGNOSTAR TELECOMMUNICATIONS PVT. LTD. & ANR [2012 (9) TMI 1092 - DELHI HIGH COURT] is relevant to be noticed where an identical issue fell for consideration. In that case also, it was answered by holding that the Official Liquidator will have to approach the DRT under Section 17 of the SARFAESI Act, if he seeks to challenge the sale held by the secured creditor under Section 13(4) of the SARFAESI Act.
The view of the Delhi High Court commends acceptance. In view of the answer to the question of maintainability, against the applicant, it is not necessary to deal with the factual aspects and the grounds for setting aside the sale, as urged by the applicants.
Application dismissed being not maintainable.
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2014 (2) TMI 1353
Whether on the allegations made in the complaint petition filed by the respondent a prima facie case of commission of offences under Sections 498A and 406 of the Penal Code is made out against the appellants?
HELD THAT:- The facts, as alleged, will have to be proved which only be done in the course of a regular trial. It is wholly unnecessary for us to embark upon a discourse as regards the scope and ambit of the Court’s power to quash a criminal proceeding. Appreciation, even in a summary manner, of the averments made in a complaint petition or FIR would not be permissible at the stage of quashing and the facts stated will have to be accepted as they appear on the very face of it. This is the core test that has to be applied before summoning the accused. Once the aforesaid stage is overcome, the facts alleged have to be proved by the complainant/prosecution on the basis of legal evidence in order to establish the penal liability of the person charged with the offence.
The complaint petition registered as Complaint No. 287/1A (Monica Vs. Vikas Sharma and Others) presently pending in the Court of Metropolitan Magistrate, Patiala House, New Delhi cannot be interdicted but has to be finally concluded by the learned Trial Court - Appeal dismissed,.
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2014 (2) TMI 1352
Expenditure incurred for purchase of audio and video rights of feature films for production of cassettes and CDs - nature of expenditure - revenue or capital expenditure - HELD THAT:- Issue as considered by the Tribunal in assessee’s own case for earlier years [2013 (1) TMI 983 - ITAT MUMBAI] and after considering relevant facts held that expenditure incurred for purchase of master plates is revenue in nature. - Decided in favour of assessee.
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2014 (2) TMI 1351
Entitlement for deduction u/s 80-IA on the generation of power and utilized for captive consumption - HELD THAT:- As decided in TAMILNADU PETRO PRODUCTS LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2010 (11) TMI 645 - MADRAS HIGH COURT] in the light of section 80-IA and in particular sub-clause (iv) of the said section which provides for the benefit even in respect of electricity generation plant established by the assessee and the income derived from such enterprise of the assessee, it will have to be held that the assessee fully complied with the requirements prescribed under section 80-IA in order to avail the benefits provided therein. Therefore, the contention based on the interpretation of the expression 'derived from' can have no application to the case where the provisions of section 80-IA get attracted - Decided against revenue.
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2014 (2) TMI 1350
Lease rent income - Correct head on income - income from house property OR business income - HELD THAT:- The issue is squarely covered by the decision of Hon’ble Supreme Court in the case of Sambhu Investment (P) Ltd. Vs. CIT (2003 (1) TMI 99 - SUPREME COURT), wherein held that when main intention of letting out the property or any portion thereof is to earn rental income, the income is to be assessed as income from house property and where the intention is to exploit the immovable property by way of complex commercial activities, the income should be assessee as income from business. Applying this proposition to the facts of the instant case, we found that the assessee has let out the property to earn the rental income. Accordingly, no infirmity in the order of CIT(A) for treating the lease income as income from house property
Deduction u/s 80IB(10) on stilt parking denied - HELD THAT:- As relying on assessee's own case infirmity in the order of CIT(A) for allowing claim of deduction under Section 80IB(10) as held that if some part of the flat is used for commercial purpose, the correct character of housing project is not vitiated, Assessing Officer has not brought on record that which part of expenditure claimed to have been incurred for parking is bogus. Hence, in view of the above said arguments, case laws and submissions of the appellant alone, the Assessing Officer could be directed to allow deduction to the appellant u/s. 80IB(10) on sale proceeds of stilt parking.
Addition of suppressed value of closing stock - AO has made addition in the valuation of closing stock by taking indirect expenditure as a part of cost of construction like interest expenses, depreciation, brokerage for lease etc. - CIT-A deleted the addition - HELD THAT:- AO has wrongly added expenses of previous year to the value of closing stock without finding fault in assessee’s method of valuation, which was consistently followed by it. The AO has wrongly included indirect cost of project which is not going to form part of value of work in progress. While computing value of closing stock the AO has not pointed out any particular expenses, which should have charged to closing stock and not added by the assessee to the closing stock. Accordingly, we do not find any reason to interfere in the findings of CIT(A) resulting into deletion of addition on account of valuation of closing stock.
Addition on account of allocation of common expenditure to Poisar Project and Sakinaka ‘D’ project - HELD THAT:- As the facts and circumstances during the year under consideration are pari materia to the facts and circumstances as considered and decided by the Tribunal in assessee’s own case, which has been elaborately referred by the CIT(A) in his impugned order Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the addition made on account of allocation of common expenditure. - Decided against revenue
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2014 (2) TMI 1349
Gain from sale of the plots after claiming indexation benefit - income from business or LTCG - plot so sold constituted its stock-in-trade - correct head of income - HELD THAT:- The ledgers of the assessee firm in books of the partners shows that the plots were introduced as a capital contribution by the said partner, and the said plots of lands were introduced as capital assets and have been so held and shown as investments in the books of accounts since many years in the past and such position were accepted in earlier years. We also found that plots no. 23B and 23C were held for more than 5 years. Plots no. 256 and 257 were held for more than 3 years 5 months .Had it been held as stock in trade, no developer would held it vacant for such a long period clearly indicate that they were held as investment with a motive to earn profits. All these aspects were not considered by lower authorities while reaching to the conclusion that plots were held as stock-in-trade and not as investment.
Vide Tripatite Deed dt.03.08.2005 CIDCO formally transferred the said plots in favor of the assessee firm effecting the full transfer of the plots by Shri. Rahimtulla Abdul Hamid Mukri and others to M/s Sea Queen Developers. The transfer of the said plots were further formalized by CIDCO by transfer order dt. 19.09.2005. Subsequently, the said plots held as Long Term Capital Asset and shown as such in the balance sheets of respective years were transferred under an Agreement of Sale dt. 01.08.2008 to M/s Ravechi Properties on consideration of ₹ 10,55,00,00 and the capital gains of ₹ 8,26,04,800 after deducting the indexed cost of ₹ 2,28,95,200 was offered for taxation by the assessee firm. All these important factual aspects and documentary evidences have not been properly appreciated by lower authorities which resulted into wrong conclusion of holding that profit arising on sale of plots held as investment is liable to tax as business income rather capital gains.
We set aside the orders of lower authorities and restore the matter back to the file of the AO for examining these documents in detail and for deciding afresh the taxability of profit arose on sale of plot as capital gains or as business income - Decided in favour of assessee for statistical purposes.
Deemed dividend addition u/s 2(22)(e) - advances received by the assessee as deemed dividend - whether shares were held by the firm in the names of the partners - HELD THAT:- No investment was made by the assessee firm in the shares of said SHIPL nor any shares were issued to the assessee firm which were held in the names of its partners. No merit in the action of Assessing Officer for applying provisions of Section 2(22)(e), when the assessee firm is neither a registered shareholder nor beneficial shareholder of shares of SHIPL. Accordingly, the Assessing Officer is directed to delete the addition made u/s 2(22)(e) of the Income-tax Act, 1961. - Decided in favour of assessee
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2014 (2) TMI 1348
Depreciation to assessee trust - Allowability of depreciation of capital asset acquired for the purpose of carrying out charitable activities and set off of deficit of earlier years against the income of current year - Held that:- The assessee is claimed for setting off of excess income over expenditure against the deficit of earlier years is correct. No illegality or infirmity in the order passed by DIT. See COMMISSIONER OF INCOME-TAX VERSUS INSTITUTE OF BANKING PERSONNEL SELECTION [2003 (7) TMI 52 - BOMBAY HIGH COURT] - Decided against revenue.
Allowance of carry forward deficit - Held that:- There is no error on the part of the CIT(A) in following the decision of the Hon'ble Bombay High Court in the case of Institute of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY HIGH COURT] and allowing the stand of the assessee.
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2014 (2) TMI 1347
TPA - Computation of net operating margins for the purpose of comparability of its international transactions - determination of net operating profits and operating revenues for the purposes of computing PLI of the assessee company - Held that:- No difference in approach between the assessee and the Revenue on the aspect of excluding any item of income or expenditure for the purposes of calculating PLI so long as such item of income/expenditure is not linked to the international transactions under review.
Objection of the Revenue is quite misplaced inasmuch as the assessee had raised this plea before the TPO evidently inasmuch as the order of the TPO extracted above, is in response to such plea of the assessee. We are also satisfied that the no additional evidence within the meaning of rule 46A of the Rules has been accepted by the CIT(A) on this aspect inasmuch as the exclusion of income/expenditure canvassed by the assessee, are based on its financial statements, which are a part of record. Therefore, we find no justification for the Revenue to assail the directions of the CIT(A).
Ostensibly, the aspect involves a factual appreciation of the material on record, and therefore, we hereby uphold the direction of the CIT(A) to the Assessing Officer to re-determine the PLI by excluding items of income/expenditure which are not linked to the international transactions in order to compute the PLI of the assessee. The Assessing Officer shall allow the assessee a reasonable opportunity to make submissions to support its stand and thereafter the Assessing Officer shall pass an order on this aspect in accordance with law. Thus, on this aspect, assessee succeeds for statistical purposes and the Revenue fails in its Grounds of Appeal.
Disallowance of adjustment on account of difference in levels of risk assumed by the assessee vis-à-vis comparable companies - Held that:- Our attention was invited to the written submissions wherein assessee had raised the issue of working capital adjustment and also wherein the issue of allowing risk adjustment wa1s raised. The assessee pointed out that aforesaid two aspects have not been adjudicated by the CIT(A) and that they have a bearing on the determination on the final tax liability. The learned counsel also furnished a copy of the order of the TPO u/s 92CA(3) of the Act for the subsequent assessment year of 2006-07 wherein the plea of the assessee for allowing of adjustment on account of working capital differences has been accepted. It was therefore contended that omission to deal with such Grounds of Appeal by the CIT(A) is unjustified.
Factually speaking, the points raised by the learned counsel for the assessee have not been controverted by the learned Departmental Representative appearing for the Revenue. In background of the aforesaid factual matrix, it is evident that the grievance raised by the assessee in terms of the Grounds of Appeal Nos. 9 and 10 have not been adjudicated by the CIT(A) and, therefore we deem it fit and proper to restore the same back to the file of the CIT(A) for adjudication afresh
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2014 (2) TMI 1346
TDS u/s 194 - Disallowance u/s 40(a)(ia) - interest payments to the nominal members without deduction of tds - Held that:- We are of the view that nominal members are to be considered as members in view of the decision of Hon'ble Punjab & Haryana High Court in the case of CIT vs. Punjab State Co-operative Bank Ltd. (2008 (3) TMI 45 - HIGH COURT PUNJAB AND HARYANA). Accordingly, the assessee was not required to deduct tax at source on interest payments to the nominal members, who are members therefore, no disallowance under section 40(a)(ia) of the Act can be made.
Also in the case of Jalgaon District Central Co-operative Bank Ltd. v. Union of India [2003 (9) TMI 56 - BOMBAY HIGH COURT] held that where the legal validity of Circular No.9 of 2002 dated 11.9.2002 was questioned and the said circular was quashed and set aside. Accordingly, there is no distinction between member and nominal member as far as provisions of section 80P and 194(3)(v) are concerned. In the facts and circumstances of the case, the order of the ld. CIT(A) is reversed and the A.O. is directed to delete the disallowance so made. - Decided in favour of assessee.
Also disallowance on account of admission fees cannot be disallowed
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2014 (2) TMI 1345
Unutilized CENVAT/MODVAT credit - Revenue submitted that section 145A was introduced with effect from 1st April 1999 which would govern the present situation and not the decision of Commissioner of IncomeTax v. Indo Nippon Chemicals Company Limited [2003 (1) TMI 8 - SUPREME COURT] which was rendered in background of the statutory provisions prevailing before that date - Held that:- Tax Appeal is admitted for consideration of the following substantial question of law :
“Whether the Appellate Tribunal has substantially erred in upholding the order of the CIT [A] in deleting the addition made by the Assessing Officer on account of unutilized Cenvat/Modvat credit of ₹ 1,98,868/- ?”
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