Court INCOME TAX APPELLATE TRIBUNAL
Brief These cases were listed for hearing before the Tribunal on 06-8-2012 and for this assessee was informed. Today i.e. on 06-8-2012 when the case was called on board, none appeared on behalf of the assessee nor any request for adjournment has been filed before the Tribunal despite the service of notice upon the assessee. It seems that the assessee is not interested in prosecuting its appeals; hence, the appeals filed by the assessee are liable to be dismissed, for non-prosecution.
Citation Tecnovate eSolutions Private Limited, 219, Okhla Industrial Area, Ward 16(4), Phase-III, New Delhi – 110 020 (PAN: AABCT4147K) (Appellant) Vs. Income Tax Officer, New Delhi (Respondent)
Judgement IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH "H": NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA Nos. 104 & 105/Del/2011 A.Yrs.: 2003-04 & 2004-05 Tecnovate eSolutions Private Limited, 219, Okhla Industrial Area, Ward 16(4), Phase-III, New Delhi – 110 020 (PAN: AABCT4147K) (Appellant) Vs. Income Tax Officer, New Delhi (Respondent) Assessee by: None Department by: Dr. B.R.R. Kumar, Sr. D.R. O R D E R PER BENCH These appeals of the assessee emanate from separate orders passed by the Ld. Commissioner of Income Tax (A)-XIX, New Delhi dated 21.10.2010 and other dated 22.10.2010 for the assessment years 2003-04 and 2004-05 respectively. 2. These cases were listed for hearing before the Tribunal on 06-8-2012 and for this assessee was informed. Today i.e. on 06-8-2012 when the case was called on board, none appeared on behalf of the assessee nor any request for adjournment has been filed before the Tribunal despite the service of notice upon the assessee. It seems that the assessee is not interested in prosecuting its appeals; hence, the appeals filed by the assessee are liable to be dismissed, for non-prosecution. In our above view, we find support from the following decisions: 1. In the case of CIT vs. B.N. Bhattachargee and another, reported in 118 ITR 461 [relevant pages 477 & 478] wherein their Lordships have held that: "The appeal does not mean merely filing of the appeal but effectively pursuing it." 2. In the case of Estate of late Tukojirao Holkar vs. CWT; 223 ITR 480 (M.P.) while dismissing the reference made at the instance of the assessee in default made following observation in their order: "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference." 3. In the case of Commissioner of Income-tax vs. Multiplan India (P) Ltd.; 38 ITD 320 (Del), the appeal filed by the revenue before the Tribunal, which was fixed for hearing. But on the date of hearing nobody represented the revenue/appellant nor any communication for adjournment was received. There was no communication or information as to why the revenue chose to remain absent on that date. The Tribunal on the basis of inherent powers, treated the appeal filed by the revenue as un-admitted in view of the provisions of Rule 19 of the Appellate Tribunal Rules, 1963. 3. The assessee, if so desired, shall be free to move this Tribunal praying for recalling this order and explaining reasons for non-compliance etc. then this order may be recalled. 4. In the result, both the appeals filed by the assessee, are dismissed, for non-prosecution. Order pronounced in the open court on 06/8/2012, upon conclusion of hearing. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Date: 06/8/2012 SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Benches
 | | | Posted on 25 August 2012 by Diganta Paul |
Court HIGH COURT OF DELHI
Brief For this purpose the petitioner says that he has obtained requisite permission including a NOC from the Organ Transplantation Committee constituted by the State of U.P, and a NOC from the District Magistrate, AGRA. Reliance is also placed by the petitioner on a certificate issued by the then Mayor of Agra and the recommendation obtained from professor Rama Shankar Katheria, Member of Parliament, AGRA. The petitioner has also placed reliance on the opinions of Dr. Manav Wadhawan and also that of Dr. Subhash Gupta. 2.1 Dr. Subhash Gupta, I am told is the doctor who has been identified to perform the operation if requisite permissions are obtained. It may be relevant to point that the Authorization Committee, i.e., respondent no. 2 had rejected the request of the petitioners for organ transplant on the ground that there was an apparent financial disparity as between, the financial wherewithal of the family of petitioner no. 2 and that of petitioner no. 1.
Citation PAWAN ANAND & ANR ..... Petitioners Through: Mr Jitender Sethi & Mr Rajesh Kaushik, Advs. Versus DIRECTOR GENERAL OF HEALTH SERVICES & OTHERS ..... Respondents Through: Mr Sumeet Pushkarna, CGSC with Mr Ashish Virmani & Mr Aditya Malhtra, Advs. for Resp./UOI. Ms Meenakshi Singh, Adv. for R-2.
Judgement * THE HIGH COURT OF DELHI AT New Delhi % Judgment delivered on: 09.08.2012 + W.P.(C) 3848/2012 PAWAN ANAND & ANR ..... Petitioners Through: Mr Jitender Sethi & Mr Rajesh Kaushik, Advs. Versus DIRECTOR GENERAL OF HEALTH SERVICES & OTHERS ..... Respondents Through: Mr Sumeet Pushkarna, CGSC with Mr Ashish Virmani & Mr Aditya Malhtra, Advs. for Resp./UOI. Ms Meenakshi Singh, Adv. for R-2. CORAM:- HON'BLE MR JUSTICE RAJIV SHAKDHER RAJIV SHAKDHER, J 1. By virtue of this writ petition the petitioner seeks to assail the original order passed by respondent no. 2 dated 07.06.2012 and the appellate order passed by respondent no. 1 dated 21.06.2012. Suffice it to say that the mother of petitioner no. 1 appears to be suffering from liver cirrhosis and that there is an urgent need for liver transplant. Petitioner no. 2 is the proposed donor. 2. For this purpose the petitioner says that he has obtained requisite permission including a NOC from the Organ Transplantation Committee constituted by the State of U.P, and a NOC from the District Magistrate, AGRA. Reliance is also placed by the petitioner on a certificate issued by the then Mayor of Agra and the recommendation obtained from professor Rama Shankar Katheria, Member of Parliament, AGRA. The petitioner has also placed reliance on the opinions of Dr. Manav Wadhawan and also that of Dr. Subhash Gupta. 2.1 Dr. Subhash Gupta, I am told is the doctor who has been identified to perform the operation if requisite permissions are obtained. It may be relevant to point that the Authorization Committee, i.e., respondent no. 2 had rejected the request of the petitioners for organ transplant on the ground that there was an apparent financial disparity as between, the financial wherewithal of the family of petitioner no. 2 and that of petitioner no. 1. 3. It may also be relevant to note that the Authorization Committee, i.e., respondent no. 2 in coming to this conclusion had examined the documents placed on record by the petitioners which included the documents pertaining to financial resources of the family of petitioner no. 1 and that of petitioner no. 2. Apart from this, entire proceedings held before the Authorization Committee were videographed. 4. Being aggrieved by the order of respondent no.2, an appeal was preferred by petitioner no. 1 under Section 17 of the Transplantation of Human Organs Act, 1994 (in short the Organs Act). This appeal, as indicated above, came to be dismissed by respondent no.1 vide order dated 21.06.2012. 5. A perusal of the order passed by respondent no. 1, i.e., the Appellate Authority would reveal that it decided the case, based on the material which was placed on record, which included the videographed tapes of the proceedings held before respondent no. 2. It also appears that respondent no.1 examined the judgment of this court in Parveen Begum Vs. Appellate Authority, 189 (2012) DLT 427, though inadvertently perhaps, reference is given of the writ petition filed by the petitioner in the first round i.e., judgment dated 15.06.2012 passed in WP(C) No. 3734/2012, titled Urmila Anand & Anr. vs Director General of Health Services & Ors. Based on the aforesaid material as well as the judgment of this court it came to the following conclusion: "….The Appellate Authority is of the view that the available evidence is not enough to establish „love and affection‟ or „affection and attachment‟ between donor and recipient which is required to approve it as „unrelated case‟ for organ transplantation under transplantation of Human Organs Act (THOA). The Appellate Authority agrees with the decision taken by the Authorization Committee of I P Apollo Hospital in this case…." 6. What stands out upon reading of the order is that petitioner no. 1 was not called for a personal hearing. To my mind, there are some matters in which compliance with principles of natural justice may not necessarily require according an opportunity of an oral hearing. [see Union of India and Another Vs. Jesus Sales Corporation, 1996 (4) SCC 69]. But this is not, surely one of those cases, as these are matters in which, even if the statute is silent, in my view, oral hearing ought to be granted even at the appellate stage, as there are many open and shut cases which on a closer examination are fully explained and / or answered. Therefore, the criticality of affording oral hearing in such like cases. In this behalf, I may take recourse to the observations of a Division Bench of this court in Moser Baer India Ltd. Vs. The Additional Commissioner of Income Tax and Anr., WP(C) No.6974/2008, decided on 19.12.2008, which read as follows:- 7.4 The other submission of the Learned ASG, which is, that even if oral hearings is considered to be mandatory, the impugned orders cannot be rendered invalid as there was no demand for oral hearing, (except in writ petition no 6974/200 8) in our view, is not tenable. The reason being that the Courts have time and again, exhorted that fair procedure is required to be followed not only within its own precincts, but also, by authorities exercising quasi-judicial and administrative powers, with a view to achieve, at the end of the day, a result, which is, fair and just. And this end result has to be examined by asking oneself a question as to whether a person who, if he had knowledge of the proceedings but, was otherwise unconcerned with the end result, would view the decision making process, as fair. A question often asked is can a person be aggrieved if he has not demanded, that which is his right i.e., a right to a fair procedure, in this case, an oral hearing. The answer to this question is not far to seek. Where the State is a litigating party, it is, its Constitutional obligation to adopt a procedure which is both fair and just while dealing with its citizens. The fact that a citizen is unaware of his legal right cannot be used as a plank to seek legal sustenance for its actions which are otherwise invalid. It is duty of the State, in its role as a litigating party, to inform the citizen of his right i.e., to seek an oral hearing. An enquiry of the kind which is contemplated under Chapter X by the TPO will achieve a far more fair result, if there is an opportunity for an oral hearing or personal representation. The observation of Megarry J, in John v. Rees (1969) 2 All. ER 274 best illustrates the point as to why it is important to give a personal hearing especially in such like matters. The relevant extracts reads as follows: It may be that there are some who would decry the importance which the courts attach to the observance of the rules of natural justice. "When something is obvious," they may say, "why force everybody to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard" The result is obvious from the start." Those who take this view do not, I think, do themselves justice. As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were of unanswerable charges which, in the end, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that, by discussion, suffered a change. Nor are those with any knowledge of human nature who pause to think for a moment likely to underestimate the feelings of resentment of those who find that a decision against them has been made without their being afforded any opportunity to influence the course of events. (emphasis is mine) 7. I have specifically queried learned counsel for the respondents as to whether oral hearing was granted to petitioner no.1. The learned counsel has confirmed that no oral hearing was granted to petitioner no. 1. The petitioner no. 1 in the present writ petition has specifically raised this as a ground of challenge. 8. In these circumstances, I am of the view that the order of the Appellate Authority i.e., respondent no.1 would have to be set aside. It is ordered accordingly. The case is remanded to the Appellate Authority i.e., respondent no.1 with a direction that they should fix a date, on which, the petitioner no. 1 could appear before them and be heard personally in support of his appeal. 9. Before I conclude, I may also note that I had interviewed petitioner no. 2 at length. This aspect has been recorded by me, briefly in my order dated 16.07.2012. Upon interviewing petitioner no. 2, I came to a distinct conclusion that the decision of petitioner no. 2 to donate a part of her liver was not an informed decision. I am conscious of the fact that the petitioner has placed on record an assessment of a psychiatrist, which seems to suggest that petitioner no. 2 is sufficiently informed about the outcome of the proposed transplant surgery. 9.1. I must note that it is a format report. Having interviewed petitioner no. 2, my impression is completely to the contrary. In the matters like this, the donor needs to be fully informed about all possible outcomes of a transplant surgery. It is, therefore, necessary that this aspect of the matter should also be recorded. In the video recorded by the Authorization Committee i.e., respondent no.2, I did not find that the Authorization Committee had informed petitioner no. 2 as to the possible outcome(s) as also the post operative changes that petitioner no.2 is likely to experience upon such a surgery being performed on her. 10. In these circumstances, it would be appropriate if the Appellate Authority/respondent no.1 were to call petitioner no. 2 and inform her about the possible outcomes of such an operation; their assessment as to whether the petitioner no. 2 has understood the possible outcomes of such an operation would be vital to the decision making process. In such like cases, lack of informed consent could vitiate the entire process. 11. After assessing the material on record, and after interviewing petitioner no. 2 personally, respondent no. 1 shall pass a reasoned order in the appeal. For this purpose, petitioner no. 1 shall appear before the Appellate Authority/respondent no.1, on 13.08.2012 at 11.00 a.m. The Appellate Authority/respondent no.1 would convene and decide the appeal within ten (10) days from the date of hearing. Needless to say the Appellate Authority/respondent no.1 is free to adopt its own procedure, as no specific procedure is provided in the Organs Act. The Appellate Authority/respondent no.1 would be free to collect material by way of evidence in support of their conclusions. Any material collected would be put to petitioner no.1, to elicit his response. The Appellate Authority/respondent no.1 will, however, bear in mind that the appeal has to be disposed of expeditiously. 12. With these directions the petition stands disposed of. 13. Dasti to the learned counsels for the parties under the signatures of the Court master. RAJIV SHAKDHER, J
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| Posted on 25 August 2012 by Diganta Paul |
Court INCOME TAX APPELLATE TRIBUNAL
Brief We first take up the dispute relating to additions of unsecured loans under section 68 of the Act. The AO during the assessment proceedings noted that the assessee who was engaged in the business of film production and marketing, had declared unsecured loans to the tune of Rs.2.16 crores out of which a sum of Rs.1.81 crores had been raised during the year. The AO asked the assessee to file loan confirmations along with copy of the bank pass books and copy of returns of income of the creditors. The assessee filed loan confirmation on 9.4.2008 without any supporting evidence such as bank pass book etc. With a view to verify the genuineness of loans, the AO issued letters under section 133(6) to the creditors who did not reply to these letters. The AO noted that the assessee had filed only photocopies of confirmations and not the originals. Further all the confirmations had handwritten addresses and the same pen had been used for signing the confirmations. The AO also noticed differences in signatures on the confirmations with respect to signatures of creditors in the returns of income and PAN card. The AO, therefore, issued summons to the creditors under section 131 of the Act in response to which only one creditor i.e. Shivpujan P. Tiwari attended. Shri Tiwari denied having given any loan to the assessee and also stated that he was a man of meager means and there was no question of giving loan of Rs.2.00 lacs. As per the AO, the statement of Shri Tiwari was shown to authorized representatives of assessee who showed helplessness in the matter. The AO thereafter asked the assessee to produce loan creditors but despite several opportunities, the assessee could not produce loan creditors for examination. The AO, therefore, concluded that the assessee was deliberately avoiding to produce the creditors for cross examination and that the assessee was trying to prevent appearance of creditors to avoid being exposed as the only creditor who appeared had denied the loan. The AO observed that under section 68 of the Act, the burden was on the assessee to prove the identity of the creditors, their credit worthiness as well as genuineness of the transactions which had not been discharged by the assessee.
Citation M/s. Oracle Entertainment Pvt. Ltd. Plot No.184, Kaira Shopping Centre, Opp. Raghunath Vihar, Sector-13 Kharghar Navi Mumbai-410 610. PAN No. AAACO 6741 P (Appellant) Vs. Income tax Officer Ward-1(4), Kalyan Rani Mansion, 2nd Floor, Kalyan Murbad Road Kalyan (West) Mumbai.(Respondent)
Judgement IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH "C", MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER ITA No.2306/Mum/2010 Assessment Year: 2006-07 M/s. Oracle Entertainment Pvt. Ltd. Plot No.184, Kaira Shopping Centre, Opp. Raghunath Vihar, Sector-13 Kharghar Navi Mumbai-410 610. PAN No. AAACO 6741 P (Appellant) Vs. Income tax Officer Ward-1(4), Kalyan Rani Mansion, 2nd Floor, Kalyan Murbad Road Kalyan (West) Mumbai. (Respondent) Appellant by: Shri K. Gopal and Shri S. Pandey Respondent by: Shri Rajarshi Dwivedi Date of hearing: 23.7.2012 Date of Pronouncement: 3.8.2012 O R D E R PER RAJENDRA SINGH, AM: This appeal by the assessee is directed against the order dated 30.11.2009 of CIT(A) for the assessment year 2006-07. The assessee in this appeal has raised disputes on two different grounds which relate to addition under section 68 of the Income tax Act, 1961 (the Act) and addition of unexplained expenditure under section 69C of the Act. 2. We first take up the dispute relating to additions of unsecured loans under section 68 of the Act. The AO during the assessment proceedings noted that the assessee who was engaged in the business of film production and marketing, had declared unsecured loans to the tune of Rs.2.16 crores out of which a sum of Rs.1.81 crores had been raised during the year. The AO asked the assessee to file loan confirmations along with copy of the bank pass books and copy of returns of income of the creditors. The assessee filed loan confirmation on 9.4.2008 without any supporting evidence such as bank pass book etc. With a view to verify the genuineness of loans, the AO issued letters under section 133(6) to the creditors who did not reply to these letters. The AO noted that the assessee had filed only photocopies of confirmations and not the originals. Further all the confirmations had handwritten addresses and the same pen had been used for signing the confirmations. The AO also noticed differences in signatures on the confirmations with respect to signatures of creditors in the returns of income and PAN card. The AO, therefore, issued summons to the creditors under section 131 of the Act in response to which only one creditor i.e. Shivpujan P. Tiwari attended. Shri Tiwari denied having given any loan to the assessee and also stated that he was a man of meager means and there was no question of giving loan of Rs.2.00 lacs. As per the AO, the statement of Shri Tiwari was shown to authorized representatives of assessee who showed helplessness in the matter. The AO thereafter asked the assessee to produce loan creditors but despite several opportunities, the assessee could not produce loan creditors for examination. The AO, therefore, concluded that the assessee was deliberately avoiding to produce the creditors for cross examination and that the assessee was trying to prevent appearance of creditors to avoid being exposed as the only creditor who appeared had denied the loan. The AO observed that under section 68 of the Act, the burden was on the assessee to prove the identity of the creditors, their credit worthiness as well as genuineness of the transactions which had not been discharged by the assessee. 2.1 The AO, therefore, treated the unsecured loans in 18 cases aggregating to Rs.67.00 lacs as income of the assessee under section 68 of the Act as per details given below:- Sr.No. Name Amount (Rs.) 1. Rekha P. Mav 3,00,000/- 2. Bhavesh J. Bhanushali 2,90,000/- 3. Jethalal B. Bhanushali 8,00,000/- 4. Kesarben Hirji 1,25,000/- 5. Ashok J. Bhanushali 8,00,000/- 6. Annapurna R. Bhanushali 3,35,000/- 7. Govind H. Josier 3,75,000/- 8. Chandrika S. Bhanushali 3,00,000/- 9. S.P. Tiwari 2,00,000/- 10. Dhanpati J. Lapsiya 7,50,000/- 11. Vershi Karji (HUF) 2,50,000/- 12. Govindji B. Nakhava 3,00,000/- 13. Tejal Mitesh Mange 3,25,000/- 14. Deepak Shivji (HUF) 1,50,000/- 15. Ramesh J. Bhanushali 4,00,000/- 16. Narangji R. Bhanushali 3,00,000/- 17. Kirit D. Thakkar 6,00,000/- 18. Rajesh R. Mange 1,00,000/- Total 67,00,000/- 3. The assessee disputed the decision of the AO and submitted before CIT(A) that the assessee had filed loan confirmations in respect of loan creditors who were regularly assessed to tax and were having P.A. Nos. The assessee had also given copies of acknowledgment of filing the returns of income by the creditors as well as copies of their bank pass-books in many cases. The AO had never asked for giving original confirmations which were lying with the assessee and copies thereof had been filed before AO. As regards the differences in signatures pointed out by AO on loan confirmation with respect to signatures of creditors in the return of income and PAN card, the assessee submitted that it had no control over such matters and that it was quite common that people sign in different styles and format at different points of time. The AO made addition merely on the basis of non appearance of the creditors and inability of the assessee to produce them before AO. The AO had not considered other documents which established the identity and credit worthiness of the creditors and which prove the genuineness of transactions. The assessee also pointed out that Shri Tiwari who had denied loan had duly signed loan confirmation and also had given copy of acknowledgment of filing return of income. He was being assessed to tax. Thus, there was sufficient evidence of Shri Tiwari giving loan to the assessee and it was not clear to the assessee as to the reasons for giving adverse statements. CIT(A) after considering the submission of the assessee and material on record, observed that the assessee had received loans through banking channels and there was no dispute regarding filing of return of income by the creditors. However, if the creditors were genuine, then it was not clear as to what prevented the assessee to produce them before AO. CIT(A) also observed that there were discrepancies in the signatures of the crediting parties and one of the creditors denied having given loan. CIT(A), therefore, agreed with the conclusion drawn by the AO that the cash credit was nothing but assessee's own unaccounted income introduced in the books of account. He, therefore, confirmed the addition made by AO, aggrieved by which, the assessee is in appeal before the Tribunal. 4. Before us, the ld. AR for the assessee submitted that assessee had filed confirmations from all loan creditors who were assessed to tax along with their Income tax return detail. The assessee had, therefore, discharged the onus placed on it. It was also submitted that the creditors were not co-operating with the assessee as it had not been able to repay the loan and which was the reason for creditors not appearing before the AO and one of them denying the loan. They had given loans by cheque and filed confirmations giving them P.A. Numbers. The ld. AR also submitted that the assessee had been pursuing with loan creditors to appear before the AO and has been successful in obtaining affidavits from nine creditors which are enclosed in the form of additional evidence. These creditors have again confirmed loan in the affidavit and one of them has also explained the reasons for difference in signature on different documents which is for the sake of security. They have also stated that they will appear before the authorities when required. It was pointed out that affidavits from eight other creditors had been filed earlier before authorities below but no enquiries had been made. The ld. AR further submitted that he was giving an undertaking to produce these creditors also as and when required by the authorities below. As regards Shri Tiwari, it was submitted that statement of the party was never provided to the assessee. It was requested that in the interest of justice these additional evidences may be admitted and assessee may be provided opportunity to produce the parties before the authorities as and when required. 4.1 The ld. DR on the other hand strongly supported the orders of authorities below and argued that the assessee had already been provided enough opportunities by the AO and therefore, further opportunity is not required to be given. It was also submitted that one of the creditors had clearly denied having given any loan. The ld. DR placed reliance on the findings given in the orders of authorities below. 5. We have perused the records and considered the rival contentions carefully. The dispute raised is regarding addition under section 68 of the Income tax Act. The assessee during the relevant year had raised fresh loans of Rs.1.81 crores. To substantiate the loans the assessee had filed copy of confirmations from the creditors giving their P.A. Number and also filing copy of acknowledgement of filing returns by them. The AO noted differences in the signatures on the confirmations and on the return of the income and on Pan Card of the creditors. He, therefore, issued letters under section 133(6) to the creditors which were not responded to. The AO thereafter issued summons under section 131 in response to which only one creditor attended who denied the loan. The AO, thereafter asked the assessee to produce creditors which was not complied with. The AO, thereafter, treated the aggregate loans of Rs.67.00 lacs in 18 cases, details of which have been given in para-2 earlier to the total income under section 68 of the Act. In appeal CIT(A) confirmed the addition. 5.1 The case of the assessee is that all loan creditors are assessed to tax and confirmation of the P.A. Numbers had been given to the AO. The addition has been made only on the ground that there were differences in the signatures and that the assessee could not produce the creditors. It has been submitted that the creditors were not cooperating with the assessee as the assessee was unable to make payment to them. However, the assessee after sustained efforts has obtained affidavits from nine creditors in which they have confirmed the loans again and have also stated that they will appear before authorities below if asked for. Some of them have given reasons for differences in signatures. The ld. AR also submitted that he was giving undertaking that he would produce the remaining eight creditors also before the authorities as and when required. As regards Shri Tiwari who had denied loan, it has been submitted that copy of statement had not been provided to the assessee. After considering all the aspects of the matter including the affidavits and undertaking given, before us and also the fact that the creditors are assessed to tax with P.A. Numbers and loans have been taken by cheque, we are of the view that, additional evidences need to be considered for arriving at a fair decision in the matter and the assessee needs to be given one more opportunity for producing the creditors. We, therefore, set aside the order of CIT(A) and restore the matter back to him for fresh order after examination if necessary by remanding the matter to the AO and after providing opportunity to the assessee to produce the creditors and after cross examination of Shri Tiwari and after hearing the assessee. 6. Ground No.2 is regarding addition of Rs.68,017/- under section 69C of the Act as unexplained expenditure. The ld. AR for the assessee did not press this ground at the time of hearing of the appeal. This ground is, therefore, dismissed as not pressed. 7. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 3.8.2012 Sd/- Sd/- (D. MANMOHAN) (RAJENDRA SINGH) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated: 3.8.2012. Jv. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT(A) Concerned, Mumbai The DR " " Bench True Copy By Order Dy/Asstt. Registrar, ITAT, Mumbai.
| | Judges should not govern the country, says CJI | | Press Trust Of India / New Delhi Aug 26, 2012, 00:15 IST |
| Asserting that judges should not govern the country or evolve policies, Chief Justice of India S H Kapadia today wondered what would happen if the executive refuses to comply with the judiciary's directives. He asked judges if they would invoke contempt proceedings against government officials for not complying with their decisions, and disapproved of a recent Supreme Court judgement which said "right to sleep" was also a fundamental right. "Judges should not govern this country. We need to go by strict principle. Whenever you lay down a law, it should not interfere with governance. We are not accountable to people. Objectivity, certainty enshrined in the basic principles of the Constitution has to be given weightage," he said, delivering a lecture on 'Jurisprudence of Constituti-onal Structure' here at the India International Centre. Kapadia said judges should go strictly by the principles laid down in Constitution which has clearly demarcated the separation of powers among the judiciary, the legislature and the executive. "Right to life, we have said, includes environmental protection, right to live with dignity. Now we have included right to sleep, where are we going? It is not a criticism. Is it capable of being enforced? When you expand the right, the judge must explore the enforceability." "Questions which judges must ask if it is capable of being enforced. Judges must apply enforceability test. Today if a judge proposes a policy matter, government says we are not going to follow, are you going by way of contempt or implement it?" he asked. The CJI said judges must abide by the principles of Constitution while dealing with Centre-state relations, federal policy etc in the wake of the recent scandals, but clarified he was not mentioning the "coalgate" scandal. |
| | Capital gains' reinvestment simplified | | Delayed investment in capital gains bonds won?t attract tax, if the instrument isn?t available | | Arvind Rao / Mumbai Aug 26, 2012, 00:09 IST |
| Many investors, who sell properties, find themselves in a tax tangle because they have not invested the proceeds from sale on time. However, the Mumbai High Court has given relief to investors who had delayed the same. Tax saving on long-term capital gains is possible by investing the capital gain amount in specified bonds, also called as Capital Gains Bonds. This benefit is available under section 54-EC of the Income Tax Act, 1961 ('the Act') up to a limit of Rs 50 lakh in a single financial year. A tax payer who wishes to claim the exemption from long-term capital gains has to invest the amount in the capital gains bonds within six months from the date of sale or before the filing of returns, whichever is earlier. In the last few years, the Income tax rules have notified bonds offered by National Highway Authority of India (NHAI) and Rural Electrification Corporation (REC) as the specified bonds to claim this exemption. In one of the recent cases that came up for a decision before the Mumbai High Court, the tax payer was denied exemption under this section as the investment into the bonds was done beyond the allowable period of 6 months. In the said case, the tax payer had sold its factory building 22 March 2006 for a long-term capital gain of Rs 49.36 lakh. The tax payer wanted to claim exemption by investing the gains in REC bonds, however the investment was done on 31 January 2007, that is, almost after 10 months from the date of sale, yet the exemption u/s 54EC was claimed in the return of income. The tax officer rejected the claim and taxed the entire capital gains as the investment should have been completed by 21 September 2006. The first level appellate authority also agreed with the tax officers' view and denied exemption to the tax payer. The second appellate authority however allowed the tax payers claim, as in the said case, the bonds were not available for part of the time during the window of six months available to the tax payer. It also noted the fact that the tax payer had deposited an amount of Rs 50 lakh with a public sector bank with a specific direction that the bonds would be purchased out of the said amount as soon they would be available, which helped support the taxpayers stand. At the time of proceedings in the High Court, the tax officers argued that REC Bonds were available for subscription during the period 1 July 2006 to 3 August 2006 and that the tax payer could have invested in these bonds then. The High Court held that the tax payer had time till 21 September 2006 to invest in bonds and avail the benefit under the said section. The said section entitles a person to avail of the right conferred thereby at any time during the period of 6 months from the date of sale of the asset. Availability of bonds only for a limited time during this period cannot prejudice the assessee's right to exercise the same up to the last date. The High court also referred to the well-known legal maxims - law does not compel a man to that which he cannot possibly perform, which would be squarely applicable to this case. As the bonds were not available, it was impossible for the tax payer to invest in them within six months of the sale of the factory. Accordingly, it was important that the section 54EC should be interpreted to ensure that it does not lead to injustice for the tax payer. Therefore, it was essential that the 6 months time frame should be reasonably extended in view of non-availability of the bonds till 22 January 2007. The High court further discussed about the extent during which the extension of time should be granted to avail the benefit of section 54EC provisions when the bonds referred to therein are not available. In this case, the High court thought it to be both prudent and proper that the extension up to the date on which they are ultimately available, especially considering the fact that the bonds were not available for a major portion of the six months, including the last day. Secondly, it may not always be possible for a tax payer to make the investment on the first possible date on which the bonds were made available during the extended period as during the period the bonds were unavailable, a person is likely to invest the amount elsewhere. Thus, it cannot be expected of him to break the investment at a day's notice and transfer the same to the specified bonds. In view of the same, the High court held that an extension of merely nine days is extremely reasonable in the said case. The tax officers further argued that the tax payer, in any case, could have purchased the bonds of NHAI which was an alternative mode of investment provided for availing the benefit of section 54EC; the same was not accepted by the High Court. It held that the law has given the tax payer the choice to investing in either bonds of REC or NHAI or thus the tax officer cannot insist that the tax payer should have invested only in the bonds of one in preference to another. The choice of which bonds to purchase is entirely with the tax payer and in case the bonds of his choice are not available as is proved in the present case, the time to invest in the bonds get automatically extended till the bonds are available in the market and the assessee can purchase the same.
The writer is a financial planner
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| | Travel allowance gives restricted benefits | | The onus is not on employers to verify or check the details submitted, though they may choose to retain the right to do so | | Sandeep Shanbhag / Mumbai Aug 26, 2012, 00:07 IST |
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Leave Travel Concession (LTC), or Leave Travel Assistance (LTA) as it's sometimes called, is an extremely tax efficient component of salary. However, there are some nuances and finer points associated with this deduction that have to be understood by employees fully in order to derive optimum advantage from this avenue. There are certain conditions under which you'll get a deduction for LTA and vice versa. Travel within India
This is by far the most important condition to be met for LTC. Nowadays, with foreign travel many a times being cheaper than domestic ones, families increasingly prefer destinations abroad over domestic vacations. However, remember that the LTA exemption is available only with respect to travel within India. Overseas travel is strictly not covered.
| EXTENT OF EXEMPTION | - Air travel: National carrier's economy class fare for the shortest route or the amount spent, whichever is less
- Train journey: First class AC fare for the shortest route or the amount spent, whichever is less
- Destinations connected by rail, but travelled by other mode: First class AC rail fare for the shortest route or the amount spent, which ever is less
- Destinations not connected by rail, but by public transport system:
First or deluxe class fare for the shortest route or the amount spent, whichever is less - Destinations cannot be connected by rail, or any other mode: First class AC rail fare for the shortest route or the amount spent, whichever is less
| Only fare is exempted
The LTC exemption is available only with respect to air, rail or bus fare. Hotel stay is not covered. Also other normally incurred expenses while travelling such as conveyance, porter, food, sightseeing costs and so on are not eligible expenses. Actuals are exemption
LTC is restricted to the expenses actually incurred during the journey. That is, if you did not travel and consequently the related expenses were not incurred, the exemption cannot be claimed. And the entire amount encashed will be taxable in your hands. For instance, an employer provides LTC of Rs 30,000 but the employee ends up spending only Rs 20,000 on travel. Then, the LTA exemption would be limited to Rs 20,000 only. The rest would be taxable. Exemption for 'family'
As mentioned earlier, LTC is available for the travel expenses of the employee along with his family. Thus, it is important to determine who is covered under 'family'. Family, for this purpose, includes spouse, children, parents, brothers and sisters of the employee who are wholly or mainly dependent on the employee. With respect to the employee's children, the exemption is available to not more than two children born after October 1, 1998. However, the restriction is not applicable for children born before that. Note that children born out of multiple birth (twins, triplets) after the first child will be treated as 'one child' only. Also, 'child' includes step or adopted child as well. Exemption available twice in four years
LTC is available for two journeys performed in a block period of four calendar years. The current block runs from 2010-2013, that is, January 1, 2010 to December 31, 2013). This means between January 1, 2010 and December 31, 2013, the employee can claim exemption for two journeys. Also, it is possible to carry forward LTC. If an employee does not avail of his entitled exemption in a block, then the exemption can be carried forward to the next block. However, it has to be claimed in the first calendar year of the next block. This will not influence his entitled two exemptions in the next block. This means, the employee can claim exemption for three journeys in the next block. Say Vishal joins an organisation in April 2007. He is entitled to LTC of Rs 25,000 a year. He uses his entitlement in 2007-08 but does not use it the second entitlement. Then, Vishal can carry forward his exemption and will have to undertake the journey in calendar year 2010 to claim it. If he does not travel in 2010, he would have to forfeit his carried forward exemption. Also, whether he travels in 2010 or not, he can to use the LTA benefit for two journeys in the block 2010-13. Employer needn't check travel proof
In CIT vs Larsen & Toubro 181 Taxman 71 (SC), it was held that the assessee employer was under no statutory obligation to collect, audit and ascertain evidence (bills) to prove that the employees have appropriately utilised the LTC exemption. Simply put, the LTC may be claimed by the employees based on submission of a declaration to the employer that the LTC amount has been appropriately spent. It may be noted that this judgment takes the onus away from employers to check travel-related proof as mandatory. However, employers retain their right to demand documentary evidence depending upon their internal corporate policy. Also, it is important that the employee retains all bills as the Assessing Officer can call for the same during a scrutiny assessment. Difference between LTC and Leave salary
LTC is meant to defray travel-related expenses when on leave. Leave salary is compensation for leave foregone. If leave standing to the employee's credit is not taken within a year, it may lapse or it may be encashed or accumulated. The accumulated leave may be availed of by the employee during his service tenure or such leave may be encashed at the time of retirement or leaving the job. Such leave salary has its own rules for tax deductions.
The writer is Director, Wonderland Consultants | Playing Peekaboo With Audit Watchdog Investors can only hope the U.S. audit watchdog will bite, even if it doesn't bark. This month, the Chinese affiliate of Big 4 accounting firm KPMG converted from a joint venture with the international firm to a local business with a majority of Chinese partners. Mandated by the Chinese government, the move marked a big change. Bloomberg News Audit board head James Doty. In that case, the affiliate seemingly should have sought a new registration with the U.S. Public Company Accounting Oversight Board. Instead, it sought in mid-August to simply continue its existing registration so that it can continue audit work for U.S.-listed Chinese companies or Chinese units of U.S. multinationals. That allows the KPMG affiliate to dodge a thorny problem. The oversight board likely wouldn't sign off on a new registration because China continues to block it from inspecting domestic audit firms that do work for U.S.-listed companies. That could have left some multinational companies with big China operations and Chinese companies listed in the U.S. without a registered auditor in China. Yet the ability of the oversight board to inspect local firms is important for investors given the raft of frauds and accounting problems that have occurred at Chinese companies with U.S. listings. Now, the onus is on the oversight board, especially because Chinese affiliates of other Big 4 firms likely will pursue similar moves in coming months. The KPMG affiliate's filing to continue as an existing registered firm doesn't require approval. But the board could object if there was a significant change in the firm's structure, which seems to be the case. So far, the board has been mute. It may be biding its time as Chairman James Doty negotiates with the Chinese government in hope of reaching an agreement on inspections by year's end. But if the board stays silent too long, and gets played by the Chinese government, investors will be the losers. A version of this article appeared August 25, 2012, on page B14 in the U.S. edition of The Wall Street Journal, with the headline: Playing Peekaboo With Audit Watchdog. | |
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