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344 orders · Page 7 of 7
The High Court held that the conversion of Zircon Sand into Zircon Powder constitutes manufacture or production. The Court agreed with the view taken by the Tribunal, which had described the activity as a manufacturing process. The reasoning was primarily based on the observations made by the Hon'ble Supreme Court in the case of Income Tax Officer, Udaipur Vs. Arihant Tiles and Marbles (P) Ltd. (2010) 320 ITR 79 (SC), particularly paragraph 23, which highlighted the revenue consequences and the recognition of such activities as manufacture by various government authorities. The Court also considered the Government Circular No.556/52/2000-CX. Consequently, all issues were answered in favour of the assessee and against the department. The appeals filed by the Revenue were dismissed. The specific issue regarding the lender's statement and accommodation entry was not explicitly addressed in the final holding, but the overall dismissal implies it was not found to be a decisive factor against the assessee in light of the primary issue being decided in their favour.
The High Court held that the Tribunal was not justified in dismissing the assessees' appeals. The Court observed that the issue of whether export incentives like DEPB credit are eligible for deduction under Section 10BA requires careful consideration in light of various Supreme Court and ITAT decisions. The Court noted that the facts of the cases cited by the assessee were not fully verifiable from the submissions. Consequently, the Court set aside the Tribunal's order and remitted the matters back to the Assessing Officer (AO). The AO is directed to reconsider the issue, taking into account the Supreme Court's decision in Topman Exports, the ITAT decisions cited by the assessee (Angira Art Exports, Suraj Exports India, and Arts & Crafts Exports), and the principles laid down in Commissioner of Income Tax vs. Meghalaya Steels Ltd. The Court explicitly stated that it had not expressed any opinion on the merits of the case and that it would be open for both sides to raise all contentions before the AO. The appeals were allowed, and the matters were remitted back to the AO.
The High Court, in its judgment dated January 24, 2018, considered the common questions of law and fact. It noted that the Supreme Court in the case of Sterling Foods had held that DEPB/duty drawback benefits would not form part of the net profit for the purpose of Section 80IA and 80IB deductions. The Court reasoned that these benefits are provided to neutralize the incidence of customs duty payment on the import content of export products and are not derived from the profits and gains made by the industrial undertaking or business itself. The Court also referred to the Supreme Court's decision in Topman Exports, which held that DEPB credit is chargeable as income under Section 28(iiib) in the year it is applied for against exports. The Court found that the Tribunal's decisions were not in line with these Apex Court pronouncements. Consequently, the High Court allowed the appeals, quashed the impugned orders of the Tribunal, and remitted the matters back to the Assessing Officer for decision in light of the aforementioned Supreme Court decisions.
The High Court, in agreement with the Tribunal, held that the activity of converting Zircon Sand into Zircon Powder constitutes manufacture or production. The Court relied on the observations made by the Hon'ble Supreme Court in para 23 of the Arihant Tiles and Marbles (P) Ltd. case (2010) 320 ITR 79 (SC). This judgment highlighted the revenue consequences and the recognition of such activities as manufacture by various government authorities, including excise duty payments. The Court found that the Tribunal's view, describing the assessee's activity as a manufacturing process, was well-reasoned. Consequently, all issues were answered in favour of the assessee and against the department. The appeals were dismissed, affirming the relief granted by the Tribunal regarding the deduction under Section 80IB. The judgment does not explicitly mention any issue left undecided.
The High Court held that the matter needs to be re-examined by the Assessing Officer (AO) in light of the Supreme Court's decision in Topman Exports and other case laws cited by the assessee, including ITAT Jodhpur and Mumbai Bench decisions. The Court noted that the facts of the cases cited by the assessee were not verifiable from the submissions made. The Court also addressed the argument that subsidies are income from other sources under Section 56, stating that Section 28(iiib) specifically includes cash assistance against exports under the head 'profits and gains of business or profession'. Therefore, subsidies reimbursing business costs would also fall under this head. The Court found that the Gauhati, Delhi, and Meghalaya High Courts' interpretations were correct, while the Madras High Court's interpretation in Sterling Foods and another case was wrongly decided. Consequently, the matter was remitted back to the AO for recalculation of income, allowing both parties to raise all contentions, including the applicability of circulars. The Tribunal's order was quashed and set aside.
The High Court held that the issues were squarely covered by its previous decision in Commissioner of Income Tax (Exemptions) vs. Mahima Shiksha Samiti. On the issue of charging at maximum marginal rate, the court referred to its earlier decision in ITA No. 708/2008 concerning the same assessee. Regarding corpus donations, the court affirmed the CIT(A)'s direction to exclude them from the computation of income. The court also held that additions to fixed assets were correctly considered as application of income under Section 11. The court found that the Tribunal had rightly considered that trustees would not be covered under Section 13 merely because they were part of another institution, and the focus should be on whether the transfer was for educational purposes. Regarding depreciation, the court held that Section 11(6) was prospective, and in view of binding jurisdictional High Court judgments, depreciation was rightly allowed. The court distinguished the Escorts Ltd. judgment, stating that no double benefit was being claimed. The court also found that foreign trips were rightly allowed as they were covered under the trust's objects and for the benefit of students. Consequently, all issues were answered in favour of the assessee and against the department.
The High Court held that the Tribunal was not justified in dismissing the appeals. The Court noted that the issue of whether export incentives like DEPB credit are eligible for deduction under Section 10BA, or if they are taxable under Section 28(iiid) or Section 56, requires further examination in light of Supreme Court decisions like Liberty India and Topman Exports, and various ITAT rulings. The Court found that the Tribunal had not properly considered these precedents. Consequently, the High Court quashed and set aside the Tribunal's order and remitted the matters back to the Assessing Officer (AO). The AO is directed to re-examine the issue, considering the Supreme Court's judgment in Topman Exports, the ITAT decisions cited by the assessee, and any applicable circulars. Both parties are permitted to raise all contentions before the AO. The Court explicitly stated that it had not expressed any opinion on the merits of the case, leaving it open for the AO to decide.
The High Court held that the issues were covered by its previous decision in Commissioner of Income Tax (Exemptions) vs. Mahima Shiksha Samiti. On the issue of charging at maximum marginal rate, the court affirmed the Tribunal's view in favour of the assessee. Regarding corpus donations, the court confirmed the exclusion from income computation, aligning with previous High Court rulings. The court also held that additions to fixed assets were correctly considered as application of income. The issue of Section 13 violations was addressed by stating that the Tribunal rightly considered that trustees would not be covered under Section 13 merely because they were part of another institution, as long as the transfer was for educational purposes. Depreciation was held to be rightly allowed, with the court noting that Section 11(6) amendment was prospective and following jurisdictional High Court judgments. The court also held that foreign trips were rightly allowed as they were for the benefit of students and covered under the trust's objects. The ruling in Escorts Vs. Union of India was distinguished. The court found no infirmity or perversity in the Tribunal's orders and concluded that all issues were answered in favour of the assessee and against the department. Consequently, the appeals were dismissed.
The High Court held that the Tribunal was not justified in dismissing the assessees' appeals. The Court noted that the facts of the cases cited by the assessee were not verifiable from the submissions. Consequently, the Assessing Officer (AO) was directed to reconsider the matter, taking into account the Supreme Court's decision in Topman Exports and the ITAT decisions referred to by the assessee (Angira Art Exports, Suraj Exports India, and Arts & Crafts Exports). The AO was instructed to recalculate the income accordingly. The Court also referred to the Supreme Court's decision in Commissioner of Income Tax vs. Meghalaya Steels Ltd., which distinguished export incentives from reimbursement of expenses. The Court clarified that subsidies reimbursed on incurring costs relatable to business would fall under 'profits and gains of business or profession' and not 'income from other sources'. The High Court quashed and set aside the Tribunal's order and allowed the appeals, remitting the matters back to the AO. The operative direction is to remit the matters back to the AO for fresh adjudication.
The High Court held that the appeals should be dismissed as not pressed. The reasoning was based on CBDT Circular No. 21/2015 dated 10.12.2015, which stipulated that appeals shall not be filed where the tax effect does not exceed specified monetary limits, and that pending appeals below these limits may be withdrawn or not pressed. Since the tax effect in the instant appeals was less than Rs. 20 lac, and the circular applied retrospectively to pending appeals, the Revenue did not press the appeals. The court clarified that substantial questions of law raised, if any, were left open for examination in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular.
The High Court held that the Tribunal was not justified in dismissing the assessees' appeals. The Court noted that the Supreme Court in Liberty India and Topman Exports had considered the issue of export incentives and their treatment under the Income Tax Act. The Court also referred to its own decision in CIT Jaipur Vs. Suresh Kumar Bajoria, which followed the principles laid down by the Gauhati and Delhi High Courts. The Court found that these High Courts had correctly interpreted Section 10BA and related provisions, distinguishing them from Section 80HHC. The Court observed that subsidies reimbursed on incurring costs relatable to a business would fall under the head 'profits and gains of business or profession' as per Section 28(iii)(b), not 'income from other sources'. Consequently, the Court quashed and set aside the order of the Tribunal and remitted the matters back to the Assessing Officer (AO) for recalculation, allowing both sides to raise all contentions, including the applicability of circulars, before the AO. The Court expressly stated that it had not expressed any opinion on the merits of the specific claims, leaving that to the AO.
The High Court held that the appeals should be dismissed as not pressed in light of CBDT Circular No. 21/2015 dated 10.12.2015. The Court noted that the tax effect in the instant appeals was indisputably less than Rs. 20 lac, which is significantly below the monetary limits prescribed for filing appeals before the High Courts. The Court directed that the appeals stand dismissed as not pressed. However, the Court clarified that the substantial questions of law raised in the instant appeal, if any, are left open to be examined in an appropriate proceeding if they arise in the future. The Court also observed that if the appeal falls within any of the exceptions mentioned in the Circular dated 10.12.2015, the Revenue would be at liberty to move an application for recalling the order.
The High Court held that all the issues were covered by its previous decision in Commissioner of Income Tax (Exemptions) vs. Mahima Shiksha Samiti and affirmed by the Supreme Court in Commissioner of Income Tax-III, Pune vs. Rajasthan & Gujarati Charitable Foundation Poona. Specifically, the court found that depreciation is rightly allowed, and the amendment to Section 11(6) is prospective. The court agreed with the Tribunal's view that foreign trips for student exchange programs were for the benefit of the educational institution and students, thus covered under the trust's objects. The court also held that the assessee was not covered under Section 13 merely because the same trustees or directors were involved in another institution, as the focus was on whether the transfer for educational purposes was done. The court reiterated that allowing depreciation for computing income for Section 11 purposes does not constitute double deduction, distinguishing the Escorts Ltd. case. Consequently, all issues were answered in favour of the assessee and against the department. The operative direction was that the appeals filed by the department were dismissed.
The High Court held that the instant appeal, with a tax effect indisputably less than Rs. 20 lac, deserved to be dismissed as not pressed in light of CBDT Circular dated 10.12.2015. The court clarified that the substantial questions of law raised in the appeal, if any, were left open to be examined in an appropriate proceeding in the future. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular. The operative direction was to dismiss the appeal as not pressed, with liberty to revive in case of difficulty.
The High Court held that the issues were covered by its previous decision in Commissioner of Income Tax (Exemptions) vs. Mahima Shiksha Samiti and by the Supreme Court's decision in Commissioner of Income Tax-III, Pune vs. Rajasthan & Gujarati Charitable Foundation Poona. Regarding the first issue (maximum marginal rate), the court referred to its prior ruling that the assessee was only claiming depreciation reduction for determining the application of funds, not a double deduction, distinguishing the Escorts case. For the issue of corpus donations, the court affirmed the Tribunal's view that they should be excluded from income computation. Additions to fixed assets were also held to be application of income. Donations to other societies were considered valid application of income. Depreciation was allowed, with the court noting that Section 11(6) amendments were prospective and that depreciation could be carried forward. The court found that Section 13 was not violated merely by common trustees or directors. Consequently, all issues were answered in favour of the assessee and against the department. The appeals were dismissed.
The High Court held that the appeal deserved to be dismissed as not pressed, taking note of CBDT Circular dated 10.12.2015 and the fact that the tax effect in the instant case was less than Rs. 20 lac, which is the prescribed limit for filing appeals before the High Courts. The Court clarified that the substantial questions of law raised in the appeal, if any, were left open to be examined in an appropriate proceeding in the future. The Revenue was also granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the Circular dated 10.12.2015. The ratio decidendi is that appeals with a tax effect below the prescribed monetary limits in CBDT circulars should generally be dismissed as not pressed, unless they fall under specific exceptions.
The High Court held that the appeal, having a tax effect less than Rs. 20 lac, which is the monetary limit prescribed for filing appeals before the High Court as per CBDT Circular No. 21/2015, deserved to be dismissed as not pressed. The Court noted that the circular applies retrospectively to pending appeals. The substantial questions of law raised in the appeal were left open to be examined in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions specified in the circular, such as those relating to constitutional validity, legality of Board's orders, or undisclosed foreign assets/bank accounts. The operative direction was to dismiss the appeal as not pressed.
The High Court held that the substantial question of law admitted was whether the distance from the municipality's local limits for determining 'urban land' should be measured by the approach road or aerial distance. The Court agreed with the findings of the learned Tribunal and the CWT(A). The CWT(A) had relied on a prior ITAT order which held that the land in question was beyond 8 kms from the Municipal Corporation, Jaipur, and thus outside the scope of a capital asset under Section 2(14) of the Income Tax Act, 1961. Consequently, the CWT(A) concluded that the land was not 'urban land' under Section 2(ea) of the Wealth Tax Act, 1957, and directed the deletion of the addition. The High Court found no reason to interfere with these findings, answering the substantial question of law in favour of the assessee and against the Revenue. The appeals were dismissed.
The High Court agreed with the findings of the learned Tribunal and the CWT(A). The Tribunal had confirmed the CWT(A)'s decision, which held that the land in question was situated beyond 8 kilometers from the Municipal Corporation, Jaipur. This finding was based on a previous decision of the ITAT concerning the same assessee for income-tax purposes, where the land was held not to be a capital asset under Section 2(14) of the Income Tax Act, 1961. Consequently, the land was not considered "urban land" as defined under Section 2(ea) of the Wealth Tax Act, 1957, and thus not liable for wealth tax. The addition of Rs. 45,00,000/- made by the Assessing Officer was directed to be deleted. The substantial question of law was answered in favour of the Assessee and against the Revenue. No issues were expressly left undecided.
The High Court held that the learned Tribunal was justified in its findings. The Court agreed with the CWT(A)'s reasoning, which was in line with a previous ITAT decision concerning the assessee's income tax matter. The CWT(A) had found that the land in question was beyond 8 kilometers from the Municipal Corporation of Jaipur, as previously held by the ITAT. Therefore, it was not considered "urban land" under Section 2(ea) of the Wealth Tax Act, 1957, and consequently, not liable for wealth tax. The addition of Rs. 45,00,000/- made in the wealth tax assessment orders for Assessment Years 2002-03 to 2006-07 was directed to be deleted. The substantial question of law was answered in favor of the assessee and against the Revenue. No issues were expressly left undecided.
The High Court held that the learned Tribunal was justified in confirming the findings of the learned Commissioner of Wealth Tax (Appeals). The Tribunal had previously held in an order dated 02.08.2010, concerning the assessee's income-tax matter, that the land in question was beyond 8 kms from the local limits of the Municipality of Jaipur, and therefore, it was outside the scope of a capital asset within the meaning of Section 2(14) of the Income Tax Act, 1961. The Commissioner (Appeals) had applied this finding to the Wealth Tax Act, 1957, stating that the land at village Thikriya was beyond 8 kms from Municipal Corporation, Jaipur and thus not 'urban land' as per Section 2(ea) of the Wealth Tax Act, 1957, directing the deletion of the addition of Rs. 45,00,000/-. The High Court agreed with this reasoning and found no reason to interfere with the findings of the Commissioner (Appeals) as they were in line with the Tribunal's previous decision. The substantial question of law was answered in favour of the Assessee and against the Revenue. The appeals were dismissed.
The High Court agreed with the findings of the learned Tribunal and the CWT(A). The Tribunal had relied on its prior decision in an income-tax matter concerning the same assessee, which held that the land was situated beyond 8 kms from the Municipal limits of Jaipur. Consequently, the land was not considered a capital asset under Section 2(14) of the Income Tax Act, 1961. The CWT(A) had also found that the land was not 'urban land' as per Section 2(ea) of the Wealth Tax Act, 1957, and directed the deletion of the addition of Rs. 45,00,000/-. The High Court found no reason to interfere with these concurrent findings. The substantial question of law was answered in favour of the Assessee and against the Revenue. The appeals filed by the Revenue were dismissed.
The High Court held that the Income Tax Appellate Tribunal (ITAT) had wrongly relied upon the High Court's previous judgment in Shri Ram Jhanwar Lal v. IT (D.B. Income Tax Appeal No.10/2006). The Court observed that the cited judgment did not even refer to Section 145(3) of the Income Tax Act, 1961, which was a crucial provision in the present appeals concerning the rejection of books of accounts and subsequent deductions. Therefore, the ITAT's reliance on that judgment was deemed erroneous. The High Court found that the matter required remittance back to the Tribunal for a fresh consideration. It was open for both parties to raise all their contentions before the ITAT. The Court directed the ITAT to expedite the hearing of the matter. No specific finding was given on the deductibility of interest or bank commission.
The High Court held that the appeals, having a tax effect less than Rs. 20 lac, which is the prescribed monetary limit for filing appeals before the High Court as per CBDT Circular No. 21/2015, deserved to be dismissed as not pressed. The court noted that the circular applies retrospectively to pending appeals. However, the court clarified that the substantial questions of law raised in the appeals were left open to be examined in future appropriate proceedings. The Revenue was granted liberty to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular (e.g., constitutional validity challenges, Board's order held illegal, revenue audit objections accepted, or undisclosed foreign assets/bank accounts).
The High Court noted that the issue was squarely covered by its own previous decisions in Ranjana Johari Vs. Assistant Commissioner of Income Tax and CIT Jaipur V/s Suresh Kumar Bajoria. The Court referred to the Supreme Court's decision in Commissioner of Income-Tax V/s Meghalaya Steels Ltd., which clarified that DEPB entitlement arises after export and is not directly derived from the business of manufacturing or selling products. The Court also acknowledged that Section 28(iii)(b) specifically includes cash assistance received against exports as income under the head 'profits and gains of business or profession'. However, the Court found that the Tribunal's order did not adequately consider the Supreme Court's decision in Topman Exports and the ITAT decisions cited by the assessee. Therefore, the High Court remitted the matters back to the Assessing Officer (AO) to decide them afresh in light of the aforementioned decisions, without expressing any opinion on the merits. The AO was directed to recalculate the income accordingly.
The High Court, referring to its own previous decisions in Ranjana Johari Vs. Assistant Commissioner of Income Tax and CIT Jaipur V/s Suresh Kumar Bajoria, and the Supreme Court's decision in Commissioner of Income-Tax V/s Meghalaya Steels Ltd., held that the matter needed to be decided in light of these judgments. The Court noted that the Tribunal's order was based on an interpretation that did not consider these binding precedents. Consequently, the High Court remitted the matters back to the Assessing Officer (AO) to decide them afresh in light of the cited decisions. The Court explicitly stated that it had not expressed any opinion on the merits of the case. The AO was directed to consider all contentions raised by both parties.
The High Court held that the ITAT's decision was justified and answered the substantial question of law in favour of the assessee. The Court agreed with the ITAT's finding that even if there was a contravention of Section 269SS, the levy of penalty under Section 271D was not justifiable if there was a reasonable cause for undertaking such a transaction. The Court noted that it is settled law that penalty under Section 271D/271E cannot be imposed if there is a reasonable cause for the failure, citing the discretionary power vested in the authority imposing the penalty. The Court referred to various judicial pronouncements, including those from the Apex Court and Delhi High Court, which held that penalty under Section 271D is not attracted in cases where payments are made on behalf of the assessee and subsequently reflected in the books of accounts through journal entries, or where the transactions are genuine and undertaken with a bonafide belief. The Court found that the transactions in the instant case did not attract the provisions of Section 269SS and 269T, and therefore, the penalty levied under Section 271D and 271E by the Joint Commissioner was not justified. The appeal filed by the department was dismissed.
The High Court held that the Income Tax Appellate Tribunal had wrongly relied upon the judgment in Shri Ram Jhanwar Lal v. IT (D.B. Income Tax Appeal No.10/2006). The Court noted that the cited judgment did not even refer to Section 145(3) of the Income Tax Act, rendering it irrelevant to the present appeals where the rejection of books of accounts under Section 145(3) was a crucial factor. Consequently, the High Court found that the matter required remittance back to the Tribunal for fresh adjudication. The parties were granted the liberty to raise all their contentions before the Tribunal, and the Tribunal was directed to expedite the hearing. No specific finding was given on the deductibility of interest or bank commission.
The High Court held that the Income Tax Appellate Tribunal had wrongly relied upon the judgment in Shri Ram Jhanwar Lal v. IT (D.B. Income Tax Appeal No.10/2006). The Court noted that the cited judgment did not even refer to Section 145(3) of the Income Tax Act, rendering it irrelevant to the present appeals where the rejection of books of accounts under Section 145(3) was a crucial factor. Consequently, the High Court found that the matter required remittance back to the Tribunal for fresh adjudication. The parties were granted the liberty to raise all their contentions before the Tribunal, and the Tribunal was directed to expedite the hearing. No specific finding was given on the deductibility of interest or bank commission.
The High Court held that the issue concerning depreciation for the assessee was indeed debatable. It referred to its own decision in Krishi Upaj Mandi Samiti, (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar, which held that a penalty under Section 271(1)(c) could only be imposed if the assessee intentionally concealed income or provided incorrect details. In this case, the assessee acted with a bonafide belief regarding the availability of depreciation, and this belief was ultimately vindicated. The court found no concealment of income or furnishing of inaccurate particulars. Therefore, there was no sufficient reason to subject the assessee to a penalty under Section 271(1)(c). The appeals were allowed, the ITAT's orders were set aside, and the orders passed by the Commissioner of Income Tax were restored.
The High Court noted that the issue was squarely covered by its own previous decisions in Ranjana Johari Vs. Assistant Commissioner of Income Tax and CIT Jaipur V/s Suresh Kumar Bajoria. These decisions, in turn, relied on the Supreme Court's view in Commissioner of Income-Tax V/s Meghalaya Steels Ltd. The Court observed that while DEPB/Duty Drawback schemes are related to exports and can be considered income under the head 'profits and gains of business or profession' (as per Section 28(iiib)), they are not necessarily derived from the profits and gains of the industrial undertaking for the purpose of Section 10BA deduction. The Court found that the Tribunal had not considered these binding precedents. Therefore, the High Court remitted the matters back to the Assessing Officer (AO) to decide them afresh in light of the aforementioned decisions. The Court explicitly stated that it had not expressed any opinion on the merits of the case.
The High Court held that the issue was squarely covered by its previous decision in Krishi Upaj Mandi Samiti, (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar. In that case, it was held that a penalty under Section 271(1)(c) could only be imposed if the assessee intentionally concealed income or provided incorrect details. The Court found that in the present case, there was neither concealment nor furnishing of inaccurate particulars. The assessee's claim regarding depreciation was a debatable issue, and their belief was bonafide. The explanation provided by the assessee was also debatable and was ultimately decided in their favour. Therefore, there was no sufficient reason to subject the assessee to a penalty under Section 271(1)(c). The appeals were allowed, the ITAT's order was set aside, and the order passed by the Commissioner of Income Tax was restored.
The High Court held that the issue was squarely covered by its earlier decision in Krishi Upaj Mandi Samiti (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar. In that case, it was held that a penalty under Section 271(1)(c) could only be imposed if the assessee intentionally concealed income or provided incorrect details. The Court found that in the present case, the assessee had a bonafide belief regarding the availability of depreciation, and the explanation provided was debatable. This debate was ultimately decided in favor of the assessee. Therefore, there was no sufficient reason to subject the assessee to a penalty under Section 271(1)(c). The appeals were allowed, the ITAT's order was set aside, and the order passed by the Commissioner of Income Tax was restored.
The High Court noted that the issue was squarely covered by its previous decision in Ranjana Johari Vs. Assistant Commissioner of Income Tax, Circle-6, Jaipur. The Court referred to the ITAT's observation that the Supreme Court in Liberty India held that DEPB/Duty Drawback benefit would not form part of the net profit for sections like 80IA/80IB, and by extension, Section 10BA. The ITAT had initially reversed the CIT(A)'s order to that extent. However, the ITAT also directed the Assessing Officer to recalculate the income considering the Supreme Court's decision in Topman Exports and other referred case laws, setting aside that ground of appeal. The High Court then referred to its own decision in CIT Jaipur V/s Suresh Kumar Bajoria, which followed the view in Meghalaya Steels Ltd. The High Court ultimately held that the matter should be remitted back to the Assessing Officer to decide in light of the aforementioned decisions. The Court explicitly stated that it had not expressed anything on merits.
The High Court held that the issue of depreciation available to the Krishi Upaj Mandi Samiti was a debatable one. The assessee had acted with a bonafide belief regarding the availability of depreciation and did not file a return based on this belief. The court referenced its own prior decision in Krishi Upaj Mandi Samiti, (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar, which had held that penalties under Section 271(1)(c) could only be imposed if there was intentional concealment of income or furnishing of incorrect details. In this case, there was neither concealment nor inaccurate particulars. The assessee's explanation was also debatable and was ultimately decided in their favour. Therefore, there was no sufficient reason to subject the assessee to a penalty under Section 271(1)(c). The appeals were allowed, and the ITAT's order was set aside, restoring the order passed by the Commissioner of Income Tax.
The High Court held that the ITAT was justified in treating the proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961 as void ab initio. The Court affirmed the view taken by the ITAT, which had relied on its own earlier decision in Commissioner of Income Tax vs. Shri Ram Singh (2008) 306 ITR 343 (Raj.). The reasoning was that the addition made by the Assessing Officer was beyond the scope of the reassessment proceedings initiated under Section 147 read with Section 148. Therefore, the issue was answered in favour of the assessee and against the department. The operative direction was to dismiss the appeal filed by the revenue.
The High Court held that the appeals filed by the Revenue were to be dismissed as not pressed. This decision was based on CBDT Circular No. 21/2015, which prescribed a monetary limit of Rs. 20,00,000/- for filing appeals before the High Court. Since the tax effect in the instant appeals was indisputably less than Rs. 20 lac, the appeals fell within the scope of the circular's directive to withdraw or not press pending appeals below the specified limits. The Court clarified that the substantial questions of law raised in the appeals were left open to be examined in future appropriate proceedings. It also granted liberty to the Revenue to move an application for recalling the order if the appeal fell under any of the exceptions mentioned in the circular, such as those relating to constitutional validity or challenges to Board's orders.
The High Court held that the issue was squarely covered by its previous decision in Krishi Upaj Mandi Samiti, (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar. The Court found that there was a debatable issue regarding the depreciation available to the assessee. The assessee acted with a bonafide belief about the availability of depreciation and did not file a return. The assessee's stand was ultimately vindicated by the High Court's decision in Commissioner of Income Tax v. Krishi Upaj Mandi Samiti. The Court reasoned that a penalty under Section 271(1)(c) could only be imposed if the assessee intentionally concealed income or provided incorrect details of expenditure. In this case, there was neither concealment of particulars of income nor furnishing of inaccurate particulars. The assessee's explanation was debatable and ultimately decided in its favour. Therefore, there was no sufficient reason to subject the assessee to a penalty under Section 271(1)(c). The appeal was allowed, setting aside the ITAT's order and restoring the order of the Commissioner of Income Tax.
The High Court held that the issue was squarely covered by its previous decision in Krishi Upaj Mandi Samiti, (Grain) Sriganganagar vs. I.T.O. Ward-2, Sriganganagar. The Court found that a debatable issue existed regarding the depreciation available to the assessee. The assessee, acting with a bonafide belief about the availability of depreciation, did not file a return. This stand was ultimately vindicated in favor of the assessee in a prior case. The Court reasoned that a penalty under Section 271(1)(c) could only be imposed if the assessee intentionally concealed income or provided incorrect details. In this case, there was neither concealment of particulars nor furnishing of inaccurate particulars. The explanation provided by the assessee was also debatable and was ultimately decided in their favor. Therefore, there was no sufficient reason to impose a penalty under Section 271(1)(c). The ITAT's order was set aside, and the order of the Commissioner of Income Tax was restored.
The Tribunal held that no substantial question of law arises for consideration in the appeal filed by the revenue. The Tribunal affirmed the orders of the CIT(Appeals) and the ITAT, which had deleted the addition of Rs. 3.77 crores made by the Assessing Officer. The reasoning was based on the settled legal principle that loose papers, diaries, and documents found from third parties, which are not regularly maintained books of accounts, cannot form the sole basis for making additions to the income of an assessee. The Tribunal cited judgments from the Supreme Court and the Delhi High Court to support this view. The ratio decidendi is that evidence consisting of loose documents found from third parties, narrating transactions with the assessee, is not sufficient on its own to sustain an addition. The appeal was dismissed as having no force.
The High Court held that no substantial question of law arises in the appeal. The Court noted that the assessee had specifically submitted before the CIT that the Trust had published a monthly magazine, "Jinvaynam," and had also given donations to "Gaushala/s" and needy persons, with receipts annexed to the reply. The Court found it unfortunate that the CIT did not consider this aspect and rejected the prayer solely on the ground that no significant activity had been started. The ITAT had minutely considered the assessee's reply and held the CIT's finding to be perverse, as charitable activities were indeed carried out. Therefore, the High Court saw no reason to interfere with the ITAT's order. The appeal filed by the Revenue was dismissed.
The High Court held that the issues in both appeals were squarely covered by its previous decision in D.B. Income Tax Appeal No.90/2016, M/s. Vijay Solvex Ltd. vs. The Income Tax Appellate Tribunal and Anr., decided on 04.08.2017. This earlier decision, in turn, relied on the Supreme Court's ruling in Godrej & Boyce Manufacturing Company Ltd. vs. Deputy Commissioner of Income Tax (2017). The Court reiterated that for Section 14A(1) to apply, there must be proof that expenditure was actually incurred in earning dividend income. The Supreme Court's judgment highlighted that Sections 14A(2) and (3) and Rule 8D were introduced to prescribe a formula for determining disallowable expenditure when the Assessing Officer is not satisfied with the assessee's claim. However, the prerequisite is the Assessing Officer's satisfaction that the assessee's claim is incorrect, supported by reasons and a nexus between expenditure and dividend income. In the absence of such reasons or a demonstrated nexus, and especially when the assessee has substantial surplus funds, the disallowance is not justified. The Court found no mention of reasons for the Assessing Officer's dissatisfaction or a nexus in the present case, and noted the availability of significant surplus funds. Therefore, the issues were answered in favour of the assessee and against the department.
The High Court held that the expenditure incurred on the abandoned project should be considered revenue expenses. The Court considered the observations of the Delhi High Court in Indo Rama Synthetics' case and the Jharkhand High Court in CIT, Ranchi vs. Tata Robins Fraser Ltd. The Jharkhand High Court's decision discussed a similar scenario where preliminary work on a project was abandoned due to adverse conditions, and the expenditure was treated as abortive expenditure and revenue in nature. The High Court noted that the Tribunal in the Tata Robins Fraser case had relied on judgments of the Calcutta High Court and the Supreme Court, which distinguish between capital expenditure (for enduring benefit) and revenue expenditure. The High Court found that the project's abandonment was due to the non-fulfillment of a statutory requirement (environmental clearance). Therefore, the expenditure incurred for the project that could not be accomplished was to be considered revenue expenditure and not capital expenditure. The issue was answered in favour of the assessee and against the department.
The High Court held that the appeal deserved to be dismissed as not pressed, taking note of CBDT Circular No. 21/2015 and the fact that the tax effect in the instant case was less than Rs. 20 lac, which is the monetary limit prescribed for filing appeals before the High Courts. The Court clarified that the substantial questions of law raised in the appeal, if any, were left open to be examined in an appropriate proceeding in the future. The Revenue was granted liberty to move an application for recalling the order if the appeal fell within any of the exceptions specified in the Circular dated 10.12.2015. Accordingly, the appeal was dismissed as not pressed, with liberty granted to revive the matter in case of difficulty.