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Showing 1 to 20 of 2046 Records
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2018 (10) TMI 2051
Assessment made u/s. 153A - incriminating material was found and seized from the assessee or not? - Addition u/s 69 - HELD THAT:- We find, it is case where incriminating documents do exists involving the unaccounted payment of loan to Mr. Chetan Mehta. It is fact that the said documents/material were not discovered or seized from the premises of the assessee.
The very facts of the said documents constitute incriminating evidence and both, assessee and Shri Mehta are searched u/s. 132 of the Act, the additional grounds raised by the assessee needs to be dismissed. There was search and seizure action on all these assessees on the same day and therefore, the incriminating information gathered in the said premises of Shri Mehta is rightly used by the Assessing Officer in making assessment. Absence of any incriminating evidence seized from the premises of the assessee, does not alter the incriminating nature of the said documents. Accordingly, the question of document not belonging to the transaction of the assessee does not arise. Considering the admitted position of the nature of incrimination, we are of the opinion that the assessment made based on the documents relied by the AO constitutes a validity of assessment.
Addition u/s. 69 - CIT (A) passed the impugned order in the month of December, 2013 regarding assessment order being dated 31.12.2009 which was much earlier to the date of order of 1st Class Magistrate. On going through the said relevant facts, we are of the opinion that this particular order of 1st Class Magistrate though relevant, did not exist at the relevant point of time. It is the firm argument of the Ld. Counsel for the assessee that the said order goes to the root of the matter relating to the addition made u/s. 69 of the Act. On perusal of the same, we are of the opinion that this order is not only relevant for adjudication of the issue on hand but also has effect considering the set principle of natural justice and the matter should be remanded to the file of Assessing Officer for considering the said order. The Assessing Officer is directed to grant reasonable opportunity of being heard to the assessee in accordance with set principle of natural justice and pass a speaking order after considering the same.
Adjusting all the inventories qua VAT in particular - HELD THAT:- Requirement of adjustment to all the inventories including all the purchases account, we are of the opinion that this issue should be remanded to the file of Assessing Officer for verification of figures and providing necessary adjustment of purchases account also, on purview of the inventories. While allowing the ground raised by the assessee, in principle, for the purpose of verification of the figure and the facts, the matter stands remanded to the file of AO for want of speaking order on this issue. AO shall grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice. Accordingly, ground raised by assessee is allowed for statistical purposes.
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2018 (10) TMI 2050
Commercial or Industrial Construction Service - appellant had not registered themselves with the department in order to file ST-3 returns periodically - non-payment of Service tax - CESTAT set aside the demand prior to 1.6.2007 and the penalties imposed under section 78 of the Act. The demand for service tax from 1.6.2007 to 30.9.2008 was upheld - HELD THAT:- It is not inclined to interfere with the impugned order.
Appeal dismissed.
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2018 (10) TMI 2049
Issue involved in this petition is sub judice before the Apex Court - A common statement ar Bar is made that the next date of hearing in the Supreme Court is 26th October 2018 - HELD THAT:- The hearing is deferred, stand over to 03rd November 2018. Till then the petitioner shall not be arrested in pursuant to the summons dated 25th September 2018 in File No. DGGSTI/PZU/INT/22/2018 without following procedure under Criminal Procedure Code.
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2018 (10) TMI 2048
Applicability of rules of reservations under the U.P. Act No. 4 of 1994 for appointment on the post of lecturers, by direct recruitment, in the aided postgraduate and undergraduate colleges in the State of UP, affiliated to the State Universities by clubbing all the vacancies as provided under Section 12 (3) of the UP Higher Eduction Service Commission Act, 1980 subject-wise - minimum posts in the cadre for applying the rules of reservations - filling up of vacancies - meaning of the words 'unfilled vacancies' in Section 3(2) of UP Act No. 4 of 1994 - Dr. Vishwajeet Singh's case [2009 (4) TMI 1068 - ALLAHABAD HIGH COURT] and the Full Bench decision in Heera Lal's case [2010 (7) TMI 1236 - ALLAHABAD HIGH COURT] have been correctly decided or not? - Applicability of doctrine of merger.
Whether this Full Bench can proceed further on merits and rule upon the correctness of Dr. Vishwajeet Singh even though the appeal preferred against it has come to be dismissed by the Supreme Court?
HELD THAT:- In the present case, the issue essentially is not whether the order dated 19.01.2017 constitutes a precedent but whether the decision in Dr. Vishwajeet Singh stood merged in the said order. The consequential issue which resultantly springs up is whether if our answer on the question of merger be in the affirmative, whether it would be open for this Full Bench to reconsider or review the correctness of Dr. Vishwajeet Singh. We have already held that there clearly was a merger of the said decision in the order of the Supreme Court. The order of the Supreme Court came to be made after grant of leave. The Supreme Court in unequivocal terms agreed with the view taken by this Court in Dr. Vishwajeet Singh and affirmed the decision. In light of the unambiguous terms of the order dated 19.01.2017, we find ourselves unable to be persuaded to hold that there was no affirmation of the said decision. The mere fact that no elaborate reasons were recorded while dismissing the Civil Appeals also does not convince us to opine that this Court would have the authority to review the correctness of Dr. Vishwajeet Singh. The unambiguous "express approval" in the order of 19.01.2017 clearly forecloses all debate and quells all doubts on the question raised.
The present reference and whether this Full Bench should examine the correctness of Dr. Vishwajeet Singh can be examined from another angle also. If one were to pose the question whether the reference could have been made if the order of the Supreme Court dated 19.01.2017 had been in existence and placed before the Division Bench, the answer would clearly be in the negative. Once the decision in Dr. Vishwajeet Singh stood specifically approved/affirmed by the Supreme Court and consequently merged in the said order, the question of doubting its correctness or dissenting from the same would not arise.
The terms of the order dated 19.01.2017 clearly establish that the said decision and the view taken by the Division Bench therein was specifically approved. The said decision consequently merged in the order of the Supreme Court. The order of the Supreme Court came to be rendered after grant of leave. Once the decision of this Court stood merged in the order of the Supreme Court, it would not be legally permissible for this Full Bench to consider the correctness or otherwise of Dr. Vishwajeet Singh. This Court is bound by the said order of the Supreme Court irrespective of the absence of a "speech" or recordal of elaborate reasons on the legal issues which arose therein. The issue essentially is not one of the Court being faced with a precedent but primarily of merger.
Conclusion - This Full Bench is clearly bound in law by the decision of the Supreme Court in Civil Appeal No. 6385-6386 of 2010, decided on 19.01.2017.
The Reference is consequently turned down. The matters shall, in consequence, be placed before the appropriate Court for disposal of the writ petition and connected matters in accordance with law.
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2018 (10) TMI 2047
Quashing of offenses under Sections 147, 148, 307, and 506 of the Indian Penal Code (IPC), which are non-compoundable, by the High Court under its inherent powers despite a compromise between the parties - HELD THAT:- In view of the fact that the complainant himself has expressed that he does not want to prosecute the applicants any further, owing to the compromise, which they have entered into, it would be absolutely futile exercise to burden upon the litigants and parties to the C-482 Application to face the trial and that too which have no logical conclusion and it would be absolutely a exercise of futility.
The Hon'ble Apex Court in the case of Gian Singh v. State of Punjab and another [2012 (9) TMI 1112 - SUPREME COURT] has held that 'the High Court must consider whether it would be unfair or contrary to the interest of justice to continue with the criminal proceeding or continuation of the criminal proceeding would tantamount to abuse of process of law despite settlement and compromise between the victim and wrongdoer and whether to secure the ends of justice, it is appropriate that criminal case is put to an end and if the answer to the above question(s) is in affirmative, the High Court shall be well within its jurisdiction to quash the criminal proceeding.'
As far as composition of offences under Sections 307 and 506 I.P.C. is concerned, the judgment of Narinder Singh and others v. State of Punjab and another [2015 (2) TMI 1042 - SUPREME COURT], has held that though the offence under Section 307 I.P.C. is serious enough, it will not be compoundable under Section 320 Cr.P.C. and it will not oust the powers of the Superior Courts exercising the powers under Section 482 Cr.P.C. to compound the offences, depending upon certain terms and conditions laid thereof.
Conclusion - The power of the High Court in quashing a criminal proceeding or FIR or complaint in exercise of its inherent jurisdiction is distinct and different from the power given to a criminal court for compounding the offenses under Section 320 of the Code.
The Compounding Application filed by the parties will stand allowed.
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2018 (10) TMI 2046
Seeking stay on impugned order for a period of fifteen days for the petitioner to approach the Division Bench of this Court - HELD THAT:- Considering that the interim order passed on 15.05.2017 in these petitions merely clarified that "any action taken by the respondents in terms of Section 43 of the Competition Act, 2002 shall he subject to further orders of the Court it would not be apposite to pass any order as requested.
Petition dismissed.
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2018 (10) TMI 2045
Exemption u/s 11 - Denial of exemption as assessee is engaged in various commercial activities, therefore, not existing for charitable purpose as defined under section 2(15) - HELD THAT:- As decided in own case [2015 (4) TMI 885 - ITAT MUMBAI] we assessee is not entitled to claim under section 11 of the Act as the activities carried out are of commercial nature, hence, is hit by the proviso to section 2(15) of the Act. Further, we hold that the assessee cannot be regarded as a part of the Government of Maharashtra so as to claim immunity under Article 289 (1) of Constitution of India. Accordingly, ground no. 2 is dismissed.
Assessee’s claim that lease premium, rent, interest on bank deposits etc. having been received on behalf of Govt. of Maharashtra are not taxable as income at the hands of the assessee - In assessee’s own case for A.Y. 2011-12 [2018 (11) TMI 778 - ITAT MUMBAI] the co-ordinate bench has categorically held that, since, the assessee cannot be considered either owner or deemed owner of the lands, the lease premium, rent, interest etc. cannot be brought to tax at the hands of the assessee.
As the aforesaid decision was not available before the Departmental Authorities when they decided the issue in the impugned assessment year, we are inclined to restore the issue to the AO with a direction to examine the facts and decide the issue following the observations of the Tribunal - Ground raised is allowed for statistical purposes.
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2018 (10) TMI 2044
Benami transactions under the Prohibition of Benami Property Transactions Act - Provisional Attachment order - HELD THAT:- It is not disputed by respondent that the two appellants have not received any salary being advance amount. As a matter of fact, it was admitted by them that the money was received by them for further disbursal. There is no denial that the appellants were mere carriers. Even in the reply to the appeals, it was admitted that they were mere carriers and were not involved in benami property.
Investigating officer must form a reason to believe based on application of mind and appreciation of the material on record (ACIT v. Dhariya Construction Co. [2010 (2) TMI 612 - SC ORDER] & CIT v. Kelvinator India Ltd [2010 (1) TMI 11 - SUPREME COURT]
These statements would show that the money in question was no longer with the appellants and could not have been attached at the hand of appellants who were merely carriers of the amount, the said fact has not been denied either in the reply or during the course of hearing.
Notice would show that it is mechanical in nature. In fact, all notices are identical except for the amount mentioned. It shows a lack of application of mind, thus making the jurisdiction assumed under section 24 is invalid. The ordinary citizens who are not involved under Benami Act cannot be harassed in this manner. The Authority must be aware that end of law, criminal liability is involved, thus, the authority must be very careful being sensitive matters.
Existence of the “benami” transaction has to be proved by the authorities i.e. the person who alleges the transaction (Sitaram Agarwal v. Subrata Chandra [2008 (5) TMI 718 - SUPREME COURT]). The authorities have failed to discharge the burden of proof. The authority has purely gone on the premise that cash is transferred from one person to another, with an object to defeat, demonetization. This is insufficient to establish a “benami” transaction.
The impugned order in two appeals are set aside. The attached properties are released forthwith. The appeal and pending application are disposed of.
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2018 (10) TMI 2043
Validity of reassessment proceedings - notice u/s 143(2) was not issued - HELD THAT:- When the law is very clear on the aspect of issuance of notice u/s 143(2) if the AO seeks not to accept any part of the return of income as furnished by the assessee or makes an assessment order contrary thereto and even in the course of re-assessment proceedings, such notices are required to be issued.
This legal position has been clarified in Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT] wherein it was held that if the AO, for any reason, repudiate the return of income filed by the assessee in response to the notice u/s 158BC(a) he must necessarily issue notice within the time prescribed proviso under section 143(2). The omission on the part of the Assessing Officer to issue notice u/s 143(2) cannot be a mere procedural irregularities and the same is not curable.
Whether a curable defect u/s 292BB? - HELD THAT:- As in the case of Oberoi [2018 (6) TMI 1472 - CALCUTTA HIGH COURT] wherein it was held that issuance of notice under section 143(2) of the Act is mandatory, if the AO seeks not to accept any or part of the return of income as furnished by the assessee or makes an assessment order contrary thereto and even in the course of re-assessment proceedings, such notices cannot be dispensed with. Provisions of section 292BB must be understood to cure any defect in the service of the notice and not authorized to dispensation of notice.
In this case, the authorities below have accepted the fact that no notice u/s 143(2) has been issued, therefore, we are of the considered view that the reassessment order passed 147 without issuance of notice u/s 143(2) of the Act is void ab initio. Decided in favour of assessee.
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2018 (10) TMI 2042
Penalty u/s 271(1)(c) - Defective notice u/s 274 - as alleged AO has failed to strike out one of the twin charges of “concealment of income” or “furnishing of inaccurate particulars of income” - HELD THAT:- At the time of confirmation of the penalty levied, CIT (A) was also not sure whether the penalty is correctly levied by the learned AO for “furnishing of inaccurate particulars of income” or “concealment of income”.
There was no clear-cut charge put on the assessee at the time of initiation of penalty. Further, at the time of recording satisfaction in the assessment order, the AO recorded the satisfaction for concealment of income, however, levied the penalty on furnishing of inaccurate particulars.
As relying on cases Manjunath cotton and ginning factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT], Munir Naga ready [2016 (10) TMI 599 - KARNATAKA HIGH COURT], S Chandrasekhar [2017 (2) TMI 1127 - KARNATAKA HIGH COURT], Samson Perincherry [2017 (1) TMI 1292 - BOMBAY HIGH COURT] Penalty levied by the learned AO u/s 271 (1) (c) of the act is not sustainable. Accordingly, Ground of the appeal of the assessee is allowed.
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2018 (10) TMI 2041
Availment of CENVAT Credit - duty paid on towers (in CKD/SKD form), parts of towers, shelters / prefabricated buildings purchased by them and used for providing output service - HELD THAT:- The controversy raised in these Appeals and the questions of law are covered by our judgment in the case of VODAFONE INDIA LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, MUMBAI II [2015 (9) TMI 583 - BOMBAY HIGH COURT] where it was held that 'Goods are neither ‘capital goods' as defined in rule 2(a)(A) of the CENVAT Credit Rules, 2004 and nor do they fall within the definition of ‘input' as defined in rule 2(k) thereof. This Court has further held that in any event the towers and parts thereof are in the nature of immovable property and are non-marketable and non-excisable and therefore, they cannot be classified as ‘inputs' so as to fall within the definition of rule 2(k) of the CENVAT Credit Rules, 2004.'
In view thereof each of these Appeals of the Assessee are dismissed, but without any order as to costs.
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2018 (10) TMI 2040
Issuance of notice under Section 37(1) of the Himachal Pradesh Co-operative Societies Act, 1968 requires consultation as per Section 37(5) or not - Malice in law - provisions of Section 37(1-A) are independent of and not subject to Section 37(1) or not - Registrar can take action for suspension and management of the Society after issuing a show cause notice or not - contradiction of Supreme Court's mandate in State of Madhya Pradesh v. Sanjay Nagayach & others [2015 (8) TMI 1109 - SUPREME COURT] or not - inquiries and powers under Sections 37 and 67 of the Act are distinct and independent or not - suspension order was based on no material and without application of mind - respondents' actions were malafide and ultra vires the Statute or not.
Issuance of SCN - whether prior to the issuance of notice, provisions of Sub-Section (5) of Section 37 of the Act would come into play or not - HELD THAT:- The answer is in the negative for the following reasons: Sub-Section (5) does not refer to Sub-Section (1-A). It only refers to Sub-section (1) and expression "any action" stipulated therein necessarily has to be in relation to the consequential action of removal of the Committee, which is after the issuance of show cause notice calling upon the noticee to show cause and state its objection, for after all, the Registrar may after affording opportunity, himself come to the conclusion that no action for removal is required to be taken in view of justification, plausible in nature, if any, furnished by the noticee. For formation of opinion in the issuance of notice no prior consultation is required. Otherwise for everything and anything he would have to rush to the bank seeking its opinion, which would not only stifle the power to be exercised by the Registrar but make his authority otiose. Removal of the Committee and the resultant consequential actions are definitely of serious nature. It is in this backdrop, safe guard of Sub-section (5) is prescribed in the Statute. The safe guard is also stipulated considering the disqualification which a Member entails by virtue of Sub-Section (6) of the very same Section, in the event of his removal.
In Macquarie Bank Limited v. Shilpi Cable Technologies Limited, [2017 (12) TMI 850 - SUPREME COURT], Hon'ble Supreme Court has held that the task of a Judge, when he looks at the literal language of the statute as well as the object and purpose of the statute, is not to interpret the provision as he likes but to interpret the provision keeping in mind the Parliament's language and the object that Parliament had in mind.
Sub-Section (1) of Section 37 provides for (a) formation of an opinion in the issuance of show cause notice; and (b) passing a written order in removing the Committee. It is only when the Registrar deems it appropriate to remove the Committee, in our considered view, he has to necessarily consult the Financial Institution to which a Cooperative Society is indebted. In any event, no prior consultation stipulated under Sub-Section (5) is required for initiating action under Sub-Section (1-A) of such Section.
Whether Sub-Section (1-A) is subject to completion of all the actions stipulated under Sub-Section (1) or not? - Whether the Registrar can take action for suspension and management of the Society after issuing a show cause notice? - HELD THAT:- The language of Sub-Section (1-A) is plain, simple and unambiguously clear. It uses the expression "while proceeding to take action under Sub-Section (1)" the Registrar is of the opinion that suspension of the Committee or any Member is necessary and in the interest of Society, he may take action of suspending the Committee or such Member and thereafter make proper arrangements for the management and affairs of the Society "till the proceedings are completed". So what is important is contemplation of action under Sub-Section (1) and the Registrar deciding to proceed in that direction, a Committee/any Member can be suspended where it is deemed necessary in the interest of the Society to do so, till such time proceedings under Sub-section (1) are completed.
The word "suspension" cannot be construed to mean "supersession" which in fact is replacement. Suspension is a stop gap temporary measure. There are no reason as to why pending such inquiry, petitioner places the entire material before the authority; argues his case; persuades and convinces the said authority in dropping the proceedings so initiated. This in fact, would only help the petitioner, for all facts can best be understood, appreciated and applied for taking decision on the action so initiated.
Whether the action of the respondents contradicts the Supreme Court's mandate in State of Madhya Pradesh v. Sanjay Nagayach & others [2015 (8) TMI 1109 - SUPREME COURT]? - HELD THAT:- Much emphasis is laid on Sanjay Nagayach. Having carefully gone through the said report, we are not in agreement with the submissions made by the learned counsel for the petitioner, for the ratio of law laid down therein is not only distinguishable but totally inapplicable to the instant facts. There the Court was dealing with a case where the alleged acts of malfeasance and misfeasance were not that of the persons in control of the affairs, but their predecessor-in-interest. Also for a period of 2 1/2 years, no action on the show cause notice was taken and suddenly, one fine day, without consultation of the concerned financial institution, the appropriate authority superseded the Board by appointing an Administrator. It is in this backdrop that the order of the authority was found to be ultra vires the provisions of the Statute, for there was no consultation prior to supersession which is not so done in the instant case. Hence the said decision has no bearing to the instant facts and the impugned action cannot be found to be contrary to the ratio of law laid down therein.
Whether the provisions of Section 37 are subject to Section 67 or not? - HELD THAT:- Section 67 of the Act confers upon the Registrar the duty, either on his own motion or on an application, as envisaged in Sub-section (2) thereof to hold an inquiry. Now incidentally, language of the said Section is unambiguous that if an application, as envisaged in Sub-section (2) thereof is received by the Registrar, then it is mandatory for him to hold an inquiry. This is unlike the provisions of Sub-section (1) thereof, wherein, the Registrar "may" of his own motion hold an inquiry. Sub-section (4) thereof further envisages that where an inquiry is made under Section 67, then the Registrar shall communicate the result of the same to the society or the cooperative society, if any, to which the said society is affiliated and to the persons or authority, if any, at whose instance the enquiry is made. Thus, it is apparent from the perusal of this Sub-section that Registrar, Cooperative Societies has no role more than holding of an inquiry and thereafter submitting the result of the same in the mode and manner prescribed under Sub-section (4). Neither this Section nor Chapter-VIII of the Act envisages any action on the said inquiry report by the Registrar - Section 67 of the Act. Whereas Section 37 confers upon the Registrar an affirmative power of superseding the committee, Section 67 only confers upon the Registrar the duty to hold an inquiry and thereafter submit the report in the mode and manner, as envisaged in Subsection (4) thereof. The purpose of incorporating Section 37 in the Act is totally different from the intent behind Section 67. There is neither any conflict in the Scheme of the Statute nor it can be said that the powers and duties conferred upon the Registrar under Sections 37 and 67, respectively either overlap each other or outreach the intent of each other.
Whether the suspension order was based on no material and without application of mind? - Whether the respondents' actions were malafide and ultra vires the Statute? - HELD THAT:- The order of suspension cannot be said to have been passed without any material or application of mind. Significantly the action cannot be said to be malafide; ultra vires the Statute; and the principles of natural justice.
The present petition, being devoid of any merit, is dismissed.
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2018 (10) TMI 2039
Levying penalty u/s. 271(1)(c) - disallowance of expenditure u/s 40(a)(ia) - . Disallowance of interest on delayed payment of professional tax and TDS - HELD THAT:- It is not a case, where the assessee is found to have raised a bogus claim, which on the said count has been disallowed by the AO. Rather, as observed by us hereinabove, the disallowance of the interest expenditure which had occasioned for failure on the part of the assessee to deposit the tax deducted at source, as regards the said expenditure, in no way dislodges the veracity of the claim of the assessee as regards incurring of the expenditure under consideration.
Thus, to our considered view the failure of the assessee to deposit the amount of tax deducted at source on the aforesaid interest paid to M/s. Citygold Investment Pvt. Ltd., would though justifiably lead to dislodging of the claim of allowability of the said interest expenditure in the hands of the assessee while computing its income, but the same cannot lead to levy of penalty u/s 271(1)(c).
We are also not impressed with the observations of the lower authorities that as the assessee had continued to persist with claiming of the unsubstantiated and inadmissible claim of interest expenditure, thus it clearly proved that it had knowingly furnished inaccurate particulars and had raised an untenable claim of expenditure in its return of income. We are of the considered view that as observed by us hereinabove, as the genuineness of the incurring of the interest expenditure under consideration had at no stage been doubted by the lower authorities, thus a mere disallowance of the said expenditure u/s. 40(a)(ia) cannot lead to drawing of an inference that the assessee had furnished inaccurate particulars of its income.
Merely because the assessee had claimed deduction of interest expenditure which has not been accepted by the revenue, penalty u/s 271(1)(c) could not have been imposed. Rather, mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. As no part of the particulars filed by the assessee in respect of the interest expenditure which admittedly had been paid to M/s. Citygold Investment Pvt. Limited are found to be incorrect, thus as per the judgment of CIT Vs. Reliance Petroproducts (P) Limited [2010 (3) TMI 80 - SUPREME COURT] no penalty u/s 271(1)(c) could have been validly imposed in the hands of the assessee. We thus in terms of our aforesaid observations, not being in agreement with the view taken by the lower authorities, thus delete the penalty imposed by the AO u/s 271(1)(c) in respect of the disallowance of interest expenditure.
Penalty imposed by the AO u/s. 271(1)(c) as regards the disallowance of the delayed payment of professional tax and interest on delayed payment of TDS - As persuaded to subscribe to the view of the lower authorities that as the aforementioned interest expenditure was incurred by the assessee on account of not adhering to the prescribed time limit for the deposit of the respective amounts, the same was thus inadmissible as per the provision of Sec. 37(1)of the Act. However, we are of the considered view, that as no part of the claim of the assessee of having incurred the aforesaid interest expenditure is found to be incorrect, therefore, merely on the count that the view of the assessee that the said amounts were allowable as an expenditure did not find favour with the AO, penalty under Sec. 271(1)(c) could not have been validly imposed on the assessee
We thus, in terms of our aforesaid observations set aside the order of the CIT(A) and delete the penalty imposed by the A.O. as regards the disallowance of the delayed payment of professional tax and interest on delayed payment of TDS.
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2018 (10) TMI 2038
Seeking for clarification/modification of the order - Section 151 CPC - plaintiff states that there are inadvertent errors in the spelling of the thirty-six names of plaintiffs/applicants mentioned in Schedule/disbursement List furnished by the parties to this Court - HELD THAT:- List before Registrar General on 15th October, 2018 for handing over of cheques to the counsel for the creditors.
List before Court on 31st January, 2019.
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2018 (10) TMI 2037
Penalty u/s 271(1)(c) - disallowance partially deleted by CIT(A) on ad hoc/estimated basis - HELD THAT:- It is undisputed in the present appeal that the quantification of the alleged concealment/inaccurate particulars is only an estimate and it is settled law that penalty is not attracted on estimated additions.
The Hon'ble Delhi High Court in the case of CIT vs. Aero Traders Pvt. Ltd., [2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is Assessment year 2005-06 determined on estimate basis. Similar view has been taken in the case of Harigopal Singh vs. CIT [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and Subhash Trading Company [1995 (11) TMI 37 - GUJARAT HIGH COURT]
Thus, when the bedrock of instant penalty is estimated disallowance, the same cannot be sustained. Accordingly, we set aside the order of the Ld. CIT (Appeals) and direct the AO to delete the penalty. Appeal of the assessee stands allowed.
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2018 (10) TMI 2036
CENVAT Credit - credit denied on various input services on the premises that these services are not input services in term of Rule 2(l) of Cenvat Credit Rules, 2004 - credit also denied on the premises that these are not inputs used in the manufacture of final products in terms of Rule 2(k) ibid - imposition of equivalent amount of penalty.
HELD THAT:- Considering the fact that all the services which have been mentioned and disputed by the appellant have been availed prior to 1.4.2011 and on construction service in respect of building contractor, architect services, design services, interior decorators’ service and health service, the Hon’ble Punjab & Haryana High Court in the case of Bellsonica Auto Components India P.Ltd. [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT] held that prior to 1.4.2011 the construction service excluded from the definition of ‘input service’. Therefore, I hold that on input services in respect of building contractor service, architect service, design service and interior decorator service, the appellant has correctly availed Cenvat credit.
Services availed by the appellant prior to 1.4.2011 in the course of business of manufacturing - HELD THAT:- This issue has been decided by the Hon’ble Bombay High Court in the case of Ultra Tech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT] where it was held that 'once the service tax is borne by the ultimate consumer of the service, namely the worker, the manufacturer cannot take credit of that part of the service tax which is borne by the consumer.' - thus, the services have been disputed by the appellant here, the appellant is entitled to avail credit.
Inputs, namely, plastic/bin crates, water chillier and swivel seats - HELD THAT:- These inputs received by the appellant used in the manufacture of final products. Therefore, the appellant is entitled to credit on input in terms of Rule 2(k) of Cenvat Credit Rules. 2004.
Appeal disposed off.
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2018 (10) TMI 2035
Rectification of mistake u/s 154 - award money received from BCCI - Eligibility to exemption u/s 10(17A) - sum received as award from BCCI (Board of Cricket Control of India) which otherwise was exempted u/s 10(17A) was filed as taxable income.
HELD THAT:- Once, it is brought to the notice of the AO that income shown in the return of income is not in accordance with law and such an income cannot be taxed under the Income Tax Act or is entitled for exemption, then there cannot be estoppel against the assessee to claim it as exempt and AO cannot reject the same simply because assessee had shown it in the return of income.
It is a well settled law that tax can be levied under the express provision of law and if any deduction or exemption is allowable to the assessee in law, then it is the duty upon the AO to compute the income and allow such deduction under such express provision of the law.
If the assessee claims that such an income is exempted u/s. 10(17A) which is duly supported by CBDT Circular which is binding on the Revenue Authorities, then the same needs to be exempted and allowed in accordance with law. Accordingly, we remit the matter back to the file of the AO to examine the assessee's claim in light of provisions of law and if such a claim is allowable in view of the CBDT Circular No.2 of 2014 r.w.s. 10(17A), then same should be allowed. Accordingly, appeal of the assessee is partly allowed for statistical purposes.
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2018 (10) TMI 2034
Recovery of possession and arrears of rent - execution petition filed in the year 2006 is barred by limitation or not - the execution petition not filed within 12 years from the date of the judgment of the Trial Court - application of doctrine of merger in the context of a property possession and rent recovery suit - HELD THAT:- A Three Judge Bench of this Court, in the case of CHANDI PRASAD & ORS. VERSUS JAGDISH PRASAD & ORS. [2004 (10) TMI 550 - SUPREME COURT], wherein it was observed that in terms of Article 136, Limitation Act 1963, a decree can be executed when it becomes enforceable. A decree is defined in Section 2(2) CPC, 1908 to mean the formal expression of an adjudication which, so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. A decree within the meaning of Section 2(2) of the CPC would be enforceable irrespective of whether it is passed by the Trial Court, the First Appellate Court or the Second Appellate Court - When a higher forum entertains an appeal and passes an order on merit, the doctrine of merger would apply. The doctrine of merger is based on the principles of the propriety in the hierarchy of the justice delivery system. The doctrine of merger does not make a distinction between an order of reversal, modification or an order of confirmation passed by the appellate authority. The said doctrine postulates that there cannot be more than one operative decree governing the same subject matter at a given point of time.
Since the judgment of the Trial Court was affirmed by the First Appellate Court and was further affirmed by the Second Appellate Court, the decree passed by the High Court becomes enforceable in view of the doctrine of merger. Hence, the execution petition filed by the plantiffs/respondents is within time, consequently the appeal fails and stands dismissed.
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2018 (10) TMI 2033
Disallowance of Capital Cost Allocation - AR has pointed that as per cost allocation policy the cost of services is allocated on the basis of head count or any other basis as may be mutually decided by the parties depending on the nature of services - HELD THAT:- AO has not disputed the receipt of services by the assessee. An ad hoc disallowance of 25% i.e. Rs.45 lacs out of total corporate cost allocation has been made by the AO for the reason that the allocation of cost has been made on subjective basis. The reasoning for making such disallowance in arbitrary manner is without any merit. Once, the AO has accepted the genuineness of expenditure and the services rendered, ad hoc disallowance of 25% of the expenditure on mere presumptions or assumptions is not sustainable.
No reasoning whatsoever has been given by the AO to show that the expenditure disallowed is not for the business of assessee. We do not find any infirmity in the directions of DRP reversing the findings of AO in draft assessment order on this count. Accordingly, ground No. 1 raised in the appeal by Revenue is dismissed.
Disallowance of warranty expenses - DR submitted that while making provision for warranty the assessee has failed to show that the provision was made on some scientific and systematic basis - HELD THAT:- The manner and the basis for making the provision in all the assessment years including the assessment year under appeal is identical. This fact has not been disputed by the Revenue. Therefore, we are of considered that the principle of consistency demands the provision created by the assessee for warranty deserves to be allowed. We further observe that the assessee has followed average of percentage of “Free of Cost” dispatches on sales made in past three years for creating provision for warranty. In addition the assessee has made provision for Rs.49 lacs towards warranty for supplies made to one of its major customer. The provision for warranty created by the assessee is based on well calculated scientific method. The assessee has made warranty provision in line with the principles enunciated in the case of Rotork Controls India Pvt. Ltd [2009 (5) TMI 16 - SUPREME COURT].
TP adjustment - international transactions pertaining to payments made to AEs for Corporate Support Services - HELD THAT:- DR has not able to controvert the findings of Co-ordinate Bench in 2008-09 [2018 (6) TMI 1266 - ITAT PUNE] No contrary decision has been brought to our notice by the Revenue on similar issue. It is also not disputed that the nature of services received by the assessee from the AEs in the assessment year under appeal are in any manner different from the services received by the assessee from its AEs in assessment year 2008-09. Thus, in view of undisputed facts we follow the order of Tribunal in assessee’s own case and allow ground Nos. 2 to 4 raised in the appeal by assessee in same terms.
Adoption of internal TNMM for benchmarking manufacturing segment - HELD THAT:- Co-ordinate Bench following its own decision in assessment year 2007-08 [2015 (5) TMI 644 - ITAT PUNE] upheld internal TNMM for the purpose of benchmarking international transactions of purchase of raw material and components from AEs as well as sale of finished goods effected to AEs. The Tribunal further observed that since the profitability under the AE segment was higher than that of the transactions under third party segment, no adjustment on account of arm’s length price was required to be made. The ld. AR submitted that there has been no change in the facts of the case vis-à-vis assessment years 2007-08, 2008-09, 2009-10 and 2010-11. Hence, on principle of consistency the ground Nos. 1 to 3 raised by Revenue deserves to be rejected.
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2018 (10) TMI 2032
Seeking to treat this writ petition as a representation - HELD THAT:- The competent respondents, including respondent No.3, are directed to treat this writ petition as representation and decide the claim of this petitioner in accordance with law, and also keeping in mind the decision upon which the petitioner is relying upon - This representation shall be decided as early as possible and practicable, preferably within a period of four weeks from the date of receipt of the copy of this order.
The writ petition is disposed off.
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