Loading High Court cases…
117 orders · Page 2 of 3
The High Court held that the Revisional Authority, in dismissing the revision petition on merits, had failed to adequately consider the petitioner's crucial ground regarding the non-service of notices under Sections 148, 142(1), and 144 of the Income Tax Act, 1961, and the jurisdictional challenge. The Court noted the revenue's fair submission that this ground was not considered. Consequently, the impugned order of the Principal Commissioner of Income Tax was set aside. The matter was remitted back to the Revisional Authority for a fresh consideration of the revision petition. The Principal Commissioner was directed to afford an opportunity of hearing to the petitioner and decide the revision in accordance with the law, addressing all the issues raised therein, expeditiously, and not later than 30 days from the communication of the order. The Court did not decide the merits of the exemption claim under Section 10(23C)(iiiad).
The High Court held that the writ petition lacked merit and was liable to be dismissed. Regarding the first issue, the Court found no infirmity in the impugned Circular. It reasoned that when the operation of a judgment that circumscribes the jurisdiction or competency of a quasi-judicial authority is stayed by the Apex Court, the authorities are bound to exercise their jurisdiction and proceed with adjudication. The Court emphasized that the Circular is binding on the authorities, and they cannot act contrary to it, referencing the Apex Court's decision in Paper Products Ltd. v. Commissioner of Central Excise. The Court further stated that if adjudication is kept in abeyance merely because a case is pending before a higher court, it would cause grave injustice and would not be in the public interest, unless there is a specific direction from the superior court. The Court also dismissed the petitioner's apprehension that the Adjudicating Authority would not follow statutory requirements under Section 138B of the Customs Act, 1962, or relevant judgments, stating that such apprehensions were unfounded and that the petitioner could invoke writ jurisdiction if the authority failed to comply with mandatory requirements. Therefore, the challenge to the circular failed.
The Tribunal's decision to set aside the adjudicating authority's order and direct adherence to legal provisions and the principles laid down in Ambika International vs. Union of India was upheld. The High Court noted that a similar question was considered in the case of M/s Elora Tobacco Co. Ltd. by a Division Bench of the same Court. The Revenue had filed a Special Leave Petition against that order before the Apex Court, which was dismissed on 19.02.2018. In light of the Apex Court's dismissal of the Special Leave Petition, the High Court held that no substantial question of law arose in the present appeals, as the matter was already settled by the Apex Court's action in the Elora Tobacco Co. case. Therefore, the appeals were dismissed.
The High Court held that the conversion of a private limited company into an LLP is distinct from liquidation. Section 2(22)(c) specifically applies to distributions made to shareholders on the liquidation of a company, to the extent attributable to accumulated profits. The court noted that the ITAT had correctly reproduced the provision and reasoned that liquidation is the process of bringing a company to an end and distributing its assets, while conversion involves a transfer of property, assets, and liabilities to the LLP. The re-designation of reserves and surpluses to the current account of LLP members upon conversion was not considered a distribution on liquidation. The Revenue's counsel's admission further supported this view. Therefore, the ITAT was found to have committed no legal error in upholding the deletion of the addition made by the AO. The appeal was dismissed as no substantial question of law arose.
The High Court held that the dispute between the parties was purely a dispute of facts and found no substantial question of law in the appeal. The Tribunal had confirmed the order of the Commissioner (Appeals), who had reversed the AO's order imposing penalty. The Commissioner (Appeals) was of the view that the assessee had submitted particulars provided by the bank, fully disclosed the waiver, and could not be held liable for furnishing inaccurate information as the bank's letter lacked clarity on the adjustment of the payment and the amount waived. The ITAT upheld this finding. Therefore, the High Court dismissed the appeal. The ratio decidendi is that if the assessee's inability to furnish specific details is due to circumstances beyond their control, and the facts are disclosed, penalty under Section 271(1)(c) may not be leviable, especially when the dispute is factual.
The High Court held that there was no illegality in the order passed by the Income Tax Appellate Tribunal, as it did not raise any substantial question of law. The Tribunal had affirmed the view of the Commissioner of Income Tax (Appeals) that the joint venture cannot be treated as a contractor and its constituents as sub-contractors. The reasoning was based on the principle that the members of the Joint Venture had taken their receipts from the Joint Venture in their personal income tax returns and had paid taxes thereon. Relying on the Supreme Court's decision in "Hindustan Coca Cola Beverage (P) Ltd Vs Commissioner of Income Tax [(2007) 8 SCC 463]", the court found that the assessee Joint Venture could not be held as 'assessee in default', and no disallowance could be made under Section 40(a)(ia). The court also noted that in subsequent years (2013-14 and 2014-15), the AO had not made any disallowance under Section 40(a)(ia) in similar circumstances. The appeal was dismissed.
The High Court held that there was no illegality in the order passed by the Income Tax Appellate Tribunal. The Court considered the Supreme Court's decision in "Hindustan Coca Cola Beverage (P) Ltd Vs Commissioner of Income Tax [(2007) 8 SCC 463]" which states that if members of a Joint Venture have taken their receipts from the JV in their personal income tax returns and paid taxes thereon, the JV cannot be held as an 'assessee in default', and no disallowance can be made under Section 40(a)(ia). The Court noted that in subsequent years (2013-14 and 2014-15), the Assessing Officer, considering the legal position, did not make any disallowance under Section 40(a)(ia) in similar cases. Therefore, the appeal filed by the Revenue was dismissed as it did not raise any substantial question of law. No operative directions were issued as the appeal was dismissed.
The High Court held that no substantial question of law arose from the ITAT's order. Regarding the share application money, the Court noted that the ITAT had affirmed the CIT(A)'s finding that only the bank accounts of three parties were genuine, leading to the deletion of Rs. 12 lakhs. The remaining Rs. 28 lakhs from 7 parties was treated as unexplained. The Court found that the ITAT's decision was based on appreciation of evidence and documents filed by the appellant. Concerning the unsecured loan, the Court upheld the CIT(A)'s finding that the depositor's creditworthiness was not proved, given their meager income and capital, and the suspicious cash deposits in their bank account before payment. The Court found no flaw in the ITAT's order and upheld it. The appeal was dismissed.
The High Court held that there was no material on record to doubt the findings of the Commissioner of Income Tax (Appeal) and the Tribunal, which would give rise to any substantial question of law. Specifically, regarding the cash credit, the Tribunal had found that the assessee had discharged his onus of proof regarding the identity, creditworthiness, and genuineness of the transaction, as the creditors had accepted advancing loans by account payee cheques, and the AO had not controverted their statements or affidavits. The Tribunal also noted that mere deposit of money by the creditor on the same day did not establish that the loan was not genuine. Regarding the addition on account of suppression of sales, the Tribunal noted that the AO had not based his estimate on any comparable case or past history and that legally, only the profit element ought to have been brought to tax. The Tribunal found the estimate of sales did not call for interference but the reasonability of the profit estimate had to be judged in light of comparable cases. Consequently, the appeal was dismissed.
The High Court noted that the parties jointly agreed that Questions 1 and 3 were not required to be adjudicated and that the appellant was not pressing these grounds, thus treating them as withdrawn. Regarding Question 2, concerning the set-off of losses and depreciation carried forward, both parties jointly agreed that this ground required remand to the Income Tax Appellate Tribunal (ITAT) for adjudication, as it had not been previously decided. Consequently, the High Court remanded Ground No. 2 to the ITAT, Indore, for its decision after providing adequate opportunity of hearing to the parties. The appeal (ITA No. 20 of 2015) was disposed of with this direction.
The High Court allowed the appeal in part. It noted that the substantial questions of law were identical to those in a related case, CEA No. 107/2017 (M/s. Pankaj Gupta vs. Central Excise & Service Tax), which was decided on 17.04.2018. In that case, the Court accepted the appellant's prayer and treated the appeal as in time. The Court acknowledged the law laid down by the Supreme Court in CCE and Customs Vs. Larsen and Tubro Ltd., which held that works contracts cannot be vivisected and taxed under different Acts, and that erection, commission, and installation services involved in the present case would not be leviable to service tax as the demand was made prior to 01.06.2007. Consequently, the High Court set aside the CESTAT's orders dated 12.08.2015 and 29.03.2017 and remitted the matter back to the CESTAT to decide it afresh. Both substantial questions of law were decided in favour of the assessee. The operative direction was to remand the matter for fresh adjudication.
The High Court dismissed all the writ petitions. It held that the issue of levy of entry tax on goods imported from outside India is no longer res integra, citing the Apex Court's decision in State of Kerala V/s. Fr. William Fernandez and the nine-judge constitution bench decision in Jindal Stainless vs. State of Haryana. Consequently, the petitioners are liable to pay entry tax as per Section 3 of the Entry Tax Act. The Court found that the other grounds raised by the petitioners lacked merit and that their contention in raising these issues was not entirely bona fide. Regarding the levy of interest, while the judgment discusses the petitioner's reliance on the Indian Oil Corporation case, it ultimately distinguishes the present cases on facts, implying that the levy of interest was upheld in the context of the specific facts presented, although the detailed reasoning for this distinction is not elaborated. The Court dismissed the petitions with costs of Rs. 10,000/- in each writ petition.
The High Court accepted the appellant's prayer and treated the appeal as in time, acknowledging the provision for rectification under Section 35EQ of the Central Excise Act, 1944, and stating that the nomenclature of the application and order makes no difference. On merits, the court noted that the ratio laid down by the Supreme Court in Assistant Commissioner of Income Tax, Rajkot Vs. Saurashtra Kutch Stock Exchange Ltd. was not disputed. Applying the law laid down by the Bombay High Court in Sheth and Sure Engineering Pvt. Ltd. Vs. Union of India and the Supreme Court in CCE and Customs Vs. Larser and Toubro Ltd., the court held that works contract cannot be vivisected and taxed under different Acts. The work contract service involved in the present case, erection, commission, and installation, would not be leviable to service tax as the demand was made prior to 01.06.2007. Consequently, the orders dated 12.08.2015 and 29.07.2017 were set aside, and the matter was remitted back to the CESTAT for a fresh decision. Both substantial questions of law were decided in favor of the assessee.
The High Court held that since the reassessment proceedings have been completed by the Assessing Officer pursuant to the ITAT's remand direction, the present appeal filed by the Department of Revenue challenging the remand order has become infructuous. The Court reasoned that there is no further order required in the appeal as the substantive proceedings have concluded. Therefore, the appeal was dismissed as rendered infructuous. The specific findings of the ITAT on the original dispute regarding undervalued stock are not detailed as the appeal was disposed of on a procedural ground.
The Tribunal held that the Commissioner of Income Tax (Appeals) was justified in deleting the disallowances made by the Assessing Officer on account of commission payments. The Tribunal found that the assessee had submitted detailed evidence, including names of agents, PAN numbers, descriptions of services rendered, confirmation of transactions, TDS details, and bank account information. The Assessing Officer had also examined these agents under Section 131, where they admitted to receiving commission and rendering services. The Tribunal noted that the services rendered by agents, such as site visits and measurements for signboards, were necessary for government supplies, and their expertise in government procedures could not be denied. The Tribunal relied on the jurisdictional High Court's decision in CIT v. Pure Pharma, which approved the requirement of agents/representatives in government supply business and the payment of commission. The Tribunal also considered that similar commission payments were accepted in earlier assessment years. Therefore, the Tribunal found no substantial question of law and dismissed the revenue's appeals.
The High Court disposed of the writ petition with a specific direction to Respondent No. 1. The Court directed the Income Tax Officer to consider and decide the petitioner's application dated March 1, 2018, for the closure of the Capital Gains Deposit Account as expeditiously as possible, preferably by April 20, 2018. This decision was based on the limited prayer made by the petitioner and the submission of the respondent's counsel. The Court did not delve into the merits of the petitioner's claim for exemption under Sections 54/54F. The operative direction was to ensure timely consideration of the application, facilitating the petitioner's objective of making the payment to the builder within the stipulated timeframe. No issue was left undecided; the court addressed the procedural request.
The Tribunal held that the Commissioner of Income Tax (Appeals) was justified in deleting the disallowances made by the Assessing Officer on account of commission payments. The Tribunal found that the assessee had submitted detailed evidence, including names of agents, PAN numbers, descriptions of services rendered, confirmation of transactions, TDS details, bank account information, and agents' income tax returns. The Assessing Officer had also examined these agents under Section 131 of the Income Tax Act, 1961, where they admitted to receiving commission and rendering services, justifying the higher commission rate. The Tribunal noted that the nature of the business, involving supplies of signboards and similar items, required site visits and measurements, for which experienced agents provided essential services. The Tribunal also referred to a letter from PWD, MP, outlining formalities and services handled by the assessee or agents. Crucially, the Tribunal relied on the jurisdictional High Court's decision in CIT v. Pure Pharma (2005) 144 Taxman 364 (MP), which upheld the requirement of agents and commission payments in government supply businesses. The Tribunal also considered that similar commission payments had been accepted in earlier assessment years. Therefore, the Tribunal found no reason to interfere with the CIT(A)'s order and dismissed the Revenue's appeal, holding that no substantial question of law arose.
The Tribunal held that the Assessing Officer erred in making the entire addition without further inquiry, especially since summons to the suppliers could not be served or were not issued. Relying on decisions from the Delhi High Court (CIT vs. Hi Lux Automative Pvt. Ltd.) and Bombay High Court (Babulal C. Borana vs. ITO), the Tribunal stated that in such cases, the genuineness should be verified from the assessee's books and bank accounts. The Tribunal found that the assessee had provided substantial evidence, including payment by account payee cheques, corresponding sales, and details reflected in the tax audit report. The Tribunal concluded that if the purchases were indeed bogus, the addition should be limited to the net profit (NP) on such purchases, not the entire amount. The Tribunal directed that the net profit should be applied at the rate of 6% on the disputed purchases. The appeal was partly allowed.
The Tribunal held that the Assessing Officer erred in making the entire addition without further inquiry, especially since summons to the suppliers could not be served or were not issued. Relying on decisions from the Delhi High Court (CIT vs. Hi Lux Automative Pvt. Ltd.) and Bombay High Court (Babulal C. Borana vs. ITO), the Tribunal stated that in such cases, the genuineness should be verified from the assessee's books and bank accounts. The Tribunal found that the assessee had provided substantial evidence, including payment by account payee cheques, corresponding sales, and details reflected in the tax audit report. The Tribunal concluded that if the purchases were indeed bogus, the addition should be limited to the net profit (NP) on such purchases, not the entire amount. The Tribunal directed that the net profit should be applied at the rate of 6% on the disputed purchases. The appeal was partly allowed.
The Tribunal held that the Commissioner of Income Tax (Appeals) was justified in deleting the disallowances made by the Assessing Officer on account of commission payments. The Tribunal found that the assessee had submitted detailed evidence, including names of agents, PAN numbers, descriptions of services rendered, confirmation of transactions, TDS details, bank account information, and agents' income tax returns. The Assessing Officer had also examined these agents under Section 131 of the Income Tax Act, 1961, where they admitted to receiving commission and rendering services, justifying the higher commission rate. The Tribunal noted that the nature of the business, involving supplies of signboards and similar items, required site visits and measurements, for which experienced agents provided essential services. The Tribunal also referred to a letter from PWD, MP, outlining formalities and services handled by the assessee or agents. Crucially, the Tribunal relied on the jurisdictional High Court's decision in CIT v. Pure Pharma (2005) 144 Taxman 364 (MP), which upheld the requirement of agents and commission payments in government supply businesses. The Tribunal also considered that similar commission payments had been accepted in earlier assessment years. Therefore, the Tribunal found no reason to interfere with the CIT(A)'s order and dismissed the Revenue's appeal, holding that no substantial question of law arose.
The High Court held that the proviso to Section 142(2A) of the Income Tax Act, 1961, which mandates that the Assessing Officer shall not direct the assessee to get the accounts audited unless the assessee has been given a reasonable opportunity of being heard, is a sine qua non for directing a statutory audit. The Court found that no material document was produced to establish that the Assessing Officer had issued any notice in compliance with this stipulation. Therefore, the Court intended to stay the assessment proceedings as proposed by the Principal Commissioner of Income Tax and directed the Assessing Officer to afford an opportunity of hearing to the assessee. After considering the assessee's objections objectively, the Assessing Officer was to proceed further within 30 days from the communication of the order. The petition was disposed of in these terms.
The High Court held that the petitioner had already availed the statutory remedy by filing an appeal before the appellate authority. Therefore, the petitioner could not be permitted to pursue a parallel remedy by filing a writ petition. The principle established is that a party must exhaust the remedies provided by statute before approaching the High Court under its writ jurisdiction, especially when a statutory appeal is pending. The High Court dismissed the writ petition with liberty to the petitioner to pursue the matter before the appellate authority.
The High Court held that the present appeal, along with other connected appeals, should be disposed of in light of the CBDT Circular dated 10.12.2015. The Court observed that the tax effect in all the listed cases did not exceed the limit of Rs. 20,00,000 prescribed for appeals before the High Court. Furthermore, the Court noted that these cases did not fall under the exceptions mentioned in paragraph 8 of the Circular, which would warrant contesting on merits despite a low tax effect. These exceptions included challenges to constitutional validity, declarations of Board's orders as ultra vires, acceptance of Revenue Audit Objections, or issues relating to undisclosed foreign assets/bank accounts. Since none of these exceptional circumstances were present, the appeals were disposed of based on the monetary limits specified in the Circular. The Court passed no order as to costs.
The Tribunal held that the addition of Rs. 4,81,700 was rightly deleted by the CIT(A) as cash balance was available in the assessee's cash book. However, the addition of Rs. 10,28,000 was confirmed by the CIT(A) due to the assessee's failure to establish the creditworthiness and genuineness of creditors. The Tribunal affirmed the findings of the lower authorities regarding an addition of Rs. 4,75,710 (though the exact amount and its origin are not clearly detailed in this section, it seems to be related to the Rs. 10,28,000 addition). Regarding the Rs. 20,00,000 addition, the Tribunal found that Shri Santosh Kumar Lalwani admitted to an agreement to purchase land and paying Rs. 8 lakhs as advance. Crucially, Shri Santosh Kumar Lalwani also stated that the assessee and another individual paid Rs. 20 lakhs towards a purchase agreement. The Tribunal held that the statement of Shri Santosh Kumar Lalwani must be believed as a whole and not piecemeal. The Tribunal noted the existence of a written agreement dated 15.08.2005 between the assessee, Shri Ajay Singh Kushwaha, and Shri Devidas and others, which authorized them to sell the property. Shri Santosh Kumar Lalwani confirmed seeing this agreement and paying Rs. 8 lakhs as advance. The Tribunal reasoned that given the total value of the land, a payment of Rs. 20 lakhs as advance by the assessee was likely. Since the assessee failed to produce the agreement for purchase from Shri Devidas and others, the Tribunal upheld the addition of Rs. 20 lakhs as unexplained investment under Section 69. The High Court, in its decision, agreed with the Tribunal's reasoning and dismissed the appeal, finding no substantial question of law.
The Tribunal held that the AO's observation that substantial dividend income must be earned for gains to be treated as capital gain is incorrect. It is not a prerequisite for claiming profit on sale of shares as capital gain. The shares sold were held as investment, not stock-in-trade. The Tribunal noted that the transactions were delivery-based, STT was paid, and capital gain under Section 10(38) or Section 111A was claimed. The assessee is not a registered broker or dealer, making the AO's relied-upon decisions inapplicable. The Tribunal affirmed that profit earned on sale of shares should be treated as capital gain, not business income, citing the jurisdictional High Court's decision in Omprakash Suri. The Tribunal concluded that Section 10(38) is applicable to profits on sale of shares held for more than 12 months, and Section 111A for shares held for not more than 12 months, provided STT is paid. The High Court found no substantial question of law and dismissed the appeal.
The High Court held that the ITAT rightly assessed the net profit at 2.5% of total turnover, as against the 5% proposed by the Assessing Officer, and directed the AO to calculate the net profit accordingly. The Court found that the ITAT, in its decision, considered relevant factors as laid down in the case of Telelinks vs. CIT (P&H), including the past tax history of the assessee. The net profit ratios for assessment years 2009-10 and 2010-11 were 5.26% and 1.86% respectively, averaging 3.56%. The ITAT also considered the impact of substantial job work receipts in earlier years which reduced in the current year. The Court concluded that a net profit ratio of 2.5% was just and appropriate in the given circumstances. Consequently, no substantial question of law arose, and the appeal filed by the Principal Commissioner of Income Tax was dismissed.
The High Court held that the Principal Commissioner of Income Tax (PCIT) rightly rejected the prayer for waiver of penalty under Section 273A(1) and (4) of the Income Tax Act, 1961. The court found that the petitioner failed to fulfill the prescribed conditions for waiver. Specifically, the petitioner was in possession of detailed and specific information regarding the suspicious long-term capital gain on shares but did not submit it prior to the detection by the Assessing Officer (AO), which was evidenced by the AO's letter dated October 26, 2017. Furthermore, the petitioner did not produce any material evidence to demonstrate genuine hardship, either financially or otherwise. The court noted that the petitioner's revised computation and acceptance of LTCG under 'Income From Other Sources' occurred after the AO's letter, indicating the disclosure was not voluntary and in good faith prior to detection. Therefore, the PCIT did not commit any legal error in rejecting the waiver application, and the writ petition lacked merit.
The High Court held that the Principal Commissioner of Income Tax rightly rejected the prayer for waiver of penalty under Section 273A(1) and (4) of the Income Tax Act, 1961. The court found that the assessee failed to fulfill the conditions prescribed for waiver. Specifically, the assessee was in possession of detailed and specific information regarding suspicious long-term capital gains on shares but did not submit this information voluntarily and in good faith prior to the detection by the Assessing Officer (prior to the AO's letter dated 27.10.2017). Furthermore, the assessee did not produce any material evidence or document to demonstrate genuine hardship, either financially or otherwise. The court concluded that the learned authority did not commit any legal error in passing the impugned order, and the petition lacked merit. The ratio decidendi is that for waiver of penalty under Section 273A, the disclosure must be voluntary and in good faith *prior* to detection by the AO, and the assessee must demonstrate genuine hardship. The operative direction was to dismiss the writ petitions.
The Tribunal held that the assessee had discharged its onus under Section 68 of the Income Tax Act, 1961, by filing all possible documents before the Assessing Officer, which were also submitted by the respective companies in response to notices under Section 133(6) of the Act. The Tribunal found that the assessee had proven the identity, creditworthiness of the creditors, and genuineness of the transactions. The Tribunal observed that the Assessing Officer proceeded to make the addition by setting aside relevant documents and making allegations without basis, including allegations of cash deposits which were later controverted by the AO himself in his remand report. The Tribunal noted confusion in the assessment order regarding whether the transactions were unsecured loans or share applications. The Tribunal found no ambiguity, perversity, or reason to interfere with the first appellate order which granted relief to the assessee. The appeal filed by the department was considered to have no merit and no substantial question of law arose. The Tribunal upheld the order of the Commissioner of Income Tax (Appeals).
The High Court dismissed the appeals filed by the Revenue. It noted that identical issues in other appeals (I.T.A. No. 199/2009 and I.T.A. No. 188/2009) against the same respondents had already been dismissed by the Court on 05.04.2016. The Court found that the grants received by the societies were for the creation of capital assets, such as buildings and equipment, and were used for that purpose. Consequently, these were held to be capital receipts and not income, making them not taxable. The Court found no error in the concurrent findings of the Commissioner (Appeals) and the Income Tax Appellate Tribunal and concluded that no substantial question of law arose, warranting dismissal of the appeal.